Exhibit 99.1
FOR IMMEDIATE RELEASE
Chief Financial Officer
(617) 912-4220
Erica E. Smith
Investor Relations
(617) 912-3766
www.bostonprivate.com
BOSTON PRIVATE ANNOUNCES RESULTS FOR THE
FOURTH-QUARTER AND YEAR-END 2006
Company Records Solid Balance Sheet Growth Recognizes Significant Loan Expansion
Boston, MA, January 24, 2007 – Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “Boston Private”) today reported fourth quarter 2006 non-GAAP cash earnings of $0.50 per diluted share, an increase of 11.1%, versus $0.45 for the fourth quarter 2005. For the year, non-GAAP cash earnings were $1.82 per diluted share, an increase of 7.1% compared to $1.70 per diluted share for the year ended December 31, 2005.
GAAP earnings for the fourth quarter were $0.40 per diluted share, an increase of 11.1% compared to $0.36 per diluted share for the fourth quarter 2005. For the year, GAAP earnings were $1.43 per diluted share, an increase of 3.6% compared to $1.38 per diluted share for the year ended 2005.
Timothy L. Vaill, Chairman and Chief Executive Officer, said, “I am gratified that the GAAP earnings for the fourth quarter were $0.40 per share compared to $0.36 per share in the third quarter. During the year, we invested in new wealth management offices in demographically rich markets such as Naples, Florida, New York City, and Hingham,
Massachusetts. We acquired Anchor Capital, further diversifying our revenue stream by entering the separately managed accounts business. In addition, we increased our investment in our fast growing affiliate partner Bingham, Osborn & Scarborough. While we continued to face the challenge of an inverted yield curve, our results this quarter were benefited by approximately $0.02 per share resulting from management’s decision to reduce discretionary incentive payments consistent with a lower earnings growth rate compared to recent years. We also recognized a $0.01 per share benefit from a lower tax rate and $0.01 per share from seasonal performance fees related to the investment management business.”
Walter M. Pressey, Boston Private’s President, stated, “Our investment management business benefited from a strong market and diversification by business mix, geography, product, investment style, and client type. Despite short-term challenges faced by one investment product, which resulted in significant outflows, our revenues grew by more than 30 percent overall and approximately 10 percent on a same affiliate basis.”
The financial statements include the results from Gibraltar Private Bank & Trust Company (“Gibraltar”), which Boston Private acquired on October 1, 2005, and from Anchor Capital Holdings LLC (“Anchor”), which the Company acquired on June 1, 2006. Accordingly, comparisons for certain periods are not reflective of same affiliate financial information. More detailed financial information regarding Gibraltar’s and Anchor’s financial results are outlined later in this press release.
Annual Highlights
| | v | Net Income for 2006 increased 24.9% to $54.4 million, compared to $43.5 million in 2005. Net income was $48.0 million, or an increase of 15.9%, on a same affiliate basis after adjusting for the $6.4 million of net income related to Gibraltar and Anchor, and the related financing. |
| | v | Total Revenues for 2006 increased 31.0% to $344.9 million, compared to $263.3 million in 2005. Revenues were $274.5 million, a 10.0% increase after adjusting for the $70.4 million of revenues related to the Gibraltar and Anchor acquisitions, and related financing. |
| | v | Net Interest Income for 2006 increased 34.8%, to $173.5 million. Net interest income increased $11.3 million, or 9.7%, to $128.0 million in 2006 after adjusting for the $45.5 million in net interest income at Gibraltar and the related trust preferred interest expense. |
2
| | o | Core net interest margin, excluding the impact of trust preferred interest expense related to acquisitions, increased 2 basis points to 4.12% from 4.10% for 2006 versus 2005. |
| | o | Net interest margin, including the impact of trust preferred interest expense, was 3.84%, 4 basis points lower than the 2005 level of 3.88%. |
| | o | Increased business volume contributed $54.4 million to the increase of net interest income. Excluding Gibraltar, business volume contributed $16.8 million to the increase in net interest income. |
| | o | Increased cost of funds, partially offset by increased asset yields, caused a $9.6 million reduction in net interest income. Excluding Gibraltar, the cost of funds caused a $5.6 million reduction in net interest income. |
| | v | Wealth Advisory Fee Income increased 8.8% to $20.8 million in 2006 over the prior year. |
| | v | Investment Management Fee Income for 2006 totaled $137.7 million, an increase of 30.1% over 2005. The increase was due predominantly to the addition of Anchor and strong investment performance at certain affiliates. On a same affiliate basis, investment management fee income was $114.8 million, an increase of 9.8%. |
| | v | Total Operating Expenses for 2006,including minority interests, increased 34.6% to $254.1 million, compared to $188.8 million in 2005. Operating expenses, including minority interest, were $196.6 million, or a 9.8% increase, on a same affiliate basis after adjusting for the $57.5 million related to the acquisitions of Anchor and Gibraltar. |
| | v | Operating Leverage was negative 3.7% for 2006. The negative operating leverage was impacted by a significant increase in the cost of deposit funds and $4.9 million in operating expenses related to investment spending to support business expansion. |
| | v | Total Assets increased 12.6% to $5.8 billion over the December 31, 2005 balance of $5.1 billion. |
| | v | Loansincreased 19.0% to $4.3 billion over the December 31, 2005 balance of $3.6 billion. Commercial and construction loans totaled $2.5 billion and represented 57.9% of the combined loan portfolio. Residential loans totaled $1.5 billion and represented 35.9% of the total portfolio. |
3
| | v | Deposits increased 8.8% to $4.1 billion over the December 31, 2005 balance of $3.7 billion. |
| | v | Total Assets Under Management/Advisory, including the Company’s unconsolidated affiliates, increased 38.2%, or $9.0 billion, over the prior year to $32.7 billion. AUM increased $2.6 billion, or 11.0%, after adjusting for the $6.4 billion in assets under management at December 31, 2006 held by Anchor. |
| | v | Change in Assets Under Management. On a consolidated basis, Boston Private’s banks and asset managers had net outflows of funds of approximately $405 million and an increase of approximately $2.7 billion related to market action for the year. |
Robert J. Whelan, Boston Private’s Chief Financial Officer, commented, “Our management teams have taken selective actions to improve financial performance, investment performance and deposit balances. I am confident that we are appropriately reinvesting for future organic growth, and promoting a superior customer experience, while optimizing our financial performance.”
CEO Vaill concluded, “We are looking forward to the year ahead. We believe we have the strategy, unique business model, and financial strength to capitalize on the tremendous opportunities in the wealth management market. I am as excited as I have ever been about the opportunities we are facing as we build one of the leading wealth management companies in the industry.”
Fourth Quarter 2006 Results
Boston Private’s revenues increased 14.4% to $90.9 million for the fourth quarter of 2006, over revenues of $79.5 million for the fourth quarter of 2005. This increase was due to the acquisition of Anchor, as well as growth achieved in the Company’s wealth advisory and investment management businesses. The Anchor acquisition contributed $7.4 million in revenue for the fourth quarter.
The Company’s net interest income decreased 1.2% to $43.4 million for the fourth quarter of 2006, compared to $43.9 million for the fourth quarter of 2005. The change was due to the impact of net interest margin decline, which caused a decrease of $5.5 million, partially offset by increased volumes of $5.0 million. Excluding the impact of trust preferred interest expense, Boston Private’s core net interest margin decreased 18 basis points to 3.85% in the fourth quarter 2006 compared to 4.03% in the third quarter of 2006. The net interest margin, including the impact of the trust preferred, was 3.58% in the fourth quarter of 2006, compared to 3.76% in the third quarter of 2006.
4
Investment management fee income for the fourth quarter 2006 totaled $37.7 million, up 34.2% over the fourth quarter 2005. The increase from the fourth quarter of 2006 was primarily due to the addition of Anchor, strong investment performance at certain affiliates and improved market action. Anchor contributed $7.4 million in fee income.
In Boston Private’s wealth advisory business, fee income increased 10.7% from the fourth quarter of 2005 to $5.5 million for the fourth quarter of 2006.
Boston Private’s banks and asset managers had net outflows of assets under management of approximately $222 million and an increase of approximately $1.6 billion related to market action for the fourth quarter.
Operating expenses, including minority interest, were $66.1 million for the fourth quarter of 2006, an increase 16.5% over the fourth quarter of 2005. The main drivers of operating expense growth were costs associated with operating expenses of the Anchor acquisition and geographic expansion. Operating expenses, including minority interest for Anchor were $5.8 million in the fourth quarter of 2006.
Net income was $15.6 million for the fourth quarter of 2006, an increase 18.6% over the fourth quarter of 2005. Anchor contributed $925 thousand to net income in the fourth quarter of 2006.
Dividend Payment Increased
Concurrent with the release of the fourth quarter 2006 earnings, the Board of Directors of the Company declared a cash dividend to shareholders of $0.09 per share, reflecting the quarterly earnings performance. The record date for this dividend is February 1, 2007 and the payment date is February 15, 2007. This is an increase from the previous quarterly level by $0.01 per share and reflects the seventh annual increase since the company instituted a dividend in 1999.
Cash Earnings
Boston Private calculates its cash earnings by adjusting net income to exclude net amortization of intangibles and the impact of certain non-cash share based compensation plans, and includes related tax benefits that result from purchase accounting. In addition to 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.)
5
Conference Call
Management will host a conference call to review the Company’s financial performance and business developments on January 25, 2007 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
The Boston Private Wealth Management Group is a national enterprise of independently operated financial service firms united by a commitment to provide exceptional wealth management solutions to the high net worth marketplace, selected institutions, key intermediaries and private companies. Member firms are subsidiaries of Boston Private Financial Holdings, Inc., (NASDAQ: BPFH) and are provided access to financial capital and resources such as sales and marketing expertise, leadership development, legal counsel and compliance guidance.
Boston Private’s core competencies are private banking, wealth advisory and investment management, represented by its acquired firms that are located in demographically-attractive geographic regions. Collectively, they provide solutions for wealth accumulation, preservation, and distribution, serving the needs of a client’s financial lifecycle. Boston Private’s firms are deeply rooted in excellence and are distinguished by their uncompromising commitment to quality relationships and superior business results.
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 performance measures exclude other significant gains or losses that are unusual in nature. Also, these non-GAAP measures exclude net amortization of intangibles and tax benefits related to purchase accounting, stock options and ESPP expense. 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.
6
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 statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
7
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | |
| | | December 31,
2006 | | | December 31,
2005 | |
FINANCIAL DATA (1): | | | | | | | | |
Total Balance Sheet Assets | | $ | 5,763,544 | | | $ | 5,118,568 | |
Stockholders’ Equity | | | 635,197 | | | | 539,348 | |
Tangible Capital: | | | | | | | | |
Boston Private Bank & Trust | | | 160,639 | | | | 137,887 | |
Borel Private Bank & Trust | | | 91,300 | | | | 76,570 | |
First Private Bank & Trust | | | 48,388 | | | | 39,514 | |
Gibraltar Private Bank & Trust | | | 78,692 | | | | 63,762 | |
Investment Securities | | | 577,903 | | | | 584,860 | |
Goodwill | | | 335,633 | | | | 286,751 | |
Intangible Assets | | | 125,331 | | | | 97,656 | |
| | |
Commercial and Construction Loans | | | 2,496,234 | | | | 2,039,443 | |
Residential Mortgage Loans | | | 1,546,965 | | | | 1,338,607 | |
Home Equity and Other Consumer Loans | | | 268,053 | | | | 246,190 | |
| | | | | | | | |
Total Loans | | | 4,311,252 | | | | 3,624,240 | |
| | |
Loans Held for Sale | | | 5,224 | | | | 12,883 | |
Allowance for Loan Losses and Off-Balance Sheet Risk | | | 48,973 | | | | 42,354 | |
Non-performing Loans | | | 9,999 | | | | 7,900 | |
Repossessed Assets, Net | | | 550 | | | | — | |
Total Non-performing Assets | | | 10,549 | | | | 7,900 | |
Deposits | | | 4,077,831 | | | | 3,748,141 | |
Borrowings | | | 914,529 | | | | 703,379 | |
| | |
Book Value Per Share | | $ | 17.36 | | | $ | 15.50 | |
Market Price Per Share | | $ | 28.21 | | | $ | 30.42 | |
| | |
ASSETS UNDER MANAGEMENT AND ADVISORY: | | | | | | | | |
| | |
Westfield Capital Management | | $ | 10,102,000 | | | $ | 8,325,000 | |
Boston Private Bank & Trust | | | 2,369,000 | | | | 2,310,000 | |
Sand Hill Advisors | | | 1,252,000 | | | | 1,094,000 | |
Boston Private Value Investors | | | 961,000 | | | | 867,000 | |
RINET Company | | | 1,262,000 | | | | 1,129,000 | |
Borel Private Bank & Trust | | | 731,000 | | | | 661,000 | |
Dalton, Greiner, Hartman, Maher & Co. | | | 2,302,000 | | | | 3,259,000 | |
KLS Professional Advisors Group | | | 3,727,000 | | | | 3,140,000 | |
Gibraltar Private Bank & Trust | | | 907,000 | | | | 757,000 | |
Anchor Capital Holdings | | | 6,444,000 | | | | — | |
First Private Bank & Trust (7) | | | 5,000 | | | | — | |
Less: Inter-company Relationship | | | (238,000 | ) | | | (203,000 | ) |
| | | | | | | | |
Consolidated Affiliate Assets Under Management and Advisory | | $ | 29,824,000 | | | $ | 21,339,000 | |
Coldstream Capital Management | | | 1,090,000 | | | | 900,000 | |
Bingham, Osborn, & Scarborough | | | 1,777,000 | | | | 1,415,000 | |
| | | | | | | | |
Total Assets Under Management and Advisory | | $ | 32,691,000 | | | $ | 23,654,000 | |
| | |
FINANCIAL RATIOS: | | | | | | | | |
| | |
Stockholders’ Equity/Total Assets | | | 11.02 | % | | | 10.54 | % |
Non-performing Loans/Total Loans | | | 0.23 | % | | | 0.22 | % |
Allowance for Loan Losses and Off-Balance Sheet Risk/Total Loans | | | 1.14 | % | | | 1.17 | % |
Tangible Capital/ Tangible Assets | | | 3.29 | % | | | 3.27 | % |
| | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended |
| | | December 31, 2006 | | December 31, 2005 | | | December 31, 2006 | | December 31, 2005 |
OPERATING RESULTS (1): | | | | | | | | | | | | | |
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) | | $ | 44,960 | | $ | 45,218 | | | $ | 179,276 | | $ | 133,532 |
FTE Adjustment | | | 1,575 | | | 1,302 | | | | 5,763 | | | 4,793 |
| | | | | | | | | | | | | |
Net Interest Income | | | 43,385 | | | 43,916 | | | | 173,513 | | | 128,739 |
| | | | | | | | | | | | | |
Investment Management & Trust Fees: | | | | | | | | | | | | | |
Westfield Capital Management | | | 15,567 | | | 12,668 | | | | 57,445 | | | 48,878 |
Boston Private Bank & Trust | | | 3,578 | | | 3,354 | | | | 13,818 | | | 12,935 |
Sand Hill Advisors | | | 1,556 | | | 1,522 | | | | 6,198 | | | 6,171 |
Boston Private Value Investors | | | 1,748 | | | 1,612 | | | | 6,805 | | | 6,296 |
Borel Private Bank & Trust | | | 1,130 | | | 956 | | | | 4,326 | | | 3,495 |
Gibraltar Private Bank & Trust | | | 1,764 | | | 1,369 | | | | 6,479 | | | 1,369 |
Dalton, Greiner, Hartman, Maher & Co. | | | 5,043 | | | 6,640 | | | | 26,182 | | | 26,729 |
First Private Bank & Trust | | | 5 | | | — | | | | 5 | | | — |
Anchor Capital Holdings | | | 7,356 | | | — | | | | 16,474 | | | — |
| | | | | | | | | | | | | |
Total Investment Management & Trust Fees | | | 37,747 | | | 28,121 | | | | 137,732 | | | 105,873 |
Wealth Advisory Fees: | | | | | | | | | | | | | |
RINET Company | | | 2,135 | | | 2,084 | | | | 8,181 | | | 8,140 |
KLS Professional Advisors Group | | | 3,336 | | | 2,848 | | | | 12,375 | | | 10,782 |
Other | | | 55 | | | 61 | | | | 204 | | | 164 |
| | | | | | | | | | | | | |
Total Wealth Advisory Fees | | | 5,526 | | | 4,993 | | | | 20,760 | | | 19,086 |
| | | | | | | | | | | | | |
Other Fees | | | 2,312 | | | 1,516 | | | | 7,843 | | | 6,278 |
| | | | | | | | | | | | | |
Total Fees | | | 45,585 | | | 34,630 | | | | 166,335 | | | 131,237 |
| | | | | | | | | | | | | |
Earnings in Equity Investments | | | 1,515 | | | 503 | | | | 3,034 | | | 1,556 |
Gain on Sale of Loans, Net | | | 434 | | | 471 | | | | 1,972 | | | 1,774 |
Gain/(Loss) on Sale of Investments, Net | | | — | | | (20 | ) | | | — | | | 20 |
| | | | | | | | | | | | | |
Total Fees and Other Income | | | 47,534 | | | 35,584 | | | | 171,341 | | | 134,587 |
| | | | | | | | | | | | | |
Total Revenue | | | 90,919 | | | 79,500 | | | | 344,854 | | | 263,326 |
| | | | | | | | | | | | | |
Provision for Loan Losses | | | 987 | | | 2,070 | | | | 6,179 | | | 5,438 |
| | | | | | | | | | | | | |
Salaries and Employee Benefits | | | 41,611 | | | 35,928 | | | | 163,438 | | | 123,387 |
Occupancy and Equipment | | | 7,900 | | | 6,447 | | | | 29,149 | | | 21,053 |
Professional Services | | | 3,651 | | | 3,080 | | | | 13,346 | | | 10,270 |
Marketing and Business Development | | | 2,169 | | | 2,048 | | | | 8,705 | | | 6,792 |
Contract Services and Processing | | | 1,321 | | | 1,224 | | | | 5,125 | | | 4,070 |
Amortization of Intangibles | | | 3,874 | | | 3,018 | | | | 13,649 | | | 7,634 |
Other | | | 4,512 | | | 3,911 | | | | 17,037 | | | 13,063 |
| | | | | | | | | | | | | |
Total Operating Expense | | | 65,038 | | | 55,656 | | | | 250,449 | | | 186,269 |
| | | | | | | | | | | | | |
Minority Interest | | | 1,020 | | | 1,032 | | | | 3,699 | | | 2,512 |
Income Before Income Taxes | | | 23,874 | | | 20,742 | | | | 84,527 | | | 69,107 |
Income Tax Expense | | | 8,266 | | | 7,583 | | | | 30,154 | | | 25,561 |
| | | | | | | | | | | | | |
Net Income | | $ | 15,608 | | $ | 13,159 | | | $ | 54,373 | | $ | 43,546 |
| | | | | | | | | | | | | |
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 31,
2006 | | | December 31,
2005 | | | December 31,
2006 | | | December 31,
2005 | |
RECONCILIATION OF GAAP EARNINGS TO CASH EARNINGS (1): | | | | | | | | | | | | |
| | | | |
Net Income (GAAP Basis) | | $ | 15,608 | | | $ | 13,159 | | | $ | 54,373 | | | $ | 43,546 | |
| | | | |
Cash Basis Earnings (2) | | | | | | | | | | | | | | | | |
Book Amortization of Purchased Intangibles, Net of Tax | | | 2,091 | | | | 1,641 | | | | 7,514 | | | | 3,982 | |
Cash Benefit of Tax Deductions from Purchased Intangibles & Goodwill | | | 1,138 | | | | 1,032 | | | | 4,206 | | | | 4,129 | |
Stock options and ESPP, Net of Tax | | | 830 | | | | 832 | | | | 3,622 | | | | 2,772 | |
| | | | | | | | | | | | | | | | |
Total Cash Basis Adjustment | | | 4,059 | | | | 3,505 | | | | 15,342 | | | | 10,883 | |
| | | | | | | | | | | | | | | | |
Cash Basis Earnings | | $ | 19,667 | | | $ | 16,664 | | | $ | 69,715 | | | $ | 54,429 | |
| | | | | | | | | | | | | | | | |
| | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 31,
2006 | | | December 31,
2005 | | | December 31,
2006 | | | December 31,
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 | | $ | 15,608 | | | $ | 13,159 | | | $ | 54,373 | | | $ | 43,546 | |
Interest on convertible trust preferred securities, net of tax | | | 765 | | | | 765 | | | | 3,060 | | | | 3,059 | |
| | | | | | | | | | | | | | | | |
Net Income for diluted EPS | | $ | 16,373 | | | $ | 13,924 | | | $ | 57,433 | | | $ | 46,605 | |
| | | | |
Calculation of average shares outstanding: | | | | | | | | | | | | | | | | |
Weighted average basic shares | | | 36,064 | | | | 34,219 | | | | 35,453 | | | | 29,425 | |
Dilutive effect of: | | | | | | | | | | | | | | | | |
Stock Options, Stock Grants and Other | | | 1,560 | | | | 1,623 | | | | 1,453 | | | | 1,071 | |
Forward Agreement | | | — | | | | — | | | | — | | | | 147 | |
Convertible trust preferred securities | | | 3,183 | | | | 3,182 | | | | 3,183 | | | | 3,182 | |
| | | | | | | | | | | | | | | | |
Dilutive potential common shares | | | 4,743 | | | | 4,805 | | | | 4,636 | | | | 4,400 | |
Weighted average diluted shares | | | 40,807 | | | | 39,024 | | | | 40,089 | | | | 33,825 | |
| | | | |
Earnings per Share: | | | | | | | | | | | | | | | | |
Basic | | $ | 0.43 | | | $ | 0.38 | | | $ | 1.53 | | | $ | 1.48 | |
Diluted | | $ | 0.40 | | | $ | 0.36 | | | $ | 1.43 | | | $ | 1.38 | |
| | | | |
RECONCILIATION OF GAAP EPSTO CASH EPS (1): | | | | | | | | | | | | | | | | |
| | | | |
(on a Diluted Basis) | | | | | | | | | | | | | | | | |
| | | | |
Earnings Per Share (GAAP Basis) | | $ | 0.40 | | | $ | 0.36 | | | $ | 1.43 | | | $ | 1.38 | |
Cash Basis Adjustment | | $ | 0.10 | | | $ | 0.09 | | | $ | 0.39 | | | $ | 0.32 | |
| | | | | | | | | | | | | | | | |
Cash Basis Earnings Per Diluted Share (6) | | $ | 0.50 | | | $ | 0.45 | | | $ | 1.82 | | | $ | 1.70 | |
| | | | | | | | | | | | | | | | |
| | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 31,
2006 | | | December 31,
2005 | | | December 31,
2006 | | | December 31,
2005 | |
OPERATING RATIOS & STATISTICS (1): | | | | | | | | | | | | | | | | |
| | | | |
Return on Average Equity | | | 9.96 | % | | | 10.00 | % | | | 9.27 | % | | | 11.23 | % |
Return on Average Assets | | | 1.10 | % | | | 1.03 | % | | | 1.02 | % | | | 1.13 | % |
Net Interest Margin | | | 3.58 | % | | | 4.00 | % | | | 3.84 | % | | | 3.88 | % |
Core Net Interest Margin(3) | | | 3.85 | % | | | 4.28 | % | | | 4.12 | % | | | 4.10 | % |
Total Fees and Other Income/Total Revenue | | | 52.28 | % | | | 44.76 | % | | | 49.69 | % | | | 51.11 | % |
Efficiency Ratio | | | 67.55 | % | | | 65.92 | % | | | 68.52 | % | | | 67.47 | % |
Loans Charged-off, Net of (Recoveries) | | $ | (39 | ) | | $ | (40 | ) | | $ | 399 | | | $ | 46 | |
| | | | |
RECONCILIATION OF NIM TO CORE NIM | | | | | | | | | | | | | | | | |
| | | | |
Net Interest Margin | | | 3.58 | % | | | 4.00 | % | | | 3.84 | % | | | 3.88 | % |
Effect of Trust Preferred, Net | | | 0.27 | % | | | 0.28 | % | | | 0.28 | % | | | 0.22 | % |
Core Net Interest Margin(3) | | | 3.85 | % | | | 4.28 | % | | | 4.12 | % | | | 4.10 | % |
| | | | |
CASH OPERATING RATIOS (1): | | | | | | | | | | | | | | | | |
| | | | |
Return on Average Equity (4) | | | 12.54 | % | | | 12.67 | % | | | 11.89 | % | | | 14.04 | % |
Return on Average Assets (5) | | | 1.39 | % | | | 1.31 | % | | | 1.31 | % | | | 1.41 | % |
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
AVERAGE BALANCE SHEET:
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
December 31, 2006 | | | Three Months Ended
December 31, 2005 | |
| | | Average
Balance | | | Income/
Expense | | | Yield/
Rate | | | Average
Balance | | | Income/
Expense | | | Yield/
Rate | |
AVERAGE ASSETS: | | | | | | | | | | | | | | | | | | | | | | |
Earnings Assets | | | | | | | | | | | | | | | | | | | | | | |
Cash and investments | | $ | 725,252 | | | $ | 7,665 | | | 4.72 | % | | $ | 880,755 | | | $ | 7,709 | | | 3.88 | % |
Loans | | | | | | | | | | | | | | | | | | | | | | |
Commercial and Construction | | | 2,411,415 | | | | 46,817 | | | 7.74 | % | | | 2,007,407 | | | | 36,970 | | | 7.32 | % |
Residential Mortgage | | | 1,535,098 | | | | 21,819 | | | 5.69 | % | | | 1,341,973 | | | | 17,458 | | | 5.20 | % |
Home Equity and Other Consumer | | | 273,830 | | | | 5,607 | | | 7.78 | % | | | 238,101 | | | | 4,259 | | | 7.00 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Total Earning Assets | | | 4,945,595 | | | | 81,908 | | | 7.00 | % | | | 4,468,236 | | | | 66,396 | | | 5.99 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Allowance for Loan Losses | | | (42,634 | ) | | | | | | | | | | (36,640 | ) | | | | | | | |
Cash and due From Banks | | | 55,612 | | | | | | | | | | | 71,434 | | | | | | | | |
Other Assets | | | 693,800 | | | | | | | | | | | 598,329 | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
TOTAL AVERAGE ASSETS | | | 5,652,373 | | | | | | | | | | | 5,101,359 | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
AVERAGE LIABILITIES AND STOCKHOLDERS’ EQUITY: | | | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | | | | | | | |
Savings and NOW | | | 459,196 | | | | 2,167 | | | 1.87 | % | | | 428,344 | | | | 950 | | | 0.88 | % |
Money Market | | | 1,878,662 | | | | 15,439 | | | 3.26 | % | | | 1,816,019 | | | | 8,560 | | | 1.87 | % |
Certificate of Deposits | | | 871,428 | | | | 10,028 | | | 4.57 | % | | | 706,315 | | | | 5,718 | | | 3.21 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Total Deposits | | | 3,209,286 | | | | 27,634 | | | 3.42 | % | | | 2,950,678 | | | | 15,228 | | | 2.05 | % |
Junior Subordinated Debentures | | | 234,021 | | | | 3,318 | | | 5.55 | % | | | 232,979 | | | | 3,221 | | | 5.41 | % |
FHLB Borrowings and Other | | | 684,866 | | | | 7,571 | | | 4.35 | % | | | 451,305 | | | | 4,031 | | | 3.54 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Total Interest-Bearing Liabilities | | | 4,128,173 | | | | 38,523 | | | 3.69 | % | | | 3,634,962 | | | | 22,480 | | | 2.45 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Non-interest Bearing Demand Deposits | | | 741,198 | | | | | | | | | | | 782,377 | | | | | | | | |
Payables and Other Liabilities | | | 155,862 | | | | | | | | | | | 157,905 | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities | | | 5,025,233 | | | | | | | | | | | 4,575,244 | | | | | | | | |
Stockholders’ Equity | | | 627,140 | | | | | | | | | | | 526,115 | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
TOTAL AVERAGE LIABILITIES & STOCKHOLDERS’ EQUITY | | $ | 5,652,373 | | | | | | | | | | $ | 5,101,359 | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Net Interest Income | | | | | | $ | 43,385 | | | | | | | | | | $ | 43,916 | | | | |
Net Interest Margin | | | | | | | 3.58 | % | | | | | | | | | | 4.00 | % | | | |
| | | | | | |
AVERAGE BALANCE SHEET: | | | | | | | | | | | | | | | | | | | | | | |
| | |
| | | Twelve Months Ended
December 31, 2006 | | | Twelve Months Ended
December 31, 2005 | |
| AVERAGE ASSETS: | | Average
Balance | | | Income/
Expense | | | Yield/
Rate | | | Average
Balance | | | Income/
Expense | | | Yield/
Rate | |
Earnings Assets | | | | | | | | | | | | | | | | | | | | | | |
Cash and investments | | $ | 701,653 | | | $ | 27,237 | | | 4.39 | % | | $ | 734,314 | | | $ | 22,527 | | | 3.52 | % |
Loans | | | | | | | | | | | | | | | | | | | | | | |
Commercial and Construction | | | 2,226,396 | | | | 169,826 | | | 7.70 | % | | | 1,581,658 | | | | 110,322 | | | 7.06 | % |
Residential Mortgage | | | 1,466,182 | | | | 82,255 | | | 5.61 | % | | | 988,799 | | | | 48,585 | | | 4.91 | % |
Home Equity and Other Consumer | | | 263,045 | | | | 20,714 | | | 7.75 | % | | | 128,673 | | | | 8,556 | | | 6.61 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Total Earning Assets | | | 4,657,276 | | | | 300,032 | | | 6.93 | % | | | 3,433,444 | | | | 189,990 | | | 5.67 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Allowance for Loan Losses | | | (40,101 | ) | | | | | | | | | | (29,744 | ) | | | | | | | |
Cash and due From Banks | | | 60,681 | | | | | | | | | | | 54,300 | | | | | | | | |
Other Assets | | | 633,886 | | | | | | | | | | | 410,399 | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
TOTAL AVERAGE ASSETS | | | 5,311,742 | | | | | | | | | | | 3,868,399 | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
AVERAGE LIABILITIES AND STOCKHOLDERS’ EQUITY: | | | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | | | | | | | |
Savings and NOW | | | 453,587 | | | | 6,754 | | | 1.49 | % | | | 315,967 | | | | 1,653 | | | 0.52 | % |
Money Market | | | 1,768,655 | | | | 49,002 | | | 2.77 | % | | | 1,347,872 | | | | 22,199 | | | 1.65 | % |
Certificate of Deposits | | | 767,736 | | | | 31,506 | | | 4.09 | % | | | 571,843 | | | | 15,784 | | | 2.76 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Total Deposits | | | 2,989,978 | | | | 87,262 | | | 2.92 | % | | | 2,235,682 | | | | 39,636 | | | 1.77 | % |
Junior Subordinated Debentures | | | 234,021 | | | | 13,167 | | | 5.63 | % | | | 145,409 | | | | 7,484 | | | 5.15 | % |
FHLB Borrowings and Other | | | 624,954 | | | | 26,090 | | | 4.13 | % | | | 410,690 | | | | 14,131 | | | 3.32 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Total Interest-Bearing Liabilities | | | 3,848,953 | | | | 126,519 | | | 3.28 | % | | | 2,791,781 | | | | 61,251 | | | 2.19 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Non-interest Bearing Demand Deposits | | | 735,224 | | | | | | | | | | | 582,960 | | | | | | | | |
Payables and Other Liabilities | | | 141,099 | | | | | | | | | | | 105,899 | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities | | | 4,725,276 | | | | | | | | | | | 3,480,640 | | | | | | | | |
Stockholders’ Equity | | | 586,466 | | | | | | | | | | | 387,759 | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
TOTAL AVERAGE LIABILITIES & STOCKHOLDERS’ EQUITY | | $ | 5,311,742 | | | | | | | | | | $ | 3,868,399 | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Net Interest Income | | | | | | $ | 173,513 | | | | | | | | | | $ | 128,739 | | | | |
Net Interest Margin | | | | | | | 3.84 | % | | | | | | | | | | 3.88 | % | | | |
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | |
| | | December 31,
2006 | | | September 30,
2006 | |
FINANCIAL DATA (1): | | | | | | | | |
| | |
Total Balance Sheet Assets | | $ | 5,763,544 | | | $ | 5,478,170 | |
Stockholders’ Equity | | | 635,197 | | | | 619,240 | |
Tangible Capital: | | | | | | | | |
Boston Private Bank & Trust | | | 160,639 | | | | 154,988 | |
Borel Private Bank & Trust | | | 91,300 | | | | 87,426 | |
First Private Bank & Trust | | | 48,388 | | | | 46,115 | |
Gibraltar Private Bank & Trust | | | 78,692 | | | | 75,340 | |
Investment Securities | | | 577,903 | | | | 533,557 | |
Goodwill | | | 335,633 | | | | 318,417 | |
Intangible Assets | | | 125,331 | | | | 125,601 | |
| | |
Commercial and Construction Loans | | | 2,496,234 | | | | 2,382,898 | |
Residential Mortgage Loans | | | 1,546,965 | | | | 1,486,942 | |
Home Equity and Other Consumer Loans | | | 268,053 | | | | 278,971 | |
| | | | | | | | |
Total Loans | | | 4,311,252 | | | | 4,148,811 | |
| | |
Loans Held for Sale | | | 5,224 | | | | 5,034 | |
Allowance for Loan Losses and Off-Balance Sheet Risk | | | 48,973 | | | | 47,707 | |
Non-performing Loans | | | 9,999 | | | | 12,592 | |
Repossessed Assets, Net | | | 550 | | | | 550 | |
Total Non-performing Assets | | | 10,549 | | | | 13,142 | |
Deposits | | | 4,077,831 | | | | 3,854,594 | |
Borrowings | | | 914,529 | | | | 871,160 | |
| | |
Book Value Per Share | | $ | 17.36 | | | $ | 16.96 | |
Market Price Per Share | | $ | 28.21 | | | $ | 27.88 | |
| | |
ASSETS UNDER MANAGEMENT AND ADVISORY: | | | | | | | | |
| | |
Westfield Capital Management | | $ | 10,102,000 | | | $ | 9,074,000 | |
Boston Private Bank & Trust | | | 2,369,000 | | | | 2,309,000 | |
Sand Hill Advisors | | | 1,252,000 | | | | 1,151,000 | |
Boston Private Value Investors | | | 961,000 | | | | 914,000 | |
RINET Company | | | 1,262,000 | | | | 1,202,000 | |
Borel Private Bank & Trust | | | 731,000 | | | | 683,000 | |
Dalton, Greiner, Hartman, Maher & Co. | | | 2,302,000 | | | | 2,784,000 | |
KLS Professional Advisors Group | | | 3,727,000 | | | | 3,494,000 | |
Gibraltar Private Bank & Trust | | | 907,000 | | | | 888,000 | |
Anchor Capital Holdings | | | 6,444,000 | | | | 5,806,000 | |
First Private Bank & Trust | | | 5,000 | | | | — | |
Less: Inter-company Relationship | | | (238,000 | ) | | | (211,000 | ) |
| | | | | | | | |
Consolidated Affiliate Assets Under Management and Advisory | | $ | 29,824,000 | | | $ | 28,094,000 | |
| | |
Coldstream Capital Management | | | 1,090,000 | | | | 1,000,000 | |
Bingham, Osborn, & Scarborough | | | 1,777,000 | | | | 1,634,000 | |
| | | | | | | | |
Total Unconsolidated Assets Under Management and Advisory | | $ | 32,691,000 | | | $ | 30,728,000 | |
| | |
FINANCIAL RATIOS (1): | | | | | | | | |
| | |
Stockholders’ Equity/Total Assets | | | 11.02 | % | | | 11.30 | % |
Nonperforming Loans/Total Loans | | | 0.23 | % | | | 0.30 | % |
Allowance for Loan Losses and Off-Balance Sheet Risk/Total Loans | | | 1.14 | % | | | 1.15 | % |
Tangible Capital/Tangible Assets | | | 3.29 | % | | | 3.48 | % |
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | |
| | | Three Months Ended | |
| | | December 31,
2006 | | | September 30,
2006 | |
OPERATING RESULTS (1): | | | | | | | | |
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) | | $ | 44,960 | | | $ | 44,646 | |
FTE Adjustment | | | 1,575 | | | | 1,488 | |
| | | | | | | | |
Net Interest Income | | | 43,385 | | | | 43,158 | |
| | | | | | | | |
Investment Management & Trust Fees: | | | | | | | | |
Westfield Capital Management | | | 15,567 | | | | 14,238 | |
Boston Private Bank & Trust | | | 3,578 | | | | 3,352 | |
Sand Hill Advisors | | | 1,556 | | | | 1,539 | |
Boston Private Value Investors | | | 1,748 | | | | 1,701 | |
Borel Private Bank & Trust | | | 1,130 | | | | 1,149 | |
Gibraltar Private Bank & Trust | | | 1,764 | | | | 1,640 | |
Dalton, Greiner, Hartman, Maher & Co. | | | 5,043 | | | | 6,559 | |
First Private Bank & Trust | | | 5 | | | | — | |
Anchor Capital | | | 7,356 | | | | 6,854 | |
| | | | | | | | |
Total Investment Management & Trust Fees | | | 37,747 | | | | 37,032 | |
Wealth Advisory Fees | | | | | | | | |
RINET Company | | | 2,135 | | | | 2,029 | |
KLS Professional Advisors Group | | | 3,336 | | | | 3,155 | |
Other | | | 55 | | | | 51 | |
| | | | | | | | |
Total Wealth Advisory Fees | | | 5,526 | | | | 5,235 | |
| | | | | | | | |
Other Fees | | | 2,312 | | | | 2,038 | |
| | | | | | | | |
Total Fees | | | 45,585 | | | | 44,305 | |
| | | | | | | | |
Earnings in Equity Investments | | | 1,515 | | | | 528 | |
Gain on Sale of Loans, Net | | | 434 | | | | 556 | |
Gain on Sale of Investments, Net | | | — | | | | — | |
| | | | | | | | |
Total Fees and Other Income | | | 47,534 | | | | 45,389 | |
| | | | | | | | |
Total Revenue | | | 90,919 | | | | 88,547 | |
| | | | | | | | |
Provision for Loan Losses | | | 987 | | | | 2,325 | |
| | | | | | | | |
Salaries and Benefits | | | 41,611 | | | | 42,244 | |
Occupancy and Equipment | | | 7,900 | | | | 7,695 | |
Professional Services | | | 3,651 | | | | 3,161 | |
Marketing and Business Development | | | 2,169 | | | | 1,842 | |
Contract Services and Processing | | | 1,321 | | | | 1,301 | |
Amortization of Intangibles | | | 3,874 | | | | 3,736 | |
Other | | | 4,512 | | | | 3,703 | |
| | | | | | | | |
Total Operating Expense | | | 65,038 | | | | 63,682 | |
| | | | | | | | |
Minority Interest | | | 1,020 | | | | 1,120 | |
Income Before Income Taxes | | | 23,874 | | | | 21,420 | |
Income Tax Expense | | | 8,266 | | | | 7,770 | |
| | | | | | | | |
Net Income | | $ | 15,608 | | | $ | 13,650 | |
| | | | | | | | |
| |
| | | Three Months Ended | |
| | | December 31,
2006 | | | September 30,
2006 | |
RECONCILIATION OF GAAP EARNINGS TO CASH EARNINGS (1): | | | | | | | | |
Net Income (GAAP Basis) | | $ | 15,608 | | | $ | 13,650 | |
Cash Basis Earnings (2) | | | | | | | | |
Book Amortization of Purchased Intangibles, Net of Tax | | | 2,091 | | | | 2,032 | |
Cash Benefit of Tax Deductions from Purchased Intangibles & Goodwill | | | 1,138 | | | | 1,023 | |
Stock options and ESPP, Net of Tax | | | 830 | | | | 829 | |
| | | | | | | | |
Total Cash Basis Adjustment | | | 4,059 | | | | 3,884 | |
| | | | | | | | |
Cash Basis Earnings | | $ | 19,667 | | | | 17,534 | |
| | | | | | | | |
| |
| | | Three Months Ended | |
| | | December 31,
2006 | | | September 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 | | $ | 15,608 | | | $ | 13,650 | |
Interest on convertible trust preferred securities, net of tax | | | 765 | | | | 765 | |
| | | | | | | | |
Net Income for diluted EPS | | $ | 16,373 | | | $ | 14,415 | |
| | |
Calculation of Average Shares Outstanding: | | | | | | | | |
Weighted average basic shares | | | 36,064 | | | | 35,953 | |
Dilutive effect of: | | | | | | | | |
Stock Options and Stock Grants, and Other | | | 1,560 | | | | 1,270 | |
Convertible trust preferred securities | | | 3,183 | | | | 3,183 | |
| | | | | | | | |
Dilutive potential common shares | | | 4,743 | | | | 4,453 | |
Weighted average diluted shares | | | 40,807 | | | | 40,406 | |
| | |
Earnings per Share: | | | | | | | | |
Basic | | $ | 0.43 | | | $ | 0.38 | |
Diluted | | $ | 0.40 | | | $ | 0.36 | |
| | |
RECONCILIATION OF GAAP EPS TO CASH EPS (1): (on a Diluted Basis) | | | | | | | | |
| | |
Earnings Per Share (GAAP Basis) | | $ | 0.40 | | | $ | 0.36 | |
Cash Basis Adjustment | | $ | 0.10 | | | $ | 0.09 | |
| | | | | | | | |
Cash Basis Earnings Per Diluted Share | | $ | 0.50 | | | $ | 0.45 | |
| | | | | | | | |
| | |
OPERATING RATIOS & STATISTICS: | | | | | | | | |
| | |
Return on Average Equity | | | 9.96 | % | | | 8.95 | % |
Return on Average Assets | | | 1.10 | % | | | 1.02 | % |
Net Interest Margin | | | 3.58 | % | | | 3.76 | % |
Core Net Interest Margin (3) | | | 3.85 | % | | | 4.03 | % |
Total Fees and Other Income/Total Revenue | | | 52.28 | % | | | 51.26 | % |
Efficiency Ratio | | | 67.55 | % | | | 67.39 | % |
Loans Charged-off, Net of (Recoveries) | | $ | (39 | ) | | $ | (101 | ) |
| | |
RECONCILIATION OF NIM TO CORE NIM | | | | | | | | |
Net Interest Margin | | | 3.58 | % | | | 3.76 | % |
Effect of Trust Preferred , Net | | | 0.27 | % | | | 0.27 | % |
Core Net Interest Margin (3) | | | 3.85 | % | | | 4.03 | % |
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | | | | | | | | |
SAME AFFILIATES (8) | | | | | | | | | | | | | | | |
Growth Excluding Acquisitions | | | | | | | | | | | | | | | |
| | | As Reported
December 31,
2006 | | | December 31,
2005 | | | Acquisitions
December 31,
2006 | | Same Affiliates
December 31,
2006 | |
FINANCIAL DATA (1): | | | | | | | | | | | | | | | |
| | | | |
Total Balance Sheet Assets | | $ | 5,763,544 | | | $ | 5,118,568 | | | $ | 93,860 | | $ | 5,669,684 | |
Stockholders’ Equity | | | 635,197 | | | | 539,348 | | | | 30,932 | | | 604,265 | |
Tangible Capital: | | | | | | | | | | | | | | | |
Boston Private Bank & Trust | | | 160,639 | | | | 137,887 | | | | — | | | 160,639 | |
Borel Private Bank & Trust | | | 91,300 | | | | 76,570 | | | | — | | | 91,300 | |
First Private Bank & Trust | | | 48,388 | | | | 39,514 | | | | — | | | 48,388 | |
Gibraltar Private Bank & Trust | | | 78,692 | | | | 63,762 | | | | — | | | 78,692 | |
Investment Securities | | | 577,903 | | | | 584,860 | | | | 394 | | | 577,509 | |
Goodwill | | | 335,633 | | | | 286,751 | | | | 38,463 | | | 297,170 | |
Intangible Assets | | | 125,331 | | | | 97,656 | | | | 35,815 | | | 89,516 | |
| | | | |
Commercial and Construction Loans | | | 2,496,234 | | | | 2,039,443 | | | | — | | | 2,496,234 | |
Residential Mortgage Loans | | | 1,546,965 | | | | 1,338,607 | | | | — | | | 1,546,965 | |
Home Equity and Other Consumer Loans | | | 268,053 | | | | 246,190 | | | | — | | | 268,053 | |
| | | | | | | | | | | | | | | |
Total Loans | | | 4,311,252 | | | | 3,624,240 | | | | — | | | 4,311,252 | |
| | | | |
Loans Held for Sale | | | 5,224 | | | | 12,883 | | | | — | | | 5,224 | |
Allowance for Loan Losses and Off-Balance Sheet Risk | | | 48,973 | | | | 42,354 | | | | — | | | 48,973 | |
Non-performing Loans | | | 9,999 | | | | 7,900 | | | | — | | | 9,999 | |
Repossessed Assets, Net | | | 550 | | | | — | | | | — | | | — | |
Total Non-performing Assets | | | 10,549 | | | | 7,900 | | | | — | | | 10,549 | |
Deposits | | | 4,077,831 | | | | 3,748,141 | | | | — | | | 4,077,831 | |
Borrowings | | | 914,529 | | | | 703,379 | | | | — | | | 914,529 | |
| | | | |
ASSETS UNDER MANAGEMENT AND ADVISORY: | | | | | | | | | | | | | | | |
| | | | |
Westfield Capital Management | | $ | 10,102,000 | | | $ | 8,325,000 | | | | — | | $ | 10,102,000 | |
Boston Private Bank & Trust | | | 2,369,000 | | | | 2,310,000 | | | | — | | | 2,369,000 | |
Sand Hill Advisors | | | 1,252,000 | | | | 1,094,000 | | | | — | | | 1,252,000 | |
Boston Private Value Investors | | | 961,000 | | | | 867,000 | | | | — | | | 961,000 | |
RINET Company | | | 1,262,000 | | | | 1,129,000 | | | | — | | | 1,262,000 | |
Borel Private Bank & Trust | | | 731,000 | | | | 661,000 | | | | — | | | 731,000 | |
Dalton, Greiner, Hartman, Maher & Co. | | | 2,302,000 | | | | 3,259,000 | | | | — | | | 2,302,000 | |
KLS Professional Advisors Group | | | 3,727,000 | | | | 3,140,000 | | | | — | | | 3,727,000 | |
Gibraltar Private Bank & Trust | | | 907,000 | | | | 757,000 | | | | — | | | 907,000 | |
Anchor Capital Holdings | | | 6,444,000 | | | | — | | | | 6,444,000 | | | — | |
First Private Bank & Trust | | | 5,000 | | | | — | | | | — | | | 5,000 | |
Less: Inter-company Relationship | | | (238,000 | ) | | | (203,000 | ) | | | — | | | (238,000 | ) |
| | | | | | | | | | | | | | | |
Consolidated Affiliate Assets Under Management and Advisory | | $ | 29,824,000 | | | $ | 21,339,000 | | | $ | 6,444,000 | | $ | 23,380,000 | |
| | | | |
Coldstream Capital Management | | | 1,090,000 | | | | 900,000 | | | | — | | | 1,090,000 | |
Bingham, Osborn, & Scarborough | | | 1,777,000 | | | | 1,415,000 | | | | — | | | 1,777,000 | |
| | | | | | | | | | | | | | | |
Total Assets Under Management and Advisory | | $ | 32,691,000 | | | $ | 23,654,000 | | | $ | 6,444,000 | | $ | 26,247,000 | |
| |
| | | Three Months Ended | |
| | | As Reported
December 31,
2006 | | | December 31,
2005 | | | Acquisitions
December 31, 2006 | | Same Affiliates
December 31,
2006 | |
OPERATING RESULTS (1): | | | | | | | | | | | | | | | |
| | | | |
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) | | $ | 44,960 | | | $ | 45,218 | | | $ | 22 | | $ | 44,938 | |
FTE Adjustment | | | 1,575 | | | | 1,302 | | | | — | | | 1,575 | |
| | | | | | | | | | | | | | | |
Net Interest Income | | | 43,385 | | | | 43,916 | | | | 22 | | | 43,363 | |
| | | | | | | | | | | | | | | |
Investment Management & Trust Fees: | | | | | | | | | | | | | | | |
Westfield Capital Management | | | 15,567 | | | | 12,668 | | | | — | | | 15,567 | |
Boston Private Bank & Trust | | | 3,578 | | | | 3,354 | | | | — | | | 3,578 | |
Sand Hill Advisors | | | 1,556 | | | | 1,522 | | | | — | | | 1,556 | |
Boston Private Value Investors | | | 1,748 | | | | 1,612 | | | | — | | | 1,748 | |
Borel Private Bank & Trust | | | 1,130 | | | | 956 | | | | — | | | 1,130 | |
Gibraltar Private Bank & Trust | | | 1,764 | | | | 1,369 | | | | — | | | 1,764 | |
Dalton, Greiner, Hartman, Maher & Co. | | | 5,043 | | | | 6,640 | | | | — | | | 5,043 | |
First Private Bank & Trust | | | 5 | | | | — | | | | — | | | 5 | |
Anchor Capital Holdings | | | 7,356 | | | | — | | | | 7,356 | | | — | |
| | | | | | | | | | | | | | | |
Total Investment Management & Trust Fees | | | 37,747 | | | | 28,121 | | | | 7,356 | | | 30,391 | |
Wealth Advisory Fees: | | | | | | | | | | | | | | | |
RINET Company | | | 2,135 | | | | 2,084 | | | | — | | | 2,135 | |
KLS Professional Advisors Group | | | 3,336 | | | | 2,848 | | | | — | | | 3,336 | |
Other | | | 55 | | | | 61 | | | | — | | | 55 | |
| | | | | | | | | | | | | | | |
Total Wealth Advisory Fees | | | 5,526 | | | | 4,993 | | | | — | | | 5,526 | |
| | | | | | | | | | | | | | | |
Other Fees | | | 2,312 | | | | 1,516 | | | | 69 | | | 2,243 | |
| | | | | | | | | | | | | | | |
Total Fees | | | 45,585 | | | | 34,630 | | | | 7,425 | | | 38,160 | |
| | | | | | | | | | | | | | | |
Earnings in Equity Investments | | | 1,515 | | | | 503 | | | | — | | | 1,515 | |
Gain on Sale of Loans, Net | | | 434 | | | | 471 | | | | — | | | 434 | |
Gain/(Loss) on Sale of Investments, Net | | | — | | | | (20 | ) | | | — | | | — | |
| | | | | | | | | | | | | | | |
Total Fees and Other Income | | | 47,534 | | | | 35,584 | | | | 7,425 | | | 40,109 | |
| | | | | | | | | | | | | | | |
Total Revenue | | | 90,919 | | | | 79,500 | | | | 7,447 | | | 83,472 | |
| | | | | | | | | | | | | | | |
Provision for Loan Losses | | | 987 | | | | 2,070 | | | | — | | | 987 | |
| | | | | | | | | | | | | | | |
Salaries and Employee Benefits | | | 41,611 | | | | 35,928 | | | | 3,894 | | | 37,717 | |
Occupancy and Equipment | | | 7,900 | | | | 6,447 | | | | 190 | | | 7,710 | |
Professional Services | | | 3,651 | | | | 3,080 | | | | 58 | | | 3,593 | |
Marketing and Business Development | | | 2,169 | | | | 2,048 | | | | 161 | | | 2,008 | |
Contract Services and Processing | | | 1,321 | | | | 1,224 | | | | 41 | | | 1,280 | |
Amortization of Intangibles | | | 3,874 | | | | 3,018 | | | | 859 | | | 3,015 | |
Other | | | 4,512 | | | | 3,911 | | | | 235 | | | 4,277 | |
| | | | | | | | | | | | | | | |
Total Operating Expense | | | 65,038 | | | | 55,656 | | | | 5,438 | | | 59,600 | |
| | | | | | | | | | | | | | | |
Minority Interest | | | 1,020 | | | | 1,032 | | | | 405 | | | 615 | |
Income Before Income Taxes | | | 23,874 | | | | 20,742 | | | | 1,604 | | | 22,270 | |
Income Tax Expense | | | 8,266 | | | | 7,583 | | | | 679 | | | 7,587 | |
| | | | | | | | | | | | | | | |
Net Income | | $ | 15,608 | | | $ | 13,159 | | | $ | 925 | | $ | 14,683 | |
| | | | | | | | | | | | | | | |
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | | | | | | | | | | | |
SAME AFFILIATES (8) | | | |
Growth Excluding Acquisitions | | | | | | | | | | | | | | | | | | |
| | | Twelve Months Ended |
| | | As Reported
December 31,
2006 | | As Reported
December 31,
2005 | | Acquisitions
December 31,
2006 | | Same
Affiliates
December 31,
2006 | | Acquisitions
December 31,
2005 | | Same
Affiliates
December 31,
2005 |
OPERATING RESULTS (1): | | | | | | | | | | | | | | | | | | |
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) | | $ | 179,276 | | $ | 133,532 | | $ | 45,528 | | $ | 133,748 | | $ | 12,056 | | $ | 121,476 |
FTE Adjustment | | | 5,763 | | | 4,793 | | | — | | | 5,763 | | | — | | | 4,793 |
| | | | | | | | | | | | | | | | | | |
Net Interest Income | | | 173,513 | | | 128,739 | | | 45,528 | | | 127,985 | | | 12,056 | | | 116,683 |
| | | | | | | | | | | | | | | | | | |
Investment Management & Trust Fees: | | | | | | | | | | | | | | | | | | |
Westfield Capital Management | | | 57,445 | | | 48,878 | | | — | | | 57,445 | | | — | | | 48,878 |
Boston Private Bank & Trust | | | 13,818 | | | 12,935 | | | — | | | 13,818 | | | — | | | 12,935 |
Sand Hill Advisors | | | 6,198 | | | 6,171 | | | — | | | 6,198 | | | — | | | 6,171 |
Boston Private Value Investors | | | 6,805 | | | 6,296 | | | — | | | 6,805 | | | — | | | 6,296 |
Borel Private Bank & Trust | | | 4,326 | | | 3,495 | | | — | | | 4,326 | | | — | | | 3,495 |
Gibraltar Private Bank & Trust | | | 6,479 | | | 1,369 | | | 6,479 | | | — | | | 1,369 | | | — |
Dalton, Greiner, Hartman, Maher & Co. | | | 26,182 | | | 26,729 | | | — | | | 26,182 | | | — | | | 26,729 |
First Private Bank & Trust | | | 5 | | | — | | | — | | | 5 | | | — | | | — |
Anchor Capital Holdings | | | 16,474 | | | — | | | 16,474 | | | — | | | | | | — |
| | | | | | | | | | | | | | | | | | |
Total Investment Management & Trust Fees | | | 137,732 | | | 105,873 | | | 22,953 | | | 114,779 | | | 1,369 | | | 104,504 |
Wealth Advisory Fees: | | | | | | | | | | | | | | | | | | |
RINET Company | | | 8,181 | | | 8,140 | | | — | | | 8,181 | | | — | | | 8,140 |
KLS Professional Advisors Group | | | 12,375 | | | 10,782 | | | — | | | 12,375 | | | — | | | 10,782 |
Other | | | 204 | | | 164 | | | — | | | 204 | | | — | | | 164 |
| | | | | | | | | | | | | | | | | | |
Total Wealth Advisory Fees | | | 20,760 | | | 19,086 | | | — | | | 20,760 | | | — | | | 19,086 |
| | | | | | | | | | | | | | | | | | |
Other Fees | | | 7,843 | | | 6,278 | | | 1,146 | | | 6,697 | | | 323 | | | 5,955 |
| | | | | | | | | | | | | | | | | | |
Total Fees | | | 166,335 | | | 131,237 | | | 24,099 | | | 142,236 | | | 1,692 | | | 129,545 |
| | | | | | | | | | | | | | | | | | |
Earnings in Equity Investments | | | 3,034 | | | 1,556 | | | — | | | 3,034 | | | — | | | 1,556 |
Gain on Sale of Loans, Net | | | 1,972 | | | 1,774 | | | 732 | | | 1,240 | | | 120 | | | 1,654 |
Gain on Sale of Investments, Net | | | — | | | 20 | | | — | | | — | | | — | | | 20 |
| | | | | | | | | | | | | | | | | | |
Total Fees and Other Income | | | 171,341 | | | 134,587 | | | 24,831 | | | 146,510 | | | 1,812 | | | 132,775 |
| | | | | | | | | | | | | | | | | | |
Total Revenue | | | 344,854 | | | 263,326 | | | 70,359 | | | 274,495 | | | 13,868 | | | 249,458 |
| | | | | | | | | | | | | | | | | | |
Provision for Loan Losses | | | 6,179 | | | 5,438 | | | 1,939 | | | 4,240 | | | 548 | | | 4,890 |
| | | | | | | | | | | | | | | | | | |
Salaries and Employee Benefits | | | 163,438 | | | 123,387 | | | 32,738 | | | 130,700 | | | 5,399 | | | 117,988 |
Occupancy and Equipment | | | 29,149 | | | 21,053 | | | 6,067 | | | 23,082 | | | 1,044 | | | 20,009 |
Professional Services | | | 13,346 | | | 10,270 | | | 2,848 | | | 10,498 | | | 351 | | | 9,919 |
Marketing and Business Development | | | 8,705 | | | 6,792 | | | 2,015 | | | 6,690 | | | 358 | | | 6,434 |
Contract Services and Processing | | | 5,125 | | | 4,070 | | | 1,303 | | | 3,822 | | | 233 | | | 3,837 |
Amortization of Intangibles | | | 13,649 | | | 7,634 | | | 7,744 | | | 5,905 | | | 1,479 | | | 6,155 |
Other | | | 17,037 | | | 13,063 | | | 3,967 | | | 13,070 | | | 959 | | | 12,104 |
| | | | | | | | | | | | | | | | | | |
Total Operating Expense | | | 250,449 | | | 186,269 | | | 56,682 | | | 193,767 | | | 9,823 | | | 176,446 |
| | | | | | | | | | | | | | | | | | |
Minority Interest | | | 3,699 | | | 2,512 | | | 893 | | | 2,806 | | | — | | | 2,512 |
Income Before Income Taxes | | | 84,527 | | | 69,107 | | | 10,845 | | | 73,682 | | | 3,497 | | | 65,610 |
Income Tax Expense | | | 30,154 | | | 25,561 | | | 4,479 | | | 25,675 | | | 1,387 | | | 24,174 |
| | | | | | | | | | | | | | | | | | |
Net Income | | $ | 54,373 | | $ | 43,546 | | $ | 6,366 | | $ | 48,007 | | $ | 2,110 | | | 41,436 |
| | | | | | | | | | | | | | | | | | |
| (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), includes the tax benefit on the portion of the purchase price which is deductible over a 15 year life, and excludes 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) | The adoption of FAS123(R ) caused an increase in the average diluted shares outstanding in prior years. The additional shares in 2005 caused original Cash Earnings Per Share to decrease from $1.71 to $1.70 per diluted share. |
| (7) | First Private Bank and Trust opened their Trust Department in the fourth quarter of 2006. |
| (8) | Financial Data and Assets Under Management and Advisory as of December 31, 2005 exclude Anchor Capital Holdings. Same Affilaite Operating Results for the three months ending December 31, 2006 exclude Anchor Capital Holdings. Same Affilaite Operating Results for the twelve months ending December 31, 2006 and 2005 exclude Anchor Capital Holdings, Gibraltar Private Bank & Trust Co., and the interest expense, net of tax, on the related Trust Preferred Debt associated with the Gibraltar acquisition. |
