(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/ STEVEN M. GAVEN | |
Name: | Steven M. Gaven | |
Title: | Executive Vice President, Chief Financial Officer | |
Date: October 24, 2019 |
• | Net income was $20.0 million, or $0.24 per diluted share |
• | Return on average common equity (non-GAAP) was 9.8% |
• | Return on average tangible common equity (non-GAAP) was 11.0% |
• | Average total loans were $7.0 billion, a 4% increase year-over-year |
• | Average total deposits were $6.7 billion, a 1% decrease year-over-year |
• | Total assets under management/advisory (“AUM”) were $16.2 billion, a decrease of 8% year-over-year |
• | Total net flows were negative $137 million, of which negative $100 million were attributable to the Wealth Management & Trust segment |
• | Completed the integration of wholly-owned affiliates Boston Private Wealth LLC and KLS Professional Advisors Group, LLC ("KLS") |
Summary Financial Results - Reported | |||||||||||||||
% Change | |||||||||||||||
($ in millions, except for per share data) | 3Q19 | 2Q19 | 3Q18 | LQ | Y/Y | ||||||||||
Net income | $20.0 | $19.4 | $18.0 | 3 | % | 11 | % | ||||||||
Diluted earnings per share | $0.24 | $0.22 | $0.20 | 9 | % | 20 | % | ||||||||
Non-GAAP Financial Measures: | |||||||||||||||
Pre-tax, pre-provision income | $25.7 | $26.2 | $23.4 | (2 | )% | 10 | % | ||||||||
Return on average common equity ("ROACE") | 9.8 | % | 9.8 | % | 9.7 | % | |||||||||
Return on average tangible common equity ("ROATCE") | 11.0 | % | 11.1 | % | 11.4 | % |
Summary Financial Results - Operating Basis (non-GAAP) | |||||||||||||||
% Change | |||||||||||||||
($ in millions, except for per share data) | 3Q19 | 2Q19 | 3Q181 | LQ | Y/Y | ||||||||||
Net income | $20.0 | $19.4 | $22.5 | 3 | % | (11 | )% | ||||||||
Diluted earnings per share | $0.24 | $0.22 | $0.25 | 9 | % | (5 | )% | ||||||||
Pre-tax, pre-provision income | $25.7 | $26.2 | $29.2 | (2 | )% | (12 | )% | ||||||||
Return on average common equity | 9.8 | % | 9.8 | % | 12.1 | % | |||||||||
Return on average tangible common equity | 11.0 | % | 11.1 | % | 14.2 | % | |||||||||
1 3Q18 results adjusted to exclude the impact of $5.8 million restructuring expense, net of $1.2 million tax effect |
Divested Affiliates |
Net Interest Income and Margin | |||||||||||||||
% Change | |||||||||||||||
($ in millions) | 3Q19 | 2Q19 | 3Q18 | LQ | Y/Y | ||||||||||
Net interest income | $56.2 | $57.5 | $59.6 | (2 | )% | (6 | )% | ||||||||
Less: Interest recovered on previous nonaccrual loans | 0.2 | — | 1.0 | nm | nm | ||||||||||
Core net interest income (non-GAAP) | $56.0 | $57.5 | $58.7 | (3 | )% | (5 | )% | ||||||||
Net interest margin | 2.72 | % | 2.78 | % | 2.90 | % | |||||||||
Core net interest margin (non-GAAP) | 2.71 | % | 2.78 | % | 2.90 | % | |||||||||
nm = not meaningful |
Noninterest Income | |||||||||||||||
% Change | |||||||||||||||
($ in millions) | 3Q19 | 2Q19 | 3Q18 | LQ | Y/Y | ||||||||||
Wealth management and trust fees | $19.1 | $18.9 | $25.5 | 1 | % | (25 | )% | ||||||||
Investment management fees | 2.5 | 2.5 | 3.2 | 2 | % | (23 | )% | ||||||||
Private banking fees 2 | 3.6 | 2.9 | 2.8 | 23 | % | 26 | % | ||||||||
Total core fees and income | $25.2 | $24.3 | $31.6 | 4 | % | (20 | )% | ||||||||
Total other income | — | 0.1 | 0.7 | (100 | )% | (100 | )% | ||||||||
Total noninterest income | $25.1 | $24.4 | $32.3 | 3 | % | (22 | )% | ||||||||
Memo: Excluding BOS | |||||||||||||||
Wealth management and trust fees (non-GAAP) 3 | $19.1 | $18.9 | $19.6 | 1 | % | (3 | )% | ||||||||
Investment management fees | 2.5 | 2.5 | 3.2 | 2 | % | (23 | )% | ||||||||
Private banking fees | 3.6 | 2.9 | 2.8 | 23 | % | 26 | % | ||||||||
Total core fees and income (non-GAAP) 3 | $25.2 | $24.3 | $25.7 | 4 | % | (2 | )% | ||||||||
Total other income | — | 0.1 | 0.7 | (100 | )% | (100 | )% | ||||||||
Total noninterest income (non-GAAP) 3 | $25.1 | $24.4 | $26.4 | 3 | % | (5 | )% | ||||||||
2 Private banking fees includes Other banking fee income and Gain/ (loss) on sale of loans, net 3 Excludes BOS revenue of $5.9 million in 3Q18 |
Assets Under Management / Advisory | ||||||||||||
% Change | ||||||||||||
($ in millions) | 3Q19 | 2Q19 | 3Q18 | LQ | Y/Y | |||||||
Wealth Management and Trust | $14,695 | $14,649 | $15,598 | — | % | (6 | )% | |||||
Other 4 | 1,533 | 1,550 | 2,125 | (1 | )% | (28 | )% | |||||
Total assets under management / advisory | $16,228 | $16,199 | $17,723 | — | % | (8 | )% | |||||
4 Includes results from Dalton, Greiner, Hartman, Maher & Co, LLC ("DGHM") |
Noninterest Expense | |||||||||||||||
% Change | |||||||||||||||
($ in millions) | 3Q19 | 2Q19 | 3Q18 | LQ | Y/Y | ||||||||||
Salaries and employee benefits | $31.7 | $32.7 | $38.9 | (3 | )% | (19 | )% | ||||||||
Occupancy and equipment | 8.3 | 7.9 | 8.2 | 5 | % | 1 | % | ||||||||
Professional services | 4.4 | 3.3 | 2.9 | 34 | % | 54 | % | ||||||||
Marketing and business development | 1.4 | 1.9 | 1.7 | (27 | )% | (18 | )% | ||||||||
Information systems | 5.2 | 5.1 | 6.2 | 1 | % | (17 | )% | ||||||||
Amortization of intangibles | 0.7 | 0.7 | 0.8 | — | % | (11 | )% | ||||||||
FDIC insurance | 0.1 | 0.6 | 0.7 | (90 | )% | (91 | )% | ||||||||
Restructuring | — | — | 5.8 | — | % | (100 | )% | ||||||||
Other | 3.9 | 3.5 | 3.4 | 11 | % | 12 | % | ||||||||
Total noninterest expense | $55.5 | $55.7 | $68.6 | — | % | (19 | )% | ||||||||
Memo: Excluding Notable Items5 and BOS | |||||||||||||||
Restructuring | — | — | 5.8 | — | % | (100 | )% | ||||||||
BOS noninterest expense | — | — | 4.0 | — | % | (100 | )% | ||||||||
Total noninterest expense (non-GAAP) | $55.5 | $55.7 | $58.8 | — | % | (6 | )% | ||||||||
5 "Notable Items" include a $5.8 million restructuring expense in 3Q18 |
Income Tax Expense | ||||||||||
Loans and Deposits - QTD Averages | |||||||||||||||
% Change | |||||||||||||||
($ in millions) | 3Q19 | 2Q19 | 3Q18 | LQ | Y/Y | ||||||||||
Commercial and industrial | $1,102 | $1,092 | $999 | 1 | % | 10 | % | ||||||||
Commercial real estate | 2,518 | 2,507 | 2,475 | — | % | 2 | % | ||||||||
Construction and land | 196 | 203 | 179 | (3 | )% | 9 | % | ||||||||
Residential | 3,016 | 3,009 | 2,837 | — | % | 6 | % | ||||||||
Home equity | 89 | 91 | 94 | (3 | )% | (5 | )% | ||||||||
Other consumer | 128 | 125 | 163 | 3 | % | (22 | )% | ||||||||
Total loans | $7,049 | $7,026 | $6,747 | — | % | 4 | % | ||||||||
Non-interest bearing deposits | 1,953 | 1,927 | 2,064 | 1 | % | (5 | )% | ||||||||
Interest bearing deposits | 4,705 | 4,664 | 4,668 | 1 | % | 1 | % | ||||||||
Total deposits | $6,658 | $6,591 | $6,732 | 1 | % | (1 | )% | ||||||||
Non-interest bearing deposits as a % of Total deposits | 29 | % | 29 | % | 31 | % |
Provision and Asset Quality | |||||||||||||||
($ in millions) | 3Q19 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | ||||||||||
Provision/ (credit) for loan loss | $0.2 | $1.4 | $(1.4) | $0.1 | $(0.9) | ||||||||||
Total criticized and classified loans | 139.0 | 141.7 | 141.3 | 146.6 | 134.7 | ||||||||||
Total nonaccrual loans | 17.6 | 17.2 | 12.0 | 14.1 | 12.1 | ||||||||||
Total loans 30-89 days past due and accruing | 4.2 | 2.4 | 17.7 | 22.3 | 11.6 | ||||||||||
Total net loans (charged-off)/ recovered | 0.1 | (0.1) | (0.1) | 1.7 | 1.0 | ||||||||||
Ratios: | |||||||||||||||
Allowance for loan losses as a % of Total loans | 1.07 | % | 1.06 | % | 1.07 | % | 1.09 | % | 1.09 | % | |||||
Nonaccrual loans as a % of Total loans | 0.25 | % | 0.24 | % | 0.17 | % | 0.20 | % | 0.18 | % |
Capital | |||||||||||||||
($ in millions, except for per share data) | 3Q19 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | ||||||||||
Tangible common equity/ Tangible assets (non-GAAP) | 8.6 | % | 8.4 | % | 8.3 | % | 8.1 | % | 7.8 | % | |||||
Tangible book value per share (non-GAAP) | $8.90 | $8.71 | $8.47 | $8.18 | $7.67 | ||||||||||
Regulatory Capital Ratios: 6 | |||||||||||||||
Tier 1 common equity | 11.2 | % | 11.2 | % | 11.4 | % | 11.4 | % | 11.1 | % | |||||
Total risk-based capital | 13.9 | % | 13.9 | % | 14.2 | % | 14.3 | % | 14.1 | % | |||||
Tier 1 risk-based capital | 12.8 | % | 12.7 | % | 13.0 | % | 13.0 | % | 12.8 | % | |||||
Tier 1 leverage capital | 9.7 | % | 9.6 | % | 9.7 | % | 9.5 | % | 9.2 | % | |||||
Common Equity Repurchase Program: | |||||||||||||||
Total shares of common stock repurchased | 678,165 | — | — | 1,505,521 | 137,144 | ||||||||||
Average price paid per share of common stock | $10.61 | — | — | $12.02 | $13.89 | ||||||||||
Aggregate repurchases of common equity ($ in millions) | $7.2 | — | — | $18.1 | $1.9 | ||||||||||
6 Current quarter information is presented based on estimated data. |
EPS Calculation |
Dividend Payments |
Non-GAAP Financial Measures |
Conference Call |
About Boston Private |
Forward-Looking Statements |
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | |||||||||||||||||||
Consolidated Balance Sheet | |||||||||||||||||||
Unaudited ($ in thousands, except share and per share data) | |||||||||||||||||||
3Q19 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | |||||||||||||||
ASSETS: | |||||||||||||||||||
Cash and cash equivalents | $ | 78,010 | $ | 65,756 | $ | 96,211 | $ | 127,259 | $ | 92,634 | |||||||||
Investment securities available-for-sale | 935,538 | 966,731 | 981,951 | 994,065 | 1,056,261 | ||||||||||||||
Investment securities held-to-maturity | 51,379 | 54,482 | 67,548 | 70,438 | 75,468 | ||||||||||||||
Equity securities at fair value | 21,780 | 19,092 | 7,491 | 14,228 | 7,079 | ||||||||||||||
Stock in Federal Home Loan Bank and Federal Reserve Bank | 47,756 | 64,453 | 47,053 | 49,263 | 48,727 | ||||||||||||||
Loans held for sale | 6,658 | 3,640 | 280 | 2,812 | 3,344 | ||||||||||||||
Loans | 7,067,151 | 7,080,260 | 6,926,968 | 6,893,158 | 6,720,420 | ||||||||||||||
Less: Allowance for loan losses | 75,359 | 75,067 | 73,814 | 75,312 | 73,500 | ||||||||||||||
Loans, net of allowance for loan losses | 6,991,792 | 7,005,193 | 6,853,154 | 6,817,846 | 6,646,920 | ||||||||||||||
Other real estate owned (“OREO”) | — | — | — | 401 | 108 | ||||||||||||||
Premises and equipment, net | 42,658 | 40,244 | 42,938 | 45,412 | 47,399 | ||||||||||||||
Goodwill 7 | 57,607 | 57,607 | 57,607 | 57,607 | 75,598 | ||||||||||||||
Intangible assets, net 7 | 10,622 | 10,884 | 11,555 | 12,227 | 13,834 | ||||||||||||||
Accrued interest receivable | 24,851 | 26,411 | 25,935 | 24,366 | 24,641 | ||||||||||||||
Deferred income taxes, net | 15,704 | 17,183 | 22,844 | 26,638 | 27,833 | ||||||||||||||
Right-of-use assets | 107,045 | 110,880 | 104,644 | — | — | ||||||||||||||
Other assets 7 | 299,544 | 270,317 | 252,932 | 252,063 | 255,994 | ||||||||||||||
TOTAL ASSETS | $ | 8,690,944 | $ | 8,712,873 | $ | 8,572,143 | $ | 8,494,625 | $ | 8,375,840 | |||||||||
LIABILITIES: | |||||||||||||||||||
Deposits | $ | 6,658,242 | $ | 6,437,963 | $ | 6,779,845 | $ | 6,781,170 | $ | 6,768,723 | |||||||||
Securities sold under agreements to repurchase | 48,860 | 62,372 | 58,329 | 36,928 | 39,453 | ||||||||||||||
Federal funds purchased | 230,000 | 135,000 | — | 250,000 | 120,000 | ||||||||||||||
Federal Home Loan Bank borrowings | 570,904 | 920,068 | 615,070 | 420,144 | 441,836 | ||||||||||||||
Junior subordinated debentures | 106,363 | 106,363 | 106,363 | 106,363 | 106,363 | ||||||||||||||
Lease liabilities | 122,799 | 126,740 | 120,162 | — | — | ||||||||||||||
Other liabilities 7 | 143,607 | 124,370 | 112,893 | 143,540 | 149,770 | ||||||||||||||
TOTAL LIABILITIES | 7,880,775 | 7,912,876 | 7,792,662 | 7,738,145 | 7,626,145 | ||||||||||||||
REDEEMABLE NONCONTROLLING INTEREST (“RNCI”) | 1,481 | 1,786 | 662 | 2,526 | 11,686 | ||||||||||||||
SHAREHOLDERS' EQUITY: | |||||||||||||||||||
Common stock, $1.00 par value; authorized: 170,000,000 shares | 83,242 | 83,774 | 83,774 | 83,656 | 84,603 | ||||||||||||||
Additional paid-in capital | 599,877 | 603,869 | 604,288 | 600,196 | 614,157 | ||||||||||||||
Retained earnings | 116,210 | 106,443 | 97,155 | 87,821 | 64,618 | ||||||||||||||
Accumulated other comprehensive income/ (loss) | 9,359 | 4,125 | (6,398 | ) | (17,719 | ) | (27,578 | ) | |||||||||||
TOTAL COMPANY'S SHAREHOLDERS' EQUITY | 808,688 | 798,211 | 778,819 | 753,954 | 735,800 | ||||||||||||||
Noncontrolling interests | — | — | — | — | 2,209 | ||||||||||||||
TOTAL SHAREHOLDERS' EQUITY | 808,688 | 798,211 | 778,819 | 753,954 | 738,009 | ||||||||||||||
TOTAL LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY | $ | 8,690,944 | $ | 8,712,873 | $ | 8,572,143 | $ | 8,494,625 | $ | 8,375,840 | |||||||||
7 On December 3, 2018, the Company completed the sale of its ownership interest in BOS to the management team of BOS for an upfront cash payment and an eight-year revenue sharing agreement with BOS. For regulatory purposes, the goodwill and intangible assets of BOS are included in consolidated calculations through the closing date. |
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | |||||||||||||||||||
Consolidated Income Statement | |||||||||||||||||||
Unaudited ($ in thousands, except share and per share data) | |||||||||||||||||||
3Q19 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | |||||||||||||||
REVENUE: | |||||||||||||||||||
Interest income | $ | 77,604 | $ | 78,728 | $ | 76,824 | $ | 76,892 | $ | 76,101 | |||||||||
Interest expense | 21,451 | 21,268 | 18,486 | 16,895 | 16,460 | ||||||||||||||
Net interest income | 56,153 | 57,460 | 58,338 | 59,997 | 59,641 | ||||||||||||||
Provision/ (credit) for loan losses | 167 | 1,363 | (1,426 | ) | 93 | (949 | ) | ||||||||||||
Net interest income after provision/ (credit) for loan losses | 55,986 | 56,097 | 59,764 | 59,904 | 60,590 | ||||||||||||||
Wealth management and trust fees 8 | 19,067 | 18,912 | 19,058 | 23,788 | 25,505 | ||||||||||||||
Investment management fees | 2,496 | 2,455 | 2,650 | 2,831 | 3,245 | ||||||||||||||
Private banking fee income | 2,658 | 2,867 | 2,499 | 2,033 | 2,775 | ||||||||||||||
Gain on sale of loans, net | 934 | 58 | 73 | 39 | 67 | ||||||||||||||
Total core fees and income | 25,155 | 24,292 | 24,280 | 28,691 | 31,592 | ||||||||||||||
Total other income | (29 | ) | 88 | 968 | 17,154 | 722 | |||||||||||||
TOTAL REVENUE 9 | 81,279 | 81,840 | 83,586 | 105,842 | 91,955 | ||||||||||||||
NONINTEREST EXPENSE: | |||||||||||||||||||
Salaries and employee benefits | 31,684 | 32,706 | 35,726 | 36,007 | 38,944 | ||||||||||||||
Occupancy and equipment | 8,260 | 7,852 | 8,348 | 7,975 | 8,164 | ||||||||||||||
Professional services | 4,435 | 3,313 | 3,560 | 4,229 | 2,877 | ||||||||||||||
Marketing and business development | 1,403 | 1,934 | 1,085 | 2,275 | 1,710 | ||||||||||||||
Information systems | 5,169 | 5,137 | 5,860 | 6,296 | 6,233 | ||||||||||||||
Amortization of intangibles | 671 | 672 | 672 | 680 | 750 | ||||||||||||||
FDIC insurance | 59 | 585 | 660 | 739 | 674 | ||||||||||||||
Restructuring | — | — | 1,646 | 2,065 | 5,763 | ||||||||||||||
Other | 3,856 | 3,460 | 2,996 | 3,291 | 3,442 | ||||||||||||||
TOTAL NONINTEREST EXPENSE | 55,537 | 55,659 | 60,553 | 63,557 | 68,557 | ||||||||||||||
INCOME BEFORE INCOME TAXES | 25,575 | 24,818 | 24,459 | 42,192 | 24,347 | ||||||||||||||
Provision for income taxes | 5,517 | 5,369 | 4,917 | 8,651 | 5,461 | ||||||||||||||
Net income from continuing operations | 20,058 | 19,449 | 19,542 | 33,541 | 18,886 | ||||||||||||||
Net income from discontinued operations 10 | — | — | — | 306 | — | ||||||||||||||
Net income before attribution to noncontrolling interests | 20,058 | 19,449 | 19,542 | 33,847 | 18,886 | ||||||||||||||
Less: Net income attributable to noncontrolling interests | 96 | 69 | 100 | 545 | 924 | ||||||||||||||
NET INCOME ATTRIBUTABLE TO THE COMPANY | $ | 19,962 | $ | 19,380 | $ | 19,442 | $ | 33,302 | $ | 17,962 | |||||||||
Adjustments, treasury stock method 11 | 304 | (816 | ) | 1,557 | 2,694 | (829 | ) | ||||||||||||
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | 20,266 | $ | 18,564 | $ | 20,999 | $ | 35,996 | $ | 17,133 | |||||||||
COMMON SHARE DATA: | |||||||||||||||||||
Weighted average basic shares outstanding | 83,631,403 | 83,565,780 | 83,285,095 | 83,750,785 | 84,017,284 | ||||||||||||||
Weighted average diluted shares outstanding 12 | 83,956,708 | 84,048,972 | 84,010,450 | 84,863,779 | 85,498,568 | ||||||||||||||
Diluted total earnings per share | $ | 0.24 | $ | 0.22 | $ | 0.25 | $ | 0.42 | $ | 0.20 | |||||||||
8 Wealth management and trust fees consists of revenue from Boston Private Wealth LLC, KLS Professional Advisors, BOS, and the trust operations of Boston Private Bank & Trust Company. 9 Total revenue is the sum of Net interest income, Total core fees and income, and Total other income. 10 Net income from discontinued operations consists of contingent payments, net of expenses, related to a divested affiliate, Westfield Capital Management Company, LLC. The Company received its final contingent payment in the first quarter of 2018 related to this affiliate and a tax benefit related to deferred taxes in the fourth quarter of 2018. 11 Adjustments to Net income attributable to the Company to arrive at Net income attributable to common shareholders, treasury stock method, as presented in these tables, include decrease/ (increase) in Noncontrolling interests redemption value. 12 For a description of the Company's policies regarding Diluted earnings per share, please refer to 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, 2018. |
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | ||||||||
Consolidated Income Statement | ||||||||
Unaudited ($ in thousands, except share and per share data) | ||||||||
Nine months ended September 30, | ||||||||
2019 | 2018 | |||||||
REVENUE: | ||||||||
Interest income | $ | 233,156 | $ | 216,012 | ||||
Interest expense | 61,205 | 41,443 | ||||||
Net interest income | 171,951 | 174,569 | ||||||
Provision/ (credit) for loan losses | 104 | (2,291 | ) | |||||
Net interest income after provision/ (credit) for loan losses | 171,847 | 176,860 | ||||||
Wealth management and trust fees 8 | 57,037 | 76,030 | ||||||
Investment management fees | 7,601 | 18,897 | ||||||
Private banking fee income | 8,024 | 7,793 | ||||||
Gain on sale of loans, net | 1,065 | 204 | ||||||
Total core fees and income | 73,727 | 102,924 | ||||||
Total other income | 1,027 | 1,228 | ||||||
TOTAL REVENUE 9 | 246,705 | 278,721 | ||||||
NONINTEREST EXPENSE: | ||||||||
Salaries and employee benefits | 100,116 | 125,461 | ||||||
Occupancy and equipment | 24,460 | 24,141 | ||||||
Professional services | 11,308 | 8,926 | ||||||
Marketing and business development | 4,422 | 5,373 | ||||||
Information systems | 16,166 | 18,889 | ||||||
Amortization of intangibles | 2,015 | 2,249 | ||||||
FDIC insurance | 1,304 | 2,126 | ||||||
Restructuring | 1,646 | 5,763 | ||||||
Other | 10,312 | 10,870 | ||||||
TOTAL NONINTEREST EXPENSE | 171,749 | 203,798 | ||||||
INCOME BEFORE INCOME TAXES | 74,852 | 77,214 | ||||||
Income tax expense | 15,803 | 28,886 | ||||||
Net income from continuing operations | 59,049 | 48,328 | ||||||
Net income from discontinued operations 10 | — | 1,696 | ||||||
Net income before attribution to noncontrolling interests | 59,049 | 50,024 | ||||||
Less: Net income attributable to noncontrolling interests | 265 | 2,942 | ||||||
NET INCOME ATTRIBUTABLE TO THE COMPANY | $ | 58,784 | $ | 47,082 | ||||
Adjustments, treasury stock method 11 | 1,045 | (4,376 | ) | |||||
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | 59,829 | $ | 42,706 | ||||
COMMON SHARE DATA | ||||||||
Weighted average basic shares outstanding | 83,495,361 | 83,544,754 | ||||||
Weighted average diluted shares outstanding 12 | 84,003,281 | 85,254,295 | ||||||
Diluted total earnings per share | $ | 0.71 | $ | 0.50 | ||||
8 Wealth management and trust fees consists of revenue from Boston Private Wealth LLC, KLS Professional Advisors, BOS, and the trust operations of Boston Private Bank & Trust Company. 9 Total revenue is the sum of Net interest income, Total core fees and income, and Total other income. 10 Net income from discontinued operations consists of contingent payments, net of expenses, related to a divested affiliate, Westfield Capital Management Company, LLC. The Company received its final contingent payment in the first quarter of 2018 related to this affiliate and a tax benefit related to deferred taxes in the fourth quarter of 2018. 11 Adjustments to Net income attributable to the Company to arrive at Net income attributable to common shareholders, treasury stock method, as presented in these tables, include decrease/ (increase) in Noncontrolling interests redemption value and dividends paid on preferred stock, if any, including deemed dividends on redemption of the 6.95% non-cumulative perpetual preferred stock, Series D (“the Series D preferred stock”), if any. On June 15, 2018, the Company redeemed all $50 million of the outstanding Series D preferred stock. 12 For a description of the Company's policies regarding Diluted earnings per share, please refer to Part II. Item 8. “Financial Statements and Supplementary Data - Note 16: Earnings Per Share” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. |
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | |||||||||||||||||||
Consolidated Financial Highlights | |||||||||||||||||||
Unaudited ($ in thousands, except share and per share data) | |||||||||||||||||||
3Q19 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | |||||||||||||||
KEY STATISTICS: | |||||||||||||||||||
Return on average assets (non-GAAP) 13 | 0.91 | % | 0.90 | % | 0.93 | % | 1.56 | % | 0.84 | % | |||||||||
ROACE (non-GAAP) 13 | 9.80 | % | 9.83 | % | 10.29 | % | 17.87 | % | 9.67 | % | |||||||||
ROATCE (non-GAAP) 13 | 10.99 | % | 11.06 | % | 11.63 | % | 20.46 | % | 11.37 | % | |||||||||
Efficiency ratio (non-GAAP) 13 | 67.5 | % | 67.2 | % | 69.7 | % | 57.1 | % | 67.0 | % | |||||||||
Noninterest income to total revenue | 30.9 | % | 29.8 | % | 30.2 | % | 43.3 | % | 35.1 | % | |||||||||
Net interest margin | 2.72 | % | 2.78 | % | 2.90 | % | 2.94 | % | 2.90 | % | |||||||||
Average loan to average deposit ratio | 105.9 | % | 106.6 | % | 101.6 | % | 98.0 | % | 100.2 | % | |||||||||
Cost of total deposits | 0.92 | % | 0.88 | % | 0.84 | % | 0.77 | % | 0.68 | % | |||||||||
Cost of interest-bearing deposits | 1.31 | % | 1.25 | % | 1.19 | % | 1.11 | % | 0.98 | % | |||||||||
Cost of total funding | 1.12 | % | 1.11 | % | 1.00 | % | 0.89 | % | 0.86 | % | |||||||||
Allowance for Loan Loss / Total Loans | 1.07 | % | 1.06 | % | 1.07 | % | 1.09 | % | 1.09 | % | |||||||||
Nonperforming loans / Total Loans | 0.25 | % | 0.24 | % | 0.17 | % | 0.20 | % | 0.18 | % | |||||||||
Net (charge-offs) / recoveries / Total loans 13 | 0.01 | % | (0.01 | )% | — | % | 0.10 | % | 0.06 | % | |||||||||
CAPITAL HIGHLIGHTS: | |||||||||||||||||||
Tier 1 common equity 14 | $ | 732,980 | $ | 726,872 | $ | 717,138 | $ | 702,728 | $ | 674,641 | |||||||||
Tier 1 capital 14 | $ | 833,431 | $ | 827,299 | $ | 817,600 | $ | 803,311 | $ | 776,328 | |||||||||
Total capital 14 | $ | 910,076 | $ | 903,675 | $ | 892,764 | $ | 879,927 | $ | 851,399 | |||||||||
Risk-weighted assets ("RWA") 14 | $ | 6,533,882 | $ | 6,491,184 | $ | 6,304,444 | $ | 6,161,677 | $ | 6,057,002 | |||||||||
Average assets for leverage 14 | $ | 8,588,358 | $ | 8,617,803 | $ | 8,447,143 | $ | 8,416,195 | $ | 8,436,411 | |||||||||
TIer 1 common equity ratio 14 | 11.22 | % | 11.20 | % | 11.38 | % | 11.40 | % | 11.14 | % | |||||||||
Tier 1 ratio 14 | 12.76 | % | 12.74 | % | 12.97 | % | 13.04 | % | 12.82 | % | |||||||||
Total capital ratio 14 | 13.93 | % | 13.92 | % | 14.16 | % | 14.28 | % | 14.06 | % | |||||||||
Leverage ratio 14 | 9.70 | % | 9.60 | % | 9.68 | % | 9.54 | % | 9.20 | % | |||||||||
Total equity / Total assets | 9.30 | % | 9.16 | % | 9.09 | % | 8.88 | % | 8.81 | % | |||||||||
Tangible common equity / Tangible assets (non-GAAP) | 8.59 | % | 8.44 | % | 8.35 | % | 8.12 | % | 7.83 | % | |||||||||
Market price per share | $ | 11.66 | $ | 12.07 | $ | 10.96 | $ | 10.57 | $ | 13.65 | |||||||||
End of period shares outstanding | 83,241,952 | 83,774,335 | 83,773,650 | 83,655,651 | 84,602,519 | ||||||||||||||
Book value per common share | $ | 9.71 | $ | 9.53 | $ | 9.30 | $ | 9.01 | $ | 8.72 | |||||||||
Tangible book value per share (non-GAAP) | $ | 8.90 | $ | 8.71 | $ | 8.47 | $ | 8.18 | $ | 7.67 | |||||||||
Common Equity Repurchase Program: | |||||||||||||||||||
Total shares of common stock repurchased | 678,165 | — | — | 1,505,521 | 137,144 | ||||||||||||||
Average price paid per share of common stock | $ | 10.61 | $ | — | $ | — | $ | 12.02 | $ | 13.89 | |||||||||
Aggregate repurchases of common equity ($ in millions) | $ | 7.2 | $ | — | $ | — | $ | 18.1 | $ | 1.9 | |||||||||
13 Annualized 14 Current quarter capital highlights are presented based on estimated data. |
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | |||||||||||||||||||
Consolidated AUM and Balance Sheet - End of Period Balances | |||||||||||||||||||
Unaudited ($ in thousands) | |||||||||||||||||||
3Q19 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | |||||||||||||||
ASSETS UNDER MANAGEMENT AND ADVISORY ("AUM"): | |||||||||||||||||||
Wealth Management and Trust | $ | 14,695,000 | $ | 14,649,000 | $ | 14,564,000 | $ | 14,206,000 | $ | 15,598,000 | |||||||||
Other | 1,533,000 | 1,550,000 | 1,558,000 | 1,715,000 | 2,125,000 | ||||||||||||||
Total AUM, excluding BOS 15 | 16,228,000 | 16,199,000 | 16,122,000 | 15,921,000 | 17,723,000 | ||||||||||||||
AUM at BOS | — | — | — | — | 4,714,000 | ||||||||||||||
Less: Inter-company relationship | — | — | — | — | (7,000 | ) | |||||||||||||
Total AUM | $ | 16,228,000 | $ | 16,199,000 | $ | 16,122,000 | $ | 15,921,000 | $ | 22,430,000 | |||||||||
AUM Reconciliation: | |||||||||||||||||||
Beginning balance | $ | 16,199,000 | $ | 16,122,000 | $ | 15,921,000 | $ | 17,723,000 | $ | 16,861,000 | |||||||||
Net flows | (137,000 | ) | (269,000 | ) | (963,000 | ) | (143,000 | ) | 260,000 | ||||||||||
Market | 166,000 | 346,000 | 1,164,000 | (1,659,000 | ) | 602,000 | |||||||||||||
Ending balance | $ | 16,228,000 | $ | 16,199,000 | $ | 16,122,000 | $ | 15,921,000 | $ | 17,723,000 | |||||||||
AUM Net Flows: | |||||||||||||||||||
Wealth Management & Trust | $ | (100,000 | ) | $ | (233,000 | ) | $ | (580,000 | ) | $ | (137,000 | ) | $ | 215,000 | |||||
Other | (37,000 | ) | (36,000 | ) | (383,000 | ) | (6,000 | ) | 45,000 | ||||||||||
Total Net flows | $ | (137,000 | ) | $ | (269,000 | ) | $ | (963,000 | ) | $ | (143,000 | ) | $ | 260,000 | |||||
DEPOSITS: | |||||||||||||||||||
Demand deposits (non-interest bearing) | $ | 1,947,363 | $ | 1,854,091 | $ | 2,016,838 | $ | 1,951,274 | $ | 2,001,275 | |||||||||
NOW | 598,048 | 563,130 | 605,852 | 626,685 | 568,148 | ||||||||||||||
Savings | 68,059 | 68,036 | 68,102 | 73,834 | 72,967 | ||||||||||||||
Money market | 3,366,623 | 3,228,608 | 3,302,244 | 3,338,892 | 3,363,062 | ||||||||||||||
Certificates of deposit | 678,149 | 724,098 | 786,809 | 790,485 | 763,271 | ||||||||||||||
TOTAL DEPOSITS | $ | 6,658,242 | $ | 6,437,963 | $ | 6,779,845 | $ | 6,781,170 | $ | 6,768,723 | |||||||||
LOANS: | |||||||||||||||||||
Commercial and Industrial | $ | 695,029 | $ | 656,186 | $ | 615,370 | $ | 623,037 | $ | 583,214 | |||||||||
Commercial tax exempt | 448,488 | 450,307 | 449,492 | 451,671 | 438,807 | ||||||||||||||
Commercial real estate | 2,533,346 | 2,530,556 | 2,439,048 | 2,395,692 | 2,399,080 | ||||||||||||||
Construction and land | 209,741 | 200,378 | 210,618 | 240,306 | 197,524 | ||||||||||||||
Residential | 2,964,042 | 3,025,758 | 2,993,132 | 2,948,973 | 2,862,879 | ||||||||||||||
Home Equity | 84,432 | 89,930 | 88,620 | 90,421 | 93,390 | ||||||||||||||
Consumer | 132,073 | 127,145 | 130,688 | 143,058 | 145,526 | ||||||||||||||
TOTAL LOANS | $ | 7,067,151 | $ | 7,080,260 | $ | 6,926,968 | $ | 6,893,158 | $ | 6,720,420 | |||||||||
15 Assets under management and advisory have been reduced to exclude those assets managed or advised by BOS for periods when BOS was owned by the Company |
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | |||||||||||||||||||
Asset Quality | |||||||||||||||||||
Unaudited ($ in thousands) | |||||||||||||||||||
3Q19 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | |||||||||||||||
CHARGE-OFFS: | |||||||||||||||||||
Loan charge-offs | $ | (185 | ) | $ | (195 | ) | $ | (564 | ) | $ | (370 | ) | $ | — | |||||
Loan recoveries | 310 | 85 | 492 | 2,089 | 985 | ||||||||||||||
NET (CHARGE-OFFS) / RECOVERIES | $ | 125 | $ | (110 | ) | $ | (72 | ) | $ | 1,719 | $ | 985 | |||||||
Net charge-offs to average loans (annualized) | 0.01 | % | (0.01 | )% | — | % | 0.10 | % | 0.06 | % | |||||||||
Net Charge-offs by Loan Type: | |||||||||||||||||||
Commercial and industrial | $ | 95 | $ | (155 | ) | $ | 188 | $ | (77 | ) | $ | 153 | |||||||
Commercial real estate | 27 | 30 | 189 | 1,394 | 820 | ||||||||||||||
Construction and land | — | — | — | — | — | ||||||||||||||
Residential | — | — | 100 | 402 | — | ||||||||||||||
Home Equity | 6 | — | (562 | ) | — | — | |||||||||||||
Consumer | (3 | ) | 15 | 13 | — | 12 | |||||||||||||
NET (CHARGE-OFFS) / RECOVERIES | $ | 125 | $ | (110 | ) | $ | (72 | ) | $ | 1,719 | $ | 985 | |||||||
NONPERFORMING LOAN DATA: | |||||||||||||||||||
Special mention loans | $ | 58,133 | $ | 70,677 | $ | 86,787 | $ | 78,528 | $ | 67,406 | |||||||||
Accruing classified loans 16 | 63,278 | 53,883 | 42,521 | 54,095 | 55,380 | ||||||||||||||
Nonaccrual loans | 17,565 | 17,155 | 12,019 | 14,057 | 12,097 | ||||||||||||||
Total Classified | 80,843 | 71,038 | 54,540 | 68,152 | 67,477 | ||||||||||||||
Criticized and Classified Loans | $ | 138,976 | $ | 141,715 | $ | 141,327 | $ | 146,680 | $ | 134,883 | |||||||||
Loans 30-89 days past due and accruing 17 | $ | 4,179 | $ | 2,434 | $ | 17,715 | $ | 22,299 | $ | 11,607 | |||||||||
16 Accruing classified 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. 17 In addition to loans 30-89 days past due and accruing, at June 30, 2019, the Company had one loan totaling $0.9 million that was more than 90 days past due but still on accrual status. This loan originated in the New England region. The Company had no loans outstanding more than 90 days past due but still on accrual status in comparative periods. |
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | ||||||||||||||||||||||||||
Average Balances, Yields, and Rates | ||||||||||||||||||||||||||
Unaudited ($ in thousands) | ||||||||||||||||||||||||||
Average Balance | Interest Income/Expense | Average Yield/Rate | ||||||||||||||||||||||||
3Q19 | 2Q19 | 3Q18 | 3Q19 | 2Q19 | 3Q18 | 3Q19 | 2Q19 | 3Q18 | ||||||||||||||||||
INTEREST-EARNING ASSETS | ||||||||||||||||||||||||||
Cash and investments: | ||||||||||||||||||||||||||
Taxable investment securities | $ | 198,655 | $ | 227,029 | $ | 324,583 | $ | 938 | $ | 1,121 | $ | 1,510 | 1.95 | % | 1.98 | % | 1.86 | % | ||||||||
Non-taxable investment securities | 305,108 | 304,309 | 297,710 | 1,924 | 1,901 | 1,779 | 2.52 | % | 2.50 | % | 2.39 | % | ||||||||||||||
Mortgage-backed securities | 492,514 | 508,033 | 552,820 | 2,622 | 2,706 | 2,941 | 2.13 | % | 2.13 | % | 2.13 | % | ||||||||||||||
Short-term investments and other | 101,958 | 130,363 | 204,814 | 1,084 | 1,057 | 1,617 | 4.06 | % | 3.23 | % | 3.11 | % | ||||||||||||||
Total cash and investments | 1,098,235 | 1,169,734 | 1,379,927 | 6,568 | 6,785 | 7,847 | 2.39 | % | 2.32 | % | 2.27 | % | ||||||||||||||
Loans: 18 | ||||||||||||||||||||||||||
Commercial and industrial | 1,101,672 | 1,091,903 | 998,817 | 11,523 | 11,170 | 9,894 | 4.09 | % | 4.05 | % | 3.88 | % | ||||||||||||||
Commercial real estate | 2,518,048 | 2,506,637 | 2,475,143 | 29,118 | 29,953 | 29,482 | 4.52 | % | 4.73 | % | 4.66 | % | ||||||||||||||
Construction and land | 195,843 | 202,609 | 179,248 | 2,410 | 2,559 | 2,193 | 4.82 | % | 5.00 | % | 4.79 | % | ||||||||||||||
Residential | 3,016,265 | 3,008,753 | 2,836,593 | 25,567 | 25,735 | 23,907 | 3.39 | % | 3.42 | % | 3.37 | % | ||||||||||||||
Home equity | 89,068 | 91,384 | 94,050 | 1,121 | 1,146 | 1,089 | 4.99 | % | 5.03 | % | 4.59 | % | ||||||||||||||
Other consumer | 127,987 | 124,778 | 163,224 | 1,297 | 1,380 | 1,689 | 4.02 | % | 4.43 | % | 4.11 | % | ||||||||||||||
Total loans | 7,048,883 | 7,026,064 | 6,747,075 | 71,036 | 71,943 | 68,254 | 3.98 | % | 4.07 | % | 3.99 | % | ||||||||||||||
Total earning assets | 8,147,118 | 8,195,798 | 8,127,002 | 77,604 | 78,728 | 76,101 | 3.76 | % | 3.82 | % | 3.70 | % | ||||||||||||||
LESS: Allowance for loan losses | 75,199 | 73,856 | 73,861 | |||||||||||||||||||||||
Cash and due from banks | 49,065 | 45,705 | 46,056 | |||||||||||||||||||||||
Other assets | 544,368 | 511,859 | 392,757 | |||||||||||||||||||||||
TOTAL AVERAGE ASSETS | $ | 8,665,352 | $ | 8,679,506 | $ | 8,491,954 | ||||||||||||||||||||
INTEREST-BEARING LIABILITIES | ||||||||||||||||||||||||||
Interest-bearing deposits: 19 | ||||||||||||||||||||||||||
Savings and NOW | $ | 615,730 | $ | 684,507 | $ | 693,419 | $ | 275 | $ | 276 | $ | 301 | 0.18 | % | 0.16 | % | 0.17 | % | ||||||||
Money market | 3,378,006 | 3,226,569 | 3,244,628 | 11,523 | 10,476 | 8,110 | 1.35 | % | 1.30 | % | 0.99 | % | ||||||||||||||
Certificates of deposit | 711,299 | 752,500 | 730,117 | 3,689 | 3,763 | 3,076 | 2.06 | % | 2.01 | % | 1.67 | % | ||||||||||||||
Total interest-bearing deposits 19 | 4,705,035 | 4,663,576 | 4,668,164 | 15,487 | 14,515 | 11,487 | 1.31 | % | 1.25 | % | 0.98 | % | ||||||||||||||
Junior subordinated debentures | 106,363 | 106,363 | 106,363 | 1,022 | 1,080 | 1,028 | 3.76 | % | 4.02 | % | 3.78 | % | ||||||||||||||
FHLB borrowings and other | 833,535 | 952,645 | 768,015 | 4,942 | 5,673 | 3,945 | 2.32 | % | 2.36 | % | 2.01 | % | ||||||||||||||
Total interest-bearing liabilities 19 | 5,644,933 | 5,722,584 | 5,542,542 | 21,451 | 21,268 | 16,460 | 1.50 | % | 1.48 | % | 1.17 | % | ||||||||||||||
Non-interest bearing demand deposits 19 | 1,953,214 | 1,926,591 | 2,063,642 | |||||||||||||||||||||||
Other liabilities | 258,371 | 238,544 | 135,508 | |||||||||||||||||||||||
Total average liabilities | 7,856,518 | 7,887,719 | 7,741,692 | |||||||||||||||||||||||
Redeemable noncontrolling interests | 944 | 943 | 13,074 | |||||||||||||||||||||||
Average shareholders’ equity | 807,890 | 790,844 | 737,188 | |||||||||||||||||||||||
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | $ | 8,665,352 | $ | 8,679,506 | $ | 8,491,954 | ||||||||||||||||||||
Net interest income | $ | 56,153 | $ | 57,460 | $ | 59,641 | ||||||||||||||||||||
Interest rate spread | 2.26 | % | 2.34 | % | 2.53 | % | ||||||||||||||||||||
Net interest margin | 2.72 | % | 2.78 | % | 2.90 | % | ||||||||||||||||||||
Average total deposits 19 | $ | 6,658,249 | $ | 6,590,167 | $ | 6,731,806 | 0.92 | % | 0.88 | % | 0.68 | % | ||||||||||||||
Average total deposits and borrowings 19 | $ | 7,598,147 | $ | 7,649,175 | $ | 7,606,184 | 1.12 | % | 1.11 | % | 0.86 | % | ||||||||||||||
18 Average loans includes Loans held for sale and Nonaccrual loans 19 Average total deposits is the sum of Average total interest-bearing deposits and Average non-interest bearing demand deposits. Average total deposits and borrowings is the sum of Average total interest-bearing liabilities and Average non-interest bearing demand deposits. |
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | ||||||||||||||||||
Average Balances, Yields, and Rates | ||||||||||||||||||
Unaudited ($ in thousands) | ||||||||||||||||||
Average Balance | Interest Income/Expense | Average Yield/Rate | ||||||||||||||||
Nine Months Ended | Nine Months Ended | Nine Months Ended | ||||||||||||||||
INTEREST-EARNING ASSETS | 9/30/19 | 9/30/18 | 9/30/19 | 9/30/18 | 9/30/19 | 9/30/18 | ||||||||||||
Cash and investments: | ||||||||||||||||||
Taxable investment securities | $ | 223,072 | $ | 328,054 | $ | 3,244 | $ | 4,521 | 1.94 | % | 1.84 | % | ||||||
Non-taxable investment securities | 305,422 | 297,509 | 5,726 | 5,261 | 2.50 | % | 2.36 | % | ||||||||||
Mortgage-backed securities | 507,338 | 570,578 | 8,225 | 9,168 | 2.16 | % | 2.14 | % | ||||||||||
Short-term investments and other | 104,225 | 174,736 | 3,049 | 3,831 | 3.78 | % | 2.91 | % | ||||||||||
Total cash and investments | 1,140,057 | 1,370,877 | 20,244 | 22,781 | 2.36 | % | 2.21 | % | ||||||||||
Loans: 18 | ||||||||||||||||||
Commercial and industrial | 1,088,027 | 969,063 | 33,673 | 27,554 | 4.08 | % | 3.75 | % | ||||||||||
Commercial real estate | 2,474,804 | 2,464,788 | 87,222 | 83,020 | 4.65 | % | 4.44 | % | ||||||||||
Construction and land | 203,211 | 171,825 | 7,610 | 6,142 | 4.94 | % | 4.71 | % | ||||||||||
Residential | 2,999,480 | 2,771,875 | 76,847 | 68,263 | 3.42 | % | 3.28 | % | ||||||||||
Home equity | 90,361 | 95,217 | 3,388 | 3,172 | 5.01 | % | 4.45 | % | ||||||||||
Other consumer | 128,879 | 176,086 | 4,172 | 5,080 | 4.33 | % | 3.86 | % | ||||||||||
Total loans | 6,984,762 | 6,648,854 | 212,912 | 193,231 | 4.04 | % | 3.85 | % | ||||||||||
Total earning assets | 8,124,819 | 8,019,731 | 233,156 | 216,012 | 3.80 | % | 3.57 | % | ||||||||||
LESS: Allowance for loan losses | 74,863 | 73,894 | ||||||||||||||||
Cash and due from banks (non-interest bearing) | 46,906 | 47,859 | ||||||||||||||||
Other assets | 516,642 | 404,375 | ||||||||||||||||
TOTAL AVERAGE ASSETS | $ | 8,613,504 | $ | 8,398,071 | ||||||||||||||
INTEREST-BEARING LIABILITIES | ||||||||||||||||||
Interest-bearing deposits: 19 | ||||||||||||||||||
Savings and NOW | $ | 658,154 | $ | 709,751 | $ | 847 | $ | 820 | 0.17 | % | 0.15 | % | ||||||
Money market | 3,317,117 | 3,139,107 | 32,072 | 17,967 | 1.29 | % | 0.77 | % | ||||||||||
Certificates of deposit | 746,453 | 691,670 | 11,141 | 7,589 | 2.00 | % | 1.47 | % | ||||||||||
Total interest-bearing deposits 19 | 4,721,724 | 4,540,528 | 44,060 | 26,376 | 1.25 | % | 0.78 | % | ||||||||||
Junior subordinated debentures | 106,363 | 106,363 | 3,223 | 2,882 | 4.05 | % | 3.62 | % | ||||||||||
FHLB borrowings and other | 801,519 | 889,178 | 13,922 | 12,185 | 2.29 | % | 1.81 | % | ||||||||||
Total interest-bearing liabilities 19 | 5,629,606 | 5,536,069 | 61,205 | 41,443 | 1.45 | % | 1.00 | % | ||||||||||
Non-interest bearing demand deposits 19 | 1,949,948 | 1,948,573 | ||||||||||||||||
Payables and other liabilities | 243,370 | 130,410 | ||||||||||||||||
Total average liabilities | 7,822,924 | 7,615,052 | ||||||||||||||||
Redeemable noncontrolling interests | 1,642 | 16,294 | ||||||||||||||||
Average shareholders’ equity | 788,938 | 766,725 | ||||||||||||||||
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | $ | 8,613,504 | $ | 8,398,071 | ||||||||||||||
Net interest income | $ | 171,951 | $ | 174,569 | ||||||||||||||
Interest rate spread | 2.35 | % | 2.57 | % | ||||||||||||||
Net interest margin | 2.80 | % | 2.88 | % | ||||||||||||||
Average total deposits 19 | $ | 6,671,672 | $ | 6,489,101 | 0.88 | % | 0.54 | % | ||||||||||
Average total deposits and borrowings 19 | $ | 7,579,554 | $ | 7,484,642 | 1.08 | % | 0.74 | % | ||||||||||
18 Average loans includes Loans held for sale and Nonaccrual loans 19 Average total deposits is the sum of Average total interest-bearing deposits and Average non-interest bearing demand deposits. Average total deposits and borrowings is the sum of Average total interest-bearing liabilities and Average non-interest bearing demand deposits. |
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | |||||||||||||||||||
Regional Loan Data | |||||||||||||||||||
Unaudited ($ in thousands) | |||||||||||||||||||
3Q19 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | |||||||||||||||
LOANS: 20 | |||||||||||||||||||
New England | $ | 3,868,690 | $ | 3,957,221 | $ | 3,901,644 | $ | 3,890,607 | $ | 3,783,032 | |||||||||
San Francisco Bay Area | 1,559,569 | 1,538,441 | 1,499,626 | 1,488,017 | 1,491,528 | ||||||||||||||
Southern California | 1,638,892 | 1,584,598 | 1,525,698 | 1,514,534 | 1,445,860 | ||||||||||||||
Total loans | $ | 7,067,151 | $ | 7,080,260 | $ | 6,926,968 | $ | 6,893,158 | $ | 6,720,420 | |||||||||
Loans (charged-off) / recovered, net: | |||||||||||||||||||
New England | $ | 275 | $ | 31 | $ | 222 | $ | (100 | ) | $ | 232 | ||||||||
San Francisco Bay Area | 6 | 20 | 18 | 1,804 | 706 | ||||||||||||||
Southern California | (156 | ) | (161 | ) | (312 | ) | 15 | 47 | |||||||||||
Total net loans (charged-off) / recovered | $ | 125 | $ | (110 | ) | $ | (72 | ) | $ | 1,719 | $ | 985 | |||||||
Special mention loans: | |||||||||||||||||||
New England | $ | 19,828 | $ | 35,235 | $ | 34,675 | $ | 31,147 | $ | 20,382 | |||||||||
San Francisco Bay Area | 4,821 | 10,360 | 23,486 | 18,585 | 18,359 | ||||||||||||||
Southern California | 33,484 | 25,082 | 28,626 | 28,796 | 28,665 | ||||||||||||||
Total special mention loans | $ | 58,133 | $ | 70,677 | $ | 86,787 | $ | 78,528 | $ | 67,406 | |||||||||
Accruing classified loans: | |||||||||||||||||||
New England | $ | 21,830 | $ | 13,012 | $ | 15,830 | $ | 10,392 | $ | 10,083 | |||||||||
San Francisco Bay Area | 23,938 | 25,957 | 20,801 | 24,584 | 24,252 | ||||||||||||||
Southern California | 17,510 | 14,914 | 5,890 | 19,119 | 21,045 | ||||||||||||||
Total accruing classified loans | $ | 63,278 | $ | 53,883 | $ | 42,521 | $ | 54,095 | $ | 55,380 | |||||||||
Nonaccruing loans: | |||||||||||||||||||
New England | $ | 8,999 | $ | 8,837 | $ | 6,161 | $ | 6,728 | $ | 5,131 | |||||||||
San Francisco Bay Area | 2,395 | 2,644 | 2,480 | 2,488 | 1,169 | ||||||||||||||
Southern California | 6,171 | 5,674 | 3,378 | 4,841 | 5,797 | ||||||||||||||
Total nonaccruing loans | $ | 17,565 | $ | 17,155 | $ | 12,019 | $ | 14,057 | $ | 12,097 | |||||||||
20 The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lenders' regional offices. |
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | |||||||||||||||||||
Reconciliations of Non-GAAP Financial Measures | |||||||||||||||||||
Unaudited ($ in thousands) | |||||||||||||||||||
3Q19 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | |||||||||||||||
ROACE AND ROATCE: | |||||||||||||||||||
Net income attributable to the Company (GAAP) (A) | $ | 19,962 | $ | 19,380 | $ | 19,442 | $ | 33,302 | $ | 17,962 | |||||||||
ADD: Amortization of intangibles, net of tax | 530 | 531 | 531 | 537 | 593 | ||||||||||||||
Tangible common net income (non-GAAP) (B) | $ | 20,492 | $ | 19,911 | $ | 19,973 | $ | 33,839 | $ | 18,555 | |||||||||
Total average shareholders’ equity (C) | $ | 807,890 | $ | 790,844 | $ | 766,283 | $ | 739,313 | $ | 737,188 | |||||||||
LESS: Average goodwill and intangible assets, net | (68,359 | ) | (68,889 | ) | (69,498 | ) | (83,153 | ) | (89,830 | ) | |||||||||
Average tangible common equity (non-GAAP) (D) | $ | 739,531 | $ | 721,955 | $ | 696,785 | $ | 656,160 | $ | 647,358 | |||||||||
ROACE (annualized) (A / C) | 9.80 | % | 9.83 | % | 10.29 | % | 17.87 | % | 9.67 | % | |||||||||
ROATCE (annualized) (B / D) | 10.99 | % | 11.06 | % | 11.63 | % | 20.46 | % | 11.37 | % | |||||||||
PRE-TAX, PRE-PROVISION INCOME: | |||||||||||||||||||
Income before income taxes (GAAP) | $ | 25,575 | $ | 24,818 | $ | 24,459 | $ | 42,192 | $ | 24,347 | |||||||||
ADD BACK: Provision/ (credit) for loan losses | 167 | 1,363 | (1,426 | ) | 93 | (949 | ) | ||||||||||||
Pre-tax, pre-provision income (non-GAAP) | $ | 25,742 | $ | 26,181 | $ | 23,033 | $ | 42,285 | $ | 23,398 | |||||||||
CORE NET INTEREST INCOME AND MARGIN: | |||||||||||||||||||
Net interest income (GAAP) | $ | 56,153 | $ | 57,460 | $ | 58,338 | $ | 59,997 | $ | 59,641 | |||||||||
LESS: Interest recovered on previous nonaccrual loans | 180 | — | 258 | 986 | 986 | ||||||||||||||
Net interest income, excluding interest recovered while loans on nonaccrual status ("Core net interest income") (non-GAAP) | $ | 55,973 | $ | 57,460 | $ | 58,080 | $ | 59,011 | $ | 58,655 | |||||||||
Net interest margin, excluding interest recovered while loans on nonaccrual status ("Core net interest margin") (non-GAAP) | 2.71 | % | 2.78 | % | 2.89 | % | 2.90 | % | 2.90 | % | |||||||||
TANGIBLE COMMON EQUITY: | |||||||||||||||||||
Total Shareholders’ Equity (GAAP) | $ | 808,688 | $ | 798,211 | $ | 778,819 | $ | 753,954 | $ | 738,009 | |||||||||
LESS: Goodwill and intangible assets, net | (68,229 | ) | (68,491 | ) | (69,162 | ) | (69,834 | ) | (89,432 | ) | |||||||||
Tangible common equity (non-GAAP) (A) | $ | 740,459 | $ | 729,720 | $ | 709,657 | $ | 684,120 | $ | 648,577 | |||||||||
Total Assets (GAAP) | $ | 8,690,944 | $ | 8,712,873 | $ | 8,572,143 | $ | 8,494,625 | $ | 8,375,840 | |||||||||
LESS: Goodwill and intangible assets, net | (68,229 | ) | (68,491 | ) | (69,162 | ) | (69,834 | ) | (89,432 | ) | |||||||||
Tangible assets (non-GAAP) (B) | $ | 8,622,715 | $ | 8,644,382 | $ | 8,502,981 | $ | 8,424,791 | $ | 8,286,408 | |||||||||
End of Period Shares Outstanding (C) | 83,241,952 | 83,774,335 | 83,773,650 | 83,655,651 | 84,602,519 | ||||||||||||||
Tangible common equity/ Tangible assets (non-GAAP) (A / B) | 8.59 | % | 8.44 | % | 8.35 | % | 8.12 | % | 7.83 | % | |||||||||
Tangible Book Value Per Share (non-GAAP) (A / C) | $8.90 | $8.71 | $8.47 | $8.18 | $7.67 | ||||||||||||||
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | |||||||||||||||||||
Reconciliations of Non-GAAP Financial Measures | |||||||||||||||||||
Unaudited ($ in thousands) | |||||||||||||||||||
3Q19 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | |||||||||||||||
RETURN ON AVERAGE ASSETS: | |||||||||||||||||||
Net income (GAAP) (A) | $ | 19,962 | $ | 19,380 | $ | 19,442 | $ | 33,302 | $ | 17,962 | |||||||||
Average Assets (non-GAAP) (B) | 8,665,352 | 8,679,506 | 8,493,725 | 8,445,298 | 8,491,954 | ||||||||||||||
Return on average assets (non-GAAP) (A / B) | 0.91 | % | 0.90 | % | 0.93 | % | 1.56 | % | 0.84 | % | |||||||||
EFFICIENCY RATIO: | |||||||||||||||||||
Total noninterest expense (GAAP) (A) | $ | 55,537 | $ | 55,659 | $ | 60,553 | $ | 63,557 | $ | 68,557 | |||||||||
Less: Amortization of intangibles | 671 | 672 | 672 | 680 | 750 | ||||||||||||||
Less: Restructuring | — | — | 1,646 | 2,065 | 5,763 | ||||||||||||||
Total noninterest expense (non-GAAP) (B) | $ | 54,866 | $ | 54,987 | $ | 58,235 | $ | 60,812 | $ | 62,044 | |||||||||
Net interest income (GAAP) | $ | 56,153 | $ | 57,460 | $ | 58,338 | $ | 59,997 | $ | 59,641 | |||||||||
Total core fees and income (GAAP) | 25,155 | 24,292 | 24,280 | 28,691 | 31,592 | ||||||||||||||
Gain on sale of affiliate (GAAP) | — | — | — | 18,142 | — | ||||||||||||||
Total other income (GAAP) | (29 | ) | 88 | 968 | (988 | ) | 722 | ||||||||||||
Total revenue (C) | $ | 81,279 | $ | 81,840 | $ | 83,586 | $ | 105,842 | $ | 91,955 | |||||||||
Efficiency ratio (GAAP) (A / C) | 68.3 | % | 68.0 | % | 72.4 | % | 60.0 | % | 74.6 | % | |||||||||
Efficiency ratio, excluding amortization of intangibles and restructuring, if any (non-GAAP) (B / C) | 67.5 | % | 67.2 | % | 69.7 | % | 57.1 | % | 67.0 | % | |||||||||
OTHER INCOME: (GAAP) | |||||||||||||||||||
Gain/ (loss) on sale of investments, net | $ | — | $ | — | $ | — | $ | (596 | ) | $ | — | ||||||||
Gain/ (loss) on OREO, net | — | — | 91 | — | — | ||||||||||||||
Gain on sale of affiliate | — | — | — | 18,142 | — | ||||||||||||||
Other | (29 | ) | 88 | 877 | (392 | ) | 722 | ||||||||||||
Total other income (GAAP) | $ | (29 | ) | $ | 88 | $ | 968 | $ | 17,154 | $ | 722 |
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | |||||||||||||||||||
Reconciliations of Non-GAAP measures: Operating Adjustments | |||||||||||||||||||
Unaudited ($ in thousands, except share and per share data) | |||||||||||||||||||
3Q19 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | |||||||||||||||
NET INCOME ATTRIBUTABLE TO THE COMPANY: | |||||||||||||||||||
NET INCOME ATTRIBUTABLE TO THE COMPANY (GAAP) | $ | 19,962 | $ | 19,380 | $ | 19,442 | $ | 33,302 | $ | 17,962 | |||||||||
LESS: Gain on sale of affiliate | — | — | — | 18,142 | — | ||||||||||||||
ADD: Information services 21 | — | — | — | (441 | ) | — | |||||||||||||
ADD: Restructuring | — | — | 1,646 | 2,065 | 5,763 | ||||||||||||||
ADD: Tax adjustments 22 | — | — | — | 3,502 | — | ||||||||||||||
Tax effect at statutory rate | — | — | (346 | ) | (341 | ) | (1,210 | ) | |||||||||||
NET INCOME ATTRIBUTABLE TO THE COMPANY (NON-GAAP) | $ | 19,962 | $ | 19,380 | $ | 20,742 | $ | 19,945 | $ | 22,515 | |||||||||
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS: | |||||||||||||||||||
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS (GAAP) | $ | 20,266 | $ | 18,564 | $ | 20,999 | $ | 35,996 | $ | 17,133 | |||||||||
LESS: Gain on sale of affiliate | — | — | — | 18,142 | — | ||||||||||||||
ADD: Information services 21 | — | — | — | (441 | ) | — | |||||||||||||
ADD: Restructuring | — | — | 1,646 | 2,065 | 5,763 | ||||||||||||||
ADD: Tax adjustments 22 | — | — | — | 3,502 | — | ||||||||||||||
Tax effect at statutory rate | — | — | (346 | ) | (341 | ) | (1,210 | ) | |||||||||||
Net income attributable to the common shareholders, treasury stock method, excluding notable items (non-GAAP) | $ | 20,266 | $ | 18,564 | $ | 22,299 | $ | 22,639 | $ | 21,686 | |||||||||
Weighted average diluted shares outstanding | 83,956,708 | 84,048,972 | 84,010,450 | 84,863,779 | 85,498,568 | ||||||||||||||
Diluted total earnings per share (GAAP) | $ | 0.24 | $ | 0.22 | $ | 0.25 | $ | 0.42 | $ | 0.20 | |||||||||
Diluted total earnings per share, excluding notable items (non-GAAP) | $ | 0.24 | $ | 0.22 | $ | 0.27 | $ | 0.27 | $ | 0.25 | |||||||||
Average common equity (non-GAAP) | $ | 807,890 | $ | 790,844 | $ | 766,283 | $ | 739,313 | $ | 737,188 | |||||||||
Average tangible common equity (non-GAAP) | $ | 739,531 | $ | 721,955 | $ | 696,785 | $ | 656,160 | $ | 647,358 | |||||||||
Return on average common equity, excluding notable items (non-GAAP) | 9.80 | % | 9.83 | % | 10.98 | % | 10.70 | % | 12.12 | % | |||||||||
Return on average tangible common equity, excluding notable items (non-GAAP) | 10.99 | % | 11.06 | % | 12.38 | % | 12.38 | % | 14.16 | % | |||||||||
Pre-tax, pre-provision income (non-GAAP) | $ | 25,742 | $ | 26,181 | $ | 23,033 | $ | 42,285 | $ | 23,398 | |||||||||
LESS: Gain on sale of affiliate | — | — | — | 18,142 | — | ||||||||||||||
ADD: Information services 21 | — | — | — | (441 | ) | — | |||||||||||||
ADD: Restructuring | — | — | 1,646 | 2,065 | 5,763 | ||||||||||||||
Pre-tax, pre-provision income, excluding notable items (non-GAAP) | $ | 25,742 | $ | 26,181 | $ | 24,679 | $ | 25,767 | $ | 29,161 | |||||||||
21 In the fourth quarter of 2018, $0.4 million of Information services expense was reclassified to Restructuring expense in conjunction with the announcement of the Company's formal restructuring plan. 22 Additional tax expense in the fourth quarter of 2018 relates to the completion of the sale of BOS. |
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