Massachusetts | 0-17089 | 04-2976299 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
Item 2.02. | Results of Operations and Financial Condition. |
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | ||
By: | /S/ DAVID J. KAYE | |
Name: | David J. Kaye | |
Title: | Executive Vice President, Chief Financial and Administrative Officer | |
Date: January 27, 2016 |
Exhibit No. | Description | ||
99.1 | Earnings Press Release of the Company dated January 27, 2016 |
• | 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. |
(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 | % |
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 | September 30, 2015 | December 31, 2014 | |||||||||
(In thousands, except share and per share data) | |||||||||||
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 |
Three Months Ended | Year Ended | ||||||||||||||||||
December 31, 2015 | September 30, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||||||||
Interest and dividend income: | (In thousands, except share and per share data) | ||||||||||||||||||
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 |
Three Months Ended | Year Ended | ||||||||||||||||||
PER SHARE DATA: | December 31, 2015 | September 30, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | ||||||||||||||
(In thousands, except share and per share data) | |||||||||||||||||||
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 |
(In thousands, except per share data) | December 31, 2015 | September 30, 2015 | December 31, 2014 | ||||||||
FINANCIAL DATA: | |||||||||||
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 | |||||
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 | % |
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 | 09/30/15 | 12/31/14 | 12/31/15 | 09/30/15 | 12/31/14 | 12/31/15 | 09/30/15 | 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 | % |
Average Balance | Interest Income/Expense | Average Yield/Rate | ||||||||||||||||
(In thousands) | Year Ended | Year Ended | Year Ended | |||||||||||||||
AVERAGE BALANCE SHEET: | 12/31/15 | 12/31/14 | 12/31/15 | 12/31/14 | 12/31/15 | 12/31/14 | ||||||||||||
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 | % |
(In thousands) | December 31, 2015 | September 30, 2015 | December 31, 2014 | ||||||||
LOAN DATA (10): | |||||||||||
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 |
(In thousands) | December 31, 2015 | September 30, 2015 | December 31, 2014 | ||||||||
CREDIT QUALITY (10): | |||||||||||
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 |
(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. |
(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 |
(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. |
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. |
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. |
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. |