8-K

UNITED STATES

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 28, 2010

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 filing 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.

The information in this Current Report on Form 8-K is furnished under Item 2.02—”Results of Operations and Financial Condition.” Such information, including the exhibit attached hereto, shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.

On April 28, 2010, Boston Private Financial Holdings, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2010. The text of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits - See Exhibit Index following signature page.

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 28, 2010

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release of the Company dated April 28, 2010.

EX-99.1

Exhibit 99.1

Boston Private Financial Holdings Reports First Quarter 2010 Results

Positive Results Driven By Strong Revenues and Lower Provision for Loan Losses

Boston, MA – April 28, 2010 – Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company”) today reported first quarter 2010 GAAP net income from continuing operations of $5.8 million, compared to GAAP net income from continuing operations of $11.9 million in the fourth quarter of 2009. After accounting for non-cash equity adjustments and preferred dividends, the Company reported first quarter 2010 GAAP diluted earnings per share from continuing operations of $0.02 compared to a loss per share of $0.05 in the fourth quarter of 2009. The Company reported GAAP earnings per share of $0.02 including discontinued operations as compared to $0.42 per share in the fourth quarter of 2009, which included one-time gains of $0.43 per share for the sale of Westfield Capital Management and $0.16 per share as a result of the repurchase of a portion of the Company’s outstanding trust preferred securities.

“We saw continued stabilization in our business in the first quarter with improving profitability from strong revenues, flat operating expenses, and reduced provision for loan losses,” said Chairman and Chief Executive Officer Timothy L. Vaill. “Deposits, loans, fee income, net flows and assets under management all improved and all of our business segments were profitable for the quarter.”

“We continue to manage our business with caution relative to the broader economic recovery. Our capital position remained strong during the quarter and we saw pockets of credit improvement, including a decrease in non-performing loans and loans past due.”

Key Financials (Note: All comparisons relate only to continuing operations except where noted).

• Revenue for the first quarter was $71.7 million, a decrease of $11.7 million, or 14%, from $83.4 million on a linked quarter basis. After adjusting for a one-time gain of $18.3 million in the fourth quarter of 2009 for the trust preferred repurchase, linked quarter revenue increased 10%. Revenues were up 2% from $70.0 million compared to the same period in 2009.

• Net Interest Income for the first quarter was $44.3 million, an increase of $3.3 million, or 8%, from $41.1 million on a linked quarter basis. Net Interest Income was up 12% from $39.4 million compared to the same period in 2009.

• Net Interest Margin for the first quarter was 3.18%, up 21 basis points from 2.97% on a linked quarter basis. Net Interest Margin was down 5 basis points from 3.23% compared to the same period in 2009.

• Total Fee Income for the first quarter was $25.9 million, an increase of $0.1 million, or 1%, from $25.8 million on a linked quarter basis. Total Fee Income was up 15% from $22.5 million compared to the same period in 2009.

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• Operating Expenses for the first quarter were flat at $56.0 million on a linked quarter basis. Operating Expenses were up 9% from $51.6 million compared to the same period in 2009.

• Tangible Common Equity/Tangible Assets (“TCE/TA”) at the end of the first quarter was 6.32%, a decrease of 34 basis points from 6.66% on a linked quarter basis due to the purchase of the remaining 19% of KLS Professional Advisors. TCE/TA was up 68 basis points from 5.64% compared to the same period in 2009.

• Total Balance Sheet Assets as of the end of the first quarter were relatively flat at $6.0 billion on a linked quarter basis. Total Balance Sheet Assets were down 16% from $7.2 billion compared to the same period in 2009. (First quarter 2009 Balance Sheet Assets include $1.7 billion in assets from Discontinued Operations.)

• Provision for Loan Losses for the first quarter was $7.6 million, a decrease of $6.2 million, or 45%, from $13.8 million on a linked quarter basis. Provision for Loan Losses was down 43% from $13.3 million compared to the same period in 2009.

• Allowance for Loan Losses as a percentage of Total Loans at the end of the first quarter was 1.68%, an increase of 9 basis points, from 1.59% on a linked quarter basis. Allowance for Loan Losses as a percentage of Total Loans was up 5 basis points from 1.63% compared to the same period in 2009.

“Our improving core profitability this quarter, after excluding one-time gains during the fourth quarter of 2009, resulted from core revenue growth driven by rising net interest income and increasing assets under management,” said David J. Kaye, Chief Financial Officer. “We have also focused on maintaining our strong capital position and continuing to reduce our credit risk. We strengthened our reserves despite our lowest loan loss provision levels in ten quarters as charge-offs declined. In addition, we remained in the top quartile of our peer group for regulatory capital and maintained a strong TCE/TA ratio.”

Total Deposits increased 5% in the first quarter to $4.5 billion compared to the fourth quarter of 2009. Total Loans increased 1% in the first quarter to $4.4 billion compared to the end of the fourth quarter of 2009. Residential loans grew 3% and commercial loans were relatively flat as of the end of the first quarter compared to the end of the fourth quarter of 2009.

Non-Performing Assets as a percentage of Total Assets were 1.73% as of the end of the first quarter, a decrease of 4 basis points from 1.77% at the end of the fourth quarter of 2009. Net Charge-offs for the quarter were $2.8 million, which represented approximately 0.06% of Total Loans, compared to $18.4 million of Net Charge-offs during the fourth quarter of 2009, or 0.43% of Total Loans. Included in the first quarter were $2.6 million in recoveries. Past Due Loans (30-89 days) as a percentage of Total Loans decreased 4 basis points, on a linked quarter basis, to 0.45%.

The Wealth Advisory and Investment Management businesses experienced an increase in Assets Under Management (“AUM”) and an increase in fee income during the first quarter. Total AUM for the first quarter was $18.3 billion, an increase of $668 million, or 4%, from $17.7 billion on a linked quarter basis. The Company experienced first quarter AUM net inflows of $69 million, as compared to $133 million of net outflows in the prior quarter.

Page 2

“We have taken a number of actions over the past eighteen months that have helped to stabilize and strengthen our business,” said Vaill. “As the economy continues to recover, we will remain cautious and focus on growth in our existing markets – areas where we can deliver locally-driven wealth management services and realize success in the near-term. We will also continue to emphasize the development of our ideal private banking affiliates, underscored this quarter by Charter Bank’s transition to Charter Private Bank.”

Dividend Payments

Concurrent with the release of the first quarter 2010 earnings, the Board of Directors of the Company declared a cash dividend to shareholders of $0.01 per share. The record date for this dividend is May 12, 2010 and the payment date is May 26, 2010.

Non-GAAP Financial Measures

The Company uses certain non-GAAP financial measures, such as the TCE/TA ratio, to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. A detailed reconciliation table of the Company’s GAAP Total Equity to Total Assets ratio to the non-GAAP measure is attached.

Conference Call

Management will hold a conference call at 9:00 a.m. Eastern Time on Thursday, April 29, to discuss the financial results in more detail. To access the call:

Dial In #: 800-435-1261

International Dial In #: 617-614-4076

Passcode: 81139829

Replay Information: Available from April 29, 2010 to May 13, 2010.

Dial In #: 888-286-8010

International Dial In #: 617-801-6888

Passcode: 20488728

Boston Private Financial Holdings, Inc.

Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) is a national financial services organization comprised of independently operated affiliates located in key regions of the U.S. that offer private banking, wealth advisory and investment management services to the high net worth marketplace, selected businesses and institutions. The Company enters demographically attractive markets through selective acquisitions and then expands by way of organic growth. It employs a distinct business strategy, empowering its affiliates to run independently such that they can best serve their clients at the local level, while at the same time providing strategic oversight and access to resources, both financial and intellectual, to support management, compliance and risk management, legal, marketing, and operations.

For more information about BPFH, visit the Company’s website at www.bostonprivate.com.

Note to Editors:

Boston Private Financial Holdings, Inc. is not to be confused with Boston Private Bank & Trust Company. Boston Private Bank & Trust Company is an independently operated and wholly-owned subsidiary of BPFH. The information reported in this press release is related to the performance and results of BPFH.

Page 3

###

CONTACT:

Catharine Sheehan

Senior Vice President, Corporate Communications

Boston Private Financial Holdings, Inc.

(617) 912-3767

csheehan@bostonprivate.com

John Hartz

Sloane & Company

857-598-4779

jhartz@sloanepr.com

Statements in this press release that are not historical facts are 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, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. These statements include, among others, statements regarding our strategy, evaluations of future interest rate trends and liquidity, prospects for growth in assets, 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 the Company’s control. Forward-looking statements are based on the current assumptions and beliefs of management and are only expectations of future results. The Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among other factors, adverse conditions in the capital and debt markets and the impact of such conditions on the Company’s private banking, asset management and investment advisory activities; changes in interest rates; competitive pressures from other financial institutions; the effects of a continuing deterioration in general economic conditions on a national basis or in the local markets in which the Company operates, including changes which adversely affect borrowers’ ability to service and repay our loans; changes in loan defaults and charge-off rates; changes in the value of securities and other assets, adequacy of loan loss reserves, or deposit levels necessitating increased borrowing to fund loans and investments; the passing of adverse government regulation; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; and risks related to the identification and implementation of acquisitions, as well as the other risks and uncertainties detailed in the Company’s Annual Report on Form 10-K, as updated by the Company’s Quarterly Reports on Form 10-Q; and other filings submitted to the Securities and Exchange Commission. The Company 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.

Page 4

Boston Private Financial Holdings, Inc. Selected Financial Data (1) (In Thousands, except share data) (Unaudited)

(In thousands, except per share data)	March 31, 2010			March 31, 2009			Dec 31, 2009
FINANCIAL DATA:
Total Balance Sheet Assets (1)	$	6,034,392		$	7,179,620		$	6,049,265
Total Equity		610,180			660,727			651,154
Cash and Investment Securities		1,327,776			955,567			1,387,483
Goodwill		108,692			105,090			108,692
Intangible Assets, Net		40,096			48,335			41,425
Commercial Loans		2,230,079			2,215,026			2,213,020
Construction and Land Loans		295,831			425,413			315,661
Residential Mortgage Loans		1,541,629			1,314,500			1,494,703
Home Equity and Other Consumer Loans		291,440			203,078			283,656
Total Loans		4,358,979			4,158,017			4,307,040
Loans Held for Sale		9,592			30,305			12,714
Other Real Estate Owned (“OREO”)		16,238			12,589			16,600
Deposits		4,478,795			3,758,608			4,255,219
Borrowings		836,240			1,122,613			992,034
Book Value Per Common Share	$	6.54		$	7.05		$	6.51
Market Price Per Share	$	7.37		$	3.51		$	5.77
ASSETS UNDER MANAGEMENT AND ADVISORY:
Private Banking	$	3,582,000		$	3,098,000		$	3,479,000
Investment Managers		7,329,000			5,736,000			7,048,000
Wealth Advisory		7,445,000			6,122,000			7,161,000
Less: Inter-company Relationship		(18,000	)		(16,000	)		(18,000	)
Consolidated Affiliate Assets Under Management and Advisory	$	18,338,000		$	14,940,000		$	17,670,000
Unconsolidated		825,000			775,000			825,000
Total Unconsolidated Assets Under Management and Advisory	$	19,163,000		$	15,715,000		$	18,495,000
FINANCIAL RATIOS:
Total Equity/Total Assets		10.11	%		9.20	%		10.76	%
Tangible Common Equity/Tangible Assets (2)		6.32	%		5.64	%		6.66	%
Allowance for Loan Losses/Total Loans		1.68	%		1.63	%		1.59	%
Allowance for Loan Losses/Non-Accrual Loans		86	%		149	%		79	%

5

Boston Private Financial Holdings, Inc. Selected Financial Data (1) (In Thousands, except share data) (Unaudited)

	Three Months Ended					Three Months Ended
	March 31, 2010		March 31, 2009			Dec 31, 2009
OPERATING RESULTS:
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE)	$	46,093	$	41,159		$	42,824
FTE Adjustment		1,782		1,750			1,767
Net Interest Income		44,311		39,409			41,057
Investment Management and Trust Fees:
Private Banking		5,716		4,904			5,482
Investment Managers		9,159		8,107			9,029
Total Investment Management Fees		14,875		13,011			14,511
Total Wealth Advisory Fees		9,257		8,272			9,138
Other Fees		1,816		1,217			2,158
Total Fees		25,948		22,500			25,807
Investment Gains		1,432		3,443			345
Gain/(Loss) on Sale of Loans and OREO, Net		48		4,270			(2,120	)
Gain on Retirement of Debt		—		407			18,332
Total Fees and Other Income		27,428		30,620			42,364
Total Revenue		71,739		70,029			83,421
Provision for Loan Losses		7,615		13,325			13,804
Salaries and Employee Benefits		33,849		30,001			32,434
Occupancy and Equipment		6,786		6,230			6,981
Professional Services		4,844		5,025			5,479
Marketing and Business Development		1,511		1,608			1,602
Contract Services and Processing		1,326		1,303			1,350
Amortization of Intangibles		1,329		1,637			2,348
FDIC Insurance		2,087		1,407			2,012
Other		4,300		4,415			3,834
Total Operating Expense		56,032		51,626			56,040
Operating Income, before Tax		8,092		5,078			13,577
Impairment, Net (3)		—		—			1,220
Income from Continuing Operations, before Tax		8,092		5,078			12,357
Income Tax Expense		2,337		818			481
Income from Continuing Operations, Net of Tax		5,755		4,260			11,876
Discontinued Operations, Net of Tax (4)		36		(629	)		31,501
Net Gain		5,791		3,631			43,377
Less: Net Income Attributable to the Noncontrolling Interest		685		765			1,169
Net Income Attributable to the Company	$	5,106	$	2,866		$	42,208

6

Boston Private Financial Holdings, Inc. Selected Financial Data (1) (In Thousands, except share data) (Unaudited)

	Three Months Ended						Three Months Ended
	March 31, 2010			March 31, 2009			Dec 31, 2009
PER SHARE DATA:
Calculation of Income/(Loss) for EPS:
Income from Continuing Operations, Net of Tax	$	5,755		$	4,260		$	11,876
Less: Net Income Attributable to Noncontrolling Interests, Net of Tax		685			765			1,169
Income from Continuing Operations Attributable to the Company	$	5,070		$	3,495		$	10,707
Decrease/(Increase) in Redemption Value, Net		1,124			(1,146	)		(1,730	)
Accretion of Beneficial Conversion Feature on Series B Preferred Stock (5)		—			(4,367	)		(9,731	)
Accretion of Discount on Series C Preferred Stock (6)		(3,025	)		(380	)		(414	)
Dividends on Preferred Securities (5)(6)		(1,567	)		(2,511	)		(1,998	)
Income/(Loss) from Continuing Operations
Available to the Common Shareholder	$	1,602		$	(4,909	)	$	(3,166	)
Income/(Loss) from Discontinued Operations Available to the Common Shareholder	$	36		$	(629	)	$	31,501
Net Income/(Loss) Available to the Common Shareholder	$	1,638		$	(5,538	)	$	28,335
Dividends paid on Series B Preferred Stock for Diluted EPS	$	73		$	—		$	—
Calculation of Average Shares Outstanding:
Weighted Average Basic Shares		67,870			64,649			67,637
Weighted Average Diluted Shares (7)		76,474			64,649			67,637
Income/(Loss) per Share - Basic
Income/(Loss) per Share from Continuing Operations	$	0.02		$	(0.08	)	$	(0.05	)
Income/(Loss) per Share from Discontinued Operations	$	0.00		$	(0.01	)	$	0.47
Net Income/(Loss) per Share	$	0.02		$	(0.09	)	$	0.42
Income/(Loss) per Share - Diluted
Income/(Loss) per Share from Continuing Operations	$	0.02		$	(0.08	)	$	(0.05	)
Income/(Loss) per Share from Discontinued Operations	$	0.00		$	(0.01	)	$	0.47
Net Income/(Loss) per Share	$	0.02		$	(0.09	)	$	0.42
	Three Months Ended						Three Months Ended
	March 31, 2010			March 31, 2009			Dec 31, 2009
OPERATING RATIOS & STATISTICS:
Return on Average Equity		3.74	%		2.11	%		26.98	%
Return on Average Assets		0.37	%		0.20	%		2.76	%
Net Interest Margin		3.18	%		3.23	%		2.97	%
Total Fees and Other Income/Total Revenue		38.23	%		43.72	%		50.78	%
Loans Charged-off, Net	$	2,797		$	9,815		$	18,370

7

Boston Private Financial Holdings, Inc. Selected Financial Data (1) (In Thousands, except share data) (Unaudited)

	Average Balance Three Months Ended									Interest Income/Expense Three Months Ended						Average Yield/Rate Three Months Ended
	March 31,						Dec 31,			March 31,				Dec 31,		March 31,				Dec 31,
	2010			2009			2009			2010		2009		2009		2010		2009		2009
AVERAGE BALANCE SHEET:
AVERAGE ASSETS
Earning Assets
Cash and Investments (8)	$	1,430,142		$	922,457		$	1,412,415		$	6,420	$	8,393	$	6,684	1.80	%	3.66	%	1.89	%
Loans (9)
Commercial and Construction (8)		2,592,771			2,657,686			2,637,992			37,587		39,076		37,395	5.76	%	5.91	%	5.62	%
Residential Mortgage		1,511,547			1,333,123			1,478,772			18,886		17,896		18,883	5.00	%	5.37	%	5.11	%
Home Equity and Other Consumer		220,852			197,187			214,088			2,459		2,191		2,500	4.48	%	4.47	%	4.59	%
Total Earning Assets		5,755,312			5,110,453			5,743,267			65,352		67,556		65,462	4.52	%	5.31	%	4.53	%
Allowance for Loan Losses		(69,760	)		(66,426	)		(73,613	)
Cash and due From Banks (Non-Interest Bearing)		12,338			65,435			27,113
Other Assets		503,447			2,036,104			580,466
TOTAL AVERAGE ASSETS	$	6,201,337		$	7,145,566		$	6,277,233
AVERAGE LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-Bearing Liabilities:
Deposits:
Savings and NOW	$	517,584		$	423,489		$	492,295		$	592	$	843	$	728	0.46	%	0.81	%	0.59	%
Money Market		1,646,046			1,125,277			1,576,760			3,921		4,967		4,521	0.97	%	1.79	%	1.14	%
Certificate of Deposit		1,419,511			1,406,402			1,569,426			6,116		9,957		7,622	1.75	%	2.87	%	1.93	%
Total Deposits		3,583,141			2,955,168			3,638,481			10,629		15,767		12,871	1.20	%	2.16	%	1.40	%
Junior Subordinated Debentures and Other Long-term Debt		193,645			256,621			215,895			2,490		3,271		2,851	5.14	%	5.10	%	5.28	%
FHLB Borrowings and Other		676,331			924,987			721,999			6,140		7,359		6,916	3.63	%	3.18	%	3.75	%
Total Interest-Bearing Liabilities		4,453,117			4,136,776			4,576,375			19,259		26,397		22,638	1.74	%	2.57	%	1.96	%
Non-interest Bearing Demand Deposits		1,010,766			821,472			906,351
Payables and Other Liabilities		87,795			1,480,220			98,229
Total Liabilities		5,551,678			6,438,468			5,580,955
Redeemable Non-Controlling Interest		30,281			20,060			53,177
Stockholders’ Equity		619,378			687,038			643,101
TOTAL AVERAGE LIABILITIES & STOCKHOLDERS’ EQUITY	$	6,201,337		$	7,145,566		$	6,277,233
Net Interest Income										$	46,093	$	41,159	$	42,824
Interest Rate Spread																2.78	%	2.74	%	2.57	%
Net Interest Margin																3.18	%	3.23	%	2.97	%

8

Boston Private Financial Holdings, Inc. Selected Financial Data (1) (In Thousands, except share data) (Unaudited)

	March 31, 2010			March 31, 2009		Dec 31, 2009
PRIVATE BANKING LOAN DATA AND CREDIT QUALITY (10):
Commercial Loans:
New England	$	962,252		$	997,437	$	943,740
Northern California		938,492			849,090		927,074
Southern California		226,942			228,593		231,684
Pacific Northwest		102,809			140,723		111,039
Total Commercial Loans	$	2,230,495		$	2,215,843	$	2,213,537
Construction and Land Loans:
New England	$	112,099		$	115,171	$	117,817
Northern California		150,884			233,235		161,839
Southern California		7,177			15,264		7,719
Pacific Northwest		25,671			61,743		28,286
Total Construction and Land Loans	$	295,831		$	425,413	$	315,661
Residential Mortgage Loans:
New England	$	1,126,290		$	1,057,034	$	1,113,842
Northern California		228,143			211,355		219,394
Southern California		142,247			43,714		124,212
Pacific Northwest		44,949			2,397		37,255
Total Residential Mortgage Loans	$	1,541,629		$	1,314,500	$	1,494,703
Home Equity and Other Consumer Loans:
New England	$	182,604		$	91,299	$	179,792
Northern California		81,035			81,550		74,192
Southern California		18,802			22,432		20,947
Pacific Northwest		5,759			4,407		5,278
Subtotal Home Equity and Other Consumer Loans	$	288,200		$	199,688	$	280,209
Total Private Banking Loans	$	4,356,155		$	4,155,444	$	4,304,110
	March 31, 2010			March 31, 2009		Dec 31, 2009
Allowance for Loan Losses:
New England	$	28,125		$	26,237	$	27,363
Northern California		23,986			16,190		19,950
Southern California		12,504			11,061		11,659
Pacific Northwest		8,647			14,103		9,472
Total Allowance for Loan Losses	$	73,262		$	67,591	$	68,444
Accruing Classified Loans (11):
New England	$	20,845		$	9,223	$	14,534
Northern California		14,234			12,058		14,768
Southern California		14,145			21,242		8,117
Pacific Northwest		13,537			22,744		15,118
Total Accruing Classified Loans	$	62,761		$	65,267	$	52,537
Non-performing Assets:
New England	$	11,224		$	5,997	$	9,216
Northern California		50,052			8,955		46,609
Southern California (12)		22,810			39,300		26,335
Pacific Northwest		20,231			25,955		24,778
Total Non-performing Assets	$	104,317		$	80,207	$	106,938
Loans 30-89 Days Past Due:
New England	$	14,939		$	7,468	$	6,658
Northern California		—			5,080		6,799
Southern California		4,645			6,743		4,259
Pacific Northwest		7			2,375		3,478
Total Loans 30-89 Days Past Due	$	19,591		$	21,666	$	21,194
Loans Charged-off/(Recovered), Net for the Three Months Ended:
New England	$	1,038		$	—	$	555
Northern California		1,789			106		6,937
Southern California		(855	)		3,782		5,065
Pacific Northwest		825			5,927		5,813
Total Net Loans Charged-off	$	2,797		$	9,815	$	18,370

9

Boston Private Financial Holdings, Inc. Selected Financial Data (1) (In Thousands, except share data) (Unaudited)

(1) Total Balance Sheet Assets at March 31, 2009 includes assets from discontinued operations of $1.7 billion.

(2) The Company calculates tangible assets by adjusting total assets to exclude goodwill and intangible assets.

The Company calculates tangible common equity by adjusting total equity to exclude: the equity from the TARP funding, and goodwill and intangible assets and includes the difference between redemption value and value per ARB 51 for redeemable non-controlling interests.

The Company uses certain non-GAAP financial measures, such as the Tangible Common Equity to Tangible Assets ratio, to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.

A reconciliation from the Company’s GAAP Total Equity to Total Assets ratio to the Non-GAAP Tangible Common Equity to Tangible Assets ratio is presented below:

	March 31, 2010			March 31, 2009			Dec 31, 2009
Total Balance Sheet Assets	$	6,034,392		$	7,179,620		$	6,049,265
LESS: Goodwill and intangible assets, Net		(148,788	)		(153,425	)		(150,117	)
Tangible Assets (non-GAAP)		5,885,604			7,026,195			5,899,148
Total Equity		610,180			660,727			651,154
LESS:  Goodwill and intangible assets, Net		(148,788	)		(153,425	)		(150,117	)
TARP Funding		(104,000	)		(154,000	)		(154,000	)
ADD:   Difference between redemption value of non-controlling interests and value under ARB 51		14,490			43,234			46,016
Total adjusting items		(238,298	)		(264,191	)		(258,101	)
Tangible Common Equity (non-GAAP)		371,882			396,536			393,053
Total Equity/Total Assets		10.11	%		9.20	%		10.76	%
Tangible Common Equity/Tangible Assets (non-GAAP)		6.32	%		5.64	%		6.66	%

(3) Gross impairment expense for the three months ended December 31, 2009 was $1.7 million.

(4) In 2009 the Company completed the sale of its affiliates Boston Private Value Investors, Sand Hill Advisors, RINET, Gibraltar, and Westfield Capital Management. Accordingly, prior period and current financial information related to the divested companies are included with discontinued operations.

Prior period AUM, for comparative purposes, was adjusted to exclude the assets managed from the divested companies.

(5) The accretion of the beneficial conversion feature and dividends on the preferred securities that the Company issued during the third quarter of 2008 is accounted for as a preferred stock dividend and reduces the income attributable to common shareholders.

(6) The accretion of the preferred discount and dividends on the preferred securities that the Company issued during the fourth quarter of 2008 is accounted for as a preferred stock dividend and reduces the income attributable to common shareholders.

(7) The diluted EPS computation for the three months ended March 31, 2010 and 2009 and for the three months ended December 31, 2009 does not assume: exercise or contingent issuance of options or other dilutive securities; conversion of the convertible trust preferred securities or the Series B Preferred stock; nor the exercise of the warrants when the results are antidilutive.

As a result of the antidilution, the potential common shares excluded from the diluted EPS computation are as follows:

	Three Months Ended
	March 31, 2010	March 31, 2009	Dec 31, 2009
Potential common shares from the convertible trust preferred securities	1,860,339	3,228,687	1,860,339
Potential common shares from the exercise or contingent issuance of the options or other dilutive securities	—	1,007,156	962,727
Potential common shares from the conversion of the Series B Preferred stock	—	7,261,091	7,261,091

If the effect of the convertible trust preferred securities would have been dilutive, interest expense, net of tax, related to the convertible trust preferred securities of $0.4 million, $0.7 million, and $0.6 million for the three months ended March 31, 2010, March 31, 2009 and December 31, 2009, respectively, would be added back to net income for diluted EPS computations for the periods presented.

Options to purchase approximately 4.1 million, 5.3 million, and 5.0 million shares of common stock were outstanding at March 31, 2010, March 31, 2009 and December 31, 2009, respectively, but were not included in the computation of the diluted EPS or in the above anti-dilution table because the options’ exercise prices were greater than the average market price of the common shares during the quarter.

In addition, a warrant to purchase approximately 2.9 million shares of common stock was outstanding at March 31, 2010, and 8.3 million shares of common stock was outstanding for both periods March 31, 2009 and December 31, 2009 but were not included in the computation of diluted EPS because the warrant’s price was greater than the average market price of the common shares during the quarter.

(8) Interest income on non-taxable investments and loans are presented on an FTE basis using the federal statutory rate. These adjustments were approximately $1.8 million for all periods presented.

(9) Includes loans held for sale and non-accrual loans.

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

(11) Accruing classified loans include loans that are classified as substandard but are still accruing interest income. The Banks may classify a loan as substandard where known information about possible credit problems of the related borrowers causes management to have doubts as to the ability of such borrowers to comply with the present repayment terms and which may result in disclosure of such loans as non-performing at some time in the future.

(12) Includes the non-strategic loans held for sale of $3.1 million, $22.3 million, and $3.6 million, at March 31, 2010, March 31, 2009, and December 31, 2009, respectively.

10