Fourth Quarter and Full Year Highlights:
- Deposit and Loan Growth: Average
Total Deposits increased 8% year-over-year to $5.9 billion. On a
linked quarter basis, Average Total Deposits increased 3%, while
Average Total Loans grew 8% year-over-year and 2% linked quarter.
The Average Loan-to-Deposit ratio was 95% at the end of the fourth
quarter, flat year-over-year.
- Net Interest Income Growth: Net
Interest Income increased 9% year-over-year and increased 4% linked
quarter to $48.1 million.
- Assets Under Management: Total
Assets Under Management/Advisory (“AUM”) decreased 8%
year-over-year to $27.6 billion, reflecting negative net flows and
negative market action. On a linked quarter basis, AUM increased 1%
due to positive market action partially offset by negative net
flows.
- Provision Credit: The Company
recorded a provision credit of $1.7 million due to net recoveries
of $0.9 million and a reduction in criticized and classified loans,
offset by loan growth. Compared to a provision expense of $2.6
million for the third quarter of 2015.
- Dividend Increase: The Board of
Directors today approved a quarterly cash dividend of $0.10 per
share, up from $0.09 per share. This marks the fifth quarterly cash
dividend increase in the past three years.
Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the
“Company” or “BPFH”) today reported fourth quarter 2015 GAAP Net
Income Attributable to the Company of $15.0 million, compared to
$13.5 million for the third quarter of 2015. Fourth quarter 2015
diluted earnings per share were $0.17, compared to $0.16 in the
third quarter of 2015 and $0.13 in the fourth quarter of 2014.
For the full year of 2015, BPFH reported GAAP Net Income
Attributable to the Company of $64.9 million, compared to $68.8 for
the full year of 2014. BPFH reported diluted earnings per share of
$0.74 compared to $0.79 for the full years of 2015 and 2014,
respectively.
“2015 was an uneven performance year for Boston Private,” said
Clayton G. Deutsch, CEO. “The Private Bank continued to build
franchise value and expand its client base across its footprint.
However, our Wealth Management businesses came under pressure from
sector-based headwinds and client withdrawals. Nevertheless, all of
our wealth management businesses took steps to strengthen their
positions. Despite near-term challenges, we enter 2016 confident
that we have the right team and client offering in place to execute
on our goal of being the premier Wealth Management and Private
Banking company in our select markets nationally.”
Core Fees and Income
Core Fees and Income decreased 6% year-over-year and linked
quarter to $37.1 million reflecting lower levels of AUM and lower
Other Banking Fee Income. For the full year 2015, Core Fees and
Income increased 13% to $157.1 million, largely due to the
acquisition of Banyan Partners, which was completed on October 2,
2014.
AUM increased to $27.6 billion in the fourth quarter, up 1% from
$27.4 billion in the third quarter of 2015, reflecting positive
market action offset by negative net flows. AUM decreased 8%
year-over-year due to negative net flows and negative market
action. The Company experienced fourth quarter 2015 AUM net
outflows of $543 million, as compared to net outflows of $751
million and $156 million in the third quarter of 2015 and fourth
quarter of 2014, respectively. AUM net outflows for 2015 were $1.9
billion as compared to net outflows of $348 million in 2014.
Net Interest Income
Net Interest Income for the fourth quarter was $48.1 million, up
4% from $46.5 million for the third quarter of 2015. On a
year-over-year basis, Net Interest Income increased 9% from $44.1
million. The current quarter, third quarter of 2015 and fourth
quarter of 2014, all include $0.3 million of interest recovered on
previous non-accrual loans.
Net Interest Margin was 2.88% for the fourth quarter, up four
basis points from 2.84% for the third quarter of 2015. Net Interest
Margin was up five basis points from 2.83% for the fourth quarter
of 2014. Excluding interest recovered on previous nonaccrual loans,
Net Interest Margin was up four basis points both linked quarter
and year-over-year to 2.86%.
Total Operating Expenses
Total Operating Expenses for the fourth quarter of 2015 were
$67.4 million, up 9% from $61.9 million for the third quarter of
2015. On a year-over-year basis, Total Operating Expenses increased
6% from $63.8 million, primarily due to higher marketing and
occupancy expenses. Restructuring Expense in the fourth quarter of
2015 was $2.0 million, while the third quarter of 2015 and fourth
quarter of 2014 include Restructuring Expense of $1.5 million and
$0.7 million, respectively.
Provision and Asset Quality
The Company recorded a provision credit of $1.7 million for the
fourth quarter of 2015, compared to a provision expense of $2.6
million for the third quarter of 2015 and $2.4 million for the
fourth quarter of 2014. The provision credit was driven by net
recoveries of $0.9 million and a reduction in criticized and
classified loans, offset by loan growth.
Criticized Loans decreased 4% on a linked quarter basis and 3%
year-over-year to $154.1 million. Nonaccrual Loans (“Nonaccruals”)
decreased 14% to $26.6 million on a linked quarter basis. On a
year-over-year basis, Nonaccruals decreased 40% from $44.2 million.
As a percentage of Total Loans, Nonaccruals were 46 basis points at
December 31, 2015, down 9 basis points from September 30, 2015, and
down 38 basis points from December 31, 2014.
Additional credit metrics are listed below on a linked quarter
and year-over-year basis:
(In millions)
December 31, 2015
September 30, 2015 December 31, 2014
Total Criticized Loans $ 154.1 $ 160.9 $ 159.6
Total Loans 30-89 Days Past Due and
Accruing (12)
$ 13.1 $ 7.0 $ 7.0 Total Net Loans (Charged-off)/ Recovered $ 0.9 $
(1.6 ) $ (1.8 ) Allowance for Loan Losses/ Total Loans 1.37 % 1.41
% 1.44 %
Capital Ratios
Capital ratios are listed below on a linked quarter and
year-over-year basis:
December 31, 2015 September
30, 2015 December 31, 2014 BPFH
Ratios: Total Risk-Based Capital * 13.8 % 13.8 % 13.8 % Tier I
Risk-Based Capital * 12.6 % 12.6 % 12.6 % Tier I Leverage Capital *
9.5 % 9.6 % 9.5 % TCE/TA 7.0 % 7.2 % 7.0 % Tier I Common Equity/
Risk Weighted Assets * 9.8 % 9.7 % 9.2 %
*December 31, 2015 information is
presented based on estimated data.
Dividend Payments
Concurrent with the release of fourth quarter 2015 earnings, the
Board of Directors of the Company declared a cash dividend to
common stock shareholders of $0.10 per share. The record date for
this dividend is February 10, 2016, and the payment date is
February 19, 2016.
The Board of Directors of the Company also declared a cash
dividend to holders of the Non-Cumulative Perpetual Preferred
Stock, Series D of $17.375 per share, which will result in a
dividend of $0.434375 per depositary share. The record date for
this dividend is February 16, 2016, and the payment date is March
15, 2016.
Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures, such as
tangible book value per share; the TCE/TA ratio; return on average
common equity; return on average tangible common equity; pre-tax,
pre-provision earnings; total operating expense excluding
restructuring; the efficiency ratio (FTE basis); and Net Interest
Income and Net Interest Margin excluding interest recovered on
previous non-accrual loans; 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 to the non-GAAP measures is attached.
Conference Call
Management will hold a conference call at 8 a.m. Eastern Time on
Thursday, January 28, 2016, to discuss the financial results,
business highlights and outlook. To access the call:
Dial In #: (888) 317-6003Elite Entry Number: 6359964
Replay Information:Available from January 28, 2016 at 12 noon
until February 4, 2016Dial In #: (877) 344-7529Conference Number:
10079628
The call will be simultaneously webcast and may be accessed on
www.bostonprivatefinancial.com.
Boston Private Financial Holdings,
Inc.
Boston Private Financial Holdings, Inc. is a national financial
services organization that owns Wealth Management and Private
Banking affiliates with offices in Boston, New York, Los Angeles,
San Francisco, San Jose, Atlanta, Florida, Wisconsin, and Texas.
The Company has an $8 billion Private Banking balance sheet, and
manages over $27 billion of client assets.
The Company positions its affiliates to serve the high net worth
marketplace with high quality products and services of unique
appeal to private clients. The Company also provides strategic
oversight and access to resources, both financial and intellectual,
to support affiliate management, marketing, compliance and legal
activities. (NASDAQ: BPFH)
For more information about BPFH, visit the Company's website
at www.bostonprivatefinancial.com.
Forward-Looking Statements
Certain statements in this press release that are not historical
facts may constitute 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,
investment management and wealth advisory activities; changes in
interest rates; competitive pressures from other financial
institutions; the effects of weakness in general economic
conditions on a national basis or in the local markets in which the
Company operates; changes in loan defaults and charge-off rates;
changes in the value of securities and other assets, adequacy of
loan loss reserves, or decreases in deposit levels necessitating
increased borrowing to fund loans and investments; changes in
government regulation; the risk that goodwill and intangibles
recorded in the Company's financial statements will become
impaired; the risk that the Company's deferred tax asset may not be
realized; risks related to the identification and implementation of
acquisitions, dispositions and restructurings; changes in
assumptions used in making such forward-looking statements; and the
other risks and uncertainties detailed in the Company's Annual
Report on Form 10-K and updated by the Company's Quarterly Reports
on Form 10-Q and other filings submitted to the Securities and
Exchange Commission. Forward-looking statements speak only as of
the date on which they are made. 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 statement is made.
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 a wholly-owned subsidiary of BPFH. The
information reported in this press release is related to the
performance and results of BPFH.
Boston Private Financial Holdings, Inc.
Selected Financial
Data (Unaudited) (In thousands,
except share and per share data)
12/31/2015
9/30/2015 12/31/2014
Assets: Cash and cash equivalents
$ 238,694 $
43,640 $ 172,609 Investment securities available for sale
1,084,510 1,023,255 829,993 Investment securities held to
maturity
116,352 121,679 140,727 Stock in Federal Home Loan
Banks
35,181 35,518 32,281 Loans held for sale
8,072
7,685 7,099 Total loans
5,719,212 5,607,472 5,269,936 Less:
Allowance for loan losses
78,500 79,246
75,838 Net loans
5,640,712 5,528,226 5,194,098
Other real estate owned (“OREO”)
776 776 929 Premises and
equipment, net
31,036 30,841 32,199 Goodwill
152,082
152,082 152,082 Intangible assets, net
33,007 34,806 39,718
Fees receivable
11,258 11,308 12,517 Accrued interest
receivable
17,950 17,039 16,071 Deferred income taxes, net
51,699 45,438 47,576 Other assets
121,179
128,235 119,975 Total assets
$
7,542,508 $ 7,180,528 $ 6,797,874
Liabilities: Deposits
$ 6,040,437 $ 5,647,859
$ 5,453,879 Securities sold under agreements to repurchase
58,215 35,698 30,496 Federal funds purchased
— 60,000
— Federal Home Loan Bank borrowings
461,324 461,899 370,150
Junior subordinated debentures
106,363 106,363 106,363 Other
liabilities
111,468 109,695
112,170 Total liabilities
6,777,807
6,421,514 6,073,058
Redeemable
Noncontrolling Interests 18,088 18,257 20,905
Shareholders’ Equity: Preferred stock, $1.00 par value;
authorized: 2,000,000 shares
47,753 47,753 47,753
Common stock, $1.00 par value; authorized:
170,000,000 shares; issued and outstanding: 83,410,961 shares at
December 31, 2015; 83,645,364 shares at September 30, 2015;
82,961,855 shares at December 31, 2014
83,411 83,645 82,962 Additional paid-in capital
600,670 598,968 610,903 Retained earnings/ (accumulated
deficit)
12,886 5,960 (37,396 ) Accumulated other
comprehensive income/ (loss)
(1,500 )
1,287 (697 )
Total Company’s shareholders’ equity
743,220 737,613 703,525
Noncontrolling interests
3,393 3,144
386 Total shareholders’ equity
746,613
740,757 703,911 Total liabilities,
redeemable noncontrolling interests and shareholders’ equity
$ 7,542,508 $ 7,180,528 $ 6,797,874
Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited) Three Months Ended Year Ended (In
thousands, except share and per share data)
12/31/2015 9/30/2015
12/31/2014 12/31/2015
12/31/2014 Interest and dividend income: Loans
$ 49,463 $ 48,058 $ 47,117
$ 192,184 $
191,658 Taxable investment securities
1,239 1,094 920
4,403 3,162 Non-taxable investment securities
1,348
1,264 978
4,758 3,738 Mortgage-backed securities
2,863 2,681 1,695
10,933 6,925 Federal funds sold and
other
449 425 381
1,390 1,359 Total interest and
dividend income
55,362 53,522
51,091
213,668 206,842
Interest expense: Deposits
4,281 4,007 3,908
16,002 14,102 Federal Home Loan Bank borrowings
1,960
2,051 2,069
7,959 9,108 Junior subordinated debentures
973 979 976
3,875 3,872 Repurchase agreements and
other short-term borrowings
8 12
10
62 59 Total
interest expense
7,222 7,049
6,963
27,898 27,141
Net interest income
48,140 46,473 44,128
185,770 179,701 Provision/ (credit) for loan losses
(1,655 ) 2,600 2,400
(1,555 ) (6,400 ) Net interest income
after provision/ (credit) for loan losses
49,795
43,873 41,728
187,325 186,101
Fees and other
income: Investment management fees
10,889 11,360 11,897
45,694 47,123 Wealth advisory fees
12,569 12,515
12,352
50,437 48,082 Wealth management and trust fees
11,782 12,424 13,327
51,309 34,582 Other banking fee
income
1,719 2,780 1,841
8,440 7,033 Gain on sale of
loans, net
178 364 192
1,207 2,158 Total core
fees and income
37,137 39,443
39,609
157,087 138,978
Gain/ (loss) on sale of investments, net
215 5 (16 )
236 (7 ) Gain/ (loss) on OREO, net
— 35 (31 )
124 957 Other
366 (37 )
360
3,722 870 Total other
income
581 3 313
4,082 1,820
Operating
expense: Salaries and employee benefits
39,520 37,938
39,881
159,401 146,648 Occupancy and equipment
9,989
9,064 8,549
37,183 31,041 Professional services
3,778
2,848 3,308
12,861 12,473 Marketing and business development
4,001 2,008 2,425
9,063 7,989 Contract services and
data processing
1,505 1,600 1,527
6,037 5,816
Amortization of intangibles
1,799 1,655 1,707
6,711
4,836 FDIC insurance
1,089 916 852
3,979 3,459
Restructuring
2,000 1,504 739
3,724 739 Other
3,726 4,396 4,772
16,222 14,128 Total operating expense
67,407 61,929 63,760
255,181 227,129 Income
before income taxes
20,106 21,390 17,890
93,313
99,770 Income tax expense
5,638 8,182
5,901
30,392
32,365 Net income from continuing operations
14,468
13,208 11,989
62,921 67,405 Net income from discontinued
operations (1)
1,455 1,316
1,510
6,411 6,160
Net income before attribution to noncontrolling interests
15,923 14,524 13,499
69,332 73,565 Less: Net income
attributable to noncontrolling interests
921
994 1,322
4,407
4,750
Net income attributable to the Company
$ 15,002 $ 13,530 $ 12,177
$ 64,925 $ 68,815
Boston Private
Financial Holdings, Inc.
Selected
Financial Data (Unaudited) (In thousands, except share
and per share data)
Three Months Ended Year
Ended PER SHARE DATA: 12/31/2015
9/30/2015 12/31/2014
12/31/2015 12/31/2014
Calculation of Income for EPS: Net income attributable to
the Company
$ 15,002 $ 13,530 $ 12,177
$
64,925 $ 68,815 Adjustments to Net Income Attributable to
the Company to Arrive at Net Income Attributable to Common
Shareholders (2)
(1,187 ) 154
(1,176 )
(3,102 ) (4,228 )
Net Income Attributable to the Common Shareholders
13,815 13,684 11,001
61,823 64,587 LESS: Amount
allocated to participating securities
(5 )
(8 ) (27 )
(92 ) (335 )
Net Income Attributable to the Common Shareholders, after
allocation to participating securities $ 13,810
$ 13,676 $ 10,974
$ 61,731
$ 64,252
End of Period Common Shares
Outstanding
83,410,961
83,645,364
82,961,855
Weighted Average Shares Outstanding: Weighted average
basic shares, including participating securities
81,197,790
81,204,808 80,880,508
81,116,055 79,605,355 LESS:
Participating securities
(62,859 ) (100,870 )
(487,596 )
(230,802 ) (683,875 ) PLUS: Dilutive
potential common shares
2,402,591
2,265,257 2,096,172
2,339,900
1,957,751
Weighted Average Diluted Shares
(3) 83,537,522 83,369,195
82,489,084
83,225,153
80,879,231
Diluted Total Earnings per Share
$ 0.17 $ 0.16 $ 0.13
$ 0.74 $ 0.79
Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited) (In thousands, except per share data)
FINANCIAL DATA:
12/31/2015
9/30/2015 12/31/2014 Book Value Per Common Share
$ 8.38 $ 8.29 $ 7.91 Tangible Book Value Per Share
(4)
$ 6.16 $ 6.05 $ 5.60 Market Price Per Share
$ 11.34 $ 11.70 $ 13.47
ASSETS UNDER
MANAGEMENT AND ADVISORY: Wealth Management and Trust
$
7,976,000 $ 8,060,000 $ 9,274,000 Investment Managers
9,952,000 9,830,000 10,772,000 Wealth Advisory
9,688,000 9,537,000 9,883,000 Less: Inter-company
Relationship
(21,000 ) (21,000 )
(22,000 ) Total Assets Under Management and Advisory
$
27,595,000 $ 27,406,000 $ 29,907,000
BPFH FINANCIAL RATIOS: Total Equity/ Total Assets
9.90 % 10.32 % 10.35 % Tangible Common Equity/
Tangible Assets (4)
6.98 % 7.24 % 7.03 % Tier I
Common Equity/ Risk Weighted Assets (4)
9.80 % 9.73 %
9.24 % Allowance for Loan Losses/ Total Loans
1.37 %
1.41 % 1.44 % Allowance for Loan Losses/ Nonaccrual Loans
295 % 258 % 172 % Return on Average Assets - Three
Months Ended (Annualized)
0.81 % 0.75 % 0.71 % Return
on Average Common Equity - Three Months Ended (Annualized) (5)
8.06 % 7.32 % 6.91 % Return on Average Tangible
Common Equity - Three Months Ended (Annualized) (5)
11.92
% 10.93 % 10.60 % Efficiency Ratio - Three Months Ended (6)
71.59 % 66.18 % 70.83 %
Boston Private Financial
Holdings, Inc.
Selected Financial Data
(Unaudited) Average Balance Interest
Income/Expense Average Yield/Rate (In thousands)
Three Months Ended Three Months Ended Three Months
Ended AVERAGE BALANCE SHEET: 12/31/15
9/30/15
12/31/14 12/31/15 9/30/15
12/31/14 12/31/15 9/30/15
12/31/14 AVERAGE ASSETS
Interest-Earning Assets: Cash and Investments: Taxable investment
securities
$ 368,573 $ 340,170 $ 305,118
$
1,239 $ 1,094 $ 920
1.35 % 1.29 % 1.21 %
Non-taxable investment securities (8)
258,755 249,854
229,157
2,074 1,945 1,504
3.21 % 3.12 % 2.63 %
Mortgage-backed securities
526,987 526,408 350,312
2,863 2,681 1,695
2.17 % 2.04 % 1.93 % Federal
funds sold and other
220,618
213,372 389,833
449
425 381
0.80 %
0.78 % 0.39 % Total Cash and
Investments
1,374,933 1,329,804
1,274,420
6,625
6,145 4,500
1.92 %
1.85 % 1.41 % Loans (9): Commercial and
Construction (8)
3,133,881 3,043,739 2,852,064
32,480
31,195 30,855
4.06 % 4.01 % 4.23 % Residential
2,224,614 2,208,004 2,120,416
17,272 17,083 16,447
3.11 % 3.09 % 3.10 % Home Equity and Other Consumer
284,076 287,102
254,387
1,982 1,982
1,799
2.77 % 2.74 %
2.80 % Total Loans
5,642,571
5,538,845 5,226,867
51,734 50,260
49,101
3.62 % 3.58 % 3.71
% Total Earning Assets
7,017,504
6,868,649 6,501,287
58,359
56,405 53,601
3.28
% 3.24 % 3.26 % LESS: Allowance
for Loan Losses
79,389 78,263 75,590 Cash and due From Banks
(Non-Interest Bearing)
39,453 38,631 41,595 Other Assets
411,642 404,945
411,546
TOTAL AVERAGE ASSETS $
7,389,210 $ 7,233,962 $
6,878,838
AVERAGE LIABILITIES, REDEEMABLE NONCONTROLLING
INTERESTS, AND SHAREHOLDERS' EQUITY
Interest-Bearing Liabilities: Interest-Bearing Deposits: Savings
and NOW
$ 586,353 $ 581,041 $ 584,210
$
105 $ 103 $ 112
0.07 % 0.07 % 0.08 % Money
Market
3,063,533 2,944,893 2,836,731
2,995 2,731
2,589
0.39 % 0.37 % 0.36 % Certificates of Deposit
593,286 593,466
597,460
1,181 1,173
1,207
0.79 % 0.78
% 0.80 % Total Interest-Bearing Deposits
4,243,172 4,119,400 4,018,401
4,281 4,007 3,908
0.40 % 0.39 % 0.39 % Junior Subordinated Debentures
106,363 106,363 106,363
973 979 976
3.58
% 3.60 % 3.59 % FHLB Borrowings and Other
491,115 526,697
447,955
1,968 2,063
2,079
1.57 % 1.53 %
1.82 % Total Interest-Bearing Liabilities
4,840,650 4,752,460
4,572,719
7,222 7,049
6,963
0.59 % 0.59
% 0.60 % Noninterest Bearing Demand Deposits
1,673,122 1,623,524 1,465,145 Payables and Other Liabilities
110,951 102,076
121,318 Total Average Liabilities
6,624,723 6,478,060
6,159,182 Redeemable Noncontrolling Interests
21,337 22,020
22,802 Average Shareholders' Equity
743,150
733,882 696,854
TOTAL AVERAGE
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND SHAREHOLDERS'
EQUITY $ 7,389,210 $ 7,233,962
$ 6,878,838 Net Interest Income - on a Fully Taxable
Equivalent Basis (FTE)
$ 51,137 $ 49,356 $ 46,638
LESS: FTE Adjustment (8)
2,997
2,883 2,510 Net Interest Income (GAAP Basis)
$ 48,140 $ 46,473 $
44,128 Interest Rate Spread
2.69 % 2.65 % 2.66 % Bank
only Net Interest Margin
2.94 % 2.91 % 2.90 % Net
Interest Margin
2.88 % 2.84 % 2.83 %
Boston
Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
Average Balance Interest Income/Expense Average
Yield/Rate (In thousands)
Year Ended Year Ended
Year Ended AVERAGE BALANCE SHEET: 12/31/2015
12/31/2014 12/31/2015
12/31/2014 12/31/2015 12/31/2014
AVERAGE ASSETS Interest-Earning Assets: Cash and
Investments: Taxable investment securities
$ 343,130
$ 279,438
$ 4,403 $ 3,162
1.28 % 1.13 %
Non-taxable investment securities (8)
245,402 225,346
7,320 5,751
2.98 % 2.55 % Mortgage-backed
securities
527,057 337,552
10,933 6,925
2.07
% 2.05 % Federal funds sold and other
167,847
285,783
1,390
1,359
0.83 % 0.47 % Total Cash
and Investments
1,283,436
1,128,119
24,046 17,197
1.87 % 1.52 % Loans (9): Commercial and
Construction (8)
2,976,950 2,846,042
125,053 126,830
4.20 % 4.40 % Residential
2,183,830 2,066,776
67,648 64,984
3.10 % 3.14 % Home Equity and
Other Consumer
284,817 246,934
7,956 7,080
2.79 %
2.87 % Total Loans
5,445,597
5,159,752
200,657
198,894
3.68 % 3.82 % Total Earning
Assets
6,729,033 6,287,871
224,703 216,091
3.34
% 3.41 % LESS: Allowance for Loan Losses
78,164 76,990 Cash and due From Banks (Non-Interest Bearing)
39,513 39,381 Other Assets
410,375
374,782
TOTAL AVERAGE ASSETS $
7,100,757 $ 6,625,044
AVERAGE LIABILITIES,
REDEEMABLE NONCONTROLLING INTERESTS, AND SHAREHOLDERS' EQUITY
Interest-Bearing Liabilities: Interest-Bearing Deposits: Savings
and NOW
$ 588,995 $ 578,827
$ 399 $ 431
0.07 % 0.07 % Money Market
2,894,615 2,619,930
10,871 8,701
0.38 % 0.33 % Certificates of
Deposit
597,153 611,285
4,732 4,970
0.79 %
0.81 % Total Interest-Bearing Deposits
4,080,763
3,810,042
16,002 14,102
0.39 % 0.37 % Junior
Subordinated Debentures
106,363 106,363
3,875 3,872
3.64 % 3.59 % FHLB Borrowings and Other
516,237 503,995
8,021
9,167
1.55 % 1.79
% Total Interest-Bearing Liabilities
4,703,363
4,420,400
27,898
27,141
0.59 % 0.61 % Noninterest
Bearing Demand Deposits
1,542,254 1,406,007 Payables and
Other Liabilities
103,669
111,664 Total Average Liabilities
6,349,286 5,938,071
Redeemable Noncontrolling Interests
21,982 20,757 Average
Shareholders' Equity
729,489
666,216
TOTAL AVERAGE LIABILITIES, REDEEMABLE NONCONTROLLING
INTERESTS, AND SHAREHOLDERS' EQUITY $ 7,100,757
$ 6,625,044 Net Interest Income - on a Fully Taxable
Equivalent Basis (FTE)
$ 196,805 $ 188,950 LESS: FTE
Adjustment (8)
11,035 9,249 Net
Interest Income (GAAP Basis)
$ 185,770
$ 179,701 Interest Rate Spread
2.75 % 2.80 % Bank
only Net Interest Margin
2.99 % 3.05 % Net Interest
Margin
2.92 % 2.98 %
Boston Private Financial
Holdings, Inc. Selected
Financial Data (Unaudited) (In thousands)
LOAN DATA (10): 12/31/2015 9/30/2015
12/31/2014 Commercial and Industrial Loans: New England
$ 894,277 $ 827,301 $ 781,646 San Francisco Bay
122,754 125,093 117,105 Southern California
94,524 84,428 54,334 Total Commercial and
Industrial Loans
$ 1,111,555 $ 1,036,822 $ 953,085
Commercial Real Estate Loans: New England
$ 799,109 $
766,253 $ 690,965 San Francisco Bay
622,123 625,145 619,222
Southern California
492,902 512,250
478,216 Total Commercial Real Estate Loans
$
1,914,134 $ 1,903,648 $ 1,788,403 Construction and Land
Loans: New England
$ 106,048 $ 111,280 $ 85,272 San
Francisco Bay
52,876 35,627 31,329 Southern California
24,510 23,504 8,748 Total Construction
and Land Loans
$ 183,434 $ 170,411 $ 125,349
Residential Loans: New England
$ 1,368,192 $
1,356,057 $ 1,299,568 San Francisco Bay
462,327 462,630
462,497 Southern California
399,021 393,199
370,030 Total Residential Loans
$ 2,229,540 $
2,211,886 $ 2,132,095 Home Equity Loans: New England
$
83,712 $ 81,796 $ 82,877 San Francisco Bay
28,966
27,076 27,575 Southern California
7,150 5,915
4,407 Total Home Equity Loans
$ 119,828 $
114,787 $ 114,859 Other Consumer Loans: New England
$
152,984 $ 161,186 $ 143,166 San Francisco Bay
4,530
5,782 6,505 Southern California
3,207 2,950
6,474 Total Other Consumer Loans
$ 160,721 $
169,918 $ 156,145 Total Loans: New England
$
3,404,322 $ 3,303,873 $ 3,083,494 San Francisco Bay
1,293,576 1,281,353 1,264,233 Southern California
1,021,314 1,022,246 922,209 Total Loans
$ 5,719,212 $ 5,607,472 $ 5,269,936
Boston Private
Financial Holdings, Inc.
Selected Financial Data (Unaudited) (In
thousands)
CREDIT QUALITY (10): 12/31/2015
9/30/2015 12/31/2014 Special Mention Loans: New
England
$ 40,121 $ 46,924 $ 32,254 San Francisco Bay
15,764 11,087 18,161 Southern California
13,326 12,718 26,325
Total Special Mention Loans
$ 69,211 $ 70,729
$ 76,740 Accruing Substandard Loans (11): New England
$ 22,026 $ 16,996 $ 11,126 San Francisco Bay
19,990 20,108 23,403 Southern California
16,398 22,405 4,331 Total
Accruing Substandard Loans
$ 58,414 $ 59,509
$ 38,860 Nonaccruing Loans: New England
$
19,572 $ 22,815 $ 26,205 San Francisco Bay
4,977
5,096 13,430 Southern California
2,022
2,816 4,547 Total Nonaccruing Loans
$
26,571 $ 30,727 $ 44,182 Other Real
Estate Owned: New England
$ 191 $ 191 $ 344 San
Francisco Bay
585 585 585 Southern California
— — — Total Other Real
Estate Owned
$ 776 $ 776 $ 929
Loans 30-89 Days Past Due and Accruing (12): New England
$
7,118 $ 6,733 $ 6,572 San Francisco Bay
2,806 14 375
Southern California
3,170 227
13 Total Loans 30-89 Days Past Due and Accruing
$ 13,094 $ 6,974 $ 6,960 Loans
(Charged-off)/ Recovered, Net for the Three Months Ended: New
England
$ 120 $ (1,618 ) $ (2,516 ) San Francisco Bay
703 (57 ) 607 Southern California
86
70 64 Total Net Loans (Charged-off)/
Recovered
$ 909 $ (1,605 ) $ (1,845 ) Loans
(Charged-off)/ Recovered, Net for the Twelve Months Ended: New
England
$ (502 ) $ (1,686 ) San Francisco Bay
4,217 3,671 Southern California
502
3,882 Total Net Loans (Charged-off)/ Recovered
$ 4,217 $ 5,867
Boston Private
Financial Holdings, Inc.
Selected Financial Data
(Unaudited) FOOTNOTES: (1) Net income from
discontinued operations consists of contingent payments or expenses
related to our divested affiliates, including Davidson Trust
Company; Boston Private Value Investors, Inc.; Sand Hill Advisors,
LLC; RINET Company, LLC; Gibraltar Private Bank & Trust
Company; and Westfield Capital Management Company, LLC. (2)
Adjustments to net income attributable to the Company to arrive at
net income attributable to the common shareholders, as presented in
these tables, include decrease/ (increase) in noncontrolling
interests redemption value, dividends paid on preferred stock, and
dividends on participating securities. (3) When the Company
has positive net income from continuing operations attributable to
the common shareholders, the Company adds additional shares to
basic weighted average shares outstanding to arrive at diluted
weighted average shares outstanding for the diluted earnings per
share calculation. These additional shares reflect the assumed
exercise, conversion, or contingent issuance of dilutive
securities. If the additional shares would result in anti-dilution
they would be excluded from the diluted earnings per share
calculation. The potential dilutive shares relate to: unexercised
stock options, unvested non-participating restricted stock, and
unexercised stock warrants. See Part II. Item 8. "Financial
Statements and Supplementary Data - Note 16: Earnings Per Share" in
the Company's Annual Report on Form 10-K for the year ended
December 31, 2014 for additional information. (4) The
Company uses certain non-GAAP financial measures, such as: Tangible
Book Value Per Share and the Tangible Common Equity ("TCE") to
Tangible Assets ("TA") ratio to provide information for investors
to effectively analyze financial trends of ongoing business
activities, and to enhance comparability with peers across the
financial sector. Reconciliations from the Company's GAAP
Total Equity to Total Assets ratio to the Non-GAAP TCE to TA ratio,
and from GAAP Book Value to Non-GAAP Tangible Book Value are
presented below: 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 non-convertible Series D Preferred stock
and exclude Goodwill and Intangible Assets, net. (In
thousands, except per share data)
December 31, 2015
September 30, 2015
December 31, 2014
Total Balance Sheet Assets
$ 7,542,508 $ 7,180,528 $
6,797,874 LESS: Goodwill and Intangible Assets, net
(185,089 ) (186,888 ) (191,800 )
Tangible Assets (non-GAAP)
$ 7,357,419 $ 6,993,640 $
6,606,074 Total Shareholders' Equity
$ 746,613 $
740,757 $ 703,911 LESS: Series D Preferred Stock (non-convertible)
(47,753 ) (47,753 ) (47,753 ) LESS: Goodwill and
Intangible Assets, net
(185,089 )
(186,888 ) (191,800 ) Total adjusting items
(232,842 ) (234,641 ) (239,553 )
Tangible Common Equity (non-GAAP)
$ 513,771 $
506,116 $ 464,358 Total Equity/Total Assets
9.90 % 10.32 % 10.35 % Tangible Common
Equity/Tangible Assets (non-GAAP)
6.98 % 7.24 % 7.03
% Total Risk Weighted Assets *
$ 5,450,149 $
5,397,148 $ 5,073,973 Tier I Common Equity *
$
534,241 $ 525,004 $ 468,902 Tier I Common Equity/ Risk
Weighted Assets
9.80 % 9.73 % 9.24 % End of
Period Shares Outstanding
83,411 83,645 82,962 Book
Value Per Common Share
$ 8.38 $ 8.29 $ 7.91 Tangible
Book Value Per Share (non-GAAP)
$ 6.16 $ 6.05 $ 5.60
* Risk Weighted Assets and Tier I Common Equity for December 31,
2015 are presented based on estimated data. (5) The Company
uses certain non-GAAP financial measures, such as: Return on
Average Common Equity and Return on Average Tangible Common Equity
to provide information for investors to effectively analyze
financial trends of ongoing business activities, and to enhance
comparability with peers across the financial sector.
Reconciliations from the Company's GAAP Return on Average Equity
ratio to the Non-GAAP Return on Average Common Equity ratio, and
the Non-GAAP Return on Average Tangible Common Equity ratio are
presented below: The Company annualizes income data based on
the number of days in the period presented and a 365 day year. The
Company calculates Average Common Equity by adjusting Average
Equity to exclude Average Preferred Equity. The Company calculates
Average Tangible Common Equity by adjusting Average Equity to
exclude Average Goodwill and Intangible Assets, net and Average
Preferred Equity.
Three Months Ended
Year ended
(In thousands)
December 31,
2015
September 30,
2015
December 31,
2014
December 31, 2015
December 31, 2014
Total average shareholders' equity
$ 743,150 $
733,882 $ 696,854 $
729,489
$ 666,216 LESS: Average Series D preferred stock (non-convertible)
(47,753 ) (47,753 ) (47,753 )
(47,753
)
(47,753 ) Average common equity (non-GAAP)
695,397 686,129 649,101
681,736
618,463 LESS: Average goodwill and intangible
assets, net
(185,983 ) (187,728 )
(184,473 )
(188,533
)
(144,658 ) Total adjusting items
(185,983
) (187,728 ) (184,473 )
(188,533
)
(144,658 ) Average Tangible Common Equity (non-GAAP)
$ 509,414 $ 498,401 $ 464,628 $
493,203
$ 473,805 Net income attributable to the
Company
$ 15,002 $ 13,530 $ 12,177 $
64,925
$ 68,815 LESS: Dividends on Series D preferred stock
(869 ) (869 ) (869 )
(3,475
)
(3,475 ) Common net income (non-GAAP)
14,133 12,661
11,308
61,450
65,340 ADD: Amortization of intangibles, net of tax (35%)
1,169 1,076 1,110
4,362
3,143 Tangible common net income (non-GAAP)
$ 15,302 $ 13,737 $ 12,418 $
65,812
$ 68,483 Return on Average Equity -
(Annualized)
8.01 % 7.31 % 6.93 %
8.90
%
10.33 % Return on Average Common Equity - (Annualized) (non-GAAP)
8.06 % 7.32 % 6.91 %
9.01
%
10.56 % Return on Average Tangible Common Equity - (Annualized)
(non-GAAP)
11.92 % 10.93 % 10.60 %
13.34
%
14.45 % (6) The Company uses certain non-GAAP financial
measures, such as: pre-tax, pre-provision earnings, total operating
expenses excluding restructuring expense, and the efficiency ratio
to provide information for investors to effectively analyze
financial trends of ongoing business activities, and to enhance
comparability with peers across the financial sector.
Reconciliations from the Company's GAAP income from continuing
operations before income taxes to non-GAAP pre-tax, pre-provision
earnings; from GAAP total operating expense to non-GAAP total
operating expense excluding restructuring; and from GAAP efficiency
ratio to Non-GAAP efficiency ratio (FTE basis), excluding
restructuring, are presented below:
Three Months Ended
Year ended (In thousands)
December 31,
2015
September 30,
2015
December 31,
2014
December 31,
2015
December 31,
2014
Income before income taxes (GAAP)
$ 20,106 $ 21,390 $
17,890
$ 93,313 $ 99,770 ADD BACK: Provision/
(credit) for loan losses
(1,655 ) 2,600
2,400
(1,555 )
(6,400 ) Pre-tax, pre-provision earnings (non-GAAP)
$
18,451 $ 23,990 $ 20,290
$ 91,758 $ 93,370
Total operating expense (GAAP)
$ 67,407 $
61,929 $ 63,760
$ 255,181 $ 227,129 Less:
Amortization of intangibles
1,799 1,655 1,707
6,711
4,836 Less: Restructuring
2,000 1,504
739
3,724 739
Total operating expense (excluding amortization of
intangibles and restructuring) (non-GAAP)
$ 63,608 $
58,770 $ 61,314
$ 244,746 $ 221,554 Total operating
expense (excluding restructuring) (non-GAAP)
65,407 60,425
63,021
251,457 226,390 Net interest income
$
48,140 $ 46,473 $ 44,128
$ 185,770 $ 179,701
Total core fees and income
37,137 39,443 39,609
157,087 138,978 Total other income
581 3 313
4,082 1,820 FTE income
2,997
2,883 2,510
11,035
9,249 Total revenue (FTE basis)
$ 88,855 $
88,802 $ 86,560
$ 357,974 $ 329,748 Efficiency Ratio,
before deduction of intangible amortization (GAAP)
78.51
% 72.08 % 75.86 %
73.55 % 70.87 % Efficiency
Ratio, FTE Basis excluding restructuring (non-GAAP)
71.59
% 66.18 % 70.83 %
68.37 % 67.19 % (7)
The Company uses certain non-GAAP financial measures, such as: net
interest income excluding interest recovered on previous
non-accrual loans and net interest margin excluding interest
recovered on previous non-accrual loans to provide information for
investors to effectively analyze financial trends of ongoing
business activities, and to enhance comparability with peers across
the financial sector. Reconciliations from the Company's
GAAP net interest income to non-GAAP net interest income excluding
interest recovered on previous non-accrual loans; and from GAAP net
interest margin to non-GAAP net interest margin excluding interest
recovered on previous non-accrual loans, are presented below:
Three Months Ended (In thousands)
December 31,
2015
September 30,
2015
December 31,
2014
Net interest income (GAAP basis)
$ 48,140 $ 46,473 $
44,128 ADD: FTE income
2,997 2,883
2,510 Net interest income, FTE basis
51,137 49,356 46,638 LESS: Interest recovered on previously
non-accrual loans
255 298
295 Net interest income, FTE basis, excluding interest
recovered on previously non-accrual loans (non-GAAP)
50,882 49,058 46,343
Net Interest Margin (FTE basis)
2.88 % 2.84 %
2.83 % Net Interest Margin, FTE basis, excluding interest recovered
on previously non-accrual loans (non-GAAP)
2.86 %
2.82 % 2.82 % (8) Interest Income on Non-taxable Investments
and Loans are presented on an FTE basis using the federal statutory
rate of 35% for each period presented. (9) Includes Loans
Held for Sale and Nonaccrual Loans. (10) The concentration
of the Private Banking loan data and credit quality is primarily
based on the location of the lender's regional offices. (11)
Accruing substandard loans include loans that are classified as
substandard but are still accruing interest income. Boston Private
Bank & Trust Company may classify a loan as substandard where
known information about possible credit problems of the related
borrowers causes management to have doubts as to the ability of
such borrowers to comply with the present repayment terms and which
may result in disclosure of such loans as nonaccrual at some time
in the future. (12) In addition to loans 30-89 days past due
and accruing, at December 31, 2015 and 2014, the Company had no
loans outstanding more than 90 days past due but still on accrual
status. At September 30, 2015, the Company had one loan totaling
$0.1 million that was more than 90 days past due but still on
accrual status. This loan originated in the New England region.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160127006277/en/
Steven GavenVice President Corporate Finance and Director of
Investor RelationsBoston Private Financial Holdings, Inc.(617)
912-3793sgaven@bostonprivate.com
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