XML 54 R28.htm IDEA: XBRL DOCUMENT v3.20.4
REPORTABLE SEGMENTS
 12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
REPORTABLE SEGMENTS REPORTABLE SEGMENTS
Management Reporting
The Company has two reportable segments: (i) Private Banking and (ii) Wealth Management and Trust, as well as the Holding Company within Holding Company and Eliminations. The financial performance of the Company is managed and evaluated according to these two segments. Each segment is managed by a segment leader (“Segment Leader”) who has full authority and responsibility for the performance and the allocation of resources within their segment. The Company’s CEO is the Company’s Chief Operating Decision Maker (“CODM”).
The Segment Leader for Private Banking is the CEO of Boston Private Bank, who is also the Company’s CEO. The Bank’s banking operations are reported in the Private Banking segment. The Segment Leader for Wealth Management and Trust is the President of Private Banking, Wealth and Trust. The Segment Leader of Wealth Management and Trust reports to the CEO of the Company. The Segment Leaders have authority with respect to the allocation of capital within their respective segments, management oversight responsibility, performance assessments, and overall authority and accountability within their respective segment. The Company’s CODM communicates with the President of Private Banking, Wealth and Trust regarding profit and loss responsibility, strategic planning, priority setting and other matters. The Company’s Chief Financial Officer reviews all financial detail with the CODM on a monthly basis.
Description of Reportable Segments
Private Banking
The Private Banking segment operates primarily in three geographic markets: New England, Northern California and Southern California.
The Bank conducts business under the name of Boston Private Bank & Trust Company in all markets. The Bank is chartered by The Commonwealth of Massachusetts and is insured by the FDIC. The Bank is principally engaged in providing banking services to high net worth individuals, privately-owned businesses and partnerships, and nonprofit organizations. In addition, the Bank is an active provider of financing for affordable housing, first-time homebuyers, economic development, social services, community revitalization and small businesses.
Wealth Management and Trust
The Wealth Management and Trust segment is comprised of the trust operations of the Bank and the operations of Boston Private Wealth. On September 1, 2019, KLS merged into Boston Private Wealth. As a result, the results of KLS are included in the results of Boston Private Wealth within the Wealth Management and Trust segment for all periods presented. The Wealth Management and Trust segment offers planning-based financial strategies, wealth management, family office, financial planning, tax planning, and trust services to individuals, families, institutions, and nonprofit institutions. The Wealth Management and Trust segment operates in New England, New York, Southeast Florida, Northern California and Southern California.
Changes to Segment Reporting
With the integration of KLS into Boston Private Wealth, the Company reorganized the segment reporting structure to align with how the Company's financial performance and strategy is reviewed and managed. The results of KLS are now included in the results of Boston Private Wealth within the Wealth Management and Trust segment for all periods presented. The results of DGHM are now included within the Holding Company and Eliminations segment for all periods presented. The results of Anchor and BOS are included in the Holding Company and Eliminations segment for the periods owned. See Part II. Item 8. “Financial Statements and Supplementary Data - Note 3: Divestitures” for further details on the transactions.
Measurement of Segment Profit and Assets
The accounting policies of the segments are the same as those described in Part II. Item 8. “Financial Statements and Supplementary Data - Note 1: Basis of Presentation and Summary of Significant Accounting Policies.”
Reconciliation of Reportable Segment Items
The following tables present a reconciliation of the revenues, expenses, assets, and other significant items of the reportable segments as of and for the years ended December 31, 2020, 2019, and 2018.
Year ended December 31,
202020192018
Private Banking (1)(In thousands)
Net interest income$235,984 $231,796 $238,036 
Fees and other income13,625 13,869 9,366 
Total revenue249,609 245,665 247,402 
Provision/(credit) for loan losses31,998 (3,564)(2,198)
Total operating expense (2)167,980 157,891 165,263 
Income before income taxes49,631 91,338 84,337 
Income tax expense 6,564 19,110 16,313 
Net income from continuing operations43,067 72,228 68,024 
Net income attributable to the Company$43,067 $72,228 $68,024 
Assets$9,964,691 $8,746,289 $8,424,967 
Amortization of intangibles$304 $37 $— 
Depreciation$10,881 $9,737 $8,646 

Year ended December 31,
202020192018
Wealth Management and Trust (1)(In thousands)
Net interest income$81 $407 $338 
Fees and other income73,100 75,949 79,192 
Total revenue73,181 76,356 79,530 
Total operating expense (2)61,948 58,375 66,492 
Income before income taxes11,233 17,981 13,038 
Income tax expense 3,506 5,768 4,145 
Net income from continuing operations$7,727 $12,213 $8,893 
Net income attributable to the Company$7,727 $12,213 $8,893 
Assets$152,412 $148,803 $130,346 
Amortization of intangibles$2,393 $2,654 $2,775 
Depreciation$1,205 $1,297 $1,660 

Year ended December 31,
202020192018
Holding Company and Eliminations (1) (3)(In thousands)
Net interest income (4)$(2,639)$(4,127)$(3,808)
Fees and other income 7,159 11,729 61,439 
Total revenue4,520 7,602 57,631 
Total operating expense 11,337 13,940 35,600 
Income/(loss) before income taxes(6,817)(6,338)22,031 
Income tax expense/(benefit) (1,182)(2,287)17,079 
Net income/(loss) from continuing operations(5,635)(4,051)4,952 
Net income attributable to noncontrolling interests6 362 3,487 
Net income from discontinued operations (5)— — 2,002 
Net income/(loss) attributable to the Company$(5,641)$(4,413)$3,467 
Assets (including eliminations)$(68,370)$(64,592)$(60,688)
Amortization of intangibles$— $— $154 
Depreciation$151 $194 $388 
Year ended December 31,
202020192018
Total Company (1) (3)(In thousands)
Net interest income$233,426 $228,076 $234,566 
Fees and other income93,884 101,547 149,997 
Total revenue327,310 329,623 384,563 
Provision/(credit) for loan losses31,998 (3,564)(2,198)
Total operating expense241,265 230,206 267,355 
Income before income taxes54,047 102,981 119,406 
Income tax expense 8,888 22,591 37,537 
Net income from continuing operations45,159 80,390 81,869 
Net income attributable to noncontrolling interests6 362 3,487 
Net income from discontinued operations (5)— — 2,002 
Net income attributable to the Company$45,153 $80,028 $80,384 
Assets$10,048,733 $8,830,501 $8,494,625 
Amortization of intangibles$2,697 $2,691 $2,929 
Depreciation$12,237 $11,228 $10,694 
___________________
(1) Due to rounding, the sum of individual segment results may not add up to the Total Company results.
(2) Total operating expense related to the Private Banking and Wealth Management and Trust segments includes Restructuring expense of $1.3 million and $0.4 million, respectively, for the year ended December 31, 2019. Total operating expense related to the Private Banking and Wealth Management and Trust segments includes Restructuring expense of $6.6 million and $1.2 million, respectively, for the year ended December 31, 2018. There were no other Restructuring expenses in other periods presented.
(3) The results of Anchor and BOS for the periods owned in 2018 are included in the Holding Company and Eliminations segment. Most categories have decreased in 2020 and 2019 relative to 2018 primarily driven by the sales of Anchor and BOS. See Part II. Item 8. “Financial Statements and Supplementary Data - Note 3: Divestitures” for additional information.
(4) Interest expense on junior subordinated debentures is included in the Holding Company and Eliminations segment.
(5) The Holding Company and Eliminations segment calculation of Net income attributable to the Company includes Net income from discontinued operations of $2.0 million for the year ended December 31, 2018. The Company received the final payment related to a revenue sharing agreement with Westfield in the first quarter of 2018. The Company will not receive additional income from Westfield now that the final payment has been received.