Acquisitions, Asset Sales, and Divestitures

12 Months Ended

Dec. 31, 2016

DIVESTITURES AND ACQUISITIONS [Abstract]

Discontinued Operations and Business Combinations Disclosure [Text Block]

ACQUISITIONS, ASSET SALES, AND DIVESTITURES

Asset Sales

In 2016, the Company sold two offices in the Southern California market, located in Granada Hills and Burbank, California. The sale consisted of certain assets and $104.0 million of deposits. This sale resulted in a gain of $2.9 million. The rationale for the sale was to better position the Company’s resources within the Southern California market.

Acquisitions

On October 2, 2014, the Bank completed the acquisition of Banyan, a registered investment advisory firm headquartered in Palm Beach Gardens, Florida. At the time of acquisition, Banyan had approximately $4.3 billion in client assets and locations in New England; South Florida; Texas; California; Atlanta, Georgia; and Madison, Wisconsin.

In the transaction, Boston Private Bank acquired 100% of certain assets and liabilities of Banyan through the issuance of approximately 1.7 million shares of the Company’s stock, valued at $21.0 million, and $43.9 million in cash payments to Banyan shareholders, including $5.0 million in a holdback account for potential future claims. The total purchase price, including contingent consideration of $2.0 million, was $66.9 million. In 2015, due to the lower than initially estimated actual financial results for 2015 and projected financial results for 2016, the $2.0 million liability for the contingent consideration was reversed and recorded as Other Income. 2016 was the last year of any contingent consideration and the contractual minimum targets for contingent payments were not met.

Goodwill of $41.9 million was recorded as a result of the transaction. Goodwill of $39.9 million is expected to be deductible for tax purposes, representing all of the goodwill except for the portion associated with the reversal of the contingent consideration. Intangible assets for advisory contracts of $23.9 million were also recorded and are expected to be amortized over 10 years.

The rationale for the transaction was that by merging Banyan with the existing Boston Private Bank wealth management business, additional technical expertise and financial acumen would be generated. Banyan has been merged with the existing wealth management business from Boston Private Bank, and the combined company has been renamed Boston Private Wealth. As a wholly-owned subsidiary of the Bank, Boston Private Wealth will also operate as part of the Wealth Management and Trust segment along with the trust operations of the Bank. These operations are reported separately from the Private Banking operations of the Bank.

Divestitures

In 2009, the Company divested its interests in Westfield Capital Management Company, LP, formerly known as Westfield Capital Management Company, LLC (“Westfield”). While the Company will continue to have no significant involvement or influence on Westfield, it retains a 12.5% share in Westfield’s revenues (up to an annual maximum of $11.6 million) through December 2017 subject to certain conditions. The Company defers gains related to these payments until determinable. Such revenue share payments are included in net income from discontinued operations in the consolidated statements of operations for the period in which the revenue is recognized. After the December 2017 payments are received in 2018, the Company will not receive additional net income from Westfield.