8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): April 23, 2008

Boston Private Financial Holdings, Inc.

(Exact Name of Registrant as Specified in its Charter)

Massachusetts	0-17089	04-2976299
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

Ten Post Office Square, Boston, Massachusetts 02109

(Address of principal executive offices)

(617) 912-1900

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the fling obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On April 23, 2008, Boston Private Financial Holdings, Inc. (the “Company”) issued a press release relating to its financial results for the first quarter of 2008. The full text of the press release and the related attachments containing this information are furnished with this Current Report on Form 8-K as Exhibit 99.1 hereto and incorporated herein by reference.

Item 9.01 Exhibits

(d) Exhibits.

99.1 Press Release of the Company dated April 23, 2008.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunder duly authorized.

BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
By:	/s/ David J. Kaye
Name:	David J. Kaye
Title:	Chief Financial Officer

Date: April 23, 2008

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release of the Company dated April 23, 2008.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT:

David J. Kaye

Chief Financial Officer

(617) 912-3949

Erica E. Smith

Investor Relations

(617) 912-3766

www.bostonprivate.com

BOSTON PRIVATE FINANCIAL HOLDINGS ANNOUNCES PRELIMINARY

RESULTS FOR FIRST QUARTER 2008

Boston, MA, April 23, 2008 – Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) today reported its first quarter 2008 cash earnings of $0.37 per diluted share, a decrease from $0.44 in the first quarter of 2007. The range of estimated GAAP earnings (loss) for the first quarter of 2008, driven by an estimated non-cash impairment charge as more fully described below, is between ($.25) per diluted share and ($.38) per diluted share. The range of estimated net loss for the quarter will be between $9.2 million and $14.2 million.

The Company believes that the significant increase in non-accrual loans at First Private in the first quarter of 2008 and continued economic declines in Southern California constitute a triggering event under GAAP accounting and will, therefore, require goodwill impairment testing at that affiliate. Accordingly, Boston Private’s management has retained a third party valuation firm to assist in making a final determination of impairment. Although this testing is not yet complete, management has estimated that the Company will incur a non-cash goodwill impairment charge in the range of $20 million to $25 million. A reconciliation table is included in the financial tables at the end of this release.

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Included in the results for the first quarter of 2008 is a provision for loan losses of $19.6 million, which reflects an increase of $18.5 million over the first quarter of 2007. Almost 70% of this increase in the provision is due to First Private Bank & Trust, the Company’s banking affiliate in Southern California. Also, as announced earlier in the quarter, Boston Private reported a pre-tax gain on the repurchase of a portion of its Convertible Notes of approximately $11.3 million which offsets in part the increase in the provision.

In the first quarter Boston Private realized an increase in its tangible equity to tangible assets ratio of 34 basis points from 3.21% to 3.55%. This ten percent increase in the ratio will not be affected by the expected non-cash goodwill impairment charge The impairment charge will reduce capital and goodwill by the same amount but will have no impact upon tangible capital.

“During the quarter, our private banking affiliates experienced the impact of the credit challenges faced by the whole banking industry due to declines in market values, particularly in the economically challenged Southern California and Southern Florida markets. At First Private, the increase in provision is related almost entirely to the bank’s construction and land development loan portfolio and was primarily due to the rapidly declining values of real estate securing loans in the Inland Empire. Gibraltar Private Bank has had limited losses in land development and construction loans. However, we added to the reserves to reflect the overall deterioration in the Southern Florida economy and an increase in the amount of criticized loans,” stated Timothy L. Vaill, Chairman and Chief Executive Officer.

Mr. Vaill continued, “Notwithstanding the increase in the provision, we had strong private banking segment revenue growth of 17% across our banking affiliates. In fact, our unique business model continues to prove resilient. The long-term strategy that we have put in place over the past few years – thoughtful diversification of our operations across both business lines and geographies – is helping to mitigate the adverse effect of market conditions on certain aspects of our business. Core operations across our three segments remain strong. In particular, our fee-based segments – Wealth Advisory and Investment Management – experienced solid year over year growth.”

“As previously reported, we have taken strong action at all of our banks to further assess our credit exposure and to enhance credit administration, including engaging a third party to conduct a review of the loan portfolio at all of our banking institutions, starting with First Private and continuing most recently at Gibraltar Private Bank,” stated James D. Dawson, Chief Executive Officer of the Private Banking Group. “While market conditions in both of these regions continue to be challenging, the risk profile of

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the Southern Florida loan portfolio is, among other things, more diversified than in Southern California. Approximately 52% of the Southern Florida portfolio is comprised of residential first mortgages or home equity loans. Gibraltar Private Bank is not in the business of lending for tract housing or speculative condominium projects. As a result, we continue to believe that providing highly personal wealth management services to successful individuals, their families and businesses is a winning business strategy that has proven successful and will continue to generate returns over the long term.”

Financial Highlights

• Estimated net loss for the quarter will be between $9.2 million and $14.2 million, driven by the estimated non-cash impairment charge.

• Total Revenues for the first quarter were up 28% to $117.3 million, compared to revenue of $92.0 million a year ago. On a linked quarter basis, revenues were up $7.8 million, or 7%.

• Net Interest Income was $49.7 million in the first quarter of 2008, compared to $43.4 million in the first quarter 2007 and $50.1 million recorded in the fourth quarter of 2007.

• The net interest margin was 3.32%, a decrease of 19 basis points from a year ago and a decrease of 7 basis points from the fourth quarter of 2007.

• The decline in net interest margin in the first quarter resulted from lower loan yields caused by the Federal Reserve rate cuts and interest income reversals due to the increase in non-accrual loans. Additional non-accrual loans lowered NIM by 7 basis points. These factors were partially offset by a decline in the cost of deposits and borrowings.

• Wealth Advisory Fees increased $5.1 million or 71% year over year to $12.4 million, as the segment benefited from continued organic growth of new client relationships, and fee increases. Davidson Trust Company, acquired on February 1, 2008, and Bingham, Osborn & Scarborough LLC (which was included in the Company’s consolidated results after they became a majority-owned affiliate partner in August 2007), contributed $4.4 million of fees in the first quarter of 2008. Wealth advisory fees increased 11% on a linked quarter basis.

• Investment Management & Trust Fees for the first quarter totaled $40.4 million, an increase of 7% over the same quarter in 2007. On a linked quarter basis,

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investment management revenues declined $4.6 million, or 10%, due to market declines and annual performance fees recorded in the fourth quarter of 2007.

• Operating Leverage for the first quarter of 2008 compared to the first quarter of 2007 was positive 12.2%. Excluding the gain from the buy back of the Convertible Notes, the operating leverage would have been -0.2% for the same period.

• Total Assets Under Management/Advisory increased 6% or $2.1 billion to $36.0 billion from consolidated and unconsolidated affiliates on a year-over-year basis. Total assets under management / advisory decreased $1.7 billion, or 5% on a linked quarter basis, primarily due to market value declines. The acquisition of Davidson Trust Company added approximately $0.9 billion of assets under management during the quarter.

“We continue to devote intense focus to a disciplined expense management approach, and were pleased that first quarter expenses were flat quarter over quarter ,” stated David J. Kaye, Chief Financial Officer. “On the credit front, turbulent economic factors drove a decline in certain collateral values and necessitated increased provisions at First Private and Gibraltar. Over 90% of the increase in the provision is limited to two of our five banking affiliates. At First Private, the deterioration was limited almost exclusively to the construction and land loan portfolio in the Inland Empire. Notwithstanding these challenges, we were pleased to see that our total revenues for the first quarter were up 28% to $117.3 million, compared to revenue of $92.0 million a year ago. Overall this underscores our strategy and shows strong organic growth across segments for the quarter.”

“Our fee based businesses, both investment management and wealth advisory, continued to outperform the benchmarks,” said Jay Cromarty, Chief Executive Officer of the Investment Management and Wealth Advisory Groups. “While we experienced net outflows this quarter, the strong performance at our affiliated firms has kept pipelines robust. These two segments of our business constitute approximately 40% of total revenues and have seen 15% year over year growth for the combined segments. This growth comes during a period of intense volatility in the markets over the past 12 months.”

“In this environment, we have kept the organization tightly focused on continuing to provide high touch, high quality services to our clients. The high net worth marketplace continues to be a very attractive business and we believe we are well positioned to capitalize on the tremendous opportunities it presents, allowing us to

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create value and deliver returns to our shareholders over the long term,” concluded Vaill.

Loan Quality

• The Company recorded $1.7 million in net charge offs during the quarter, which represented approximately 3 basis points of total loans.

• Non-performing assets as a percentage of total assets increased to 125 basis points, or $32.7 million, to $86.5 million from the prior quarter. Of this increase, 75% or $24.5 million was at First Private.

• The allowance for credit losses as a percentage of total loans was 1.77%, up 31 basis points from the prior quarter and 64 basis points from the first quarter 2007, primarily due to the additional provisions noted above.

• The criticized loans increased to $302.2 million in the first quarter of 2008 from $165.7 million in the fourth quarter of 2007. The increase in criticized loans at First Private accounted for 85% of the growth.

Dividend Payment

Concurrent with the release of the first quarter 2008 earnings, the Board of Directors of Boston Private Financial Holdings declared a cash dividend to shareholders of $0.10 per share. The record date for this dividend is May 1, 2008 and the payment date is May 15, 2008.

Cash Earnings/Operating Earnings

Boston Private calculates its non-GAAP cash earnings by adjusting net income to exclude net amortization of intangibles, goodwill and intangibles impairment, and the impact of certain non-cash share based compensation plans, and includes related tax benefits that result from purchase accounting. In addition to GAAP earnings, the Company believes its non-GAAP cash earnings report the additional value to shareholders generated by purchase accounting adjustments and the non-cash share based compensation plans. (A detailed reconciliation table is attached.)

For purposes of this release, Boston Private calculated its operating earnings by including the projected effect of the estimated non-cash impairment charge related to the goodwill at First Private Bank. A reconciliation of estimated earnings including the

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impact of the estimated impairment charge is included in the financial tables that follow.

Conference Call

Management will host a conference call to review the Company’s financial performance and business developments on April 23, 2008 at 8:30 a.m. Eastern time. Interested parties may join the call by dialing 866-770-7125 passcode: 9810159. The call will be simultaneously web cast and may be accessed on the Internet by linking through www.bostonprivate.com . A continuous telephone replay will be available beginning at 11:30 a.m. Eastern time. The replay telephone number is 888-286-8010 passcode: 73539806.

Boston Private Wealth Management Group

Boston Private is a financial services company which owns independently-operated affiliates located in key geographic regions of the U.S. Boston Private’s affiliates offer private banking, wealth advisory and investment management services to the high net worth marketplace, selected businesses and institutions. The Company’s strategy is to enter new markets primarily through selected acquisitions, and then expand its wealth management business by way of organic growth. It makes investments in mid-size firms in demographically attractive areas, forming geographic clusters that represent the firm’s core competencies. Boston Private provides continuing assistance to its affiliates with strategic matters, marketing, compliance and operations. For more information about Boston Private, visit the Company’s web site at www.bostonprivate.com

This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s management uses these non-GAAP measures in its analysis of the Company’s performance. These measures typically adjust GAAP performance measures to exclude the effects of charges and expenses related to the consummation of mergers and acquisitions, as well as excluding other significant gains or losses that are unusual in nature. Also included in these non-GAAP measures are net amortization of intangibles, tax benefits related to purchase accounting, stock options and ESPP expense. Because these items and their impact on the Company’s performance are difficult to predict, management believes that presentations of financial measures excluding the impact of these items provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s businesses. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily

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comparable to non-GAAP performance measures which may be presented by other companies.

Statements in this press release that are not historical facts are forward-looking statements as defined by United States securities laws. Forward-looking statements involve risks and uncertainties. These statements include, but are not limited to, prospects for long term financial performance, the impact on the Company’s results of market conditions and prevailing and future interest rates, prospects for growth in balance sheet assets and assets under management and advisory, and prospects for overall results over the long term. You should not place undue reliance on our forward-looking statements. You should exercise caution in interpreting and relying on forward-looking statements because they are subject to significant risks, uncertainties and other factors which are, in some cases, beyond Boston Private’s control and could cause actual results to differ materially from those set forth in the forward-looking statements. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements include, among others, adverse conditions in the capital and debt markets and the impact of such conditions on Boston Private’s investment advisory activities; interest rate compression which may adversely impact net interest income; competitive pressures from other financial institutions which, together with other factors, may affect the Company’s growth and financial performance; the effects of national and local economic conditions; including changes which adversely affect borrowers’ ability to service and repay our loans, changes in loan defaults and charge-off rates, adequacy of loan loss reserves, reduction in deposit levels necessitating increased borrowing to fund loans and investments, asset quality issues; the passing of adverse government regulation, and the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired or further impaired; as well as the other risks and uncertainties detailed in Boston Private’s Annual Report on Form 10-K and other filings submitted to the Securities and Exchange Commission. Boston Private does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

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Boston Private Financial Holdings, Inc. Selected Financial Data (In Thousands, except share data) (Unaudited)

	March 31, 2008
RECONCILIATION OF ESTIMATED EARNINGS (*)
Including Impact of Estimated Impairement Charge:
Net Income before Impairment	$	10,756		$	10,756
Projected Impairement		(20,000	)		(25,000	)
Projected Loss	$	(9,244	)	$	(14,244	)
PROJECTED DILUTED EPS	$	(0.25	)	$	(0.38	)

(*) The below financials do not include the above estimated impairment charge related to the goodwill at First Private Bank. The additional provision that occurred at First Private in Q1 ‘08 was considered a triggering event which necessitated goodwill impairment testing under FAS 142. The Company has not finalized the impairment results but estimates the final charge to be between $20 million to $25 million (no tax benefit will be recorded as a result of the charge).

	March 31, 2008			March 31, 2007
FINANCIAL DATA:
Total Balance Sheet Assets	$	6,909,669		$	5,871,510
Stockholders’ Equity		688,620			651,282
Investment Securities		728,542			511,985
Goodwill		351,343			332,462
Intangible Assets, Net		108,942			121,782
Commercial and Construction Loans		3,253,109			2,608,172
Residential Mortgage Loans		1,795,814			1,581,829
Home Equity and Other Consumer Loans		333,768			268,956
Total Loans		5,382,691			4,458,957
Loans Held for Sale		7,324			8,911
Deposits		4,370,379			4,101,432
Borrowings		1,742,158			1,012,088
Book Value Per Share	$	17.88		$	17.72
Market Price Per Share	$	10.59		$	27.92
ASSETS UNDER MANAGEMENT AND ADVISORY:
Private Banking		4,727,000			4,180,000
Investment Managers		20,766,000			20,426,000
Wealth Advisory (1)		9,805,000			8,438,000
Less: Inter-company Relationship		(313,000	)		(255,000	)
Consolidated Affiliate Assets Under Management and Advisory	$	34,985,000		$	32,789,000
Unconsolidated		1,050,000			1,110,000
Total Unconsolidated Assets Under Management and Advisory	$	36,035,000		$	33,899,000
FINANCIAL RATIOS:
Stockholders’ Equity/Total Assets		9.97	%		11.09	%
Tangible Equity/Tanigble Assets		3.54	%		3.64	%
Allowance for Credit Losses/Total Loans		1.77	%		1.13	%
	Three Months Ended
	March 31, 2008			March 31, 2007
OPERATING RESULTS:
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE)	$	51,538		$	45,019
FTE Adjustment		1,868			1,635
Net Interest Income		49,670			43,384
Investment Management and Trust Fees:
Private Banking		7,815			6,673
Investment Managers		32,576			31,049
Total Investment Management Fees		40,391			37,722
Total Wealth Advisory Fees		12,387			7,266
Other Fees		3,114			2,453
Total Fees		55,892			47,441
Earnings in Equity Investments		86			668
Gain on Sale of Loans, Net		357			532
Gain on Retirement of Debt		11,324			—
Total Fees and Other Income		67,659			48,641
Total Revenue		117,329			92,025
Provision for Loan Losses		19,648			1,176
Salaries and Employee Benefits		52,843			46,601
Occupancy and Equipment		8,930			7,874
Professional Services		4,977			3,206
Marketing and Business Development		2,885			2,596
Contract Services and Processing		1,858			1,435
Amortization of Intangibles		3,221			3,549
Provision for Unfunded Loan Commitments		92			163
Other		5,429			4,119
Total Operating Expense		80,235			69,543
Minority Interest		1,503			914
Income Before Income Taxes		15,943			20,392
Income Tax Expense		5,187			7,258
Net Income before Impairment	$	10,756		$	13,134

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Boston Private Financial Holdings, Inc. Selected Financial Data (In Thousands, except share data) (Unaudited)

	Three Months Ended
	March 31, 2008			March 31, 2007
RECONCILIATION OF EARNINGS BEFORE IMPAIRMENT
TO CASH EARNINGS:
Net Income before Impairment (GAAP Basis)	$	10,756		$	13,134
Cash Basis Earnings (2)
Book Amortization of Purchased Intangibles, Net of Tax		1,785			1,912
Cash Benefit of Tax Deductions from Purchased Intangibles & Goodwill		1,127			1,098
Stock options and ESPP, Net of Tax		835			1,121
Total Cash Basis Adjustment	$	3,747		$	4,131
Cash Basis Earnings	$	14,503		$	17,265
	Three Months Ended
	March 31, 2008			March 31, 2007
PER SHARE DATA: (In thousands, except per share data)
Calculation of Net Income for EPS before Impairment:
Net Income as reported and for basic EPS before Impairment	$	10,756		$	13,134
Interest on convertible trust preferred securities, net of tax		740			750
Net Income for diluted EPS before Impairment	$	11,496		$	13,884
Calculation of Average Shares Outstanding:
Weighted average basic shares		37,457			36,277
Dilutive effect of:
Stock Options, Stock Grants, and Other		895			1,674
Convertible trust preferred securities		3,187			3,184
Dilutive potential common shares		4,082			4,858
Weighted Average Diluted Shares		41,539			41,135
Earnings per Share before Impairment:
Basic	$	0.29		$	0.36
Diluted	$	0.28		$	0.34
RECONCILIATION OF EPS BEFORE IMPAIRMENT
TO CASH EPS:
(on a Diluted Basis)
Earnings Per Share before Impairment (GAAP Basis)	$	0.28		$	0.34
Cash Basis Adjustment	$	0.09		$	0.10
Cash Basis Earnings Per Diluted Share	$	0.37		$	0.44
	Three Months Ended
	March 31, 2008			March 31, 2007
OPERATING RATIOS & STATISTICS:
Return on Average Equity before Impairment		6.31	%		8.17	%
Return on Average Assets before Impairment		0.62	%		0.91	%
Net Interest Margin		3.32	%		3.51	%
Core Net Interest Margin(3)		3.70	%		3.76	%
Total Fees and Other Income/Total Revenue		57.67	%		52.86	%
Efficiency Ratio		65.84	%		71.77	%
Net Loans Charged-off	$	1,688		$	8
RECONCILIATION OF NIM TO CORE NIM:
Net Interest Margin		3.32	%		3.51	%
Effect of Trust Preferred, Net		0.38	%		0.25	%
Core Net Interest Margin(3)		3.70	%		3.76	%
CASH OPERATING RATIOS:
Return on Average Equity (4)		8.51	%		10.74	%
Return on Average Assets (5)		0.83	%		1.19	%

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Boston Private Financial Holdings, Inc. Selected Financial Data (In Thousands, except share data) (Unaudited)

AVERAGE BALANCE SHEET:

	Three Months Ended March 31, 2008								Three Months Ended March 31, 2007
	Average Balance			Income/ Expense			Yield/ Rate		Average Balance			Income/ Expense			Yield/ Rate
AVERAGE ASSETS
Earnings Assets
Cash and investments	$	884,286		$	10,048		4.54	%	$	691,090		$	8,329		4.82	%
Loans
Commercial and Construction		3,142,400			55,657		7.02	%		2,540,403			49,128		7.74	%
Residential Mortgage		1,798,327			27,599		6.14	%		1,588,980			22,834		5.75	%
Home Equity and Other Consumer		317,033			5,287		6.59	%		265,736			5,181		7.77	%
Total Earning Assets		6,142,046			98,591		6.38	%		5,086,209			85,472		6.72	%
Allowance for Loan Losses		(73,532	)							(43,816	)
Cash and due From Banks		78,390								56,127
Other Assets		804,338								703,881
TOTAL AVERAGE ASSETS	$	6,951,242							$	5,802,401
AVERAGE LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-Bearing Liabilities:
Deposits:
Savings and NOW	$	661,782		$	3,248		1.97	%	$	550,726		$	2,930		2.16	%
Money Market		1,859,869			13,845		2.99	%		1,874,556			15,710		3.40	%
Certificate of Deposits		1,106,709			12,480		4.54	%		888,152			10,272		4.69	%
Total Deposits		3,628,360			29,573		3.28	%		3,313,434			28,912		3.54	%
Junior Subordinated Debentures		522,596			5,834		4.47	%		234,021			3,293		5.63	%
FHLB Borrowings and Other		1,221,782			11,646		3.77	%		741,425			8,248		4.45	%
Total Interest-Bearing Liabilities		5,372,738			47,053		3.51	%		4,288,880			40,453		3.81	%
Non-interest Bearing Demand Deposits		764,626								729,887
Payables and Other Liabilities		132,176								140,719
Total Liabilities		6,269,540								5,159,486
Stockholders’ Equity		681,702								642,915
TOTAL AVERAGE LIABILITIES & STOCKHOLDERS’ EQUITY	$	6,951,242							$	5,802,401
Net Interest Income				$	51,538							$	45,019
Net Interest Margin					3.32	%							3.51	%

PRIVATE BANKING LOAN DATA AND CREDIT QUALITY (6):

	March 31, 2008		March 31, 2007
Commercial and Construction Loans:
New England	$	1,008,392	$	839,627
Northern California		875,306		769,670
Southern California		536,141		419,342
South Florida		611,440		579,533
Pacific Northwest		222,826		—
Total Commercial and Construction Loans	$	3,254,105	$	2,608,172
Residential Mortgage Loans:
New England	$	1,040,972	$	960,555
Northern California		169,810		125,912
Southern California		10,826		8,894
South Florida		546,828		486,468
Pacific Northwest		27,378		—
Total Residential Mortgage Loans	$	1,795,814	$	1,581,829
Home Equity and Other Consumer Loans:
New England	$	57,047	$	43,465
Northern California		58,443		38,159
Southern California		13,560		5,099
South Florida		193,578		178,722
Pacific Northwest		3,716		—
Home Equity and Other Consumer Loans	$	326,344	$	265,445
Total Private Banking Loans	$	5,376,263	$	4,455,446
Allowance for Credit Losses:
New England	$	24,375	$	22,584
Northern California	$	12,559	$	10,710
Southern California	$	38,661	$	5,426
South Florida	$	16,330	$	11,584
Pacific Northwest	$	3,175		—
Criticized Loans (9):
New England	$	35,137	$	36,537
Northern California	$	1,525	$	197
Southern California	$	196,167	$	6,587
South Florida	$	48,689	$	3,288
Pacific Northwest	$	20,705		—
Non-performing Loans:
New England	$	7,240	$	1,718
Northern California	$	479		—
Southern California	$	51,197	$	6,444
South Florida	$	20,447	$	1,402
Pacific Northwest	$	5,704		—
Net Loans Charged-off/(Recovered) for the Three Months Ended:
New England	$	1,005	$	(2	)
Northern California	$	15	$	9
Southern California	$	592		—
South Florida	$	76		—
Pacific Northwest		—		—

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Boston Private Financial Holdings, Inc. Selected Financial Data (In Thousands, except share data) (Unaudited)

	March 31, 2008			December 31, 2007
FINANCIAL DATA:
Total Balance Sheet Assets	$	6,909,669		$	6,818,131
Stockholders’ Equity		688,620			662,461
Investment Securities		728,542			719,934
Goodwill		351,343			349,889
Intangible Assets, Net		108,942			108,349
Commercial and Construction Loans		3,253,109			3,182,081
Residential Mortgage Loans		1,795,814			1,765,217
Home Equity and Other Consumer Loans		333,768			312,602
Total Loans		5,382,691			5,259,900
Loans Held for Sale		7,324			6,782
Deposits		4,370,379			4,375,101
Borrowings		1,742,158			1,632,944
Book Value Per Share	$	17.88		$	17.68
Market Price Per Share	$	10.59		$	27.08
ASSETS UNDER MANAGEMENT AND ADVISORY:
Private Banking		4,727,000			4,738,000
Investment Managers		20,766,000			23,058,000
Wealth Advisory		9,805,000			9,055,000
Less: Inter-company Relationship		(313,000	)		(286,000	)
Consolidated Affiliate Assets Under Management and Advisory	$	34,985,000		$	36,565,000
Unconsolidated		1,050,000			1,188,000
Total Unconsolidated Assets Under Management and Advisory	$	36,035,000		$	37,753,000
FINANCIAL RATIOS:
Stockholders’ Equity/Total Assets		9.97	%		9.72	%
Tangible Equity/Tangible Assets		3.54	%		3.21	%
Allowance for Credit Losses/Total Loans		1.77	%		1.46	%

4

Boston Private Financial Holdings, Inc. Selected Financial Data (In Thousands, except share data) (Unaudited)

	Three Months Ended
	March 31, 2008		December 31, 2007
OPERATING RESULTS:
Net Interest Income—on a Fully Taxable Equivalent Basis (FTE)	$	51,538	$	51,987
FTE Adjustment		1,868		1,837
Net Interest Income		49,670		50,150
Investment Management and Trust Fees:
Private Banking		7,815		7,660
Investment Managers		32,576		37,338
Total Investment Management Fees		40,391		44,998
Total Wealth Advisory Fees		12,387		11,116
Other Fees		3,114		2,876
Total Fees		55,892		58,990
Earnings (Loss) in Equity Investments		86		(71	)
Gain on Sale of Loans, Net		357		440
Gain on Retirement of Debt		11,324		—
Total Fees and Other Income		67,659		59,359
Total Revenue		117,329		109,509
Provision for Loan Losses		19,648		19,252
Salaries and Benefits		52,843		51,640
Occupancy and Equipment		8,930		9,000
Professional Services		4,977		4,341
Marketing and Business Development		2,885		3,103
Contract Services and Processing		1,858		1,816
Amortization of Intangibles		3,221		3,699
Provision for unfunded loan commitments		92		1,813
Other		5,429		5,244
Total Operating Expense		80,235		80,656
Income Before Minority Interest, Income Taxes & Impairment		17,446		9,601
Impairment of Goodwill and Intangibles, Net (7)		—		37,150
Income (Loss) Before Minority Interest and Taxes		17,446		(27,549	)
Minority Interest		1,503		1,511
Income Before Income Taxes		15,943		(29,060	)
Income Tax Expense, net of impairment		5,187		2,096
Net Income/(Loss) before Current Quarter Impairment	$	10,756	$	(31,156	)
	Three Months Ended
	March 31, 2008		December 31, 2007
RECONCILIATION OF GAAP EARNINGS BEFORE CURRENT QUARTER IMPAIRMENT TO CASH EARNINGS:
Net Income/(Loss) before Current Quarter Impairment (GAAP Basis)	$	10,756	$	(31,156	)
Cash Basis Earnings (2)
Book Amortization of Purchased Intangibles, Net of Tax		1,785		2,052
Cash Benefit of Tax Deductions from Purchased Intangibles & Goodwill		1,127		1,098
Impairment of Goodwill and Intangibles, Net		—		37,150
Stock options and ESPP, Net of Tax		835		950
Total Cash Basis Adjustment	$	3,747	$	41,250
Cash Basis Earnings	$	14,503	$	10,094

	Three Months Ended
	March 31, 2008			December 31, 2007
PER SHARE DATA: (In thousands, except per share data)
Calculation of Net Income for EPS before Current Quarter Impairment:
Net Income as reported and for basic EPS before Current Quarter Impairment	$	10,756		$	(31,156	)
Interest on Convertible Trust Preferred Securities, Net of Tax		740			—
Net Income for diluted EPS before Current Quarter Impairment	$	11,496		$	(31,156	)
Interest on convertible trust preferred securities, net of tax for Cash EPS		—			750
Calculation of Average Shares Outstanding:
Weighted average basic shares		37,457			37,058
Dilutive effect of:
Stock Options, Stock Grants, and Other (8)		895			—
Convertible Trust Preferred securities (8)		3,187			—
Dilutive potential common shares		4,082			—
Weighted Average Diluted Shares		41,539			37,058
Weighted Average Diluted Shares for Cash EPS		41,539			41,960
Earnings/(Loss) per Share before Current Quarter Impairment:
Basic	$	0.29		$	(0.84	)
Diluted	$	0.28		$	(0.84	)
RECONCILIATION OF EPS BEFORE CURRENT QUARTER IMPAIRMENT TO CASH EPS:
(on a Diluted Basis)
Earnings/(Loss) Per Share before Current Quarter Impairment (GAAP Basis)	$	0.28		$	(0.84	)
Cash Basis Adjustment	$	0.09		$	1.10
Cash Basis Earnings Per Diluted Share	$	0.37		$	0.26
OPERATING RATIOS & STATISTICS:
Return on Average Equity before Current Quarter Impairment		6.31	%		-18.11	%
Return on Average Assets before Current Quarter Impairment		0.62	%		-1.83	%
Net Interest Margin		3.32	%		3.39	%
Core Net Interest Margin (3)		3.70	%		3.63	%
Total Fees and Other Income/Total Revenue		57.67	%		54.20	%
Efficiency Ratio		65.84	%		68.80	%
Net Loans Charged-off	$	1,688		$	506

5

Boston Private Financial Holdings, Inc. Selected Financial Data (In Thousands, except share data) (Unaudited)

	Three Months Ended
	March 31, 2008		December 31, 2007
PRIVATE BANKING LOAN DATA AND CREDIT QUALITY (6):
Commercial and Construction Loans:
New England	$	1,008,392	$	985,234
Northern California		875,306		844,428
Southern California		536,141		526,823
South Florida		611,440		608,441
Pacific Northwest		222,826		218,117
Total Commercial and Construction Loans	$	3,254,105	$	3,183,043
Residential Mortgage Loans:
New England	$	1,040,972	$	1,022,155
Northern California		169,810		152,417
Southern California		10,826		12,763
South Florida		546,828		553,356
Pacific Northwest		27,379		24,526
Total Residential Mortgage Loans	$	1,795,815	$	1,765,217
Home Equity and Other Consumer Loans:
New England	$	57,047	$	55,802
Northern California		58,443		50,700
Southern California		13,560		4,204
South Florida		193,578		191,820
Pacific Northwest		3,716		4,164
Home Equity and Other Consumer Loans	$	326,344	$	306,690
Total Private Banking Loans	$	5,376,264	$	5,254,950
Allowance for Credit Losses:
New England	$	24,375	$	24,131
Northern California	$	12,559	$	12,111
Southern California	$	38,661	$	25,695
South Florida	$	16,330	$	12,406
Pacific Northwest	$	3,175	$	2,704
Criticized Loans (9):
New England	$	35,137	$	34,786
Northern California	$	1,525	$	38
Southern California	$	196,167	$	80,499
South Florida	$	48,689	$	34,144
Pacific Northwest	$	20,705	$	16,283
Non-performing Loans:
New England	$	7,240	$	7,390
Northern California	$	479		—
Southern California	$	51,197	$	27,911
South Florida	$	20,447	$	18,508
Pacific Northwest	$	5,704		—
Net Loans Charged-off for the Three Months Ended:
New England	$	1,005	$	4
Northern California	$	15	$	10
Southern California	$	592		—
South Florida	$	76	$	480
Pacific Northwest		—	$	12

6

(1) The Company went from a minority to majority ownership of Bingham, Osborn, & Scarborough in Q3 2007.

Prior period financial information is included with Earnings in Equity Investments.

Prior period AUM data is shown for comparative purposes as being included with the consolidated Company.

(2) The Company calculates its cash earnings by adjusting net income to exclude the amortization of the purchased intangibles (net of tax), the tax benefit on the portion of the purchase price allocated to goodwill, which is deductible over a 15 year life, impairment, and certain non-cash share based compensation plans (net of tax). The tax savings are deferred under GAAP accounting but are included in cash earnings since the tax savings (lower tax payment) will be retained unless the acquired company is sold. The Company uses certain non-GAAP financial measures, such as Cash Earnings, to provide information for investors to effectively analyze financial trends of ongoing business activities.

(3) The Company defines Core Net Interest Margin as Net Interest Margin excluding the interest expense on the Junior Subordinated Debentures and $30 million of the convertible bond that was used for the purchase of Charter Bank. The Company utilizes Trust Preferred Securities to assist in the funding of acquisitions and believes it is useful to compare Net Interest Margin excluding the impact of this acquisition funding vehicle.

(4) The Company calculates Return on Average Equity on a cash basis as Cash Basis Earnings divided by Average Equity.

(5) The Company calculates Return on Average Assets on a cash basis as Cash Basis Earnings divided by Average Assets.

(6) The concentration of the Private Banking loan data and credit quality is based on the location of the lender.

(7) Since Gibraltar Private Bank and Trust (“Gibraltar”) was acquired pursuant to a tax-free reorganization, all goodwill generated by the acquisition of Gibraltar is not deductible for tax purposes. As a result, there is no tax benefit attributable to the $29.1 million impairment charge related to Gibraltar in the 4th quarter of 2007.

The acquisition of Dalton, Greiner, Hartman, Maher and Co (“DGHM”) was acquired pursuant to a taxable transaction, all goodwill generated by the acquisition of DGHM is generally deductible for tax purposes. As a result, there is a $5.8 million tax benefit attributable to the $13.9 million impairment charge related to DGHM, which results in an impairment charge, net, of $8.1 million in the 4th quarter of 2007.

(8) The convertible trust preferred debt, stock options and restricted shares were anti-dilutive for the 4th quarter of 2007 and therefore excluded from diluted earnings per share. The convertible trust preferred was also anti-dilutive for the fiscal year 2007, whereas the restricted stock and stock options were dilutive. The separate evaluations for quarterly and year-to-date computations may result in a 2007 year-to-date earnings per share that do not equal the sum of the quarterly earnings per share.

(9) Criticized loans include loans classified as either special mention, substandard, doubtful, or loss.

7