Boston Private Financial Holdings, Inc. Reports Fourth Quarter and Full Year 2017 Results; Raises Dividend to $0.12 Per Share
Fourth Quarter and Full Year Highlights:
| |
| • | Average Total Deposits increased 7% year-over-year to $6.4 billion, and Average Total Loans increased 7% year-over-year to $6.4 billion. |
| |
| • | Total Assets Under Management/Advisory (“AUM”), excluding Anchor Capital Advisors LLC ("Anchor"), were $21.2 billion at the end of the fourth quarter, and Net Flows during the fourth quarter were $128 million. |
| |
| • | Operating Return on Average Common Equity for the fourth quarter was 10.2% and Operating Return on Average Tangible Common Equity was 13.4%. |
| |
| • | Full year Operating Return on Average Common Equity was 10.1% and Operating Return on Average Tangible Common Equity was 13.6%. |
| |
| • | The Board of Directors approved a quarterly cash dividend of $0.12 per share of common stock, an increase from $0.11 per share in the prior quarter. |
Notable Items impacting fourth quarter results:
| |
| • | $1.3 million loss on sale, $0.4 million of legal expense, and $24.9 goodwill impairment expense related to the Held for Sale classification and previously announced divestiture of Anchor |
| |
| • | $12.9 million Income Tax Expense related to the Tax Cuts and Jobs Act |
Boston, MA - January 17, 2018 - Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported fourth quarter 2017 GAAP Net loss attributable to the Company of $18.3 million, compared to Net Income of $19.8 million for the third quarter of 2017 and $17.6 million for the fourth quarter of 2016. Fourth quarter 2017 diluted earnings per share were ($0.24), compared to $0.22 in the third quarter of 2017, and $0.19 in the fourth quarter of 2016. For the full year of 2017, BPFH reported GAAP Net Income attributable to the Company of $40.6 million or $0.42 of diluted earnings per share.
This press release includes references to Operating metrics (non-GAAP) that exclude the impact of Notable Items listed above. A full reconciliation of these adjustments can be found in the footnotes.
|
| | | | | | | | | | | |
| Summary of fourth quarter and full year financial results (GAAP basis and Operating basis) |
| ($ in millions, except for per share data) | Quarter ended December 31, 2017 | | Year ended December 31, 2017 |
| | GAAP or Reported | | Operating | | GAAP or Reported | | Operating |
| Net income / (loss) attributable to the Company (18) | $(18.3) | | $20.6 | | $40.6 | | $79.5 |
| Diluted Total Earnings Per Share (5), (18) | $(0.24) | | $0.22 | | $0.42 | | $0.88 |
| | | | | | | | |
| Non-GAAP Financial Measures | Reported | | Operating | | Reported | | Operating |
| Return on Average Common Equity (8), (18) | (9.9 | )% | | 10.2 | % | | 5.0 | % | | 10.1 | % |
| Return on Average Tangible Common Equity (8), (18) | (11.9 | )% | | 13.4 | % | | 7.0 | % | | 13.6 | % |
"Our results this quarter include a combined impact of $38.9 million of charges resulting from our agreement to divest Anchor and the Tax Cuts and Jobs Act," said Clayton G. Deutsch, CEO. "Divesting Anchor will liberate
capital for us, creating flexibility to reinvest in a more focused company, and the Tax Cuts and Jobs Act will result in a significantly lower effective tax rate going forward."
"Excluding the impact of these items, our Company showed a strong core earnings performance, generating $74.6 million of Operating Net Income in 2017 with an Operating Return on Average Common Equity of 10.1%. During 2017, we increased the tangible book value per share of our Company by 8%, and we raised the quarterly dividend on our common stock to $0.12 per share as of the first quarter of 2018."
Divestiture
During the fourth quarter, the Company entered into an agreement to sell its ownership interest in Anchor in a transaction that will result in Anchor being majority owned by members of its management team. The transaction is expected to close in the first quarter of 2018. Results attributed to Anchor’s performance remain consolidated in the Company’s results during current and prior periods. For presentation purposes, Anchor’s AUM is excluded from current and prior period AUM amounts, but is included in the calculation of Core Fees and Income. The Company has classified the assets and liabilities of Anchor as Held for Sale at December 31, 2017, which are included with Other Assets and Other Liabilities, respectively, on the Company’s Consolidated Balance Sheet.
Core Fees and Income/Assets Under Management
Total Core Fees and Income for the fourth quarter were $40.2 million, a 3% increase on a linked quarter basis and a 4% increase year-over-year. The increase reflects higher levels of AUM in the Wealth Management & Trust, Investment Management, and Wealth Advisory segments on both a linked quarter basis and year-over-year basis. Other Banking Fees decreased linked quarter due to lower loan fees, while increasing year-over-year due to increased BOLI income.
AUM, excluding Anchor, was $21.2 billion at the end of the fourth quarter, an increase of 3% linked quarter and 13% year-over-year. The Company experienced net flows of $128 million during the fourth quarter of 2017. Net flows by segment were $79 million for Wealth Management & Trust, $20 million for Investment Management, and $29 million for Wealth Advisory.
Net Interest Income
Net Interest Income for the fourth quarter was $57.3 million, an increase of 1% from $56.6 million for the third quarter of 2017 and an increase of 11% from $51.5 million for the fourth quarter of 2016.
Net Interest Margin was 3.04% for the fourth quarter of 2017, an increase of 2 basis points from the third quarter of 2017 and an increase of 16 basis points from the fourth quarter of 2016. Excluding interest recovered on previous nonaccrual loans, Net Interest Margin for the fourth quarter was 3.02%, flat from the third quarter of 2017 and an increase of 16 basis points from the fourth quarter of 2016.
Total Operating Expense
Total Operating Expense for the fourth quarter of 2017 was $94.0 million, up 36% linked quarter and 31% year-over-year. Notable expenses excluded from non-GAAP results include goodwill impairment charges of $24.9 million in the fourth quarter of 2017 and $9.5 million in the fourth quarter of 2016, and $0.4 of legal expense related to the divestiture of Anchor Capital in the fourth quarter of 2017.
On an operating basis (non-GAAP), Total Expense during the fourth quarter of 2017 was $68.7 million, a decrease of 1% linked quarter and an increase of 10% year-over-year. For the full year, operating basis Total Expense was $274.6 million, an increase of 8% year-over-year.
Provision and Asset Quality
The Company recorded a provision credit of $0.9 million for the fourth quarter of 2017, compared to a provision credit of $0.4 million for the third quarter of 2017 and $1.1 million for the fourth quarter of 2016. The provision credit in the fourth quarter of 2017 was due to net recoveries and improved loss factors, partially offset by an increase in Criticized Loans and loan growth.
Criticized Loans as of December 31, 2017 were $154.8 million, an increase of 6% linked quarter and an increase of 31% year-over-year. Nonaccrual Loans (“Nonaccruals”) as of December 31, 2017 were $14.3 million, an increase of 5% linked quarter and a decrease of 17% year-over-year. As a percentage of Total Loans, Nonaccruals were 22 basis points as of December 31, 2017, up 1 basis point compared to September 30, 2017, and down 6 basis points from December 31, 2016.
Additional credit metrics are listed below:
|
| | | | | | | | | | | | | | | | | | | |
| (In millions) | December 31,
2017 | | September 30,
2017 | | June 30,
2017 | | March 31,
2017 | | December 31,
2016 |
| Total Criticized Loans | $ | 154.8 |
| | $ | 146.0 |
| | $ | 129.5 |
| | $ | 135.1 |
| | $ | 118.5 |
|
Total Loans 30-89 Days Past Due and Accruing (15) | $ | 25.0 |
| | $ | 5.3 |
| | $ | 3.2 |
| | $ | 28.7 |
| | $ | 15.1 |
|
| Total Net Loans (Charged-off)/ Recovered | $ | 0.8 |
| | $ | 0.3 |
| | $ | 3.1 |
| | $ | 0.1 |
| | $ | 1.5 |
|
Allowance for Loan Losses/ Total Loans | 1.15 | % | | 1.17 | % | | 1.19 | % | | 1.25 | % | | 1.28 | % |
Income Tax Expense
The Company recorded $21.4 million of Income Tax Expense during the current quarter. As a result of the Tax Cuts and Jobs Act, the company recorded $12.2 million of Income Tax Expense due to the revaluation of the Company’s Deferred Tax Asset (“DTA”) and Deferred Tax Liability (“DTL”) and Low Income Housing Tax Credit (“LIHTC”) investments. The Company also incurred a $0.7 million Income Tax Expense due to nondeductible executive compensation as a result of the Tax Cuts and Jobs Act and the divestiture of Anchor Capital.
|
| | | | | | | | | | | | | | | |
| Summary of Adjustments to Income Tax Expense |
| (In millions) | Quarter ended December 31, | | Year ended December 31, |
| | 2017 | | 2016 | | 2017 | | 2016 |
| Income Tax Expense | $ | 21.4 |
| | $ | 7.2 |
| | $ | 46.2 |
| | $ | 31.0 |
|
| Adjustments: | | | | | | | |
| Revaluation of DTA, DTL and LITHC | 12.2 |
| | - |
| | 12.2 |
| | - |
|
| Nondeductible executive compensation | 0.7 |
| | - |
| | 0.7 |
| | - |
|
| Tax impact of notable items (17) | (0.6 | ) | | (2.3 | ) | | (0.6 | ) | | (3.0 | ) |
| Total Non-GAAP adjustments | 12.3 |
| | (2.3 | ) | | 12.3 |
| | (3.0 | ) |
| Operating Income Tax Expense | $ | 9.1 |
| | $ | 9.5 |
| | $ | 33.9 |
| | $ | 34.0 |
|
| Effective Tax Rate on Continuing Operations (excluding Total Non-GAAP adjustments) | 30.3 | % | | 30.5 | % | | 30.0 | % | | 30.9 | % |
Capital Ratios
The Company’s capital ratios are listed below:
|
| | | | | | | | | | | | | | |
| | December 31,
2017 | | September 30,
2017 | | June 30,
2017 | | March 31,
2017 | | December 31,
2016 |
| BPFH Ratios: | | | | | | | | | |
| Total Risk-Based Capital * | 14.1 | % | | 14.3 | % | | 14.1 | % | | 13.8 | % | | 13.9 | % |
| Tier I Risk-Based Capital * | 12.8 | % | | 13.0 | % | | 12.9 | % | | 12.6 | % | | 12.6 | % |
| Tier I Leverage Capital * | 9.3 | % | | 9.4 | % | | 9.3 | % | | 9.2 | % | | 9.4 | % |
TCE/TA (6) | 7.3 | % | | 7.4 | % | | 7.4 | % | | 7.0 | % | | 7.1 | % |
Tier I Common Equity/ Risk Weighted Assets * | 10.3 | % | | 10.4 | % | | 10.3 | % | | 10.0 | % | | 10.0 | % |
*December 31, 2017 information is presented based on estimated data.
Dividend Payments
Concurrent with the release of fourth quarter 2017 earnings, the Board of Directors of the Company declared a cash dividend to common shareholders of $0.12 per share. The record date for this dividend is February 2, 2018, and the payment date is February 16, 2018.
The Board of Directors of the Company also declared a cash dividend to holders of the Non-Cumulative Perpetual Preferred Stock, Series D of $17.375 per share, which will result in a dividend of $0.434375 per depositary share. The record date for this dividend is February 15, 2018, and the payment date is March 15, 2018.
Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.
These non-GAAP financial measures include tangible book value per share; the TCE/TA ratio; return on average common equity; return on average tangible common equity; pre-tax, pre-provision income; total operating expense excluding intangibles, goodwill impairment, and restructuring; the efficiency ratio (FTE basis); the efficiency ratio (FTE basis) excluding amortization of intangibles, goodwill impairment, and restructuring; net interest income and net interest margin excluding interest recovered on previous nonaccrual loans, also referred to as core net interest margin; net income attributable to the Company excluding notable items; net income attributable to the common shareholders, treasury stock method, excluding notable items (non-GAAP); diluted earnings per share excluding notable items; operating basis total revenue; operating basis total operating expenses; operating basis pre-tax, pre-provision income; operating basis income before income taxes; operating basis income tax expense; operating basis net income/ (loss) attributable to the Company; operating basis net income/ (loss) attributable to the Common Shareholders; operating basis weighted average diluted shares outstanding; operating basis diluted total earnings/ (loss) per share; operating basis return on average common equity; operating basis return on average tangible common equity; and operating basis effective tax rate.
A detailed reconciliation table of the Company’s GAAP to non-GAAP measures is attached.
Conference Call
Management will hold a conference call at 8 a.m. Eastern Time on Thursday, January 18, 2018, to discuss the financial results, business highlights and outlook. To access the call:
Dial In #: (888) 317-6003
Elite Entry Number: 2399470
Replay Information:
Available from January 18, 2018 at 12 noon until January 25, 2018
Dial In #: (877) 344-7529
Conference Number: 10115473
The call will be simultaneously webcast and may be accessed on www.bostonprivate.com
Boston Private Financial Holdings, Inc.
Boston Private Financial Holdings, Inc. is a national financial services organization that owns Wealth Management, Trust, and Private Banking affiliates with offices in Boston, New York, Los Angeles, San Francisco, San Jose, Florida, and Wisconsin. The Company has total assets of approximately $8 billion, and manages over $20 billion of client assets.
The Company’s affiliates 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, wealth advisory, and trust 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; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; changes in government regulation; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; the risk that the Company’s deferred tax asset may not be realized; risks related to the identification and implementation of acquisitions, dispositions and restructurings; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Company’s Annual Report on Form 10-K and updated by the Company’s Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statement is made.
Note to Editors:
Boston Private Financial Holdings, Inc. is not to be confused with Boston Private Bank & Trust Company. Boston Private Bank & Trust Company is a wholly-owned subsidiary of BPFH. The information reported in this press release is related to the performance and results of BPFH.
###
CONTACT:
Adam Bromley
(617) 912-4386
abromley@bostonprivate.com
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| | December 31,
2017 | | September 30,
2017 | | June 30,
2017 | | March 31,
2017 | | December 31,
2016 |
| | (In thousands, except share and per share data) |
| Assets: | | | | | | | | | |
| Cash and cash equivalents | $ | 120,541 |
| | $ | 110,440 |
| | $ | 97,032 |
| | $ | 165,186 |
| | $ | 106,557 |
|
| Investment securities available-for-sale | 1,170,328 |
| | 1,189,827 |
| | 1,188,720 |
| | 1,256,208 |
| | 1,264,132 |
|
| Investment securities held-to-maturity | 74,576 |
| | 84,090 |
| | 99,024 |
| | 98,424 |
| | 93,079 |
|
| Stock in Federal Home Loan Bank and Federal Reserve Bank | 59,973 |
| | 61,714 |
| | 45,568 |
| | 50,133 |
| | 44,077 |
|
| Loans held for sale | 4,697 |
| | 1,957 |
| | 2,870 |
| | 350 |
| | 3,464 |
|
| Total loans | 6,505,028 |
| | 6,413,201 |
| | 6,279,928 |
| | 6,250,217 |
| | 6,114,354 |
|
| Less: Allowance for loan losses | 74,742 |
| | 74,873 |
| | 75,009 |
| | 78,031 |
| | 78,077 |
|
| Net loans | 6,430,286 |
| | 6,338,328 |
| | 6,204,919 |
| | 6,172,186 |
| | 6,036,277 |
|
| Other real estate owned (“OREO”) | — |
| | — |
| | — |
| | — |
| | 1,690 |
|
| Premises and equipment, net | 37,640 |
| | 36,546 |
| | 34,135 |
| | 32,974 |
| | 31,827 |
|
| Goodwill (1) | 75,598 |
| | 142,554 |
| | 142,554 |
| | 142,554 |
| | 142,554 |
|
| Intangible assets, net (1) | 16,083 |
| | 22,447 |
| | 23,873 |
| | 25,299 |
| | 26,725 |
|
| Fees receivable | 11,154 |
| | 12,560 |
| | 12,639 |
| | 12,230 |
| | 13,400 |
|
| Accrued interest receivable | 22,322 |
| | 21,823 |
| | 20,680 |
| | 20,790 |
| | 20,479 |
|
| Deferred income taxes, net | 29,031 |
| | 46,088 |
| | 49,827 |
| | 53,686 |
| | 55,460 |
|
| Other assets (1) | 259,515 |
| | 201,024 |
| | 185,805 |
| | 185,100 |
| | 130,753 |
|
| Total assets | $ | 8,311,744 |
| | $ | 8,269,398 |
| | $ | 8,107,646 |
| | $ | 8,215,120 |
| | $ | 7,970,474 |
|
| Liabilities: | | | | | | | | | |
| Deposits | $ | 6,510,246 |
| | $ | 6,262,347 |
| | $ | 6,381,339 |
| | $ | 6,246,620 |
| | $ | 6,085,146 |
|
| Securities sold under agreements to repurchase | 32,169 |
| | 59,903 |
| | 29,232 |
| | 67,249 |
| | 59,624 |
|
| Federal funds purchased | 30,000 |
| | 70,000 |
| | 40,000 |
| | — |
| | 80,000 |
|
| Federal Home Loan Bank borrowings | 693,681 |
| | 812,773 |
| | 618,989 |
| | 885,445 |
| | 734,205 |
|
| Junior subordinated debentures | 106,363 |
| | 106,363 |
| | 106,363 |
| | 106,363 |
| | 106,363 |
|
| Other liabilities (1) | 135,880 |
| | 127,069 |
| | 115,088 |
| | 110,310 |
| | 119,683 |
|
| Total liabilities | 7,508,339 |
| | 7,438,455 |
| | 7,291,011 |
| | 7,415,987 |
| | 7,185,021 |
|
| Redeemable Noncontrolling Interests (“RNCI”) | 17,461 |
| | 15,882 |
| | 17,216 |
| | 17,232 |
| | 16,972 |
|
| Shareholders’ Equity: | | | | | | | | | |
| Preferred stock, $1.00 par value; authorized: 2,000,000 shares | 47,753 |
| | 47,753 |
| | 47,753 |
| | 47,753 |
| | 47,753 |
|
| Common stock, $1.00 par value; authorized: 170,000,000 shares | 84,208 |
| | 84,082 |
| | 84,015 |
| | 84,134 |
| | 83,732 |
|
| Additional paid-in capital | 607,929 |
| | 606,802 |
| | 602,507 |
| | 602,748 |
| | 597,454 |
|
| Retained earnings | 47,991 |
| | 76,455 |
| | 66,807 |
| | 53,510 |
| | 47,929 |
|
| Accumulated other comprehensive income/ (loss) | (7,123 | ) | | (4,823 | ) | | (6,038 | ) | | (10,237 | ) | | (12,548 | ) |
| Total Company’s shareholders’ equity | 780,758 |
| | 810,269 |
| | 795,044 |
| | 777,908 |
| | 764,320 |
|
| Noncontrolling interests | 5,186 |
| | 4,792 |
| | 4,375 |
| | 3,993 |
| | 4,161 |
|
| Total shareholders’ equity | 785,944 |
| | 815,061 |
| | 799,419 |
| | 781,901 |
| | 768,481 |
|
| Total liabilities, redeemable noncontrolling interests and shareholders’ equity | $ | 8,311,744 |
| | $ | 8,269,398 |
| | $ | 8,107,646 |
| | $ | 8,215,120 |
| | $ | 7,970,474 |
|
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | December 31,
2017 | | September 30,
2017 | | June 30,
2017 | | March 31,
2017 | | December 31,
2016 |
| Interest and dividend income: | (In thousands, except share and per share data) |
| Loans | $ | 59,496 |
| | $ | 58,096 |
| | $ | 57,736 |
| | $ | 53,636 |
| | $ | 51,499 |
|
| Taxable investment securities | 1,562 |
| | 1,569 |
| | 1,592 |
| | 1,670 |
| | 1,592 |
|
| Non-taxable investment securities | 1,697 |
| | 1,664 |
| | 1,655 |
| | 1,606 |
| | 1,520 |
|
| Mortgage-backed securities | 3,125 |
| | 3,267 |
| | 3,495 |
| | 3,504 |
| | 3,290 |
|
| Federal funds sold and other | 978 |
| | 916 |
| | 831 |
| | 600 |
| | 508 |
|
| Total interest and dividend income | 66,858 |
| | 65,512 |
| | 65,309 |
| | 61,016 |
| | 58,409 |
|
| Interest expense: | | | | | | | | | |
| Deposits | 6,048 |
| | 5,356 |
| | 4,949 |
| | 4,531 |
| | 4,152 |
|
| Federal Home Loan Bank borrowings | 2,626 |
| | 2,657 |
| | 2,489 |
| | 2,111 |
| | 1,987 |
|
| Junior subordinated debentures | 771 |
| | 761 |
| | 716 |
| | 671 |
| | 674 |
|
| Repurchase agreements and other short-term borrowings | 141 |
| | 111 |
| | 10 |
| | 61 |
| | 77 |
|
| Total interest expense | 9,586 |
| | 8,885 |
| | 8,164 |
| | 7,374 |
| | 6,890 |
|
| Net interest income | 57,272 |
| | 56,627 |
| | 57,145 |
| | 53,642 |
| | 51,519 |
|
| Provision/ (credit) for loan losses | (942 | ) | | (432 | ) | | (6,114 | ) | | (181 | ) | | (1,128 | ) |
| Net interest income after provision/ (credit) for loan losses | 58,214 |
| | 57,059 |
| | 63,259 |
| | 53,823 |
| | 52,647 |
|
| Fees and other income: | | | | | | | | | |
| Investment management fees | 12,321 |
| | 11,274 |
| | 11,081 |
| | 10,839 |
| | 12,408 |
|
| Wealth advisory fees | 13,496 |
| | 13,279 |
| | 12,961 |
| | 12,823 |
| | 12,568 |
|
| Wealth management and trust fees | 11,756 |
| | 11,619 |
| | 11,161 |
| | 10,826 |
| | 11,031 |
|
| Other banking fee income | 2,531 |
| | 2,726 |
| | 1,964 |
| | 1,694 |
| | 2,387 |
|
| Gain on sale of loans, net | 85 |
| | 169 |
| | 59 |
| | 138 |
| | 105 |
|
| Total core fees and income | 40,189 |
| | 39,067 |
| | 37,226 |
| | 36,320 |
| | 38,499 |
|
| Gain/ (loss) on sale of investments, net | (110 | ) | | 230 |
| | 237 |
| | 19 |
| | 2 |
|
| Gain/ (loss) on OREO, net | — |
| | — |
| | — |
| | (46 | ) | | (110 | ) |
| Gain/ (loss) on sale of affiliates or offices | (1,264 | ) | | — |
| | — |
| | — |
| | 2,862 |
|
| Other | 360 |
| | 970 |
| | 555 |
| | 213 |
| | 2,705 |
|
| Total other income | (1,014 | ) | | 1,200 |
| | 792 |
| | 186 |
| | 5,459 |
|
| Total revenue (2) | 96,447 |
| | 96,894 |
| | 95,163 |
| | 90,148 |
| | 95,477 |
|
| Operating expense: | | | | | | | | | |
| Salaries and employee benefits | 43,920 |
| | 45,168 |
| | 43,493 |
| | 45,825 |
| | 39,669 |
|
| Occupancy and equipment | 7,753 |
| | 7,944 |
| | 7,283 |
| | 7,185 |
| | 7,047 |
|
| Professional services | 4,035 |
| | 3,308 |
| | 3,106 |
| | 3,314 |
| | 2,756 |
|
| Marketing and business development | 1,919 |
| | 2,216 |
| | 1,971 |
| | 1,660 |
| | 2,022 |
|
| Information systems | 5,635 |
| | 5,282 |
| | 5,500 |
| | 5,379 |
| | 5,030 |
|
| Amortization of intangibles | 1,323 |
| | 1,426 |
| | 1,426 |
| | 1,426 |
| | 1,542 |
|
| Impairment of goodwill | 24,901 |
| | — |
| | — |
| | — |
| | 9,528 |
|
| FDIC insurance | 677 |
| | 647 |
| | 879 |
| | 766 |
| | 727 |
|
| Other | 3,826 |
| | 3,355 |
| | 4,163 |
| | 3,225 |
| | 3,522 |
|
| Total operating expense | 93,989 |
| | 69,346 |
| | 67,821 |
| | 68,780 |
| | 71,843 |
|
| Income before income taxes | 3,400 |
| | 27,980 |
| | 33,456 |
| | 21,549 |
| | 24,762 |
|
| Income tax expense | 21,391 |
| | 8,289 |
| | 9,963 |
| | 6,553 |
| | 7,247 |
|
| Net income/ (loss) from continuing operations | (17,991 | ) | | 19,691 |
| | 23,493 |
| | 14,996 |
| | 17,515 |
|
| Net income from discontinued operations (3) | 989 |
| | 1,186 |
| | 1,063 |
| | 1,632 |
| | 1,184 |
|
| Net income/ (loss) before attribution to noncontrolling interests | (17,002 | ) | | 20,877 |
| | 24,556 |
| | 16,628 |
| | 18,699 |
|
| Less: Net income attributable to noncontrolling interests | 1,278 |
| | 1,074 |
| | 1,150 |
| | 966 |
| | 1,147 |
|
| Net income/ (loss) attributable to the Company | $ | (18,280 | ) | | $ | 19,803 |
| | $ | 23,406 |
| | $ | 15,662 |
| | $ | 17,552 |
|
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
|
| | | | | | | |
| | Year Ended |
| | December 31,
2017 | | December 31,
2016 |
| Interest and dividend income: | (In thousands, except share and per share data) |
| Loans | $ | 228,964 |
| | $ | 201,349 |
|
| Taxable investment securities | 6,393 |
| | 6,230 |
|
| Non-taxable investment securities | 6,622 |
| | 5,754 |
|
| Mortgage-backed securities | 13,391 |
| | 12,416 |
|
| Federal funds sold and other | 3,325 |
| | 1,890 |
|
| Total interest and dividend income | 258,695 |
| | 227,639 |
|
| Interest expense: | | | |
| Deposits | 20,884 |
| | 16,571 |
|
| Federal Home Loan Bank borrowings | 9,883 |
| | 8,008 |
|
| Junior subordinated debentures | 2,919 |
| | 2,427 |
|
| Repurchase agreements and other short-term borrowings | 323 |
| | 195 |
|
| Total interest expense | 34,009 |
| | 27,201 |
|
| Net interest income | 224,686 |
| | 200,438 |
|
| Provision/ (credit) for loan losses | (7,669 | ) | | (6,935 | ) |
| Net interest income after provision/ (credit) for loan losses | 232,355 |
| | 207,373 |
|
| Fees and other income: | | | |
| Investment management fees | 45,515 |
| | 44,410 |
|
| Wealth advisory fees | 52,559 |
| | 50,581 |
|
| Wealth management and trust fees | 45,362 |
| | 43,980 |
|
| Other banking fee income | 8,915 |
| | 12,050 |
|
| Gain on sale of loans, net | 451 |
| | 667 |
|
| Total core fees and income | 152,802 |
| | 151,688 |
|
| Gain/ (loss) on sale of investments, net | 376 |
| | 521 |
|
| Gain/ (loss) on OREO, net | (46 | ) | | 306 |
|
| Gain/ (loss) on sale of affiliates or offices | (1,264 | ) | | 2,862 |
|
| Other | 2,098 |
| | 3,410 |
|
| Total other income | 1,164 |
| | 7,099 |
|
| Total revenue (2) | 378,652 |
| | 359,225 |
|
| Operating expense: | | | |
| Salaries and employee benefits | 178,406 |
| | 163,767 |
|
| Occupancy and equipment | 30,165 |
| | 28,007 |
|
| Professional services | 13,763 |
| | 11,576 |
|
| Marketing and business development | 7,766 |
| | 7,626 |
|
| Information systems | 21,796 |
| | 19,229 |
|
| Amortization of intangibles | 5,601 |
| | 6,282 |
|
| Impairment of goodwill | 24,901 |
| | 9,528 |
|
| FDIC insurance | 2,969 |
| | 3,484 |
|
| Restructuring | — |
| | 2,017 |
|
| Other | 14,569 |
| | 13,437 |
|
| Total operating expense | 299,936 |
| | 264,953 |
|
| Income before income taxes | 86,385 |
| | 101,207 |
|
| Income tax expense | 46,196 |
| | 30,963 |
|
| Net income from continuing operations | 40,189 |
| | 70,244 |
|
| Net income from discontinued operations (3) | 4,870 |
| | 5,541 |
|
| Net income before attribution to noncontrolling interests | 45,059 |
| | 75,785 |
|
| Less: Net income attributable to noncontrolling interests | 4,468 |
| | 4,157 |
|
| Net income attributable to the Company | $ | 40,591 |
| | $ | 71,628 |
|
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| PER SHARE DATA: | December 31,
2017 | | September 30,
2017 | | June 30,
2017 | | March 31,
2017 | | December 31,
2016 |
| | (In thousands, except share and per share data) |
| Calculation of Income for EPS: | | | | | | | | | |
| Net income/ (loss) attributable to the Company | $ | (18,280 | ) | | $ | 19,803 |
| | $ | 23,406 |
| | $ | 15,662 |
| | $ | 17,552 |
|
| Adjustments to Net income/ (loss) attributable to the Company to arrive at Net income/ (loss) attributable to Common Shareholders, treasury stock method (4) | (1,998 | ) | | (1,146 | ) | | (577 | ) | | (1,166 | ) | | (1,798 | ) |
| Net income/ (loss) attributable to the Common Shareholders, treasury stock method | $ | (20,278 | ) | | $ | 18,657 |
| | $ | 22,829 |
| | $ | 14,496 |
| | $ | 15,755 |
|
| | | | | | | | | | |
| End of Period Common Shares Outstanding | 84,208,538 |
| | 84,082,250 |
| | 84,015,141 |
| | 84,134,104 |
| | 83,731,769 |
|
| | | | | | | | | | |
| Weighted Average Shares Outstanding: | | | | | | | | | |
| Weighted average basic shares outstanding | 82,904,776 |
| | 82,556,225 |
| | 82,298,493 |
| | 81,951,179 |
| | 81,217,391 |
|
| Weighted average diluted shares outstanding (5) | 82,904,776 |
| | 84,888,311 |
| | 84,741,680 |
| | 84,560,918 |
| | 83,438,137 |
|
| | | | | | | | | | |
| Diluted Total Earnings/ (Loss) per Share | $ | (0.24 | ) | | $ | 0.22 |
| | $ | 0.27 |
| | $ | 0.17 |
| | $ | 0.19 |
|
|
| | | | | | | |
| | Year Ended |
| PER SHARE DATA: | December 31,
2017 | | December 31,
2016 |
| | (In thousands, except share and per share data) |
| Calculation of Income for EPS: | | | |
| Net income attributable to the Company | $ | 40,591 |
| | $ | 71,628 |
|
| Adjustments to Net income attributable to the Company to arrive at Net income attributable to Common Shareholders, treasury stock method (4) | (4,887 | ) | | (4,063 | ) |
| Net Income Attributable to the Common Shareholders, treasury stock method | $ | 35,704 |
| | $ | 67,565 |
|
| | | | |
| Weighted Average Shares Outstanding: | | | |
| Weighted average basic shares outstanding | 82,430,633 |
| | 81,264,273 |
|
| Weighted average diluted shares outstanding (5) | 84,802,565 |
| | 83,209,126 |
|
| | | | |
| Diluted Total Earnings per Share | $ | 0.42 |
| | $ | 0.81 |
|
| | | | |
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| (In thousands, except per share data) | December 31,
2017 | | September 30,
2017 | | June 30,
2017 | | March 31,
2017 | | December 31,
2016 |
| FINANCIAL DATA: |
| Book Value Per Common Share | $ | 8.77 |
| | $ | 9.13 |
| | $ | 8.95 |
| | $ | 8.73 |
| | $ | 8.61 |
|
| Tangible Book Value Per Share (6) | $ | 7.12 |
| | $ | 7.16 |
| | $ | 6.97 |
| | $ | 6.73 |
| | $ | 6.59 |
|
| Market Price Per Share | $ | 15.45 |
| | $ | 16.55 |
| | $ | 15.35 |
| | $ | 16.40 |
| | $ | 16.55 |
|
| | | | | | | | | | |
| ASSETS UNDER MANAGEMENT AND ADVISORY: | | | | | | | | | |
| Wealth Management and Trust | $ | 7,865,000 |
| | $ | 7,703,000 |
| | $ | 7,429,000 |
| | $ | 7,260,000 |
| | $ | 7,008,000 |
|
| Investment Managers (7) | 2,004,000 |
| | 1,902,000 |
| | 1,829,000 |
| | 1,849,000 |
| | 1,803,000 |
|
| Wealth Advisory | 11,350,000 |
| | 10,992,000 |
| | 10,744,000 |
| | 10,579,000 |
| | 9,989,000 |
|
| Less: Inter-company Relationship | (11,000 | ) | | (11,000 | ) | | (11,000 | ) | | (11,000 | ) | | (11,000 | ) |
| Total Assets Under Management and Advisory, excluding Anchor (7) | $ | 21,208,000 |
| | $ | 20,586,000 |
| | $ | 19,991,000 |
| | $ | 19,677,000 |
| | $ | 18,789,000 |
|
| Assets Under Management and Advisory at Anchor | 9,277,000 |
| | 9,181,000 |
| | 9,072,000 |
| | 9,058,000 |
| | 8,768,000 |
|
| Total Assets Under Management and Advisory, including Anchor | $ | 30,485,000 |
| | $ | 29,767,000 |
| | $ | 29,063,000 |
| | $ | 28,735,000 |
| | $ | 27,557,000 |
|
| | | | | | | | | | |
| FINANCIAL RATIOS: | | | | | | | | | |
| Total Equity/ Total Assets | 9.46 | % | | 9.86 | % | | 9.86 | % | | 9.52 | % | | 9.64 | % |
| Tangible Common Equity/ Tangible Assets (6) | 7.33 | % | | 7.43 | % | | 7.37 | % | | 7.04 | % | | 7.07 | % |
| Tier I Common Equity/ Risk Weighted Assets (6) | 10.29 | % | | 10.42 | % | | 10.28 | % | | 9.97 | % | | 10.00 | % |
| Allowance for Loan Losses/ Total Loans | 1.15 | % | | 1.17 | % | | 1.19 | % | | 1.25 | % | | 1.28 | % |
| Allowance for Loan Losses/ Nonaccrual Loans | 523 | % | | 550 | % | | 464 | % | | 373 | % | | 451 | % |
| Return on Average Assets - Three Months Ended (Annualized) | (0.88 | )% | | 0.96 | % | | 1.15 | % | | 0.79 | % | | 0.89 | % |
| Return on Average Common Equity - Three Months Ended (Annualized) (8) | (9.92 | )% | | 9.87 | % | | 12.12 | % | | 8.26 | % | | 9.07 | % |
| Return on Average Tangible Common Equity - Three Months Ended (Annualized) (8) | (11.94 | )% | | 13.24 | % | | 16.27 | % | | 11.43 | % | | 12.75 | % |
| Efficiency Ratio - Three Months Ended (9) | 68.23 | % | | 68.06 | % | | 67.69 | % | | 72.45 | % | | 61.87 | % |
| | | | | | | | | | |
| DEPOSIT DETAIL: | | | | | | | | | |
| Demand deposits (noninterest-bearing) | $ | 2,025,690 |
| | $ | 1,850,833 |
| | $ | 1,935,622 |
| | $ | 1,772,854 |
| | $ | 1,753,648 |
|
| NOW | 645,361 |
| | 636,013 |
| | 631,973 |
| | 620,280 |
| | 578,657 |
|
| Savings | 70,935 |
| | 74,333 |
| | 69,892 |
| | 74,293 |
| | 74,162 |
|
| Money market | 3,121,811 |
| | 3,009,779 |
| | 3,055,642 |
| | 3,176,472 |
| | 3,102,048 |
|
| Certificates of deposit | 646,449 |
| | 691,389 |
| | 688,210 |
| | 602,721 |
| | 576,631 |
|
| Total Deposits | $ | 6,510,246 |
| | $ | 6,262,347 |
| | $ | 6,381,339 |
| | $ | 6,246,620 |
| | $ | 6,085,146 |
|
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Average Balance | | Interest Income/Expense | | Average Yield/Rate |
| (In thousands) | Three Months Ended | | Three Months Ended | | Three Months Ended |
| AVERAGE BALANCE SHEET: | 12/31/17 | 09/30/17 | 12/31/16 | | 12/31/17 | 09/30/17 | 12/31/16 | | 12/31/17 | 09/30/17 | 12/31/16 |
| AVERAGE ASSETS | | | | | | | | | | | |
| Interest-Earning Assets: | | | | | | | | | | | |
| Cash and Investments: | | | | | | | | | | | |
| Taxable investment securities | $ | 345,743 |
| $ | 353,374 |
| $ | 375,913 |
| | $ | 1,562 |
| $ | 1,569 |
| $ | 1,592 |
| | 1.81 | % | 1.77 | % | 1.69 | % |
| Non-taxable investment securities (10) | 298,851 |
| 295,727 |
| 285,330 |
| | 2,611 |
| 2,559 |
| 2,338 |
| | 3.50 | % | 3.46 | % | 3.28 | % |
| Mortgage-backed securities | 608,508 |
| 631,052 |
| 679,644 |
| | 3,125 |
| 3,267 |
| 3,290 |
| | 2.05 | % | 2.07 | % | 1.94 | % |
| Federal funds sold and other | 172,656 |
| 146,285 |
| 130,740 |
| | 978 |
| 916 |
| 508 |
| | 2.23 | % | 2.47 | % | 1.53 | % |
| Total Cash and Investments | 1,425,758 |
| 1,426,438 |
| 1,471,627 |
| | 8,276 |
| 8,311 |
| 7,728 |
| | 2.32 | % | 2.33 | % | 2.10 | % |
| Loans (11): | | | | | | | | | | | |
| Commercial and Industrial (10) | 962,159 |
| 994,388 |
| 1,110,268 |
| | 9,603 |
| 10,001 |
| 10,892 |
| | 3.91 | % | 3.94 | % | 3.84 | % |
| Commercial Real Estate (10) | 2,369,526 |
| 2,381,583 |
| 2,109,601 |
| | 26,473 |
| 25,579 |
| 21,153 |
| | 4.37 | % | 4.20 | % | 3.92 | % |
| Construction and Land (10) | 131,107 |
| 113,562 |
| 96,242 |
| | 1,568 |
| 1,415 |
| 1,018 |
| | 4.68 | % | 4.88 | % | 4.14 | % |
| Residential | 2,650,014 |
| 2,567,044 |
| 2,350,644 |
| | 21,248 |
| 20,423 |
| 17,999 |
| | 3.21 | % | 3.18 | % | 3.06 | % |
| Home Equity | 105,044 |
| 106,744 |
| 117,985 |
| | 1,074 |
| 1,128 |
| 1,050 |
| | 4.06 | % | 4.19 | % | 3.54 | % |
| Other Consumer | 177,951 |
| 187,184 |
| 188,908 |
| | 1,489 |
| 1,554 |
| 1,323 |
| | 3.32 | % | 3.29 | % | 2.79 | % |
| Total Loans | 6,395,801 |
| 6,350,505 |
| 5,973,648 |
| | 61,455 |
| 60,100 |
| 53,435 |
| | 3.79 | % | 3.73 | % | 3.53 | % |
| Total Earning Assets | 7,821,559 |
| 7,776,943 |
| 7,445,275 |
| | 69,731 |
| 68,411 |
| 61,163 |
| | 3.52 | % | 3.48 | % | 3.25 | % |
| LESS: Allowance for Loan Losses | 75,608 |
| 75,166 |
| 79,440 |
| | | | | | | | |
| Cash and due From Banks (Non-Interest Bearing) | 43,648 |
| 42,031 |
| 39,133 |
| | | | | | | | |
| Other Assets | 452,744 |
| 455,820 |
| 427,545 |
| | | | | | | | |
| TOTAL AVERAGE ASSETS | $ | 8,242,343 |
| $ | 8,199,628 |
| $ | 7,832,513 |
| | | | | | | | |
| AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | |
| Interest-Bearing Liabilities: | | | | | | | | | | | |
| Interest-Bearing Deposits (11): | | | | | | | | | | | |
| NOW | $ | 614,198 |
| $ | 630,282 |
| $ | 567,538 |
| | $ | 186 |
| $ | 189 |
| $ | 126 |
| | 0.12 | % | 0.12 | % | 0.09 | % |
| Savings | 72,974 |
| 71,900 |
| 76,033 |
| | (38 | ) | 16 |
| 18 |
| | (0.21 | )% | 0.09 | % | 0.09 | % |
| Money Market | 3,177,687 |
| 3,065,059 |
| 2,969,292 |
| | 3,998 |
| 3,436 |
| 2,807 |
| | 0.50 | % | 0.44 | % | 0.38 | % |
| Certificates of Deposit | 685,136 |
| 671,992 |
| 563,045 |
| | 1,902 |
| 1,715 |
| 1,201 |
| | 1.10 | % | 1.01 | % | 0.85 | % |
| Total Interest-Bearing Deposits (12) | 4,549,995 |
| 4,439,233 |
| 4,175,908 |
| | 6,048 |
| 5,356 |
| 4,152 |
| | 0.53 | % | 0.48 | % | 0.40 | % |
| Junior Subordinated Debentures | 106,363 |
| 106,363 |
| 106,363 |
| | 771 |
| 761 |
| 674 |
| | 2.84 | % | 2.80 | % | 2.48 | % |
| FHLB Borrowings and Other | 728,374 |
| 736,035 |
| 742,247 |
| | 2,767 |
| 2,768 |
| 2,064 |
| | 1.49 | % | 1.47 | % | 1.09 | % |
| Total Interest-Bearing Liabilities | 5,384,732 |
| 5,281,631 |
| 5,024,518 |
| | 9,586 |
| 8,885 |
| 6,890 |
| | 0.70 | % | 0.66 | % | 0.54 | % |
Non-interest Bearing Demand Deposits (11) (12) | 1,894,924 |
| 1,966,479 |
| 1,870,130 |
| | | | | | | | |
| Payables and Other Liabilities | 128,075 |
| 121,288 |
| 140,006 |
| | | | | | | | |
| Total Average Liabilities | 7,407,731 |
| 7,369,398 |
| 7,034,654 |
| | | | | | | | |
| Redeemable Noncontrolling Interests | 21,094 |
| 21,634 |
| 20,393 |
| | | | | | | | |
| Average Shareholders’ Equity | 813,518 |
| 808,596 |
| 777,466 |
| | | | | | | | |
| TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | $ | 8,242,343 |
| $ | 8,199,628 |
| $ | 7,832,513 |
| | | | | | | | |
| Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) | | | | | $ | 60,145 |
| $ | 59,526 |
| $ | 54,273 |
| | | | |
| LESS: FTE Adjustment (10) | | | | | 2,873 |
| 2,899 |
| 2,754 |
| | | | |
| Net Interest Income (GAAP Basis) | | | | | $ | 57,272 |
| $ | 56,627 |
| $ | 51,519 |
| | | | |
| Interest Rate Spread | | | | | | | | | 2.82 | % | 2.82 | % | 2.71 | % |
| Bank only Net Interest Margin | | | | | | | | | 3.08 | % | 3.07 | % | 2.91 | % |
| Net Interest Margin | | | | | | | | | 3.04 | % | 3.02 | % | 2.88 | % |
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
|
| | | | | | | | | | | | | | | | | | |
| | Average Balance | | Interest Income/Expense | | Average Yield/Rate |
| (In thousands) | Year Ended | | Year Ended | | Year Ended |
| AVERAGE BALANCE SHEET: | 12/31/17 | 12/31/16 | | 12/31/17 | 12/31/16 | | 12/31/17 | 12/31/16 |
| AVERAGE ASSETS | | | | | | | | |
| Interest-Earning Assets: | | | | | | | | |
| Cash and Investments: | | | | | | | | |
| Taxable investment securities | $ | 363,760 |
| $ | 373,937 |
| | $ | 6,393 |
| $ | 6,230 |
| | 1.76 | % | 1.67 | % |
| Non-taxable investment securities (10) | 296,117 |
| 270,320 |
| | 10,187 |
| 8,850 |
| | 3.44 | % | 3.27 | % |
| Mortgage-backed securities | 641,157 |
| 615,873 |
| | 13,391 |
| 12,416 |
| | 2.09 | % | 2.02 | % |
| Federal funds sold and other | 170,017 |
| 152,616 |
| | 3,325 |
| 1,890 |
| | 1.96 | % | 1.24 | % |
| Total Cash and Investments | 1,471,051 |
| 1,412,746 |
| | 33,296 |
| 29,386 |
| | 2.26 | % | 2.08 | % |
| Loans (11): | | | | | | | | |
| Commercial and Industrial (10) | 981,822 |
| 1,081,658 |
| | 38,680 |
| 43,250 |
| | 3.94 | % | 4.00 | % |
| Commercial Real Estate (10) | 2,358,658 |
| 1,964,544 |
| | 102,030 |
| 80,369 |
| | 4.33 | % | 4.09 | % |
| Construction and Land (10) | 119,530 |
| 134,651 |
| | 5,604 |
| 5,385 |
| | 4.69 | % | 4.00 | % |
| Residential | 2,533,437 |
| 2,284,478 |
| | 80,236 |
| 70,553 |
| | 3.17 | % | 3.09 | % |
| Home Equity | 109,815 |
| 120,878 |
| | 4,376 |
| 4,310 |
| | 3.99 | % | 3.57 | % |
| Other Consumer | 188,122 |
| 176,683 |
| | 5,989 |
| 4,516 |
| | 3.18 | % | 2.56 | % |
| Total Loans | 6,291,384 |
| 5,762,892 |
| | 236,915 |
| 208,383 |
| | 3.77 | % | 3.62 | % |
| Total Earning Assets | 7,762,435 |
| 7,175,638 |
| | 270,211 |
| 237,769 |
| | 3.48 | % | 3.31 | % |
| LESS: Allowance for Loan Losses | 77,365 |
| 78,368 |
| | | | | | |
| Cash and due From Banks (Non-Interest Bearing) | 42,420 |
| 39,669 |
| | | | | | |
| Other Assets | 440,268 |
| 430,972 |
| | | | | | |
| TOTAL AVERAGE ASSETS | $ | 8,167,758 |
| $ | 7,567,911 |
| | | | | | |
| AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| Interest-Bearing Liabilities: | | | | | | | | |
| Interest-Bearing Deposits (11): | | | | | | | | |
| NOW | $ | 615,586 |
| $ | 553,981 |
| | $ | 658 |
| $ | 437 |
| | 0.11 | % | 0.08 | % |
| Savings | 72,867 |
| 75,977 |
| | 12 |
| 89 |
| | 0.02 | % | 0.12 | % |
| Money Market | 3,156,305 |
| 2,960,702 |
| | 13,799 |
| 11,422 |
| | 0.44 | % | 0.39 | % |
| Certificates of Deposit | 653,486 |
| 565,274 |
| | 6,416 |
| 4,623 |
| | 0.98 | % | 0.82 | % |
| Total Interest-Bearing Deposits (12) | 4,498,244 |
| 4,155,934 |
| | 20,885 |
| 16,571 |
| | 0.46 | % | 0.40 | % |
| Junior Subordinated Debentures | 106,363 |
| 106,363 |
| | 2,919 |
| 2,427 |
| | 2.71 | % | 2.28 | % |
| FHLB Borrowings and Other | 723,672 |
| 652,998 |
| | 10,205 |
| 8,203 |
| | 1.41 | % | 1.26 | % |
| Total Interest-Bearing Liabilities | 5,328,279 |
| 4,915,295 |
| | 34,009 |
| 27,201 |
| | 0.64 | % | 0.55 | % |
Non-interest Bearing Demand
Deposits (11) (12) | 1,901,510 |
| 1,736,637 |
| | | | | | |
| Payables and Other Liabilities | 118,904 |
| 126,039 |
| | | | | | |
| Total Average Liabilities | 7,348,693 |
| 6,777,971 |
| | | | | | |
| Redeemable Noncontrolling Interests | 21,309 |
| 20,323 |
| | | | | | |
| Average Shareholders’ Equity | 797,756 |
| 769,617 |
| | | | | | |
| TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | $ | 8,167,758 |
| $ | 7,567,911 |
| | | | | | |
| Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) | | | | $ | 236,202 |
| $ | 210,568 |
| | | |
| LESS: FTE Adjustment (10) | | | | 11,515 |
| 10,130 |
| | | |
| Net Interest Income (GAAP Basis) | | | | $ | 224,687 |
| $ | 200,438 |
| | | |
| Interest Rate Spread | | | | | | | 2.84 | % | 2.76 | % |
| Bank only Net Interest Margin | | | | | | | 3.09 | % | 2.95 | % |
| Net Interest Margin | | | | | | | 3.04 | % | 2.93 | % |
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| (In thousands) | December 31,
2017 | | September 30,
2017 | | June 30,
2017 | | March 31,
2017 | | December 31,
2016 |
| LOAN DATA (13): | | | | |
| Other Commercial and Industrial Loans: | | | | | | | | | |
| New England | $ | 438,322 |
| | $ | 503,322 |
| | $ | 429,598 |
| | $ | 458,687 |
| | $ | 493,451 |
|
| San Francisco Bay Area | 23,311 |
| | 50,686 |
| | 49,163 |
| | 55,289 |
| | 50,578 |
|
| Southern California | 59,359 |
| | 64,248 |
| | 62,995 |
| | 66,378 |
| | 67,341 |
|
| Total Other Commercial and Industrial Loans | $ | 520,992 |
| | $ | 618,256 |
| | $ | 541,756 |
| | $ | 580,354 |
| | $ | 611,370 |
|
| Commercial Tax Exempt Loans: | | | | | | | | | |
| New England | $ | 305,792 |
| | $ | 320,172 |
| | $ | 312,783 |
| | $ | 318,137 |
| | $ | 317,691 |
|
| San Francisco Bay Area | 101,340 |
| | 99,540 |
| | 91,666 |
| | 79,517 |
| | 69,064 |
|
| Southern California | 11,566 |
| | 11,638 |
| | 11,708 |
| | 11,778 |
| | 11,849 |
|
| Total Commercial Tax Exempt Loans | $ | 418,698 |
| | $ | 431,350 |
| | $ | 416,157 |
| | $ | 409,432 |
| | $ | 398,604 |
|
| Total Commercial and Industrial Loans | $ | 939,690 |
| | 1,049,606 |
| | 957,913 |
| | 989,786 |
| | 1,009,974 |
|
| Commercial Real Estate Loans: | | | | | | | | | |
| New England | $ | 1,002,092 |
| | $ | 988,788 |
| | $ | 993,426 |
| | $ | 1,017,565 |
| | $ | 1,012,284 |
|
| San Francisco Bay Area | 725,454 |
| | 698,148 |
| | 688,751 |
| | 686,019 |
| | 637,042 |
|
| Southern California | 712,674 |
| | 676,223 |
| | 674,168 |
| | 665,043 |
| | 652,918 |
|
| Total Commercial Real Estate Loans | $ | 2,440,220 |
| | $ | 2,363,159 |
| | $ | 2,356,345 |
| | $ | 2,368,627 |
| | $ | 2,302,244 |
|
| Construction and Land Loans: | | | | | | | | | |
| New England | $ | 86,874 |
| | $ | 61,635 |
| | $ | 74,919 |
| | $ | 58,737 |
| | $ | 47,434 |
|
| San Francisco Bay Area | 27,891 |
| | 20,893 |
| | 22,177 |
| | 28,148 |
| | 29,629 |
|
| Southern California | 50,225 |
| | 35,763 |
| | 33,808 |
| | 30,122 |
| | 27,776 |
|
| Total Construction and Land Loans | $ | 164,990 |
| | $ | 118,291 |
| | $ | 130,904 |
| | $ | 117,007 |
| | $ | 104,839 |
|
| Residential Loans: | | | | | | | | | |
| New England | $ | 1,598,072 |
| | $ | 1,558,587 |
| | $ | 1,540,393 |
| | $ | 1,508,138 |
| | $ | 1,456,592 |
|
| San Francisco Bay Area | 512,189 |
| | 510,956 |
| | 488,854 |
| | 474,294 |
| | 473,102 |
|
| Southern California | 572,272 |
| | 531,245 |
| | 495,978 |
| | 481,184 |
| | 450,167 |
|
| Total Residential Loans | $ | 2,682,533 |
| | $ | 2,600,788 |
| | $ | 2,525,225 |
| | $ | 2,463,616 |
| | $ | 2,379,861 |
|
| Home Equity Loans: | | | | | | | | | |
| New England | $ | 67,435 |
| | $ | 72,149 |
| | $ | 71,953 |
| | $ | 80,904 |
| | $ | 87,280 |
|
| San Francisco Bay Area | 22,462 |
| | 26,052 |
| | 28,400 |
| | 26,006 |
| | 25,129 |
|
| Southern California | 10,061 |
| | 9,026 |
| | 8,196 |
| | 7,626 |
| | 6,408 |
|
| Total Home Equity Loans | $ | 99,958 |
| | $ | 107,227 |
| | $ | 108,549 |
| | $ | 114,536 |
| | $ | 118,817 |
|
| Other Consumer Loans: | | | | | | | | | |
| New England | $ | 149,022 |
| | $ | 150,309 |
| | $ | 175,644 |
| | $ | 175,096 |
| | $ | 186,680 |
|
| San Francisco Bay Area | 14,707 |
| | 15,302 |
| | 17,909 |
| | 17,163 |
| | 7,517 |
|
| Southern California | 13,908 |
| | 8,519 |
| | 7,439 |
| | 4,386 |
| | 4,422 |
|
| Total Other Consumer Loans | $ | 177,637 |
| | $ | 174,130 |
| | $ | 200,992 |
| | $ | 196,645 |
| | $ | 198,619 |
|
| Total Loans: | | | | | | | | | |
| New England | $ | 3,647,609 |
| | $ | 3,654,962 |
| | $ | 3,598,716 |
| | $ | 3,617,264 |
| | $ | 3,601,412 |
|
| San Francisco Bay Area | 1,427,354 |
| | 1,421,577 |
| | 1,386,920 |
| | 1,366,436 |
| | 1,292,061 |
|
| Southern California | 1,430,065 |
| | 1,336,662 |
| | 1,294,292 |
| | 1,266,517 |
| | 1,220,881 |
|
| Total Loans | $ | 6,505,028 |
| | $ | 6,413,201 |
| | $ | 6,279,928 |
| | $ | 6,250,217 |
| | $ | 6,114,354 |
|
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| (In thousands) | December 31,
2017 | | September 30,
2017 | | June 30,
2017 | | March 31,
2017 | | December 31,
2016 |
| CREDIT QUALITY (13): | | | | |
| Special Mention Loans: | | | | | | | | | |
| New England | $ | 45,640 |
| | $ | 37,569 |
| | $ | 34,538 |
| | $ | 21,596 |
| | $ | 14,750 |
|
| San Francisco Bay Area | 23,400 |
| | 23,898 |
| | 23,399 |
| | 23,850 |
| | 21,901 |
|
| Southern California | 18,134 |
| | 17,207 |
| | 4,327 |
| | 4,350 |
| | 884 |
|
| Total Special Mention Loans | $ | 87,174 |
| | $ | 78,674 |
| | $ | 62,264 |
| | $ | 49,796 |
| | $ | 37,535 |
|
| Accruing Substandard Loans (14): | | | | | | | | | |
| New England | $ | 10,911 |
| | $ | 8,196 |
| | $ | 10,185 |
| | $ | 12,157 |
| | $ | 10,972 |
|
| San Francisco Bay Area | 11,615 |
| | 11,622 |
| | 6,574 |
| | 15,824 |
| | 15,890 |
|
| Southern California | 30,826 |
| | 33,923 |
| | 34,339 |
| | 36,398 |
| | 36,809 |
|
| Total Accruing Substandard Loans | $ | 53,352 |
| | $ | 53,741 |
| | $ | 51,098 |
| | $ | 64,379 |
| | $ | 63,671 |
|
| Nonaccruing Loans: | | | | | | | | | |
| New England | $ | 6,061 |
| | $ | 7,380 |
| | $ | 9,880 |
| | $ | 14,407 |
| | $ | 10,081 |
|
| San Francisco Bay Area | 1,473 |
| | 1,494 |
| | 1,857 |
| | 2,312 |
| | 2,989 |
|
| Southern California | 6,761 |
| | 4,749 |
| | 4,439 |
| | 4,226 |
| | 4,245 |
|
| Total Nonaccruing Loans | $ | 14,295 |
| | $ | 13,623 |
| | $ | 16,176 |
| | $ | 20,945 |
| | $ | 17,315 |
|
| Other Real Estate Owned: | | | | | | | | | |
| New England | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 1,690 |
|
| San Francisco Bay Area | — |
| | — |
| | — |
| | — |
| | — |
|
| Southern California | — |
| | — |
| | — |
| | — |
| | — |
|
| Total Other Real Estate Owned | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 1,690 |
|
| Loans 30-89 Days Past Due and Accruing (15): | | | | | | | | | |
| New England | $ | 19,725 |
| | $ | 4,664 |
| | $ | 3,182 |
| | $ | 9,843 |
| | $ | 10,311 |
|
| San Francisco Bay Area | 1,911 |
| | 430 |
| | 12 |
| | 10,111 |
| | 591 |
|
| Southern California | 3,412 |
| | 198 |
| | — |
| | 8,771 |
| | 4,235 |
|
| Total Loans 30-89 Days Past Due and Accruing | $ | 25,048 |
| | $ | 5,292 |
| | $ | 3,194 |
| | $ | 28,725 |
| | $ | 15,137 |
|
| Loans (Charged-off)/ Recovered, Net for the Three Months Ended: | | | | | | | | | |
| New England | $ | 1,020 |
| | $ | 73 |
| | $ | 667 |
| | $ | 79 |
| | $ | 1,120 |
|
| San Francisco Bay Area | 64 |
| | 206 |
| | 2,856 |
| | 35 |
| | 384 |
|
| Southern California | (273 | ) | | 17 |
| | (431 | ) | | 21 |
| | 33 |
|
| Total Net Loans (Charged-off)/ Recovered | $ | 811 |
| | $ | 296 |
| | $ | 3,092 |
| | $ | 135 |
| | $ | 1,537 |
|
| Loans (Charged-off)/ Recovered, Net for the Year Ended: | | | | | | | | | |
| New England | $ | 1,839 |
| | | | | | | | $ | 1,954 |
|
| San Francisco Bay Area | 3,161 |
| | | | | | | | 4,693 |
|
| Southern California | (666 | ) | | | | | | | | (135 | ) |
| Total Net Loans (Charged-off)/ Recovered | $ | 4,334 |
| | | | | | | | $ | 6,512 |
|
Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
FOOTNOTES:
| |
| (1) | On December 20, 2017, Boston Private Financial Holdings, Inc. (the “Company”) announced an agreement, effective December 19, 2017, to sell all of its current equity interest in Anchor Capital Advisors LLC, an indirect, majority-owned subsidiary of the Company (“Anchor”), to the management team of Anchor for an upfront cash payment and a non-voting, revenue share participation interest in Anchor. The transaction is expected to close in the first quarter of 2018. Completion of the transaction is subject to Anchor raising financing and obtaining client consents, as well as customary closing conditions. At December 31, 2017 the assets and liabilities of Anchor, including goodwill and intangible assets, have been classified as held for sale and are included within Other assets and Other liabilities, respectively, on the Company’s consolidated balance sheet. For regulatory purposes, the goodwill and intangible assets of Anchor will be included in consolidated calculations. See footnotes 6 and 8, below. |
| |
| (2) | Total revenue is the sum of Net interest income, Total core fees and income, and Total other income. |
| |
| (3) | Net income from discontinued operations consists of contingent payments or expenses related to our divested affiliates, including Westfield Capital Management Company, LLC. |
| |
| (4) | 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 and dividends paid on preferred stock. |
| |
| (5) | 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 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, 2016 for additional information. |
| |
| (6) | 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 share and per share data) | December 31,
2017 | | September 30,
2017 | | June 30,
2017 | | March 31,
2017 | | December 31,
2016 |
| Total Balance Sheet Assets | $ | 8,311,744 |
| | $ | 8,269,398 |
| | $ | 8,107,646 |
| | $ | 8,215,120 |
| | $ | 7,970,474 |
|
| LESS: Goodwill and Intangible Assets, net * | (138,775 | ) | | (165,001 | ) | | (166,427 | ) | | (167,853 | ) | | (169,279 | ) |
| Tangible Assets (non-GAAP) | $ | 8,172,969 |
| | $ | 8,104,397 |
| | $ | 7,941,219 |
| | $ | 8,047,267 |
| | $ | 7,801,195 |
|
| Total Shareholders’ Equity | $ | 785,944 |
| | $ | 815,061 |
| | $ | 799,419 |
| | $ | 781,901 |
| | $ | 768,481 |
|
| LESS: Series D Preferred Stock (non-convertible) | (47,753 | ) | | (47,753 | ) | | (47,753 | ) | | (47,753 | ) | | (47,753 | ) |
| LESS: Goodwill and Intangible Assets, net * | (138,775 | ) | | (165,001 | ) | | (166,427 | ) | | (167,853 | ) | | (169,279 | ) |
| Total adjusting items | (186,528 | ) | | (212,754 | ) | | (214,180 | ) | | (215,606 | ) | | (217,032 | ) |
| Tangible Common Equity (non-GAAP) | $ | 599,416 |
| | $ | 602,307 |
| | $ | 585,239 |
| | $ | 566,295 |
| | $ | 551,449 |
|
| Total Equity/Total Assets | 9.46 | % | | 9.86 | % | | 9.86 | % | | 9.52 | % | | 9.64 | % |
| Tangible Common Equity/Tangible Assets (non-GAAP) | 7.33 | % | | 7.43 | % | | 7.37 | % | | 7.04 | % | | 7.07 | % |
| | | | | | | | | | |
| Total Risk Weighted Assets ** | $ | 5,892,286 |
| | $ | 5,831,558 |
| | $ | 5,765,471 |
| | $ | 5,806,853 |
| | $ | 5,716,037 |
|
| Tier I Common Equity ** | $ | 606,265 |
| | $ | 607,822 |
| | $ | 592,845 |
| | $ | 578,941 |
| | $ | 571,663 |
|
| Tier I Common Equity/ Risk Weighted Assets | 10.29 | % | | 10.42 | % | | 10.28 | % | | 9.97 | % | | 10.00 | % |
| | | | | | | | | | |
| End of Period Shares Outstanding | 84,208,538 |
| | 84,082,250 |
| | 84,015,141 |
| | 84,134,104 |
| | 83,731,769 |
|
| | | | | | | | | | |
| Book Value Per Common Share | $ | 8.77 |
| | $ | 9.13 |
| | $ | 8.95 |
| | $ | 8.73 |
| | $ | 8.61 |
|
| Tangible Book Value Per Share (non-GAAP) | $ | 7.12 |
| | $ | 7.16 |
| | $ | 6.97 |
| | $ | 6.73 |
| | $ | 6.59 |
|
* Includes goodwill and intangible assets at affiliates held for sale.
** Risk Weighted Assets and Tier I Common Equity for December 31, 2017 are presented based on estimated data.
Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
| |
| (7) | Assets Under Management and Advisory (“AUM”) for all periods shown have been reduced to exclude those assets managed or advised by Anchor. |
| |
| (8) | The Company uses certain non-GAAP financial measures, such as: Return on Average Common Equity and Return on Average Tangible Common Equity to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. |
Reconciliations from the Company’s GAAP Return on Average Equity ratio to the Non-GAAP Return on Average Common Equity ratio, and the Non-GAAP Return on Average Tangible Common Equity ratio are presented below:
The Company annualizes income data based on the number of days in the period presented and a 365 day year. The Company calculates Average Common Equity by adjusting Average Equity to exclude Average Preferred Equity. The Company calculates Average Tangible Common Equity by adjusting Average Equity to exclude Average Goodwill and Intangible Assets, net and Average Preferred Equity.
|
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (In thousands) | December 31,
2017 | | September 30,
2017 | | June 30,
2017 | | March 31,
2017 | | December 31,
2016 |
| Total average shareholders’ equity | $ | 813,518 |
| | $ | 808,596 |
| | $ | 793,526 |
| | $ | 774,251 |
| | $ | 777,466 |
|
| LESS: Average Series D preferred stock (non-convertible) | (47,753 | ) | | (47,753 | ) | | (47,753 | ) | | (47,753 | ) | | (47,753 | ) |
| Average common equity (non-GAAP) | 765,765 |
| | 760,843 |
| | 745,773 |
| | 726,498 |
| | 729,713 |
|
| LESS: Average goodwill and intangible assets, net * | (157,978 | ) | | (165,766 | ) | | (167,204 | ) | | (168,681 | ) | | (179,535 | ) |
| Average Tangible Common Equity (non-GAAP) | $ | 607,787 |
| | $ | 595,077 |
| | $ | 578,569 |
| | $ | 557,817 |
| | $ | 550,178 |
|
| |
|
| |
| | | | | |
|
| Net income/ (loss) attributable to the Company | $ | (18,280 | ) | | $ | 19,803 |
| | $ | 23,406 |
| | $ | 15,662 |
| | $ | 17,552 |
|
| LESS: Dividends on Series D preferred stock | (869 | ) | | (868 | ) | | (869 | ) | | (869 | ) | | (869 | ) |
| Common net income/ (loss) (non-GAAP) | (19,149 | ) | | 18,935 |
| | 22,537 |
| | 14,793 |
| | 16,683 |
|
| ADD: Amortization of intangibles, net of tax (35%) | 860 |
| | 927 |
| | 927 |
| | 927 |
| | 1,002 |
|
| Tangible common net income/ (loss) (non-GAAP) | $ | (18,289 | ) | | $ | 19,862 |
| | $ | 23,464 |
| | $ | 15,720 |
| | $ | 17,685 |
|
| | | | | | | | | | |
| Return on Average Equity - (Annualized) | (8.91 | )% | | 9.72 | % | | 11.83 | % | | 8.20 | % | | 8.96 | % |
| Return on Average Common Equity - (Annualized) (non-GAAP) | (9.92 | )% | | 9.87 | % | | 12.12 | % | | 8.26 | % | | 9.07 | % |
| Return on Average Tangible Common Equity - (Annualized) (non-GAAP) | (11.94 | )% | | 13.24 | % | | 16.27 | % | | 11.43 | % | | 12.75 | % |
|
| | | | | | | |
| | Year Ended |
| (In thousands) | December 31,
2017 | | December 31,
2016 |
| Total average shareholders’ equity | $ | 797,756 |
| | $ | 769,617 |
|
| LESS: Average Series D preferred stock (non-convertible) | (47,753 | ) | | (47,753 | ) |
| Average common equity (non-GAAP) | 750,003 |
| | 721,864 |
|
| LESS: Average goodwill and intangible assets, net * | (164,530 | ) | | (181,976 | ) |
| Average Tangible Common Equity (non-GAAP) | $ | 585,473 |
| | $ | 539,888 |
|
| | | | |
| Net income attributable to the Company | $ | 40,591 |
| | $ | 71,628 |
|
| LESS: Dividends on Series D preferred stock | (3,475 | ) | | (3,475 | ) |
| Common net income (non-GAAP) | 37,116 |
| | 68,153 |
|
| ADD: Amortization of intangibles, net of tax (35%) | 3,641 |
| | 4,083 |
|
| Tangible common net income (non-GAAP) | $ | 40,757 |
| | $ | 72,236 |
|
| | | | |
| Return on Average Equity - (Annualized) | 5.09 | % | | 9.31 | % |
| Return on Average Common Equity - (Annualized) (non-GAAP) | 4.95 | % | | 9.44 | % |
| Return on Average Tangible Common Equity - (Annualized) (non-GAAP) | 6.96 | % | | 13.38 | % |
| | | | |
* Includes goodwill and intangible assets at affiliates held for sale.
| |
| (9) | The Company uses certain non-GAAP financial measures, such as: pre-tax, pre-provision income, total operating expenses excluding amortization of intangibles, goodwill impairment, and restructuring expense, and the efficiency ratio to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. |
Reconciliations from the Company’s GAAP income from continuing operations before income taxes to non-GAAP pre-tax, pre-provision income; from GAAP total operating expense to non-GAAP total operating expense excluding amortization of intangibles, goodwill impairment, and restructuring; and from GAAP efficiency ratio to Non-GAAP efficiency ratio (FTE basis), excluding amortization of intangibles, goodwill impairment, and restructuring, are presented below:
|
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (In thousands) | December 31,
2017 | | September 30,
2017 | | June 30,
2017 | | March 31,
2017 | | December 31,
2016 |
| Income before income taxes (GAAP) | $ | 3,400 |
| | $ | 27,980 |
| | $ | 33,456 |
| | $ | 21,549 |
| | $ | 24,762 |
|
| ADD BACK: Provision/ (credit) for loan losses | (942 | ) | | (432 | ) | | (6,114 | ) | | (181 | ) | | (1,128 | ) |
| Pre-tax, pre-provision income (non-GAAP) | $ | 2,458 |
| | $ | 27,548 |
| | $ | 27,342 |
| | $ | 21,368 |
| | $ | 23,634 |
|
| | | | | | | | | | |
| Total operating expense (GAAP) | $ | 93,989 |
| | $ | 69,346 |
| | $ | 67,821 |
| | $ | 68,780 |
| | $ | 71,843 |
|
| Less: Amortization of intangibles | 1,323 |
| | 1,426 |
| | 1,426 |
| | 1,426 |
| | 1,542 |
|
| Less: Goodwill impairment | 24,901 |
| | — |
| | — |
| | — |
| | 9,528 |
|
| Total operating expense (excluding amortization of intangibles, goodwill impairment, and restructuring) (non-GAAP) | $ | 67,765 |
| | $ | 67,920 |
| | $ | 66,395 |
| | $ | 67,354 |
| | $ | 60,773 |
|
| | | | | | | | | | |
| Net interest income | $ | 57,272 |
| | $ | 56,627 |
| | $ | 57,145 |
| | $ | 53,642 |
| | $ | 51,519 |
|
| Total core fees and income | 40,189 |
| | 39,067 |
| | 37,226 |
| | 36,320 |
| | 38,499 |
|
| Total other income | (1,014 | ) | | 1,200 |
| | 792 |
| | 186 |
| | 5,459 |
|
| FTE income | 2,873 |
| | 2,899 |
| | 2,923 |
| | 2,820 |
| | 2,754 |
|
| Total revenue (FTE basis) | $ | 99,320 |
| | $ | 99,793 |
| | $ | 98,086 |
| | $ | 92,968 |
| | $ | 98,231 |
|
| Efficiency Ratio (GAAP) | 97.45 | % | | 71.57 | % | | 71.27 | % | | 76.30 | % | | 75.25 | % |
| Efficiency Ratio, FTE Basis excluding amortization of intangibles, goodwill impairment, and restructuring (non-GAAP) | 68.23 | % | | 68.06 | % | | 67.69 | % | | 72.45 | % | | 61.87 | % |
|
| | | | | | | |
| | Year Ended |
| (In thousands) | December 31,
2017 | | December 31,
2016 |
| Income before income taxes (GAAP) | $ | 86,385 |
| | $ | 101,207 |
|
| ADD BACK: Provision/ (credit) for loan losses | (7,669 | ) | | (6,935 | ) |
| Pre-tax, pre-provision income (non-GAAP) | $ | 78,716 |
| | $ | 94,272 |
|
| | | | |
| Total operating expense (GAAP) | $ | 299,936 |
| | $ | 264,953 |
|
| Less: Amortization of intangibles | 5,601 |
| | 6,282 |
|
| Less: Goodwill impairment | 24,901 |
| | 9,528 |
|
| Less: Restructuring | — |
| | 2,017 |
|
| Total operating expense (excluding amortization of intangibles, goodwill impairment, and restructuring) (non-GAAP) | $ | 269,434 |
| | $ | 247,126 |
|
| | | | |
| Net interest income | $ | 224,686 |
| | $ | 200,438 |
|
| Total core fees and income | 152,802 |
| | 151,688 |
|
| Total other income | 1,164 |
| | 7,099 |
|
| FTE income | 11,515 |
| | 10,130 |
|
| Total revenue (FTE basis) | $ | 390,167 |
| | $ | 369,355 |
|
| Efficiency Ratio (GAAP) | 79.21 | % | | 73.76 | % |
| Efficiency Ratio, FTE Basis excluding amortization of intangibles, goodwill impairment, and restructuring (non-GAAP) | 69.06 | % | | 66.91 | % |
| |
| (10) | 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. |
| |
| (11) | Average Loans includes Loans Held for Sale and Nonaccrual Loans. Average Deposits includes Deposits Held for Sale, if any. |
Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
| |
| (12) | Average Total Deposits is the sum of Average Total Interest-Bearing Deposits and Average Noninterest Bearing Demand Deposits. |
| |
| (13) | The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lender’s regional offices. |
| |
| (14) | 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. |
| |
| (15) | At December 31, 2017, September 30, 2017 June 30, 2017, March 31, 2017, and December 31, 2016, the Company had no loans outstanding more than 90 days past due but still on accrual status. |
| |
| (16) | The Company uses certain non-GAAP financial measures, such as: net interest income excluding interest recovered on previous nonaccrual loans and net interest margin excluding interest recovered on previous nonaccrual loans, also referred to as core net interest margin, to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. |
Reconciliations from the Company’s GAAP net interest income to non-GAAP net interest income excluding interest recovered on previous nonaccrual loans; and from GAAP net interest margin to non-GAAP net interest margin excluding interest recovered on previous nonaccrual loans, are presented below:
|
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (In thousands) | December 31,
2017 | | September 30,
2017 | | June 30,
2017 | | March 31,
2017 | | December 31,
2016 |
| Net interest income (GAAP basis) | $ | 57,272 |
| | $ | 56,627 |
| | $ | 57,145 |
| | $ | 53,642 |
| | $ | 51,519 |
|
| ADD: FTE income | 2,873 |
| | 2,899 |
| | 2,923 |
| | 2,820 |
| | 2,754 |
|
| Net interest income, FTE basis | 60,145 |
| | 59,526 |
| | 60,068 |
| | 56,462 |
| | 54,273 |
|
| LESS: Interest recovered on previously nonaccrual loans | 429 |
| | 133 |
| | 1,971 |
| | 299 |
| | 365 |
|
| Net interest income, FTE basis, excluding interest recovered on previously nonaccrual loans (non-GAAP) | 59,716 |
| | 59,393 |
| | 58,097 |
| | 56,163 |
| | 53,908 |
|
| | | | | | | | | | |
| Net Interest Margin (FTE basis) | 3.04 | % | | 3.02 | % | | 3.07 | % | | 2.94 | % | | 2.88 | % |
| Net Interest Margin, FTE basis, excluding interest recovered on previously nonaccrual loans (non-GAAP) - also referred to as core Net Interest Margin | 3.02 | % | | 3.02 | % | | 2.97 | % | | 2.92 | % | | 2.86 | % |
| |
| (17) | The Company uses certain non-GAAP financial measures, such as: net income attributable to the Company excluding notable items and diluted earnings per share excluding notable items to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. |
Reconciliations from the Company’s GAAP net income attributable to the Company to non-GAAP net income attributable to the Company excluding notable items and from GAAP diluted earnings per share to non-GAAP diluted earnings per share excluding notable items are presented below:
|
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| (In thousands, except share and per share data) | December 31,
2017 | | September 30,
2017 | | June 30,
2017 | | March 31,
2017 | | December 31,
2016 |
| Net income/ (loss) attributable to the Company (GAAP) | $ | (18,280 | ) | | $ | 19,803 |
| | $ | 23,406 |
| | $ | 15,662 |
| | $ | 17,552 |
|
| LESS: Gain/ (loss) on sale of affiliates or offices | (1,264 | ) | | — |
| | — |
| | — |
| | 2,862 |
|
| ADD BACK: Additional deal expenses | 400 |
| | — |
| | — |
| | — |
| | — |
|
| ADD BACK: Impairment of goodwill | 24,901 |
| | — |
| | — |
| | — |
| | 9,528 |
|
| ADD BACK: Tax adjustments | 12,880 |
| | — |
| | — |
| | — |
| | — |
|
| Tax effect at 35% statutory rate * | (582 | ) | | — |
| | — |
| | — |
| | (2,333 | ) |
Net income attributable to the Company excluding notable items (non-GAAP) | $ | 20,583 |
| | $ | 19,803 |
| | $ | 23,406 |
| | $ | 15,662 |
| | $ | 21,885 |
|
| | | | | | | | | | |
| Net income/ (loss) attributable to the Common Shareholders, treasury stock method (GAAP) | $ | (20,278 | ) | | $ | 18,657 |
| | $ | 22,829 |
| | $ | 14,496 |
| | $ | 15,755 |
|
| LESS: Gain/ (loss) on sale of affiliates or offices | (1,264 | ) | | — |
| | — |
| | — |
| | 2,862 |
|
| ADD BACK: additional deal expenses | 400 |
| | — |
| | — |
| | — |
| | — |
|
| ADD BACK: Impairment of goodwill | 24,901 |
| | — |
| | — |
| | — |
| | 9,528 |
|
| ADD BACK: Tax adjustments | 12,880 |
| | — |
| | — |
| | — |
| | — |
|
| Tax effect at 35% statutory rate * | (582 | ) | | — |
| | — |
| | — |
| | (2,333 | ) |
| Net Income Attributable to the Common Shareholders, treasury stock method, excluding notable items (non-GAAP) | $ | 18,585 |
| | $ | 18,657 |
| | $ | 22,829 |
| | $ | 14,496 |
| | $ | 20,088 |
|
| | | | | | | | | | |
| Weighted average diluted shares outstanding (3) | 85,196,760 |
| | 84,888,311 |
| | 84,741,680 |
| | 84,560,918 |
| | 83,438,137 |
|
| | | | | | | | | | |
| Diluted Total Earnings/ (Loss) per Share (GAAP) | $ | (0.24 | ) | | $ | 0.22 |
| | $ | 0.27 |
| | $ | 0.17 |
| | $ | 0.19 |
|
| Diluted Total Earnings per Share, excluding notable items (non-GAAP) | $ | 0.22 |
| | $ | 0.22 |
| | $ | 0.27 |
| | $ | 0.17 |
| | $ | 0.24 |
|
* Tax effect is applied to both the impairment of goodwill and the gain on sale of offices in the fourth quarter 2016. However, due to the nature of the goodwill related to Anchor, no tax effect is applied to the goodwill impairment in the fourth quarter of 2017.
| |
| (18) | The Company uses certain operating basis financial measures, which are non-GAAP financial measures to provide information for investors to effectively analyze trends of ongoing business activities and to enhance comparability with peers across the financial sector.
Reconciliations from the Company’s GAAP financial measures to non-GAAP operating basis financial measures are presented below. |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Year Ended |
| | December 31, 2017 | | December 31, 2017 |
| (In thousands, except share and per share data) | GAAP or Reported Value | | Notable Items | | Operating Basis (Non-GAAP) | | GAAP or Reported Value | | Notable Items | | Operating Basis (Non-GAAP) |
| Total revenue | $ | 96,447 |
| | $ | 1,264 |
| | $ | 97,711 |
| | $ | 378,652 |
| | $ | 1,264 |
| | $ | 379,916 |
|
| Total operating expense | 93,989 |
| | (25,301 | ) | | 68,688 |
| | 299,936 |
| | (25,301 | ) | | 274,635 |
|
| Pre-tax, pre-provision income | 2,458 |
| | 26,565 |
| | 29,023 |
| | 78,716 |
| | 26,565 |
| | 105,281 |
|
| Income before income taxes | 3,400 |
| | 26,565 |
| | 29,965 |
| | 86,385 |
| | 26,565 |
| | 112,950 |
|
| Income tax expense | 21,391 |
| | (12,298 | ) | | 9,093 |
| | 46,196 |
| | (12,298 | ) | | 33,898 |
|
| Net income/ (loss) attributable to the Company | (18,280 | ) | | 38,863 |
| | 20,583 |
| | 40,591 |
| | 38,863 |
| | 79,454 |
|
| Net income/ (loss) attributable to the Common Shareholders | (20,278 | ) | | 38,863 |
| | 18,585 |
| | 35,704 |
| | 38,863 |
| | 74,567 |
|
| | | | | | | | | | | | |
| Weighted average diluted shares outstanding | 82,904,776 |
| | 85,196,760 |
| | 85,196,760 |
| | 84,802,565 |
| | 84,802,565 |
| | 84,802,565 |
|
| Diluted total Earnings/ (Loss) Per Share | $ | (0.24 | ) | | $ | 0.46 |
| | $ | 0.22 |
| | $ | 0.42 |
| | $ | 0.46 |
| | $ | 0.88 |
|
| | | | | | | | | | | | |
| Average Common Equity | 765,765 |
| | | | 765,765 |
| | 750,003 |
| | | | 750,003 |
|
| Return on Average Common Equity | (9.92 | )% | | | | 10.21 | % | | 4.95 | % | |
|
| | 10.13 | % |
| | | | | | | | | |
|
| | |
| Average Tangible Common Equity | 607,787 |
| | | | 607,787 |
| | 585,473 |
| | | | 585,473 |
|
| Return on Average Tangible Common Equity | (11.94 | )% | | | | 13.43 | % | | 6.96 | % | | | | 13.60 | % |
| | | | | | | | | | | | |
| Effective Tax Rate on Continuing Operations | nm |
| | | | 30.3 | % | | 53.5 | % | | | | 30.0 | % |
| | | | | | | | | | | | |
| nm not meaningful | | | | | | | | | | | |
