Boston Private Financial Holdings, Inc. Reports First Quarter 2015 GAAP EPS of $0.21
First Quarter Highlights:
• | Revenue Growth: Total Revenue increased 4% linked quarter and 13% year-over-year to $87.4 million. |
• | Deposit and Loan Growth: Average Total Deposits increased 7% year-over-year to $5.4 billion. On a linked quarter basis, Average Total Deposits decreased 1% due to seasonal outflows, while Average Total Loans grew 3% year-over-year and 1% linked quarter. The Average Loan-to-Deposit ratio was 97% at the end of the first quarter, down from 101% in the first quarter of 2014. |
• | Provision Credit: The Company recorded a provision credit of $2.5 million due to net recoveries of $3.9 million in the quarter, offset by provision for criticized and classified loans. |
Boston, MA - April 14, 2015 - Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported first quarter 2015 GAAP Net Income Attributable to the Company of $18.8 million, compared to $12.2 million for the fourth quarter of 2014. First quarter 2015 diluted earnings per share were $0.21, a $0.08 increase from the fourth quarter of 2014, and a $0.01 increase from the first quarter of 2014.
“We continue to focus our efforts on expanding our private clients business,” said Clayton G. Deutsch, CEO and President. "In February, we officially introduced Boston Private Wealth to the marketplace, our newly formed wealth management subsidiary within Boston Private Bank & Trust Company. In addition, our West Coast Private Banking group has maintained the positive momentum it experienced in 2014 in the first quarter.”
Core Fees and Income Increased 27% Year-Over-Year
Core Fees and Income increased 27% year-over-year to $40.2 million. The increase reflects organic growth as well as increases from Banyan Partners LLC, which was acquired in October 2014. On a linked quarter basis, Core Fees and Income increased 1% from $39.6 million in the fourth quarter of 2014.
Total Assets Under Management/Advisory (“AUM”) were flat on a linked basis quarter and up 21% year-over-year to $30.0 billion. The year-over-year increase includes organic growth and AUM related to the Banyan acquisition.
Net Interest Income
Net Interest Income for the first quarter was $46.1 million, up 4% from $44.1 million for the fourth quarter of 2014. On a year-over-year basis, Net Interest Income increased 3% from $44.5 million. Included in the first quarter 2015 Net Interest Income is $1.7 million of interest recovered on previous non-accrual loans. Excluding the $1.7 million of interest recovered, Net Interest Income was $44.4 million.
Net Interest Margin was 3.00% for the first quarter, up 17 basis points from 2.83% for the fourth quarter of 2014. Net Interest Margin was down 4 basis points from 3.04% for the first quarter of 2014. Excluding interest recovered on previous nonaccrual loans, Net Interest Margin was 2.89% for the first quarter of 2015.
Total Operating Expenses
Total Operating Expenses for the first quarter of 2015 were $63.4 million, down 1% from $63.8 million for the fourth quarter of 2014. On a year-over-year basis, Total Operating Expenses increased 15% from $55.0 million, primarily due to the the impact of the Banyan acquisition.
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Provision and Asset Quality
The Company recorded a provision credit of $2.5 million for the first quarter of 2015, compared to a provision expense of $2.4 million for the fourth quarter of 2014. The provision credit was driven by net recoveries of $3.9 million, partially offset by loan downgrades. The Company recorded a provision credit of $1.2 million for the first quarter of 2014.
Criticized Loans increased 3% on a linked quarter basis and decreased 12% year-over-year. Nonaccrual Loans (“Nonaccruals”) decreased 27% to $32.1 million on a linked quarter basis. On a year-over-year basis, Nonaccruals decreased 24% from $42.1 million. As a percentage of Total Loans, Nonaccruals were 61 basis points at March 31, 2015, down 23 basis points from December 31, 2014, and down 20 basis points from March 31, 2014.
Additional credit metrics are listed below on a linked quarter and year-over-year basis:
(In millions) | March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||
Total Criticized Loans | $ | 164.1 | $ | 159.6 | $ | 187.3 | |||||
Total Loans 30-89 Days Past Due and Accruing (11) | $ | 25.4 | $ | 7.0 | $ | 10.6 | |||||
Total Net Loans (Charged-off)/ Recovered | $ | 3.9 | $ | (1.8 | ) | $ | 1.4 | ||||
Allowance for Loan Losses/ Total Loans | 1.46 | % | 1.44 | % | 1.48 | % | |||||
Capital Ratios
Capital ratios are listed below on a linked quarter and year-over-year basis:
March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||
BPFH Ratios: | ||||||||
Total Risk-Based Capital * | 14.0 | % | 14.5 | % | 15.0 | % | ||
Tier I Risk-Based Capital * | 12.3 | % | 13.3 | % | 13.7 | % | ||
Tier I Leverage Capital * | 9.5 | % | 9.5 | % | 10.2 | % | ||
TCE/TA | 7.2 | % | 7.0 | % | 7.1 | % | ||
Tier I Common Equity/ Risk Weighted Assets * | 9.8 | % | 9.8 | % | 10.1 | % | ||
*March 31, 2015 information is presented based on estimated data and incorporates the implementation of Basel III.
Dividend Payments
Concurrent with the release of first quarter 2015 earnings, the Board of Directors of the Company declared a cash dividend to common stock shareholders of $0.09 per share. The record date for this dividend is May 8, 2015, and the payment date is May 22, 2015.
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 May 15, 2015, and the payment date is June 15, 2015.
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; and the efficiency ratio (FTE basis), 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 Wednesday, April 15, 2015, to discuss the financial results, business highlights and outlook. To access the call:
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Dial In #: (888) 317-6003
Elite Entry Number: 2955905
Replay Information:
Available from April 15, 2015 at 12 noon until April 22, 2015
Dial In #: (877) 344-7529
Conference Number: 10063688
The call will be simultaneously webcast and may be accessed on www.bostonprivate.com.
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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 a $7 billion Private Banking balance sheet, and manages approximately $30 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.bostonprivate.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; increasing 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.
###
CONTACT:
Steven Gaven
Vice President Corporate Finance and Director of Investor Relations
Boston Private Financial Holdings, Inc.
(617) 912-3793
sgaven@bostonprivate.com
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Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
March 31, 2015 | December 31, 2014 | March 31, 2014 | |||||||||
(In thousands, except share and per share data) | |||||||||||
Assets: | |||||||||||
Cash and cash equivalents | $ | 88,118 | $ | 172,609 | $ | 398,687 | |||||
Investment securities available for sale | 971,842 | 829,993 | 700,531 | ||||||||
Investment securities held to maturity | 134,978 | 140,727 | 127,938 | ||||||||
Stock in Federal Home Loan Banks | 32,761 | 32,281 | 37,450 | ||||||||
Loans held for sale | 10,570 | 7,099 | 2,297 | ||||||||
Total loans | 5,295,013 | 5,269,936 | 5,162,470 | ||||||||
Less: Allowance for loan losses | 77,263 | 75,838 | 76,605 | ||||||||
Net loans | 5,217,750 | 5,194,098 | 5,085,865 | ||||||||
Other real estate owned (“OREO”) | 929 | 929 | 921 | ||||||||
Premises and equipment, net | 30,999 | 32,199 | 29,045 | ||||||||
Goodwill | 152,082 | 152,082 | 110,180 | ||||||||
Intangible assets, net | 38,116 | 39,718 | 19,551 | ||||||||
Fees receivable | 12,519 | 12,517 | 11,039 | ||||||||
Accrued interest receivable | 15,990 | 16,071 | 15,057 | ||||||||
Deferred income taxes, net | 45,614 | 47,576 | 53,716 | ||||||||
Other assets | 117,504 | 119,975 | 113,143 | ||||||||
Total assets | $ | 6,869,772 | $ | 6,797,874 | $ | 6,705,420 | |||||
Liabilities: | |||||||||||
Deposits | $ | 5,373,407 | $ | 5,453,879 | $ | 5,341,644 | |||||
Securities sold under agreements to repurchase | 52,237 | 30,496 | 93,550 | ||||||||
Federal funds purchased | 50,000 | — | 15,000 | ||||||||
Federal Home Loan Bank borrowings | 450,022 | 370,150 | 394,458 | ||||||||
Junior subordinated debentures | 106,363 | 106,363 | 106,363 | ||||||||
Other liabilities | 97,773 | 112,170 | 87,652 | ||||||||
Total liabilities | 6,129,802 | 6,073,058 | 6,038,667 | ||||||||
Redeemable Noncontrolling Interests | 21,280 | 20,905 | 20,774 | ||||||||
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: 83,051,675 shares at March 31, 2015; 82,961,855 shares at December 31, 2014; 80,001,139 shares at March 31, 2014 | 83,052 | 82,962 | 80,001 | ||||||||
Additional paid-in capital | 604,386 | 610,903 | 610,590 | ||||||||
Accumulated deficit | (18,613 | ) | (37,396 | ) | (89,170 | ) | |||||
Accumulated other comprehensive income/ (loss) | 1,120 | (697 | ) | (3,305 | ) | ||||||
Total Company’s shareholders’ equity | 717,698 | 703,525 | 645,869 | ||||||||
Noncontrolling interests | 992 | 386 | 110 | ||||||||
Total shareholders’ equity | 718,690 | 703,911 | 645,979 | ||||||||
Total liabilities, redeemable noncontrolling interests and shareholders’ equity | $ | 6,869,772 | $ | 6,797,874 | $ | 6,705,420 | |||||
5
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
Three Months Ended | |||||||||||
March 31, 2015 | December 31, 2014 | March 31, 2014 | |||||||||
Interest and dividend income: | (In thousands, except share and per share data) | ||||||||||
Loans | $ | 48,000 | $ | 47,117 | $ | 47,214 | |||||
Taxable investment securities | 995 | 920 | 636 | ||||||||
Non-taxable investment securities | 1,021 | 978 | 904 | ||||||||
Mortgage-backed securities | 2,614 | 1,695 | 1,936 | ||||||||
Federal funds sold and other | 234 | 381 | 346 | ||||||||
Total interest and dividend income | 52,864 | 51,091 | 51,036 | ||||||||
Interest expense: | |||||||||||
Deposits | 3,892 | 3,908 | 3,216 | ||||||||
Federal Home Loan Bank borrowings | 1,931 | 2,069 | 2,326 | ||||||||
Junior subordinated debentures | 956 | 976 | 955 | ||||||||
Repurchase agreements and other short-term borrowings | 13 | 10 | 17 | ||||||||
Total interest expense | 6,792 | 6,963 | 6,514 | ||||||||
Net interest income | 46,072 | 44,128 | 44,522 | ||||||||
Provision/ (credit) for loan losses | (2,500 | ) | 2,400 | (1,200 | ) | ||||||
Net interest income after provision/ (credit) for loan losses | 48,572 | 41,728 | 45,722 | ||||||||
Fees and other income: | |||||||||||
Investment management fees | 11,714 | 11,897 | 11,461 | ||||||||
Wealth advisory fees | 12,675 | 12,352 | 11,473 | ||||||||
Wealth management and trust fees | 13,558 | 13,327 | 6,961 | ||||||||
Other banking fee income | 1,910 | 1,841 | 1,680 | ||||||||
Gain on sale of loans, net | 303 | 192 | 89 | ||||||||
Total core fees and income | 40,160 | 39,609 | 31,664 | ||||||||
Gain/ (loss) on sale of investments, net | 8 | (16 | ) | 1 | |||||||
Gain/ (loss) on OREO, net | 89 | (31 | ) | 819 | |||||||
Other | 1,088 | 360 | 249 | ||||||||
Total other income | 1,185 | 313 | 1,069 | ||||||||
Operating expense: | |||||||||||
Salaries and employee benefits | 42,127 | 39,881 | 36,574 | ||||||||
Occupancy and equipment | 9,035 | 8,549 | 7,797 | ||||||||
Professional services | 3,021 | 3,308 | 2,843 | ||||||||
Marketing and business development | 1,348 | 2,425 | 1,426 | ||||||||
Contract services and data processing | 1,437 | 1,527 | 1,438 | ||||||||
Amortization of intangibles | 1,603 | 1,707 | 1,053 | ||||||||
FDIC insurance | 1,011 | 852 | 896 | ||||||||
Restructuring | — | 739 | — | ||||||||
Other | 3,845 | 4,772 | 2,941 | ||||||||
Total operating expense | 63,427 | 63,760 | 54,968 | ||||||||
Income before income taxes | 26,490 | 17,890 | 23,487 | ||||||||
Income tax expense | 8,572 | 5,901 | 7,138 | ||||||||
Net income from continuing operations | 17,918 | 11,989 | 16,349 | ||||||||
Net income from discontinued operations (1) | 2,094 | 1,510 | 1,928 | ||||||||
Net income before attribution to noncontrolling interests | 20,012 | 13,499 | 18,277 | ||||||||
Less: Net income attributable to noncontrolling interests | 1,229 | 1,322 | 1,236 | ||||||||
Net income attributable to the Company | $ | 18,783 | $ | 12,177 | $ | 17,041 | |||||
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Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
Three Months Ended | |||||||||||
PER SHARE DATA: | March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||
(In thousands, except share and per share data) | |||||||||||
Calculation of Income for EPS: | |||||||||||
Net income attributable to the Company | $ | 18,783 | $ | 12,177 | $ | 17,041 | |||||
Adjustments to Net Income Attributable to the Company to Arrive at Net Income Attributable to Common Shareholders (2) | (1,005 | ) | (1,176 | ) | (1,061 | ) | |||||
Net Income Attributable to the Common Shareholders | 17,778 | 11,001 | 15,980 | ||||||||
LESS: Amount allocated to participating securities | (60 | ) | (27 | ) | (117 | ) | |||||
Net Income Attributable to the Common Shareholders, after allocation to participating securities | $ | 17,718 | $ | 10,974 | $ | 15,863 | |||||
End of Period Common Shares Outstanding | 83,051,675 | 82,961,855 | 80,001,139 | ||||||||
Weighted Average Shares Outstanding: | |||||||||||
Weighted average basic shares, including participating securities | 80,983,916 | 80,880,508 | 79,107,968 | ||||||||
LESS: Participating securities | (469,557 | ) | (487,596 | ) | (962,783 | ) | |||||
PLUS: Dilutive potential common shares | 2,079,966 | 2,096,172 | 1,865,705 | ||||||||
Weighted Average Diluted Shares (3) | 82,594,325 | 82,489,084 | 80,010,890 | ||||||||
Diluted Total Earnings per Share | $ | 0.21 | $ | 0.13 | $ | 0.20 | |||||
7
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
(In thousands, except per share data) | March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||
FINANCIAL DATA: | |||||||||||
Book Value Per Common Share | $ | 8.08 | $ | 7.91 | $ | 7.48 | |||||
Tangible Book Value Per Share (4) | $ | 5.79 | $ | 5.60 | $ | 5.86 | |||||
Market Price Per Share | $ | 12.15 | $ | 13.47 | $ | 13.53 | |||||
ASSETS UNDER MANAGEMENT AND ADVISORY: | |||||||||||
Wealth Management and Trust | $ | 9,306,000 | $ | 9,274,000 | $ | 4,612,000 | |||||
Investment Managers | 10,730,000 | 10,772,000 | 10,505,000 | ||||||||
Wealth Advisory | 10,012,000 | 9,883,000 | 9,641,000 | ||||||||
Less: Inter-company Relationship | (22,000 | ) | (22,000 | ) | (22,000 | ) | |||||
Total Assets Under Management and Advisory | $ | 30,026,000 | $ | 29,907,000 | $ | 24,736,000 | |||||
FINANCIAL RATIOS: | |||||||||||
Total Equity/ Total Assets | 10.46 | % | 10.35 | % | 9.63 | % | |||||
Tangible Common Equity/ Tangible Assets (4) | 7.20 | % | 7.03 | % | 7.12 | % | |||||
Tier I Common Equity/ Risk Weighted Assets (4) | 9.76 | % | 9.76 | % | 10.11 | % | |||||
Allowance for Loan Losses/ Total Loans | 1.46 | % | 1.44 | % | 1.48 | % | |||||
Allowance for Loan Losses/ Nonaccrual Loans | 240 | % | 172 | % | 182 | % | |||||
Return on Average Assets - Three Months Ended (Annualized) | 1.10 | % | 0.71 | % | 1.06 | % | |||||
Return on Average Common Equity - Three Months Ended (Annualized) (5) | 10.79 | % | 6.97 | % | 10.91 | % | |||||
Return on Average Tangible Common Equity - Three Months Ended (Annualized) (5) | 16.03 | % | 10.69 | % | 14.58 | % | |||||
Efficiency Ratio - Three Months Ended (6) | 68.74 | % | 70.83 | % | 67.88 | % | |||||
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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: | 03/31/15 | 12/31/14 | 03/31/14 | 03/31/15 | 12/31/14 | 03/31/14 | 03/31/15 | 12/31/14 | 03/31/14 | |||||||||||||||||
AVERAGE ASSETS | ||||||||||||||||||||||||||
Interest-Earning Assets: | ||||||||||||||||||||||||||
Cash and Investments: | ||||||||||||||||||||||||||
Taxable investment securities | $ | 320,373 | $ | 305,118 | $ | 254,407 | $ | 995 | $ | 920 | $ | 636 | 1.24 | % | 1.21 | % | 1.00 | % | ||||||||
Non-taxable investment securities (7) | 230,251 | 229,157 | 224,054 | 1,571 | 1,504 | 1,391 | 2.73 | % | 2.63 | % | 2.48 | % | ||||||||||||||
Mortgage-backed securities | 516,032 | 350,312 | 341,082 | 2,614 | 1,695 | 1,936 | 2.03 | % | 1.93 | % | 2.27 | % | ||||||||||||||
Federal funds sold and other | 147,999 | 389,833 | 204,157 | 234 | 381 | 346 | 0.64 | % | 0.39 | % | 0.68 | % | ||||||||||||||
Total Cash and Investments | 1,214,655 | 1,274,420 | 1,023,700 | 5,414 | 4,500 | 4,309 | 1.78 | % | 1.41 | % | 1.68 | % | ||||||||||||||
Loans (8): | ||||||||||||||||||||||||||
Commercial and Construction (7) | 2,851,801 | 2,852,064 | 2,833,475 | 31,366 | 30,855 | 30,921 | 4.40 | % | 4.23 | % | 4.37 | % | ||||||||||||||
Residential | 2,140,525 | 2,120,416 | 2,035,232 | 16,656 | 16,447 | 16,169 | 3.11 | % | 3.10 | % | 3.18 | % | ||||||||||||||
Home Equity and Other Consumer | 277,967 | 254,387 | 245,596 | 1,953 | 1,799 | 1,805 | 2.85 | % | 2.80 | % | 2.98 | % | ||||||||||||||
Total Loans | 5,270,293 | 5,226,867 | 5,114,303 | 49,975 | 49,101 | 48,895 | 3.80 | % | 3.71 | % | 3.83 | % | ||||||||||||||
Total Earning Assets | 6,484,948 | 6,501,287 | 6,138,003 | 55,389 | 53,601 | 53,204 | 3.42 | % | 3.26 | % | 3.47 | % | ||||||||||||||
LESS: Allowance for Loan Losses | 77,039 | 75,590 | 77,228 | |||||||||||||||||||||||
Cash and due From Banks (Non-Interest Bearing) | 38,062 | 41,595 | 41,559 | |||||||||||||||||||||||
Other Assets | 406,799 | 411,546 | 347,721 | |||||||||||||||||||||||
TOTAL AVERAGE ASSETS | $ | 6,852,770 | $ | 6,878,838 | $ | 6,450,055 | ||||||||||||||||||||
AVERAGE LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||||
Interest-Bearing Liabilities: | ||||||||||||||||||||||||||
Interest-Bearing Deposits: | ||||||||||||||||||||||||||
Savings and NOW | $ | 599,695 | $ | 584,210 | $ | 545,973 | $ | 103 | $ | 112 | $ | 98 | 0.07 | % | 0.08 | % | 0.07 | % | ||||||||
Money Market | 2,812,827 | 2,836,731 | 2,490,836 | 2,596 | 2,589 | 1,845 | 0.37 | % | 0.36 | % | 0.30 | % | ||||||||||||||
Certificates of Deposit | 604,404 | 597,460 | 624,547 | 1,193 | 1,207 | 1,273 | 0.80 | % | 0.80 | % | 0.83 | % | ||||||||||||||
Total Interest-Bearing Deposits | 4,016,926 | 4,018,401 | 3,661,356 | 3,892 | 3,908 | 3,216 | 0.39 | % | 0.39 | % | 0.36 | % | ||||||||||||||
Junior Subordinated Debentures | 106,363 | 106,363 | 106,363 | 956 | 976 | 955 | 3.59 | % | 3.59 | % | 3.59 | % | ||||||||||||||
FHLB Borrowings and Other | 470,392 | 447,955 | 506,864 | 1,944 | 2,079 | 2,343 | 1.65 | % | 1.82 | % | 1.85 | % | ||||||||||||||
Total Interest-Bearing Liabilities | 4,593,681 | 4,572,719 | 4,274,583 | 6,792 | 6,963 | 6,514 | 0.60 | % | 0.60 | % | 0.61 | % | ||||||||||||||
Noninterest Bearing Demand Deposits | 1,422,202 | 1,465,145 | 1,422,928 | |||||||||||||||||||||||
Payables and Other Liabilities | 102,255 | 121,318 | 91,863 | |||||||||||||||||||||||
Total Average Liabilities | 6,118,138 | 6,159,182 | 5,789,374 | |||||||||||||||||||||||
Redeemable Noncontrolling Interests | 22,748 | 22,802 | 20,132 | |||||||||||||||||||||||
Average Shareholders' Equity | 711,884 | 696,854 | 640,549 | |||||||||||||||||||||||
TOTAL AVERAGE LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND SHAREHOLDERS' EQUITY | $ | 6,852,770 | $ | 6,878,838 | $ | 6,450,055 | ||||||||||||||||||||
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) | $ | 48,597 | $ | 46,638 | $ | 46,690 | ||||||||||||||||||||
LESS: FTE Adjustment (7) | 2,525 | 2,510 | 2,168 | |||||||||||||||||||||||
Net Interest Income (GAAP Basis) | $ | 46,072 | $ | 44,128 | $ | 44,522 | ||||||||||||||||||||
Interest Rate Spread | 2.82 | % | 2.66 | % | 2.86 | % | ||||||||||||||||||||
Bank only Net Interest Margin | 3.07 | % | 2.90 | % | 3.11 | % | ||||||||||||||||||||
Net Interest Margin | 3.00 | % | 2.83 | % | 3.04 | % | ||||||||||||||||||||
9
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
(In thousands) | March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||
LOAN DATA (9): | |||||||||||
Commercial and Industrial Loans: | |||||||||||
New England | $ | 786,334 | $ | 781,646 | $ | 704,056 | |||||
San Francisco Bay | 122,418 | 117,105 | 108,365 | ||||||||
Southern California | 58,086 | 54,334 | 39,780 | ||||||||
Total Commercial and Industrial Loans | $ | 966,838 | $ | 953,085 | $ | 852,201 | |||||
Commercial Real Estate Loans: | |||||||||||
New England | $ | 684,395 | $ | 690,965 | $ | 730,709 | |||||
San Francisco Bay | 601,305 | 619,222 | 644,108 | ||||||||
Southern California | 477,341 | 478,216 | 483,817 | ||||||||
Total Commercial Real Estate Loans | $ | 1,763,041 | $ | 1,788,403 | $ | 1,858,634 | |||||
Construction and Land Loans: | |||||||||||
New England | $ | 91,764 | $ | 85,272 | $ | 94,966 | |||||
San Francisco Bay | 31,012 | 31,329 | 62,879 | ||||||||
Southern California | 14,318 | 8,748 | 16,871 | ||||||||
Total Construction and Land Loans | $ | 137,094 | $ | 125,349 | $ | 174,716 | |||||
Residential Loans: | |||||||||||
New England | $ | 1,295,955 | $ | 1,299,568 | $ | 1,227,114 | |||||
San Francisco Bay | 459,310 | 462,497 | 456,372 | ||||||||
Southern California | 387,771 | 370,030 | 352,369 | ||||||||
Total Residential Loans | $ | 2,143,036 | $ | 2,132,095 | $ | 2,035,855 | |||||
Home Equity Loans: | |||||||||||
New England | $ | 82,716 | $ | 82,877 | $ | 77,470 | |||||
San Francisco Bay | 29,835 | 27,575 | 28,159 | ||||||||
Southern California | 3,639 | 4,407 | 3,334 | ||||||||
Total Home Equity Loans | $ | 116,190 | $ | 114,859 | $ | 108,963 | |||||
Other Consumer Loans: | |||||||||||
New England | $ | 156,042 | $ | 143,166 | $ | 119,500 | |||||
San Francisco Bay | 7,245 | 6,505 | 7,311 | ||||||||
Southern California | 5,527 | 6,474 | 5,246 | ||||||||
Eliminations and other, net | — | — | 44 | ||||||||
Total Other Consumer Loans | $ | 168,814 | $ | 156,145 | $ | 132,101 | |||||
Total Loans: | |||||||||||
New England | $ | 3,097,206 | $ | 3,083,494 | $ | 2,953,815 | |||||
San Francisco Bay | 1,251,125 | 1,264,233 | 1,307,194 | ||||||||
Southern California | 946,682 | 922,209 | 901,417 | ||||||||
Eliminations and other, net | — | — | 44 | ||||||||
Total Loans | $ | 5,295,013 | $ | 5,269,936 | $ | 5,162,470 | |||||
10
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
(In thousands) | March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||
CREDIT QUALITY (9): | |||||||||||
Special Mention Loans: | |||||||||||
New England | $ | 47,635 | $ | 32,254 | $ | 41,920 | |||||
San Francisco Bay | 16,350 | 18,161 | 25,055 | ||||||||
Southern California | 22,161 | 26,325 | 36,452 | ||||||||
Total Special Mention Loans | $ | 86,146 | $ | 76,740 | $ | 103,427 | |||||
Accruing Substandard Loans (10): | |||||||||||
New England | $ | 18,534 | $ | 11,126 | $ | 12,319 | |||||
San Francisco Bay | 21,996 | 23,403 | 26,294 | ||||||||
Southern California | 5,472 | 4,331 | 3,507 | ||||||||
Total Accruing Substandard Loans | $ | 46,002 | $ | 38,860 | $ | 42,120 | |||||
Nonaccruing Loans: | |||||||||||
New England | $ | 18,271 | $ | 26,205 | $ | 21,569 | |||||
San Francisco Bay | 9,347 | 13,430 | 12,541 | ||||||||
Southern California | 4,515 | 4,547 | 7,944 | ||||||||
Total Nonaccruing Loans | $ | 32,133 | $ | 44,182 | $ | 42,054 | |||||
Other Real Estate Owned: | |||||||||||
New England | $ | 344 | $ | 344 | $ | 336 | |||||
San Francisco Bay | 585 | 585 | 585 | ||||||||
Southern California | — | — | — | ||||||||
Total Other Real Estate Owned | $ | 929 | $ | 929 | $ | 921 | |||||
Loans 30-89 Days Past Due and Accruing (11): | |||||||||||
New England | $ | 18,236 | $ | 6,572 | $ | 4,472 | |||||
San Francisco Bay | 3,398 | 375 | 2,577 | ||||||||
Southern California | 3,760 | 13 | 3,528 | ||||||||
Total Loans 30-89 Days Past Due and Accruing | $ | 25,394 | $ | 6,960 | $ | 10,577 | |||||
Loans (Charged-off)/ Recovered, Net for the Three Months Ended: | |||||||||||
New England | $ | 890 | $ | (2,516 | ) | $ | 540 | ||||
San Francisco Bay | 2,738 | 607 | 640 | ||||||||
Southern California | 297 | 64 | 254 | ||||||||
Total Net Loans (Charged-off)/ Recovered | $ | 3,925 | $ | (1,845 | ) | $ | 1,434 | ||||
11
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) | March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||
Total Balance Sheet Assets | $ | 6,869,772 | $ | 6,797,874 | $ | 6,705,420 | |||||
LESS: Goodwill and Intangible Assets, net | (190,198 | ) | (191,800 | ) | (129,731 | ) | |||||
Tangible Assets (non-GAAP) | $ | 6,679,574 | $ | 6,606,074 | $ | 6,575,689 | |||||
Total Shareholders' Equity | $ | 718,690 | $ | 703,911 | $ | 645,979 | |||||
LESS: Series D Preferred Stock (non-convertible) | (47,753 | ) | (47,753 | ) | (47,753 | ) | |||||
LESS: Goodwill and Intangible Assets, net | (190,198 | ) | (191,800 | ) | (129,731 | ) | |||||
Total adjusting items | (237,951 | ) | (239,553 | ) | (177,484 | ) | |||||
Tangible Common Equity (non-GAAP) | $ | 480,739 | $ | 464,358 | $ | 468,495 | |||||
Total Equity/Total Assets | 10.46 | % | 10.35 | % | 9.63 | % | |||||
Tangible Common Equity/Tangible Assets (non-GAAP) | 7.20 | % | 7.03 | % | 7.12 | % | |||||
Total Risk Weighted Assets * | $ | 5,159,073 | $ | 4,803,633 | $ | 4,707,604 | |||||
Tier I Common Equity * | $ | 503,564 | $ | 468,612 | $ | 475,930 | |||||
Tier I Common Equity/ Risk Weighted Assets | 9.76 | % | 9.76 | % | 10.11 | % | |||||
End of Period Shares Outstanding | 83,052 | 82,962 | 80,001 | ||||||||
Book Value Per Common Share | $ | 8.08 | $ | 7.91 | $ | 7.48 | |||||
Tangible Book Value Per Share (non-GAAP) | $ | 5.79 | $ | 5.60 | $ | 5.86 | |||||
* Risk Weighted Assets and Tier I Common Equity for March 31, 2015 are presented based on estimated data.
12
Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
(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 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 | |||||||||||
(In thousands) | March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||
Total average shareholders' equity | $ | 711,884 | $ | 696,854 | $ | 640,549 | |||||
LESS: Average Series D preferred stock (non-convertible) | (47,753 | ) | (47,753 | ) | (47,753 | ) | |||||
Average common equity (non-GAAP) | 664,131 | 649,101 | 592,796 | ||||||||
LESS: Average goodwill and intangible assets, net | (191,053 | ) | (184,473 | ) | (130,272 | ) | |||||
Total adjusting items | (191,053 | ) | (184,473 | ) | (130,272 | ) | |||||
Average Tangible Common Equity (non-GAAP) | $ | 473,078 | $ | 464,628 | $ | 462,524 | |||||
Net income attributable to the Company | $ | 18,783 | $ | 12,177 | $ | 17,041 | |||||
LESS: Dividends on Series D preferred stock | (869 | ) | (869 | ) | (869 | ) | |||||
Common net income (non-GAAP) | 17,914 | 11,308 | 16,172 | ||||||||
ADD: Amortization of intangibles, net of tax (35%) | 1,042 | 1,110 | 684 | ||||||||
Tangible common net income (non-GAAP) | $ | 18,956 | $ | 12,418 | $ | 16,856 | |||||
Return on Average Equity - (Annualized) | 10.55 | % | 6.99 | % | 10.64 | % | |||||
Return on Average Common Equity - (Annualized) (non-GAAP) | 10.79 | % | 6.97 | % | 10.91 | % | |||||
Return on Average Tangible Common Equity - (Annualized) (non-GAAP) | 16.03 | % | 10.69 | % | 14.58 | % | |||||
13
Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
(6) | The Company uses certain non-GAAP financial measures, such as: pre-tax, pre-provision earnings 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; and from GAAP efficiency ratio to Non-GAAP efficiency ratio (FTE basis), excluding restructuring, are presented below:
Three Months Ended | |||||||||||
(In thousands) | March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||||||
Income before income taxes (GAAP) | $ | 26,490 | $ | 17,890 | $ | 23,487 | |||||
ADD BACK: Provision/ (credit) for loan losses | (2,500 | ) | 2,400 | (1,200 | ) | ||||||
Pre-tax, pre-provision earnings (non-GAAP) | $ | 23,990 | $ | 20,290 | $ | 22,287 | |||||
Total operating expense (GAAP) | $ | 63,427 | $ | 63,760 | $ | 54,968 | |||||
Less: Amortization of intangibles | 1,603 | 1,707 | 1,053 | ||||||||
Less: Restructuring | — | 739 | — | ||||||||
Total operating expense (excluding amortization of intangibles and restructuring) (non-GAAP) | $ | 61,824 | $ | 61,314 | $ | 53,915 | |||||
Net interest income | $ | 46,072 | $ | 44,128 | $ | 44,522 | |||||
Total core fees and income | 40,160 | 39,609 | 31,664 | ||||||||
Total other income | 1,185 | 313 | 1,069 | ||||||||
FTE income | 2,525 | 2,510 | 2,168 | ||||||||
Total revenue (FTE basis) | $ | 89,942 | $ | 86,560 | $ | 79,423 | |||||
Efficiency Ratio, before deduction of intangible amortization (GAAP) | 72.56 | % | 75.86 | % | 71.15 | % | |||||
Efficiency Ratio, FTE Basis (non-GAAP) | 68.74 | % | 70.83 | % | 67.88 | % | |||||
(7) | 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. |
(8) | Includes Loans Held for Sale and Nonaccrual Loans. |
(9) | The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lender's regional offices. Net loans from the Company to certain principals of the Company's affiliate partners, loans at the Company's non-banking segments, and inter-company loan eliminations are identified as “Eliminations and other, net”. |
(10) | 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. |
(11) | In addition to loans 30-89 days past due and accruing, at March 31, 2015 and December 31, 2014 the Company had no loans were more than 90 days past due but still on accrual status. At March 31, 2014, the Company had three loans totaling $0.6 million that were more than 90 days past due but still on accrual status. These loans originated in the New England region. |
14