Exhibit 99.1
| | |
| FOR IMMEDIATE RELEASE | |  |
| | |
| CONTACT: | | Robert J. Whelan |
| | Chief Financial Officer |
| | (617) 912-4220 |
| |
| | Erica E. Smith |
| | Investor Relations |
| | (617) 912-3766 |
| | www.bostonprivate.com |
BOSTON PRIVATE ANNOUNCES RESULTS FOR THE THIRD QUARTER 2006
Boston, MA, October 25, 2006 – Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company”) today reported third quarter 2006 cash earnings of $0.45 per diluted share versus $0.45 for the third quarter 2005. GAAP earnings were $0.36 per diluted share, compared to $0.38 per diluted share for the third quarter 2005.
Included in the financial performance are the results from Gibraltar Private Bank & Trust Company (“Gibraltar”), which Boston Private acquired on October 1, 2005, and of Anchor Capital Holdings LLC (“Anchor”), which Boston Private acquired on June 1, 2006. More detailed financial information regarding Gibraltar’s and Anchor’s financial results is outlined later in this press release.
Highlights
| | • | | Total Revenues for the third quarter 2006 increased 36.7% to $88.5 million, compared to $64.8 million a year ago. Adjusted for the $20.3 million of revenues related to the Gibraltar and Anchor acquisitions, including interest on the new trust preferred issued and assumed in connection with the Gibraltar transaction, revenues were $68.3 million, or a 5.4% increase, on a same affiliate basis. (Gibraltar and Anchor contributed revenues of $15.2 million and $7.0 million, respectively, in the third quarter of 2006). |
| | • | | Total Operating Expenses,including minority interests, for the third quarter increased 45.2% to $64.8 million, compared to $44.6 million a year ago. Adjusted for the $16.4 million related to the acquisitions of Gibraltar and Anchor, operating expenses were $48.4 million, or an 8.4% increase, on a same affiliate basis. (Gibraltar and Anchor had operating expenses of $11.0 million and $5.4 million, respectively, in the third quarter of 2006). For the third quarter, included in operating expenses are approximately $1.4 |
| | million in expenses related to the new initiatives to open offices in Beverley, MA, Hingham, MA, Lexington, MA, New York, NY, Naples, FL and Los Altos, CA. |
| | • | | Operating Leverage, on a same affiliate basis, was negative 3.0% for the third quarter of 2006 as compared to the third quarter of 2005. The negative operating leverage was impacted by the operating expenses related to the new private banking offices. |
| | • | | Total Net Income, for the third quarter 2006 increased 19.6% to $13.6 million, compared to $11.4 million a year ago. Adjusted for the $2.1 million of net income related to Gibraltar and Anchor and the related financing, net income was $11.6 million, or an increase of 1.3%, on a same affiliate basis. (Gibraltar and Anchor contributed net income of $2.3 million and $907 thousand, respectively, and the trust preferred related to the Gibraltar acquisition resulted in interest expense of $1.1 million, net of tax, in the third quarter of 2006). |
| | • | | Net Interest Income,increased $13.1 million, or 43.6%, to $43.2 million. Adjusted for the $11.3 million in net interest income at Gibraltar and the related trust preferred interest expense, same affiliate net interest income increased $1.8 million, or 5.9%, to $31.8 million in the third quarter of 2006. |
| | • | | Core net interest margin, excluding the impact of trust preferred interest expense related to acquisitions, decreased 3 basis points to 4.03% from the third quarter level of 2005 of 4.06% and decreased 17 basis points from 4.20% in the second quarter of 2006. |
| | • | | Net interest margin, including the impact of trust preferred interest expense, was 3.76%, 12 basis points lower than the third quarter of 2005 level of 3.88% and 16 basis points lower than the 3.92% level in the second quarter of 2006. |
| | • | | Increased volume contributed $16.4 million to the increase of net interest income. |
| | • | | Increased interest rates caused a $3.3 million reduction in net interest income. |
| | • | | Total Assets increased 44.5%, to $5.5 billion over the September 30, 2005 balance of $3.8 billion. Gibraltar and Anchor had $1.4 billion and $82 million, respectively, in assets at September 30, 2006. |
| | • | | Loansincreased 62.2% to $4.1 billion over the September 30, 2005 balance of $2.6 billion. Commercial loans totaled $2.4 billion and represented 58% of the combined loan portfolio. Residential loans totaled $1.5 billion and represented 36% of the total portfolio. Gibraltar had $1.2 billion in loans at September 30, 2006. |
| | • | | Deposits increased 43.8%, to $3.9 billion over the September 30, 2005 balance of $2.7 billion. Gibraltar had $0.9 billion in deposits at September 30, 2006. |
| | • | | Wealth Advisory Fee Income increased $411 thousand to $5.2 million for the third quarter of 2006, an increase of 8.5% over the prior year. |
| | • | | Investment Management Fee Income for the third quarter 2006 totaled $37.0 million, an increase of 35.2% over the third quarter 2005. The increase was due predominantly to |
| | the additions of Gibraltar and Anchor and strong investment performance at certain affiliates. On a same affiliate basis, investment management fee income was $28.5 million, an increase of 4.2%. |
| | • | | Total Assets Under Management/Advisory, including the Company’s unconsolidated affiliates, increased 34.5%, or $7.9 billion, over the prior year to $30.7 billion. Adjusted for the $888 million and $5.8 billion in assets under management at September 30, 2006 held by Gibraltar and Anchor, respectively, AUM increased $1.2 billion, or 5.2%, on a same affiliate basis. |
| | • | | Change in Assets Under Management. On a consolidated basis, Boston Private had net inflows of funds of approximately $140 million related to organic growth and an increase of approximately $270 million related to market action for the quarter. Year-to-date on a consolidated basis Boston Private had an increase of $1.4 billion related to market action and $5.4 billion from acquisitions, partially offset by net organic outflows of $90 million. |
Timothy L. Vaill, Chairman and Chief Executive Officer, said, “During the quarter, we continued to make progress executing our strategy to build a franchise that delivers long-term value to our shareholders. We experienced strong commercial and residential loan demand. Our deposits grew 5% during the quarter, in a very tough environment. We continue to experience net interest margin compression due to funding a portion of the robust loan growth with higher cost funds, and also increased deposit rates due to competitive pressures. Our investments in new banking locations continue to progress nicely. With the opening of the New York office expected next month, five of our six new private banking offices will be operational.”
Robert J. Whelan, Boston Private’s Chief Financial Officer, advised, “We experienced an increase of approximately 550 thousand diluted shares in the quarter, primarily due to the shares issued in the Anchor transaction on June 1 being outstanding for the full quarter. We estimate that with typical transactions, such as option exercises, we will have approximately 40.6 million fully diluted weighted average shares outstanding for the fourth quarter.”
Walter M. Pressey, Boston Private’s President, stated, “Anchor is an important new affiliate partner that further diversifies our distribution channels into the fastest growing segment of the investment management market — separately managed accounts. Diversification across geography, product, investment style and distribution channel is an important guiding principle for our company and will help us leverage our assets and grow our business as the interest rate environment improves. “
CEO Vaill concluded, “While our strategy is enabled by strategic acquisitions, targeted market research, de novo expansion and multiple distribution channels, it is also guided by the foundation of holding company support, optimal stewardship of capital, diversification and balanced affiliate management. Our long-term objective is to deliver sustainable organic growth that will generate superior returns to our shareholders and we continued to make progress during the third quarter.”
Dividend Payment Continues
Concurrent with the release of the third quarter 2006 earnings, the Board of Directors of Boston Private Financial Holdings declared a cash dividend to shareholders of $0.08 per share, reflecting the quarterly earnings performance. The record date for this dividend is November 1, 2006 and the payment date is November 15, 2006.
Cash Earnings
Boston Private calculates its cash earnings by adjusting net income to exclude net amortization of intangibles, and include related tax benefits that result from purchase accounting, as well as exclude the impact of certain non-cash share based compensation plans. Over and above GAAP earnings, the Company believes its cash earnings reports the additional value to shareholders generated by purchase accounting adjustments and the non-cash share based compensation plans. (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 October 26, 2006 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. 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 Financial Holdings, Inc. (Nasdaq: BPFH) is a wealth management firm that owns independently-operated financial services firms across the U.S. These affiliated firms comprise the Boston Private Wealth Management Group and provide private banking, wealth advisory and investment management services to the high net worth marketplace, selected businesses and institutions. Through strategic acquisitions the Company enters demographically attractive geographic areas to deliver lifetime financial solutions on a local and national basis. The Company makes capital resources available to its subsidiaries and provides resources such as sales and marketing expertise, leadership development, legal counsel and compliance guidance.
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, these non-GAAP measures exclude net amortization of intangibles and include 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, 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 business of Anchor Capital 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)
| | | | | | | | | | | | |
| | | September 30,
2006 | | | September 30,
2005 | | | December 31,
2005 | |
FINANCIAL DATA (1): | | | | | | | | | | | | |
Total Balance Sheet Assets | | $ | 5,478,170 | | | $ | 3,790,291 | | | $ | 5,118,568 | |
Stockholders’ Equity | | | 619,240 | | | | 403,133 | | | | 539,348 | |
Tangible Capital: | | | | | | | | | | | | |
Boston Private Bank & Trust | | | 154,988 | | | | 131,693 | | | | 137,887 | |
Borel Private Bank & Trust | | | 87,426 | | | | 72,173 | | | | 76,570 | |
First Private Bank & Trust | | | 46,115 | | | | 37,095 | | | | 39,514 | |
Gibraltar Private Bank & Trust | | | 75,340 | | | | — | | | | 63,762 | |
Investment Securities | | | 533,557 | | | | 540,236 | | | | 584,860 | |
Goodwill | | | 318,417 | | | | 132,246 | | | | 286,751 | |
Intangible Assets | | | 125,601 | | | | 48,424 | | | | 97,656 | |
Commercial and Construction Loans | | | 2,382,898 | | | | 1,586,875 | | | | 2,039,443 | |
Residential Mortgage Loans | | | 1,486,942 | | | | 880,041 | | | | 1,338,607 | |
Home Equity and Other Consumer Loans | | | 278,971 | | | | 91,071 | | | | 246,190 | |
| | | | | | | | | | | | |
Total Loans | | | 4,148,811 | | | | 2,557,987 | | | | 3,624,240 | |
Loans Held for Sale | | | 5,034 | | | | 8,232 | | | | 12,883 | |
Allowance for Loan Losses and Off-Balance Sheet Risk | | | 47,707 | | | | 31,795 | | | | 42,354 | |
Non-performing Loans | | | 12,592 | | | | 5,657 | | | | 7,900 | |
Repossessed Assets, Net | | | 550 | | | | — | | | | — | |
Total Non-performing Assets | | | 13,142 | | | | 5,657 | | | | 7,900 | |
Deposits | | | 3,854,594 | | | | 2,681,272 | | | | 3,748,141 | |
Borrowings | | | 871,160 | | | | 607,936 | | | | 703,379 | |
Book Value Per Share | | $ | 16.96 | | | $ | 13.43 | | | $ | 15.50 | |
Market Price Per Share | | $ | 27.88 | | | $ | 26.54 | | | $ | 30.42 | |
ASSETS UNDER MANAGEMENT AND ADVISORY: | | | | | | | | | | | | |
Westfield Capital Management | | $ | 9,074,000 | | | $ | 8,374,000 | | | $ | 8,325,000 | |
Boston Private Bank & Trust | | | 2,309,000 | | | | 2,312,000 | | | | 2,310,000 | |
Sand Hill Advisors | | | 1,151,000 | | | | 1,087,000 | | | | 1,094,000 | |
Boston Private Value Investors | | | 914,000 | | | | 849,000 | | | | 867,000 | |
RINET Company | | | 1,202,000 | | | | 1,092,000 | | | | 1,129,000 | |
Borel Private Bank & Trust | | | 683,000 | | | | 653,000 | | | | 661,000 | |
Dalton, Greiner, Hartman, Maher & Co. | | | 2,784,000 | | | | 3,384,000 | | | | 3,259,000 | |
KLS Professional Advisors Group | | | 3,494,000 | | | | 3,030,000 | | | | 3,140,000 | |
Gibraltar Private Bank & Trust | | | 888,000 | | | | — | | | | 757,000 | |
Anchor Capital Holdings | | | 5,806,000 | | | | — | | | | — | |
First Private Bank & Trust | | | — | | | | — | | | | — | |
Less: Inter-company Relationship | | | (211,000 | ) | | | (216,000 | ) | | | (203,000 | ) |
| | | | | | | | | | | | |
Consolidated Affiliate Assets Under Management and Advisory | | $ | 28,094,000 | | | $ | 20,565,000 | | | $ | 21,339,000 | |
Coldstream Capital Management | | | 1,000,000 | | | | 875,000 | | | | 900,000 | |
Bingham, Osborn, & Scarborough | | | 1,634,000 | | | | 1,403,000 | | | | 1,415,000 | |
| | | | | | | | | | | | |
Total Assets Under Management and Advisory | | $ | 30,728,000 | | | $ | 22,843,000 | | | $ | 23,654,000 | |
FINANCIAL RATIOS: | | | | | | | | | | | | |
Stockholders’ Equity/Total Assets | | | 11.30 | % | | | 10.64 | % | | | 10.54 | % |
Non-performing Loans/Total Loans | | | 0.30 | % | | | 0.22 | % | | | 0.22 | % |
Allowance for Loan Losses and Off-Balance Sheet Risk/Total Loans | | | 1.15 | % | | | 1.24 | % | | | 1.17 | % |
Tangible Capital/ Tangible Assets | | | 3.48 | % | | | 6.16 | % | | | 3.27 | % |
| | | | | | | | | | | | |
| | | Three Months Ended | | Nine Months Ended |
| | | September 30,
2006 | | September 30,
2005 | | September 30,
2006 | | September 30,
2005 |
OPERATING RESULTS (1): | | | | | | | | | | | | |
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) | | $ | 44,646 | | $ | 31,219 | | $ | 134,316 | | $ | 88,314 |
FTE Adjustment | | | 1,488 | | | 1,167 | | | 4,188 | | | 3,491 |
| | | | | | | | | | | | |
Net Interest Income | | | 43,158 | | | 30,052 | | | 130,128 | | | 84,823 |
| | | | | | | | | | | | |
Investment Management & Trust Fees: | | | | | | | | | | | | |
Westfield Capital Management | | | 14,238 | | | 13,226 | | | 41,877 | | | 36,209 |
Boston Private Bank & Trust | | | 3,352 | | | 3,283 | | | 10,240 | | | 9,582 |
Sand Hill Advisors | | | 1,539 | | | 1,523 | | | 4,642 | | | 4,649 |
Boston Private Value Investors | | | 1,701 | | | 1,524 | | | 5,057 | | | 4,684 |
Borel Private Bank & Trust | | | 1,149 | | | 896 | | | 3,196 | | | 2,539 |
Gibraltar Private Bank & Trust | | | 1,640 | | | — | | | 4,715 | | | — |
Dalton, Greiner, Hartman, Maher & Co. | | | 6,559 | | | 6,931 | | | 21,139 | | | 20,089 |
Anchor Capital Holdings | | | 6,854 | | | — | | | 9,119 | | | — |
| | | | | | | | | | | | |
Total Investment Management & Trust Fees | | | 37,032 | | | 27,383 | | | 99,985 | | | 77,752 |
Wealth Advisory Fees: | | | | | | | | | | | | |
RINET Company | | | 2,029 | | | 2,031 | | | 6,046 | | | 6,057 |
KLS Professional Advisors Group | | | 3,155 | | | 2,742 | | | 9,039 | | | 7,934 |
Other | | | 51 | | | 51 | | | 149 | | | 102 |
| | | | | | | | | | | | |
Total Wealth Advisory Fees | | | 5,235 | | | 4,824 | | | 15,234 | | | 14,093 |
| | | | | | | | | | | | |
Other Fees | | | 2,038 | | | 1,430 | | | 5,532 | | | 4,763 |
| | | | | | | | | | | | |
Total Fees | | | 44,305 | | | 33,637 | | | 120,751 | | | 96,608 |
| | | | | | | | | | | | |
Earnings in Equity Investments | | | 528 | | | 548 | | | 1,519 | | | 1,053 |
Gain on Sale of Loans, Net | | | 556 | | | 533 | | | 1,538 | | | 1,303 |
Gain on Sale of Investments, Net | | | — | | | — | | | — | | | 41 |
| | | | | | | | | | | | |
Total Fees and Other Income | | | 45,389 | | | 34,718 | | | 123,808 | | | 99,005 |
| | | | | | | | | | | | |
Total Revenue | | | 88,547 | | | 64,770 | | | 253,936 | | | 183,828 |
| | | | | | | | | | | | |
Provision for Loan Losses | | | 2,325 | | | 1,728 | | | 5,192 | | | 3,368 |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Salaries and Employee Benefits | | | 42,244 | | | 30,286 | | | 121,827 | | | 87,457 |
Occupancy and Equipment | | | 7,695 | | | 5,059 | | | 21,249 | | | 14,606 |
Professional Services | | | 3,161 | | | 2,035 | | | 9,696 | | | 7,190 |
Marketing and Business Development | | | 1,842 | | | 1,432 | | | 6,540 | | | 4,744 |
Contract Services and Processing | | | 1,301 | | | 960 | | | 3,804 | | | 2,846 |
Amortization of Intangibles | | | 3,736 | | | 1,539 | | | 9,775 | | | 4,616 |
Other | | | 3,703 | | | 2,785 | | | 12,521 | | | 9,155 |
| | | | | | | | | | | | |
Total Operating Expense | | | 63,682 | | | 44,096 | | | 185,412 | | | 130,614 |
| | | | | | | | | | | | |
Minority Interest | | | 1,120 | | | 526 | | | 2,679 | | | 1,480 |
Income Before Income Taxes | | | 21,420 | | | 18,420 | | | 60,653 | | | 48,366 |
Income Tax Expense | | | 7,770 | | | 7,004 | | | 21,888 | | | 17,979 |
| | | | | | | | | | | | |
Net Income | | $ | 13,650 | | $ | 11,416 | | $ | 38,765 | | $ | 30,387 |
| | | | | | | | | | | | |
1
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30,
2006 | | | September 30,
2005 | | | September 30,
2006 | | | September 30,
2005 | |
RECONCILIATION OF GAAP EARNINGS TO CASH EARNINGS (1): | | | | | | | | | | | | | | | | |
Net Income (GAAP Basis) | | $ | 13,650 | | | $ | 11,416 | | | $ | 38,765 | | | $ | 30,387 | |
Cash Basis Earnings (2) | | | | | | | | | | | | | | | | |
Book Amortization of Purchased Intangibles, Net of Tax | | | 2,032 | | | | 780 | | | | 5,423 | | | | 2,341 | |
Cash Benefit of Tax Deductions from Purchased Intangibles & Goodwill | | | 1,023 | | | | 1,032 | | | | 3,068 | | | | 3,097 | |
Stock options and ESPP, Net of Tax | | | 829 | | | | 596 | | | | 2,792 | | | | 1,939 | |
| | | | | | | | | | | | | | | | |
Total Cash Basis Adjustment | | | 3,884 | | | | 2,408 | | | | 11,283 | | | | 7,377 | |
| | | | | | | | | | | | | | | | |
Cash Basis Earnings | | $ | 17,534 | | | $ | 13,824 | | | $ | 50,048 | | | $ | 37,764 | |
| | | | | | | | | | | | | | | | |
| | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30,
2006 | | | September 30,
2005 | | | September 30,
2006 | | | September 30,
2005 | |
PER SHARE DATA: (In thousands, except per share data) (1) | | | | | | | | | | | | | | | | |
Calculation of Net Income for EPS: | | | | | | | | | | | | | | | | |
Net Income as reported and for basic EPS | | $ | 13,650 | | | $ | 11,416 | | | $ | 38,765 | | | $ | 30,387 | |
Interest on convertible trust preferred securities, net of tax | | | 765 | | | | 765 | | | | 2,295 | | | | 2,294 | |
| | | | | | | | | | | | | | | | |
Net Income for diluted EPS | | $ | 14,415 | | | $ | 12,181 | | | $ | 41,060 | | | $ | 32,681 | |
Calculation of average shares outstanding: | | | | | | | | | | | | | | | | |
Weighted average basic shares | | | 35,953 | | | | 27,954 | | | | 35,249 | | | | 27,719 | |
Dilutive effect of: | | | | | | | | | | | | | | | | |
Stock Options, Stock Grants and Other | | | 1,270 | | | | 913 | | | | 1,414 | | | | 905 | |
Forward Agreement | | | — | | | | 248 | | | | — | | | | 197 | |
Convertible trust preferred securities | | | 3,183 | | | | 3,182 | | | | 3,183 | | | | 3,182 | |
| | | | | | | | | | | | | | | | |
Dilutive potential common shares | | | 4,453 | | | | 4,343 | | | | 4,597 | | | | 4,284 | |
Weighted average diluted shares | | | 40,406 | | | | 32,297 | | | | 39,846 | | | | 32,003 | |
Earnings per Share: | | | | | | | | | | | | | | | | |
Basic | | $ | 0.38 | | | $ | 0.41 | | | $ | 1.10 | | | $ | 1.10 | |
Diluted | | $ | 0.36 | | | $ | 0.38 | | | $ | 1.03 | | | $ | 1.02 | |
RECONCILIATION OF GAAP EPS TO CASH EPS (1): | | | | | | | | | | | | | | | | |
(on a Diluted Basis) | | | | | | | | | | | | | | | | |
Earnings Per Share (GAAP Basis) | | $ | 0.36 | | | $ | 0.38 | | | $ | 1.03 | | | $ | 1.02 | |
Cash Basis Adjustment | | $ | 0.09 | | | $ | 0.07 | | | $ | 0.28 | | | $ | 0.23 | |
| | | | | | | | | | | | | | | | |
Cash Basis Earnings Per Diluted Share | | $ | 0.45 | | | $ | 0.45 | | | $ | 1.31 | | | $ | 1.25 | |
| | | | | | | | | | | | | | | | |
| | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30,
2006 | | | September 30,
2005 | | | September 30,
2006 | | | September 30,
2005 | |
OPERATING RATIOS & STATISTICS (1): | | | | | | | | | | | | | | | | |
Return on Average Equity | | | 8.95 | % | | | 12.81 | % | | | 9.01 | % | | | 11.86 | % |
Return on Average Assets | | | 1.02 | % | | | 1.28 | % | | | 0.99 | % | | | 1.17 | % |
Net Interest Margin | | | 3.76 | % | | | 3.88 | % | | | 3.91 | % | | | 3.78 | % |
Core Net Interest Margin (3) | | | 4.03 | % | | | 4.06 | % | | | 4.19 | % | | | 3.97 | % |
Total Fees and Other Income/Total Revenue | | | 51.26 | % | | | 53.60 | % | | | 48.76 | % | | | 53.86 | % |
Efficiency Ratio | | | 67.39 | % | | | 65.62 | % | | | 68.86 | % | | | 68.14 | % |
Loans Charged-off, Net of (Recoveries) | | | ($101 | ) | | $ | 10 | | | $ | 438 | | | $ | 87 | |
RECONCILIATION OF NIM TO CORE NIM | | | | | | | | | | | | | | | | |
Net Interest Margin | | | 3.76 | % | | | 3.88 | % | | | 3.91 | % | | | 3.78 | % |
Effect of Trust Preferred, Net | | | 0.27 | % | | | 0.18 | % | | | 0.28 | % | | | 0.19 | % |
Core Net Interest Margin (3) | | | 4.03 | % | | | 4.06 | % | | | 4.19 | % | | | 3.97 | % |
CASH OPERATING RATIOS (1): | | | | | | | | | | | | | | | | |
Return on Average Equity (4) | | | 11.50 | % | | | 15.51 | % | | | 11.64 | % | | | 14.74 | % |
Return on Average Assets (5) | | | 1.31 | % | | | 1.55 | % | | | 1.28 | % | | | 1.46 | % |
2
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30,
2006 | | | September 30,
2005 | | | September 30,
2006 | | | September 30,
2005 | |
AVERAGE BALANCE SHEET: | | | | | | | | | | | | | | | | |
AVERAGE ASSETS: | | | | | | | | | | | | | | | | |
Interest-Bearing Cash | | $ | 17,627 | | | $ | 6,353 | | | $ | 11,524 | | | $ | 4,337 | |
Federal Funds Sold and other | | | 71,215 | | | | 105,935 | | | | 116,848 | | | | 132,006 | |
U.S. Treasuries and Agencies | | | 218,537 | | | | 224,148 | | | | 228,185 | | | | 222,432 | |
Municipal Securities | | | 219,530 | | | | 237,150 | | | | 223,492 | | | | 231,646 | |
Corporate Bonds | | | 35,032 | | | | 29,371 | | | | 39,313 | | | | 31,340 | |
Mortgage-Backed Securities | | | 39,831 | | | | 38,547 | | | | 41,155 | | | | 41,899 | |
Stock in Federal Home Loan Banks | | | 36,562 | | | | 22,414 | | | | 33,300 | | | | 21,738 | |
Commercial and Construction Loans | | | 2,298,433 | | | | 1,516,775 | | | | 2,164,046 | | | | 1,437,989 | |
Residential Mortgage Loans | | | 1,485,702 | | | | 906,860 | | | | 1,442,958 | | | | 870,961 | |
Home Equity and Other Consumer Loans | | | 274,387 | | | | 92,515 | | | | 259,461 | | | | 92,203 | |
| | | | | | | | | | | | | | | | |
Total Earning Assets | | | 4,696,856 | | | | 3,180,068 | | | | 4,560,282 | | | | 3,086,551 | |
Allowance for Loan Losses | | | (40,695 | ) | | | (27,209 | ) | | | (39,247 | ) | | | (27,442 | ) |
Goodwill | | | 318,296 | | | | 132,246 | | | | 297,232 | | | | 133,298 | |
Intangible Assets | | | 127,390 | | | | 48,996 | | | | 107,966 | | | | 50,932 | |
Other Assets | | | 269,643 | | | | 231,113 | | | | 272,268 | | | | 213,133 | |
| | | | | | | | | | | | | | | | |
TOTAL AVERAGE ASSETS | | $ | 5,371,490 | | | $ | 3,565,214 | | | $ | 5,198,501 | | | $ | 3,456,472 | |
| | | | | | | | | | | | | | | | |
AVERAGE LIABILITIES AND STOCKHOLDERS’ EQUITY: | | | | | | | | | | | | | | | | |
Savings Accounts | | $ | 132,843 | | | $ | 58,245 | | | $ | 116,945 | | | $ | 45,690 | |
NOW Accounts | | | 314,027 | | | | 229,404 | | | | 334,752 | | | | 232,768 | |
Money Market Accounts | | | 1,754,157 | | | | 1,224,013 | | | | 1,731,579 | | | | 1,191,754 | |
Certificates of Deposit | | | 771,820 | | | | 539,790 | | | | 732,790 | | | | 526,715 | |
| | | | | | | | | | | | | | | | |
Total Interest-Bearing Deposits | | | 2,972,847 | | | | 2,051,452 | | | | 2,916,066 | | | | 1,996,927 | |
Repurchase Agreements | | | 126,196 | | | | 100,705 | | | | 118,766 | | | | 98,696 | |
FHLB Borrowings | | | 533,627 | | | | 302,156 | | | | 468,385 | | | | 296,363 | |
Junior Subordinated Debentures | | | 234,021 | | | | 118,781 | | | | 234,021 | | | | 115,899 | |
Other Borrowings | | | 34,640 | | | | 228 | | | | 17,622 | | | | 2,053 | |
| | | | | | | | | | | | | | | | |
Total Interest-Bearing Liabilities | | | 3,901,331 | | | | 2,573,322 | | | | 3,754,860 | | | | 2,509,938 | |
Non-interest Bearing Deposits | | | 712,060 | | | | 533,033 | | | | 733,062 | | | | 516,395 | |
Other Liabilities | | | 148,052 | | | | 102,385 | | | | 137,105 | | | | 88,498 | |
| | | | | | | | | | | | | | | | |
Total Liabilities | | | 4,761,443 | | | | 3,208,740 | | | | 4,625,027 | | | | 3,114,831 | |
Stockholders’ Equity | | | 610,047 | | | | 356,474 | | | | 573,474 | | | | 341,641 | |
| | | | | | | | | | | | | | | | |
TOTAL AVERAGE LIABILITIES & STOCKHOLDERS’ EQUITY | | $ | 5,371,490 | | | $ | 3,565,214 | | | $ | 5,198,501 | | | $ | 3,456,472 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | |
| | | September 30,
2006 | | | June 30,
2006 | |
FINANCIAL DATA (1): | | | | | | | | |
Total Balance Sheet Assets | | $ | 5,478,170 | | | $ | 5,279,086 | |
Stockholders’ Equity | | | 619,240 | | | | 600,347 | |
Tangible Capital: | | | | | | | | |
Boston Private Bank & Trust | | | 154,988 | | | | 147,098 | |
Borel Private Bank & Trust | | | 87,426 | | | | 83,600 | |
First Private Bank & Trust | | | 46,115 | | | | 44,017 | |
Gibraltar Private Bank & Trust | | | 75,340 | | | | 71,296 | |
Investment Securities | | | 533,557 | | | | 563,513 | |
Goodwill | | | 318,417 | | | | 318,118 | |
Intangible Assets | | | 125,601 | | | | 129,338 | |
Commercial and Construction Loans | | | 2,382,898 | | | | 2,197,682 | |
Residential Mortgage Loans | | | 1,486,942 | | | | 1,482,629 | |
Home Equity and Other Consumer Loans | | | 278,971 | | | | 270,633 | |
| | | | | | | | |
Total Loans | | | 4,148,811 | | | | 3,950,944 | |
Loans Held for Sale | | | 5,034 | | | | 8,131 | |
Allowance for Loan Losses and Off-Balance Sheet Risk | | | 47,707 | | | | 45,383 | |
Non-performing Loans | | | 12,592 | | | | 5,775 | |
Repossessed Assets, Net | | | 550 | | | | — | |
Total Non-performing Assets | | | 13,142 | | | | 5,775 | |
Deposits | | | 3,854,594 | | | | 3,661,419 | |
Borrowings | | | 871,160 | | | | 887,612 | |
Book Value Per Share | | $ | 16.96 | | | $ | 16.52 | |
Market Price Per Share | | $ | 27.88 | | | $ | 27.90 | |
ASSETS UNDER MANAGEMENT AND ADVISORY: | | | | | | | | |
Westfield Capital Management | | $ | 9,074,000 | | | $ | 8,890,000 | |
Boston Private Bank & Trust | | | 2,309,000 | | | | 2,279,000 | |
Sand Hill Advisors | | | 1,151,000 | | | | 1,120,000 | |
Boston Private Value Investors | | | 914,000 | | | | 891,000 | |
RINET Company | | | 1,202,000 | | | | 1,180,000 | |
Borel Private Bank & Trust | | | 683,000 | | | | 692,000 | |
Dalton, Greiner, Hartman, Maher & Co. | | | 2,784,000 | | | | 3,199,000 | |
KLS Professional Advisors Group | | | 3,494,000 | | | | 3,399,000 | |
Gibraltar Private Bank & Trust | | | 888,000 | | | | 798,000 | |
Anchor Capital Holdings | | | 5,806,000 | | | | 5,430,000 | |
First Private Bank & Trust | | | — | | | | — | |
Less: Inter-company Relationship | | | (211,000 | ) | | | (201,000 | ) |
| | | | | | | | |
Consolidated Affiliate Assets Under Management and Advisory | | $ | 28,094,000 | | | $ | 27,677,000 | |
Coldstream Capital Management | | | 1,000,000 | | | | 975,000 | |
Bingham, Osborn, & Scarborough | | | 1,634,000 | | | | 1,545,000 | |
| | | | | | | | |
Total Unconsolidated Assets Under Management and Advisory | | $ | 30,728,000 | | | $ | 30,197,000 | |
FINANCIAL RATIOS (1): | | | | | | | | |
Stockholders’ Equity/Total Assets | | | 11.30 | % | | | 11.37 | % |
Nonperforming Loans/Total Loans | | | 0.30 | % | | | 0.15 | % |
Allowance for Loan Losses and Off-Balance Sheet Risk/Total Loans | | | 1.15 | % | | | 1.15 | % |
Tangible Capital/Tangible Assets | | | 3.48 | % | | | 3.16 | % |
3
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | |
| | | Three Months Ended | |
| | | September 30,
2006 | | | June 30,
2006 | |
OPERATING RESULTS (1): | | | | | | | | |
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) | | $ | 44,646 | | | $ | 44,766 | |
FTE Adjustment | | | 1,488 | | | | 1,364 | |
| | | | | | | | |
Net Interest Income | | | 43,158 | | | | 43,402 | |
| | | | | | | | |
Investment Management & Trust Fees: | | | | | | | | |
Westfield Capital Management | | | 14,238 | | | | 13,900 | |
Boston Private Bank & Trust | | | 3,352 | | | | 3,472 | |
Sand Hill Advisors | | | 1,539 | | | | 1,562 | |
Boston Private Value Investors | | | 1,701 | | | | 1,724 | |
Borel Private Bank & Trust | | | 1,149 | | | | 1,061 | |
Gibraltar Private Bank & Trust | | | 1,640 | | | | 1,580 | |
Dalton, Greiner, Hartman, Maher & Co. | | | 6,559 | | | | 7,036 | |
Anchor Capital | | | 6,854 | | | | 2,263 | |
| | | | | | | | |
Total Investment Management & Trust Fees | | | 37,032 | | | | 32,598 | |
Wealth Advisory Fees | | | | | | | | |
RINET Company | | | 2,029 | | | | 2,078 | |
KLS Professional Advisors Group | | | 3,155 | | | | 3,005 | |
Other | | | 51 | | | | 47 | |
| | | | | | | | |
Total Wealth Advisory Fees | | | 5,235 | | | | 5,130 | |
| | | | | | | | |
Other Fees | | | 2,038 | | | | 1,664 | |
| | | | | | | | |
Total Fees | | | 44,305 | | | | 39,392 | |
| | | | | | | | |
Earnings in Equity Investments | | | 528 | | | | 220 | |
Gain on Sale of Loans, Net | | | 556 | | | | 525 | |
Gain on Sale of Investments, Net | | | — | | | | — | |
| | | | | | | | |
Total Fees and Other Income | | | 45,389 | | | | 40,137 | |
| | | | | | | | |
Total Revenue | | | 88,547 | | | | 83,539 | |
| | | | | | | | |
Provision for Loan Losses | | | 2,325 | | | | 1,704 | |
| | | | | | | | |
Salaries and Benefits | | | 42,244 | | | | 40,208 | |
Occupancy and Equipment | | | 7,695 | | | | 6,995 | |
Professional Services | | | 3,161 | | | | 3,727 | |
Marketing and Business Development | | | 1,842 | | | | 2,361 | |
Contract Services and Processing | | | 1,301 | | | | 1,273 | |
Amortization of Intangibles | | | 3,736 | | | | 3,164 | |
Other | | | 3,703 | | | | 4,302 | |
| | | | | | | | |
Total Operating Expense | | | 63,682 | | | | 62,030 | |
| | | | | | | | |
Minority Interest | | | 1,120 | | | | 745 | |
Income Before Income Taxes | | | 21,420 | | | | 19,060 | |
Income Tax Expense | | | 7,770 | | | | 6,772 | |
| | | | | | | | |
Net Income | | $ | 13,650 | | | $ | 12,288 | |
| | | | | | | | |
| |
| | | Three Months Ended | |
| | | September 30,
2006 | | | June 30,
2006 | |
RECONCILIATION OF GAAP EARNINGS TO CASH EARNINGS (1): | | | | | | | | |
Net Income (GAAP Basis) | | $ | 13,650 | | | $ | 12,288 | |
Cash Basis Earnings (1) | | | | | | | | |
Book Amortization of Purchased Intangibles, Net of Tax | | | 2,032 | | | | 1,763 | |
Cash Benefit of Tax Deductions from Purchased Intangibles & Goodwill | | | 1,023 | | | | 1,023 | |
Stock options and ESPP, Net of Tax | | | 829 | | | | 1,062 | |
| | | | | | | | |
Total Cash Basis Adjustment | | | 3,884 | | | | 3,848 | |
| | | | | | | | |
Cash Basis Earnings | | $ | 17,534 | | | | 16,136 | |
| | | | | | | | |
| |
| | | Three Months Ended | |
| | | September 30,
2006 | | | June 30,
2006 | |
PER SHARE DATA: (In thousands, except per share data) (1) | | | | | | | | |
Calculation of Net Income for EPS: | | | | | | | | |
Net Income as reported and for basic EPS | | $ | 13,650 | | | $ | 12,288 | |
Interest on convertible trust preferred securities, net of tax | | | 765 | | | | 765 | |
| | | | | | | | |
Net Income for diluted EPS | | $ | 14,415 | | | $ | 13,053 | |
Calculation of Average Shares Outstanding: | | | | | | | | |
Weighted average basic shares | | | 35,953 | | | | 35,199 | |
Dilutive effect of: | | | | | | | | |
Stock Options and Stock Grants, and Other | | | 1,270 | | | | 1,518 | |
Convertible trust preferred securities | | | 3,183 | | | | 3,182 | |
| | | | | | | | |
Dilutive potential common shares | | | 4,453 | | | | 4,700 | |
Weighted average diluted shares | | | 40,406 | | | | 39,899 | |
Earnings per Share: | | | | | | | | |
Basic | | $ | 0.38 | | | $ | 0.35 | |
Diluted | | $ | 0.36 | | | $ | 0.33 | |
RECONCILIATION OF GAAP EPS TO CASH EPS (1): | | | | | | | | |
(on a Diluted Basis) | | | | | | | | |
Earnings Per Share (GAAP Basis) | | $ | 0.36 | | | $ | 0.33 | |
Cash Basis Adjustment | | $ | 0.09 | | | $ | 0.09 | |
| | | | | | | | |
Cash Basis Earnings Per Diluted Share | | $ | 0.45 | | | $ | 0.42 | |
| | | | | | | | |
OPERATING RATIOS & STATISTICS: | | | | | | | | |
Return on Average Equity | | | 8.95 | % | | | 8.62 | % |
Return on Average Assets | | | 1.02 | % | | | 0.95 | % |
Net Interest Margin | | | 3.76 | % | | | 3.92 | % |
Core Net Interest Margin (3) | | | 4.03 | % | | | 4.20 | % |
Total Fees and Other Income/Total Revenue | | | 51.26 | % | | | 48.05 | % |
Efficiency Ratio | | | 67.39 | % | | | 69.95 | % |
Loans Charged-off, Net of (Recoveries) | | | ($101 | ) | | $ | 12 | |
RECONCILIATION OF NIM TO CORE NIM | | | | | | | | |
Net Interest Margin | | | 3.76 | % | | | 3.92 | % |
Effect of Trust Preferred , Net | | | 0.27 | % | | | 0.28 | % |
Core Net Interest Margin (3) | | | 4.03 | % | | | 4.20 | % |
4
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
SAME AFFILIATES
Growth Excluding Acquisitions
| | | | | | | | | | | | | | | |
| | | As Reported
September 30,
2006 | | | September 30,
2005 | | | Acquisitions
September 30,
2006 | | Same Affiliates
September 30,
2006 | |
FINANCIAL DATA (1): | | | | | | | | | | | | | | | |
Total Balance Sheet Assets | | $ | 5,478,170 | | | $ | 3,790,291 | | | $ | 1,677,774 | | $ | 3,800,396 | |
Stockholders’ Equity | | | 619,240 | | | | 403,133 | | | | 167,018 | | | 452,222 | |
Tangible Capital: | | | | | | | | | | | | | | | |
Boston Private Bank & Trust | | | 154,988 | | | | 131,693 | | | | — | | | 154,988 | |
Borel Private Bank & Trust | | | 87,426 | | | | 72,173 | | | | — | | | 87,426 | |
First Private Bank & Trust | | | 46,115 | | | | 37,095 | | | | — | | | 46,115 | |
Gibraltar Private Bank & Trust | | | 75,340 | | | | — | | | | 75,340 | | | — | |
Investment Securities | | | 533,557 | | | | 540,236 | | | | 26,068 | | | 507,489 | |
Goodwill | | | 318,417 | | | | 132,246 | | | | 186,781 | | | 131,636 | |
Intangible Assets | | | 125,601 | | | | 48,424 | | | | 82,917 | | | 42,684 | |
Commercial and Construction Loans | | | 2,382,898 | | | | 1,586,875 | | | | 531,140 | | | 1,851,758 | |
Residential Mortgage Loans | | | 1,486,942 | | | | 880,041 | | | | 459,402 | | | 1,027,540 | |
Home Equity and Other Consumer Loans | | | 278,971 | | | | 91,071 | | | | 184,290 | | | 94,681 | |
| | | | | | | | | | | | | | | |
Total Loans | | | 4,148,811 | | | | 2,557,987 | | | | 1,174,832 | | | 2,973,979 | |
Loans Held for Sale | | | 5,034 | | | | 8,232 | | | | — | | | 5,034 | |
Allowance for Loan Losses and Off-Balance Sheet Risk | | | 47,706 | | | | 31,795 | | | | 10,993 | | | 36,713 | |
Non-performing Loans | | | 12,592 | | | | 5,657 | | | | 1,788 | | | 10,804 | |
Repossessed Assets, Net | | | 550 | | | | — | | | | — | | | — | |
Total Non-performing Assets | | | 13,142 | | | | 5,657 | | | | 1,788 | | | 11,354 | |
Deposits | | | 3,854,594 | | | | 2,681,272 | | | | 941,635 | | | 2,912,959 | |
Borrowings | | | 871,160 | | | | 607,936 | | | | 305,074 | | | 566,086 | |
ASSETS UNDER MANAGEMENT AND ADVISORY: | | | | | | | | | | | | | | | |
Westfield Capital Management | | $ | 9,074,000 | | | $ | 8,374,000 | | | | — | | $ | 9,074,000 | |
Boston Private Bank & Trust | | | 2,309,000 | | | | 2,312,000 | | | | — | | | 2,309,000 | |
Sand Hill Advisors | | | 1,151,000 | | | | 1,087,000 | | | | — | | | 1,151,000 | |
Boston Private Value Investors | | | 914,000 | | | | 849,000 | | | | — | | | 914,000 | |
RINET Company | | | 1,202,000 | | | | 1,092,000 | | | | — | | | 1,202,000 | |
Borel Private Bank & Trust | | | 683,000 | | | | 653,000 | | | | — | | | 683,000 | |
Dalton, Greiner, Hartman, Maher & Co. | | | 2,784,000 | | | | 3,384,000 | | | | — | | | 2,784,000 | |
KLS Professional Advisors Group | | | 3,494,000 | | | | 3,030,000 | | | | — | | | 3,494,000 | |
Gibraltar Private Bank & Trust | | | 888,000 | | | | — | | | | 888,000 | | | — | |
Anchor Capital Holdings | | | 5,806,000 | | | | — | | | | 5,806,000 | | | — | |
First Private Bank & Trust | | | — | | | | — | | | | — | | | — | |
| | | | | | | | | | | | | | | |
Less: Inter-company Relationship | | | (211,000 | ) | | | (216,000 | ) | | | — | | | (211,000 | ) |
| | | | | | | | | | | | | | | |
Consolidated Affiliate Assets Under Management and Advisory | | $ | 28,094,000 | | | $ | 20,565,000 | | | $ | 6,694,000 | | $ | 21,400,000 | |
Coldstream Capital Management | | | 1,000,000 | | | | 875,000 | | | | — | | | 1,000,000 | |
Bingham, Osborn, & Scarborough | | | 1,634,000 | | | | 1,403,000 | | | | — | | | 1,634,000 | |
| | | | | | | | | | | | | | | |
Total Assets Under Management and Advisory | | $ | 30,728,000 | | | $ | 22,843,000 | | | $ | 6,694,000 | | $ | 24,034,000 | |
| | | | | | | | | | | | | | | |
| |
| | | Three Months Ended | |
| | | As Reported
September 30,
2006 | | | September 30,
2005 | | | Acquisitions
September 30,
2006 | | Same Affiliates
September 30,
2006 | |
OPERATING RESULTS (1): | | | | | | | | | | | | | | | |
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) | | $ | 44,646 | | | $ | 31,219 | | | $ | 11,327 | | $ | 33,319 | |
FTE Adjustment | | | 1,488 | | | | 1,167 | | | | — | | | 1,488 | |
| | | | | | | | | | | | | | | |
Net Interest Income | | | 43,158 | | | | 30,052 | | | | 11,327 | | | 31,831 | |
| | | | | | | | | | | | | | | |
Investment Management & Trust Fees: | | | | | | | | | | | | | | | |
Westfield Capital Management | | | 14,238 | | | | 13,226 | | | | — | | | 14,238 | |
Boston Private Bank & Trust | | | 3,352 | | | | 3,283 | | | | — | | | 3,352 | |
Sand Hill Advisors | | | 1,539 | | | | 1,523 | | | | — | | | 1,539 | |
Boston Private Value Investors | | | 1,701 | | | | 1,524 | | | | — | | | 1,701 | |
Borel Private Bank & Trust | | | 1,149 | | | | 896 | | | | — | | | 1,149 | |
Gibraltar Private Bank & Trust | | | 1,640 | | | | — | | | | 1,640 | | | — | |
Dalton, Greiner, Hartman, Maher & Co. | | | 6,559 | | | | 6,931 | | | | — | | | 6,559 | |
Anchor Capital Holdings | | | 6,854 | | | | — | | | | 6,854 | | | — | |
| | | | | | | | | | | | | | | |
Total Investment Management & Trust Fees | | | 37,032 | | | | 27,383 | | | | 8,494 | | | 28,538 | |
Wealth Advisory Fees: | | | | | | | | | | | | | | | |
RINET Company | | | 2,029 | | | | 2,031 | | | | — | | | 2,029 | |
KLS Professional Advisors Group | | | 3,155 | | | | 2,742 | | | | — | | | 3,155 | |
Other | | | 51 | | | | 51 | | | | — | | | 51 | |
| | | | | | | | | | | | | | | |
Total Wealth Advisory Fees | | | 5,235 | | | | 4,824 | | | | — | | | 5,235 | |
| | | | | | | | | | | | | | | |
Other Fees | | | 2,038 | | | | 1,430 | | | | 330 | | | 1,708 | |
| | | | | | | | | | | | | | | |
Total Fees | | | 44,305 | | | | 33,637 | | | | 8,824 | | | 35,481 | |
| | | | | | | | | | | | | | | |
Earnings in Equity Investments | | | 528 | | | | 548 | | | | — | | | 528 | |
Gain on Sale of Loans, Net | | | 556 | | | | 533 | | | | 131 | | | 425 | |
Gain on Sale of Investments, Net | | | — | | | | — | | | | — | | | — | |
| | | | | | | | | | | | | | | |
Total Fees and Other Income | | | 45,389 | | | | 34,718 | | | | 8,955 | | | 36,434 | |
| | | | | | | | | | | | | | | |
Total Revenue | | | 88,547 | | | | 64,770 | | | | 20,282 | | | 68,265 | |
| | | | | | | | | | | | | | | |
Provision for Loan Losses | | | 2,325 | | | | 1,728 | | | | 312 | | | 2,013 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Salaries and Employee Benefits | | | 42,244 | | | | 30,286 | | | | 9,743 | | | 32,501 | |
Occupancy and Equipment | | | 7,695 | | | | 5,059 | | | | 1,591 | | | 6,104 | |
Professional Services | | | 3,161 | | | | 2,035 | | | | 786 | | | 2,375 | |
Marketing and Business Development | | | 1,842 | | | | 1,432 | | | | 474 | | | 1,368 | |
Contract Services and Processing | | | 1,301 | | | | 960 | | | | 334 | | | 967 | |
Amortization of Intangibles | | | 3,736 | | | | 1,539 | | | | 2,336 | | | 1,400 | |
Other | | | 3,703 | | | | 2,785 | | | | 790 | | | 2,913 | |
| | | | | | | | | | | | | | | |
Total Operating Expense | | | 63,682 | | | | 44,096 | | | | 16,054 | | | 47,628 | |
| | | | | | | | | | | | | | | |
Minority Interest | | | 1,120 | | | | 526 | | | | 383 | | | 737 | |
Income Before Income Taxes | | | 21,420 | | | | 18,420 | | | | 3,533 | | | 17,887 | |
Income Tax Expense | | | 7,770 | | | | 7,004 | | | | 1,449 | | | 6,321 | |
| | | | | | | | | | | | | | | |
Net Income | | $ | 13,650 | | | $ | 11,416 | | | $ | 2,084 | | $ | 11,566 | |
| | | | | | | | | | | | | | | |
5
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | | | | | | |
| | | Nine Months Ended | |
| | | As Reported
September 30,
2006 | | September 30,
2005 | | Acquisitions
September 30,
2006 | | Same
Affiliates
September 30,
2006 | |
OPERATING RESULTS (1): | | | | | | | | | | | | | |
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) | | $ | 134,316 | | $ | 88,314 | | $ | 35,130 | | $ | 99,186 | |
FTE Adjustment | | | 4,188 | | | 3,491 | | | — | | | 4,188 | |
| | | | | | | | | | | | | |
Net Interest Income | | | 130,128 | | | 84,823 | | | 35,130 | | | 94,998 | |
| | | | | | | | | | | | | |
Investment Management & Trust Fees: | | | | | | | | | | | | | |
Westfield Capital Management | | | 41,877 | | | 36,209 | | | — | | | 41,877 | |
Boston Private Bank & Trust | | | 10,240 | | | 9,582 | | | — | | | 10,240 | |
Sand Hill Advisors | | | 4,642 | | | 4,649 | | | — | | | 4,642 | |
Boston Private Value Investors | | | 5,057 | | | 4,684 | | | — | | | 5,057 | |
Borel Private Bank & Trust | | | 3,196 | | | 2,539 | | | — | | | 3,196 | |
Gibraltar Private Bank & Trust | | | 4,715 | | | — | | | 4,715 | | | — | |
Dalton, Greiner, Hartman, Maher & Co. | | | 21,139 | | | 20,089 | | | — | | | 21,139 | |
| | | | | | | | | | | | | |
Anchor Capital Holdings | | | 9,119 | | | — | | | 9,119 | | | — | |
| | | | | | | | | | | | | |
Total Investment Management & Trust Fees | | | 99,985 | | | 77,752 | | | 13,834 | | | 86,151 | |
Wealth Advisory Fees: | | | | | | | | | | | | | |
RINET Company | | | 6,046 | | | 6,057 | | | — | | | 6,046 | |
KLS Professional Advisors Group | | | 9,039 | | | 7,934 | | | — | | | 9,039 | |
Other | | | 149 | | | 102 | | | 815 | | | (666 | ) |
| | | | | | | | | | | | | |
Total Wealth Advisory Fees | | | 15,234 | | | 14,093 | | | 815 | | | 14,419 | |
| | | | | | | | | | | | | |
Other Fees | | | 5,532 | | | 4,763 | | | — | | | 5,532 | |
| | | | | | | | | | | | | |
Total Fees | | | 120,751 | | | 96,608 | | | 14,649 | | | 106,102 | |
| | | | | | | | | | | | | |
Earnings in Equity Investments | | | 1,519 | | | 1,053 | | | | | | 1,519 | |
Gain on Sale of Loans, Net | | | 1,538 | | | 1,303 | | | 556 | | | 982 | |
Gain on Sale of Investments, Net | | | — | | | 41 | | | — | | | — | |
| | | | | | | | | | | | | |
Total Fees and Other Income | | | 123,808 | | | 99,005 | | | 15,205 | | | 108,603 | |
| | | | | | | | | | | | | |
Total Revenue | | | 253,936 | | | 183,828 | | | 50,335 | | | 203,601 | |
| | | | | | | | | | | | | |
Provision for Loan Losses | | | 5,192 | | | 3,368 | | | 1,639 | | | 3,553 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Salaries and Employee Benefits | | | 121,827 | | | 87,457 | | | 22,860 | | | 98,967 | |
Occupancy and Equipment | | | 21,249 | | | 14,606 | | | 4,153 | | | 17,096 | |
Professional Services | | | 9,696 | | | 7,190 | | | 2,126 | | | 7,570 | |
Marketing and Business Development | | | 6,540 | | | 4,744 | | | 1,442 | | | 5,098 | |
Contract Services and Processing | | | 3,804 | | | 2,846 | | | 928 | | | 2,876 | |
Amortization of Intangibles | | | 9,775 | | | 4,616 | | | 5,574 | | | 4,201 | |
Other | | | 12,521 | | | 9,155 | | | 2,861 | | | 9,660 | |
| | | | | | | | | | | | | |
Total Operating Expense | | | 185,412 | | | 130,614 | | | 39,944 | | | 145,468 | |
| | | | | | | | | | | | | |
Minority Interest | | | 2,679 | | | 1,480 | | | 488 | | | 2,191 | |
Income Before Income Taxes | | | 60,653 | | | 48,366 | | | 8,264 | | | 52,389 | |
Income Tax Expense | | | 21,888 | | | 17,979 | | | 3,365 | | | 18,523 | |
| | | | | | | | | | | | | |
Net Income | | $ | 38,765 | | $ | 30,387 | | $ | 4,899 | | $ | 33,866 | |
| | | | | | | | | | | | | |
| (1) | The Company adopted FAS 123(R) on January 1, 2006 and elected the modified retrospective application. Under the modified retrospective application method, all prior quarters have been restated. |
| (2) | The Company calculates its cash earnings by adjusting net income to exclude the amortization of the purchased intangibles (net of tax), the tax benefit on the portion of the purchase price which is deductible over a 15 year life, and certain non-cash share based compensation plans (net of tax). The 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 Cash Earnings, to provide information for investors to effectively analyze financial trends of ongoing business activities. |
| (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 believes it is useful to compare Net Interest Margin excluding the impact of this acquisition funding vehicle. |
| (4) | The Company calculates Return on Average Equity on a cash basis as Cash Basis Earnings divided by Average Equity. |
| (5) | The Company calculates Return on Average Assets on a cash basis as Cash Basis Earnings divided by Average Assets. |
6
