Exhibit 99.1
Boston Private Financial Holdings, Inc. Reports Second Quarter 2011 Results
Boston, MA - July 26, 2011 - Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported second quarter 2011 GAAP Net Income to Common Stockholders of $14.3 million, compared to a net loss of $0.4 million in the first quarter of 2011. BPFH reported a second quarter diluted earnings per share of $0.17 compared to a per share loss of $0.01 in the first quarter of 2011.
“This quarter shows progress across important dimensions of our overall program to position the Company for strong long-term performance,” said CEO and President Clayton G. Deutsch. “First, the quarter provides clear evidence that our program to reduce risk and improve our credit profile is gaining traction. We see significant declines in problem loans, we have reduced our elevated levels of loan loss provision, and we are continuing to accumulate capital.”
“Second, this quarter we successfully merged our four banks into one, unified Private Bank. We consummated the merger ahead of schedule, we have installed a single integrated management team, we are expanding our client service capabilities across our four major private client markets, and we are hard at work driving our post-merger conversions and consolidations. Our program is on track and achieving the milestones established in our merger plan.”
“Finally, we believe we are beginning to demonstrate the growth and earnings power of our Wealth Management and Private Banking businesses. Despite a challenging economic and industry environment, year-over-year revenue is up 11% for the quarter. Our residential mortgage portfolio is up 10% year-over-year. We continue to diversify our commercial portfolio and reduce the San Francisco Bay Area commercial real estate portfolio, while building a more strategic commercial and industrial and CRE client pipeline. Our Wealth Advisory and Investment Management segments generated $20.6 million of fee income for the quarter, up 10% year-over-year. These segments show positive operating leverage, with year-over-year pre-tax income up 22%.”
“These results overall, while not yet satisfying our long-term profitability goals, represent important progress. We will continue our focus on asset quality, perfecting the bank merger, and profitable business building as we move ahead.”
Key Financials (Note: All comparisons relate only to continuing operations.)
• | Revenue for the second quarter was $78.3 million, an increase of $4.5 million or 6%, from $73.8 million on a linked quarter basis. Revenue was up 11% compared to the same period in 2010 from $70.7 million. |
◦ | Net Interest Income for the second quarter was $46.0 million, an increase of $2.3 million or 5%, from $43.7 million on a linked quarter basis. Net Interest Income increased 2% compared to the same period in 2010 from $45.0 million. |
◦ | Fee Income (Investment Management, Wealth Advisory and Other Private Banking Fees) for the second quarter was $27.9 million, an increase of $0.5 million or 2%, from $27.4 million on linked quarter basis. Fee Income was up 8% compared to the same period in 2010 from $25.8 million. |
• | Net Interest Margin for the second quarter was 3.29%, an increase of 11 basis points from 3.18% on a linked quarter basis, and flat compared to the same period in 2010. |
• | Operating Expenses (including $4.3 million of restructuring charges) for the second quarter were $62.5 million, an increase of $0.8 million or 1%, from $61.7 million on a linked quarter basis. Operating Expenses were up 10% compared to the same period in 2010 from $56.7 million. |
◦ | Excluding the $4.3 million of restructuring charges, Operating Expenses were $58.2 million, a decrease of $1.6 million or 3%, from $59.7 million (excluding $2 million of restructuring charges) on a linked quarter basis. Operating Expenses were up 3% compared to the same period in 2010 from $56.7 million. |
• | Tangible Common Equity/Tangible Assets (“TCE/TA”) at the end of the second quarter was 6.88%, up 26 basis points from 6.62% as of the end of the first quarter. |
• | Total Balance Sheet Assets as of the end of the second quarter were $6.0 billion, an increase of $54.5 million or 1%, from $6.0 billion as of the end of the first quarter and up 3% compared to the same period in 2010 from $5.9 billion. |
• | Provision for Loan Losses for the second quarter was a credit of $2.2 million, a decrease of $15.6 million from $13.4 million on a linked quarter basis, and down $17.2 million compared to the same period in 2010 from $15.0 million. |
• | Allowance for Loan Losses as a percentage of Total Loans as of the end of the second quarter was 2.24%, down 1 basis point from 2.25% as of the end of the first quarter, and up 48 basis points compared to the same period in 2010 from 1.76%. |
“Through improved performance and the bank consolidation, we have both strengthened our capital ratios and created a more efficient capital base,” said David J. Kaye, Chief Financial Officer. “While expenses remain elevated due to restructuring costs, we still anticipate the impact of previously announced merger-related savings to be realized by the second quarter 2012.”
Total Loans were $4.4 billion at the end of the second quarter, down 1% from $4.5 billion at the end of the first quarter, and down 2% at the end of the same period in 2010. Total Deposits were $4.6 billion at the end of the second quarter, up slightly from $4.5 billion at the end of the first quarter, and up 4% from $4.4 billion at the end of the same period in 2010.
Non-Performing Loans as a percentage of Total Loans was 1.81% as of the end of the second quarter, down from 2.50% as of the end of the first quarter of 2011. Net Recoveries for the second quarter 2011 were $0.7 million, compared to $11.5 million of Net Charge-offs in the prior quarter. Past Due Loans (30-89 days) as a percentage of Total Loans decreased 68 basis points on a linked quarter basis to 15 basis points.
Total Assets Under Management/Advisory (“AUM”) remained flat on a linked quarter basis at $20.2 billion in the second quarter of 2011. Total AUM was up 16% compared to the same period in 2010. The Company experienced second quarter 2011 net AUM outflows of $150 million, as compared to $36 million of net inflows in the prior quarter.
Dividend Payments
Concurrent with the release of the second quarter 2011 earnings, the Board of Directors of the Company declared a cash dividend to shareholders of $0.01 per share. The record date for this dividend is August 16, 2011 and the payment date is August 30, 2011.
Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures, such as the TCE/TA and TCE/RWA ratios, 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 8:00 a.m. Eastern Time on Wednesday, July 27, 2011 to discuss the financial results in more detail. To access the call:
Dial In #: (866) 843-0890
International Dial In #: (412) 317-9250
Elite Entry Number: 6035385
Replay Information:
Available from July 27 at 10 a.m. to Aug. 4, 2011
Dial In #: (877) 344-7529
International Dial In #: (412) 317-0088
Conference Number: 10001963
The call will be simultaneously webcast and may be accessed on www.bostonprivate.com.
Boston Private Financial Holdings, Inc.
Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) is a national financial services organization comprised of affiliated companies located in key regions of the U.S. that offer private banking, wealth advisory and investment management services to the high net worth marketplace, selected businesses and institutions. Its business strategy is to empower its affiliates to serve their clients at the local level, while at the same time providing strategic oversight and access to resources, both financial and intellectual, to support management, compliance and risk management, legal, marketing, and operations.
For more information about BPFH, visit the Company's website at www.bostonprivate.com.
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 locally operated and wholly-owned subsidiary of BPFH. The information reported in this press release is related to the performance and results of BPFH.
CONTACT:
Jeanne Hess
Assistant Vice President, Investor Relations
Boston Private Financial Holdings, Inc.
(617) 912-3798
jhess@bostonprivate.com
John Hartz
Sloane & Company
857-598-4779
jhartz@sloanepr.com
Statements in this press release that are not historical facts are 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, changes in assumptions or unanticipated factors adversely affecting the timing, among other matters, of expenses or cost savings relating to or resulting from the consolidation of the Company's banking subsidiaries; 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 a continuing deterioration in general economic conditions on a national basis or in the local markets in which the Company operates, including changes which adversely affect borrowers' ability to service and repay our loans; changes in loan defaults and charge-off rates; changes in the value of securities and other assets, adequacy of loan loss reserves, or decreases in deposit levels necessitating increased borrowing to fund loans and investments; increasing government regulation, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; 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; 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. 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 statements are made.
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
(In thousands, except per share data) | June 30, 2011 | June 30, 2010 | March 31, 2011 | ||||||
FINANCIAL DATA: | |||||||||
Total Balance Sheet Assets | $ | 6,036,778 | $ | 5,867,709 | $ | 5,982,309 | |||
Total Equity | 538,970 | 540,666 | 522,111 | ||||||
Cash and Investment Securities | 1,310,962 | 1,016,840 | 1,196,316 | ||||||
Commercial and Industrial Loans | 619,728 | 606,449 | 668,402 | ||||||
Commercial Real Estate Loans | 1,568,588 | 1,720,791 | 1,649,487 | ||||||
Construction and Land Loans | 130,570 | 259,829 | 126,408 | ||||||
Residential Mortgage Loans | 1,767,671 | 1,601,714 | 1,714,530 | ||||||
Home Equity Loans | 153,528 | 165,517 | 155,217 | ||||||
Other Consumer Loans | 169,355 | 131,901 | 142,855 | ||||||
Total Loans | 4,409,440 | 4,486,201 | 4,456,899 | ||||||
Allowance for Loan Losses | 98,742 | 79,073 | 100,282 | ||||||
Loans Held for Sale | 4,625 | 28,449 | 2,833 | ||||||
Other Real Estate Owned ("OREO") | 14,485 | 12,113 | 11,497 | ||||||
Deposits | 4,551,319 | 4,380,793 | 4,540,190 | ||||||
Borrowings | 834,788 | 839,539 | 815,737 | ||||||
Book Value Per Common Share | $ | 6.17 | $ | 6.45 | $ | 6.03 | |||
Market Price Per Share | $ | 6.58 | $ | 6.43 | $ | 7.07 | |||
ASSETS UNDER MANAGEMENT AND ADVISORY: | |||||||||
Private Banking | $ | 3,739,000 | $ | 3,405,000 | $ | 3,670,000 | |||
Investment Managers | 8,295,000 | 6,880,000 | 8,437,000 | ||||||
Wealth Advisory | 8,184,000 | 7,210,000 | 8,085,000 | ||||||
Less: Inter-company Relationship | (20,000 | ) | (17,000 | ) | (20,000 | ) | |||
Assets Under Management and Advisory | $ | 20,198,000 | $ | 17,478,000 | $ | 20,172,000 | |||
FINANCIAL RATIOS: | |||||||||
Total Equity/Total Assets | 8.93 | % | 9.21 | % | 8.73 | % | |||
Tangible Common Equity/Tangible Assets (2) | 6.88 | % | 7.11 | % | 6.62 | % | |||
Allowance for Loan Losses/Total Loans | 2.24 | % | 1.76 | % | 2.25 | % | |||
Allowance for Loan Losses/Non-performing Loans | 124 | % | 81 | % | 90 | % | |||
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | March 31, | June 30, | June 30, | ||||||||||
OPERATING RESULTS: | 2011 | 2010 | 2011 | 2011 | 2010 | |||||||||
Net Interest Income | $ | 46,024 | $ | 45,017 | $ | 43,711 | 89,735 | 89,327 | ||||||
Investment Management and Trust Fees: | ||||||||||||||
Private Banking | 6,026 | 5,872 | 5,965 | 11,991 | 11,683 | |||||||||
Investment Managers | 10,311 | 9,390 | 10,118 | 20,429 | 18,548 | |||||||||
Total Investment Management and Trust Fees | 16,337 | 15,262 | 16,083 | 32,420 | 30,231 | |||||||||
Total Wealth Advisory Fees | 10,277 | 9,304 | 10,072 | 20,348 | 18,562 | |||||||||
Other Private Banking Fees | 1,287 | 1,264 | 1,233 | 2,520 | 2,441 | |||||||||
Total Fees | 27,901 | 25,830 | 27,388 | 55,288 | 51,234 | |||||||||
Gain on Repurchase of debt | 1,838 | — | — | 1,838 | — | |||||||||
Gain/(Loss) on Sale of Loans, net | 1,125 | 500 | 385 | 1,511 | 958 | |||||||||
Other Revenue, Gains and (Losses), net (3) | 1,449 | (697 | ) | 2,321 | 3,770 | 869 | ||||||||
Total Fees and Other Income | 32,313 | 25,633 | 30,094 | 62,407 | 53,061 | |||||||||
Total Revenue | 78,337 | 70,650 | 73,805 | 152,142 | 142,388 | |||||||||
Provision/(Credit) for Loan Losses | (2,190 | ) | 14,962 | 13,350 | 11,160 | 22,577 | ||||||||
Salaries and Employee Benefits | 35,867 | 34,653 | 36,772 | 72,639 | 68,501 | |||||||||
Occupancy and Equipment | 7,431 | 6,696 | 7,343 | 14,774 | 13,482 | |||||||||
Professional Services | 5,314 | 4,324 | 5,184 | 10,497 | 9,168 | |||||||||
FDIC Insurance | 1,294 | 2,266 | 2,236 | 3,530 | 4,353 | |||||||||
Restructuring | 4,304 | — | 1,982 | 6,286 | — | |||||||||
Other Operating Expenses (4) | 8,255 | 8,726 | 8,188 | 16,444 | 17,194 | |||||||||
Total Operating Expense | 62,465 | 56,665 | 61,705 | 124,170 | 112,698 | |||||||||
Income/(Loss) from Continuing Operations, before Tax | 18,062 | (977 | ) | (1,250 | ) | 16,812 | 7,113 | |||||||
Income Tax Expense/(Benefit) | 4,229 | (1,202 | ) | (178 | ) | 4,051 | 1,134 | |||||||
Discontinued Operations, Net of Tax (1) | 1,516 | 1,509 | 1,670 | 3,186 | 1,545 | |||||||||
Less: Net Income Attributable to the Noncontrolling Interests | 804 | 616 | 747 | 1,551 | 1,301 | |||||||||
Net Income/(Loss) Attributable to the Company | $ | 14,545 | $ | 1,118 | $ | (149 | ) | 14,396 | 6,223 | |||||
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | March 31, | June 30, | June 30, | ||||||||||||
PER SHARE DATA: | 2011 | 2010 | 2011 | 2011 | 2010 | |||||||||||
Calculation of Income/(Loss) for EPS: | ||||||||||||||||
Net Income/(Loss) from Continuing Operations | $ | 13,833 | $ | 225 | $ | (1,072 | ) | 12,761 | 5,979 | |||||||
Less: Net Income Attributable to Noncontrolling Interests | 804 | 616 | 747 | 1,551 | 1,301 | |||||||||||
Net Income/(Loss) from Continuing Operations Attributable to the Company | $ | 13,029 | $ | (391 | ) | $ | (1,819 | ) | 11,210 | 4,678 | ||||||
Adjustments to Net Income/(Loss) Attributable to the Company to Arrive at Net Income/(Loss) Attributable to Common Stockholders (5) | (199 | ) | (6,160 | ) | (276 | ) | (475 | ) | (9,628 | ) | ||||||
Net Income/(Loss) from Continuing Operations Attributable to the Common Stockholders | $ | 12,830 | $ | (6,551 | ) | $ | (2,095 | ) | 10,735 | (4,950 | ) | |||||
Net Income/(Loss) from Discontinued Operations | $ | 1,516 | $ | 1,509 | $ | 1,670 | 3,186 | 1,545 | ||||||||
Net Income/(Loss) Attributable to the Common Stockholders | $ | 14,346 | $ | (5,042 | ) | $ | (425 | ) | 13,921 | (3,405 | ) | |||||
Dividends Paid on Series B Preferred Stock for Diluted EPS | 73 | — | — | 145 | — | |||||||||||
Calculation of Average Shares Outstanding: | ||||||||||||||||
Weighted Average Basic Shares | 75,195 | 68,787 | 74,671 | 74,934 | 68,331 | |||||||||||
Weighted Average Diluted Shares | 83,265 | 68,787 | 74,671 | 83,115 | 68,331 | |||||||||||
Earnings/(Loss) per Share - Basic | ||||||||||||||||
Earnings/(Loss) per Share from Continuing Operations | $ | 0.17 | $ | (0.09 | ) | $ | (0.03 | ) | $ | 0.15 | $ | (0.07 | ) | |||
Income/(Loss) per Share from Discontinued Operations | $ | 0.02 | $ | 0.02 | $ | 0.02 | $ | 0.04 | $ | 0.02 | ||||||
Earnings/(Loss) per Share | $ | 0.19 | $ | (0.07 | ) | $ | (0.01 | ) | $ | 0.19 | $ | (0.05 | ) | |||
Earnings/(Loss) per Share - Diluted (6) | ||||||||||||||||
Earnings/(Loss) per Share from Continuing Operations | $ | 0.15 | $ | (0.09 | ) | $ | (0.03 | ) | $ | 0.13 | $ | (0.07 | ) | |||
Income/(Loss) per Share from Discontinued Operations | $ | 0.02 | $ | 0.02 | $ | 0.02 | $ | 0.04 | $ | 0.02 | ||||||
Earnings/(Loss) per Share | $ | 0.17 | $ | (0.07 | ) | $ | (0.01 | ) | $ | 0.17 | $ | (0.05 | ) | |||
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
Average Balance | Interest Income/Expense | Average Yield/Rate | ||||||||||||||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||
June 30, | June 30, | March 31, | June 30, | June 30, | March 31, | June 30, | June 30, | March 31, | ||||||||||||||||
AVERAGE BALANCE SHEET: | 2011 | 2010 | 2011 | 2011 | 2010 | 2011 | 2011 | 2010 | 2011 | |||||||||||||||
AVERAGE ASSETS | ||||||||||||||||||||||||
Earning Assets | ||||||||||||||||||||||||
Cash and Investments (7) | $ | 1,245,874 | $ | 1,222,464 | $ | 1,331,795 | $ | 4,918 | $ | 5,732 | $ | 5,160 | 1.58 | % | 1.88 | % | 1.55 | % | ||||||
Loans (8) | ||||||||||||||||||||||||
Commercial and Construction (7) | 2,400,681 | 2,605,125 | 2,446,178 | 33,819 | 35,414 | 32,316 | 5.49 | % | 5.41 | % | 5.32 | % | ||||||||||||
Residential Mortgage | 1,742,769 | 1,563,746 | 1,685,001 | 19,131 | 19,251 | 18,729 | 4.39 | % | 4.92 | % | 4.45 | % | ||||||||||||
Home Equity and Other Consumer | 316,268 | 277,473 | 296,259 | 2,971 | 3,842 | 2,867 | 3.75 | % | 5.52 | % | 3.90 | % | ||||||||||||
Total Earning Assets | 5,705,592 | 5,668,808 | 5,759,233 | 60,839 | 64,239 | 59,072 | 4.20 | % | 4.52 | % | 4.12 | % | ||||||||||||
Allowance for Loan Losses | 103,233 | 74,923 | 99,667 | |||||||||||||||||||||
Cash and due From Banks (Non-Interest Bearing) | 31,690 | 13,385 | 33,565 | |||||||||||||||||||||
Other Assets | 456,139 | 493,339 | 454,922 | |||||||||||||||||||||
TOTAL AVERAGE ASSETS | $ | 6,090,188 | $ | 6,100,609 | $ | 6,148,053 | ||||||||||||||||||
AVERAGE LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||||||
Interest-Bearing Liabilities: | ||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||
Savings and NOW | $ | 517,271 | $ | 536,905 | $ | 542,011 | 358 | $ | 515 | $ | 375 | 0.28 | % | 0.38 | % | 0.28 | % | |||||||
Money Market | 1,910,004 | 1,653,006 | 1,858,645 | 2,787 | 3,762 | 2,814 | 0.59 | % | 0.91 | % | 0.61 | % | ||||||||||||
Certificates of Deposits | 1,029,713 | 1,340,825 | 1,084,494 | 3,156 | 5,104 | 3,461 | 1.23 | % | 1.53 | % | 1.29 | % | ||||||||||||
Total Deposits | 3,456,988 | 3,530,736 | 3,485,150 | 6,301 | 9,381 | 6,650 | 0.73 | % | 1.07 | % | 0.77 | % | ||||||||||||
Junior Subordinated Debentures | 192,416 | 193,645 | 193,645 | 1,905 | 2,504 | 1,892 | 3.96 | % | 5.17 | % | 3.91 | % | ||||||||||||
FHLB Borrowings and Other | 644,084 | 617,181 | 698,034 | 4,780 | 5,589 | 4,913 | 2.94 | % | 3.58 | % | 2.82 | % | ||||||||||||
Total Interest-Bearing Liabilities | 4,293,488 | 4,341,562 | 4,376,829 | 12,986 | 17,474 | 13,455 | 1.21 | % | 1.61 | % | 1.24 | % | ||||||||||||
Non-interest Bearing Demand Deposits | 1,128,330 | 1,037,556 | 1,117,347 | |||||||||||||||||||||
Payables and Other Liabilities | 117,707 | 106,308 | 114,203 | |||||||||||||||||||||
Total Liabilities | 5,539,525 | 5,485,426 | 5,608,379 | |||||||||||||||||||||
Redeemable Non-Controlling Interest | 20,613 | 20,569 | 19,891 | |||||||||||||||||||||
Stockholders' Equity | 530,050 | 594,614 | 519,783 | |||||||||||||||||||||
TOTAL AVERAGE LIABILITIES & STOCKHOLDERS' EQUITY | $ | 6,090,188 | $ | 6,100,609 | $ | 6,148,053 | ||||||||||||||||||
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) | $ | 47,853 | $ | 46,765 | $ | 45,617 | ||||||||||||||||||
FTE Adjustment (7) | 1,829 | 1,748 | 1,906 | |||||||||||||||||||||
Net Interest Income (GAAP Basis) | $ | 46,024 | $ | 45,017 | $ | 43,711 | ||||||||||||||||||
Interest Rate Spread | 2.99 | % | 2.91 | % | 2.88 | % | ||||||||||||||||||
Net Interest Margin | 3.29 | % | 3.29 | % | 3.18 | % | ||||||||||||||||||
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data) (Unaudited)
Average Balance | Interest Income/Expense | Average Yield/Rate | ||||||||||||||
Six Months Ended | Six Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | June 30, | June 30, | June 30, | June 30, | |||||||||||
AVERAGE BALANCE SHEET: | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | ||||||||||
AVERAGE ASSETS | ||||||||||||||||
Earning Assets | ||||||||||||||||
Cash and Investments (7) | $ | 1,288,650 | $ | 1,324,141 | $ | 10,079 | $ | 12,152 | 1.57 | % | 1.84 | % | ||||
Loans (8) | ||||||||||||||||
Commercial and Construction (7) | 2,306,311 | 2,570,211 | 66,134 | 73,002 | 5.68 | % | 5.54 | % | ||||||||
Residential Mortgage | 1,714,044 | 1,537,790 | 37,860 | 38,137 | 4.42 | % | 4.96 | % | ||||||||
Home Equity and Other Consumer | 423,311 | 278,119 | 5,838 | 6,302 | 2.88 | % | 4.54 | % | ||||||||
Total Earning Assets | 5,732,316 | 5,710,261 | 119,911 | 129,593 | 4.17 | % | 4.53 | % | ||||||||
Allowance for Loan Losses | 101,460 | 72,356 | ||||||||||||||
Cash and due From Banks (Non-Interest Bearing) | 32,644 | 12,897 | ||||||||||||||
Other Assets | 458,612 | 516,463 | ||||||||||||||
TOTAL AVERAGE ASSETS | $ | 6,122,112 | $ | 6,167,265 | ||||||||||||
AVERAGE LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||
Interest-Bearing Liabilities: | ||||||||||||||||
Deposits: | ||||||||||||||||
Savings and NOW | $ | 529,671 | $ | 526,967 | $ | 732 | $ | 1,108 | 0.28 | % | 0.42 | % | ||||
Money Market | 1,873,025 | 1,645,994 | 5,602 | 7,683 | 0.60 | % | 0.94 | % | ||||||||
Certificates of Deposits | 1,056,952 | 1,397,982 | 6,617 | 11,220 | 1.26 | % | 1.62 | % | ||||||||
Total Deposits | 3,459,648 | 3,570,943 | 12,951 | 20,011 | 0.75 | % | 1.13 | % | ||||||||
Junior Subordinated Debentures | 192,938 | 193,645 | 3,797 | 4,994 | 3.94 | % | 5.16 | % | ||||||||
FHLB Borrowings and Other | 670,910 | 646,593 | 9,693 | 11,730 | 2.87 | % | 3.61 | % | ||||||||
Total Interest-Bearing Liabilities | 4,323,496 | 4,411,181 | 26,441 | 36,735 | 1.23 | % | 1.67 | % | ||||||||
Non-interest Bearing Demand Deposits | 1,135,483 | 1,029,197 | ||||||||||||||
Payables and Other Liabilities | 117,575 | 99,151 | ||||||||||||||
Total Liabilities | 5,576,554 | 5,539,529 | ||||||||||||||
Redeemable Non-Controlling Interest | 20,241 | 21,195 | ||||||||||||||
Stockholders' Equity | 525,317 | 606,541 | ||||||||||||||
TOTAL AVERAGE LIABILITIES & STOCKHOLDERS' EQUITY | $ | 6,122,112 | $ | 6,167,265 | ||||||||||||
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) | $ | 93,470 | $ | 92,858 | ||||||||||||
FTE Adjustment (7) | 3,735 | 3,531 | ||||||||||||||
Net Interest Income (GAAP Basis) | $ | 89,735 | $ | 89,327 | ||||||||||||
Interest Rate Spread | 2.94 | % | 2.86 | % | ||||||||||||
Net Interest Margin | 3.25 | % | 3.24 | % | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
OPERATING RATIOS: | June 30, | June 30, | March 31, | June 30, | June 30, | |||||||||||
2011 | 2010 | 2011 | 2011 | 2010 | ||||||||||||
Return on Average Equity | 10.98 | % | 0.75 | % | (0.11%) | 5.48 | % | 2.05 | % | |||||||
Return on Average Assets | 0.96 | % | 0.07 | % | (0.01%) | 0.47 | % | 0.20 | % | |||||||
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data) (Unaudited)
LOAN DATA AND CREDIT QUALITY (8): | June 30, | June 30, | March 31, | ||||||
2011 | 2010 | 2011 | |||||||
Commercial and Industrial Loans: | |||||||||
New England | $ | 480,452 | $ | 437,015 | $ | 513,875 | |||
San Francisco Bay | 60,065 | 79,901 | 60,884 | ||||||
Southern California | 45,001 | 49,638 | 54,284 | ||||||
Pacific Northwest | 34,326 | 40,210 | 39,508 | ||||||
Eliminations and other, net | (116 | ) | (315 | ) | (149 | ) | |||
Total Commercial and Industrial Loans | $ | 619,728 | $ | 606,449 | $ | 668,402 | |||
Commercial Real Estate Loans: | |||||||||
New England | $ | 625,328 | $ | 611,547 | $ | 644,092 | |||
San Francisco Bay | 670,469 | 866,270 | 728,040 | ||||||
Southern California | 170,496 | 176,577 | 179,996 | ||||||
Pacific Northwest | 102,295 | 66,397 | 97,359 | ||||||
Total Commercial Real Estate Loans | $ | 1,568,588 | $ | 1,720,791 | $ | 1,649,487 | |||
Construction and Land Loans: | |||||||||
New England | $ | 78,149 | $ | 105,642 | $ | 71,623 | |||
San Francisco Bay | 42,286 | 134,153 | 40,245 | ||||||
Southern California | 3,215 | 3,068 | 2,441 | ||||||
Pacific Northwest | 6,920 | 16,966 | 12,099 | ||||||
Total Construction and Land Loans | $ | 130,570 | $ | 259,829 | $ | 126,408 | |||
Residential Mortgage Loans: | |||||||||
New England | $ | 1,217,654 | $ | 1,134,756 | $ | 1,196,954 | |||
San Francisco Bay | 321,110 | 262,762 | 305,567 | ||||||
Southern California | 177,320 | 158,425 | 161,469 | ||||||
Pacific Northwest | 51,587 | 45,771 | 50,540 | ||||||
Total Residential Mortgage Loans | $ | 1,767,671 | $ | 1,601,714 | $ | 1,714,530 | |||
Home Equity Loans: | |||||||||
New England | $ | 91,041 | $ | 101,264 | $ | 91,573 | |||
San Francisco Bay | 52,132 | 53,847 | 54,182 | ||||||
Southern California | 4,910 | 5,714 | 4,308 | ||||||
Pacific Northwest | 5,445 | 4,692 | 5,154 | ||||||
Total Home Equity Loans | $ | 153,528 | $ | 165,517 | $ | 155,217 | |||
Other Consumer Loans: | |||||||||
New England | $ | 140,006 | $ | 96,146 | $ | 110,242 | |||
San Francisco Bay | 14,330 | 19,605 | 17,274 | ||||||
Southern California | 12,199 | 12,364 | 12,259 | ||||||
Pacific Northwest | 1,180 | 1,514 | 1,069 | ||||||
Eliminations and other, net | 1,640 | 2,272 | 2,011 | ||||||
Total Other Consumer Loans | $ | 169,355 | $ | 131,901 | $ | 142,855 | |||
Total Loans | |||||||||
New England | $ | 2,632,630 | $ | 2,486,370 | $ | 2,628,359 | |||
San Francisco Bay | 1,160,392 | 1,416,538 | 1,206,192 | ||||||
Southern California | 413,141 | 405,786 | 414,757 | ||||||
Pacific Northwest | 201,753 | 175,550 | 205,729 | ||||||
Eliminations and other, net | 1,524 | 1,957 | 1,862 | ||||||
Total Loans | $ | 4,409,440 | $ | 4,486,201 | $ | 4,456,899 | |||
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
June 30, | June 30, | March 31, | |||||||
2011 | 2010 | 2011 | |||||||
Special Mention Loans: | |||||||||
New England | $ | 55,051 | $ | 53,958 | $ | 56,737 | |||
San Francisco Bay | 68,262 | 29,398 | 36,779 | ||||||
Southern California | 16,158 | 7,474 | 14,778 | ||||||
Pacific Northwest | 17,029 | 17,139 | 15,369 | ||||||
Total Special Mention Loans | $ | 156,500 | $ | 107,969 | $ | 123,663 | |||
Accruing Classified Loans (9): | |||||||||
New England | $ | 17,213 | $ | 12,867 | $ | 25,422 | |||
San Francisco Bay | 57,420 | 24,723 | 71,358 | ||||||
Southern California | 25,145 | 11,838 | 20,045 | ||||||
Pacific Northwest | 3,697 | 11,732 | 8,921 | ||||||
Total Accruing Classified Loans | $ | 103,475 | $ | 61,160 | $ | 125,746 | |||
Non-performing Loans: | |||||||||
New England | $ | 29,095 | $ | 14,638 | $ | 23,314 | |||
San Francisco Bay | 31,753 | 54,397 | 66,694 | ||||||
Southern California (11) | 13,226 | 17,726 | 10,818 | ||||||
Pacific Northwest | 5,868 | 13,505 | 10,410 | ||||||
Total Non-performing Loans | $ | 79,942 | $ | 100,266 | $ | 111,236 | |||
Other Real Estate Owned: | |||||||||
New England | $ | 1,498 | $ | 1,050 | $ | 1,400 | |||
San Francisco Bay | 10,974 | 3,719 | 7,301 | ||||||
Southern California | 345 | 4,141 | 1,128 | ||||||
Pacific Northwest | 1,668 | 3,203 | 1,668 | ||||||
Total Other Real Estate Owned | $ | 14,485 | $ | 12,113 | $ | 11,497 | |||
Loans 30-89 Days Past Due and Accruing: | |||||||||
New England | $ | 3,060 | $ | 4,474 | $ | 9,890 | |||
San Francisco Bay | 2,304 | 392 | 26,043 | ||||||
Southern California | 1,137 | 2,628 | 1,206 | ||||||
Pacific Northwest | — | 33 | — | ||||||
Total Loans 30-89 Days Past Due and Accruing | $ | 6,501 | $ | 7,527 | $ | 37,139 | |||
Loans Charged-off/(Recovered), Net for the Three Months Ended: | |||||||||
New England | $ | 127 | $ | 1,784 | $ | 1,274 | |||
San Francisco Bay | 2,036 | 7,216 | 11,289 | ||||||
Southern California | (3,552 | ) | 444 | (1,086 | ) | ||||
Pacific Northwest | 739 | (293 | ) | (6 | ) | ||||
Total Net Loans Charged-off | $ | (650 | ) | $ | 9,151 | $ | 11,471 | ||
Loans Charged-off/(Recovered), Net for the Six Months Ended: | |||||||||
New England | $ | 1,401 | $ | 2,822 | |||||
San Francisco Bay | 13,325 | 9,005 | |||||||
Southern California | (4,638 | ) | (411 | ) | |||||
Pacific Northwest | 733 | 532 | |||||||
Total Net Loans Charged-off | $ | 10,821 | $ | 11,948 | |||||
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
(1) In 2009, the Company completed the sale of its affiliates Boston Private Value Investors, Sand Hill Advisors, RINET, Gibraltar, and Westfield Capital Management. Accordingly, prior period and current financial information related to the divested companies are included with discontinued operations.
(2) The Company uses certain non-GAAP financial measures, such as the Tangible Common Equity ("TCE") to Tangible Assets ("TA"), and TCE to Risk Weighted Assets ratios, 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 reconciliation from the Company's GAAP Total Equity to Total Assets ratio to the Non-GAAP TCE to TA, and TCE to Risk Weighted Assets ratios is 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 Goodwill and Intangible Assets, net and includes the difference between Redemption Value and value per ARB 51 for Redeemable Non-controlling Interests.
June 30, | June 30, | March 31, | |||||||
2011 | 2010 | 2011 | |||||||
Total Balance Sheet Assets | $ | 6,036,778 | $ | 5,867,709 | $ | 5,982,309 | |||
LESS: Goodwill and Intangible Assets, net | (147,951 | ) | (147,451 | ) | (149,388 | ) | |||
Tangible Assets (non-GAAP) | 5,888,827 | 5,720,258 | 5,832,921 | ||||||
Total Equity | 538,970 | 540,666 | 522,111 | ||||||
LESS: Goodwill and Intangible Assets, net | (147,951 | ) | (147,451 | ) | (149,388 | ) | |||
ADD: Difference between Redemption Value of Non-controlling Interests and value under ARB 51 | 14,170 | 13,659 | 13,259 | ||||||
Total adjusting items | (133,781 | ) | (133,792 | ) | (136,129 | ) | |||
Tangible Common Equity (non-GAAP) | 405,189 | 406,874 | 385,982 | ||||||
Total Equity/Total Assets | 8.93 | % | 9.21 | % | 8.73 | % | |||
Tangible Common Equity/Tangible Assets (non-GAAP) | 6.88 | % | 7.11 | % | 6.62 | % | |||
Total Risk Weighted Assets * | 3,965,671 | 4,130,243 | 4,024,413 | ||||||
Tangible Common Equity/Total Risk Weighted Assets (non-GAAP) | 10.2 | % | 9.9 | % | 9.6 | % | |||
* Risk Weighted Assets for June 30, 2011 is shown on a pro-forma basis
(3) Other Revenue, Gains and (Losses), net, as presented in these tables include Gain/(Loss) on Sale of Investments, net; Gain/(Loss) on Sale of Oreo, net; and Other Miscellaneous Revenue.
(4) Other Operating Expenses, as presented in these tables, include expenses related to Marketing and Business Development, Contract Services and Processing, Impairment Expense, and Amortization of Intangibles.
Boston Private Financial Holdings, Inc.
Selected Financial Data (1)
(In Thousands, except share data)
(Unaudited)
(5) Adjustments to Net Income Attributable to the Company to arrive at Net Income/(Loss) Attributable to the Common Stockholders, as presented in these tables, include decrease/ (increase) in Noncontrolling Interests Redemption Value; Dividends on Preferred Securities; and Accretion of Discount on Series C Preferred Stock.
(6) When the Company has positive Net Income from Continuing Operations Attributable to the Common Stockholders, 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 to 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 Earning Per Share calculation. The potential dilutive shares relate to: unexercised stock options, unvested restricted stock, unexercised stock warrants, contingently issuable shares, unconverted Convertible Preferred stock, and unconverted Convertible Trust Preferred securities. The amount of shares that were anti-dilutive for the three and six months ended June 30, 2011 were 1.7 million for both periods. The amount of shares that were anti-dilutive for the three and six months ended June 30, 2010 were 11.0 million, and 10.8 million respectively. The amount of shares that were anti-dilutive for the three months ended March 31, 2011 were 10.1 million. See Part II. Item 8. "Financial Statements and Supplementary Data - Note 1: Basis of Presentation and Summary of Significant Accounting Policies"in the Company's Annual Report on Form 10-K, as amended, for the year ended December 31, 2010 for additional information.
(7) Interest Income on Non-taxable Investments and Loans are presented on an FTE basis using the federal statutory rate.
(8) Includes Loans Held for Sale and Non-accrual Loans.
(9) The concentration of the Private Banking loan data and credit quality is based on the location of the lender. Net loans from the Holding Company to certain principals of the Company's affiliate partners, loans at the Company's non-banking segments, and inter-company loan eliminations are identified as “Eliminations and other, net”.
(10) Accruing classified loans include loans that are classified as substandard but are still accruing interest income. The Banks 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 nonperforming at some time in the future.
(11) Includes the non-strategic loans held for sale of $3.0 million, at June 30, 2010. There were no non-strategic loans held for sale at June 30, 2011 and March 31, 2011.