Regulatory Matters

12 Months Ended

Dec. 31, 2013

REGULATORY MATTERS [Abstract]

Regulatory Capital Requirements under Banking Regulations [Text Block]

REGULATORY MATTERS

Investment Management and Wealth Advisory

The Company’s investment management and wealth advisory businesses are highly regulated, primarily at the federal level by the SEC, and by state regulatory agencies. The Company has subsidiaries which are registered investment advisers under the Investment Advisers Act of 1940. The Investment Advisers Act of 1940 imposes numerous obligations on registered investment advisers, including fiduciary, record keeping, operational, and disclosure obligations. The subsidiaries, as investment advisers, are also subject to regulation under the federal and state securities laws and the fiduciary laws of certain states. In addition, the Company has subsidiaries which act as sub-advisers to mutual funds, which are registered under the Investment Company Act of 1940 and are subject to that Act’s provisions and regulations. The Company’s subsidiaries are also subject to the provisions and regulations of ERISA, to the extent any such entities act as a “fiduciary” under ERISA with respect to certain of its clients. ERISA and the related provisions of the federal tax laws impose a number of duties on persons who are fiduciaries under ERISA, and prohibit certain transactions involving the assets of each ERISA plan which is a client, as well as certain transactions by the fiduciaries and certain other related parties to such plans.

Banking

The Company and the Bank are subject to extensive supervision and regulation by the Federal Reserve, the FDIC, which insures the deposits of the Bank to the maximum extent permitted by law, and the Massachusetts Commissioner of Banks. The federal and state laws and regulations which are applicable to banks regulate, among other things, the scope of their business, their investments, their reserves against deposits, the timing of the availability of deposited funds, and the nature and amount of collateral for certain loans. The laws and regulations governing the Bank generally have been promulgated to foster the safety and soundness of the Bank and protect depositors, and not for the purpose of protecting shareholders of the Company.

As a bank holding company, the Company is subject to various regulatory capital requirements administered by federal agencies. Failure to meet minimum capital requirements can result in certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a material effect on the Company’s financial statements. For example, under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank, which is a wholly-owned subsidiary of the Company, must meet specific capital guidelines that involve quantitative measures of the Bank’s assets and certain off-balance sheet items as calculated under regulatory guidelines. The Bank’s capital and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Similarly, the Company is also subject to capital requirements administered by the Federal Reserve with respect to certain non-banking activities, including adjustments in connection with off-balance sheet items.

Current FDIC regulations governing capital requirements state that FDIC-insured institutions, to be adequately capitalized, must have qualifying total risk-based capital to risk-weighted assets of at least 8%, of which at least 4% must be Tier I capital. The primary items in the Company’s Tier I capital include total equity, trust preferred securities, and redeemable noncontrolling interests, less accumulated other comprehensive income and, goodwill and intangible assets. Assets and off-balance sheet items are assigned to four risk categories, each with appropriate weights. The resulting capital ratio represents Tier I capital as a percentage of risk-weighted assets and off-balance sheet items. The risk-based capital rules are designed to make regulatory capital more sensitive to differences in risk profiles among banks and bank holding companies, to account for off-balance sheet exposure and to minimize disincentives for holding liquid assets.

The following table presents the Company’s and the Bank’s amount of regulatory capital and related ratios as of December 31, 2013 and 2012. Also presented are the capital guidelines established by the Federal Reserve, which pertain to the Company, and by the FDIC, which pertains to the Bank. To be categorized as “adequately capitalized,” the Company and the Bank must be in compliance with these “adequately capitalized” ratios. To be categorized as “well capitalized,” the Company and the Bank must be in compliance with these “well capitalized” ratios and not subject to any written agreement, order, capital directive, or prompt corrective action directive. The Federal Reserve, the FDIC, and the Massachusetts Commissioner of Banks may impose higher capital ratios than those listed below based on the results of regulatory exams. The Company and the Bank were categorized as “well capitalized” as of December 31, 2013 and 2012.

	Actual				For capital adequacy purposes (at least)				To be well capitalized under prompt corrective action provisions (at least)
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(In thousands)
As of December 31, 2013
Total risk-based capital
Company	$	689,767	14.77	%	$	373,483	8.0	%	$	466,854	10.0	%
Boston Private Bank	631,510		13.63		354,285		8.0		442,856		10.0
Tier I risk-based capital
Company	631,041		13.52		186,741		4.0		280,112		6.0
Boston Private Bank	573,340		12.37		177,112		4.0		265,714		6.0
Tier I leverage capital
Company	631,041		10.09		250,085		4.0		312,606		5.0
Boston Private Bank	573,340		9.27		239,663		4.0		299,579		5.0
As of December 31, 2012
Total risk-based capital
Company	$	676,206	14.61	%	$	370,223	8.0	%	$	462,779	10.0	%
Boston Private Bank	594,422		12.94		367,522		8.0		459,402		10.0
Tier I risk-based capital
Company	617,965		13.35		185,112		4.0		277,667		6.0
Boston Private Bank	536,649		11.68		183,761		4.0		275,641		6.0
Tier I leverage capital
Company	617,965		9.94		248,692		4.0		310,865		5.0
Boston Private Bank	536,649		8.73		245,755		4.0		307,194		5.0

Bank regulatory authorities restrict the Bank from lending or advancing funds to, or investing in the securities of, the Company. Further, these authorities restrict the amounts available for the payment of dividends by the Bank to the Company.

As of the filing of this Annual Report on Form 10-K, the Company has sponsored the creation of, or assumed sponsorship of, three statutory trusts for the sole purpose of issuing trust preferred securities and investing the proceeds in junior subordinated debentures of the Company. The Company canceled one statutory trusts in August 2013 and another in January 2014, after the Company repurchased all of the respective trusts’ trust preferred securities.

In accordance with ASC 810-10-55, Consolidation - Overall - Implementation Guidance and Illustrations - Variable Interest Entities, these statutory trusts created by, or assumed by, the Company are not consolidated into the Company’s financial statements; however, the Company reflects the amounts of junior subordinated debentures payable to the preferred stockholders of statutory trusts as debt in its financial statements. As of December 31, 2013, and December 31, 2012 all $100.0 million, and $136.5 million, respectively of the net balance of these trust preferred securities qualified as Tier I capital. Tier I capital is included in the calculation of all three capital ratios in the above table, while Tier II capital is only included in the calculation of total risk-based capital in the above table.

For the year ending December 31, 2013, the Company repurchased $36.5 million of its junior subordinated debentures.