Reportable segments

Management Reporting

The Company has four reportable segments (Private Banking, Wealth Management and Trust, Investment Management, and Wealth Advisory), and the Holding Company (Boston Private Financial Holdings, Inc.). The financial performance of the Company is managed and evaluated by these four areas. The segments are managed separately as a result of the concentrations in each function.

Measurement of Segment Profit and Assets

The accounting policies of the segments are the same as those described in 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 for the year ended December 31, 2017.

Revenues, expenses, and assets are recorded by each segment, and separate financial statements are reviewed by their management and the Company’s segment chief executive officers.

Reconciliation of Reportable Segment Items

The following tables present a reconciliation of the revenues, profits, assets, and other significant items of reportable segments as of and for the three months ended March 31, 2018 and 2017. Interest expense on junior subordinated debentures is reported at the Holding Company.



	Three months ended March 31,
	2018			2017
Private Banking	(In thousands)
Net interest income	$	58,131		$	54,256
Fees and other income	2,475			1,828
Total revenues	60,606			56,084
Provision/ (credit) for loan losses	(1,795		)	(181		)
Operating expense	39,627			35,058
Income before income taxes	22,774			21,207
Income tax expense	4,613			6,269
Net income from continuing operations	18,161			14,938
Net income attributable to the Company	$	18,161		$	14,938

Assets	$	8,185,803		$	8,058,121
Depreciation	$	1,584		$	1,371



	Three months ended March 31,
	2018		2017
Wealth Management and Trust	(In thousands)
Fees and other income	$	12,274	$	10,921
Operating expense	10,694		13,873
Income/ (loss) before income taxes	1,580		(2,952		)
Income tax expense/ (benefit)	475		(1,166		)
Net income/ (loss) from continuing operations	1,105		(1,786		)
Net income/ (loss) attributable to the Company	$	1,105	$	(1,786	)

Assets	$	71,560	$	74,408
Amortization of intangibles	$	701	$	727
Depreciation	$	321	$	337



	Three months ended March 31,
	2018		2017
Investment Management (1)	(In thousands)
Net interest income	$	4	$	4
Fees and other income	11,408		10,859
Total revenues	11,412		10,863
Operating expense	8,525		8,354
Income before income taxes	2,887		2,509
Income tax expense	671		844
Net income from continuing operations	2,216		1,665
Noncontrolling interests	488		462
Net income attributable to the Company	$	1,728	$	1,203

Assets	$	66,996	$	92,255
Amortization of intangibles	$	—	$	650
Depreciation	$	34	$	66



	Three months ended March 31,
	2018		2017
Wealth Advisory	(In thousands)
Net interest income	$	48	$	17
Fees and other income	13,539		12,843
Total revenues	13,587		12,860
Operating expense	10,536		9,443
Income before income taxes	3,051		3,417
Income tax expense	786		1,287
Net income from continuing operations	2,265		2,130
Noncontrolling interests	562		504
Net income attributable to the Company	$	1,703	$	1,626

Assets	$	73,054	$	73,182
Amortization of intangibles	$	49	$	49
Depreciation	$	163	$	226



	Three months ended March 31,
	2018			2017
Holding Company and Eliminations	(In thousands)
Net interest income	$	(800	)	$	(635	)
Fees and other income	47			55
Total revenues	(753		)	(580		)
Operating expense	1,475			2,052
Income/ (loss) before income taxes	(2,228		)	(2,632		)
Income tax expense/ (benefit)	(519		)	(681		)
Net income/ (loss) from continuing operations	(1,709		)	(1,951		)
Discontinued operations	1,698			1,632
Net income/ (loss) attributable to the Company	$	(11	)	$	(319	)

Assets (including eliminations)	$	(79,054	)	$	(82,846	)



	Three months ended March 31,
	2018			2017
Total Company	(In thousands)
Net interest income	$	57,383		$	53,642
Fees and other income	39,743			36,506
Total revenues	97,126			90,148
Provision/ (credit) for loan losses	(1,795		)	(181		)
Operating expense	70,857			68,780
Income before income taxes	28,064			21,549
Income tax expense	6,026			6,553
Net income from continuing operations	22,038			14,996
Noncontrolling interests	1,050			966
Discontinued operations	1,698			1,632
Net income attributable to the Company	$	22,686		$	15,662

Assets	$	8,318,359		$	8,215,120
Amortization of intangibles	$	750		$	1,426
Depreciation	$	2,102		$	2,000

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(1)	Results for the Investment Management Segment for the three months ended March 31, 2018 and 2017 include results for DGHM and Anchor. Assets for the Investment Management Segment at March 31, 2018 and 2017 include assets of DGHM and Anchor; however, Anchor’s assets and liabilities are classified as held for sale at March 31, 2018.