Exhibit 99.1
| | |
| FOR IMMEDIATE RELEASE | |  |
| | |
| CONTACT: | | Walter M. Pressey |
| | President and Interim Chief Financial Officer (617) 912-1921 Erica E. Smith Investor Relations (617) 912-3766 www.bostonprivate.com |
|
BOSTON PRIVATE ANNOUNCES RESULTS FOR SECOND QUARTER 2007 Increased Net Interest Income, Wealth Advisory, and Investment Management Fees |
Boston, MA, July 25, 2007 – Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) today reported second quarter 2007 cash earnings of $0.47 per diluted share, an increase of 11.9% from $0.42 per diluted share in the second quarter of 2006, and a 6.8% increase from $0.44 per diluted share in the first quarter of 2007. GAAP earnings for the second quarter 2007 were $0.13 per diluted share versus $0.33 per diluted share for the second quarter of 2006 and $0.34 per diluted share in the first quarter of 2007. Included in the GAAP financial results is a non-cash impairment charge of $10.1 million, net of tax and minority interest, or $0.25 per diluted share, to reduce goodwill carried on the Company’s books relating to the acquisition of Dalton, Greiner, Hartman, Maher & Co., LLC (“DGHM”). The total charge to goodwill of $17.9 million reduces the balance related to the purchase of DGHM to $33.5 million as of June 30, 2007. Excluding the impact of the non-cash impairment charge, core operating earnings would have been $0.38 per share for the second quarter an increase of 15.2% compared with $0.33 per diluted share for the second quarter of 2006 and 11.8% compared with $0.34 per diluted share in the first quarter of 2007.
Included in the financial performance are the results from Anchor Holdings (“Anchor”), which Boston Private acquired on June 1, 2006. More detailed financial information regarding Anchor’s financial results is outlined later in the press release.
Highlights
| | · | Net Income for the second quarter was $4.8 million, including the impact of the $10.1 million non-cash impairment charge, net of tax and minority interest. Excluding the impact of the non-cash impairment charge, net income would have been $14.8 million, compared to $12.3 million a year ago, an increase of 20.7% over the second quarter 2006 and an increase of 12.9% over the first quarter 2007. On a same affiliate basis, excluding the impact of the impairment charge, net income would have been $13.8 million, an increase of 12.4% compared to the second quarter of 2006. |
| | · | Total Revenues for the second quarter increased 15.6% to $96.6 million, compared to revenue of $83.5 million a year ago. Linked quarter revenues were up $4.5 million, or 4.9%, to $96.6 million. On a same affiliate basis, revenues were $90.6 million, an 8.5% increase compared to the second quarter 2006. |
| | · | Net Interest Incomeincreased 1.9% or $836 thousand over the second quarter 2006, to $44.2 million. Linked quarter net interest income increased $854 thousand, or 2%, to $44.2 million. |
| | · | Organic growth, on a linked quarter basis, increased net interest income by $1.0 million. |
| | · | Increased cost of funds, partially offset by increased yields on earning assets, decreased linked quarter net interest income by $176 thousand. |
| | · | Net interest margin, including the impact of trust preferred interest expense, was 3.47%, 4 basis points lower than the first quarter of 2007 and 45 basis points lower than the second quarter of 2006. |
| | · | Wealth Advisory Fee Income increased 15.6%, over the prior year to $7.7 million. Wealth advisory fees increased 6.5% on a linked quarter basis, a 26% annualized increase. |
| | · | Investment Management Fee Incomefor the second quarter totaled $40.3 million, including $2.2 million in performance fees at Westfield Capital Management, an increase of 29.8% over the same quarter in 2006. Linked quarter, investment management fee income increased 6.9%. On a same affiliate |
2
| | basis, investment management fee income was $34.4 million, an increase of 10.9% year over year. |
| | · | Total Operating Expenses, excluding the non-cash impairment charge for the second quarter, were up 15.4% to $71.6 million, compared to $62.0 million a year ago. Approximately 47% of the increase was due to the addition of Anchor’s operating expenses for the full quarter and the additional increase came from compensation and related benefits to support additional growth of the firm as well as annual merit increases. On a same affiliate basis, excluding the impairment charge, operating expenses were $67.9 million, a year over year increase of 9.5%. |
| | · | Operating Leverage, excluding the non-cash impairment charge, from the second quarter of 2006 to the second quarter of 2007 declined 0.3% primarily due to compression of the net interest margin. Net interest income, representing approximately 50 percent of the company’s revenue, increased only 1.9% year over year while organic growth of the loan portfolio was 16.1% and deposits grew 6.6%. The inverted yield curve coupled with loans growing faster than deposits increased the cost of funding causing the net interest margin to decline by 45 basis points. |
| | · | Total Balance Sheet Assets at June 30, 2007 were $5.9 billion compared to $5.3 billion a year ago, an increase of 12.5%. On a linked quarter basis, total balance sheet assets grew by $68 million, or 1.2%. |
| | · | Total Loans increased $635 million, or 16.1%, from June 30, 2006, to $4.6 billion. On a linked quarter basis, total loans grew by 2.9%, an annualized growth rate of 11.6%. |
| | · | Allowance for credit losses, including the allowance for off-balance sheet risk, as a percentage of total loans was 1.13% in the first and second quarters of 2007 which indicates consistent risk characteristics of the loan portfolio. |
| | · | Non-performing assets increased to $16.6 million, or 0.28% of total assets, at June 30, 2007 from $10.0 million, or 0.17% of total assets, at March 31, 2007. Although there was an increase in NPA’s during the quarter, loans 30 to 89 days past due decreased $8.6 million during the quarter. |
| | · | The company recorded during the second quarter of 2007 $525 thousand in net recoveries on loans previously charged off. The majority of the net |
3
| | recoveries were related to a loan charged off at First Private Bank prior to being acquired by Boston Private. |
| | · | There was $2.1 million in OREO during the quarter representing two properties in Southern California. |
| | · | Total Deposits increased $241 million, or 6.6%, from June 30, 2006, to $3.9 billion. On a linked quarter basis, deposits declined by $199 million, or 4.9%, while average deposits for the same period increased $21 million, or 0.5% reflecting the fact that the decline in deposits occurred at the end of June. |
| | · | Total Assets Under Management/Advisoryfrom consolidated and unconsolidated affiliates increased 19.2%, or $5.8 billion, over the prior year to $36.0 billion. On a linked quarter basis total Assets Under Management/Advisory increased approximately $2.1 billion, or 6.2%, an annualized growth rate of 24.8%. During the second quarter, Assets Under Management from our consolidated banks and investment managers grew approximately $1.6 billion, or 6.4%, from $24.6 billion to $26.2 billion. Virtually all of this growth was driven by positive market action, while net flows were essentially flat with a net decline of $8 million. |
Timothy L. Vaill, Chairman and Chief Executive Officer, said, “We are pleased to report increased cash earnings per share for the quarter, which is particularly gratifying given the competitive market environment and our continued investments in our business. We posted double digit loan growth and our credit quality remains solid, despite a slight up tick in non-performing assets. Our net interest income increased 1.9% year over year despite an 11.5% decline in our net interest margin, illustrating the power of organic growth of our balance sheet. Our overall results benefited from the strength of our diversification with our investment management business increasing as a result of organic growth at Anchor and Westfield and positive market action across our investment management affiliates.”
“In early July, we completed the Charter acquisition, issued $287.5 million of 3.00% Contingent Convertible Senior Notes due 2027 and completed an associated 1.5 million share buy-back,” stated Walter Pressey, President and Interim Chief Financial Officer. “These transactions will have a positive influence our financial results in the third quarter. We anticipate that average basic and fully diluted shares outstanding for the third quarter will be approximately 36.9 million and 41.6 million, respectively. Our investments in new offices continue to contribute approximately 22%, or $54.2 million, of the $241 million of organic deposit growth over the second quarter 2006.”
4
Vaill concluded, “We are also delighted to welcome David Kaye, who will be starting next week, as our new Chief Financial Officer. In addition, I am pleased to announce two new members of our Board of Directors, Adolfo Henriques and Deborah Foye Kuenstner. I am pleased with our strong core earnings performance this quarter especially considering the challenges the banking industry continues to face. We feel that our comprehensive, diversified and unique strategy, positions us well to deliver organic growth and increase long term shareholder value.”
Dividend Payment Continues
Concurrent with the release of the second quarter 2007 earnings, the Board of Directors of Boston Private Financial Holdings declared a cash dividend to shareholders of $0.09 per share. The record date for this dividend is August 1, 2007 and the payment date is August 15, 2007.
Cash Earnings
Boston Private calculates its cash earnings by adjusting net income to exclude net amortization of intangibles, impairment, 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 report 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 July 26, 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 or Yahoo! Finance. A continuous telephone replay will be available beginning at 11:30 a.m. Eastern time. The replay telephone number is (800) 388-9064.
Boston Private Wealth Management Group
Boston Private is a financial services company that owns independently operated affiliates located in key geographic regions of the U.S. Boston Private’s affiliates offer private banking, wealth advisory and investment management services to the high net
5
worth marketplace, selected businesses and institutions. The Company’s strategy is to enter new markets primarily through selected acquisitions, and then expand its wealth management business by way of organic growth. It makes investments in mid-size firms in demographically attractive areas, forming geographic clusters that represent the firm’s core competencies. Boston Private provides continuing assistance to its affiliates with strategic matters, marketing, compliance and operations. For more information about Boston Private, visit the Company’s web site atwww.bostonprivate.com.
This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s management uses these non-GAAP measures in its analysis of the Company’s performance. These measures typically adjust GAAP performance measures to exclude the effects of charges and expenses related to the consummation of mergers and acquisitions, as well as excluding other significant gains or losses that are unusual in nature. Also included in these non-GAAP measures are net amortization of intangibles, tax benefits related to purchase accounting, stock options, impairment 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.
Statements in this press release that are not historical facts are forward-looking statements as defined by United States securities laws. 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; 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.
6
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | | | | | |
| | | June 30,
2007 | | | June 30,
2006 | | | December 31,
2006 | |
FINANCIAL DATA (1): | | | | | | | | | | | | |
Total Balance Sheet Assets | | $ | 5,939,469 | | | $ | 5,279,086 | | | $ | 5,763,544 | |
Stockholders’ Equity | | | 663,695 | | | | 600,347 | | | | 635,197 | |
Tangible Capital: | | | | | | | | | | | | |
Boston Private Bank & Trust | | | 166,643 | | | | 147,098 | | | | 160,639 | |
Borel Private Bank & Trust | | | 100,146 | | | | 83,600 | | | | 91,300 | |
First Private Bank & Trust | | | 49,157 | | | | 44,017 | | | | 48,388 | |
Gibraltar Private Bank & Trust | | | 83,608 | | | | 71,296 | | | | 78,692 | |
Investment Securities | | | 576,137 | | | | 564,513 | | | | 577,903 | |
Goodwill | | | 311,240 | | | | 318,118 | | | | 335,633 | |
Intangible Assets | | | 118,828 | | | | 129,338 | | | | 125,331 | |
| | | |
Commercial and Construction Loans | | | 2,701,540 | | | | 2,197,682 | | | | 2,496,234 | |
Residential Mortgage Loans | | | 1,603,529 | | | | 1,482,629 | | | | 1,546,965 | |
Home Equity and Other Consumer Loans | | | 281,092 | | | | 270,633 | | | | 268,053 | |
| | | | | | | | | | | | |
Total Loans | | | 4,586,161 | | | | 3,950,944 | | | | 4,311,252 | |
| | | |
Loans Held for Sale | | | 8,603 | | | | 8,131 | | | | 5,224 | |
| | | |
Allowance for Loan Losses and Off-Balance Sheet Risk | | | 51,995 | | | | 45,383 | | | | 48,973 | |
Non-performing Loans | | | 14,003 | | | | 5,775 | | | | 9,999 | |
Repossessed Assets, Net | | | 475 | | | | — | | | | 550 | |
Other Real Estate Owned, Net | | | 2,116 | | | | — | | | | — | |
Total Non-performing Assets | | | 16,594 | | | | 5,775 | | | | 10,549 | |
Deposits | | | 3,902,432 | | | | 3,661,419 | | | | 4,077,831 | |
Borrowings | | | 1,256,505 | | | | 887,612 | | | | 914,529 | |
| | | |
Book Value Per Share | | $ | 17.84 | | | $ | 16.52 | | | $ | 17.19 | |
Market Price Per Share | | $ | 26.87 | | | $ | 27.90 | | | $ | 28.21 | |
| | | |
ASSETS UNDER MANAGEMENT AND ADVISORY: | | | | | | | | | | | | |
Westfield Capital Management | | $ | 11,659,000 | | | $ | 8,890,000 | | | $ | 10,102,000 | |
Boston Private Bank & Trust | | | 2,600,000 | | | | 2,279,000 | | | | 2,369,000 | |
Sand Hill Advisors | | | 1,271,000 | | | | 1,120,000 | | | | 1,252,000 | |
Boston Private Value Investors | | | 943,000 | | | | 891,000 | | | | 961,000 | |
RINET Company | | | 1,347,000 | | | | 1,180,000 | | | | 1,262,000 | |
Borel Private Bank & Trust | | | 718,000 | | | | 692,000 | | | | 731,000 | |
Dalton, Greiner, Hartman, Maher & Co. | | | 1,806,000 | | | | 3,199,000 | | | | 2,302,000 | |
KLS Professional Advisors Group | | | 4,204,000 | | | | 3,399,000 | | | | 3,727,000 | |
Gibraltar Private Bank & Trust | | | 959,000 | | | | 798,000 | | | | 907,000 | |
Anchor Capital Holdings | | | 7,483,000 | | | | 5,430,000 | | | | 6,444,000 | |
First Private Bank & Trust | | | 21,000 | | | | — | | | | 5,000 | |
Less: Inter-company Relationship | | | (250,000 | ) | | | (201,000 | ) | | | (238,000 | ) |
| | | | | | | | | | | | |
Consolidated Affiliate Assets Under Management and Advisory | | $ | 32,761,000 | | | $ | 27,677,000 | | | $ | 29,824,000 | |
| | | |
Coldstream Capital Management | | | 1,200,000 | | | | 975,000 | | | | 1,090,000 | |
Bingham, Osborn, & Scarborough | | | 2,038,000 | | | | 1,545,000 | | | | 1,777,000 | |
| | | | | | | | | | | | |
Total Assets Under Management and Advisory | | $ | 35,999,000 | | | $ | 30,197,000 | | | $ | 32,691,000 | |
| | | |
FINANCIAL RATIOS: | | | | | | | | | | | | |
Stockholders’ Equity/Total Assets | | | 11.17 | % | | | 11.37 | % | | | 11.02 | % |
Non-performing Loans/Total Loans | | | 0.31 | % | | | 0.15 | % | | | 0.23 | % |
Allowance for Loan Losses and Off-Balance Sheet Risk/Total Loans | | | 1.13 | % | | | 1.15 | % | | | 1.14 | % |
Tangible Capital/Tangible Assets | | | 4.24 | % | | | 3.16 | % | | | 3.29 | % |
| | | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | June 30,
2007 | | June 30,
2006 | | June 30,
2007 | | June 30,
2006 |
OPERATING RESULTS (1): | | | | | | | | | | | | |
Net Interest Income—on a Fully Taxable Equivalent Basis (FTE) | | $ | 45,960 | | $ | 44,766 | | $ | 90,980 | | $ | 89,670 |
FTE Adjustment | | | 1,722 | | | 1,364 | | | 3,358 | | | 2,700 |
| | | | | | | | | | | | |
Net Interest Income | | | 44,238 | | | 43,402 | | | 87,622 | | | 86,970 |
| | | | | | | | | | | | |
Investment Management & Trust Fees: | | | | | | | | | | | | |
Westfield Capital Management | | | 18,704 | | | 13,900 | | | 35,409 | | | 27,639 |
Boston Private Bank & Trust | | | 3,857 | | | 3,472 | | | 7,542 | | | 6,889 |
Boston Private Value Investors | | | 1,734 | | | 1,724 | | | 3,498 | | | 3,356 |
Borel Private Bank & Trust | | | 1,241 | | | 1,061 | | | 2,368 | | | 2,047 |
Gibraltar Private Bank & Trust | | | 2,057 | | | 1,580 | | | 3,896 | | | 3,075 |
Dalton, Greiner, Hartman, Maher & Co. | | | 3,979 | | | 7,036 | | | 8,507 | | | 14,580 |
First Private Bank & Trust | | | 26 | | | — | | | 50 | | | — |
Anchor Capital Holdings | | | 8,700 | | | 2,263 | | | 16,736 | | | 2,263 |
| | | | | | | | | | | | |
Total Investment Management & Trust Fees | | | 40,298 | | | 31,036 | | | 78,006 | | | 59,849 |
Wealth Advisory Fees: | | | | | | | | | | | | |
RINET Company | | | 2,384 | | | 2,078 | | | 4,510 | | | 4,018 |
Sand Hill Advisors | | | 1,694 | | | 1,562 | | | 3,400 | | | 3,104 |
KLS Professional Advisors Group | | | 3,611 | | | 3,005 | | | 6,996 | | | 5,884 |
Other | | | 48 | | | 47 | | | 97 | | | 98 |
| | | | | | | | | | | | |
Total Wealth Advisory Fees | | | 7,737 | | | 6,692 | | | 15,003 | | | 13,104 |
| | | | | | | | | | | | |
Other Fees | | | 3,015 | | | 1,664 | | | 5,463 | | | 3,492 |
| | | | | | | | | | | | |
Total Fees | | | 51,050 | | | 39,392 | | | 98,472 | | | 76,445 |
| | | | | | | | | | | | |
Earnings in Equity Investments | | | 582 | | | 220 | | | 1,265 | | | 991 |
Gain on Sale of Loans, Net | | | 695 | | | 525 | | | 1,227 | | | 982 |
Gain on Sale of Investments, Net | | | 5 | | | — | | | 8 | | | — |
| | | | | | | | | | | | |
Total Fees and Other Income | | | 52,332 | | | 40,137 | | | 100,972 | | | 78,418 |
| | | | | | | | | | | | |
Total Revenue | | | 96,570 | | | 83,539 | | | 188,594 | | | 165,388 |
| | | | | | | | | | | | |
Provision for Loan Losses | | | 745 | | | 1,704 | | | 1,921 | | | 2,867 |
| | | | | | | | | | | | |
Salaries and Employee Benefits | | | 46,672 | | | 40,208 | | | 93,272 | | | 79,583 |
Occupancy and Equipment | | | 8,103 | | | 6,995 | | | 15,978 | | | 13,553 |
Professional Services | | | 4,129 | | | 3,727 | | | 7,335 | | | 6,535 |
Marketing and Business Development | | | 2,834 | | | 2,361 | | | 5,432 | | | 4,697 |
Contract Services and Processing | | | 1,608 | | | 1,273 | | | 3,044 | | | 2,503 |
Amortization of Intangibles | | | 3,508 | | | 3,164 | | | 7,057 | | | 6,038 |
Other | | | 4,789 | | | 4,302 | | | 9,069 | | | 8,820 |
| | | | | | | | | | | | |
Total Operating Expense | | | 71,643 | | | 62,030 | | | 141,187 | | | 121,729 |
| | | | | | | | | | | | |
Income before Minority Interest, Income Taxes & Impairment | | | 24,182 | | | 19,805 | | | 45,486 | | | 40,792 |
Impairment of Goodwill, net of tax | | | 10,054 | | | — | | | 10,054 | | | — |
Income before Minority Interest and Income Taxes | | | 14,128 | | | 19,805 | | | 35,432 | | | 40,792 |
Minority Interest | | | 106 | | | 745 | | | 1,020 | | | 1,559 |
Income Before Income Taxes | | | 14,022 | | | 19,060 | | | 34,412 | | | 39,233 |
Income Tax Expense | | | 9,246 | | | 6,772 | | | 16,503 | | | 14,118 |
| | | | | | | | | | | | |
Net Income | | $ | 4,776 | | $ | 12,288 | | $ | 17,909 | | $ | 25,115 |
| | | | | | | | | | | | |
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | June 30, 2007 | | June 30,
2006 | | June 30,
2007 | | June 30, 2006 |
RECONCILIATION OF GAAP EARNINGS TO CASH EARNINGS (1): | | | | | | | | | | | | |
| | | | |
Net Income (GAAP Basis) | | $ | 4,776 | | $ | 12,288 | | $ | 17,909 | | $ | 25,115 |
Cash Basis Earnings (2) | | | | | | | | | | | | |
Book Amortization of Purchased Intangibles, net of tax | | | 1,890 | | | 1,763 | | | 3,801 | | | 3,390 |
Cash Benefit of Tax Deductions from Purchased Intangibles & Goodwill | | | 1,077 | | | 1,023 | | | 2,188 | | | 2,046 |
Impairment of Goodwill, net of tax | | | 10,054 | | | — | | | 10,054 | | | — |
Stock options and ESPP, net of tax | | | 925 | | | 1,062 | | | 2,046 | | | 1,963 |
| | | | | | | | | | | | |
Total Cash Basis Adjustment | | | 13,946 | | | 3,848 | | | 18,089 | | | 7,399 |
| | | | | | | | | | | | |
Cash Basis Earnings | | $ | 18,722 | | $ | 16,136 | | $ | 35,998 | | $ | 32,514 |
| | | | | | | | | | | | |
| | |
| | | Three Months Ended | | Six Months Ended |
| | | June 30, 2007 | | June 30,
2006 | | June 30,
2007 | | 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 | | $ | 4,776 | | $ | 12,288 | | $ | 17,909 | | $ | 25,115 |
Interest on convertible trust preferred securities, net of tax (6) | | | — | | | 765 | | | 1,500 | | | 1,530 |
| | | | | | | | | | | | |
Net Income for diluted EPS | | $ | 4,776 | | $ | 13,053 | | $ | 19,409 | | $ | 26,645 |
Interest on convertible trust preferred securities, net of tax for Cash EPS | | | 750 | | | — | | | — | | | — |
| | | | |
Calculation of average shares outstanding: | | | | | | | | | | | | |
Weighted average basic shares | | | 36,616 | | | 35,199 | | | 36,447 | | | 34,910 |
Dilutive effect of: | | | | | | | | | | | | |
Stock Options, Stock Grants and Other | | | 1,487 | | | 1,518 | | | 1,579 | | | 1,551 |
Convertible trust preferred securities (6) | | | — | | | 3,182 | | | 3,184 | | | 3,182 |
| | | | | | | | | | | | |
Dilutive potential common shares | | | 1,487 | | | 4,700 | | | 4,763 | | | 4,733 |
Weighted average diluted shares for EPS | | | 38,103 | | | 39,899 | | | 41,210 | | | 39,643 |
Weighted average diluted shares for Cash EPS | | | 41,288 | | | — | | | — | | | — |
| | | | |
Earnings per Share: | | | | | | | | | | | | |
Basic | | $ | 0.13 | | $ | 0.35 | | $ | 0.49 | | $ | 0.72 |
Diluted (6) | | $ | 0.13 | | $ | 0.33 | | $ | 0.47 | | $ | 0.67 |
| | | | |
RECONCILIATION OF GAAP EPS TO CASH EPS (1): | | | | | | | | | | | | |
(on a Diluted Basis) | | | | | | | | | | | | |
Earnings Per Share (GAAP Basis) | | $ | 0.13 | | $ | 0.33 | | $ | 0.47 | | $ | 0.67 |
Cash Basis Adjustment | | $ | 0.34 | | $ | 0.09 | | $ | 0.44 | | $ | 0.19 |
| | | | | | | | | | | | |
Cash Basis Earnings Per Diluted Share | | $ | 0.47 | | $ | 0.42 | | $ | 0.91 | | $ | 0.86 |
| | | | | | | | | | | | |
| | |
| | | Three Months Ended | | Six Months Ended |
| OPERATING RATIOS & STATISTICS (1): | | June 30, 2007 | | June 30,
2006 | | June 30,
2007 | | June 30, 2006 |
Return on Average Equity | | | 2.97% | | | 8.62% | | | 6.44% | | | 9.03% |
Return on Average Assets | | | 0.32% | | | 0.95% | | | 0.70% | | | 0.98% |
Net Interest Margin | | | 3.47% | | | 3.92% | | | 3.48% | | | 3.96% |
Core Net Interest Margin(3) | | | 3.72% | | | 4.20% | | | 3.74% | | | 4.26% |
Total Fees and Other Income/Total Revenue | | | 54.19% | | | 48.05% | | | 53.54% | | | 47.41% |
Efficiency Ratio | | | 70.24% | | | 69.95% | | | 70.80% | | | 69.65% |
Loans Charged-off, Net of (Recoveries) | | | ($525) | | | $12 | | | ($518) | | | $539 |
RECONCILIATION OF NIM TO CORE NIM | | | | | | | | | | | | |
Net Interest Margin | | | 3.47% | | | 3.92% | | | 3.48% | | | 3.96% |
Effect of Trust Preferred, Net | | | 0.25% | | | 0.28% | | | 0.26% | | | 0.30% |
Core Net Interest Margin(3) | | | 3.72% | | | 4.20% | | | 3.74% | | | 4.26% |
CASH OPERATING RATIOS (1): | | | | | | | | | | | | |
Return on Average Equity (4) | | | 11.65% | | | 11.32% | | | 12.94% | | | 11.69% |
Return on Average Assets (5) | | | 1.26% | | | 1.25% | | | 1.41% | | | 1.27% |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | |
| AVERAGE BALANCE SHEET: | | Three Months Ended | | Three Months Ended |
| | | June 30, 2007 | | June 30, 2006 |
| AVERAGE ASSETS: | | Average
Balance | | | Income/
Expense | | Yield/
Rate | | Average
Balance | | | Income/
Expense | | Yield/
Rate |
Earnings Assets | | | | | | | | | | | | | | | | | | |
Cash and investment | | $ | 735,046 | | | $ | 8,093 | | 4.96% | | $ | 674,008 | | | $ | 6,035 | | 4.08% |
Loans | | | | | | | | | | | | | | | | | | |
Commercial and Construction | | | 2,628,288 | | | | 50,252 | | 7.68% | | | 2,143,288 | | | | 40,770 | | 7.65% |
Residential Mortgage | | | 1,604,611 | | | | 23,358 | | 5.82% | | | 1,456,485 | | | | 20,378 | | 5.60% |
Home Equity and Other Consumer | | | 276,672 | | | | 5,442 | | 7.83% | | | 259,738 | | | | 5,093 | | 7.61% |
| | | | | | | | | | | | | | | | | | |
Total Earning Assets | | | 5,244,617 | | | | 87,145 | | 6.74% | | | 4,533,519 | | | | 72,276 | | 6.46% |
| | | | | | | | | | | | | | | | | | |
Allowance for Loan Losses | | | (48,008 | ) | | | | | | | | (38,817 | ) | | | | | |
Cash and due From Banks | | | 54,105 | | | | | | | | | 61,213 | | | | | | |
Other Assets | | | 681,459 | | | | | | | | | 604,594 | | | | | | |
| | | | | | | | | | | | | | | | | | |
TOTAL AVERAGE ASSETS | | $ | 5,932,173 | | | | | | | | $ | 5,160,509 | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | |
AVERAGE LIABILITIES AND STOCKHOLDERS’ EQUITY: | | | | | | | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | | | |
Savings and NOW | | $ | 564,742 | | | $ | 3,014 | | 2.14% | | $ | 458,979 | | | $ | 1,474 | | 1.29% |
Money Market | | | 1,867,200 | | | | 15,728 | | 3.38% | | | 1,696,037 | | | | 10,991 | | 2.60% |
Certificate of Deposits | | | 925,998 | | | | 11,031 | | 4.78% | | | 726,806 | | | | 7,097 | | 3.92% |
| | | | | | | | | | | | | | | | | | |
Total Deposits | | | 3,357,940 | | | | 29,773 | | 3.56% | | | 2,881,822 | | | | 19,562 | | 2.72% |
Junior Subordinated Debentures | | | 234,021 | | | | 3,299 | | 5.58% | | | 234,021 | | | | 3,286 | | 5.55% |
FHLB Borrowings and Other | | | 863,756 | | | | 9,835 | | 4.50% | | | 590,328 | | | | 6,026 | | 4.04% |
| | | | | | | | | | | | | | | | | | |
Total Interest-Bearing Liabilities | | | 4,455,717 | | | | 42,907 | | 3.85% | | | 3,706,171 | | | | 28,874 | | 3.11% |
| | | | | | | | | | | | | | | | | | |
Non-interest Bearing Demand Deposits | | | 706,598 | | | | | | | | | 758,002 | | | | | | |
Payables and Other Liabilities | | | 126,943 | | | | | | | | | 125,981 | | | | | | |
| | | | | | | | | | | | | | | | | | |
Total Liabilities | | | 5,289,258 | | | | | | | | | 4,590,154 | | | | | | |
Stockholders’ Equity | | | 642,915 | | | | | | | | | 570,355 | | | | | | |
| | | | | | | | | | | | | | | | | | |
TOTAL AVERAGE LIABILITIES & STOCKHOLDERS’ EQUITY | | $ | 5,932,173 | | | | | | | | $ | 5,160,509 | | | | | | |
| | | | | | | | | | | | | | | | | | |
Net Interest Income | | | | | | $ | 44,238 | | | | | | | | $ | 43,402 | | |
Boston Private Financial Holdings, Inc.
Selected Financial Data
(in Thousands, except share data)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| AVERAGE BALANCE SHEET: | | Six Months Ended June 30, 2007 | | | Six Months Ended June 30, 2006 | |
| | | Average
Balance | | | Income/
Expense | | Yield/
Rate | | | Average
Balance | | | Income/
Expense | | Yield/
Rate | |
AVERAGE ASSETS: | | | | | | | | | | | | | | | | | | | | |
Earnings Assets | | | | | | | | | | | | | | | | | | | | |
Cash and investment | | $ | 713,827 | | | $ | 15,407 | | 4.89 | % | | $ | 721,994 | | | $ | 13,076 | | 4.11 | % |
Loans | | | | | | | | | | | | | | | | | | | | |
Commercial and Construction | | | 2,585,912 | | | | 98,760 | | 7.70 | % | | | 2,095,738 | | | | 78,304 | | 7.54 | % |
Residential Mortgage | | | 1,595,097 | | | | 46,192 | | 5.79 | % | | | 1,421,231 | | | | 39,453 | | 5.55 | % |
Home Equity and Other Consumer | | | 271,644 | | | | 10,623 | | 7.79 | % | | | 252,041 | | | | 9,629 | | 7.51 | % |
| | | | | | | | | | | | | | | | | | | | |
Total Earning Assets | | | 5,166,480 | | | | 170,982 | | 6.73 | % | | | 4,491,004 | | | | 140,462 | | 6.36 | % |
| | | | | | | | | | | | | | | | | | | | |
Allowance for Loan Losses | | | (47,447 | ) | | | | | | | | | (38,511 | ) | | | | | | |
Cash and due From Banks | | | 55,086 | | | | | | | | | | 62,932 | | | | | | | |
Other Assets | | | 701,859 | | | | | | | | | | 598,700 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
TOTAL AVERAGE ASSETS | | $ | 5,875,978 | | | | | | | | | $ | 5,114,125 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
AVERAGE LIABILITIES AND STOCKHOLDERS’ EQUITY: | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | | | | | |
Savings and NOW | | $ | 557,772 | | | $ | 5,944 | | 2.15 | % | | $ | 454,151 | | | $ | 2,682 | | 1.19 | % |
Money Market | | | 1,870,212 | | | | 31,437 | | 3.09 | % | | | 1,720,329 | | | | 20,290 | | 2.38 | % |
Certificate of Deposits | | | 907,013 | | | | 21,303 | | 5.35 | % | | | 712,952 | | | | 13,113 | | 3.71 | % |
| | | | | | | | | | | | | | | | | | | | |
Total Deposits | | | 3,334,997 | | | | 58,684 | | 3.55 | % | | | 2,887,432 | | | | 36,085 | | 2.52 | % |
Junior Subordinated Debentures | | | 234,021 | | | | 6,592 | | 5.68 | % | | | 234,021 | | | | 6,544 | | 5.64 | % |
FHLB Borrowings and Other | | | 802,931 | | | | 18,084 | | 4.48 | % | | | 559,259 | | | | 10,863 | | 3.86 | % |
| | | | | | | | | | | | | | | | | | | | |
Total Interest-Bearing Liabilities | | | 4,371,949 | | | | 83,360 | | 3.83 | % | | | 3,680,712 | | | | 53,492 | | 2.92 | % |
| | | | | | | | | | | | | | | | | | | | |
Non-interest Bearing Demand Deposits | | | 718,178 | | | | | | | | | | 743,767 | | | | | | | |
Payables and Other Liabilities | | | 133,506 | | | | | | | | | | 133,231 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total Liabilities | | | 5,223,633 | | | | | | | | | | 4,557,710 | | | | | | | |
Stockholders’ Equity | | | 652,345 | | | | | | | | | | 556,415 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
TOTAL AVERAGE LIABILITIES & STOCKHOLDERS’ EQUITY | | $ | 5,875,978 | | | | | | | | | $ | 5,114,125 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net Interest Income | | | | | | $ | 87,622 | | | | | | | | | $ | 86,970 | | | |
| | | | | | | | |
| | | June 30, 2007 | | | March 31,
2007 | |
FINANCIAL DATA (1): | | | | | | | | |
Total Balance Sheet Assets | | $ | 5,939,469 | | | $ | 5,871,510 | |
Stockholders’ Equity | | | 663,695 | | | | 651,282 | |
Tangible Capital: | | | | | | | | |
Boston Private Bank & Trust | | | 166,643 | | | | 161,414 | |
Borel Private Bank & Trust | | | 100,146 | | | | 96,270 | |
First Private Bank & Trust | | | 49,157 | | | | 46,700 | |
Gibraltar Private Bank & Trust | | | 83,608 | | | | 81,756 | |
Investment Securities | | | 576,137 | | | | 511,985 | |
Goodwill | | | 311,240 | | | | 332,462 | |
Intangible Assets | | | 118,828 | | | | 121,782 | |
Commercial and Construction Loans | | | 2,701,540 | | | | 2,608,172 | |
Residential Mortgage Loans | | | 1,603,529 | | | | 1,581,829 | |
Home Equity and Other Consumer Loans | | | 281,092 | | | | 268,956 | |
| | | | | | | | |
Total Loans | | | 4,586,161 | | | | 4,458,957 | |
Loans Held for Sale | | | 8,603 | | | | 8,911 | |
Allowance for Loan Losses and Off-Balance Sheet Risk | | | 51,995 | | | | 50,303 | |
Non-performing Loans | | | 14,003 | | | | 9,564 | |
Repossessed Assets, Net | | | 475 | | | | 475 | |
Other Real Estate Owned | | | 2,116 | | | | — | |
Total Non-performing Assets | | | 16,594 | | | | 10,039 | |
Deposits | | | 3,902,432 | | | | 4,101,432 | |
Borrowings | | | 1,256,505 | | | | 1,012,088 | |
Book Value Per Share | | $ | 17.84 | | | $ | 17.72 | |
Market Price Per Share | | $ | 26.87 | | | $ | 27.92 | |
| | |
ASSETS UNDER MANAGEMENT AND ADVISORY: | | | | | | | | |
| | |
Westfield Capital Management | | $ | 11,659,000 | | | $ | 10,521,000 | |
Boston Private Bank & Trust | | | 2,600,000 | | | | 2,499,000 | |
Sand Hill Advisors | | | 1,271,000 | | | | 1,284,000 | |
Boston Private Value Investors | | | 943,000 | | | | 915,000 | |
RINET Company | | | 1,347,000 | | | | 1,285,000 | |
Borel Private Bank & Trust | | | 718,000 | | | | 707,000 | |
Dalton, Greiner, Hartman, Maher & Co. | | | 1,806,000 | | | | 2,014,000 | |
KLS Professional Advisors Group | | | 4,204,000 | | | | 3,939,000 | |
Gibraltar Private Bank & Trust | | | 959,000 | | | | 959,000 | |
Anchor Capital Holdings | | | 7,483,000 | | | | 6,976,000 | |
First Private Bank & Trust | | | 21,000 | | | | 15,000 | |
Less: Inter-company Relationship | | | (250,000 | ) | | | (255,000 | ) |
| | | | | | | | |
Consolidated Affiliate Assets Under Management and Advisory | | $ | 32,761,000 | | | $ | 30,859,000 | |
Coldstream Capital Management | | | 1,200,000 | | | | 1,110,000 | |
Bingham, Osborn, & Scarborough | | | 2,038,000 | | | | 1,930,000 | |
| | | | | | | | |
Total Unconsolidated Assets Under Management and Advisory | | $ | 35,999,000 | | | $ | 33,899,000 | |
| | |
FINANCIAL RATIOS (1): | | | | | | | | |
| | |
Stockholders’ Equity/Total Assets | | | 11.17 | % | | | 11.09 | % |
Nonperforming Loans/Total Loans | | | 0.31 | % | | | 0.21 | % |
Allowance for Loan Losses and Off-Balance Sheet Risk/Total Loans | | | 1.13 | % | | | 1.13 | % |
Tangible Capital/Tangible Assets | | | 4.24 | % | | | 3.64 | % |
| | | | | | | | |
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | |
| | | Three Months Ended | |
| | | June 30,
2007 | | | March 31,
2007 | |
OPERATING RESULTS (1): | | | | | | | | |
Net Interest Income—on a Fully Taxable Equivalent Basis (FTE) | | $ | 45,960 | | | $ | 45,019 | |
FTE Adjustment | | | 1,722 | | | | 1,635 | |
| | | | | | | | |
Net Interest Income | | | 44,238 | | | | 43,384 | |
| | | | | | | | |
Investment Management & Trust Fees: | | | | | | | | |
Westfield Capital Management | | | 18,704 | | | | 16,705 | |
Boston Private Bank & Trust | | | 3,857 | | | | 3,685 | |
Boston Private Value Investors | | | 1,734 | | | | 1,765 | |
Borel Private Bank & Trust | | | 1,241 | | | | 1,127 | |
Gibraltar Private Bank & Trust | | | 2,057 | | | | 1,839 | |
Dalton, Greiner, Hartman, Maher & Co. | | | 3,979 | | | | 4,528 | |
First Private Bank & Trust | | | 26 | | | | 22 | |
Anchor Capital | | | 8,700 | | | | 8,036 | |
| | | | | | | | |
Total Investment Management & Trust Fees | | | 40,298 | | | | 37,707 | |
Wealth Advisory Fees | | | | | | | | |
RINET Company | | | 2,384 | | | | 2,127 | |
Sand Hill Advisors | | | 1,694 | | | | 1,706 | |
KLS Professional Advisors Group | | | 3,611 | | | | 3,385 | |
Other | | | 48 | | | | 48 | |
| | | | | | | | |
Total Wealth Advisory Fees | | | 7,737 | | | | 7,266 | |
| | | | | | | | |
Other Fees | | | 3,015 | | | | 2,450 | |
| | | | | | | | |
Total Fees | | | 51,050 | | | | 47,423 | |
| | | | | | | | |
Earnings in Equity Investments | | | 582 | | | | 683 | |
Gain on Sale of Loans, Net | | | 695 | | | | 532 | |
Gain on Sale of Investments, Net | | | 5 | | | | 3 | |
| | | | | | | | |
Total Fees and Other Income | | | 52,332 | | | | 48,641 | |
| | | | | | | | |
Total Revenue | | | 96,570 | | | | 92,025 | |
| | | | | | | | |
Provision for Loan Losses | | | 745 | | | | 1,176 | |
| | | | | | | | |
Salaries and Benefits | | | 46,672 | | | | 46,601 | |
Occupancy and Equipment | | | 8,103 | | | | 7,874 | |
Professional Services | | | 4,129 | | | | 3,206 | |
Marketing and Business Development | | | 2,834 | | | | 2,596 | |
Contract Services and Processing | | | 1,608 | | | | 1,435 | |
Amortization of Intangibles | | | 3,508 | | | | 3,549 | |
Other | | | 4,789 | | | | 4,282 | |
| | | | | | | | |
Total Operating Expense | | | 71,643 | | | | 69,543 | |
| | | | | | | | |
Income before Minority Interest, Income Taxes & Impairment | | | 24,182 | | | | 21,306 | |
Impairment of Goodwill, net of tax | | | 10,054 | | | | — | |
Income before Minority Interest and Income Taxes | | | 14,128 | | | | 21,306 | |
Minority Interest | | | 106 | | | | 914 | |
Income Before Income Taxes | | | 14,022 | | | | 20,392 | |
Income Tax Expense | | | 9,246 | | | | 7,258 | |
| | | | | | | | |
Net Income | | $ | 4,776 | | | $ | 13,134 | |
| | | | | | | | |
| |
| | | Three Months Ended | |
| | | June 30,
2007 | | | March 31,
2007 | |
RECONCILIATION OF GAAP EARNINGS | | | | | | | | |
TO CASH EARNINGS (2): | | | | | | | | |
| | |
Net Income (GAAP Basis) | | $ | 4,776 | | | $ | 13,134 | |
| | |
Cash Basis Earnings (1) | | | | | | | | |
Book Amortization of Purchased Intangibles, net of tax | | | 1,890 | | | | 1,912 | |
Cash Benefit of Tax Deductions from Purchased Intangibles & Goodwill | | | 1,077 | | | | 1,098 | |
Impairment of Goodwill, net of tax | | | 10,054 | | | | — | |
Stock options and ESPP, net of tax | | | 925 | | | | 1,121 | |
| | | | | | | | |
Total Cash Basis Adjustment | | | 13,946 | | | | 4,131 | |
| | | | | | | | |
Cash Basis Earnings | | $ | 18,722 | | | | 17,265 | |
| | | | | | | | |
| |
| | | Three Months Ended | |
| | | June 30,
2007 | | | March 31,
2007 | |
PER SHARE DATA: (In thousands, except per share data) (1) | | | | | | | | |
| | |
Calculation of Net Income for EPS: | | | | | | | | |
| | |
Net Income as reported and for basic EPS | | $ | 4,776 | | | $ | 13,134 | |
Interest on convertible trust preferred securities, net of tax | | | — | | | | 750 | |
| | | | | | | | |
Net Income for diluted EPS | | $ | 4,776 | | | $ | 13,884 | |
| | |
Calculation of Average Shares Outstanding: | | | | | | | | |
Weighted average basic shares | | | 36,616 | | | | 36,277 | |
Dilutive effect of: | | | | | | | | |
Stock Options and Stock Grants, and Other | | | 1,487 | | | | 1,674 | |
Convertible trust preferred securities (6) | | | — | | | | 3,184 | |
| | | | | | | | |
Dilutive potential common shares | | | 1,487 | | | | 4,858 | |
Weighted average diluted shares | | | 38,103 | | | | 41,135 | |
| | |
Earnings per Share: | | | | | | | | |
Basic | | $ | 0.13 | | | $ | 0.36 | |
Diluted | | $ | 0.13 | | | $ | 0.34 | |
| | |
RECONCILIATION OF GAAP EPS TO CASH EPS (1): | | | | | | | | |
(on a Diluted Basis) | | | | | | | | |
| | |
Earnings Per Share (GAAP Basis) | | $ | 0.13 | | | $ | 0.34 | |
Cash Basis Adjustment | | $ | 0.34 | | | $ | 0.10 | |
| | | | | | | | |
Cash Basis Earnings Per Diluted Share | | $ | 0.47 | | | $ | 0.44 | |
| | | | | | | | |
| | |
OPERATING RATIOS & STATISTICS: | | | | | | | | |
| | |
Return on Average Equity | | | 2.97 | % | | | 8.17 | % |
Return on Average Assets | | | 0.32 | % | | | 0.91 | % |
Net Interest Margin | | | 3.47 | % | | | 3.51 | % |
Core Net Interest Margin (3) | | | 3.72 | % | | | 3.77 | % |
Total Fees and Other Income/Total Revenue | | | 54.19 | % | | | 52.86 | % |
Efficiency Ratio | | | 70.24 | % | | | 71.39 | % |
Loans Charged-off, Net of (Recoveries) | | $ | (525 | ) | | $ | 8 | |
| | |
RECONCILIATION OF NIM TO CORE NIM | | | | | | | | |
Net Interest Margin | | | 3.47 | % | | | 3.51 | % |
Effect of Trust Preferred, Net | | | 0.25 | % | | | 0.26 | % |
Core Net Interest Margin (3) | | | 3.72 | % | | | 3.77 | % |
10
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
SAME AFFILIATES
Growth Excluding Acquisitions
| | | | | | | | | | | | | |
| | | Three Months Ended | |
| OPERATING RESULTS (1): | | As Reported
June 30,
2007 | | June 30,
2006 | | Acquisitions
June 30,
2007 | | Same Affiliates
June 30, 2007 | |
Net Interest Income—on a Fully Taxable Equivalent Basis (FTE) | | $ | 45,960 | | $ | 44,766 | | $ | 17 | | $ | 45,943 | |
FTE Adjustment | | | 1,722 | | | 1,364 | | | — | | | 1,722 | |
| | | | | | | | | | | | | |
Net Interest Income | | | 44,238 | | | 43,402 | | | 17 | | | 44,221 | |
| | | | | | | | | | | | | |
Investment Management & Trust Fees: | | | | | | | | | | | | | |
Westfield Capital Management | | | 18,704 | | | 13,900 | | | — | | | 18,704 | |
Boston Private Bank & Trust | | | 3,857 | | | 3,472 | | | — | | | 3,857 | |
Boston Private Value Investors | | | 1,734 | | | 1,724 | | | — | | | 1,734 | |
Borel Private Bank & Trust | | | 1,241 | | | 1,061 | | | — | | | 1,241 | |
Gibraltar Private Bank & Trust | | | 2,057 | | | 1,580 | | | | | | 2,057 | |
Dalton, Greiner, Hartman, Maher & Co. | | | 3,979 | | | 7,036 | | | — | | | 3,979 | |
First Private Bank & Trust | | | 26 | | | — | | | — | | | 26 | |
Anchor Capital Holdings | | | 8,700 | | | 2,263 | | | 5,872 | | | 2,828 | |
| | | | | | | | | | | | | |
Total Investment Management & Trust Fees | | | 40,298 | | | 31,036 | | | 5,872 | | | 34,426 | |
Wealth Advisory Fees: | | | | | | | | | | | | | |
RINET Company | | | 2,384 | | | 2,078 | | | — | | | 2,384 | |
Sand Hill Advisors | | | 1,694 | | | 1,562 | | | | | | 1,694 | |
KLS Professional Advisors Group | | | 3,611 | | | 3,005 | | | — | | | 3,611 | |
Other | | | 48 | | | 47 | | | — | | | 48 | |
| | | | | | | | | | | | | |
Total Wealth Advisory Fees | | | 7,737 | | | 6,692 | | | — | | | 7,737 | |
| | | | | | | | | | | | | |
Other Fees | | | 3,015 | | | 1,664 | | | 44 | | | 2,971 | |
| | | | | | | | | | | | | |
Total Fees | | | 51,050 | | | 39,392 | | | 5,916 | | | 45,134 | |
| | | | | | | | | | | | | |
Earnings in Equity Investments | | | 582 | | | 220 | | | — | | | 582 | |
Gain on Sale of Loans, Net | | | 695 | | | 525 | | | | | | 695 | |
Gain on Sale of Investments, Net | | | 5 | | | — | | | 2 | | | 3 | |
| | | | | | | | | | | | | |
Total Fees and Other Income | | | 52,332 | | | 40,137 | | | 5,918 | | | 46,414 | |
| | | | | | | | | | | | | |
Total Revenue | | | 96,570 | | | 83,539 | | | 5,935 | | | 90,635 | |
| | | | | | | | | | | | | |
Provision for Loan Losses | | | 745 | | | 1,704 | | | — | | | 745 | |
| | | | | | | | | | | | | |
Salaries and Employee Benefits | | | 46,672 | | | 40,208 | | | 2,731 | | | 43,941 | |
Occupancy and Equipment | | | 8,103 | | | 6,995 | | | 129 | | | 7,974 | |
Professional Services | | | 4,129 | | | 3,727 | | | 55 | | | 4,074 | |
Marketing and Business Development | | | 2,834 | | | 2,361 | | | 111 | | | 2,723 | |
Contract Services and Processing | | | 1,608 | | | 1,273 | | | 30 | | | 1,578 | |
Amortization of Intangibles | | | 3,508 | | | 3,164 | | | 573 | | | 2,935 | |
Other | | | 4,789 | | | 4,302 | | | 110 | | | 4,679 | |
| | | | | | | | | | | | | |
Total Operating Expense | | | 71,643 | | | 62,030 | | | 3,739 | | | 67,904 | |
| | | | | | | | | | | | | |
Income before Minority Interest, Income Taxes & Impairment | | | 24,182 | | | 19,805 | | | 2,196 | | | 21,986 | |
Impairment of Goodwill, net of tax | | | 10,054 | | | — | | | — | | | 10,054 | |
Income before Minority Interest and Income Taxes | | | 14,128 | | | 19,805 | | | 2,196 | | | 11,932 | |
Minority Interest | | | 106 | | | 745 | | | 437 | | | (331 | ) |
Income Before Income Taxes | | | 14,022 | | | 19,060 | | | 1,759 | | | 12,263 | |
Income Tax Expense | | | 9,246 | | | 6,772 | | | 745 | | | 8,501 | |
| | | | | | | | | | | | | |
Net Income | | $ | 4,776 | | $ | 12,288 | | $ | 1,014 | | $ | 3,762 | |
| | | | | | | | | | | | | |
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | |
| | | Six Months Ended |
| OPERATING RESULTS (1): | | As Reported
June 30,
2007 | | June 30,
2006 | | Acquisitions
June 30,
2007 | | Same Affiliates
June 30, 2007 |
Net Interest Income—on a Fully Taxable Equivalent Basis (FTE) | | $ | 90,980 | | $ | 89,670 | | $ | 36 | | $ | 90,944 |
FTE Adjustment | | | 3,358 | | | 2,700 | | | — | | | 3,358 |
| | | | | | | | | | | | |
Net Interest Income | | | 87,622 | | | 86,970 | | | 36 | | | 87,586 |
| | | | | | | | | | | | |
Investment Management & Trust Fees: | | | | | | | | | | | | |
Westfield Capital Management | | | 35,409 | | | 27,639 | | | — | | | 35,409 |
Boston Private Bank & Trust | | | 7,542 | | | 6,889 | | | — | | | 7,542 |
Boston Private Value Investors | | | 3,498 | | | 3,356 | | | — | | | 3,498 |
Borel Private Bank & Trust | | | 2,368 | | | 2,047 | | | — | | | 2,368 |
Gibraltar Private Bank & Trust | | | 3,896 | | | 3,075 | | | — | | | 3,896 |
Dalton, Greiner, Hartman, Maher & Co. | | | 8,507 | | | 14,580 | | | — | | | 8,507 |
First Privare Bank & Trust | | | 50 | | | — | | | — | | | 50 |
Anchor Capital Holdings | | | 16,736 | | | 2,263 | | | 13,907 | | | 2,829 |
| | | | | | | | | | | | |
Total Investment Management & Trust Fees | | | 78,006 | | | 59,849 | | | 13,907 | | | 64,099 |
Wealth Advisory Fees: | | | | | | | | | | | | |
RINET Company | | | 4,510 | | | 4,018 | | | — | | | 4,510 |
Sand Hill Advisors | | | 3,400 | | | 3,104 | | | — | | | 3,400 |
KLS Professional Advisors Group | | | 6,996 | | | 5,884 | | | — | | | 6,996 |
Other | | | 97 | | | 98 | | | — | | | 97 |
| | | | | | | | | | | | |
Total Wealth Advisory Fees | | | 15,003 | | | 13,104 | | | — | | | 15,003 |
| | | | | | | | | | | | |
Other Fees | | | 5,463 | | | 3,492 | | | 110 | | | 5,353 |
| | | | | | | | | | | | |
Total Fees | | | 98,472 | | | 76,445 | | | 14,017 | | | 84,455 |
| | | | | | | | | | | | |
Earnings in Equity Investments | | | 1,265 | | | 991 | | | | | | 1,265 |
Gain on Sale of Loans, Net | | | 1,227 | | | 982 | | | | | | 1,227 |
Gain on Sale of Investments, Net | | | 8 | | | — | | | 6 | | | 2 |
| | | | | | | | | | | | |
Total Fees and Other Income | | | 100,972 | | | 78,418 | | | 14,023 | | | 86,949 |
| | | | | | | | | | | | |
Total Revenue | | | 188,594 | | | 165,388 | | | 14,059 | | | 174,535 |
| | | | | | | | | | | | |
Provision for Loan Losses | | | 1,921 | | | 2,867 | | | — | | | 1,921 |
| | | | | | | | | | | | |
Salaries and Employee Benefits | | | 93,272 | | | 79,583 | | | 7,200 | | | 86,072 |
Occupancy and Equipment | | | 15,978 | | | 13,553 | | | 310 | | | 15,668 |
Professional Services | | | 7,335 | | | 6,535 | | | 81 | | | 7,254 |
Marketing and Business Development | | | 5,432 | | | 4,697 | | | 277 | | | 5,155 |
Contract Services and Processing | | | 3,044 | | | 2,503 | | | 89 | | | 2,955 |
Amortization of Intangibles | | | 7,057 | | | 6,038 | | | 1,432 | | | 5,625 |
Other | | | 9,069 | | | 8,820 | | | 195 | | | 8,874 |
| | | | | | | | | | | | |
Total Operating Expense | | | 141,187 | | | 121,729 | | | 9,584 | | | 131,603 |
| | | | | | | | | | | | |
Income before Minority Interest, Income Taxes & Impairment | | | 45,486 | | | 40,792 | | | 4,475 | | | 41,011 |
Impairment of Goodwill, net of tax | | | 10,054 | | | — | | | — | | | 10,054 |
Income before Minority Interest and Income Taxes | | | 35,432 | | | 40,792 | | | 4,475 | | | 30,957 |
Minority Interest | | | 1,020 | | | 1,559 | | | 891 | | | 129 |
Income Before Income Taxes | | | 34,412 | | | 39,233 | | | 3,584 | | | 30,828 |
Income Tax Expense | | | 16,503 | | | 14,118 | | | 1,518 | | | 14,985 |
| | | | | | | | | | | | |
Net Income | | $ | 17,909 | | $ | 25,115 | | $ | 2,066 | | $ | 15,843 |
| | | | | | | | | | | | |
| (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, impairment, 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) | The convertible trust preferred debt was anti-dilutive for the quarter and therefore excluded from diluted earnings per share, but dilutive for the year-to-date computation and therefore included. The separate evaluations for quarterly and year-to-date computations may result in year-to-date earnings per share that do not equal the sum of the quarterly earnings per share. |
