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. |
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | ||
By: | /S/ STEVEN M. GAVEN | |
Name: | Steven M. Gaven | |
Title: | Executive Vice President, Chief Financial Officer | |
Date: April 17, 2019 |
• | GAAP Net income was $19.4 million, or $0.25 per diluted share, and Operating Net income was $20.7 million or $0.27 per diluted share |
• | Return on average common equity was 10.3%; Operating Return on average common equity was 11.0% |
• | Return on average tangible common equity was 11.6%; Operating Return on average tangible common equity was 12.4% |
• | Average total deposits were $6.8 billion, a 6% increase year-over-year |
• | Average total loans were $6.9 billion, a 5% increase year-over-year |
• | Total assets under management/advisory (“AUM”) were $16.1 billion, a decrease of 4% year-over-year |
• | Total net flows were negative $963 million, of which $508 million were attributable to the Wealth Management & Trust segment and $455 million were attributable to Affiliate Partners |
• | $1.6 million restructuring expense related to executive departures |
Summary Financial Results - Reported | |||||||||||||||
% Change | |||||||||||||||
($ in millions, except for per share data) | 1Q19 | 4Q18 | 1Q18 | LQ | Y/Y | ||||||||||
Net income | $19.4 | $33.3 | $22.7 | (42 | )% | (14 | )% | ||||||||
Diluted earnings per share | $0.25 | $0.42 | $0.27 | (40 | )% | (7 | )% | ||||||||
Non-GAAP Financial Measures: | |||||||||||||||
Pre-tax, pre-provision income | $23.0 | $42.3 | $26.3 | (46 | )% | (12 | )% | ||||||||
Return on average common equity ("ROACE") | 10.3 | % | 17.9 | % | 12.0 | % | |||||||||
Return on average tangible common equity ("ROATCE") | 11.6 | % | 20.5 | % | 15.2 | % | |||||||||
nm = not meaningful |
Summary Financial Results - Operating Basis (non-GAAP) | |||||||||||||||
% Change | |||||||||||||||
($ in millions, except for per share data) | 1Q191 | 4Q182 | 1Q18 | LQ | Y/Y | ||||||||||
Net income | $20.7 | $19.9 | $22.7 | 4 | % | (9 | )% | ||||||||
Diluted earnings per share | $0.27 | $0.27 | $0.27 | — | % | — | % | ||||||||
Pre-tax, pre-provision income | $24.7 | $25.8 | $26.3 | (4 | )% | (6 | )% | ||||||||
Return on average common equity | 11.0 | % | 10.7 | % | 12.0 | % | |||||||||
Return on average tangible common equity | 12.4 | % | 12.4 | % | 15.2 | % | |||||||||
1 1Q19 results adjusted to exclude the net after-tax impact of $1.6 million restructuring expense 2 4Q18 results adjusted to exclude the net after-tax impact of $18.1 million gain on sale and $3.5 million tax expense related to the divestiture of Bingham, Osborn, & Scarborough, LLC and $1.6 million restructuring expense |
Divested Affiliates |
Net Interest Income and Margin | ||||||||||||||||||
% Change | ||||||||||||||||||
($ in millions) | 1Q19 | 4Q18 | 1Q18 | LQ | Y/Y | |||||||||||||
Net interest income | $58.3 | $60.0 | $57.4 | (3 | )% | 2 | % | |||||||||||
Less: Interest recovered on previous nonaccrual loans | 0.3 | 1.0 | 0.1 | (74 | )% | nm | ||||||||||||
Core net interest income (non-GAAP) | 58.1 | 59.0 | 57.3 | (2 | )% | 1 | % | |||||||||||
Net interest margin | 2.90 | % | 2.94 | % | 2.90 | % | ||||||||||||
Core net interest margin (non-GAAP) | 2.89 | % | 2.90 | % | 2.90 | % |
Noninterest Income | |||||||||||||||
% Change | |||||||||||||||
($ in millions) | 1Q19 | 4Q18 | 1Q18 | LQ | Y/Y | ||||||||||
Investment management fees | $2.7 | $2.8 | $11.4 | (6 | )% | (77 | )% | ||||||||
Wealth advisory fees | 8.2 | 12.1 | 13.5 | (33 | )% | (40 | )% | ||||||||
Wealth management and trust fees | 10.9 | 11.7 | 12.2 | (7 | )% | (10 | )% | ||||||||
Private banking fees 3 | 2.6 | 2.1 | 2.3 | 24 | % | 13 | % | ||||||||
Total core fees and income | $24.3 | $28.7 | $39.4 | (15 | )% | (38 | )% | ||||||||
Total other income | 1.0 | 17.2 | 0.3 | (94 | )% | nm | |||||||||
Total noninterest income | $25.2 | $45.8 | $39.7 | (45 | )% | (36 | )% | ||||||||
Memo: Excluding Divested Affiliates and the gain on sale related to the divestiture of BOS | |||||||||||||||
Investment management fees (non-GAAP) 4 | 2.7 | 2.8 | 3.0 | (6 | )% | (11 | )% | ||||||||
Wealth advisory fees (non-GAAP) 6 | 8.2 | 8.3 | 7.8 | (1 | )% | 5 | % | ||||||||
Total core fees and income (non-GAAP) 4 5 | $24.3 | $24.9 | $25.3 | (2 | )% | (4 | )% | ||||||||
Total other income (non-GAAP) 6 | 1.0 | (1.0) | 0.3 | nm | nm | ||||||||||
Total noninterest income (non-GAAP) 4 5 | $25.2 | $23.9 | $25.6 | 5 | % | (2 | )% | ||||||||
3 Private banking fees includes Other banking fee income and Gain/ (loss) on sale of loans, net 4 Excludes Anchor revenue of $8.4 million in 1Q18 5 Excludes BOS revenue of $3.9 million in 4Q18 and $5.7 million in 1Q18 6 Excludes $18.1 million gain on sale in 4Q18 |
Assets Under Management / Advisory | ||||||||||||
% Change | ||||||||||||
($ in millions) | 1Q19 | 4Q18 | 1Q18 | LQ | Y/Y | |||||||
Wealth Management and Trust | $7,593 | $7,602 | $7,831 | — | % | (3 | )% | |||||
Affiliate Partners 7 | 8,529 | 8,319 | 8,878 | 3 | % | (4 | )% | |||||
Total assets under management / advisory 8 | $16,122 | $15,921 | $16,709 | 1 | % | (4 | )% | |||||
Total net flows 8 | $(963) | $(143) | $122 | |||||||||
7 Segment includes Dalton, Greiner, Hartman, Maher & Co., LLC ("DGHM") and KLS Professional Advisors Group, LLC ("KLS") 8 Excludes Anchor and BOS |
Operating Expense | |||||||||||||||
% Change | |||||||||||||||
($ in millions) | 1Q19 | 4Q18 | 1Q18 | LQ | Y/Y | ||||||||||
Salaries and employee benefits | $35.7 | $36.0 | $47.1 | (1 | )% | (24 | )% | ||||||||
Occupancy and equipment | 8.3 | 8.0 | 7.7 | 5 | % | 8 | % | ||||||||
Professional services | 3.6 | 4.2 | 3.2 | (16 | )% | 12 | % | ||||||||
Marketing and business development | 1.1 | 2.3 | 1.6 | (52 | )% | (32 | )% | ||||||||
Information systems | 5.9 | 6.3 | 5.9 | (7 | )% | — | % | ||||||||
Amortization of intangibles | 0.7 | 0.7 | 0.8 | (1 | )% | (10 | )% | ||||||||
FDIC insurance | 0.7 | 0.7 | 0.7 | (11 | )% | (11 | )% | ||||||||
Restructuring | 1.6 | 2.1 | — | (20 | )% | nm | |||||||||
Other | 3.0 | 3.3 | 3.9 | (9 | )% | (23 | )% | ||||||||
Total operating expense | $60.6 | $63.6 | $70.9 | (5 | )% | (15 | )% | ||||||||
Memo: Excluding Notable Items and Divested Affiliates | |||||||||||||||
Information systems 9 | — | (0.4 | ) | — | nm | nm | |||||||||
Restructuring | 1.6 | 2.1 | — | (20 | )% | nm | |||||||||
Divested Affiliates operating expense | — | 2.8 | 10.6 | nm | nm | ||||||||||
Total operating expense (non-GAAP) | $58.9 | $59.1 | $60.3 | — | % | (2 | )% | ||||||||
9 $0.4 million of Information services expense was reclassified to Restructuring expense in conjunction with the Company's formal restructuring plan announced in 4Q18 |
Income Tax Expense | ||||||||||
Loans and Deposits - QTD Averages | |||||||||||||||
% Change | |||||||||||||||
($ in millions) | 1Q19 | 4Q18 | 1Q18 | LQ | Y/Y | ||||||||||
Commercial and industrial | $1,070 | $1,027 | $933 | 4 | % | 15 | % | ||||||||
Commercial real estate | 2,398 | 2,402 | 2,441 | — | % | (2 | )% | ||||||||
Construction and land | 211 | 209 | 169 | 1 | % | 25 | % | ||||||||
Residential | 2,973 | 2,907 | 2,702 | 2 | % | 10 | % | ||||||||
Home equity | 91 | 94 | 97 | (3 | )% | (7 | )% | ||||||||
Other consumer | 134 | 141 | 186 | (5 | )% | (28 | )% | ||||||||
Total loans | $6,877 | $6,781 | $6,529 | 1 | % | 5 | % | ||||||||
Non-interest bearing deposits | 1,975 | 2,092 | 1,872 | (6 | )% | 5 | % | ||||||||
Interest bearing deposits | 4,792 | 4,826 | 4,516 | (1 | )% | 6 | % | ||||||||
Total deposits | $6,767 | $6,918 | $6,388 | (2 | )% | 6 | % | ||||||||
Non-interest bearing deposits as a % of Total deposits | 29 | % | 30 | % | 29 | % |
Provision and Asset Quality | |||||||||||||||
($ in millions) | 1Q19 | 4Q18 | 3Q18 | 2Q18 | 1Q18 | ||||||||||
Provision/ (credit) for loan loss | $(1.4) | $0.1 | $(0.9) | $0.5 | $(1.8) | ||||||||||
Total criticized loans | 141.3 | 146.6 | 134.7 | 114.4 | 124.1 | ||||||||||
Total nonaccrual loans | 12.0 | 14.1 | 12.1 | 15.7 | 16.4 | ||||||||||
Total loans 30-89 days past due and accruing | 17.7 | 22.3 | 11.6 | 5.0 | 20.4 | ||||||||||
Total net loans (charged-off)/ recovered | (0.1) | 1.7 | 1.0 | 0.1 | — | ||||||||||
Ratios: | |||||||||||||||
Allowance for loan losses as a % of Total loans | 1.07 | % | 1.09 | % | 1.09 | % | 1.09 | % | 1.10 | % | |||||
Nonaccrual loans as a % of Total loans | 0.17 | % | 0.20 | % | 0.18 | % | 0.23 | % | 0.25 | % |
Capital | |||||||||||||||
($ in millions, except for per share data) | 1Q19 | 4Q18 | 3Q18 | 2Q18 | 1Q18 | ||||||||||
Tangible common equity/ Tangible assets 12 | 8.3 | % | 8.1 | % | 7.8 | % | 7.5 | % | 7.4 | % | |||||
Tangible book value per share 12 | $8.47 | $8.18 | $7.67 | $7.62 | $7.17 | ||||||||||
Regulatory Capital Ratios: 13 | |||||||||||||||
Tier 1 common equity | 11.4 | % | 11.4 | % | 11.1 | % | 10.9 | % | 10.4 | % | |||||
Total risk-based capital | 14.2 | % | 14.3 | % | 14.1 | % | 13.8 | % | 14.2 | % | |||||
Tier 1 risk-based capital | 13.0 | % | 13.0 | % | 12.8 | % | 12.6 | % | 12.9 | % | |||||
Tier 1 leverage capital | 9.7 | % | 9.5 | % | 9.2 | % | 9.2 | % | 9.4 | % | |||||
Common Equity Repurchase Program: | |||||||||||||||
Total shares of common stock repurchased | — | 1,505,521 | 137,144 | — | — | ||||||||||
Average price paid per share of common stock | — | $12.02 | $13.89 | — | — | ||||||||||
Aggregate repurchases of common equity ($ in millions) | — | $18.1 | $1.9 | — | — | ||||||||||
12 See footnote 6 for a GAAP to non-GAAP reconciliation. 13 Current quarter information is presented based on estimated data. |
EPS Calculation |
March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | |||||||||||||||
(In thousands, except share and per share data) | |||||||||||||||||||
Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 96,211 | $ | 127,259 | $ | 92,634 | $ | 364,539 | $ | 77,085 | |||||||||
Investment securities available-for-sale | 981,951 | 994,065 | 1,056,261 | 1,069,025 | 1,101,588 | ||||||||||||||
Investment securities held-to-maturity | 67,548 | 70,438 | 75,468 | 78,955 | 70,809 | ||||||||||||||
Equity securities at fair value | 7,491 | 14,228 | 7,079 | 7,942 | 16,909 | ||||||||||||||
Stock in Federal Home Loan Bank and Federal Reserve Bank | 47,053 | 49,263 | 48,727 | 70,127 | 54,455 | ||||||||||||||
Loans held for sale | 280 | 2,812 | 3,344 | 4,622 | 3,918 | ||||||||||||||
Total loans | 6,926,968 | 6,893,158 | 6,720,420 | 6,767,123 | 6,602,327 | ||||||||||||||
Less: Allowance for loan losses | 73,814 | 75,312 | 73,500 | 73,464 | 72,898 | ||||||||||||||
Net loans | 6,853,154 | 6,817,846 | 6,646,920 | 6,693,659 | 6,529,429 | ||||||||||||||
Other real estate owned (“OREO”) | — | 401 | 108 | 108 | — | ||||||||||||||
Premises and equipment, net | 42,938 | 45,412 | 47,399 | 46,421 | 43,627 | ||||||||||||||
Goodwill (1) | 57,607 | 57,607 | 75,598 | 75,598 | 75,598 | ||||||||||||||
Intangible assets, net (1) | 11,555 | 12,227 | 13,834 | 14,584 | 15,334 | ||||||||||||||
Fees receivable | 3,982 | 5,101 | 10,445 | 10,405 | 10,640 | ||||||||||||||
Accrued interest receivable | 25,935 | 24,366 | 24,641 | 23,732 | 22,614 | ||||||||||||||
Deferred income taxes, net | 22,844 | 26,638 | 27,833 | 26,316 | 32,058 | ||||||||||||||
Right of use assets | 104,644 | — | — | — | — | ||||||||||||||
Other assets (1) | 248,950 | 246,962 | 245,549 | 230,170 | 264,295 | ||||||||||||||
Total assets | $ | 8,572,143 | $ | 8,494,625 | $ | 8,375,840 | $ | 8,716,203 | $ | 8,318,359 | |||||||||
Liabilities: | |||||||||||||||||||
Deposits | $ | 6,779,845 | $ | 6,781,170 | $ | 6,768,723 | $ | 6,620,179 | $ | 6,584,322 | |||||||||
Securities sold under agreements to repurchase | 58,329 | 36,928 | 39,453 | 58,824 | 85,257 | ||||||||||||||
Federal funds purchased | — | 250,000 | 120,000 | — | — | ||||||||||||||
Federal Home Loan Bank borrowings | 615,070 | 420,144 | 441,836 | 1,056,938 | 611,588 | ||||||||||||||
Junior subordinated debentures | 106,363 | 106,363 | 106,363 | 106,363 | 106,363 | ||||||||||||||
Lease liabilities | 120,162 | — | — | — | — | ||||||||||||||
Other liabilities (1) | 112,893 | 143,540 | 149,770 | 129,175 | 125,004 | ||||||||||||||
Total liabilities | 7,792,662 | 7,738,145 | 7,626,145 | 7,971,479 | 7,512,534 | ||||||||||||||
Redeemable noncontrolling interests (“RNCI”) | 662 | 2,526 | 11,686 | 10,747 | 16,322 | ||||||||||||||
Shareholders’ equity: | |||||||||||||||||||
Preferred stock, $1.00 par value; authorized: 2,000,000 shares | — | — | — | — | 47,753 | ||||||||||||||
Common stock, $1.00 par value; authorized: 170,000,000 shares | 83,774 | 83,656 | 84,603 | 84,479 | 84,194 | ||||||||||||||
Additional paid-in capital | 604,288 | 600,196 | 614,157 | 613,918 | 612,526 | ||||||||||||||
Retained earnings | 97,155 | 87,821 | 64,618 | 56,912 | 61,518 | ||||||||||||||
Accumulated other comprehensive income/ (loss) | (6,398 | ) | (17,719 | ) | (27,578 | ) | (23,328 | ) | (21,313 | ) | |||||||||
Total Company’s shareholders’ equity | 778,819 | 753,954 | 735,800 | 731,981 | 784,678 | ||||||||||||||
Noncontrolling interests | — | — | 2,209 | 1,996 | 4,825 | ||||||||||||||
Total shareholders’ equity | 778,819 | 753,954 | 738,009 | 733,977 | 789,503 | ||||||||||||||
Total liabilities, RNCI and shareholders’ equity | $ | 8,572,143 | $ | 8,494,625 | $ | 8,375,840 | $ | 8,716,203 | $ | 8,318,359 |
Three Months Ended | |||||||||||||||||||
March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | |||||||||||||||
Interest and dividend income: | (In thousands, except share and per share data) | ||||||||||||||||||
Loans | $ | 69,933 | $ | 69,294 | $ | 68,254 | $ | 64,048 | $ | 60,929 | |||||||||
Investment securities | 5,983 | 6,242 | 6,230 | 6,302 | 6,418 | ||||||||||||||
Short-term investments and other | 908 | 1,356 | 1,617 | 1,205 | 1,009 | ||||||||||||||
Total interest and dividend income | 76,824 | 76,892 | 76,101 | 71,555 | 68,356 | ||||||||||||||
Interest expense: | |||||||||||||||||||
Deposits | 14,058 | 13,470 | 11,487 | 8,365 | 6,524 | ||||||||||||||
Borrowings | 4,428 | 3,425 | 4,973 | 5,645 | 4,449 | ||||||||||||||
Total interest expense | 18,486 | 16,895 | 16,460 | 14,010 | 10,973 | ||||||||||||||
Net interest income | 58,338 | 59,997 | 59,641 | 57,545 | 57,383 | ||||||||||||||
Provision/ (credit) for loan losses | (1,426 | ) | 93 | (949 | ) | 453 | (1,795 | ) | |||||||||||
Net interest income after provision/ (credit) for loan losses | 59,764 | 59,904 | 60,590 | 57,092 | 59,178 | ||||||||||||||
Noninterest income: | |||||||||||||||||||
Investment management fees | 2,650 | 2,831 | 3,245 | 4,227 | 11,425 | ||||||||||||||
Wealth advisory fees | 8,165 | 12,111 | 13,995 | 13,693 | 13,512 | ||||||||||||||
Wealth management and trust fees | 10,893 | 11,677 | 11,510 | 11,169 | 12,151 | ||||||||||||||
Other banking fee income | 2,499 | 2,033 | 2,775 | 2,745 | 2,273 | ||||||||||||||
Gain on sale of loans, net | 73 | 39 | 67 | 63 | 74 | ||||||||||||||
Total core fees and income | 24,280 | 28,691 | 31,592 | 31,897 | 39,435 | ||||||||||||||
Gain/ (loss) on sale of investments, net | — | (596 | ) | — | 7 | (24 | ) | ||||||||||||
Gain/ (loss) on OREO, net | 91 | — | — | — | — | ||||||||||||||
Gain on sale of affiliate | — | 18,142 | — | — | — | ||||||||||||||
Other | 877 | (392 | ) | 722 | 191 | 332 | |||||||||||||
Total other income | 968 | 17,154 | 722 | 198 | 308 | ||||||||||||||
Total revenue (2) | 83,586 | 105,842 | 91,955 | 89,640 | 97,126 | ||||||||||||||
Operating expense: | |||||||||||||||||||
Salaries and employee benefits | 35,726 | 36,007 | 38,944 | 39,433 | 47,084 | ||||||||||||||
Occupancy and equipment | 8,348 | 7,975 | 8,164 | 8,229 | 7,748 | ||||||||||||||
Professional services | 3,560 | 4,229 | 2,877 | 2,872 | 3,177 | ||||||||||||||
Marketing and business development | 1,085 | 2,275 | 1,710 | 2,070 | 1,593 | ||||||||||||||
Information systems | 5,860 | 6,296 | 6,233 | 6,770 | 5,886 | ||||||||||||||
Amortization of intangibles | 672 | 680 | 750 | 749 | 750 | ||||||||||||||
FDIC insurance | 660 | 739 | 674 | 708 | 744 | ||||||||||||||
Restructuring | 1,646 | 2,065 | 5,763 | — | — | ||||||||||||||
Other | 2,996 | 3,291 | 3,442 | 3,553 | 3,875 | ||||||||||||||
Total operating expense | 60,553 | 63,557 | 68,557 | 64,384 | 70,857 | ||||||||||||||
Income before income taxes | 24,459 | 42,192 | 24,347 | 24,803 | 28,064 | ||||||||||||||
Income tax expense | 4,917 | 8,651 | 5,461 | 17,399 | 6,026 | ||||||||||||||
Net income from continuing operations | 19,542 | 33,541 | 18,886 | 7,404 | 22,038 | ||||||||||||||
Net income/ (loss) from discontinued operations (3) | — | 306 | — | (2 | ) | 1,698 | |||||||||||||
Net income before attribution to noncontrolling interests | 19,542 | 33,847 | 18,886 | 7,402 | 23,736 | ||||||||||||||
Less: Net income attributable to noncontrolling interests | 100 | 545 | 924 | 968 | 1,050 | ||||||||||||||
Net income attributable to the Company | $ | 19,442 | $ | 33,302 | $ | 17,962 | $ | 6,434 | $ | 22,686 | |||||||||
Adjustments, treasury stock method (4) | 1,557 | 2,694 | (829 | ) | (3,524 | ) | (23 | ) | |||||||||||
Net income attributable to common shareholders, treasury stock method | $ | 20,999 | $ | 35,996 | $ | 17,133 | $ | 2,910 | $ | 22,663 | |||||||||
Weighted average basic shares outstanding | 83,285,095 | 83,750,785 | 84,017,284 | 83,509,115 | 83,097,758 | ||||||||||||||
Weighted average diluted shares outstanding (5) | 84,010,450 | 84,863,779 | 85,498,568 | 85,413,575 | 85,271,650 | ||||||||||||||
Diluted total earnings per share | $ | 0.25 | $ | 0.42 | $ | 0.20 | $ | 0.03 | $ | 0.27 |
(In thousands, except per share data) | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | ||||||||||||||
FINANCIAL DATA: | |||||||||||||||||||
Book value per common share | $ | 9.30 | $ | 9.01 | $ | 8.72 | $ | 8.69 | $ | 8.81 | |||||||||
Tangible book value per share (6) | $ | 8.47 | $ | 8.18 | $ | 7.67 | $ | 7.62 | $ | 7.17 | |||||||||
Market price per share | $ | 10.96 | $ | 10.57 | $ | 13.65 | $ | 15.90 | $ | 15.05 | |||||||||
ASSETS UNDER MANAGEMENT AND ADVISORY ("AUM"): | |||||||||||||||||||
Wealth Management and Trust | $ | 7,593,000 | $ | 7,602,000 | $ | 8,335,000 | $ | 7,789,000 | $ | 7,831,000 | |||||||||
Affiliate Partners, excluding Anchor and BOS | 8,529,000 | 8,319,000 | 9,388,000 | 9,072,000 | 8,878,000 | ||||||||||||||
Total AUM, excluding Anchor and BOS (7) | 16,122,000 | 15,921,000 | 17,723,000 | 16,861,000 | 16,709,000 | ||||||||||||||
AUM at Anchor and BOS | — | — | 4,714,000 | 4,525,000 | 13,530,000 | ||||||||||||||
Less: Inter-company relationship | — | — | (7,000 | ) | (7,000 | ) | (11,000 | ) | |||||||||||
Total AUM | $ | 16,122,000 | $ | 15,921,000 | $ | 22,430,000 | $ | 21,379,000 | $ | 30,228,000 | |||||||||
FINANCIAL RATIOS: | |||||||||||||||||||
Total equity/ Total assets | 9.09 | % | 8.88 | % | 8.81 | % | 8.42 | % | 9.49 | % | |||||||||
Tangible common equity/ Tangible assets (6) | 8.35 | % | 8.12 | % | 7.83 | % | 7.46 | % | 7.38 | % | |||||||||
Tier 1 common equity/ Risk weighted assets (6) | 11.38 | % | 11.40 | % | 11.14 | % | 10.90 | % | 10.39 | % | |||||||||
Allowance for loan losses/ Total loans | 1.07 | % | 1.09 | % | 1.09 | % | 1.09 | % | 1.10 | % | |||||||||
Allowance for loan losses/ Nonaccrual loans | 614 | % | 536 | % | 608 | % | 469 | % | 445 | % | |||||||||
Return on average assets (annualized) | 0.93 | % | 1.56 | % | 0.84 | % | 0.31 | % | 1.11 | % | |||||||||
ROACE (annualized) (non-GAAP) (8) | 10.29 | % | 17.87 | % | 9.67 | % | 3.03 | % | 12.02 | % | |||||||||
ROATCE (annualized) (non-GAAP) (8) | 11.63 | % | 20.46 | % | 11.37 | % | 3.90 | % | 15.20 | % | |||||||||
Efficiency ratio (annualized) (non-GAAP) (9) | 69.67 | % | 57.14 | % | 67.04 | % | 70.29 | % | 71.46 | % | |||||||||
DEPOSIT DETAIL: | |||||||||||||||||||
Demand deposits (non-interest bearing) | $ | 2,016,838 | $ | 1,951,274 | $ | 2,001,275 | $ | 2,089,373 | $ | 1,932,732 | |||||||||
NOW | 605,852 | 626,685 | 568,148 | 635,841 | 689,526 | ||||||||||||||
Savings | 68,102 | 73,834 | 72,967 | 73,675 | 73,580 | ||||||||||||||
Money market | 3,302,244 | 3,338,892 | 3,363,062 | 3,128,211 | 3,177,692 | ||||||||||||||
Certificates of deposit | 786,809 | 790,485 | 763,271 | 693,079 | 710,792 | ||||||||||||||
Total deposits | $ | 6,779,845 | $ | 6,781,170 | $ | 6,768,723 | $ | 6,620,179 | $ | 6,584,322 |
Average Balance | Interest Income/Expense | Average Yield/Rate | ||||||||||||||||||||||||
(In thousands) | Three Months Ended | Three Months Ended | Three Months Ended | |||||||||||||||||||||||
AVERAGE BALANCE SHEET: | 03/31/19 | 12/31/18 | 03/31/18 | 03/31/19 | 12/31/18 | 03/31/18 | 03/31/19 | 12/31/18 | 03/31/18 | |||||||||||||||||
AVERAGE ASSETS | ||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||
Cash and investments (10): | ||||||||||||||||||||||||||
Taxable investment securities | $ | 244,230 | $ | 317,230 | $ | 333,253 | $ | 1,185 | $ | 1,486 | $ | 1,510 | 1.94 | % | 1.87 | % | 1.81 | % | ||||||||
Non-taxable investment securities | 306,868 | 301,242 | 296,958 | 1,901 | 1,833 | 1,730 | 2.48 | % | 2.43 | % | 2.33 | % | ||||||||||||||
Mortgage-backed securities | 521,788 | 536,264 | 588,461 | 2,897 | 2,923 | 3,178 | 2.22 | % | 2.18 | % | 2.16 | % | ||||||||||||||
Short-term investments and other | 79,603 | 134,182 | 161,573 | 908 | 1,356 | 1,009 | 4.58 | % | 3.98 | % | 2.51 | % | ||||||||||||||
Total cash and investments | 1,152,489 | 1,288,918 | 1,380,245 | 6,891 | 7,598 | 7,427 | 2.39 | % | 2.35 | % | 2.15 | % | ||||||||||||||
Loans (10) (11): | ||||||||||||||||||||||||||
Commercial and industrial | 1,070,161 | 1,027,128 | 933,209 | 10,979 | 10,431 | 8,460 | 4.10 | % | 3.97 | % | 3.63 | % | ||||||||||||||
Commercial real estate | 2,398,413 | 2,402,304 | 2,441,215 | 28,151 | 29,016 | 26,151 | 4.69 | % | 4.73 | % | 4.28 | % | ||||||||||||||
Construction and land | 211,351 | 209,475 | 169,384 | 2,641 | 2,588 | 1,937 | 5.00 | % | 4.83 | % | 4.57 | % | ||||||||||||||
Residential | 2,972,945 | 2,907,446 | 2,702,317 | 25,545 | 24,630 | 21,766 | 3.44 | % | 3.39 | % | 3.22 | % | ||||||||||||||
Home equity | 90,646 | 93,656 | 97,191 | 1,121 | 1,148 | 1,042 | 5.02 | % | 4.86 | % | 4.35 | % | ||||||||||||||
Other consumer | 133,937 | 140,591 | 185,596 | 1,496 | 1,481 | 1,573 | 4.53 | % | 4.18 | % | 3.44 | % | ||||||||||||||
Total loans | 6,877,453 | 6,780,600 | 6,528,912 | 69,933 | 69,294 | 60,929 | 4.07 | % | 4.03 | % | 3.74 | % | ||||||||||||||
Total earning assets | 8,029,942 | 8,069,518 | 7,909,157 | 76,824 | 76,892 | 68,356 | 3.83 | % | 3.76 | % | 3.46 | % | ||||||||||||||
LESS: Allowance for loan losses | 75,537 | 75,006 | 74,834 | |||||||||||||||||||||||
Cash and due from banks (non-interest bearing) | 46,172 | 53,633 | 51,944 | |||||||||||||||||||||||
Other assets | 493,148 | 397,153 | 425,617 | |||||||||||||||||||||||
TOTAL AVERAGE ASSETS | $ | 8,493,725 | $ | 8,445,298 | $ | 8,311,884 | ||||||||||||||||||||
AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||
Interest-bearing deposits (12): | ||||||||||||||||||||||||||
Savings and NOW | $ | 674,872 | $ | 649,937 | $ | 716,930 | $ | 296 | $ | 377 | $ | 215 | 0.18 | % | 0.23 | % | 0.12 | % | ||||||||
Money market | 3,341,397 | 3,392,039 | 3,141,564 | 10,072 | 9,502 | 4,314 | 1.22 | % | 1.11 | % | 0.56 | % | ||||||||||||||
Certificates of deposit | 775,817 | 784,184 | 657,109 | 3,690 | 3,591 | 1,995 | 1.93 | % | 1.82 | % | 1.23 | % | ||||||||||||||
Total interest-bearing deposits (12) | 4,792,086 | 4,826,160 | 4,515,603 | 14,058 | 13,470 | 6,524 | 1.19 | % | 1.11 | % | 0.59 | % | ||||||||||||||
Junior subordinated debentures | 106,363 | 106,363 | 106,363 | 1,121 | 1,043 | 846 | 4.22 | % | 3.84 | % | 3.18 | % | ||||||||||||||
FHLB borrowings and other | 615,985 | 515,734 | 878,093 | 3,307 | 2,382 | 3,603 | 2.15 | % | 1.81 | % | 1.64 | % | ||||||||||||||
Total interest-bearing liabilities (12) | 5,514,434 | 5,448,257 | 5,500,059 | 18,486 | 16,895 | 10,973 | 1.36 | % | 1.23 | % | 0.80 | % | ||||||||||||||
Non-interest bearing demand deposits (12) | 1,974,526 | 2,092,070 | 1,872,472 | |||||||||||||||||||||||
Other liabilities | 236,426 | 154,612 | 133,243 | |||||||||||||||||||||||
Total average liabilities | 7,725,386 | 7,694,939 | 7,505,774 | |||||||||||||||||||||||
Redeemable noncontrolling interests | 2,056 | 11,046 | 22,085 | |||||||||||||||||||||||
Average shareholders’ equity | 766,283 | 739,313 | 784,025 | |||||||||||||||||||||||
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | $ | 8,493,725 | $ | 8,445,298 | $ | 8,311,884 | ||||||||||||||||||||
Net interest income | $ | 58,338 | $ | 59,997 | $ | 57,383 | ||||||||||||||||||||
Interest rate spread | 2.47 | % | 2.53 | % | 2.66 | % | ||||||||||||||||||||
Bank only net interest margin | 2.96 | % | 3.02 | % | 3.00 | % | ||||||||||||||||||||
Net interest margin | 2.90 | % | 2.96 | % | 2.90 | % | ||||||||||||||||||||
Average total deposits (12) | 6,766,612 | 6,918,230 | 6,388,075 | 0.84 | % | 0.77 | % | 0.41 | % | |||||||||||||||||
Average total deposits and borrowings (12) | 7,488,960 | 7,540,327 | 7,372,531 | 1.00 | % | 0.89 | % | 0.60 | % |
(In thousands) | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | ||||||||||||||
LOAN DATA (13): | |||||||||||||||||||
Other commercial and industrial loans: | |||||||||||||||||||
New England | $ | 492,800 | $ | 503,201 | $ | 460,409 | $ | 481,081 | $ | 444,419 | |||||||||
San Francisco Bay Area | 39,829 | 43,702 | 41,256 | 35,220 | 23,491 | ||||||||||||||
Southern California | 82,741 | 76,134 | 81,549 | 66,892 | 63,183 | ||||||||||||||
Total other commercial and industrial loans | $ | 615,370 | $ | 623,037 | $ | 583,214 | $ | 583,193 | $ | 531,093 | |||||||||
New England | $ | 342,270 | $ | 344,079 | $ | 330,753 | $ | 332,572 | $ | 313,955 | |||||||||
San Francisco Bay Area | 96,024 | 96,387 | 96,775 | 94,959 | 95,380 | ||||||||||||||
Southern California | 11,198 | 11,205 | 11,279 | 11,351 | 11,422 | ||||||||||||||
Total commercial tax-exempt loans | $ | 449,492 | $ | 451,671 | $ | 438,807 | $ | 438,882 | $ | 420,757 | |||||||||
Total commercial and industrial loans | $ | 1,064,862 | $ | 1,074,708 | $ | 1,022,021 | $ | 1,022,075 | $ | 951,850 | |||||||||
Commercial real estate loans: | |||||||||||||||||||
New England | $ | 1,068,619 | $ | 1,022,061 | $ | 1,043,494 | $ | 1,069,942 | $ | 1,046,178 | |||||||||
San Francisco Bay Area | 720,276 | 714,449 | 724,243 | 739,769 | 721,871 | ||||||||||||||
Southern California | 650,153 | 659,182 | 631,343 | 694,810 | 696,954 | ||||||||||||||
Total commercial real estate loans | $ | 2,439,048 | $ | 2,395,692 | $ | 2,399,080 | $ | 2,504,521 | $ | 2,465,003 | |||||||||
Construction and land loans: | |||||||||||||||||||
New England | $ | 136,097 | $ | 153,929 | $ | 114,411 | $ | 88,068 | $ | 79,563 | |||||||||
San Francisco Bay Area | 43,130 | 41,516 | 40,755 | 37,783 | 34,050 | ||||||||||||||
Southern California | 31,391 | 44,861 | 42,358 | 46,173 | 51,627 | ||||||||||||||
Total construction and land loans | $ | 210,618 | $ | 240,306 | $ | 197,524 | $ | 172,024 | $ | 165,240 | |||||||||
Residential loans: | |||||||||||||||||||
New England | $ | 1,692,421 | $ | 1,689,318 | $ | 1,650,989 | $ | 1,643,039 | $ | 1,619,856 | |||||||||
San Francisco Bay Area | 570,132 | 559,578 | 554,502 | 533,394 | 511,903 | ||||||||||||||
Southern California | 730,579 | 700,077 | 657,388 | 631,773 | 605,610 | ||||||||||||||
Total residential loans | $ | 2,993,132 | $ | 2,948,973 | $ | 2,862,879 | $ | 2,808,206 | $ | 2,737,369 | |||||||||
Home equity loans: | |||||||||||||||||||
New England | $ | 59,074 | $ | 57,617 | $ | 61,291 | $ | 61,125 | $ | 65,434 | |||||||||
San Francisco Bay Area | 18,279 | 19,722 | 19,769 | 17,366 | 19,314 | ||||||||||||||
Southern California | 11,267 | 13,082 | 12,330 | 13,310 | 9,583 | ||||||||||||||
Total home equity loans | $ | 88,620 | $ | 90,421 | $ | 93,390 | $ | 91,801 | $ | 94,331 | |||||||||
Other consumer loans: | |||||||||||||||||||
New England | $ | 110,363 | $ | 120,402 | $ | 121,685 | $ | 145,726 | $ | 166,413 | |||||||||
San Francisco Bay Area | 11,956 | 12,663 | 14,228 | 14,659 | 13,569 | ||||||||||||||
Southern California | 8,369 | 9,993 | 9,613 | 8,111 | 8,552 | ||||||||||||||
Total other consumer loans | $ | 130,688 | $ | 143,058 | $ | 145,526 | $ | 168,496 | $ | 188,534 | |||||||||
Total loans: | |||||||||||||||||||
New England | $ | 3,901,644 | $ | 3,890,607 | $ | 3,783,032 | $ | 3,821,553 | $ | 3,735,818 | |||||||||
San Francisco Bay Area | 1,499,626 | 1,488,017 | 1,491,528 | 1,473,150 | 1,419,578 | ||||||||||||||
Southern California | 1,525,698 | 1,514,534 | 1,445,860 | 1,472,420 | 1,446,931 | ||||||||||||||
Total loans | $ | 6,926,968 | $ | 6,893,158 | $ | 6,720,420 | $ | 6,767,123 | $ | 6,602,327 |
(In thousands) | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | ||||||||||||||
CREDIT QUALITY (13): | |||||||||||||||||||
Special mention loans: | |||||||||||||||||||
New England | $ | 34,675 | $ | 31,147 | $ | 20,382 | $ | 18,515 | $ | 33,282 | |||||||||
San Francisco Bay Area | 23,486 | 18,585 | 18,359 | 19,255 | 14,117 | ||||||||||||||
Southern California | 28,626 | 28,796 | 28,665 | 15,678 | 15,689 | ||||||||||||||
Total special mention loans | $ | 86,787 | $ | 78,528 | $ | 67,406 | $ | 53,448 | $ | 63,088 | |||||||||
Accruing classified loans (14): | |||||||||||||||||||
New England | $ | 15,830 | $ | 10,392 | $ | 10,083 | $ | 11,493 | $ | 8,767 | |||||||||
San Francisco Bay Area | 20,801 | 24,584 | 24,252 | 12,766 | 14,970 | ||||||||||||||
Southern California | 5,890 | 19,119 | 21,045 | 21,194 | 21,436 | ||||||||||||||
Total accruing classified loans | $ | 42,521 | $ | 54,095 | $ | 55,380 | $ | 45,453 | $ | 45,173 | |||||||||
Nonaccruing loans: | |||||||||||||||||||
New England | $ | 6,161 | $ | 6,728 | $ | 5,131 | $ | 7,282 | $ | 8,056 | |||||||||
San Francisco Bay Area | 2,480 | 2,488 | 1,169 | 1,319 | 1,442 | ||||||||||||||
Southern California | 3,378 | 4,841 | 5,797 | 7,050 | 6,882 | ||||||||||||||
Total nonaccruing loans | $ | 12,019 | $ | 14,057 | $ | 12,097 | $ | 15,651 | $ | 16,380 | |||||||||
Loans 30-89 days past due and accruing: | |||||||||||||||||||
New England | $ | 7,232 | $ | 15,961 | $ | 9,193 | $ | 4,653 | $ | 10,571 | |||||||||
San Francisco Bay Area | 2,021 | 2,246 | 1,651 | — | 2,251 | ||||||||||||||
Southern California | 8,462 | 4,092 | 763 | 324 | 7,554 | ||||||||||||||
Total loans 30-89 days past due and accruing | $ | 17,715 | $ | 22,299 | $ | 11,607 | $ | 4,977 | $ | 20,376 | |||||||||
Loans (charged-off)/ recovered, net: | |||||||||||||||||||
New England | $ | 222 | $ | (100 | ) | $ | 232 | $ | (73 | ) | $ | (285 | ) | ||||||
San Francisco Bay Area | 18 | 1,804 | 706 | 91 | 67 | ||||||||||||||
Southern California | (312 | ) | 15 | 47 | 95 | 169 | |||||||||||||
Total net loans (charged-off)/ recovered | $ | (72 | ) | $ | 1,719 | $ | 985 | $ | 113 | $ | (49 | ) |
(1) | On April 13, 2018, the Company completed the sale of its ownership interest in Anchor to the management team of Anchor for an upfront cash payment and future payments. Anchor’s results remain consolidated in the Company’s results through the closing date. For presentation purposes, Anchor’s AUM is excluded from prior period AUM amounts, whereas it is included in the calculation of Core fees and income through the closing date. The Company classified the assets and liabilities of Anchor as held for sale at March 31, 2018, 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 are included in consolidated calculations through the closing date. |
(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 and a tax benefit related to deferred taxes in the fourth quarter of 2018 when annual tax returns were filed. |
(4) | Adjustments to Net income attributable to the Company to arrive at Net income attributable to the common shareholders, treasury stock method, as presented in these tables, include decrease/ (increase) in Noncontrolling interests redemption value and dividends paid on preferred stock, if any, including deemed dividends on redemption of the 6.95% Non-Cumulative Perpetual Preferred Stock, Series D (“the Series D preferred stock”), if any. 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 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, if any. 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, 2018 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) | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | ||||||||||||||
Total balance sheet assets | $ | 8,572,143 | $ | 8,494,625 | $ | 8,375,840 | $ | 8,716,203 | $ | 8,318,359 | |||||||||
LESS: Goodwill and intangible assets, net * | (69,162 | ) | (69,834 | ) | (89,432 | ) | (90,182 | ) | (138,026 | ) | |||||||||
Tangible assets (non-GAAP) | $ | 8,502,981 | $ | 8,424,791 | $ | 8,286,408 | $ | 8,626,021 | $ | 8,180,333 | |||||||||
Total shareholders’ equity | $ | 778,819 | $ | 753,954 | $ | 738,009 | $ | 733,977 | $ | 789,503 | |||||||||
LESS: Series D preferred stock (non-convertible) | — | — | — | — | (47,753 | ) | |||||||||||||
LESS: Goodwill and intangible assets, net * | (69,162 | ) | (69,834 | ) | (89,432 | ) | (90,182 | ) | (138,026 | ) | |||||||||
Total adjusting items | (69,162 | ) | (69,834 | ) | (89,432 | ) | (90,182 | ) | (185,779 | ) | |||||||||
Tangible common equity (non-GAAP) | $ | 709,657 | $ | 684,120 | $ | 648,577 | $ | 643,795 | $ | 603,724 | |||||||||
Total equity/ Total assets | 9.09 | % | 8.88 | % | 8.81 | % | 8.42 | % | 9.49 | % | |||||||||
Tangible common equity/ Tangible assets (non-GAAP) | 8.35 | % | 8.12 | % | 7.83 | % | 7.46 | % | 7.38 | % | |||||||||
Total risk weighted assets ** | $ | 6,301,912 | $ | 6,161,677 | $ | 6,057,002 | $ | 6,104,586 | $ | 5,974,866 | |||||||||
Tier 1 common equity ** | $ | 717,138 | $ | 702,728 | $ | 674,641 | $ | 665,628 | $ | 621,084 | |||||||||
Tier 1 common equity/ Risk weighted assets ** | 11.38 | % | 11.40 | % | 11.14 | % | 10.90 | % | 10.39 | % | |||||||||
End of period shares outstanding | 83,773,650 | 83,655,651 | 84,602,519 | 84,478,858 | 84,194,267 | ||||||||||||||
Book value per common share | $ | 9.30 | $ | 9.01 | $ | 8.72 | $ | 8.69 | $ | 8.81 | |||||||||
Tangible book value per share (non-GAAP) | $ | 8.47 | $ | 8.18 | $ | 7.67 | $ | 7.62 | $ | 7.17 |
(7) | Assets under management and advisory have been reduced to exclude those assets managed or advised by Anchor and BOS for periods when Anchor and BOS were owned by the Company. |
(8) | The Company uses certain non-GAAP financial measures, such as: ROACE and ROATCE 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) | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | ||||||||||||||
Total average shareholders’ equity | $ | 766,283 | $ | 739,313 | $ | 737,188 | $ | 775,949 | $ | 784,025 | |||||||||
LESS: Average Series D preferred stock | — | — | — | (39,881 | ) | (47,753 | ) | ||||||||||||
Average common equity (non-GAAP) | 766,283 | 739,313 | 737,188 | 736,068 | 736,272 | ||||||||||||||
LESS: Average goodwill and intangible assets, net * | (69,498 | ) | (83,153 | ) | (89,830 | ) | (102,533 | ) | (138,451 | ) | |||||||||
Average tangible common equity (non-GAAP) | $ | 696,785 | $ | 656,160 | $ | 647,358 | $ | 633,535 | $ | 597,821 | |||||||||
Net income attributable to the Company | $ | 19,442 | $ | 33,302 | $ | 17,962 | $ | 6,434 | $ | 22,686 | |||||||||
LESS: Dividends on Series D preferred stock | — | — | — | (869 | ) | (869 | ) | ||||||||||||
Common net income (non-GAAP) | 19,442 | 33,302 | 17,962 | 5,565 | 21,817 | ||||||||||||||
ADD: Amortization of intangibles, net of tax | 531 | 537 | 593 | 592 | 593 | ||||||||||||||
Tangible common net income (non-GAAP) | $ | 19,973 | $ | 33,839 | $ | 18,555 | $ | 6,157 | $ | 22,410 | |||||||||
Return on average equity - (annualized) | 10.29 | % | 17.87 | % | 9.67 | % | 3.33 | % | 11.73 | % | |||||||||
ROACE - (annualized) (non-GAAP) | 10.29 | % | 17.87 | % | 9.67 | % | 3.03 | % | 12.02 | % | |||||||||
ROATCE - (annualized) (non-GAAP) | 11.63 | % | 20.46 | % | 11.37 | % | 3.90 | % | 15.20 | % |
(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) | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | ||||||||||||||
Income before income taxes (GAAP) | $ | 24,459 | $ | 42,192 | $ | 24,347 | $ | 24,803 | $ | 28,064 | |||||||||
ADD BACK: Provision/ (credit) for loan losses | (1,426 | ) | 93 | (949 | ) | 453 | (1,795 | ) | |||||||||||
Pre-tax, pre-provision income (non-GAAP) | $ | 23,033 | $ | 42,285 | $ | 23,398 | $ | 25,256 | $ | 26,269 | |||||||||
Total operating expense (GAAP) | $ | 60,553 | $ | 63,557 | $ | 68,557 | $ | 64,384 | $ | 70,857 | |||||||||
Less: Amortization of intangibles | 672 | 680 | 750 | 749 | 750 | ||||||||||||||
Less: Restructuring | 1,646 | 2,065 | 5,763 | — | — | ||||||||||||||
Total operating expense (non-GAAP) | $ | 58,235 | $ | 60,812 | $ | 62,044 | $ | 63,635 | $ | 70,107 | |||||||||
Net interest income | $ | 58,338 | $ | 59,997 | $ | 59,641 | $ | 57,545 | $ | 57,383 | |||||||||
Total core fees and income | 24,280 | 28,691 | 31,592 | 31,897 | 39,435 | ||||||||||||||
Gain on sale of affiliate | — | 18,142 | — | — | — | ||||||||||||||
Total other income | 968 | (988 | ) | 722 | 198 | 308 | |||||||||||||
Total revenue | $ | 83,586 | $ | 105,842 | $ | 91,955 | $ | 89,640 | $ | 97,126 | |||||||||
Efficiency ratio (GAAP) | 72.44 | % | 60.05 | % | 74.55 | % | 71.83 | % | 72.95 | % | |||||||||
Efficiency ratio, excluding amortization of intangibles and restructuring, if any (non-GAAP) | 69.67 | % | 57.14 | % | 67.04 | % | 70.29 | % | 71.46 | % |
(10) | Currently, the FTE adjustment for interest income on Non-taxable investments and loans is immaterial and therefore has not been applied. For comparison purposes, GAAP amounts are shown for all periods 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 lenders' regional offices. |
(14) | Accruing classified 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) | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | ||||||||||||||
Net interest income (GAAP basis) | $ | 58,338 | $ | 59,997 | $ | 59,641 | $ | 57,545 | $ | 57,383 | |||||||||
LESS: Interest recovered on previous nonaccrual loans | 258 | 986 | 986 | — | 80 | ||||||||||||||
Net interest income, excluding interest recovered while loans on nonaccrual status (non-GAAP) - also referred to as Core net interest income (non-GAAP) | 58,080 | 59,011 | 58,064 | 56,649 | 57,303 | ||||||||||||||
Net interest margin, excluding interest recovered while loans on nonaccrual status (non-GAAP) - also referred to as Core net interest margin (non-GAAP) | 2.89 | % | 2.90 | % | 2.85 | % | 2.85 | % | 2.90 | % |
(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) | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | ||||||||||||||
Net income attributable to the Company (GAAP) | $ | 19,442 | $ | 33,302 | $ | 17,962 | $ | 6,434 | $ | 22,686 | |||||||||
LESS: Gain on sale of affiliate | — | 18,142 | — | — | — | ||||||||||||||
ADD BACK: Information services * | — | (441 | ) | — | 441 | — | |||||||||||||
ADD BACK: Restructuring | 1,646 | 2,065 | 5,763 | — | — | ||||||||||||||
ADD BACK: Tax adjustments ** | — | 3,502 | — | 12,706 | — | ||||||||||||||
Tax effect at statutory rate | (346 | ) | (341 | ) | (1,210 | ) | (93 | ) | — | ||||||||||
Net income attributable to the Company excluding notable items (non-GAAP) | $ | 20,742 | $ | 19,945 | $ | 22,515 | $ | 19,488 | $ | 22,686 | |||||||||
Net income attributable to the common shareholders, treasury stock method (GAAP) | $ | 20,999 | $ | 35,996 | $ | 17,133 | $ | 2,910 | $ | 22,663 | |||||||||
ADD BACK: Deemed dividend due to redemption of Series D preferred stock | — | — | — | 2,247 | — | ||||||||||||||
LESS: Gain on sale of affiliate | — | 18,142 | — | — | — | ||||||||||||||
ADD BACK: Information services * | — | (441 | ) | — | 441 | — | |||||||||||||
ADD BACK: Restructuring | 1,646 | 2,065 | 5,763 | — | — | ||||||||||||||
ADD BACK: Tax adjustments ** | — | 3,502 | — | 12,706 | — | ||||||||||||||
Tax effect at statutory rate | (346 | ) | (341 | ) | (1,210 | ) | (93 | ) | — | ||||||||||
Net income attributable to the common shareholders, treasury stock method, excluding notable items (non-GAAP) | $ | 22,299 | $ | 22,639 | $ | 21,686 | $ | 18,211 | $ | 22,663 | |||||||||
Weighted average diluted shares outstanding | 84,010,450 | 84,863,779 | 85,498,568 | 85,413,575 | 85,271,650 | ||||||||||||||
Diluted total earnings per share (GAAP) | $ | 0.25 | $ | 0.42 | $ | 0.20 | $ | 0.03 | $ | 0.27 | |||||||||
Diluted total earnings per share, excluding notable items (non-GAAP) | $ | 0.27 | $ | 0.27 | $ | 0.25 | $ | 0.21 | $ | 0.27 | |||||||||
Average common equity (non-GAAP) | $ | 766,283 | $ | 739,313 | $ | 737,188 | $ | 736,068 | $ | 736,272 | |||||||||
Average tangible common equity (non-GAAP) | $ | 696,785 | $ | 656,160 | $ | 647,358 | $ | 633,535 | $ | 597,821 | |||||||||
Return on average common equity - (annualized), excluding notable items (non-GAAP) | 10.98 | % | 10.70 | % | 12.12 | % | 10.15 | % | 12.02 | % | |||||||||
Return on average tangible common equity - (annualized), excluding notable items (non-GAAP) | 12.38 | % | 12.38 | % | 14.16 | % | 12.16 | % | 15.20 | % | |||||||||
Pre-tax, pre-provision income (non-GAAP) | $ | 23,033 | $ | 42,285 | $ | 23,398 | $ | 25,256 | $ | 26,269 | |||||||||
LESS: Gain on sale of affiliate | — | 18,142 | — | — | — | ||||||||||||||
ADD BACK: Information services * | — | (441 | ) | — | 441 | — | |||||||||||||
ADD BACK: Restructuring | 1,646 | 2,065 | 5,763 | — | — | ||||||||||||||
Pre-tax, pre-provision income, excluding notable items (non-GAAP) | $ | 24,679 | $ | 25,767 | $ | 29,161 | $ | 25,697 | $ | 26,269 |
* | In the fourth quarter of 2018, $0.4 million of Information services expense was reclassified to Restructuring expense in conjunction with the Company's formal restructuring plan announced in the fourth quarter of 2018. |
** | Additional tax expense in the second quarter of 2018 relates to the tax impact of the April 2018 completion of the sale of Anchor and additional expense in the fourth quarter of 2018 relates to the completion of the sale of BOS. |
ZNYGVUKC6UPL#FN8-SZ;V[OT-W^"]-_\ A_T/\XIU
M7=)MR68M8>ZY[0_9N=(86BWUGC?[:O>RK?\ Z;]&J]S/JY]BN)>1AEF5(KW[
M0TOK^V_9_2;NWMRMGH^A^D^T_P!&]ZL5,Z3]NK]*QWVP.:1&[<0*3M%OM_HS
MJ/\ 2?H/M/I_]JO32^U7V(QF=&)K&RV;:*\FN19!9:[TV^[=_.,_PE?[BM8=
MN(FT!N]GV@R:W&MP9=6UQ<[W,L]GO8S?^D]+>J3J_J_Z&.'6/V>G@C'
M/OW;0^S]GN9[=^ZS]/\ :?\ NMZOVK9C[T7&JZ0.JMLJN>[(< ZNYGVUKC6UPL#FN8-
MSZ;V[OT-W^"]-_\ A_T/\XIU7=)MR68M8>ZY[0_9N=(86BWUGC?[:O>RK?\
MZ;]&J]S/JY]BN)>1AEF5(KW[0TOK^V_9_2;NWMRMGH^A^D^T_P!&]ZL5,Z3]
MNK]*QWVP.:1&[<0*3M%OM_HSJ/\ 2?H/M/I_]JO32^U7V(QF=&)K&RV;:*\F
MN19!9:[TV^[=_.,_PE?[BM8=N(FT!N]GV@R:W&MP9=6UQ<[W,L]GO8S
M?^D]+>J3J_J_Z&.'6/V>G@C'/OW;0^S]GN9[=^ZS]/\ :?\ NMZOVK9C[T7&
MJZ0.JMLJN>[(< _'T&0 #E_)(Y5+]/RXF7:W _K#E?T_%
MR;?SE'J:.18,!@>7;2UO_P H]3_H>?H #_/BOSO6C=%=WII/%<6-GT,$+VWJ
METLW&GMY>4^I-L-9LP .*LQB-8#TCSKM!K=E<$ .44HC%5
MGTSS;*3K2Q[!:BKRR#!PBFT+[NPB:9] 8\5M_0U 1YY[!K03FSHKM+$)<
M!%+L^M8!=Y4AVJB$OL_N;>B@ /D?K\J?'K#E?Q+,PYU5)W++^JFU,^@ !\[
M^_Q4-=5\M_3?CZ6YG*W4/ZOY_0 I5NPN1["BAKRE UM8P Y5R6-5:G2_.'RW
MV^?7^)2GC_+8I:T\P]+]0(W(P !$5M2L(']W4O*!K:Q;"FAKR Y?
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MJ;.G9H^MUO52QOV-^"S$:[=[][+;,G=ZIV56G5;,S.H
M9?56]%P[?L;Z\=F7FYC&LLO&G%O?=COUK#PT!HEWM;MKJL_[>]2Q9[Z>AM&2ZZ][ZGLR3*GKJ'F;G_O='<7WBI;V\5+>WBI;V\5+>WBI:81*HE@C08TO$PEQ?-&L[[>JG,*>
MJD6]O%2WMXJ6]O%2WMXJ6C(14P0G).
+.SLT8S7 M4)T409F8C3@8J0[-H&6
M6 M.C0H:
&4G9LMCI>H,&?>QJA=2Q.)@9F!M'DBV?,HDM3M2QP]LC\&G$"II
M8)B!'E8X!FU+_#^.3+.*,54?$.00HSP=3'9YR*X 9L //#U$P#=3'R>S<$?B
M%B")UI'A/%&6D$ ]6)P>#ES2Y<83K1B:EL)X)'"<^$.]!=XAC61;W6H7@S9&
M&?>B>P+8P Q4=+RX7HN(1 /S$38WIT6C)D=3B[JII[-D&9]X)_"6ITM*ISB
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MZ M3(QZJ9/XMR-3/'GFI@.93@#G8U-I(FE'C".>*?
M&>3DO($X#FSW1*5(G925&J,\#1*GG+PSJX4TV['CQIB)+2TS-1D[3I]YZ'#A
MPG,2H24HH81F4F!-,.C\3."]"?DENI))T*FG@!,U#4DR$Y.3<[%DY.@7\1.=3T"
M_B)SJ>@7\1.=3T"_B)SJ>@7\1.=3T"_B)SJ>@7\1.=3T"_B)SJ>@7\27SJ/(
MF>$C%3N@P/8!,E2.BEFQYAN#= (O$:0I% =88NO*):5
R$6$5&VBXZ74XXLQ;;KBW3 U,+8@YP8$, 1FS]HR&GZG"K_E9Y)7
MYC94.C*F==(,>P87KI?GKL3^K?S3V%L YXN*4@>6@+*>"\,Y) I"DG6DL5R&
MN-Y+P )T*P ^EL2<#)\*