EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACT: Robert J. Whelan
Chief Financial Officer
(617) 912-4220
www.bostonprivate.com
BOSTON PRIVATE REPORTS STRONG SECOND QUARTER,
SIGNIFICANT GROWTH AND INCREASED EPS
Boston, MA, July 27, 2005—Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) today reported second quarter 2005 earnings of $0.37 per diluted share, up 28% compared to $0.29 per diluted share for the second quarter 2004. Cash earnings for the second quarter 2005 increased $0.09, or 26%, per diluted share to $0.43 versus $0.34 for the second quarter 2004.
Highlights
| | v | Net Income for the second quarter 2005 was up 35% to $11.0 million, compared to net income of $8.2 million a year ago. |
| | v | Total Revenues for the second quarter 2005 were up 27% to $60.7 million, compared to $47.7 million a year ago. |
| | v | Deposits increased $426 million, or 20%, from June 30, 2004 to June 30, 2005. |
| | v | Loans increased $484 million, or 25%, from June 30, 2004 to June 30, 2005. |
| | v | Total assets under management and advisory, including the Company’s unconsolidated affiliates, increased $5.1 billion, or 30%, over the prior year to $22.0 billion. |
| | v | Net interest income increased 7% or $1.8 million over the first quarter, to $28.3 million. |
| | o | Net interest margin increased 9 basis points to 3.77% from the first quarter level of 3.68%. |
| | o | Increased volume of earning assets contributed $1.2 million, or 67%, to the increase of net interest income. |
| | o | Increased rates contributed $577,000, or 33%, to the increase of net interest income. |
| | v | The Company also announced the continuation of its quarterly cash dividend to shareholders of $0.07 per share. |
Timothy L. Vaill, Chairman and Chief Executive Officer, said, “I am pleased to report that Boston Private achieved very healthy earnings growth in the second quarter of 2005. We experienced the highest quarterly net income and EPS in the firm’s history. The earnings growth in Q2 continues to be well balanced amongst the three core business lines with particular strength in our private banking business. Although the sluggish stock markets this year have adversely impacted our investment management affiliates somewhat, the strength of our diversified franchise is evident. We have also benefited by the new business growth across our firms.”
Mr. Vaill went on to say, “Organic growth continues to be the mainstay of our long-term business strategy. Boston Private builds critical mass by forming regional clusters of companies which can work together, and one example is what has happened here in New England: From the second quarter of 2001—the date of our last acquisition in this region—to the second quarter of 2005, growth of revenues was $15.2 million, a 77% increase. This strong growth for the region was driven during this time by organic growth of AUM ($6.8 billion, or 125%), Deposits ($690.8 million, or 83%) and Loans ($692.2 million, or 94%).”
“With the pending acquisition of Gibraltar Financial Corporation we are entering an exciting new region in the Southeast—one of the fastest growing areas of the country. We expect this deal to close on or about October 1st. With this type of strategic expansion, the continued organic growth of the Company’s existing businesses, and positive operating leverage, I remain optimistic about the future of the Company. This is a very exciting time for our wealth management business,” concluded Vaill.
Second Quarter 2005 Results
Boston Private’s revenues increased 27% to $60.7 million for the second quarter 2005, over revenues of $47.7 million for the second quarter 2004. This increase was due to growth achieved in each of the Company’s businesses: private banking, wealth advisory and investment management, as well as a large loan prepayment fee received during the quarter at one of our private banks. The large loan prepayment fee added approximately $340 thousand, net of tax, to Net Income, or approximately $0.01 per diluted share for the second quarter.
The Company’s net interest income increased 35% or $7.4 million for second quarter 2005 compared to second quarter 2004. The increase in net interest income in the second quarter of 2005 compared to the second quarter of 2004 was due to increased volume of earning assets, which contributed $5.2 million, and rate increases which contributed $2.2 million. Boston Private’s net interest margin increased 9 basis points to 3.77% in the second quarter 2005 compared to 3.68% in the first quarter of 2005. Excluding the impact of trust preferred interest expense, the consolidated core net interest margin was 3.95% in the second quarter of 2005, compared to 3.86% in the first quarter of 2005.
Boston Private’s loan portfolio achieved strong growth with commercial loans up 29% and residential loans up 19% over the prior year. Commercial loans totaled $1.5 billion and represented 61% of the combined loan portfolio. Residential loans totaled $865 million and represented 36% of the total portfolio. Combined, the loan portfolio grew 25% over the past
twelve months. This loan growth was supported by growth in deposits, which increased $426 million, or 20%, over the June 30, 2004 balance, to $2.6 billion.
In Boston Private’s wealth advisory business, fee income increased $2.7 million to $4.7 million for the second quarter of 2005. The increase from the second quarter of 2004 was primarily due to the acquisition of KLS Professional Advisors in the fourth quarter of 2004. Investment management fee income for the second quarter 2005 totaled $25.2 million, up 7% over second quarter 2004. Assets under management and advisory increased 30% to $20.0 billion at June 30, 2005 from $15.3 billion at June 30, 2004. Total assets under management and advisory, including the Company’s unconsolidated affiliates, increased 30% over the prior year to $22.0 billion. Organic net new sales were $273 million in the second quarter, representing an annualized growth rate of 6%. Market action, or the general appreciation in the market prices of securities, resulted in an increase of $481 million in assets under management and advisory during the second quarter of 2005.
Operating expenses were $42.0 million for the second quarter 2005, up 25% over the second quarter 2004. The main drivers of operating expense growth were operating expenses of the newly acquired affiliates, incentive compensation and investments in new business initiatives.
We experienced positive operating leverage in the second quarter with revenues increasing 3.9% from the first quarter of 2005 and expenses decreasing 1.5% from the first quarter of 2005.
Strategic Expansion Developments
On April 19, 2005, Boston Private announced the signing of a definitive agreement to acquire Gibraltar Financial Corporation, which is the parent company of Gibraltar Bank, FSB. Gibraltar Bank had approximately $1 billion in total assets at June 30, 2005, and conducts a private banking and wealth management business through five locations in Southeast Florida. The transaction is currently expected to be accretive within 12-18 months.
Dividend Payment Continues
Concurrent with the release of the second quarter 2005 earnings, the Board of Directors of Boston Private Financial Holdings declared a cash dividend to shareholders of $0.07 per share, reflecting the quarterly earnings performance. The record date for this dividend is August 1, 2005 and the payment date is August 15, 2005.
Cash Earnings
Boston Private calculates its cash earnings by adjusting net income to exclude significant nonrecurring items, and net amortization of intangibles and tax benefits related to purchase accounting. The Company provides this information to permit investors to compare Boston Private with similar companies that have not made acquisitions. (A detailed reconciliation table is attached.)
Conference Call
Management will host a conference call to review the Company’s financial performance and business developments on July 28, 2005 at 9 a.m. Eastern time. Interested parties may join the call by dialing 800-867-0731 and the password required is “Boston”. The call will be
simultaneously web cast and may be accessed on the Internet by linking throughwww.bostonprivate.com,www.prnewswire.com, or Yahoo! Finance. A continuous telephone replay will be available beginning at 11:30 a.m. Eastern time. The replay telephone number is 800-388-9064.
Boston Private Wealth Management Group
Boston Private is a financial services company which owns independently-operated affiliates located in key geographic regions of the United States. Boston Private’s affiliates offer private banking, wealth advisory and investment management services to the high net worth marketplace, selected businesses and institutions. The Company’s strategy is to enter new markets primarily through selected acquisitions, and then expand its wealth management business by way of organic growth. It makes investments in mid-size firms in demographically attractive areas, forming geographic clusters that represent the firm’s core competencies. Boston Private provides continuing assistance to its affiliates with strategic matters, marketing, compliance and operations. For more information about Boston Private, visit the company’s web site atwww.bostonprivate.com.
This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s management uses these non-GAAP measures in its analysis of the Company’s performance. These measures typically adjust GAAP performance measures to exclude the effects of charges and expenses related to the consummation of mergers and acquisitions, as well as excluding other significant gains or losses that are unusual in nature. Also included in these non-GAAP measures are net amortization of intangibles and tax benefits related to purchase accounting. Because these items and their impact on the Company’s performance are difficult to predict, management believes that presentations of financial measures excluding the impact of these items provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s businesses. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.
Statements in this press release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. These statements include, but are not limited to,prospects for long term financial performance, references to proposed acquisition transactions and the expected timing and results thereof, the impact on the Company’s results of improved market conditions and prevailing and future interest rates, prospects for growth in balance sheet assets and assets under management and advisory 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 Boston Private’s control and could cause actual results to differ materially from those set forth in the forward-looking statements. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements include, among others, adverse conditions in the capital markets and the impact of such conditions on Boston Private’s investment advisory activities; the risk that the transaction with Gibraltar Financial Corporation may not be consummated on a timely basis or at all; the risk that the business of Gibraltar Financial Corporation will not be integrated successfully with Boston Private’s or such integration may be more difficult, time-consuming or costly than expected; interest rate compression which may adversely impact net interest income; competitive pressures from other financial institutions which, together with other factors, may affect the Company’s growth and financial performance; the effects of national and local economic conditions; and the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; as well as the other risks and uncertainties detailed in Boston Private’s Annual Report on Form 10-K and other filings submitted to the Securities and Exchange Commission. Boston Private does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
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| FINANCIAL DATA: | | June 30,
2005
| | | June 30,
2004
| | | %
Change
| | | December 31,
2004
| | | | | | |
Total Balance Sheet Assets | | $ | 3,528,274 | | | $ | 2,824,849 | | | 24.9 | % | | $ | 3,273,192 | | | | | | | |
Stockholders’ Equity | | | 344,730 | | | | 294,190 | | | 17.2 | % | | | 321,227 | | | | | | | |
Tangible Capital: | | | | | | | | | | | | | | | | | | | | | |
Boston Private Bank & Trust | | | 125,237 | | | | 106,105 | | | 18.0 | % | | | 116,164 | | | | | | | |
Borel Private Bank & Trust | | | 68,121 | | | | 51,295 | | | 32.8 | % | | | 59,242 | | | | | | | |
First Private Bank & Trust | | | 35,524 | | | | 17,534 | | | 102.6 | % | | | 29,856 | | | | | | | |
Investment Securities | | | 571,139 | | | | 571,588 | | | (0.1 | %) | | | 559,190 | | | | | | | |
Goodwill | | | 132,246 | | | | 86,073 | | | 53.6 | % | | | 130,486 | | | | | | | |
Intangible Assets | | | 49,963 | | | | 44,593 | | | 12.0 | % | | | 56,677 | | | | | | | |
| | | | | | |
Commercial and Construction Loans | | | 1,468,680 | | | | 1,136,982 | | | 29.2 | % | | | 1,357,067 | | | | | | | |
Residential Mortgage Loans | | | 864,846 | | | | 724,873 | | | 19.3 | % | | | 796,991 | | | | | | | |
Home Equity and Other Consumer Loans | | | 93,805 | | | | 81,643 | | | 14.9 | % | | | 94,542 | | | | | | | |
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Total Loans | | | 2,427,331 | | | | 1,943,498 | | | 24.9 | % | | | 2,248,600 | | | | | | | |
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Loans Held for Sale | | | 46,390 | | | | 15,384 | | | 201.5 | % | | | 42,384 | | | | | | | |
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Allowance for Loan Losses and Off-Balance Sheet Risk | | | 30,205 | | | | 24,211 | | | 24.8 | % | | | 27,937 | | | | | | | |
Non-performing Loans | | | 4,438 | | | | 1,310 | | | 238.8 | % | | | 1,137 | | | | | | | |
Other Real Estate Owned | | | — | | | | 377 | | | (100.0 | %) | | | 377 | | | | | | | |
Total Non-performing Assets | | | 4,438 | | | | 1,687 | | | 163.1 | % | | | 1,514 | | | | | | | |
Deposits | | | 2,555,668 | | | | 2,130,078 | | | 20.0 | % | | | 2,386,368 | | | | | | | |
Borrowings | | | 537,158 | | | | 307,910 | | | 74.5 | % | | | 474,171 | | | | | | | |
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Book Value Per Share | | $ | 12.27 | | | $ | 10.76 | | | 14.0 | % | | $ | 11.61 | | | | | | | |
Market Price Per Share | | $ | 25.20 | | | $ | 23.16 | | | 8.8 | % | | $ | 28.17 | | | | | | | |
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ASSETS UNDER MANAGEMENT AND ADVISORY: | | | | | | | | | | | | | | | | | | | | | |
Westfield Capital Management | | $ | 8,104,000 | | | $ | 7,246,000 | | | 11.8 | % | | $ | 7,707,000 | | | | | | | |
Boston Private Bank & Trust | | | 2,283,000 | | | | 1,923,000 | | | 18.7 | % | | | 2,010,000 | | | | | | | |
Sand Hill Advisors | | | 1,044,000 | | | | 952,000 | | | 9.7 | % | | | 1,062,000 | | | | | | | |
Boston Private Value Investors | | | 827,000 | | | | 784,000 | | | 5.5 | % | | | 860,000 | | | | | | | |
RINET Company | | | 1,038,000 | | | | 904,000 | | | 14.8 | % | | | 1,051,000 | | | | | | | |
Borel Private Bank & Trust | | | 649,000 | | | | 567,000 | | | 14.5 | % | | | 568,000 | | | | | | | |
Dalton, Greiner, Hartman, Maher & Co. | | | 3,326,000 | | | | 3,123,000 | | | 6.5 | % | | | 3,353,000 | | | | | | | |
KLS Professional Advisors Group | | | 2,956,000 | | | | — | | | nm | | | | 2,880,000 | | | | | | | |
Less: Inter-company Relationship | | | (206,000 | ) | | | (151,000 | ) | | 36.4 | % | | | (185,000 | ) | | | | | | |
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Consolidated Affiliate Assets Under Management and Advisory | | $ | 20,021,000 | | | $ | 15,348,000 | | | 30.4 | % | | $ | 19,306,000 | | | | | | | |
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Coldstream Capital Management | | | 650,000 | | | | 530,000 | | | 22.6 | % | | | 600,000 | | | | | | | |
Bingham, Osborn, & Scarborough | | | 1,284,000 | | | | 1,023,000 | | | 25.5 | % | | | 1,167,000 | | | | | | | |
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Total Assets Under Management and Advisory | | $ | 21,955,000 | | | $ | 16,901,000 | | | 29.9 | % | | $ | 21,073,000 | | | | | | | |
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FINANCIAL RATIOS: | | | | | | | | | | | | | | | | | | | | | |
Stockholders’ Equity/Total Assets | | | 9.77 | % | | | 10.41 | % | | (6.1 | %) | | | 9.81 | % | | | | | | |
Non-performing Loans/Total Loans | | | 0.18 | % | | | 0.07 | % | | 157.1 | % | | | 0.05 | % | | | | | | |
Allowance for Loan Losses and Off-Balance Sheet Risk/Total Loans | | | 1.24 | % | | | 1.25 | % | | (0.8 | %) | | | 1.24 | % | | | | | | |
Allowance for Loan Losses and Off-Balance | | | | | | | | | | | | | | | | | | | | | |
Sheet Risk/Non-performing Assets | | | 680.60 | % | | | 1435.15 | % | | (52.6 | %) | | | 1845.24 | % | | | | | | |
Tangible Capital/Tangible Assets | | | 4.86 | % | | | 6.07 | % | | (19.9 | %) | | | 4.34 | % | | | | | | |
| | | | |
| | | Three Months Ended
| | | | | | Six Months Ended
| | | |
| OPERATING RESULTS: | | June 30,
2005
| | | June 30,
2004
| | | %
Change
| | | June 30, 2005
| | | June
30,
2004
| | %
Change
| |
Net Interest Income—on a Fully Taxable Equivalent Basis (FTE) | | $ | 29,470 | | | $ | 21,907 | | | 34.5 | % | | $ | 57,095 | | | $ | 42,075 | | 35.7 | % |
FTE Adjustment | | | 1,176 | | | | 987 | | | 19.1 | % | | | 2,324 | | | | 1,972 | | 17.8 | % |
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Net Interest Income | | | 28,294 | | | | 20,920 | | | 35.2 | % | | | 54,771 | | | | 40,103 | | 36.6 | % |
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Investment Management Fees: | | | | | | | | | | | | | | | | | | | | | |
Westfield Capital Management | | | 11,637 | | | | 11,002 | | | 5.8 | % | | | 22,983 | | | | 21,320 | | 7.8 | % |
Boston Private Bank & Trust | | | 3,208 | | | | 2,875 | | | 11.6 | % | | | 6,298 | | | | 5,721 | | 10.1 | % |
Sand Hill Advisors | | | 1,560 | | | | 1,399 | | | 11.5 | % | | | 3,126 | | | | 2,704 | | 15.6 | % |
Boston Private Value Investors | | | 1,567 | | | | 1,486 | | | 5.5 | % | | | 3,160 | | | | 2,914 | | 8.4 | % |
Borel Private Bank & Trust | | | 824 | | | | 745 | | | 10.6 | % | | | 1,643 | | | | 1,458 | | 12.7 | % |
Dalton, Greiner, Hartman, Maher & Co. | | | 6,437 | | | | 6,016 | | | 7.0 | % | | | 13,159 | | | | 9,560 | | 37.6 | % |
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Total Investment Management Fees | | | 25,233 | | | | 23,523 | | | 7.3 | % | | | 50,369 | | | | 43,677 | | 15.3 | % |
Wealth Advisory Fees: | | | | | | | | | | | | | | | | | | | | | |
RINET Company | | | 2,031 | | | | 1,966 | | | 3.3 | % | | | 4,025 | | | | 3,924 | | 2.6 | % |
KLS Professional Advisors Group | | | 2,635 | | | | — | | | nm | | | | 5,191 | | | | — | | nm | |
Other | | | 24 | | | | 27 | | | (11.1 | %) | | | 53 | | | | 60 | | (11.7 | %) |
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Total Wealth Advisory Fees | | | 4,690 | | | | 1,993 | | | 135.3 | % | | | 9,269 | | | | 3,984 | | 132.7 | % |
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Other Fees | | | 1,653 | | | | 971 | | | 70.2 | % | | | 3,332 | | | | 2,275 | | 46.5 | % |
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Total Fees | | | 31,576 | | | | 26,487 | | | 19.2 | % | | | 62,970 | | | | 49,936 | | 26.1 | % |
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Earnings (loss) in Equity Investments | | | 289 | | | | (192 | ) | | (250.5 | %) | | | 505 | | | | 32 | | nm | |
Gain on Sale of Loans, Net | | | 464 | | | | 457 | | | 1.5 | % | | | 770 | | | | 693 | | 11.1 | % |
Gain on Sale of Investments, Net | | | 37 | | | | — | | | nm | | | | 41 | | | | 211 | | (80.6 | %) |
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Total Fees and Other Income | | | 32,366 | | | | 26,752 | | | 21.0 | % | | | 64,286 | | | | 50,872 | | 26.4 | % |
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Total Revenue | | | 60,660 | | | | 47,672 | | | 27.2 | % | | | 119,057 | | | | 90,975 | | 30.9 | % |
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Provision for Loan Losses | | | 778 | | | | 963 | | | (19.2 | %) | | | 1,640 | | | | 1,731 | | (5.3 | %) |
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Salaries and Employee Benefits | | | 27,088 | | | | 22,468 | | | 20.6 | % | | | 55,007 | | | | 43,865 | | 25.4 | % |
Occupancy and Equipment | | | 4,836 | | | | 3,588 | | | 34.8 | % | | | 9,547 | | | | 7,193 | | 32.7 | % |
Professional Services | | | 2,410 | | | | 1,693 | | | 42.4 | % | | | 5,155 | | | | 2,980 | | 73.0 | % |
Marketing and Business Development | | | 1,782 | | | | 1,497 | | | 19.0 | % | | | 3,312 | | | | 2,689 | | 23.2 | % |
Contract Services and Processing | | | 1,123 | | | | 684 | | | 64.2 | % | | | 1,885 | | | | 1,354 | | 39.2 | % |
Amortization of Intangibles | | | 1,539 | | | | 1,250 | | | 23.1 | % | | | 3,077 | | | | 2,032 | | 51.4 | % |
Other | | | 3,218 | | | | 2,540 | | | 26.7 | % | | | 6,369 | | | | 4,980 | | 27.9 | % |
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Total Operating Expense | | | 41,996 | | | | 33,720 | | | 24.5 | % | | | 84,352 | | | | 65,093 | | 29.6 | % |
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Minority Interest | | | 382 | | | | 397 | | | (3.8 | %) | | | 955 | | | | 602 | | 58.6 | % |
Income Before Income Taxes | | | 17,504 | | | | 12,592 | | | 39.0 | % | | | 32,110 | | | | 23,549 | | 36.4 | % |
Income Tax Expense | | | 6,490 | | | | 4,437 | | | 46.3 | % | | | 11,795 | | | | 8,161 | | 44.5 | % |
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Net Income | | $ | 11,014 | | | $ | 8,155 | | | 35.1 | % | | $ | 20,315 | | | $ | 15,388 | | 32.0 | % |
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months
Ended
| | | | | | Six Months Ended
| | | | |
| | | June 30,
2005
| | | June 30,
2004
| | | %
Change
| | | June 30,
2005
| | | June 30,
2004
| | | %
Change
| |
RECONCILIATION OF GAAP EARNINGS TO ADJUSTED AND
CASH EARNINGS: | | | | | | | | | | | | | | | | | | |
Net Income (GAAP Basis) | | $ | 11,014 | | | $ | 8,155 | | | 35.1 | % | | $ | 20,315 | | | $ | 15,388 | | | 32.0 | % |
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Adjusted Net Income | | $ | 11,014 | | | $ | 8,155 | | | 35.1 | % | | $ | 20,315 | | | $ | 15,388 | | | 32.0 | % |
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Cash Basis Earnings (1) | | | | | | | | | | | | | | | | | | | | | | |
Book Amortization of Purchased Intangibles, Net of Tax | | | 780 | | | | 600 | | | 30.0 | % | | | 1,561 | | | | 974 | | | 60.3 | % |
Cash Benefit of Tax Deductions from Purchased Intangibles & Goodwill | | | 1,032 | | | | 808 | | | 27.7 | % | | | 2,065 | | | | 1,398 | | | 47.7 | % |
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Total Cash Basis Adjustment | | | 1,812 | | | | 1,408 | | | 28.7 | % | | | 3,626 | | | | 2,372 | | | 52.9 | % |
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Cash Basis Earnings | | $ | 12,826 | | | $ | 9,563 | | | 34.1 | % | | $ | 23,941 | | | $ | 17,760 | | | 34.8 | % |
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| | | | |
| | | Three Months
Ended
| | | | | | Six Months Ended
| | | | |
| | | June 30,
2005
| | | June 30,
2004
| | | %
Change
| | | June 30,
2005
| | | June 30,
2004
| | | %
Change
| |
PER SHARE DATA: (In thousands, except per share data) | | | | | | | | | | | | | | | | | | | | | | |
Calculation of Net Income for EPS: | | | | | | | | | | | | | | | | | | | | | | |
Net Income as reported and for basic EPS | | $ | 11,014 | | | $ | 8,155 | | | 35.1 | % | | $ | 20,315 | | | $ | 15,388 | | | 32.0 | % |
Interest on convertible trust preferred securities, net of tax | | | 765 | | | | — | | | nm | | | | 1,529 | | | | — | | | nm | |
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Net Income for diluted EPS | | $ | 11,779 | | | $ | 8,155 | | | 44.4 | % | | $ | 21,844 | | | $ | 15,388 | | | 42.0 | % |
| | | | | | |
Calculation of average shares outstanding: | | | | | | | | | | | | | | | | | | | | | | |
Weighted average basic shares (2) | | | 27,680 | | | | 27,314 | | | 1.3 | % | | | 27,601 | | | | 27,750 | | | (0.5 | %) |
Dilutive effect of: | | | | | | | | | | | | | | | | | | | | | | |
Stock Options and Stock Grants | | | 711 | | | | 1,074 | | | (33.8 | %) | | | 802 | | | | 1,174 | | | (31.7 | %) |
Forward Agreement | | | 88 | | | | 84 | | | 4.8 | % | | | 161 | | | | 84 | | | | |
Convertible trust preferred securities | | | 3,183 | | | | — | | | nm | | | | 3,182 | | | | — | | | | |
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Dilutive potential common shares | | | 3,982 | | | | 1,158 | | | 243.9 | % | | | 4,145 | | | | 1,258 | | | 229.5 | % |
Weighted average diluted shares | | | 31,662 | | | | 28,472 | | | 11.2 | % | | | 31,746 | | | | 29,008 | | | 9.4 | % |
Eliminate Increase in Shares Outstanding—FAS 128 Revision (2) | | | — | | | | — | | | nm | | | | — | | | | 994 | | | (100.0 | %) |
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Adjusted Average Diluted Shares Outstanding | | | 31,662 | | | | 28,472 | | | 11.2 | % | | | 31,746 | | | | 28,014 | | | 13.3 | % |
| | | | | | |
Earnings per Share: | | | | | | | | | | | | | | | | | | | | | | |
Basic | | $ | 0.40 | | | $ | 0.30 | | | 33.3 | % | | $ | 0.74 | | | $ | 0.55 | | | 34.5 | % |
Diluted | | $ | 0.37 | | | $ | 0.29 | | | 27.6 | % | | $ | 0.69 | | | $ | 0.53 | | | 30.2 | % |
| | | | | | |
RECONCILIATION OF GAAP EPS TO ADJUSTED AND CASH EPS: (on a Diluted Basis) | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Earnings Per Share (GAAP Basis) | | $ | 0.37 | | | $ | 0.29 | | | 27.6 | % | | $ | 0.69 | | | $ | 0.53 | | | 30.2 | % |
Eliminate Increase in Shares Outstanding—FAS 128 Revision (2) | | | — | | | | — | | | | | | | — | | | $ | 0.01 | | | (100.0 | %) |
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Adjusted Earnings Per Share | | $ | 0.37 | | | $ | 0.29 | | | 27.6 | % | | $ | 0.69 | | | $ | 0.54 | | | 27.8 | % |
Cash Basis Adjustment | | $ | 0.06 | | | $ | 0.05 | | | 20.0 | % | | $ | 0.11 | | | $ | 0.09 | | | 22.2 | % |
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Cash Basis Earnings Per Diluted Share | | $ | 0.43 | | | $ | 0.34 | | | 26.5 | % | | $ | 0.80 | | | $ | 0.63 | | | 27.0 | % |
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| | | | |
| | | Three Months
Ended
| | | | | | Six Months Ended
| | | | |
| | | June 30,
2005
| | | June 30,
2004
| | | %
Change
| | | June 30,
2005
| | | June 30,
2004
| | | %
Change
| |
OPERATING RATIOS & STATISTICS: | | | | | | | | | | | | | | | | | | | | | | |
Return on Average Equity | | | 12.95 | % | | | 11.18 | % | | 15.8 | % | | | 12.16 | % | | | 11.01 | % | | 10.4 | % |
Return on Average Assets | | | 1.27 | % | | | 1.15 | % | | 10.4 | % | | | 1.19 | % | | | 1.16 | % | | 2.6 | % |
Net Interest Margin | | | 3.77 | % | | | 3.40 | % | | 10.9 | % | | | 3.73 | % | | | 3.50 | % | | 6.6 | % |
Core Net Interest Margin(3) | | | 3.95 | % | | | 3.41 | % | | 15.8 | % | | | 3.91 | % | | | 3.51 | % | | | |
Total Fees and Other Income/Total Revenue | | | 53.36 | % | | | 56.12 | % | | (4.9 | %) | | | 54.00 | % | | | 55.92 | % | | (3.4 | %) |
Efficiency Ratio | | | 66.27 | % | | | 67.10 | % | | (1.2 | %) | | | 67.69 | % | | | 68.54 | % | | (1.2 | %) |
Loans Charged-off, Net of Recoveries | | $ | 4 | | | $ | 5 | | | (20.0 | %) | | $ | 78 | | | $ | 12 | | | nm | |
| | | | | | |
CASH OPERATING RATIOS: | | | | | | | | | | | | | | | | | | | | | | |
Return on Average Equity(4) | | | 15.08 | % | | | 13.11 | % | | 15.0 | % | | | 14.33 | % | | | 12.71 | % | | 12.7 | % |
Return on Average Assets(5) | | | 1.48 | % | | | 1.35 | % | | 9.6 | % | | | 1.41 | % | | | 1.34 | % | | 5.2 | % |
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | |
| AVERAGE BALANCE SHEET: | | Three Months Ended
| | |
| | | Six Months Ended
| | |
| |
| AVERAGE ASSETS: | | June 30,
2005
| | | June 30,
2004
| | | %
Change
| | | June 30,
2005
| | | June 30,
2004
| | | %
Change
| |
Interest-Bearing Cash | | $ | 4,058 | | | $ | 1,383 | | | 193.4 | % | | $ | 3,312 | | | $ | 1,268 | | | 161.2 | % |
Federal Funds Sold and Other | | | 137,194 | | | | 141,130 | | | (2.8 | %) | | | 145,257 | | | | 121,416 | | | 19.6 | % |
U.S. Treasuries and Agencies | | | 229,199 | �� | | | 185,268 | | | 23.7 | % | | | 221,559 | | | | 180,156 | | | 23.0 | % |
Municipal Securities | | | 229,290 | | | | 234,452 | | | (2.2 | %) | | | 228,849 | | | | 225,551 | | | 1.5 | % |
Corporate Bonds | | | 32,114 | | | | 62,267 | | | (48.4 | %) | | | 32,341 | | | | 42,357 | | | (23.6 | %) |
Mortgage-Backed Securities | | | 41,974 | | | | 56,552 | | | (25.8 | %) | | | 43,602 | | | | 48,691 | | | (10.5 | %) |
Stock in Federal Home Loan Banks | | | 22,196 | | | | 16,399 | | | 35.3 | % | | | 21,395 | | | | 14,278 | | | 49.8 | % |
Commercial and Construction Loans | | | 1,430,941 | | | | 1,078,265 | | | 32.7 | % | | | 1,399,838 | | | | 1,012,484 | | | 38.3 | % |
Residential Mortgage Loans | | | 877,503 | | | | 704,230 | | | 24.6 | % | | | 852,714 | | | | 680,016 | | | 25.4 | % |
Home Equity and Other Consumer Loans | | | 92,934 | | | | 77,927 | | | 19.3 | % | | | 92,044 | | | | 78,512 | | | 17.2 | % |
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|
Total Earning Assets | | | 3,097,403 | | | | 2,557,873 | | | 21.1 | % | | | 3,040,911 | | | | 2,404,729 | | | 26.5 | % |
Allowance for Loan Losses | | | (26,717 | ) | | | (23,627 | ) | | 13.1 | % | | | (27,560 | ) | | | (22,622 | ) | | 21.8 | % |
Goodwill | | | 134,766 | | | | 85,955 | | | 56.8 | % | | | 133,833 | | | | 71,496 | | | 87.2 | % |
Intangible Assets | | | 50,530 | | | | 45,040 | | | 12.2 | % | | | 51,934 | | | | 36,785 | | | 41.2 | % |
Other Assets | | | 211,646 | | | | 161,795 | | | 30.8 | % | | | 208,704 | | | | 157,086 | | | 32.9 | % |
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|
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|
TOTAL AVERAGE ASSETS | | $ | 3,467,628 | | | $ | 2,827,036 | | | 22.7 | % | | $ | 3,407,822 | | | $ | 2,647,474 | | | 28.7 | % |
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AVERAGE LIABILITIES AND STOCKHOLDERS’ EQUITY: | | | | | | | | | | | | | | | | | | | | | | |
Savings Accounts | | $ | 39,330 | | | $ | 32,205 | | | 22.1 | % | | $ | 39,309 | | | $ | 30,862 | | | 27.4 | % |
NOW Accounts | | | 237,551 | | | | 228,629 | | | 3.9 | % | | | 234,477 | | | | 209,608 | | | 11.9 | % |
Money Market Accounts | | | 1,181,996 | | | | 1,091,576 | | | 8.3 | % | | | 1,170,397 | | | | 1,042,241 | | | 12.3 | % |
Certificates of Deposit | | | 528,866 | | | | 402,043 | | | 31.5 | % | | | 520,070 | | | | 359,048 | | | 44.8 | % |
| | |
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|
Total Interest-Bearing Deposits | | | 1,987,743 | | | | 1,754,453 | | | 13.3 | % | | | 1,964,253 | | | | 1,641,759 | | | 19.6 | % |
Repurchase Agreements | | | 102,449 | | | | 74,359 | | | 37.8 | % | | | 102,634 | | | | 74,226 | | | 38.3 | % |
FHLB Borrowings | | | 297,428 | | | | 244,483 | | | 21.7 | % | | | 291,231 | | | | 234,771 | | | 24.0 | % |
Junior Subordinated Debentures | | | 114,434 | | | | 6,186 | | | nm | | | | 114,434 | | | | 4,943 | | | nm | |
Other Borrowings | | | 5,698 | | | | 2,497 | | | 128.2 | % | | | 5,168 | | | | 1,768 | | | 192.3 | % |
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|
Total Interest-Bearing Liabilities | | | 2,507,752 | | | | 2,081,978 | | | 20.5 | % | | | 2,477,720 | | | | 1,957,467 | | | 26.6 | % |
Non-interest Bearing Deposits | | | 527,997 | | | | 362,997 | | | 45.5 | % | | | 507,938 | | | | 328,470 | | | 54.6 | % |
Other Liabilities | | | 91,630 | | | | 90,370 | | | 1.4 | % | | | 87,940 | | | | 82,032 | | | 7.2 | % |
| | |
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|
Total Liabilities | | | 3,127,379 | | | | 2,535,345 | | | 23.4 | % | | | 3,073,598 | | | | 2,367,969 | | | 29.8 | % |
Stockholders’ Equity | | | 340,249 | | | | 291,691 | | | 16.6 | % | | | 334,224 | | | | 279,505 | | | 19.6 | % |
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|
TOTAL AVERAGE LIABILITIES & STOCKHOLDERS’ EQUITY | | $ | 3,467,628 | | | $ | 2,827,036 | | | 22.7 | % | | $ | 3,407,822 | | | $ | 2,647,474 | | | 28.7 | % |
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| | | | | | |
| | | June 30,
2005
| | | March 31,
2005
| | | %
Change
| | | | | | | | | | |
FINANCIAL DATA: | | | | | | | | | | | | | | | | | | | | | | |
Total Balance Sheet Assets | | $ | 3,528,274 | | | $ | 3,619,491 | | | (2.5 | %) | | | | | | | | | | | |
Stockholders’ Equity | | | 344,730 | | | | 331,917 | | | 3.9 | % | | | | | | | | | | | |
Tangible Capital: | | | | | | | | | | | | | | | | | | | | | | |
Boston Private Bank & Trust | | | 125,237 | | | | 118,571 | | | 5.6 | % | | | | | | | | | | | |
Borel Private Bank & Trust | | | 68,121 | | | | 61,867 | | | 10.1 | % | | | | | | | | | | | |
First Private Bank & Trust | | | 35,524 | | | | 31,204 | | | 13.8 | % | | | | | | | | | | | |
Investment Securities | | | 571,139 | | | | 575,927 | | | (0.8 | %) | | | | | | | | | | | |
Goodwill | | | 132,246 | | | | 134,150 | | | (1.4 | %) | | | | | | | | | | | |
Intangible Assets | | | 49,963 | | | | 51,501 | | | (3.0 | %) | | | | | | | | | | | |
Commercial and Construction Loans | | | 1,468,680 | | | | 1,404,507 | | | 4.6 | % | | | | | | | | | | | |
Residential Mortgage Loans | | | 864,846 | | | | 823,274 | | | 5.0 | % | | | | | | | | | | | |
Home Equity and Other Consumer Loans | | | 93,805 | | | | 91,504 | | | 2.5 | % | | | | | | | | | | | |
| | |
|
|
| |
|
|
| |
|
| | | | | | | | | | | |
Total Loans | | | 2,427,331 | | | | 2,319,285 | | | 4.7 | % | | | | | | | | | | | |
Loans Held for Sale | | | 46,390 | | | | 23,389 | | | 98.3 | % | | | | | | | | | | | |
Allowance for Loan Losses and Off-Balance Sheet Risk | | | 30,205 | | | | 28,939 | | | 4.4 | % | | | | | | | | | | | |
Non-performing Loans | | | 4,438 | | | | 1,552 | | | 186.0 | % | | | | | | | | | | | |
Other Real Estate Owned | | | — | | | | — | | | nm | | | | | | | | | | | | |
Total Non-performing Assets | | | 4,438 | | | | 1,552 | | | 186.0 | % | | | | | | | | | | | |
Deposits | | | 2,555,668 | | | | 2,690,771 | | | (5.0 | %) | | | | | | | | | | | |
Borrowings | | | 537,158 | | | | 516,006 | | | 4.1 | % | | | | | | | | | | | |
Book Value Per Share | | $ | 12.27 | | | $ | 11.86 | | | 3.4 | % | | | | | | | | | | | |
Market Price Per Share | | $ | 25.20 | | | $ | 23.75 | | | 6.1 | % | | | | | | | | | | | |
| | | | | | |
ASSETS UNDER MANAGEMENT AND ADVISORY: | | | | | | | | | | | | | | | | | | | | | | |
Westfield Capital Management | | $ | 8,104,000 | | | $ | 7,492,000 | | | 8.2 | % | | | | | | | | | | | |
Boston Private Bank & Trust | | | 2,283,000 | | | | 2,241,000 | | | 1.9 | % | | | | | | | | | | | |
Sand Hill Advisors | | | 1,044,000 | | | | 1,059,000 | | | (1.4 | %) | | | | | | | | | | | |
Boston Private Value Investors | | | 827,000 | | | | 829,000 | | | (0.2 | %) | | | | | | | | | | | |
RINET Company | | | 1,038,000 | | | | 1,033,000 | | | 0.5 | % | | | | | | | | | | | |
Borel Private Bank & Trust | | | 649,000 | | | | 584,000 | | | 11.1 | % | | | | | | | | | | | |
Dalton, Greiner, Hartman, Maher & Co. | | | 3,326,000 | | | | 3,287,000 | | | 1.2 | % | | | | | | | | | | | |
KLS Professional Advisors Group | | | 2,956,000 | | | | 2,932,000 | | | 0.8 | % | | | | | | | | | | | |
Less: Inter-company Relationship | | | (206,000 | ) | | | (190,000 | ) | | 8.4 | % | | | | | | | | | | | |
| | |
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|
| | | | | | | | | | | |
Consolidated Affiliate Assets Under Management and Advisory | | $ | 20,021,000 | | | $ | 19,267,000 | | | 3.9 | % | | | | | | | | | | | |
Coldstream Capital Management | | | 650,000 | | | | 650,000 | | | 0.0 | % | | | | | | | | | | | |
Bingham, Osborn, & Scarborough | | | 1,284,000 | | | | 1,217,000 | | | 5.5 | % | | | | | | | | | | | |
| | |
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| |
|
|
| |
|
| | | | | | | | | | | |
Total Unconsolidated Assets Under Management and Advisory | | $ | 21,955,000 | | | $ | 21,134,000 | | | 3.9 | % | | | | | | | | | | | |
| | | | | | |
FINANCIAL RATIOS: | | | | | | | | | | | | | | | | | | | | | | |
Stockholders’ Equity/Total Assets | | | 9.77 | % | | | 9.17 | % | | 6.5 | % | | | | | | | | | | | |
Non-performing Loans/Total Loans | | | 0.18 | % | | | 0.07 | % | | 169.0 | % | | | | | | | | | | | |
Allowance for Loan Losses and Off-Balance Sheet Risk/Total Loans | | | 1.24 | % | | | 1.25 | % | | (0.6 | %) | | | | | | | | | | | |
Allowance for Loan Losses and Off-Balance | | | | | | | | | | | | | | | | | | | | | | |
Sheet Risk/Non-performing Assets | | | 680.60 | % | | | 1864.63 | % | | (63.5 | %) | | | | | | | | | | | |
Tangible Capital/Tangible Assets | | | 4.86 | % | | | 4.26 | % | | 14.1 | % | | | | | | | | | | | |
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | | | | |
| | | Three Months Ended
| | | | |
| OPERATING RESULTS: | | June 30,
2005
| | | March 31,
2005
| | | %
Change
| |
Net Interest Income—on a Fully Taxable Equivalent Basis (FTE) | | $ | 29,470 | | | $ | 27,626 | | | 6.7 | % |
FTE Adjustment | | | 1,176 | | | | 1,149 | | | 2.3 | % |
| | |
|
|
| |
|
|
| |
|
|
Net Interest Income | | | 28,294 | | | | 26,477 | | | 6.9 | % |
| | |
|
|
| |
|
|
| |
|
|
Investment Management Fees: | | | | | | | | | | | |
Westfield Capital Management | | | 11,637 | | | | 11,346 | | | 2.6 | % |
Boston Private Bank & Trust | | | 3,208 | | | | 3,091 | | | 3.8 | % |
Sand Hill Advisors | | | 1,560 | | | | 1,566 | | | (0.4 | %) |
Boston Private Value Investors | | | 1,567 | | | | 1,593 | | | (1.6 | %) |
Borel Private Bank & Trust | | | 824 | | | | 819 | | | 0.6 | % |
Dalton, Greiner, Hartman, Maher & Co. | | | 6,437 | | | | 6,721 | | | (4.2 | %) |
| | |
|
|
| |
|
|
| |
|
|
Total Investment Management Fees | | | 25,233 | | | | 25,136 | | | 0.4 | % |
Wealth Advisory Fees | | | | | | | | | | | |
RINET Company | | | 2,031 | | | | 1,995 | | | 1.8 | % |
KLS Professional Advisors Group | | | 2,635 | | | | 2,556 | | | 3.1 | % |
Other | | | 24 | | | | 28 | | | (14.3 | %) |
| | |
|
|
| |
|
|
| |
|
|
Total Wealth Advisory Fees | | | 4,690 | | | | 4,579 | | | 2.4 | % |
| | |
|
|
| |
|
|
| |
|
|
Other Fees | | | 1,653 | | | | 1,678 | | | (1.5 | %) |
| | |
|
|
| |
|
|
| |
|
|
Total Fees | | | 31,576 | | | | 31,393 | | | 0.6 | % |
| | |
|
|
| |
|
|
| |
|
|
Earnings in Equity Investments | | | 289 | | | | 216 | | | 33.8 | % |
Gain on Sale of Loans, Net | | | 464 | | | | 306 | | | 51.6 | % |
Gain on Sale of Investments, Net | | | 37 | | | | 4 | | | nm | |
| | |
|
|
| |
|
|
| |
|
|
Total Fees and Other Income | | | 32,366 | | | | 31,919 | | | 1.4 | % |
| | |
|
|
| |
|
|
| |
|
|
Total Revenue | | | 60,660 | | | | 58,396 | | | 3.9 | % |
| | |
|
|
| |
|
|
| |
|
|
Provision for Loan Losses | | | 778 | | | | 862 | | | (9.7 | %) |
| | |
|
|
| |
|
|
| |
|
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Salaries and Benefits | | | 27,088 | | | | 27,919 | | | (3.0 | %) |
Occupancy and Equipment | | | 4,836 | | | | 4,712 | | | 2.6 | % |
Professional Services | | | 2,410 | | | | 2,745 | | | (12.2 | %) |
Marketing and Business Development | | | 1,782 | | | | 1,531 | | | 16.4 | % |
Contract Services and Processing | | | 1,123 | | | | 762 | | | 47.4 | % |
Amortization of Intangibles | | | 1,539 | | | | 1,539 | | | 0.0 | % |
Other | | | 3,218 | | | | 3,147 | | | 2.3 | % |
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Total Operating Expense | | | 41,996 | | | | 42,355 | | | (0.8 | %) |
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Minority Interest | | | 382 | | | | 573 | | | (33.3 | %) |
Income Before Income Taxes | | | 17,504 | | | | 14,606 | | | 19.8 | % |
Income Tax Expense | | | 6,490 | | | | 5,305 | | | 22.3 | % |
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Net Income | | $ | 11,014 | | | $ | 9,301 | | | 18.4 | % |
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| | | Three Months Ended
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RECONCILIATION OF GAAP EARNINGS TO ADJUSTED AND CASH EARNINGS:
Adjusted Net Income | | June 30,
2005
| | | March 31,
2005
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Change
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Net Income (GAAP Basis) | | $ | 11,014 | | | $ | 9,301 | | | 18.4 | % |
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Adjusted Net Income | | $ | 11,014 | | | $ | 9,301 | | | 18.4 | % |
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Cash Basis Earnings(1) | | | | | | | | | | | |
Book Amortization of Purchased Intangibles, Net of Tax | | | 780 | | | | 780 | | | 0.0 | % |
Cash Benefit of Tax Deductions from Purchased Intangibles & Goodwill | | | 1,032 | | | | 1,032 | | | 0.0 | % |
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Total Cash Basis Adjustment | | $ | 1,812 | | | $ | 1,812 | | | 0.0 | % |
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Cash Basis Earnings | | $ | 12,826 | | | $ | 11,113 | | | 15.4 | % |
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| | | Three Months Ended
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| | | June 30,
2005
| | | March 31,
2005
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Change
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PER SHARE DATA: (In thousands) | | | | | | | | | | | |
Calculation of Net Income for EPS: | | | | | | | | | | | |
Net Income as reported and for basic EPS | | $ | 11,014 | | | $ | 9,301 | | | 18.4 | % |
Interest on convertible trust preferred securities, net of tax | | | 765 | | | | 765 | | | 0.0 | % |
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Net Income for diluted EPS | | $ | 11,779 | | | $ | 10,066 | | | 17.0 | % |
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Calculation of average shares outstanding: | | | | | | | | | | | |
Weighted average basic shares | | | 27,680 | | | | 27,522 | | | 0.6 | % |
Dilutive effect of: | | | | | | | | | | | |
Stock Options and Stock Grants | | | 711 | | | | 882 | | | (19.4 | %) |
Forward Agreement | | | 88 | | | | 228 | | | (61.4 | %) |
Convertible trust preferred securities | | | 3,183 | | | | 3,182 | | | 0.0 | % |
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Dilutive potential common shares | | | 3,982 | | | | 4,292 | | | (7.2 | %) |
Weighted average diluted shares | | | 31,662 | | | | 31,814 | | | (0.5 | %) |
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Earnings per Share: | | | | | | | | | | | |
Basic | | $ | 0.40 | | | $ | 0.34 | | | 17.6 | % |
Diluted | | $ | 0.37 | | | $ | 0.32 | | | 15.6 | % |
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RECONCILIATION OF GAAP EPS TO ADJUSTED AND CASH EPS:
(on a Diluted Basis) | | | | | | | | | | | |
Earnings Per Share (GAAP Basis) | | $ | 0.37 | | | $ | 0.32 | | | 15.6 | % |
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Adjusted Earnings Per Share | | $ | 0.37 | | | $ | 0.32 | | | 15.6 | % |
Cash Basis Adjustment | | $ | 0.06 | | | $ | 0.05 | | | 20.0 | % |
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Cash Basis Earnings Per Diluted Share | | $ | 0.43 | | | $ | 0.37 | | | 16.2 | % |
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OPERATING RATIOS & STATISTICS: | | | | | | | | | | | |
Return on Average Equity | | | 12.95 | % | | | 11.34 | % | | 14.2 | % |
Return on Average Assets | | | 1.27 | % | | | 1.11 | % | | 14.4 | % |
Net Interest Margin | | | 3.77 | % | | | 3.68 | % | | 2.4 | % |
Core Net Interest Margin(3) | | | 3.95 | % | | | 3.86 | % | | 2.3 | % |
Total Fees and Other Income/Total Revenue | | | 53.36 | % | | | 54.66 | % | | (2.4 | %) |
Efficiency Ratio | | | 66.27 | % | | | 69.16 | % | | (4.2 | %) |
Loans Charged-off, Net of Recoveries | | $ | 4 | | | $ | 74 | | | (94.6 | %) |
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Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| (1) | The Company defines Cash Basis Earnings as Adjusted Earnings, plus the amortization of the purchased intangibles (net of tax), plus the tax benefit on the portion of the purchase price which is deductible over a 15 year life. These tax savings are deferred under GAAP accounting but are included in cash earnings since the tax savings (lower tax payment) will be retained unless the acquired company is sold. The Company uses certain non-GAAP financial measures, such as Adjusted Earnings, to provide information for investors to effectively analyze financial trends of ongoing business activities. Adjusted Earnings exclude significant unusual and non-recurring items. |
| (2) | Due to a change that the Financial Accounting Standards Board (“FASB”) made on March 31, 2004, additional shares of approximately 994,000 were included in average basic shares outstanding for the six months ending June 30, 2004 related to the Company’s forward stock agreement. The Company amended the forward stock agreement on April 1, 2004 which eliminated the need to include the effect of the forward agreement in basic shares after that date. |
| (3) | The Company defines Core Net Interest Margin as Net Interest Margin excluding the interest expense on the Junior Subordinated Debentures. The Company utilizes Trust Preferred Securities to assist in the funding of acquisitions and belives it is useful to compare Net Interest Margin excluding the impact of this acquistion funding vehicle. |
| (4) | The Company calculates Return on Average Equity on a cash basis as Cash Net Income divided by Average Equity. |
| (5) | The Company calculates Return on Average Assets on a cash basis as Cash Net Income divided by Average Assets. |
