-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OlxjoTg3j7IpnJ7aNEqcdgGiU4a3zVQzpcVgWCyLv/4H9QpAvsXPly8LntQuRoDy 0oH7LeOf2UpNMcvR0vZ8ag== 0000950135-99-002654.txt : 19990514 0000950135-99-002654.hdr.sgml : 19990514 ACCESSION NUMBER: 0000950135-99-002654 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOSTON PRIVATE FINANCIAL HOLDINGS INC CENTRAL INDEX KEY: 0000821127 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 042976299 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-17089 FILM NUMBER: 99620452 BUSINESS ADDRESS: STREET 1: 10 POST OFFICE SQ CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6175561900 MAIL ADDRESS: STREET 1: 10 POST OFFICE SQUARE CITY: BOSTON STATE: MA ZIP: 02109 FORMER COMPANY: FORMER CONFORMED NAME: BOSTON PRIVATE BANCORP INC DATE OF NAME CHANGE: 19920703 10-Q 1 BOSTON PRIVATE FINANCIAL 10-Q 1 As filed with the Securities and Exchange Commission on May 13, 1999 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------- FORM 10-Q (Mark One) |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 1999 OR |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______. Commission File Number: 0-17089 BOSTON PRIVATE FINANCIAL HOLDINGS, INC. (Exact name of registrant as specified in its charter)
COMMONWEALTH OF MASSACHUSETTS 04-2976299 (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) TEN POST OFFICE SQUARE BOSTON, MASSACHUSETTS 02109 (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 912-1900 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15 (d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No __ APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of APRIL 30, 1999:
Common Stock - Par Value $1.00 10,812,813 shares - ------------------------------ ----------------- (class) (outstanding)
================================================================================ 2 BOSTON PRIVATE FINANCIAL HOLDINGS, INC FORM 10-Q TABLE OF CONTENTS
PAGE ---- Cover Page 1 Index 2 PART I - FINANCIAL INFORMATION Item 1 Financial Statements Consolidated Balance Sheets 3 Consolidated Statements of Operations 4 Consolidated Statements of Changes in Stockholders' Equity 5 Consolidated Statements of Cash Flows 6 Notes to Consolidated Financial Statements 7 - 9 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 10 - 18 Item 3 Quantitative and Qualitative Disclosures about Market Risk 19 PART II - OTHER INFORMATION Item 1 Legal Proceedings 19 Item 2 Changes in Securities and Use of Proceeds 19 Item 3 Defaults upon Senior Securities 19 Item 4 Submission of Matters to a Vote of Security Holders 19 Item 5 Other Information 19 Item 6 Exhibits and Reports on Form 8-K 19 Signature Page 20
2 3 BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31, 1999 1998 --------- ------------ (IN THOUSANDS, EXCEPT SHARE DATA) ASSETS: Cash and due from banks $ 17,608 $ 12,924 Federal funds sold 7,000 11,000 Investment securities available for sale (amortized cost of $61,204 and $53,996, respectively) 60,904 54,102 Mortgage-backed securities available for sale (amortized cost of $7,550 and $11,840, respectively) 7,551 11,909 Loans receivable: Commercial 169,401 154,940 Residential mortgage 184,878 173,810 Home equity 19,724 19,866 Other 302 335 --------- --------- Total loans 374,305 348,951 Less allowance for loan losses (4,641) (4,386) --------- --------- Net loans 369,664 344,565 Stock in the Federal Home Loan Bank of Boston 4,718 4,718 Premises and equipment, net 3,567 3,627 Excess of cost over net assets acquired, net 3,229 3,424 Management fees receivable 3,244 3,288 Accrued interest receivable 2,565 2,405 Other assets 4,100 5,285 --------- --------- Total assets $ 484,150 $ 457,247 ========= ========= LIABILITIES: Deposits $ 363,686 $ 334,852 Securities sold under agreements to repurchase 10,026 6,241 FHLB borrowings 71,322 76,329 Accrued interest payable 1,178 651 Other liabilities 4,032 6,883 --------- --------- Total liabilities 450,244 424,956 --------- --------- STOCKHOLDERS' EQUITY: Common stock, $1.00 par value per share; authorized: 18,000,000 shares issued: 10,812,613 shares in 1999 and 10,747,744 shares in 1998 10,813 10,748 Additional paid-in capital 13,045 12,680 Retained earnings 10,572 9,246 Stock subscriptions receivable (332) (495) Accumulated other comprehensive income (loss) (192) 112 --------- --------- Total stockholders' equity 33,906 32,291 --------- --------- Total liabilities and stockholders' equity $ 484,150 $ 457,247 ========= =========
3 4 BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, ----------------------------- 1999 1998 ------------- ------------ (IN THOUSANDS, EXCEPT SHARE DATA) Interest and dividend income: Commercial loans $ 3,525 $ 3,076 Residential mortgage loans 3,056 2,348 Home equity and other loans 379 332 Investment securities 610 570 Mortgage-backed securities 169 266 FHLB stock dividends 76 64 Federal funds sold 132 86 Deposits in banks 28 40 ------------ ------------ Total interest and dividend income 7,975 6,782 ------------ ------------ Interest expense: Savings and NOW 111 102 Money market 1,540 1,139 Certificates of deposit 1,109 1,065 Federal funds purchased 38 39 Securities sold under agreements to repurchase 79 52 FHLB borrowings 1,072 1,101 Other short-term borrowings -- 14 ------------ ------------ Total interest expense 3,949 3,512 ------------ ------------ Net interest income 4,026 3,270 Provision for loan losses 238 284 ------------ ------------ Net interest income after provision for loan losses 3,788 2,986 ------------ ------------ Fees and other income: Investment management and trust 4,207 3,740 Equity in earnings of partnerships 90 205 Deposit account service charges 69 51 Gain on sale of loans 44 39 Gain on sale of investment securities 46 55 Other 104 55 ------------ ------------ Total fees and other income 4,560 4,145 ------------ ------------ Operating expense: Salaries and employee benefits 4,258 3,826 Occupancy 371 329 Equipment 217 157 Professional services 622 368 Marketing 143 94 Business development 168 128 Amortization of intangibles 70 81 Other 399 351 ------------ ------------ Total operating expense 6,248 5,334 ------------ ------------ Income before income taxes 2,100 1,797 Income tax expense 649 609 ------------ ------------ Income before cumulative effect of change in accounting principle 1,451 1,188 Cumulative effect of change in accounting principle 125 -- ------------ ------------ Net income $ 1,326 $ 1,188 ============ ============ Per share data: Basic earnings per share: Income before cumulative effect of change in accounting principle $ 0.13 $ 0.11 Cumulative effect of change in accounting principle (0.01) -- ------------ ------------ Net income $ 0.12 $ 0.11 ============ ============ Diluted earnings per share: Income before cumulative effect of change in accounting principle $ 0.13 $ 0.11 Cumulative effect of change in accounting principle (0.01) -- ------------ ------------ Net income $ 0.12 $ 0.11 ============ ============ Average common shares outstanding 10,777,918 10,671,213 ============ ============ Average diluted shares outstanding 11,117,998 11,081,198 ============ ============
4 5 BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
ACCUMULATED ADDITIONAL OTHER COMMON PAID-IN RETAINED STOCK COMPREHENSIVE STOCK CAPITAL EARNINGS SUBSCRIPTIONS INCOME (LOSS) TOTAL -------- --------- -------- ------------- ------------- -------- (IN THOUSANDS, EXCEPT SHARE DATA) Balance at December 31, 1997 $ 10,641 $ 12,140 $ 3,800 $ (669) $ (23) $ 25,935 Net income -- -- 1,188 -- -- 1,188 Other comprehensive income, net: Change in unrealized gain (loss) on securities available for sale -- -- -- -- (62) (62) -------- Total other comprehensive income 1,126 Stock options exercised 44 315 -- -- -- 359 Stock subscription payments -- -- -- 165 -- 165 -------- -------- -------- -------- -------- -------- Balance at March 31, 1998 10,552 11,909 3,122 (681) (137) 27,585 Balance at December 31, 1998 10,748 12,680 9,246 (495) 112 32,291 Net income -- -- 1,326 -- -- 1,326 Other comprehensive income, net: Change in unrealized gain (loss) on securities available for sale -- -- -- -- (304) (304) -------- Total other comprehensive income 1,022 Proceeds from issuance of 47,769 shares of common stock 48 328 -- -- -- 376 Stock options exercised 17 37 -- -- -- 54 Stock subscription payments -- -- -- 163 -- 163 -------- -------- -------- -------- -------- -------- Balance at March 31, 1999 $ 10,813 $ 13,045 $ 10,572 $ (332) $ (192) $ 33,906 ======== ======== ======== ======== ======== ========
5 6 BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, ---------------------------- 1999 1998 -------- -------- (IN THOUSANDS) Cash flows from operating activities: Net income $ 1,326 $ 1,188 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 430 292 Gain on sale of loans (44) (39) Gain on sale of investment securities (46) (55) Provision for loan losses 238 284 Distributed (undistributed) earnings of partnership investments 1,738 (205) Loans originated for sale (5,487) (5,495) Proceeds from sale of loans 5,531 5,534 (Increase) decrease in: Accrued interest receivable (160) (132) Investment management fees receivable 44 (548) Other assets (382) (535) Increase (decrease) in: Accrued interest payable 527 56 Other liabilities (2,851) 160 -------- -------- Net cash provided (used) by operating activities 864 505 -------- -------- Cash flows from investing activities: Net decrease (increase) in fed funds sold 4,000 (20,250) Investment securities available for sale: Purchases (40,444) (20,480) Sales 27,105 14,583 Maturities 6,040 2,880 Mortgage-backed securities available for sale: Sales 3,387 -- Principal payments 895 -- Investment securities held to maturity: Purchases -- (874) Maturities -- 1,400 Mortgage-backed securities held to maturity: Principal payments -- 2,028 Net decrease (increase) in loans (25,247) (3,309) Purchase of FHLB stock -- (516) Recoveries on loans previously charged off 24 2 Capital expenditures (145) (329) -------- -------- Net cash provided (used) by investing activities (24,385) (24,865) -------- -------- Cash flows from financing activities: Net increase (decrease) in deposits 28,834 21,383 Net increase (decrease) in repurchase agreements 3,785 4,274 Net increase (decrease) in federal funds purchased -- (13,255) FHLB advances: Proceeds 3,629 24,180 Repayments (8,636) (14,292) Net increase (decrease) in other short-term borrowings -- (517) Proceeds from stock subscriptions receivable 163 165 Proceeds from issuance of common stock 430 359 -------- -------- Net cash provided (used) by financing activities 28,205 22,297 -------- -------- Net increase (decrease) in cash and due from banks 4,684 (2,063) Cash and due from banks at beginning of year 12,924 12,361 -------- -------- Cash and due from banks at end of period $ 17,608 $ 10,298 ======== ======== Supplementary disclosures of cash flow information: Cash paid during the period for interest $ 3,422 $ 3,455 Cash paid during the period for income taxes 313 700 Supplementary disclosures of non-cash activities: Transfer of loans to other real estate owned -- 42
6 7 BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) BASIS OF PRESENTATION The consolidated financial statements of Boston Private Financial Holdings, Inc. (the "Company") include the accounts of the Company and its wholly-owned subsidiaries, Boston Private Bank & Trust Company (the "Bank"), and Boston Private Investment Management, Inc. ("BPIM"). The Bank's consolidated financial statements include the accounts of its wholly-owned subsidiaries, BPB Securities Corporation, Boston Private Asset Management Corporation, and Boston Private Preferred Capital Corporation. BPIM's consolidated financial statements include the accounts of its wholly-owned subsidiary, Westfield Capital Management Company ("Westfield"). All significant intercompany accounts and transactions have been eliminated in consolidation. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to change relate to the determination of the allowance for loan losses. In connection with the determination of the allowance for loan losses, management obtains independent appraisals for significant properties. The unaudited interim consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles and include all necessary adjustments of a normal recurring nature, which in the opinion of management, are required for a fair presentation of the results and financial condition of the Company. The interim results of consolidated operations are not necessarily indicative of the results for the entire year. The information in this report should be read in conjunction with the consolidated financial statements and accompanying notes included in the December 31, 1998 Annual Report to Shareholders. Certain fiscal 1998 information has been reclassified to conform with the 1999 presentation. (2) EARNINGS PER SHARE Basic EPS excludes dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. The earnings per share calculation is based upon the weighted average number of common shares and common share equivalents outstanding during the period. Stock options, when dilutive, are included as common stock equivalents using the treasury stock method. The following table is a reconciliation of the numerators and denominators of basic and diluted earnings per share computations for the three months ended March 31:
1999 1998 ------------------------------ ------------------------------ Per Per Share Share Income Shares Amount Income Shares Amount ------- ------- ------ ------- ------- ------ (In thousands, except per share amounts) BASIC EPS Net Income $1,326 10,778 $0.12 $1,188 10,671 $0.11 ===== ===== EFFECT OF DILUTIVE SECURITIES Stock Options -- 340 -- 410 ------ ------ ------ ------ DILUTED EPS ------ ------- ----- ------- ------ ----- Net Income $1,326 11,118 $0.12 $ 1,188 11,081 $0.11 ====== ======= ===== ======= ====== =====
7 8 BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (3) BUSINESS SEGMENTS Management Reporting The Company has two reportable segments, the Bank and Westfield. The financial performance of the Company is managed and evaluated by business segment. The segments are managed separately because each business is a company with different clients, employees, systems, risks, and marketing strategies. Description of Business Segments The Bank pursues a "private banking" business strategy and is principally engaged in providing banking, investment and fiduciary products to high net worth individuals, their families and businesses in the greater Boston area and New England and, to a lesser extent, Europe and Latin America. The Bank offers its clients a broad range of basic deposit services, including checking and savings accounts, with automated teller machine ("ATM") access, and cash management services through sweep accounts and repurchase agreements. The Bank also offers commercial, residential mortgage, home equity and consumer loans. In addition, it provides investment advisory and asset management services, securities custody and safekeeping services, trust and estate administration and IRA and Keogh accounts. The Bank's investment management emphasis is on large-cap equity and actively managed fixed income portfolios. Westfield serves the investment management needs of high net worth individuals and institutions with endowments or retirement plans in the greater Boston area, New England, and other areas of the U.S. Westfield specializes in growth equity portfolios with a particular focus on identifying and managing small and mid-cap equity positions. It also acts as the managing general partner for three limited partnerships, one invests primarily in technology stocks, another invests primarily in small capitalization equities and a third, started in June 1998, invests primarily in midcap equities. Measurement of Segment Profit and Assets The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Revenues, expenses, and assets are recorded by each segment, and separate financial statements are reviewed by management. In addition to direct expenses, each business segment is allocated a share of holding company expenses based on the segment's percentage of consolidated net income. Reconciliation of Reportable Segment Items The following tables are a reconciliation of the revenues, net income, assets, and other significant items of reportable segments as of and for the quarters ended March 31, 1999 and 1998.
1999 ------------------------------------------------------------- BANK WESTFIELD OTHER INTERSEGMENT TOTAL --------- --------- --------- ------------ -------- (in thousands) INCOME STATEMENT DATA: Revenues from External Customers: Net Interest Income $ 4,026 $ 31 $ -- $ (31) $ 4,026 Non-Interest Income 2,052 2,508 -- -- 4,560 -------- ------- ------ --------- -------- Total Revenues 6,078 2,539 -- (31) 8,586 Provision for Loan Losses 238 -- -- -- 238 Non-Interest Expense 4,440 1,933 -- -- 6,373 Income Taxes 401 248 -- -- 649 -------- ------- ------ --------- -------- Segment Profit $ 999 $ 358 $ -- $ (31) $ 1,326 -------- ------- ------ ---------- -------- BALANCE SHEET DATA: Total Segment Assets $480,673 $ 3,821 $1,805 $ (2,149) $484,150 ======== ======= ====== ========= ========
8 9 BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1999 ------------------------------------------------------------- BANK WESTFIELD OTHER INTERSEGMENT TOTAL --------- --------- --------- ------------ -------- (in thousands) INCOME STATEMENT DATA: Revenues from External Customers: Net Interest Income $ 3,277 $ -- $ 2 $ (9) $ 3,270 Non-Interest Income 1,415 2,730 -- -- 4,145 -------- ------- ------ --------- -------- Total Revenues 4,692 2,730 2 (9) 7,415 Provision for Loan Losses 284 -- -- -- 284 Non-Interest Expense 3,451 1,883 -- -- 5,334 Income Taxes 262 347 -- -- 609 -------- ------- ------ --------- -------- Segment Profit $ 695 $ 500 $ 2 $ (9) $ 1,188 -------- ------- ------ --------- -------- BALANCE SHEET DATA: Total Segment Assets $388,862 $ 3,805 $ 488 $ (574) $392,581 ======== ======= ====== ========= ========
(4) RECENT ACCOUNTING DEVELOPMENTS In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS 133, "Accounting for Derivative Instruments and Hedging Activities." This statement establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, (collectively referred to as "derivatives") and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair market value. Under this statement, an entity that elects to apply hedge accounting is required to establish at the inception of the hedge the method it will use for assessing the effectiveness of the hedging derivative and the measurement approach for determining the ineffective aspect of the hedge. This statement is effective for all fiscal quarters of fiscal years beginning after June 15, 1999. This statement will not have a material effect on the Company's consolidated financial statements. 9 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE QUARTER ENDED MARCH 31, 1999 This quarterly report contain certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. The Company's actual results could differ materially from those projected in the forward-looking statements as a result of, among other factors, changes in loan defaults and charge-off rates, reduction in deposit levels necessitating increased borrowing to fund loans and investments, changes in interest rates, fluctuations in assets under management and other sources of fee income, the impact of year 2000 issues on the Company, its clients and its vendors, changes in assumptions used in making such forward-looking statements, as well as the factors listed under "Risk Factors and Factors Affecting Forward Looking Statements", in the Company's Annual Report on Form 10-K for the year ended December 31, 1998. GENERAL Boston Private Financial Holdings, Inc. (the "Company") is incorporated under the laws of the Commonwealth of Massachusetts and is registered with the Board of Governors of the Federal Reserve System (the "Federal Reserve Board") as a bank holding company under the Bank Holding Company Act of 1956, as amended (the "BHCA"). On July 1, 1988, the Company became the parent holding company of Boston Private Bank & Trust Company (the "Bank"), a trust company chartered by the Commonwealth of Massachusetts and insured by the Federal Deposit Insurance Corporation (the "FDIC"). Effective April 22, 1998, the Company changed its name from Boston Private Bancorp, Inc. to Boston Private Financial Holdings, Inc. On October 31, 1997, the Company acquired Westfield Capital Management Company Inc. ("Westfield"), a Massachusetts corporation engaged in providing a range of investment management services to individual and institutional clients, in exchange for 3,918,367 newly issued shares of the Company's common stock. Concurrent with the acquisition, the Company formed a subsidiary, Boston Private Investment Management, Inc., as a holding company for Westfield. The acquisition was accounted for as a "pooling of interests." Accordingly, the current and prior period results of operations of the Company have been restated to reflect the results of operations on a consolidated basis. The Company conducts substantially all of its business through its wholly-owned operating subsidiaries, the Bank and Westfield. The Company's and the Bank's principal office is located at Ten Post Office Square, Boston, Massachusetts, and Westfield is located at One Financial Center, Boston, Massachusetts. The Bank pursues a "private banking" business strategy and is principally engaged in providing banking, investment and fiduciary products and services to high net worth individuals, their families and businesses in the greater Boston area and New England and, to a lesser extent, Europe and Latin America. The Bank offers its clients a broad range of basic deposit services, including checking and savings accounts, with automated teller machine ("ATM") access, and cash management services through sweep accounts and repurchase agreements. The Bank also offers commercial, residential mortgage, home equity and personal loans. In addition, it provides investment advisory and asset management services, securities custody and safekeeping services, trust and estate administration and IRA and Keogh accounts. Westfield serves the investment management needs of high net worth individuals and institutions with endowments or retirement plans in the greater Boston area, New England, and other areas of the U.S. Westfield specializes in growth equity portfolios with a particular focus on identifying and managing small and mid-cap equity positions. It also acts as the managing general partner for three limited partnerships, one invests primarily in technology stocks, another invests primarily in small capitalization equities and a third, started in June 1998, invests primarily in midcap equities. 10 11 FINANCIAL CONDITION TOTAL ASSETS Total assets increased $26.9 million, or 5.9% from $457.2 million at December 31, 1998 to $484.2 million at March 31, 1999. This increase is primarily due to continued loan growth funded by deposit balances. INVESTMENTS Total investments (consisting of cash, federal funds sold, investment securities, mortgage-backed securities, and stock in the FHLB of Boston) totaled $97.8 million, or 20.2% of total assets, at March 31, 1999, compared to $94.7 million, or 20.7% of total assets, at December 31, 1998. Funds from the sale and maturity of $36.5 million of investment securities and mortgage-backed securities were primarily reinvested in municipal bonds. Management periodically evaluates investment alternatives to properly manage the overall balance sheet. The timing of sales and reinvestments is based on various factors, including management's evaluation of interest rate trends and loan demand. The following table is a summary of investment and mortgage-backed securities available for sale as of March 31, 1999 and December 31, 1998:
Unrealized Amortized ----------------- Market Cost Gains Losses Value ---------- ------- ------ --------- AT MARCH 31, 1999 U.S. Government and agencies $ 28,134 $ 3 $ (278) $ 27,859 Municipal bonds 33,070 71 (96) 33,045 Mortgage-backed securities 7,550 26 (25) 7,551 ========== ====== ====== ========= Total investments $ 68,754 $ 100 $ (399) $ 68,455 ========== ====== ====== ========= AT DECEMBER 31, 1998 U.S. Government and agencies $ 35,074 $ 10 $ (34) $ 35,050 Municipal bonds 18,922 132 (2) 19,052 Mortgage-backed securities 11,840 83 (14) 11,909 ========== ====== ====== ========= Total investments $ 65,836 $ 225 $ (50) $ 66,011 ========== ====== ====== =========
LOANS Total loans increased $25.4 million, or 7.3%, during the first quarter of 1999 from $349.0 million, or 76.3% of total assets, at December 31, 1998, to $374.3 million, or 77.3% of total assets, at March 31, 1999. Both the commercial and residential mortgage loan portfolios experienced significant growth due to the strong local economy and low interest rate environment. Interest rates affect both the level of new loan originations and refinances or paydowns of existing loans. During the first quarter of 1999, interest rates were at fairly stable, low levels, and demand for new residential and commercial loans and refinances was strong. Commercial loans increased $14.5 million, or 9.3%, and residential mortgage loans increased $11.1 million, or 6.4%, during the first quarter of 1999 as a result of net new loan originations. RISK ELEMENTS The following table sets forth information regarding non-performing loans, non-performing assets, and delinquent loans 30-89 days past due as to interest or principal at the dates indicated.
MARCH 31, 1999 DECEMBER 31, 1998 -------------- ----------------- (DOLLARS IN THOUSANDS) Loans accounted for on a nonaccrual basis $ 636 $ 565 Loans past due 90 days or more, but still accruing -- -- ------ ------ Total non-performing loans 636 565 Other real estate owned -- -- ====== ====== Total non-performing assets $ 636 $ 565 ====== ====== Delinquent loans 30-89 days past due 3,703 3,307 ====== ======
11 12 The Company discontinues the accrual of interest on a loan when the collectibility of principal or interest is in doubt. In certain instances, loans that have become 90 days past due may remain on accrual status if the value of the collateral securing the loan is sufficient to cover principal and interest and the loan is in the process of collection. Total non-performing assets increased by $71,000, or 12.6% during the first quarter of 1999, however the percentage of non-performing assets to total assets remained fairly stable at 0.13%. The Company continues to evaluate the underlying collateral and value of each of its non-performing assets and pursues the collection of all amounts due. At March 31, 1999, loans with an aggregate balance of $3.7 million, or 0.99% of total loans, were 30 to 89 days past due, an increase of $396,000, or 12.0%, from $3.3 million, or 0.95% of total loans, reported at December 31, 1998. Most of these loans are adequately secured and management's success in keeping these borrowers current varies from month to month. ALLOWANCE FOR LOAN LOSSES The allowance for loan losses is established through a charge to operations. When management believes that the collectibility of a loan's principal balance is unlikely, the principal amount is charged against the allowance. Recoveries on loans which have been previously charged off are credited to the allowance as received. The allowance for loan losses is determined using a systematic analysis and procedural discipline based on historical experience, product types and industry benchmarks. The allowance is segregated into three components; "general", "specific" and "unallocated". The general component is determined by applying coverage percentages to groups of loans based on risk ratings and product types. A system of periodic loan reviews is performed to individually assess the inherent risk and assign risk ratings to each loan. Coverage percentages applied are determined based on industry practice and management's judgment. The specific component is established by allocating a portion of the allowance for loan losses to individual classified loans on the basis of specific circumstances and assessments. The unallocated component supplements the first two components based on management's judgment of the effect of current and forecasted economic conditions on the borrowers' abilities to repay, an evaluation of the allowance for loan losses in relation to the size of the overall loan portfolio, and consideration of the relationship of the allowance for loan losses to non-performing loans, net charge-off trends, and other factors. While this evaluation process utilizes historical and other objective information, the classification of loans and the establishment of the allowance for loan losses relies to a great extent on the judgment and experience of management. While management evaluates currently available information in establishing the allowance for loan losses, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used in making the evaluations. In addition, various regulatory agencies, as an integral part of their examination process, periodically review a financial institution's allowance for loan losses. Such agencies may require the financial institution to recognize additions to the allowance based on their judgments about information available to them at the time of their examination. The following table is an analysis of the Bank's allowance for loan losses for the periods indicated:
THREE MONTHS ENDED MARCH 31, ---------------------------- 1999 1998 ---------- --------- (DOLLARS IN THOUSANDS) Ending gross loans $ 374,305 $ 279,779 ========== ========= Allowance for loan losses, beginning of period $ 4,386 $ 3,645 Provision for loan losses 238 284 Charge-offs (7) (376) Recoveries 24 2 ---------- --------- Allowance for loan losses, end of period $ 4,641 $ 3,555 ========== =========
12 13 DEPOSITS AND BORROWINGS The Company experienced an increase in total deposits of $28.8 million, or 8.6%, during the first quarter of 1999, from $334.9 million, or 73.2% of total assets, at December 31, 1998, to $363.7 million, or 75.1% of total assets, at March 31, 1999. This increase was most pronounced in certificates of deposit $100,000 or greater, and savings accounts. The increase in savings accounts was primarily due to the Bank acting as agent for client funds on a temporary basis. The following table shows the composition of the Company's deposits at March 31, 1999 and December 31, 1998:
MARCH 31, DECEMBER 31, 1999 1998 --------- --------- (IN THOUSANDS) Demand deposits $ 44,517 $ 47,766 NOW 36,689 35,735 Savings 28,344 4,235 Money market 164,038 164,626 Certificates of deposit under $100,000 29,169 29,874 Certificates of deposit $100,000 or greater 60,929 52,616 --------- --------- Total $ 363,686 $ 334,852 ========= =========
Total borrowings (consisting of securities sold under agreements to repurchase ("repurchase agreements"), federal funds purchased, FHLB borrowings and other short-term borrowings) decreased by $1.2 million or 1.5%, during the first three months of 1999. This decrease was attributable to paydowns of FHLB borrowings, partially offset by an increase in repurchase agreements with cash management customers of the Bank. Management will from time to time take advantage of opportunities to fund asset growth with borrowings, but on a long-term basis the Company intends to replace a portion of its borrowings with core deposits. LIQUIDITY Liquidity is defined as the ability to meet current and future financial obligations of a short-term nature. The Company further defines liquidity as the ability to respond to the needs of depositors and borrowers as well as to earnings enhancement opportunities in a changing marketplace. Primary sources of liquidity consist of investment management fees, deposit inflows, loan repayments, borrowed funds, and maturity and sales of investment securities. These sources fund the Company's lending and investment activities. Management is responsible for establishing and monitoring liquidity targets as well as strategies to meet these targets. At March 31, 1999, cash, federal funds sold and securities available for sale amounted to $93.1 million, or 19.2% of total assets of the Company. This compares to $89.9 million, or 19.7% of total assets, at December 31, 1998. In general, the Bank maintains a liquidity target of 10% to 20% of total assets. The Bank is a member of the FHLB of Boston and as such has access to both short and long-term borrowings of up to $149 million at the current time. In addition, the Bank maintains a line of credit at the FHLB of Boston as well as other lines of credit with several correspondent banks. Management believes that the Bank has adequate liquidity to meet its commitments for the foreseeable future. Westfield's primary source of liquidity consists of investment management fees that are collected on a quarterly basis. At March 31, 1999 Westfield had working capital of approximately $1.9 million. Management believes that Westfield has adequate liquidity to meet its commitments for the foreseeable future. The Company's primary sources of funds are dividends from its subsidiaries, issuance of its Common Stock and borrowings. Management believes that the Company has adequate liquidity to meet its commitments for the foreseeable future. CAPITAL RESOURCES Total stockholders' equity of the Company at March 31, 1999 was $33.9 million, as compared to $32.3 million at December 31, 1998. This increase was the result of the Company's net income for the quarter of $1.3 million, plus the exercise of stock options, less the change in accumulated other comprehensive income. 13 14 The following table presents actual capital amounts and regulatory capital requirements as of March 31, 1999 and December 31, 1998:
TO BE WELL CAPITALIZED FOR CAPITAL ADEQUACY PURPOSES UNDER PROMPT CORRECTIVE ACTUAL ACTION PROVISIONS ------------------------------- ------------------------------- ---------------------------- AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO --------------- --------------- --------------- -------------- -------------- -------------- AS OF MARCH 31, 1999: Total risk-based capital Company $ 34,548 11.78% $ 23,462 > 8.0% $ 29,328 > 10.0% Bank 30,592 10.56 23,181 8.0 28,976 10.0 Tier I risk-based Company 30,870 10.53 11,731 4.0 17,597 6.0 Bank 26,957 9.30 11,590 4.0 17,386 6.0 Tier I leverage capital Company 30,870 6.60 18,706 4.0 23,383 5.0 Bank 26,957 5.82 18,513 4.0 23,141 5.0 AS OF DECEMBER 31, 1998: Total risk-based capital Company $ 32,185 11.77% $ 21,873 > 8.0% $ 27,341 > 10.0% Bank 29,157 10.87 21,452 8.0 26,815 10.0 Tier I risk-based Company 28,755 10.52 10,936 4.0 16,405 6.0 Bank 25,792 9.62 10,726 4.0 16,089 6.0 Tier I leverage capital Company 28,755 6.57 17,509 4.0 21,886 5.0 Bank 25,792 5.96 17,318 4.0 21,647 5.0
YEAR 2000 READINESS DISCLOSURE Scope and Overview. In 1996, the Company formed a Year 2000 project team to identify information technology and non-information technology systems, procedures, and practices that require modification or replacement. The Year 2000 problem concerns the inability of computer-based systems, including among others, computer hardware, embedded chips, and computer software programs, to recognize properly and process date-sensitive information involving 20th and 21st century dates. Data processing for the Company's major operating systems (investment management, custody, loans and deposits) is conducted through third party vendors using on-site computer interfaces. Inventory and Year 2000 readiness assessment of all information technology and non-information technology systems and applications has been completed and all third party vendors who service the Company have been contacted. Efforts to bring the major operating systems, and certain outsourced applications, into compliance with Year 2000 requirements have or will be accomplished primarily through the installation of updated or replacement hardware or programs developed by third parties. In addition the status of all Company facilities and all significant third-party providers of goods and services to the Company has been assessed. State of Readiness. The Company's Year 2000 Readiness Program contains a number of discrete segments, including Awareness and Assessment, Project Planning, Remediation, User Acceptance Test Plans, Unit Testing, Commercial, Personal, Contingency Plans for Information Systems and Contingency Plans for Business Continuation. Awareness and Assessment, Project Planning for all aspects and User Acceptance Test Plans for mission critical systems have been completed. Mission critical systems are defined by the Company as those vital to the successful 14 15 continuance of core business activities. Contingency Planning for all mission critical information technology systems and for Business Continuation has been completed and will be updated periodically during 1999. The Company relies on several third party service providers for key business processes. It continues to work closely with these companies to monitor the progress of their Year 2000 efforts. The Company's Year 2000 project team has contacted all material service providers to discuss and assess their Year 2000 readiness. In addition, the Company is seeking verbal and written verification from its material third party service providers as to their Year 2000 readiness. The Company began Year 2000 testing with material third party service providers during the third quarter of 1998, and plans to complete testing by June 30, 1999. This schedule continues to track in line with the Company's overall Year 2000 project plan. The Remediation phase, wherein non-compliant software and hardware are either modified or replaced, was substantially completed by December 31, 1998 for mission critical applications and by March 31, 1999 for non-mission critical applications. The Company has yet to identify any operating system which appears unlikely to be Year 2000 compliant or for which a suitable alternative cannot be implemented. The Company expects to complete User Acceptance Testing for mission critical information technology and non-information technology systems by June 30, 1999. The initial portion of the Commercial phase, which includes the evaluation of credit risk stemming from problems borrowers may have in resolving their own Year 2000 issues, has been completed; however, monitoring of the remediation efforts of high risk customers will be ongoing. During the monitoring stage the Company is taking steps designed to reduce any increased potential credit risk as a result of borrowers' Year 2000 issues. Assessment of Year 2000 risk has been incorporated into the loan underwriting process. During this phase the Company is also evaluating investments made on behalf of investment management and trust clients and in the Company's own investment portfolio to determine risk stemming from problems securities issuers may have in resolving their own Year 2000 issues. Also encompassed in this phase, are in-process evaluation, assessment and monitoring of the state of readiness of the Company's funds providers and the capital markets. The Personal phase is largely focused on customer communications as to the state of the Company's Year 2000 readiness. Initial communications have been distributed and the process is ongoing. Risks of Year 2000 Issues. The Company's businesses are substantially dependent upon its data processing software and hardware systems, and on its ability to process information. If the Company failed to be Year 2000 compliant, as compared to its competitors, there could be an adverse effect on the Company's business. In addition, since the Company is regulated by various regulatory agencies of state and federal banking authorities, failure to be Year 2000 compliant could subject the Company to formal supervisory or enforcement actions, which could have an adverse impact on the Company's business. Since the Company relies on third parties for software and other support, there are risks that the Company's operations could be disrupted by adverse developments affecting the operations of these third parties. Such risks include, among others, an inability to process and underwrite loan applications, to credit deposits and withdrawals from deposit accounts, to credit loan payments or track delinquencies, to properly reconcile and record daily activity or to engage in normal banking activities. The Company continues to discuss these matters with, obtain written certification from, and test the systems of third party service providers as to Year 2000 compliance. However, there can be no assurance that any potential impact associated with incompatible systems after December 31, 1999 would not have a material adverse effect on the Company's business, financial condition or results of operation. Additionally, if those commercial borrowers whose operations depend heavily on automated systems experience Year 2000 compliance problems affecting their ability to repay, the Company's financial condition and results of operations could be adversely affected by requirements to record additional loan loss provision. Furthermore, the Company faces financial risk from its fund providers as the Year 2000 problem may produce some deposit contraction forcing a change to alternative and higher costing funding sources. Finally, to the extent that certain utility and communication services utilized by the Company face Year 2000 problems, the Company's operations could be disrupted. Contingency Plans. The Company believes that, with modifications to existing systems and conversions to new systems, the Year 2000 problem will not pose significant operational problems for the Company's systems as so 15 16 modified and converted. The Company expects that the necessary modifications will be implemented prior to the Year 2000, although there can be no assurance that this will be the case. In the event that modifications are not completed prior to the Year 2000, the Company has developed contingency plans. However, there can be no assurance that these plans will fully mitigate any failures or problems. Furthermore, there may be certain mission critical third party services where alternative arrangements are limited or unavailable. Expenses. Year 2000 Readiness Program expenses are absorbed within normal spending levels. The Company upgrades its hardware and associated software and invests in new information technology systems as part of its ongoing operations. Neither the upgrades, nor new investments made to date through March 31, 1999, have been accelerated due to the Year 2000 Readiness Program. Management currently estimates that out-of-pocket costs related to the Year 2000 Readiness Program will be less than $100,000. The Company's credit risk associated with borrowers may increase to the extent that borrowers fail to adequately address Year 2000 issues. As part of the Company's Year 2000 project, existing loans have been evaluated to identify and monitor loans to those borrowers with the highest Year 2000 risk. The Company currently expects that the total aggregate expenses to address the Year 2000 issue will not be material to the Company's consolidated results of operations, although as the Company proceeds with its implementation plan, there may be additional unforeseen costs, which may be significant. The preceding "Year 2000 Readiness Disclosure" discussion contains various forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1933. These forward-looking statements represent the Company's beliefs or expectations regarding future events. When used in the "Year 2000 Readiness Disclosure" discussion, the words "believes," "expects," "estimates," and similar expressions are intended to identify forward-looking statements. Forward-looking statements include, without limitation, the Company's expectations as to when it will complete the modification and testing phases of its Year 2000 project plan as well as its Year 2000 contingency plans; its estimated cost of achieving Year 2000 readiness; and the Company's belief that its internal systems will be Year 2000 compliant in a timely manner. All forward-looking statements involve a number of risks and uncertainties that could cause the actual results to differ materially from the projected results. Factors that may cause these differences include, but are not limited to, the availability of qualified personnel and other information technology resources; the ability to identify and remediate all date sensitive lines of computer code or to replace embedded computer chips in affected systems or equipment; and the actions of governmental agencies or other third parties with respect to Year 2000 problems. 16 17 RESULTS OF OPERATIONS NET INCOME. The Company recorded net income of $1.3 million, or $0.12 per diluted share, for the quarter ended March 31, 1999. This represents an 11.6% increase over the net income of $1.2 million, or $0.11 per diluted share, for the same period in 1998. During the quarter ended March 31, 1999, the Company implemented an accounting change that resulted in a non-recurring charge of $125,000. Excluding the impact of this non-recurring charge, net income would have been $1.4 million , or $0.13 per diluted share, an increase of 22.1% over last year. NET INTEREST INCOME. For the quarter ended March 31, 1999, net interest income was $4.0 million, an increase of $756,000, or 23.1%, over the same period in 1998. This increase was primarily attributable to an increase of $90.8 million, or 25.5%, in the average balance of earning assets. The Company's net interest margin was relatively flat at 3.65% for the first quarter of 1999, compared to 3.67% for the same period last year. INTEREST INCOME. During the first three months of 1999, interest income was $8.0 million, an increase of $1.2 million, or 17.6%, over the same period in 1998. Interest income on commercial loans increased 14.6% to $3.5 million for the three months ended March 31, 1999, compared to $3.1 million for the same period in 1998. Interest income from residential mortgage loans increased 30.2% to $3.1 million compared to $2.3 million, and home equity and other loans increased 14.2% to $379,000 compared to $332,000, for the same periods, respectively. These increases were primarily due to an increase in loan volume, partially offset by a decrease in yield. The average balance of commercial loans increased 25.6% while the average rate decreased 8.7%, or 81 basis points to 8.51% for the quarter ended March 31, 1999. The average balance of residential mortgage loans increased 36.1%, while the average rate decreased 4.3%, or 31 basis points to 6.92% for the same period, and the average balance of home equity and other loans increased 24.3%, while the average rate decreased 8.7%, or 69 basis points to 7.56%. Total investment income decreased $11,000, or 1.1%, to $1.0 million for the quarter ended March 31, 1999, compared to $1.0 million for the same period in 1998. This decrease was primarily attributable to a reduction in the average yield on investments of 42 basis points, or 7.3%, partially offset by an increase in average balances. INTEREST EXPENSE. Interest paid on deposits and borrowings increased $437,000, or 12.4%, to $3.9 million for the three months ended March 31, 1999, from $3.5 million for the same period during 1998. This increase in the Company's interest expense reflects an increase in the average balance of interest-bearing liabilities of $78.1 million, or 25.3% between the two periods, partially offset by a 9.5% decrease in the average cost of interest-bearing liabilities from 4.55% for the first quarter of 1998, to 4.12% for the first quarter of 1999. PROVISION FOR LOAN LOSSES. The provision for loan losses was $238,000 for the quarter ended March 31, 1999, compared to $284,000 for the same period in 1998. Management evaluates several factors including new loan originations, estimated charge-offs, and risk characteristics of the loan portfolio when determining the provision for loan losses. These factors include the level and mix of loan growth, the level of non-accrual and delinquent loans, and the level of charge-offs and recoveries. Also see discussion under "Financial Condition - -Allowance for Loan Losses." Net recoveries were $17,000 during the first quarter of 1999, compared to $374,000 of net charge-offs for the same period in 1998. FEES AND OTHER INCOME. Fees and other income increased $415,000, or 10.0% to $4.6 million for the three month period ending March 31, 1999, compared to $4.1 million for the same period in 1998. The majority of fee income is attributable to advisory fees earned on assets under management. These fees increased $467,000, or 12.5% to $4.2 million for the first quarter of 1999 compared to $3.7 million for the same period in 1998. This increase is primarily due to a 6.5% increase in assets under management from $2.5 billion on March 31, 1998 to $2.7 billion on March 31, 1999. Deposit account service fees have increased $18,000, or 35.3%, to $69,000 for the first quarter of 1999 as a result of an increase in the number of deposit accounts. Gain on sale of loans has increased $5,000 to $44,000 due to a higher volume of fixed rate loans sold in the secondary market. Other fee income increased $49,000 to $104,000 due to a higher level of non-amortized loan fees. 17 18 OPERATING EXPENSE. Total operating expense for the first quarter of 1999 increased $914,000, or 17.1% to $6.2 million compared to $5.3 million for the same period in 1998. This increase in total operating expense was primarily attributable to the Company's continued growth and expansion. The Company has experienced a 23.3% increase in total assets, and a 23.4% increase in the number of employees from March 31, 1998 to March 31, 1999. In April, 1998, the Company opened a new banking office in Wellesley, Massachusetts. Salaries and benefits, the largest component of operating expense, increased $432,000, or 11.3%, to $4.3 million for the quarter ended March 31, 1999, from $3.8 million for the same period in 1998. This increase was due to a 23.4% increase in the number of employees, normal salary increases, and the related taxes thereon. Occupancy and equipment expense increased $102,000, or 21.0%, to $588,000 for the first quarter of 1999, from $486,000 for the same period last year. This increase was primarily attributable to higher depreciation expense as a result of the Company's continued investments in technology, and the occupancy expenses related to the new banking office in Wellesley, Massachusetts which was opened in April 1998. Professional services include outsourced data processing and custody expense, legal fees, consulting fees, and other professional services such as audit and tax preparation. These expenses increased $254,000, or 69.0% as a result of legal and consulting expenses incurred for strategic projects, and increased service and volume related charges for data processing and custody. Marketing expenses increased $49,000, or 52.1%, to $143,000 for the first quarter of 1999 as a result of ongoing advertising designed to increase the visibility of the Company and its products and services. The Company also experienced a $40,000, or 31.3% increase in business development expense as a result of an increase in the number of employees and new business activity. Other expenses include supplies, telephone, postage, publications and subscriptions, and other miscellaneous business expenses. These expenses have increased $48,000, or 13.7% to $399,000, primarily as a result of increased business volume and an increase in the number of employees. INCOME TAX EXPENSE. The Company recorded income tax expense of $649,000 for the first quarter of 1999 as compared to $609,000 for the same period last year. The effective tax rate was 30.9% and 34.0% for the two periods, respectively. The decrease in the Company's effective tax rate is a result of a tax saving strategy implemented during the first quarter of 1999. 18 19 ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK For information related to this item, see the Company's December 31, 1998 Form 10-K, Item 6 - Interest Rate Sensitivity and Market Risk. No material changes have occurred since that date. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS For information related to this item, see the Company's December 31, 1998 Form 10-K. No material changes have occurred since that date. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS No changes in security holders' rights have taken place. ITEM 3. DEFAULTS UPON SENIOR SECURITIES No defaults upon senior securities have taken place. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF THE SECURITY HOLDERS No matters submitted to a vote of security holders. ITEM 5. OTHER INFORMATION No information to report. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K Exhibits. Exhibit 27.1 Financial Data Schedule No reports on Form 8-K were filed during the three-month period ended March 31, 1999. 19 20 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BOSTON PRIVATE FINANCIAL HOLDINGS, INC. (Registrant) MAY 13, 1999 /s/ TIMOTHY L. VAILL - ------------ -------------------------------------- Timothy L. Vaill Chairman and Chief Executive Officer MAY 13, 1999 /s/ WALTER M. PRESSEY - ------------ -------------------------------------- Walter M. Pressey Executive Vice President and Chief Financial Officer 20 EX-27.1 2 FINANCIAL DATA SCHEDULE
9 1 US DOLLARS 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 1 17,608 2,376 7,000 0 68,455 68,754 68,455 374,305 (4,641) 484,150 363,686 10,026 5,210 71,322 0 0 10,813 23,093 484,150 6,960 1,015 0 7,975 2,760 3,949 4,026 238 46 6,248 2,100 2,100 0 125 1,326 0.12 0.12 7.26 636 3,703 0 0 4,386 7 24 4,641 4,641 0 0
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