Massachusetts | 001-35070 | 04-2976299 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 7.01. | Regulation FD Disclosure. |
Item 8.01. | Other Events. |
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | ||
By: | /S/ STEVEN M. GAVEN | |
Name: | Steven M. Gaven | |
Title: | Executive Vice President, Chief Financial Officer | |
Date: October 17, 2018 |
• | GAAP net income was $18.0 million or $0.20 per diluted share, and operating net income was $22.5 million or $0.25 per diluted share |
• | Operating return on average common equity was 12.1% |
• | Operating return on average tangible common equity was 14.2% |
• | Average total deposits were $6.7 billion, a 5% increase year-over-year |
• | Average total loans were $6.7 billion, a 6% increase year-over-year |
• | Total assets under management/advisory (“AUM”) were $22.4 billion and total net flows were positive $342 million |
• | Restructuring expense of $5.8 million expected to result in $11 million of annual expense reduction in 2019 |
Summary Financial Results - Reported | |||||||||||||||
% Change | |||||||||||||||
($ in millions, except for per share data) | 3Q18 | 2Q18 | 3Q17 | Linked Quarter | Year over Year | ||||||||||
Net income attributable to the Company | $18.0 | $6.4 | $19.8 | nm | (9 | )% | |||||||||
Diluted earnings per share | $0.20 | $0.03 | $0.22 | nm | (9 | )% | |||||||||
Non-GAAP Financial Measures: | |||||||||||||||
Pre-tax, pre-provision income | $23.4 | $25.3 | $27.5 | (7 | )% | (15 | )% | ||||||||
Return on average common equity ("ROACE") | 9.7 | % | 3.0 | % | 9.9 | % | |||||||||
Return on average tangible common equity ("ROATCE") | 11.4 | % | 3.9 | % | 13.2 | % | |||||||||
nm = not meaningful |
Summary Financial Results - Operating Basis (non-GAAP) | |||||||||||||||
% Change | |||||||||||||||
($ in millions, except for per share data) | 3Q181 | 2Q182 | 3Q17 | Linked Quarter | Year over Year | ||||||||||
Net income attributable to the Company | $22.5 | $19.1 | $19.8 | 18 | % | 14 | % | ||||||||
Diluted earnings per share | $0.25 | $0.21 | $0.22 | 21 | % | 15 | % | ||||||||
Pre-tax, pre-provision income | $29.2 | $25.3 | $27.5 | 15 | % | 6 | % | ||||||||
Return on average common equity | 12.1 | % | 10.0 | % | 9.9 | % | |||||||||
Return on average tangible common equity | 14.2 | % | 11.9 | % | 13.2 | % | |||||||||
1 3Q18 results adjusted to exclude the impact of $5.8 million restructuring expense less a $1.2 million tax benefit, resulting in a net $4.6 million benefit to overall results 2 2Q18 results adjusted to exclude the impact of $12.7 million income tax expense related to the divestiture of Anchor Capital Advisors LLC See footnote 16 for a GAAP to non-GAAP reconciliation |
Divestiture |
Net Interest Income and Margin (non-GAAP, except for Net Interest Income) | ||||||||||||||||||
% Change | ||||||||||||||||||
($ in millions) | 3Q18 | 2Q18 | 3Q17 | Linked Quarter | Year over Year | |||||||||||||
Net interest income | $59.6 | $57.5 | $56.6 | 4 | % | 5 | % | |||||||||||
Less: Interest recovered on previous nonaccrual loans | 1.0 | — | 0.1 | nm | nm | |||||||||||||
Core net interest income, non-FTE basis | 58.7 | 57.5 | 56.5 | 2 | % | 4 | % | |||||||||||
Add: FTE adjustment | 0.6 | 0.9 | 2.9 | (34 | )% | (80 | )% | |||||||||||
Core net interest income, FTE basis | 59.2 | 58.4 | 59.4 | 1 | % | — | % | |||||||||||
Net interest margin (FTE basis) | 2.93 | % | 2.89 | % | 3.02 | % | ||||||||||||
Core net interest margin (FTE basis) | 2.88 | % | 2.89 | % | 3.02 | % | ||||||||||||
Core net interest margin (non-FTE basis) | 2.85 | % | 2.85 | % | 2.87 | % | ||||||||||||
FTE = Fully Taxable Equivalent |
Noninterest Income | |||||||||||||||
% Change | |||||||||||||||
($ in millions) | 3Q18 | 2Q18 | 3Q17 | Linked Quarter | Year over Year | ||||||||||
Investment management fees | $3.2 | $4.2 | $11.3 | (23 | )% | (71 | )% | ||||||||
Wealth advisory fees | 14.0 | 13.7 | 13.3 | 2 | % | 5 | % | ||||||||
Wealth management and trust fees | 11.5 | 11.2 | 11.6 | 3 | % | (1 | )% | ||||||||
Private banking fees3 | 2.8 | 2.8 | 2.9 | 1 | % | (2 | )% | ||||||||
Total core fees and income | $31.6 | $31.9 | $39.1 | (1 | )% | (19 | )% | ||||||||
Total other income | 0.7 | 0.2 | 1.2 | nm | (40 | )% | |||||||||
Total noninterest income | $32.3 | $32.1 | $40.3 | 1 | % | (20 | )% | ||||||||
Memo: Noninterest income lines excluding Anchor | |||||||||||||||
Less: Anchor revenue | — | 1.1 | 8.4 | nm | nm | ||||||||||
Investment management fees (non-GAAP) | 3.2 | 3.1 | 2.9 | 5 | % | 12 | % | ||||||||
Total core fees and income (non-GAAP) | $31.6 | $30.7 | $30.7 | 3 | % | 3 | % | ||||||||
Total noninterest income (non-GAAP) | $32.3 | $30.9 | $31.9 | 4 | % | 1 | % | ||||||||
3 Private banking fees includes Other banking fee income and Gain/ (loss) on sale of loans, net |
Assets Under Management / Advisory | ||||||||||||
% Change | ||||||||||||
($ in millions) | 3Q18 | 2Q18 | 3Q17 | Linked Quarter | Year over Year | |||||||
Wealth Management and Trust | $8,335 | $7,789 | $7,703 | 7 | % | 8 | % | |||||
Investment Management 4 | 2,125 | 2,031 | 1,902 | 5 | % | 12 | % | |||||
Wealth Advisory | 11,977 | 11,566 | 10,992 | 4 | % | 9 | % | |||||
Total assets under management / advisory 4 5 | $22,430 | $21,379 | $20,586 | 5 | % | 9 | % | |||||
Net flows | 3Q18 | 2Q18 | 3Q17 | |||||||||
Wealth Management and Trust | $315 | $(77) | $114 | |||||||||
Investment Management 4 | 45 | 27 | (5) | |||||||||
Wealth Advisory | (18) | (30) | (71) | |||||||||
Total net flows 4 | $342 | $(76) | $38 | |||||||||
4 Information excludes Anchor 5 Segments do not sum to Total assets under management due to an intercompany relationship of $7 million in 3Q18 and 2Q18 and $11 million in 3Q17 |
Operating Expense | |||||||||||||||
% Change | |||||||||||||||
($ in millions) | 3Q18 | 2Q18 | 3Q17 | Linked Quarter | Year over Year | ||||||||||
Salaries and employee benefits | $38.9 | $39.4 | $44.9 | (1 | )% | (13 | )% | ||||||||
Occupancy and equipment | 8.2 | 8.2 | 7.9 | (1 | )% | 3 | % | ||||||||
Professional services | 2.9 | 2.9 | 3.3 | — | % | (13 | )% | ||||||||
Marketing and business development | 1.7 | 2.1 | 2.2 | (17 | )% | (23 | )% | ||||||||
Information systems | 6.2 | 6.8 | 5.3 | (8 | )% | 18 | % | ||||||||
Amortization of intangibles | 0.8 | 0.7 | 1.4 | — | % | (47 | )% | ||||||||
FDIC insurance | 0.7 | 0.7 | 0.6 | (5 | )% | 4 | % | ||||||||
Restructuring | 5.8 | — | — | nm | nm | ||||||||||
Other | 3.4 | 3.6 | 3.6 | (3 | )% | (5 | )% | ||||||||
Total operating expense | $68.6 | $64.4 | $69.3 | 6 | % | (1 | )% | ||||||||
Memo: Excluding Anchor and Restructuring | |||||||||||||||
Restructuring | 5.8 | — | — | nm | nm | ||||||||||
Anchor operating expense | — | 0.9 | 6.4 | nm | nm | ||||||||||
Total operating expense (non-GAAP) 6 | $62.8 | $63.4 | $62.9 | (1 | )% | — | % | ||||||||
6 For information on non-GAAP financial measures, see page 6 nm= not meaningful |
Income Tax Expense | ||||||||||
Loans and Deposits - QTD Averages | |||||||||||||||
% Change | |||||||||||||||
($ in millions) | 3Q18 | 2Q18 | 3Q17 | Linked Quarter | Year over Year | ||||||||||
Commercial and industrial | $999 | $974 | $994 | 3 | % | — | % | ||||||||
Commercial real estate | 2,475 | 2,478 | 2,382 | — | % | 4 | % | ||||||||
Construction and land | 179 | 167 | 114 | 8 | % | 58 | % | ||||||||
Residential | 2,837 | 2,775 | 2,567 | 2 | % | 11 | % | ||||||||
Home equity | 94 | 94 | 107 | — | % | (12 | )% | ||||||||
Other consumer | 163 | 180 | 187 | (9 | )% | (13 | )% | ||||||||
Total loans | $6,747 | $6,668 | $6,351 | 1 | % | 6 | % | ||||||||
Non-interest bearing deposits | 2,064 | 1,908 | 1,966 | 8 | % | 5 | % | ||||||||
Interest bearing deposits | 4,668 | 4,441 | 4,439 | 5 | % | 5 | % | ||||||||
Total deposits | $6,732 | $6,349 | $6,406 | 6 | % | 5 | % | ||||||||
Non-interest bearing deposits as a % of Total deposits | 31 | % | 30 | % | 31 | % |
Provision and Asset Quality | |||||||||||||||
($ in millions) | 3Q18 | 2Q18 | 1Q18 | 4Q17 | 3Q17 | ||||||||||
Provision/ (credit) for loan loss | $(0.9) | $0.5 | $(1.8) | $(0.9) | $(0.4) | ||||||||||
Total criticized loans | 134.7 | 114.4 | 124.1 | 154.8 | 146.0 | ||||||||||
Total nonaccrual loans | 12.1 | 15.7 | 16.4 | 14.3 | 13.6 | ||||||||||
Total loans 30-89 days past due and accruing | 11.6 | 5.0 | 20.4 | 25.0 | 5.3 | ||||||||||
Total net loans (charged-off)/ recovered | 1.0 | 0.1 | — | 0.8 | 0.3 | ||||||||||
Ratios: | |||||||||||||||
Allowance for loan losses as a % of Total loans | 1.09 | % | 1.09 | % | 1.10 | % | 1.15 | % | 1.17 | % | |||||
Nonaccrual loans as a % of Total loans | 0.18 | % | 0.23 | % | 0.25 | % | 0.22 | % | 0.21 | % |
Capital | |||||||||||||||
3Q18 | 2Q18 | 1Q18 | 4Q17 | 3Q17 | |||||||||||
Tangible common equity/ Total assets 7 | 7.8 | % | 7.5 | % | 7.4 | % | 7.3 | % | 7.4 | % | |||||
Tangible book value per share 7 | $7.67 | $7.62 | $7.17 | $7.12 | $7.16 | ||||||||||
Regulatory Capital Ratios: 8 | |||||||||||||||
Tier 1 common equity | 11.1 | % | 10.9 | % | 10.4 | % | 10.3 | % | 10.4 | % | |||||
Total risk-based capital | 14.1 | % | 13.8 | % | 14.2 | % | 14.1 | % | 14.3 | % | |||||
Tier 1 risk-based capital | 12.8 | % | 12.6 | % | 12.9 | % | 12.9 | % | 13.0 | % | |||||
Tier 1 leverage capital | 9.2 | % | 9.2 | % | 9.4 | % | 9.3 | % | 9.4 | % | |||||
7 See footnote 6 for a GAAP to non-GAAP reconciliation. 8 Current quarter information is presented based on estimated data. |
September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | |||||||||||||||
(In thousands, except share and per share data) | |||||||||||||||||||
Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 92,634 | $ | 364,539 | $ | 77,085 | $ | 120,541 | $ | 110,440 | |||||||||
Investment securities available-for-sale | 1,063,340 | 1,076,967 | 1,118,497 | 1,170,328 | 1,189,827 | ||||||||||||||
Investment securities held-to-maturity | 75,468 | 78,955 | 70,809 | 74,576 | 84,090 | ||||||||||||||
Stock in Federal Home Loan Bank and Federal Reserve Bank | 48,727 | 70,127 | 54,455 | 59,973 | 61,714 | ||||||||||||||
Loans held for sale | 3,344 | 4,622 | 3,918 | 4,697 | 1,957 | ||||||||||||||
Total loans | 6,720,420 | 6,767,123 | 6,602,327 | 6,505,028 | 6,413,201 | ||||||||||||||
Less: Allowance for loan losses | 73,500 | 73,464 | 72,898 | 74,742 | 74,873 | ||||||||||||||
Net loans | 6,646,920 | 6,693,659 | 6,529,429 | 6,430,286 | 6,338,328 | ||||||||||||||
Other real estate owned (“OREO”) | 108 | 108 | — | — | — | ||||||||||||||
Premises and equipment, net | 47,399 | 46,421 | 43,627 | 37,640 | 36,546 | ||||||||||||||
Goodwill (1) | 75,598 | 75,598 | 75,598 | 75,598 | 142,554 | ||||||||||||||
Intangible assets, net (1) | 13,834 | 14,584 | 15,334 | 16,083 | 22,447 | ||||||||||||||
Fees receivable | 10,445 | 10,405 | 10,640 | 11,154 | 12,560 | ||||||||||||||
Accrued interest receivable | 24,641 | 23,732 | 22,614 | 22,322 | 21,823 | ||||||||||||||
Deferred income taxes, net | 27,833 | 26,316 | 32,058 | 29,031 | 46,088 | ||||||||||||||
Other assets (1) | 245,549 | 230,170 | 264,295 | 259,515 | 201,024 | ||||||||||||||
Total assets | $ | 8,375,840 | $ | 8,716,203 | $ | 8,318,359 | $ | 8,311,744 | $ | 8,269,398 | |||||||||
Liabilities: | |||||||||||||||||||
Deposits | $ | 6,768,723 | $ | 6,620,179 | $ | 6,584,322 | $ | 6,510,246 | $ | 6,262,347 | |||||||||
Securities sold under agreements to repurchase | 39,453 | 58,824 | 85,257 | 32,169 | 59,903 | ||||||||||||||
Federal funds purchased | 120,000 | — | — | 30,000 | 70,000 | ||||||||||||||
Federal Home Loan Bank borrowings | 441,836 | 1,056,938 | 611,588 | 693,681 | 812,773 | ||||||||||||||
Junior subordinated debentures | 106,363 | 106,363 | 106,363 | 106,363 | 106,363 | ||||||||||||||
Other liabilities (1) | 149,770 | 129,175 | 125,004 | 135,880 | 127,069 | ||||||||||||||
Total liabilities | 7,626,145 | 7,971,479 | 7,512,534 | 7,508,339 | 7,438,455 | ||||||||||||||
Redeemable noncontrolling interests (“RNCI”) | 11,686 | 10,747 | 16,322 | 17,461 | 15,882 | ||||||||||||||
Shareholders’ equity: | |||||||||||||||||||
Preferred stock, $1.00 par value; authorized: 2,000,000 shares | — | — | 47,753 | 47,753 | 47,753 | ||||||||||||||
Common stock, $1.00 par value; authorized: 170,000,000 shares | 84,603 | 84,479 | 84,194 | 84,208 | 84,082 | ||||||||||||||
Additional paid-in capital | 614,157 | 613,918 | 612,526 | 607,929 | 606,802 | ||||||||||||||
Retained earnings | 64,618 | 56,912 | 61,518 | 49,526 | 76,455 | ||||||||||||||
Accumulated other comprehensive income/ (loss) | (27,578 | ) | (23,328 | ) | (21,313 | ) | (8,658 | ) | (4,823 | ) | |||||||||
Total Company’s shareholders’ equity | 735,800 | 731,981 | 784,678 | 780,758 | 810,269 | ||||||||||||||
Noncontrolling interests | 2,209 | 1,996 | 4,825 | 5,186 | 4,792 | ||||||||||||||
Total shareholders’ equity | 738,009 | 733,977 | 789,503 | 785,944 | 815,061 | ||||||||||||||
Total liabilities, redeemable noncontrolling interests and shareholders’ equity | $ | 8,375,840 | $ | 8,716,203 | $ | 8,318,359 | $ | 8,311,744 | $ | 8,269,398 |
Three Months Ended | |||||||||||||||||||
September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | |||||||||||||||
Interest and dividend income: | (In thousands, except share and per share data) | ||||||||||||||||||
Loans | $ | 68,254 | $ | 64,048 | $ | 60,929 | $ | 59,496 | $ | 58,096 | |||||||||
Taxable investment securities | 1,510 | 1,501 | 1,510 | 1,562 | 1,569 | ||||||||||||||
Non-taxable investment securities | 1,779 | 1,752 | 1,730 | 1,697 | 1,664 | ||||||||||||||
Mortgage-backed securities | 2,941 | 3,049 | 3,178 | 3,125 | 3,267 | ||||||||||||||
Short-term investments and other | 1,617 | 1,205 | 1,009 | 978 | 916 | ||||||||||||||
Total interest and dividend income | 76,101 | 71,555 | 68,356 | 66,858 | 65,512 | ||||||||||||||
Interest expense: | |||||||||||||||||||
Deposits | 11,487 | 8,365 | 6,524 | 6,048 | 5,356 | ||||||||||||||
Federal Home Loan Bank borrowings | 3,877 | 4,447 | 3,344 | 2,626 | 2,657 | ||||||||||||||
Junior subordinated debentures | 1,028 | 1,008 | 846 | 771 | 761 | ||||||||||||||
Repurchase agreements and other short-term borrowings | 68 | 190 | 259 | 141 | 111 | ||||||||||||||
Total interest expense | 16,460 | 14,010 | 10,973 | 9,586 | 8,885 | ||||||||||||||
Net interest income | 59,641 | 57,545 | 57,383 | 57,272 | 56,627 | ||||||||||||||
Provision/ (credit) for loan losses | (949 | ) | 453 | (1,795 | ) | (942 | ) | (432 | ) | ||||||||||
Net interest income after provision/ (credit) for loan losses | 60,590 | 57,092 | 59,178 | 58,214 | 57,059 | ||||||||||||||
Fees and other income: | |||||||||||||||||||
Investment management fees | 3,245 | 4,227 | 11,425 | 12,321 | 11,274 | ||||||||||||||
Wealth advisory fees | 13,995 | 13,693 | 13,512 | 13,496 | 13,279 | ||||||||||||||
Wealth management and trust fees | 11,510 | 11,169 | 12,151 | 11,756 | 11,619 | ||||||||||||||
Other banking fee income | 2,775 | 2,745 | 2,273 | 2,531 | 2,726 | ||||||||||||||
Gain on sale of loans, net | 67 | 63 | 74 | 85 | 169 | ||||||||||||||
Total core fees and income | 31,592 | 31,897 | 39,435 | 40,189 | 39,067 | ||||||||||||||
Gain/ (loss) on sale of investments, net | — | 7 | (24 | ) | (110 | ) | 230 | ||||||||||||
Gain/ (loss) on sale of affiliates or offices | — | — | — | (1,264 | ) | — | |||||||||||||
Other | 722 | 191 | 332 | 360 | 970 | ||||||||||||||
Total other income | 722 | 198 | 308 | (1,014 | ) | 1,200 | |||||||||||||
Total revenue (2) | 91,955 | 89,640 | 97,126 | 96,447 | 96,894 | ||||||||||||||
Operating expense: | |||||||||||||||||||
Salaries and employee benefits | 38,944 | 39,433 | 47,084 | 44,612 | 44,912 | ||||||||||||||
Occupancy and equipment | 8,164 | 8,229 | 7,748 | 7,753 | 7,944 | ||||||||||||||
Professional services | 2,877 | 2,872 | 3,177 | 4,035 | 3,308 | ||||||||||||||
Marketing and business development | 1,710 | 2,070 | 1,593 | 1,919 | 2,216 | ||||||||||||||
Information systems | 6,233 | 6,770 | 5,886 | 5,635 | 5,282 | ||||||||||||||
Amortization of intangibles | 750 | 749 | 750 | 1,323 | 1,426 | ||||||||||||||
Impairment of goodwill | — | — | — | 24,901 | — | ||||||||||||||
FDIC insurance | 674 | 708 | 744 | 677 | 647 | ||||||||||||||
Restructuring | 5,763 | — | — | — | — | ||||||||||||||
Other | 3,442 | 3,553 | 3,875 | 3,134 | 3,611 | ||||||||||||||
Total operating expense | 68,557 | 64,384 | 70,857 | 93,989 | 69,346 | ||||||||||||||
Income before income taxes | 24,347 | 24,803 | 28,064 | 3,400 | 27,980 | ||||||||||||||
Income tax expense | 5,461 | 17,399 | 6,026 | 21,391 | 8,289 | ||||||||||||||
Net income/ (loss) from continuing operations | 18,886 | 7,404 | 22,038 | (17,991 | ) | 19,691 | |||||||||||||
Net income from discontinued operations (3) | — | (2 | ) | 1,698 | 989 | 1,186 | |||||||||||||
Net income/ (loss) before attribution to noncontrolling interests | 18,886 | 7,402 | 23,736 | (17,002 | ) | 20,877 | |||||||||||||
Less: Net income attributable to noncontrolling interests | 924 | 968 | 1,050 | 1,278 | 1,074 | ||||||||||||||
Net income/ (loss) attributable to the Company | $ | 17,962 | $ | 6,434 | $ | 22,686 | $ | (18,280 | ) | $ | 19,803 |
Nine Months Ended | |||||||
September 30, 2018 | September 30, 2017 | ||||||
Interest and dividend income: | (In thousands, except share and per share data) | ||||||
Loans | $ | 193,231 | $ | 169,468 | |||
Taxable investment securities | 4,521 | 4,831 | |||||
Non-taxable investment securities | 5,261 | 4,925 | |||||
Mortgage-backed securities | 9,168 | 10,266 | |||||
Short-term investments and other | 3,831 | 2,347 | |||||
Total interest and dividend income | 216,012 | 191,837 | |||||
Interest expense: | |||||||
Deposits | 26,376 | 14,836 | |||||
Federal Home Loan Bank borrowings | 11,668 | 7,257 | |||||
Junior subordinated debentures | 2,882 | 2,148 | |||||
Repurchase agreements and other short-term borrowings | 517 | 182 | |||||
Total interest expense | 41,443 | 24,423 | |||||
Net interest income | 174,569 | 167,414 | |||||
Provision/ (credit) for loan losses | (2,291 | ) | (6,727 | ) | |||
Net interest income after provision/ (credit) for loan losses | 176,860 | 174,141 | |||||
Fees and other income: | |||||||
Investment management fees | 18,897 | 33,194 | |||||
Wealth advisory fees | 41,200 | 39,063 | |||||
Wealth management and trust fees | 34,830 | 33,606 | |||||
Other banking fee income | 7,793 | 6,384 | |||||
Gain on sale of loans, net | 204 | 366 | |||||
Total core fees and income | 102,924 | 112,613 | |||||
Gain/ (loss) on sale of investments, net | (17 | ) | 486 | ||||
Gain/ (loss) on OREO, net | — | (46 | ) | ||||
Other | 1,245 | 1,738 | |||||
Total other income | 1,228 | 2,178 | |||||
Total revenue (2) | 278,721 | 282,205 | |||||
Operating expense: | |||||||
Salaries and employee benefits | 125,461 | 133,889 | |||||
Occupancy and equipment | 24,141 | 22,412 | |||||
Professional services | 8,926 | 9,728 | |||||
Marketing and business development | 5,373 | 5,847 | |||||
Information systems | 18,889 | 16,161 | |||||
Amortization of intangibles | 2,249 | 4,278 | |||||
FDIC insurance | 2,126 | 2,292 | |||||
Restructuring | 5,763 | — | |||||
Other | 10,870 | 11,340 | |||||
Total operating expense | 203,798 | 205,947 | |||||
Income before income taxes | 77,214 | 82,985 | |||||
Income tax expense | 28,886 | 24,805 | |||||
Net income from continuing operations | 48,328 | 58,180 | |||||
Net income from discontinued operations (3) | 1,696 | 3,881 | |||||
Net income before attribution to noncontrolling interests | 50,024 | 62,061 | |||||
Less: Net income attributable to noncontrolling interests | 2,942 | 3,190 | |||||
Net income attributable to the Company | $ | 47,082 | $ | 58,871 |
Three Months Ended | |||||||||||||||||||
PER SHARE DATA: | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | ||||||||||||||
(In thousands, except share and per share data) | |||||||||||||||||||
Calculation of income for EPS: | |||||||||||||||||||
Net income/ (loss) attributable to the Company | $ | 17,962 | $ | 6,434 | $ | 22,686 | $ | (18,280 | ) | $ | 19,803 | ||||||||
Adjustments to Net income/ (loss) attributable to the Company to arrive at Net income/ (loss) attributable to common shareholders, treasury stock method (4) | (829 | ) | (3,524 | ) | (23 | ) | (1,998 | ) | (1,146 | ) | |||||||||
Net income/ (loss) attributable to the common shareholders, treasury stock method | $ | 17,133 | $ | 2,910 | $ | 22,663 | $ | (20,278 | ) | $ | 18,657 | ||||||||
End of period common shares outstanding | 84,602,519 | 84,478,858 | 84,194,267 | 84,208,538 | 84,082,250 | ||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||
Weighted average basic shares outstanding | 84,017,284 | 83,509,115 | 83,097,758 | 82,904,776 | 82,556,225 | ||||||||||||||
Weighted average diluted shares outstanding (5) | 85,498,568 | 85,413,575 | 85,271,650 | 82,904,776 | 84,888,311 | ||||||||||||||
Diluted total earnings/ (loss) per share | $ | 0.20 | $ | 0.03 | $ | 0.27 | $ | (0.24 | ) | $ | 0.22 |
Nine Months Ended | |||||||
PER SHARE DATA: | September 30, 2018 | September 30, 2017 | |||||
(In thousands, except share and per share data) | |||||||
Calculation of income for EPS: | |||||||
Net income attributable to the Company | $ | 47,082 | $ | 58,871 | |||
Adjustments to Net income attributable to the Company to arrive at Net income attributable to common shareholders, treasury stock method (4) | (4,376 | ) | (2,889 | ) | |||
Net income attributable to the common shareholders, treasury stock method | $ | 42,706 | $ | 55,982 | |||
Weighted average shares outstanding: | |||||||
Weighted average basic shares outstanding | 83,544,754 | 82,270,849 | |||||
Weighted average diluted shares outstanding (5) | 85,254,295 | 84,741,172 | |||||
Diluted total earnings per share | $ | 0.50 | $ | 0.66 | |||
(In thousands, except per share data) | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | ||||||||||||||
FINANCIAL DATA: | |||||||||||||||||||
Book value per common share | $ | 8.72 | $ | 8.69 | $ | 8.81 | $ | 8.77 | $ | 9.13 | |||||||||
Tangible book value per share (6) | $ | 7.67 | $ | 7.62 | $ | 7.17 | $ | 7.12 | $ | 7.16 | |||||||||
Market price per share | $ | 13.65 | $ | 15.90 | $ | 15.05 | $ | 15.45 | $ | 16.55 | |||||||||
ASSETS UNDER MANAGEMENT AND ADVISORY: | |||||||||||||||||||
Wealth Management and Trust | $ | 8,335,000 | $ | 7,789,000 | $ | 7,831,000 | $ | 7,865,000 | $ | 7,703,000 | |||||||||
Investment Management (7) | 2,125,000 | 2,031,000 | 1,920,000 | 2,004,000 | 1,902,000 | ||||||||||||||
Wealth Advisory | 11,977,000 | 11,566,000 | 11,446,000 | 11,350,000 | 10,992,000 | ||||||||||||||
Less: Inter-company relationship | (7,000 | ) | (7,000 | ) | (11,000 | ) | (11,000 | ) | (11,000 | ) | |||||||||
Total assets under management and advisory, excluding Anchor (7) | $ | 22,430,000 | $ | 21,379,000 | $ | 21,186,000 | $ | 21,208,000 | $ | 20,586,000 | |||||||||
Assets under management and advisory at Anchor through March 31, 2018 | — | — | 9,042,000 | 9,277,000 | 9,181,000 | ||||||||||||||
Total assets under management and advisory, including Anchor through March 31, 2018 | $ | 22,430,000 | $ | 21,379,000 | $ | 30,228,000 | $ | 30,485,000 | $ | 29,767,000 | |||||||||
FINANCIAL RATIOS: | |||||||||||||||||||
Total equity/ Total assets | 8.81 | % | 8.42 | % | 9.49 | % | 9.46 | % | 9.86 | % | |||||||||
Tangible common equity/ Tangible assets (6) | 7.83 | % | 7.46 | % | 7.38 | % | 7.33 | % | 7.43 | % | |||||||||
Tier 1 common equity/ Risk weighted assets (6) | 11.14 | % | 10.90 | % | 10.39 | % | 10.32 | % | 10.42 | % | |||||||||
Allowance for loan losses/ Total loans | 1.09 | % | 1.09 | % | 1.10 | % | 1.15 | % | 1.17 | % | |||||||||
Allowance for loan losses/ Nonaccrual loans | 608 | % | 469 | % | 445 | % | 523 | % | 550 | % | |||||||||
Return on average assets - three months ended (annualized) | 0.84 | % | 0.31 | % | 1.11 | % | (0.88 | )% | 0.96 | % | |||||||||
Return on average common equity - three months ended (annualized) (8) | 9.67 | % | 3.03 | % | 12.02 | % | (9.92 | )% | 9.87 | % | |||||||||
Return on average tangible common equity - three months ended (annualized) (8) | 11.37 | % | 3.90 | % | 15.20 | % | (11.94 | )% | 13.24 | % | |||||||||
Efficiency ratio - three months ended (9) | 67.04 | % | 70.29 | % | 71.46 | % | 68.23 | % | 68.06 | % | |||||||||
DEPOSIT DETAIL: | |||||||||||||||||||
Demand deposits (noninterest-bearing) | $ | 2,001,275 | $ | 2,089,373 | $ | 1,932,732 | $ | 2,025,690 | $ | 1,850,833 | |||||||||
NOW | 568,148 | 635,841 | 689,526 | 645,361 | 636,013 | ||||||||||||||
Savings | 72,967 | 73,675 | 73,580 | 70,935 | 74,333 | ||||||||||||||
Money market | 3,363,062 | 3,128,211 | 3,177,692 | 3,121,811 | 3,009,779 | ||||||||||||||
Certificates of deposit | 763,271 | 693,079 | 710,792 | 646,449 | 691,389 | ||||||||||||||
Total deposits | $ | 6,768,723 | $ | 6,620,179 | $ | 6,584,322 | $ | 6,510,246 | $ | 6,262,347 |
Average Balance | Interest Income/Expense | Average Yield/Rate | ||||||||||||||||||||||||
(In thousands) | Three Months Ended | Three Months Ended | Three Months Ended | |||||||||||||||||||||||
AVERAGE BALANCE SHEET: | 09/30/18 | 06/30/18 | 09/30/17 | 09/30/18 | 06/30/18 | 09/30/17 | 09/30/18 | 06/30/18 | 09/30/17 | |||||||||||||||||
AVERAGE ASSETS | ||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||
Cash and investments: | ||||||||||||||||||||||||||
Taxable investment securities | $ | 324,583 | $ | 326,482 | $ | 353,374 | $ | 1,510 | $ | 1,501 | $ | 1,569 | 1.86 | % | 1.84 | % | 1.77 | % | ||||||||
Non-taxable investment securities (10) | 297,710 | 297,852 | 295,727 | 2,256 | 2,217 | 2,559 | 3.03 | % | 2.98 | % | 3.46 | % | ||||||||||||||
Mortgage-backed securities | 552,820 | 570,845 | 631,052 | 2,941 | 3,049 | 3,267 | 2.13 | % | 2.14 | % | 2.07 | % | ||||||||||||||
Short-term investments and other | 204,814 | 157,878 | 146,285 | 1,617 | 1,205 | 916 | 3.11 | % | 3.03 | % | 2.47 | % | ||||||||||||||
Total cash and investments | 1,379,927 | 1,353,057 | 1,426,438 | 8,324 | 7,972 | 8,311 | 2.41 | % | 2.35 | % | 2.33 | % | ||||||||||||||
Loans (11): | ||||||||||||||||||||||||||
Commercial and industrial (10) | 998,817 | 974,443 | 994,388 | 9,940 | 9,439 | 10,001 | 3.89 | % | 3.83 | % | 3.94 | % | ||||||||||||||
Commercial real estate (10) | 2,475,143 | 2,477,634 | 2,381,583 | 29,547 | 27,550 | 25,579 | 4.67 | % | 4.40 | % | 4.20 | % | ||||||||||||||
Construction and land (10) | 179,248 | 166,736 | 113,562 | 2,196 | 2,040 | 1,415 | 4.80 | % | 4.84 | % | 4.88 | % | ||||||||||||||
Residential | 2,836,593 | 2,775,239 | 2,567,044 | 23,907 | 22,590 | 20,423 | 3.37 | % | 3.26 | % | 3.18 | % | ||||||||||||||
Home equity | 94,050 | 94,445 | 106,744 | 1,089 | 1,041 | 1,128 | 4.59 | % | 4.42 | % | 4.19 | % | ||||||||||||||
Other consumer | 163,224 | 179,684 | 187,184 | 1,689 | 1,818 | 1,554 | 4.11 | % | 4.06 | % | 3.29 | % | ||||||||||||||
Total loans | 6,747,075 | 6,668,181 | 6,350,505 | 68,368 | 64,478 | 60,100 | 4.00 | % | 3.84 | % | 3.73 | % | ||||||||||||||
Total earning assets | 8,127,002 | 8,021,238 | 7,776,943 | 76,692 | 72,450 | 68,411 | 3.73 | % | 3.59 | % | 3.48 | % | ||||||||||||||
LESS: Allowance for loan losses | 73,861 | 72,998 | 75,166 | |||||||||||||||||||||||
Cash and due from banks (non-interest bearing) | 46,056 | 45,337 | 42,031 | |||||||||||||||||||||||
Other assets | 392,757 | 396,744 | 455,820 | |||||||||||||||||||||||
TOTAL AVERAGE ASSETS | $ | 8,491,954 | $ | 8,390,321 | $ | 8,199,628 | ||||||||||||||||||||
AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||
Interest-bearing deposits (12): | ||||||||||||||||||||||||||
Savings and NOW | $ | 693,419 | $ | 719,159 | $ | 702,182 | $ | 301 | $ | 304 | $ | 205 | 0.17 | % | 0.17 | % | 0.12 | % | ||||||||
Money market | 3,244,628 | 3,033,306 | 3,065,059 | 8,110 | 5,543 | 3,436 | 0.99 | % | 0.73 | % | 0.44 | % | ||||||||||||||
Certificates of deposit | 730,117 | 688,567 | 671,992 | 3,076 | 2,518 | 1,715 | 1.67 | % | 1.47 | % | 1.01 | % | ||||||||||||||
Total interest-bearing deposits (12) | 4,668,164 | 4,441,032 | 4,439,233 | 11,487 | 8,365 | 5,356 | 0.98 | % | 0.76 | % | 0.48 | % | ||||||||||||||
Junior subordinated debentures | 106,363 | 106,363 | 106,363 | 1,028 | 1,008 | 761 | 3.78 | % | 3.75 | % | 2.80 | % | ||||||||||||||
FHLB borrowings and other | 768,015 | 1,022,636 | 736,035 | 3,945 | 4,637 | 2,768 | 2.01 | % | 1.79 | % | 1.47 | % | ||||||||||||||
Total interest-bearing liabilities (12) | 5,542,542 | 5,570,031 | 5,281,631 | 16,460 | 14,010 | 8,885 | 1.17 | % | 1.00 | % | 0.66 | % | ||||||||||||||
Non-interest bearing demand deposits (12) | 2,063,642 | 1,908,037 | 1,966,479 | |||||||||||||||||||||||
Payables and other liabilities | 135,508 | 122,175 | 121,288 | |||||||||||||||||||||||
Total average liabilities | 7,741,692 | 7,600,243 | 7,369,398 | |||||||||||||||||||||||
Redeemable noncontrolling interests | 13,074 | 14,129 | 21,634 | |||||||||||||||||||||||
Average shareholders’ equity | 737,188 | 775,949 | 808,596 | |||||||||||||||||||||||
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | $ | 8,491,954 | $ | 8,390,321 | $ | 8,199,628 | ||||||||||||||||||||
Net interest income - on a fully taxable equivalent basis (FTE) | $ | 60,232 | $ | 58,440 | $ | 59,526 | ||||||||||||||||||||
LESS: FTE adjustment (10) | 591 | 895 | 2,899 | |||||||||||||||||||||||
Net interest income (GAAP basis) | $ | 59,641 | $ | 57,545 | $ | 56,627 | ||||||||||||||||||||
Interest rate spread | 2.56 | % | 2.59 | % | 2.82 | % | ||||||||||||||||||||
Bank only net interest margin | 2.98 | % | 2.95 | % | 3.07 | % | ||||||||||||||||||||
Net interest margin | 2.93 | % | 2.89 | % | 3.02 | % | ||||||||||||||||||||
Average total deposits (12) | 6,731,806 | 6,349,069 | 6,405,712 | 0.68 | % | 0.53 | % | 0.33 | % | |||||||||||||||||
Average total deposits and borrowings (12) | 7,606,184 | 7,478,068 | 7,248,110 | 0.86 | % | 0.75 | % | 0.48 | % |
Average Balance | Interest Income/Expense | Average Yield/Rate | ||||||||||||||||
(In thousands) | Nine Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||||
AVERAGE BALANCE SHEET: | 09/30/18 | 09/30/17 | 09/30/18 | 09/30/17 | 09/30/18 | 09/30/17 | ||||||||||||
AVERAGE ASSETS | ||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||
Cash and investments: | ||||||||||||||||||
Taxable investment securities | $ | 328,054 | $ | 369,929 | $ | 4,521 | $ | 4,831 | 1.84 | % | 1.74 | % | ||||||
Non-taxable investment securities (10) | 297,509 | 295,195 | 6,663 | 7,576 | 2.99 | % | 3.42 | % | ||||||||||
Mortgage-backed securities | 570,578 | 652,159 | 9,168 | 10,266 | 2.14 | % | 2.10 | % | ||||||||||
Short-term investments and other | 174,736 | 169,114 | 3,831 | 2,347 | 2.91 | % | 1.55 | % | ||||||||||
Total cash and investments | 1,370,877 | 1,486,397 | 24,183 | 25,020 | 2.35 | % | 2.21 | % | ||||||||||
Loans (11): | ||||||||||||||||||
Commercial and industrial (10) | 969,063 | 988,449 | 28,135 | 29,077 | 3.83 | % | 3.88 | % | ||||||||||
Commercial real estate (10) | 2,464,788 | 2,354,996 | 83,438 | 75,556 | 4.46 | % | 4.23 | % | ||||||||||
Construction and land (10) | 171,825 | 115,629 | 6,201 | 4,036 | 4.76 | % | 4.60 | % | ||||||||||
Residential | 2,771,875 | 2,494,151 | 68,263 | 58,988 | 3.28 | % | 3.15 | % | ||||||||||
Home equity | 95,217 | 111,423 | 3,172 | 3,302 | 4.45 | % | 3.96 | % | ||||||||||
Other consumer | 176,086 | 191,550 | 5,080 | 4,500 | 3.86 | % | 3.14 | % | ||||||||||
Total loans | 6,648,854 | 6,256,198 | 194,289 | 175,459 | 3.87 | % | 3.71 | % | ||||||||||
Total earning assets | 8,019,731 | 7,742,595 | 218,472 | 200,479 | 3.61 | % | 3.43 | % | ||||||||||
LESS: Allowance for loan losses | 73,894 | 77,957 | ||||||||||||||||
Cash and due from banks (non-interest bearing) | 47,859 | 42,006 | ||||||||||||||||
Other assets | 404,375 | 436,373 | ||||||||||||||||
TOTAL AVERAGE ASSETS | $ | 8,398,071 | $ | 8,143,017 | ||||||||||||||
AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||
Interest-bearing deposits (12): | ||||||||||||||||||
Savings and NOW | $ | 709,751 | $ | 688,885 | $ | 820 | $ | 521 | 0.15 | % | 0.10 | % | ||||||
Money market | 3,139,107 | 3,149,545 | 17,967 | 9,801 | 0.77 | % | 0.42 | % | ||||||||||
Certificates of deposit | 691,670 | 642,820 | 7,589 | 4,514 | 1.47 | % | 0.94 | % | ||||||||||
Total interest-bearing deposits (12) | 4,540,528 | 4,481,250 | 26,376 | 14,836 | 0.78 | % | 0.44 | % | ||||||||||
Junior subordinated debentures | 106,363 | 106,363 | 2,882 | 2,148 | 3.62 | % | 2.66 | % | ||||||||||
FHLB borrowings and other | 889,178 | 722,087 | 12,185 | 7,439 | 1.81 | % | 1.36 | % | ||||||||||
Total interest-bearing liabilities (12) | 5,536,069 | 5,309,700 | 41,443 | 24,423 | 1.00 | % | 0.61 | % | ||||||||||
Non-interest bearing demand deposits (12) | 1,948,573 | 1,903,709 | ||||||||||||||||
Payables and other liabilities | 130,410 | 115,622 | ||||||||||||||||
Total average liabilities | 7,615,052 | 7,329,031 | ||||||||||||||||
Redeemable noncontrolling interests | 16,294 | 21,341 | ||||||||||||||||
Average shareholders’ equity | 766,725 | 792,645 | ||||||||||||||||
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | $ | 8,398,071 | $ | 8,143,017 | ||||||||||||||
Net interest income - on a fully taxable equivalent basis (FTE) | $ | 177,029 | $ | 176,056 | ||||||||||||||
LESS: FTE adjustment (10) | 2,460 | 8,642 | ||||||||||||||||
Net interest income (GAAP basis) | $ | 174,569 | $ | 167,414 | ||||||||||||||
Interest rate spread | 2.61 | % | 2.82 | % | ||||||||||||||
Bank only net interest margin | 2.97 | % | 3.06 | % | ||||||||||||||
Net interest margin | 2.92 | % | 3.01 | % | ||||||||||||||
Average total deposits (12) | 6,489,101 | 6,384,959 | 0.54 | % | 0.31 | % | ||||||||||||
Average total deposits and borrowings (12) | 7,484,642 | 7,213,409 | 0.74 | % | 0.45 | % |
(In thousands) | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | ||||||||||||||
LOAN DATA (13): | |||||||||||||||||||
Other commercial and industrial loans: | |||||||||||||||||||
New England | $ | 460,409 | $ | 481,081 | $ | 444,419 | $ | 438,322 | $ | 503,322 | |||||||||
San Francisco Bay Area | 41,256 | 35,220 | 23,491 | 23,311 | 50,686 | ||||||||||||||
Southern California | 81,549 | 66,892 | 63,183 | 59,359 | 64,248 | ||||||||||||||
Total other commercial and industrial loans | $ | 583,214 | $ | 583,193 | $ | 531,093 | $ | 520,992 | $ | 618,256 | |||||||||
Commercial tax-exempt loans: | |||||||||||||||||||
New England | $ | 330,753 | $ | 332,572 | $ | 313,955 | $ | 305,792 | $ | 320,172 | |||||||||
San Francisco Bay Area | 96,775 | 94,959 | 95,380 | 101,340 | 99,540 | ||||||||||||||
Southern California | 11,279 | 11,351 | 11,422 | 11,566 | 11,638 | ||||||||||||||
Total commercial tax-exempt loans | $ | 438,807 | $ | 438,882 | $ | 420,757 | $ | 418,698 | $ | 431,350 | |||||||||
Total commercial and industrial loans | $ | 1,022,021 | $ | 1,022,075 | $ | 951,850 | $ | 939,690 | $ | 1,049,606 | |||||||||
Commercial real estate loans: | |||||||||||||||||||
New England | $ | 1,043,494 | $ | 1,069,942 | $ | 1,046,178 | $ | 1,002,092 | $ | 988,788 | |||||||||
San Francisco Bay Area | 724,243 | 739,769 | 721,871 | 725,454 | 698,148 | ||||||||||||||
Southern California | 631,343 | 694,810 | 696,954 | 712,674 | 676,223 | ||||||||||||||
Total commercial real estate loans | $ | 2,399,080 | $ | 2,504,521 | $ | 2,465,003 | $ | 2,440,220 | $ | 2,363,159 | |||||||||
Construction and land loans: | |||||||||||||||||||
New England | $ | 114,411 | $ | 88,068 | $ | 79,563 | $ | 86,874 | $ | 61,635 | |||||||||
San Francisco Bay Area | 40,755 | 37,783 | 34,050 | 27,891 | 20,893 | ||||||||||||||
Southern California | 42,358 | 46,173 | 51,627 | 50,225 | 35,763 | ||||||||||||||
Total construction and land loans | $ | 197,524 | $ | 172,024 | $ | 165,240 | $ | 164,990 | $ | 118,291 | |||||||||
Residential loans: | |||||||||||||||||||
New England | $ | 1,650,989 | $ | 1,643,039 | $ | 1,619,856 | $ | 1,598,072 | $ | 1,558,587 | |||||||||
San Francisco Bay Area | 554,502 | 533,394 | 511,903 | 512,189 | 510,956 | ||||||||||||||
Southern California | 657,388 | 631,773 | 605,610 | 572,272 | 531,245 | ||||||||||||||
Total residential loans | $ | 2,862,879 | $ | 2,808,206 | $ | 2,737,369 | $ | 2,682,533 | $ | 2,600,788 | |||||||||
Home equity loans: | |||||||||||||||||||
New England | $ | 61,291 | $ | 61,125 | $ | 65,434 | $ | 67,435 | $ | 72,149 | |||||||||
San Francisco Bay Area | 19,769 | 17,366 | 19,314 | 22,462 | 26,052 | ||||||||||||||
Southern California | 12,330 | 13,310 | 9,583 | 10,061 | 9,026 | ||||||||||||||
Total home equity loans | $ | 93,390 | $ | 91,801 | $ | 94,331 | $ | 99,958 | $ | 107,227 | |||||||||
Other consumer loans: | |||||||||||||||||||
New England | $ | 121,685 | $ | 145,726 | $ | 166,413 | $ | 149,022 | $ | 150,309 | |||||||||
San Francisco Bay Area | 14,228 | 14,659 | 13,569 | 14,707 | 15,302 | ||||||||||||||
Southern California | 9,613 | 8,111 | 8,552 | 13,908 | 8,519 | ||||||||||||||
Total other consumer loans | $ | 145,526 | $ | 168,496 | $ | 188,534 | $ | 177,637 | $ | 174,130 | |||||||||
Total loans: | |||||||||||||||||||
New England | $ | 3,783,032 | $ | 3,821,553 | $ | 3,735,818 | $ | 3,647,609 | $ | 3,654,962 | |||||||||
San Francisco Bay Area | 1,491,528 | 1,473,150 | 1,419,578 | 1,427,354 | 1,421,577 | ||||||||||||||
Southern California | 1,445,860 | 1,472,420 | 1,446,931 | 1,430,065 | 1,336,662 | ||||||||||||||
Total loans | $ | 6,720,420 | $ | 6,767,123 | $ | 6,602,327 | $ | 6,505,028 | $ | 6,413,201 |
(In thousands) | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | ||||||||||||||
CREDIT QUALITY (13): | |||||||||||||||||||
Special mention loans: | |||||||||||||||||||
New England | $ | 20,382 | $ | 18,515 | $ | 33,282 | $ | 45,640 | $ | 37,569 | |||||||||
San Francisco Bay Area | 18,359 | 19,255 | 14,117 | 23,400 | 23,898 | ||||||||||||||
Southern California | 28,665 | 15,678 | 15,689 | 18,134 | 17,207 | ||||||||||||||
Total special mention loans | $ | 67,406 | $ | 53,448 | $ | 63,088 | $ | 87,174 | $ | 78,674 | |||||||||
Accruing substandard loans (14): | |||||||||||||||||||
New England | $ | 10,083 | $ | 11,493 | $ | 8,767 | $ | 10,911 | $ | 8,196 | |||||||||
San Francisco Bay Area | 24,252 | 12,766 | 14,970 | 11,615 | 11,622 | ||||||||||||||
Southern California | 21,045 | 21,194 | 21,436 | 30,826 | 33,923 | ||||||||||||||
Total accruing substandard loans | $ | 55,380 | $ | 45,453 | $ | 45,173 | $ | 53,352 | $ | 53,741 | |||||||||
Nonaccruing loans: | |||||||||||||||||||
New England | $ | 5,131 | $ | 7,282 | $ | 8,056 | $ | 6,061 | $ | 7,380 | |||||||||
San Francisco Bay Area | 1,169 | 1,319 | 1,442 | 1,473 | 1,494 | ||||||||||||||
Southern California | 5,797 | 7,050 | 6,882 | 6,761 | 4,749 | ||||||||||||||
Total nonaccruing loans | $ | 12,097 | $ | 15,651 | $ | 16,380 | $ | 14,295 | $ | 13,623 | |||||||||
Loans 30-89 days past due and accruing: | |||||||||||||||||||
New England | $ | 9,193 | $ | 4,653 | $ | 10,571 | $ | 19,725 | $ | 4,664 | |||||||||
San Francisco Bay Area | 1,651 | — | 2,251 | 1,911 | 430 | ||||||||||||||
Southern California | 763 | 324 | 7,554 | 3,412 | 198 | ||||||||||||||
Total loans 30-89 days past due and accruing | $ | 11,607 | $ | 4,977 | $ | 20,376 | $ | 25,048 | $ | 5,292 | |||||||||
Loans (charged-off)/ recovered, net for the three months ended: | |||||||||||||||||||
New England | $ | 232 | $ | (73 | ) | $ | (285 | ) | $ | 1,020 | $ | 73 | |||||||
San Francisco Bay Area | 706 | 91 | 67 | 64 | 206 | ||||||||||||||
Southern California | 47 | 95 | 169 | (273 | ) | 17 | |||||||||||||
Total net loans (charged-off)/ recovered | $ | 985 | $ | 113 | $ | (49 | ) | $ | 811 | $ | 296 | ||||||||
Loans (charged-off)/ recovered, net for the nine months ended: | |||||||||||||||||||
New England | $ | (126 | ) | $ | 819 | ||||||||||||||
San Francisco Bay Area | 864 | 3,097 | |||||||||||||||||
Southern California | 311 | (393 | ) | ||||||||||||||||
Total Net Loans (Charged-off)/ Recovered | $ | 1,049 | $ | 3,523 |
(1) | On December 20, 2017, Boston Private Financial Holdings, Inc. (the “Company”) announced an agreement, effective December 19, 2017, to sell all of its current equity interest in Anchor Capital Advisors LLC, an indirect, majority-owned subsidiary of the Company (“Anchor”), to the management team of Anchor for an upfront cash payment and a non-voting, revenue share participation interest in Anchor. On April 13, 2018, the Company completed the sale of its ownership interest in Anchor. Anchor’s results remain consolidated in the Company’s results during current and prior periods through the closing date. For presentation purposes, Anchor’s AUM are excluded from current and prior period AUM amounts, but are included in the calculation of Core Fees and Income. The Company classified the assets and liabilities of Anchor as held for sale at March 31, 2018 and December 31, 2017, which are included with Other assets and Other liabilities, respectively, on the Company’s consolidated balance sheet. For regulatory purposes, the goodwill and intangible assets of Anchor will be included in consolidated calculations. See footnotes 6 and 8, below. |
(2) | Total revenue is the sum of Net interest income, Total core fees and income, and Total other income. |
(3) | Net income from discontinued operations consists of contingent payments net of expenses related to our divested affiliate, Westfield Capital Management Company, LLC. The Company received its final contingent payment in the first quarter of 2018 related to this affiliate. |
(4) | Adjustments to Net income attributable to the Company to arrive at Net income attributable to the common shareholders, as presented in these tables, include decrease/ (increase) in Noncontrolling interests redemption value and dividends paid on preferred stock, including deemed dividends on redemption of the 6.95% Non-Cumulative Perpetual Preferred Stock, Series D (“the Series D preferred stock”). On June 15, 2018, the Company redeemed all $50 million of the outstanding Series D preferred stock. |
(5) | When the Company has positive Net income from continuing operations attributable to the common shareholders, the Company adds additional shares to basic Weighted average shares outstanding to arrive at Weighted average diluted shares outstanding for the Diluted earnings/ (loss) per share calculation. These additional shares 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 earnings per share calculation. The potential dilutive shares relate to: unexercised stock options, unvested restricted stock, and unexercised stock warrants. See Part II. Item 8. “Financial Statements and Supplementary Data - Note 16: Earnings Per Share” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 for additional information. |
(6) | The Company uses certain non-GAAP financial measures, such as: Tangible book value per share and the Tangible common equity (“TCE”) to Tangible assets (“TA”) ratio to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. |
(In thousands, except share and per share data) | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | ||||||||||||||
Total balance sheet assets | $ | 8,375,840 | $ | 8,716,203 | $ | 8,318,359 | $ | 8,311,744 | $ | 8,269,398 | |||||||||
LESS: Goodwill and intangible assets, net * | (89,432 | ) | (90,182 | ) | (138,026 | ) | (138,775 | ) | (165,001 | ) | |||||||||
Tangible assets (non-GAAP) | $ | 8,286,408 | $ | 8,626,021 | $ | 8,180,333 | $ | 8,172,969 | $ | 8,104,397 | |||||||||
Total shareholders’ equity | $ | 738,009 | $ | 733,977 | $ | 789,503 | $ | 785,944 | $ | 815,061 | |||||||||
LESS: Series D preferred stock (non-convertible) | — | — | (47,753 | ) | (47,753 | ) | (47,753 | ) | |||||||||||
LESS: Goodwill and intangible assets, net * | (89,432 | ) | (90,182 | ) | (138,026 | ) | (138,775 | ) | (165,001 | ) | |||||||||
Total adjusting items | (89,432 | ) | (90,182 | ) | (185,779 | ) | (186,528 | ) | (212,754 | ) | |||||||||
Tangible common equity (non-GAAP) | $ | 648,577 | $ | 643,795 | $ | 603,724 | $ | 599,416 | $ | 602,307 | |||||||||
Total equity/ Total assets | 8.81 | % | 8.42 | % | 9.49 | % | 9.46 | % | 9.86 | % | |||||||||
Tangible common equity/ Tangible assets (non-GAAP) | 7.83 | % | 7.46 | % | 7.38 | % | 7.33 | % | 7.43 | % | |||||||||
Total risk weighted assets ** | $ | 6,057,099 | $ | 6,104,586 | $ | 5,974,866 | $ | 5,892,286 | $ | 5,831,558 | |||||||||
Tier 1 common equity ** | $ | 674,641 | $ | 665,628 | $ | 621,084 | $ | 607,800 | $ | 607,822 | |||||||||
Tier 1 common equity/ Risk weighted assets ** | 11.14 | % | 10.90 | % | 10.39 | % | 10.32 | % | 10.42 | % | |||||||||
End of period shares outstanding | 84,602,519 | 84,478,858 | 84,194,267 | 84,208,538 | 84,082,250 | ||||||||||||||
Book value per common share | $ | 8.72 | $ | 8.69 | $ | 8.81 | $ | 8.77 | $ | 9.13 | |||||||||
Tangible book value per share (non-GAAP) | $ | 7.67 | $ | 7.62 | $ | 7.17 | $ | 7.12 | $ | 7.16 |
(7) | Assets under management and advisory have been reduced to exclude those assets managed or advised by Anchor for periods when Anchor was owned by the Company. |
(8) | The Company uses certain non-GAAP financial measures, such as: Return on average common equity and Return on average tangible common equity to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. |
Three Months Ended | |||||||||||||||||||
(In thousands) | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | ||||||||||||||
Total average shareholders’ equity | $ | 737,188 | $ | 775,949 | $ | 784,025 | $ | 813,518 | $ | 808,596 | |||||||||
LESS: Average Series D preferred stock (non-convertible) | — | (39,881 | ) | (47,753 | ) | (47,753 | ) | (47,753 | ) | ||||||||||
Average common equity (non-GAAP) | 737,188 | 736,068 | 736,272 | 765,765 | 760,843 | ||||||||||||||
LESS: Average goodwill and intangible assets, net * | (89,830 | ) | (102,533 | ) | (138,451 | ) | (157,978 | ) | (165,766 | ) | |||||||||
Average tangible common equity (non-GAAP) | $ | 647,358 | $ | 633,535 | $ | 597,821 | $ | 607,787 | $ | 595,077 | |||||||||
Net income/ (loss) attributable to the Company | $ | 17,962 | $ | 6,434 | $ | 22,686 | $ | (18,280 | ) | $ | 19,803 | ||||||||
LESS: Dividends on Series D preferred stock | — | (869 | ) | (869 | ) | (869 | ) | (868 | ) | ||||||||||
Common net income/ (loss) (non-GAAP) | 17,962 | 5,565 | 21,817 | (19,149 | ) | 18,935 | |||||||||||||
ADD: Amortization of intangibles, net of tax (35% in 2017, 21% in 2018) | 593 | 592 | 593 | 860 | 927 | ||||||||||||||
Tangible common net income/ (loss) (non-GAAP) | $ | 18,555 | $ | 6,157 | $ | 22,410 | $ | (18,289 | ) | $ | 19,862 | ||||||||
Return on average equity - (annualized) | 9.67 | % | 3.33 | % | 11.73 | % | (8.91 | )% | 9.72 | % | |||||||||
Return on average common equity - (annualized) (non-GAAP) | 9.67 | % | 3.03 | % | 12.02 | % | (9.92 | )% | 9.87 | % | |||||||||
Return on average tangible common equity - (annualized) (non-GAAP) | 11.37 | % | 3.90 | % | 15.20 | % | (11.94 | )% | 13.24 | % |
Nine Months Ended | |||||||
(In thousands) | September 30, 2018 | September 30, 2017 | |||||
Total average shareholders’ equity | $ | 766,725 | $ | 792,645 | |||
LESS: Average Series D preferred stock (non-convertible) | (29,037 | ) | (47,753 | ) | |||
Average common equity (non-GAAP) | 737,688 | 744,892 | |||||
LESS: Average goodwill and intangible assets, net * | (109,324 | ) | (167,209 | ) | |||
Average tangible common equity (non-GAAP) | $ | 628,364 | $ | 577,683 | |||
Net income/ (loss) attributable to the Company | $ | 47,082 | $ | 58,871 | |||
LESS: Dividends on Series D preferred stock | (1,738 | ) | (2,606 | ) | |||
Common net income/ (loss) (non-GAAP) | 45,344 | 56,265 | |||||
ADD: Amortization of intangibles, net of tax (35% in 2017, 21% in 2018) | 1,777 | 2,781 | |||||
Tangible common net income/ (loss) (non-GAAP) | $ | 47,121 | $ | 59,046 | |||
Return on average equity - (annualized) | 8.21 | % | 9.93 | % | |||
Return on average common equity - (annualized) (non-GAAP) | 8.22 | % | 10.10 | % | |||
Return on average tangible common equity - (annualized) (non-GAAP) | 10.03 | % | 13.67 | % | |||
(9) | The Company uses certain non-GAAP financial measures, such as: Pre-tax, pre-provision income, Total operating expenses excluding amortization of intangibles, goodwill impairment, and restructuring expense, if any, and the Efficiency ratio to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. |
Three Months Ended | |||||||||||||||||||
(In thousands) | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | ||||||||||||||
Income before income taxes (GAAP) | $ | 24,347 | $ | 24,803 | $ | 28,064 | $ | 3,400 | $ | 27,980 | |||||||||
ADD BACK: Provision/ (credit) for loan losses | (949 | ) | 453 | (1,795 | ) | (942 | ) | (432 | ) | ||||||||||
Pre-tax, pre-provision income (non-GAAP) | $ | 23,398 | $ | 25,256 | $ | 26,269 | $ | 2,458 | $ | 27,548 | |||||||||
Total operating expense (GAAP) | $ | 68,557 | $ | 64,384 | $ | 70,857 | $ | 93,989 | $ | 69,346 | |||||||||
Less: Amortization of intangibles | 750 | 749 | 750 | 1,323 | 1,426 | ||||||||||||||
Less: Goodwill impairment | — | — | — | 24,901 | — | ||||||||||||||
Less: Restructuring | 5,763 | — | — | — | — | ||||||||||||||
Total operating expense (excluding amortization of intangibles, restructuring, and goodwill impairment) (non-GAAP) | $ | 62,044 | $ | 63,635 | $ | 70,107 | $ | 67,765 | $ | 67,920 | |||||||||
Net interest income | $ | 59,641 | $ | 57,545 | $ | 57,383 | $ | 57,272 | $ | 56,627 | |||||||||
Total core fees and income | 31,592 | 31,897 | 39,435 | 40,189 | 39,067 | ||||||||||||||
Total other income | 722 | 198 | 308 | (1,014 | ) | 1,200 | |||||||||||||
FTE income | 591 | 895 | 974 | 2,873 | 2,899 | ||||||||||||||
Total revenue (FTE basis) | $ | 92,546 | $ | 90,535 | $ | 98,100 | $ | 99,320 | $ | 99,793 | |||||||||
Efficiency ratio (GAAP) | 74.55 | % | 71.83 | % | 72.95 | % | 97.45 | % | 71.57 | % | |||||||||
Efficiency ratio, FTE Basis excluding amortization of intangibles, restructuring, and goodwill impairment (non-GAAP) | 67.04 | % | 70.29 | % | 71.46 | % | 68.23 | % | 68.06 | % |
Nine Months Ended | |||||||
(In thousands) | September 30, 2018 | September 30, 2017 | |||||
Income before income taxes (GAAP) | $ | 77,214 | $ | 82,985 | |||
ADD BACK: Provision/ (credit) for loan losses | (2,291 | ) | (6,727 | ) | |||
Pre-tax, pre-provision income (non-GAAP) | $ | 74,923 | $ | 76,258 | |||
Total operating expense (GAAP) | $ | 203,798 | $ | 205,947 | |||
Less: Amortization of intangibles | 2,249 | 4,278 | |||||
Less: Restructuring | 5,763 | — | |||||
Total operating expense (excluding amortization of intangibles, restructuring, and goodwill impairment) (non-GAAP) | $ | 195,786 | $ | 201,669 | |||
Net interest income | $ | 174,569 | $ | 167,414 | |||
Total core fees and income | 102,924 | 112,613 | |||||
Total other income | 1,228 | 2,178 | |||||
FTE income | 2,460 | 8,642 | |||||
Total revenue (FTE basis) | $ | 281,181 | $ | 290,847 | |||
Efficiency ratio (GAAP) | 73.12 | % | 72.98 | % | |||
Efficiency ratio, FTE Basis excluding amortization of intangibles, restructuring, and goodwill impairment (non-GAAP) | 69.63 | % | 69.34 | % | |||
(10) | Interest income on Non-taxable investments and loans are presented on an FTE basis using the federal statutory rate of 35% in 2017 and 21% in 2018 for each respective period presented. |
(11) | Average loans includes Loans held for sale and Nonaccrual loans. |
(12) | Average total deposits is the sum of Average total interest-bearing deposits and Average non-interest bearing demand deposits. Average total deposits and borrowings is the sum of Average total interest-bearing liabilities and Average non-interest bearing demand deposits. |
(13) | The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lender’s regional offices. |
(14) | Accruing substandard loans include loans that are classified as substandard but are still accruing interest income. Boston Private Bank & Trust Company 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 nonaccrual at some time in the future. |
(15) | The Company uses certain non-GAAP financial measures, such as: Net interest income excluding interest recovered on previous nonaccrual loans and Net interest margin excluding interest recovered on previous nonaccrual loans, also referred to as Core net interest margin, to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. |
Three Months Ended | |||||||||||||||||||
(In thousands) | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | ||||||||||||||
Net interest income (GAAP basis) | $ | 59,641 | $ | 57,545 | $ | 57,383 | $ | 57,272 | $ | 56,627 | |||||||||
LESS: Interest recovered on previously nonaccrual loans | 986 | — | 80 | 429 | 133 | ||||||||||||||
Net interest income, excluding interest recovered on previously nonaccrual loans (non-GAAP) - also referred to as Core net interest income (non-GAAP) | 58,655 | 57,545 | 57,303 | 56,843 | 56,494 | ||||||||||||||
ADD: FTE income | 591 | 895 | 974 | 2,873 | 2,899 | ||||||||||||||
Net interest income, FTE basis, excluding interest recovered on previously nonaccrual loans (non-GAAP) - also referred to as Core net interest income, FTE basis (non-GAAP) | 59,246 | 58,440 | 58,277 | 59,716 | 59,393 | ||||||||||||||
Net interest margin (FTE basis) | 2.93 | % | 2.89 | % | 2.95 | % | 3.04 | % | 3.02 | % | |||||||||
Net interest margin, FTE basis, excluding interest recovered on previously nonaccrual loans (non-GAAP) - also referred to as Core net interest margin (FTE basis) | 2.88 | % | 2.89 | % | 2.94 | % | 3.02 | % | 3.02 | % | |||||||||
Net interest margin, non-FTE basis, excluding interest recovered on previously nonaccrual loans (non-GAAP) - also referred to as Core net interest margin (non-FTE basis) (non-GAAP) | 2.85 | % | 2.85 | % | 2.90 | % | 2.87 | % | 2.87 | % |
(16) | The Company uses certain non-GAAP financial measures, such as: Net income attributable to the Company excluding notable items and Diluted earnings per share excluding notable items to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. |
Three Months Ended | |||||||||||||||||||
(In thousands, except share and per share data) | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | ||||||||||||||
Net income/ (loss) attributable to the Company (GAAP) | $ | 17,962 | $ | 6,434 | $ | 22,686 | $ | (18,280 | ) | $ | 19,803 | ||||||||
LESS: Gain/ (loss) on sale of affiliates or offices | — | — | — | (1,264 | ) | — | |||||||||||||
ADD BACK: Anchor divestiture legal expense | — | — | — | 400 | — | ||||||||||||||
ADD BACK: Impairment of goodwill | — | — | — | 24,901 | — | ||||||||||||||
ADD BACK: Restructuring | 5,763 | — | — | — | — | ||||||||||||||
ADD BACK: Tax adjustments * | — | 12,706 | — | 12,880 | — | ||||||||||||||
Tax effect at statutory rate (35% in '17, 21% in '18) ** | (1,210 | ) | — | — | (582 | ) | — | ||||||||||||
Net income attributable to the Company excluding notable items (non-GAAP) | $ | 22,515 | $ | 19,140 | $ | 22,686 | $ | 20,583 | $ | 19,803 | |||||||||
Net income/ (loss) attributable to the common shareholders, treasury stock method (GAAP) | $ | 17,133 | $ | 2,910 | $ | 22,663 | $ | (20,278 | ) | $ | 18,657 | ||||||||
ADD BACK: Deemed dividend due to redemption of Series D preferred stock | — | 2,247 | — | — | — | ||||||||||||||
LESS: Gain/ (loss) on sale of affiliates or offices | — | — | — | (1,264 | ) | — | |||||||||||||
ADD BACK: Anchor divestiture legal expense | — | — | — | 400 | — | ||||||||||||||
ADD BACK: Impairment of goodwill | — | — | — | 24,901 | — | ||||||||||||||
ADD BACK: Restructuring | 5,763 | — | — | — | — | ||||||||||||||
ADD BACK: Tax adjustments * | — | 12,706 | — | 12,880 | — | ||||||||||||||
Tax effect at statutory rate (35% in '17, 21% in '18) ** | (1,210 | ) | — | — | (582 | ) | — | ||||||||||||
Net income attributable to the common shareholders, treasury stock method, excluding notable items (non-GAAP) | $ | 21,686 | $ | 17,863 | $ | 22,663 | $ | 18,585 | $ | 18,657 | |||||||||
Weighted average diluted shares outstanding (GAAP) | 85,498,568 | 85,413,575 | 85,271,650 | 82,904,776 | 84,888,311 | ||||||||||||||
Weighted average diluted shares outstanding, excluding notable items (non-GAAP) *** | 85,498,568 | 85,413,575 | 85,271,650 | 85,196,760 | 84,888,311 | ||||||||||||||
Diluted total earnings/ (loss) per share (GAAP) | $ | 0.20 | $ | 0.03 | $ | 0.27 | $ | (0.24 | ) | $ | 0.22 | ||||||||
Diluted total earnings per share, excluding notable items (non-GAAP) | $ | 0.25 | $ | 0.21 | $ | 0.27 | $ | 0.22 | $ | 0.22 | |||||||||
Average common equity (non-GAAP) | $ | 737,188 | $ | 736,068 | $ | 736,272 | $ | 765,765 | $ | 760,843 | |||||||||
Average tangible common equity (non-GAAP) | $ | 647,358 | $ | 633,535 | $ | 597,821 | $ | 607,787 | $ | 595,077 | |||||||||
Return on average common equity - (annualized), excluding notable items (non-GAAP) | 12.12 | % | 9.96 | % | 12.02 | % | 10.21 | % | 9.87 | % | |||||||||
Return on average tangible common equity - (annualized), excluding notable items (non-GAAP) | 14.16 | % | 11.94 | % | 15.20 | % | 13.43 | % | 13.24 | % | |||||||||
Pre-tax, pre-provision income (non-GAAP) | $ | 23,398 | $ | 25,256 | $ | 26,269 | $ | 2,458 | $ | 27,548 | |||||||||
LESS: Gain/ (loss) on sale of affiliates or offices | — | — | — | (1,264 | ) | — | |||||||||||||
ADD BACK: Anchor divestiture legal expense | — | — | — | 400 | — | ||||||||||||||
ADD BACK: Impairment of goodwill | — | — | — | 24,901 | — | ||||||||||||||
ADD BACK: Restructuring | 5,763 | — | — | — | — | ||||||||||||||
Pre-tax, pre-provision income, excluding notable items (non-GAAP) | $ | 29,161 | $ | 25,256 | $ | 26,269 | $ | 29,023 | $ | 27,548 |
*** | For the fourth quarter of 2017, Weighted average diluted shares outstanding include the dilutive effects when the excluded notable items move net income/ (loss) attributable to the common shareholders from a net loss to a net income position. |
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