Regulatory Matters

12 Months Ended

Dec. 31, 2015

REGULATORY MATTERS [Abstract]

Regulatory Capital Requirements under Banking Regulations [Text Block]

REGULATORY MATTERS

Wealth Management and Trust, Investment Management, and Wealth Advisory

The Company’s Wealth Management and Trust, 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 RIAs under the Investment Advisers Act of 1940. The Investment Advisers Act of 1940 imposes numerous obligations on RIAs, 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.

Private 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 of December 31, 2015, quantitative measures established by regulation to ensure capital adequacy required us to maintain minimum ratios of common equity Tier 1, Tier 1, and total capital (as defined in the regulations) to risk-weighted assets (as defined in the regulations) and of Tier 1 capital (as defined in the regulations) to average assets (as defined in the regulations). 

The following table presents the Company’s and the Bank’s amount of regulatory capital and related ratios as of December 31, 2015 and 2014. Also presented are the minimum requirements established by the Federal Reserve and the FDIC as of those dates for the Company and the Bank, respectively, to meet applicable capital requirements and the requirements of the FDIC as of those dates for the Bank to be considered “well capitalized” under the FDIC’s prompt corrective action provisions. Effective January 1, 2015, revised regulatory rules issued by the Federal banking agencies, including the FDIC and the Federal Reserve, went into effect. The capital amounts and ratios disclosed in the table below are presented in accordance with these new rules from that date forward.

The Federal Reserve, the FDIC, and the Massachusetts Division of Banks may impose higher capital ratios than those listed below based upon the results of regulatory exams. The Bank was categorized as “well capitalized” under the FDIC’s prompt corrective action provisions as of December 31, 2015 and 2014.

	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, 2015
Common equity tier 1 risk-based capital
Company	$	534,241	9.80	%	$	245,216	4.5	%	n/a		n/a
Boston Private Bank	621,668		11.49		243,407		4.5		$	351,588	6.5	%
Tier 1 risk-based capital
Company	686,160		12.59		326,954		6.0		n/a		n/a
Boston Private Bank	621,668		11.49		324,543		6.0		432,723		8.0
Total risk-based capital
Company	754,758		13.85		435,939		8.0		n/a		n/a
Boston Private Bank	689,437		12.75		432,723		8.0		540,904		10.0
Tier 1 leverage capital
Company	686,160		9.50		289,059		4.0		n/a		n/a
Boston Private Bank	621,668		8.68		286,461		4.0		358,077		5.0
As of December 31, 2014
Tier 1 risk-based capital
Company	$	637,968	12.57	%	$	202,959	4.0	%	n/a		n/a
Boston Private Bank	566,444		11.25		201,480		4.0		$	302,220	6.0	%
Total risk-based capital
Company	701,705		13.83		405,918		8.0		n/a		n/a
Boston Private Bank	629,591		12.50		402,960		8.0		503,700		10.0
Tier 1 leverage capital
Company	637,968		9.53		267,651		4.0		n/a		n/a
Boston Private Bank	566,444		8.55		265,077		4.0		331,346		5.0

___________________

n/a = not applicable

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 December 31, 2015, the Company has sponsored the creation of two statutory trusts for the sole purpose of issuing trust preferred securities and investing the proceeds in junior subordinated debentures of the Company. The Company has dissolved three statutory trusts, in August 2013, October 2013, and January 2014, respectively, 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 both December 31, 2015, and 2014, all $100.0 million, of the net balance of these trust preferred securities qualified as Tier 1 capital.