Exhibit 99.1
| | |
| FOR IMMEDIATE RELEASE | |  |
| | |
| CONTACT: | | David J. Kaye |
| | Chief Financial Officer |
| | (617) 912-3949 |
| |
| | Erica E. Smith |
| | Investor Relations |
| | (617) 912-3766 |
| | www.bostonprivate.com |
BOSTON PRIVATE REPORTS FINANCIAL RESULTS FOR THE
FOURTH QUARTER AND YEAR END 2007
Revenue Growth of 17% for the Year
Incremental Non-cash Impairment Charge Taken at Dalton Greiner
Boston, MA, January 23, 2008 – Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company”) today reported fourth quarter 2007 non-GAAP cash earnings per diluted share (defined later in this press release) of $0.52, a 4% increase over $0.50 per diluted share in the fourth quarter 2006. For the year, non-GAAP cash earnings were $1.96 per diluted share, an increase of 8% compared to $1.82 per diluted share for the year ended 2006.
GAAP net loss was ($0.55) per share for the fourth quarter of 2007, compared to GAAP earnings of $0.40 per diluted share for the fourth quarter 2006. As previously announced, included in the 2007 results was a fourth quarter non-cash charge to GAAP earnings of approximately $29 million, or $0.75 per diluted share, related to a reduction in the carrying value of goodwill with respect to Gibraltar Private Bank. Also included in the 2007 fourth quarter results is a non-cash charge to GAAP earnings of approximately $13.9 million pre-tax ($8.1 million after-tax), or $0.22 per diluted share, related to a reduction in the value of intangible assets at Dalton, Greiner, Hartman, Maher & Co., LLC (DGHM). This charge is the result of management’s re-evaluation of certain assumptions used in the valuation models, given less robust asset flows than
were previously expected, as well as market conditions. Excluding these impairment charges, operating earnings for the fourth quarter would have been $0.42 per diluted share, an increase of 5% from the fourth quarter last year. For the year, GAAP earnings were $0.39 per diluted share, a decrease of 73% compared to $1.43 per diluted share for the same period in 2006.
Also, included in the fourth quarter 2007 financials are the results from the acquisition of Charter Bank (“Charter”) on July 1, 2007. In addition, the revenues and expenses of Bingham Osborn & Scarborough LLC (“BOS”) were included in the Company’s consolidated results after they became a majority-owned affiliate partner in August 2007.
Loan Credit Quality
The Company’s credit quality continues to compare favorably to industry averages.
| | • | | The Company recorded $506 thousand in net charge offs during the quarter, which represented less than 1 basis point of total loans, well below the SNL Bank Index average of 30 basis points (using third quarter 2007 statistics). |
| | • | | Non-performing assets as a percentage of total assets increased 11 basis points, or $8.6 million, to $36.8 million from the prior quarter, which represents 0.54% of total assets, as of December 31, 2007. In comparison, the average bank in the SNL Bank Index had non-performing assets that represented 70 basis points of total assets for the third quarter 2007. |
| | • | | The allowance for loan losses as a percentage of total loans was 1.05%, up 2 basis points from the prior quarter and 4 basis points from the fourth quarter of 2006. |
Financial Highlights
| | • | | Operating earnings(as defined below) increased to $62.2 million for the year, a 14% increase over 2006. The Company’s private banking segment had operating earnings of $52.8 million, a 7% increase; the investment management segment had operating income of $27.4 million, a 29% increase; and the wealth advisory segment operating income was $5.0 million or a 50% increase. |
| | • | | Total Revenues for 2007 increased 17% to $404.7 million, compared to $344.9 million a year ago. Fourth quarter revenues were up 22% to $110.6 million from the fourth quarter of 2006. |
| | • | | Net Interest Incomeincreased $15.5 million, or 9%, to $189.0 million. On a same affiliate basis, net interest income increased $8.1 million, or 5%, to $181.6 million compared with 2006. |
| | • | | The net interest margin was 3.46%, a decrease of 12 basis points from a year ago, and a decrease of 13 basis points from the third quarter 2007. |
| | • | | The decline in net interest margin in the fourth quarter resulted from declining loan yields caused by the three Federal Reserve rate cuts since September, which were not offset by corresponding declines in the cost of deposits due to the competitive landscape. |
| | • | | Wealth Advisory Fee Income increased $9.3 million to $36.2 million for 2007, an increase of 34% over the prior year. |
| | • | | Investment Management Fee Income for 2007 totaled $162.6 million, an increase of 24% over 2006. |
| | • | | Total Assets Under Management/Advisoryfrom consolidated and unconsolidated affiliates increased 16%, or $5.1 billion, over the prior year to $37.8 billion. On a linked quarter basis, total assets under management and advisory from consolidated and unconsolidated affiliates increased approximately $567 million, of which $545 million was due to net flows. |
| | • | | Change in Assets Under Management. On a consolidated basis, Boston Private had net inflows of funds from the investment managers and banks of approximately $1 billion for the full year related to organic growth and an increase of approximately $3 billion related to positive market appreciation for the year. |
Walter Pressey, President, said, “In 2007, Dalton Greiner appointed a new CEO, Bruce Geller, a new CIO, Jeff Baker, and adjusted their investment approach. These actions have positively impacted their results. Since June 2007, performance at DGHM has improved significantly. Virtually all of DGHM’s products are currently exceeding relative benchmarks for the 1, 3, and 10 year periods. The 1 year performance of DGHM’s flagship small cap value product ranks in the top 15% of its peer group. We believe that once the market recognizes Dalton Greiner’s performance, assets will follow.”
Timothy L. Vaill, Chairman and Chief Executive Officer, said, “The Company continued its growth in revenues posting a nearly 22% increase for the fourth quarter as compared to 2006. I was gratified that this top line growth came despite a challenging macro-economic environment. We are inevitably going to have some credit issues and potentially some charge-offs at certain points in the economic cycle—we are not totally immune from that. But due to our business philosophy and sound credit culture we believe we will continue to compare favorably against the SNL Bank Index. I believe that the strength of our credit quality stems directly from our client-focused approach across all of our banking affiliates. Our people believe in uncompromising attention to detail and high quality, customized service. This approach has continued to stand us in good stead in the industry.”
David J. Kaye, Boston Private’s Chief Financial Officer, noted, “I was pleased to see strong year over year operating earnings growth of 15% fueled by each one of our three segments, further validating our diversification strategy as a potent driver of our financial results. In addition, I believe we are well positioned as we enter 2008, as our net asset inflows of $545 million gave us one of the strongest quarters the Company has had in the last five years.”
Boston Private has also announced a change in its corporate management structure. Executives have been named as industry segment leaders replacing the geographic alignment formerly in place. J. H. Cromarty, formerly the President of the Eastern Region, will head up the Wealth Advisory business; James D. Dawson, formerly the President of Boston Private Bank, has been named the leader for the Private Banking segment, effective April 1, 2008; and for the Investment Management business—Timothy G. Dalton, the founder of Dalton, Greiner, Hartman & Maher LLC, will serve on an interim basis while the Company seeks a permanent leader. Jonathan H. Parker and Walter Pressey were also named Vice Chairs of the holding company.
CEO Vaill commented, “We have been reporting financial results internally on a business segment basis for several quarters, and these changes will give management the focus needed to increase our effectiveness and profitability while we continue to grow our national franchise. Importantly, the executive skills and relevant experience being brought to bear by these three individuals will result in a stronger competitive stance.”
He concluded, “The banking and wealth management industries face challenges today. We believe this new management structure positions the Company to achieve its long-term objective to deliver organic growth and generate solid returns to our shareholders.”
Dividend Payment Increased
Concurrent with the release of the fourth quarter 2007 earnings, the Board of Directors of the Company declared a cash dividend to shareholders of $0.10 per share, reflecting the quarterly earnings performance. The record date for this dividend is February 1, 2008 and the payment date is February 15, 2008. This is an increase from the previous quarterly level by $0.01 per share and reflects the eighth annual increase since the Company instituted a dividend in 1999.
Cash Earnings
Boston Private calculates its non-GAAP cash earnings by adjusting net income to exclude net amortization of intangibles, goodwill and intangibles impairment, and the impact of certain non-cash share based compensation plans, and includes related tax benefits that result from purchase accounting that are deferred under GAAP. In addition to GAAP earnings, the Company believes its non-GAAP 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.)
Operating Earnings
Boston Private defines operating earnings to be net income excluding goodwill and intangibles impairment charges, and related taxes, if applicable.
Conference Call
Management will host a conference call to review the Company’s financial performance and business developments on January 24, 2008 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 through www.bostonprivate.com. A continuous telephone replay will be available beginning at 11:30 a.m. Eastern time. The replay telephone number is 800-388-9064.
Boston Private Wealth Management Group
Boston Private 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 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 three key disciplines. 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 at www.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 net amortization of intangibles, tax benefits related to purchase accounting, stock options, goodwill and intangible 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 considering 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 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 and debt 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; asset quality issues; and the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired or further impaired; as well as the other risks and uncertainties detailed in Boston Private’s Annual Report on Form 10-K and other filings submitted to the Securities and Exchange Commission. Boston Private does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | | | | | | | | |
| | | December 31,
2007 | | | December 31,
2006 | | | |
FINANCIAL DATA: | | | | | | | | | |
Total Balance Sheet Assets | | $ | 6,828,519 | | | $ | 5,763,544 | | |
Stockholders' Equity | | | 673,246 | | | | 635,197 | | |
Tangible Capital: | | | | | | | | | |
Boston Private Bank & Trust | | | 180,815 | | | | 160,639 | | |
Borel Private Bank & Trust | | | 105,267 | | | | 91,300 | | |
First Private Bank & Trust | | | 53,513 | | | | 48,388 | | |
Gibraltar Private Bank & Trust | | | 90,157 | | | | 78,692 | | |
Charter Bank | | | 28,237 | | | | — | | |
Investment Securities | | | 719,934 | | | | 577,903 | | |
Goodwill | | | 349,889 | | | | 335,633 | | |
Intangible Assets | | | 108,349 | | | | 125,331 | | |
Commercial and Construction Loans | | | 3,183,139 | | | | 2,496,234 | | |
Residential Mortgage Loans | | | 1,765,217 | | | | 1,546,965 | | |
Home Equity and Other Consumer Loans | | | 312,602 | | | | 268,053 | | |
| | | | | | | | | |
Total Loans | | | 5,260,958 | | | | 4,311,252 | | |
Loans Held for Sale | | | 6,782 | | | | 5,224 | | |
Allowance for Loan Losses and Off-Balance Sheet Risk | | | 59,446 | | | | 48,973 | | |
Non-performing Loans | | | 35,601 | | | | 9,999 | | |
Repossessed Assets, Net | | | 475 | | | | 550 | | |
Other Real Estate Owned, Net | | | 711 | | | | — | | |
Total Non-performing Assets | | | 36,787 | | | | 10,549 | | |
Deposits | | | 4,375,101 | | | | 4,077,831 | | |
Borrowings | | | 1,632,944 | | | | 914,529 | | |
Book Value Per Share | | $ | 17.97 | | | $ | 17.36 | | |
Market Price Per Share | | $ | 27.08 | | | $ | 28.21 | | |
ASSETS UNDER MANAGEMENT AND ADVISORY: | | | | | | | | | |
Boston Private Bank & Trust | | $ | 2,812,000 | | | $ | 2,369,000 | | |
Borel Private Bank & Trust | | | 819,000 | | | | 731,000 | | |
Gibraltar Private Bank & Trust | | | 1,082,000 | | | | 907,000 | | |
First Private Bank & Trust | | | 25,000 | | | | 5,000 | | |
| | | | | | | | | |
Total Banks | | | 4,738,000 | | | | 4,012,000 | | |
Westfield Capital Management | | | 13,140,000 | | | | 10,102,000 | | |
Dalton, Greiner, Hartman, Maher & Co. | | | 1,509,000 | | | | 2,302,000 | | |
Anchor Capital Holdings | | | 7,606,000 | | | | 6,444,000 | | |
Boston Private Value Investors | | | 803,000 | | | | 961,000 | | |
| | | | | | | | | |
Total Asset Managers | | | 23,058,000 | | | | 19,809,000 | | |
Sand Hill Advisors | | | 1,186,000 | | | | 1,252,000 | | |
RINET Company | | | 1,457,000 | | | | 1,262,000 | | |
KLS Professional Advisors Group | | | 4,315,000 | | | | 3,727,000 | | |
Bingham, Osborn, & Scarborough (1) | | | 2,097,000 | | | | 1,777,000 | | |
| | | | | | | | | |
Total Wealth Advisors | | | 9,055,000 | | | | 8,018,000 | | |
Less: Inter-company Relationship | | | (286,000 | ) | | | (238,000 | ) | |
| | | | | | | | | |
Consolidated Affiliate Assets Under Management and Advisory | | $ | 36,565,000 | | | $ | 31,601,000 | | |
Coldstream Capital Management | | | 1,188,000 | | | | 1,090,000 | | |
| | | | | | | | | |
Total Assets Under Management and Advisory | | $ | 37,753,000 | | | $ | 32,691,000 | | |
FINANCIAL RATIOS: | | | | | | | | | |
Stockholders' Equity/Total Assets | | | 9.86 | % | | | 11.02 | % | |
Non-performing Loans/Total Loans | | | 0.68 | % | | | 0.23 | % | |
Allowance for Loan Losses and Off-Balance Sheet Risk/Total Loans | | | 1.13 | % | | | 1.14 | % | |
Allowance for Loan Losses and Off-Balance | | | | | | | | | |
Sheet Risk/Non-performing Assets | | | 161.60 | % | | | 464.24 | % | |
Tangible Capital/ Tangible Assets | | | 3.38 | % | | | 3.29 | % | |
| | |
| | | Three Months Ended | | | Twelve Months Ended |
| | | December 31,
2007 | | | December 31,
2006 | | | December 31,
2007 | | | December 31,
2006 |
OPERATING RESULTS: | | | | | | | | | | | | | | | |
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) | | $ | 53,045 | | | $ | 44,960 | | | $ | 195,995 | | | $ | 179,276 |
FTE Adjustment | | | 1,837 | | | | 1,575 | | | | 7,016 | | | | 5,763 |
| | | | | | | | | | | | | | | |
Net Interest Income | | | 51,208 | | | | 43,385 | | | | 188,979 | | | | 173,513 |
| | | | | | | | | | | | | | | |
Investment Management & Trust Fees: | | | | | | | | | | | | | | | |
Westfield Capital Management | | | 20,597 | | | | 15,567 | | | | 75,411 | | | | 57,445 |
Boston Private Bank & Trust | | | 4,240 | | | | 3,578 | | | | 15,804 | | | | 13,818 |
Boston Private Value Investors | | | 1,573 | | | | 1,748 | | | | 6,809 | | | | 6,805 |
Borel Private Bank & Trust | | | 1,229 | | | | 1,130 | | | | 4,853 | | | | 4,326 |
Gibraltar Private Bank & Trust | | | 2,149 | | | | 1,764 | | | | 8,095 | | | | 6,479 |
Dalton, Greiner, Hartman, Maher & Co. | | | 3,778 | | | | 5,043 | | | | 16,363 | | | | 26,182 |
First Private Bank & Trust | | | 42 | | | | 5 | | | | 116 | | | | 5 |
Anchor Capital Holdings (8) | | | 9,199 | | | | 7,356 | | | | 35,164 | | | | 16,474 |
| | | | | | | | | | | | | | | |
Total Investment Management & Trust Fees | | | 42,807 | | | | 36,191 | | | | 162,615 | | | | 131,534 |
Wealth Advisory Fees: | | | | | | | | | | | | | | | |
RINET Company | | | 2,184 | | | | 2,135 | | | | 9,097 | | | | 8,181 |
Sand Hill Advisors | | | 1,583 | | | | 1,556 | | | | 6,612 | | | | 6,198 |
KLS Professional Advisors Group | | | 3,910 | | | | 3,336 | | | | 14,665 | | | | 12,375 |
Bingham, Osborn, & Scarborough (1) | | | 3,386 | | | | — | | | | 5,657 | | | | — |
Other | | | 53 | | | | 55 | | | | 201 | | | | 204 |
| | | | | | | | | | | | | | | |
Total Wealth Advisory Fees | | | 11,116 | | | | 7,082 | | | | 36,232 | | | | 26,958 |
| | | | | | | | | | | | | | | |
Other Fees | | | 2,876 | | | | 2,312 | | | | 11,135 | | | | 7,843 |
| | | | | | | | | | | | | | | |
Total Fees | | | 56,799 | | | | 45,585 | | | | 209,982 | | | | 166,335 |
| | | | | | | | | | | | | | | |
Earnings in Equity Investments | | | 2,120 | | | | 1,515 | | | | 3,782 | | | | 3,034 |
Gain on Sale of Loans, Net | | | 440 | | | | 434 | | | | 1,963 | | | | 1,972 |
| | | | | | | | | | | | | | | |
Total Fees and Other Income | | | 59,359 | | | | 47,534 | | | | 215,727 | | | | 171,341 |
| | | | | | | | | | | | | | | |
Total Revenue | | | 110,567 | | | | 90,919 | | | | 404,706 | | | | 344,854 |
| | | | | | | | | | | | | | | |
Provision for Loan Losses | | | 3,347 | | | | 987 | | | | 9,006 | | | | 6,179 |
| | | | | | | | | | | | | | | |
Salaries and Employee Benefits | | | 52,940 | | | | 41,611 | | | | 196,524 | | | | 163,438 |
Occupancy and Equipment | | | 8,999 | | | | 7,900 | | | | 33,684 | | | | 29,149 |
Professional Services | | | 4,341 | | | | 3,651 | | | | 15,629 | | | | 13,346 |
Marketing and Business Development | | | 3,103 | | | | 2,169 | | | | 11,083 | | | | 8,705 |
Contract Services and Processing | | | 1,816 | | | | 1,321 | | | | 6,555 | | | | 5,125 |
Amortization of Intangibles | | | 3,699 | | | | 3,874 | | | | 14,484 | | | | 13,649 |
Provision for Unfunded Loan Commitments | | | 116 | | | | 240 | | | | (1,328 | ) | | | 839 |
Other | | | 5,244 | | | | 4,272 | | | | 18,366 | | | | 16,198 |
| | | | | | | | | | | | | | | |
Total Operating Expense | | | 80,258 | | | | 65,038 | | | | 294,997 | | | | 250,449 |
| | | | | | | | | | | | | | | |
Income before Minority Interest, Income Taxes & Impairment | | | 26,962 | | | | 24,894 | | | | 100,703 | | | | 88,226 |
Impairment of Goodwill and Intangibles, net (7) | | | 37,150 | | | | — | | | | 47,204 | | | | — |
| | | | | | | | | | | | | | | |
Income before Minority Interest and Income Taxes | | | (10,188 | ) | | | 24,894 | | | | 53,499 | | | | 88,226 |
Minority Interest | | | 1,511 | | | | 1,020 | | | | 4,842 | | | | 3,699 |
Income Before Income Taxes | | | (11,699 | ) | | | 23,874 | | | | 48,657 | | | | 84,527 |
Income Tax Expense, net of impairment | | | 8,673 | | | | 8,266 | | | | 33,702 | | | | 30,154 |
| | | | | | | | | | | | | | | |
Net (Loss) Income | | $ | (20,372 | ) | | $ | 15,608 | | | $ | 14,955 | | | $ | 54,373 |
| | | | | | | | | | | | | | | |
1
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 31,
2007 | | | December 31,
2006 | | | December 31,
2007 | | | December 31,
2006 | |
RECONCILIATION OF GAAP EARNINGS TO CASH EARNINGS: | | | | | | | | | | | | | | | | |
Net (Loss) Income (GAAP Basis) | | $ | (20,372 | ) | | $ | 15,608 | | | $ | 14,955 | | | $ | 54,373 | |
| | | | |
Cash Basis Earnings (2) | | | | | | | | | | | | | | | | |
Book Amortization of Purchased Intangibles, net of tax | | | 2,052 | | | | 2,091 | | | | 7,855 | | | | 7,514 | |
Cash Benefit of Tax Deductions from Purchased Intangibles & Goodwill | | | 1,098 | | | | 1,138 | | | | 4,398 | | | | 4,206 | |
Impairment of Goodwill and Intangibles, net (7) | | | 37,150 | | | | — | | | | 47,204 | | | | — | |
Stock options and ESPP, net of tax | | | 950 | | | | 830 | | | | 4,032 | | | | 3,622 | |
| | | | | | | | | | | | | | | | |
Total Cash Basis Adjustment | | | 41,250 | | | | 4,059 | | | | 63,489 | | | | 15,342 | |
| | | | | | | | | | | | | | | | |
Cash Basis Earnings | | $ | 20,878 | | | $ | 19,667 | | | $ | 78,444 | | | $ | 69,715 | |
| | | | | | | | | | | | | | | | |
| | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 31,
2007 | | | December 31,
2006 | | | December 31,
2007 | | | December 31,
2006 | |
PER SHARE DATA: (In thousands, except per share data) | | | | | | | | | | | | | | | | |
Calculation of Net Income for EPS: | | | | | | | | | | | | | | | | |
Net (Loss) Income as reported and for basic EPS | | $ | (20,372 | ) | | $ | 15,608 | | | $ | 14,955 | | | $ | 54,373 | |
Interest on convertible trust preferred securities, net of tax (6) | | | — | | | | 765 | | | | — | | | | 3,060 | |
| | | | | | | | | | | | | | | | |
Net Income for diluted EPS | | $ | (20,372 | ) | | $ | 16,373 | | | $ | 14,955 | | | $ | 57,433 | |
| | | | |
Interest on convertible trust preferred securities, net of tax for Cash EPS (6) | | | 750 | | | | — | | | | 3,000 | | | | — | |
| | | | |
Calculation of average shares outstanding: | | | | | | | | | | | | | | | | |
Weighted average basic shares | | | 37,058 | | | | 36,064 | | | | 36,732 | | | | 35,453 | |
Dilutive effect of: | | | | | | | | | | | | | | | | |
Stock Options, Stock Grants and Other (6) | | | — | | | | 1,560 | | | | 1,583 | | | | 1,453 | |
Convertible trust preferred securities (6) | | | — | | | | 3,183 | | | | — | | | | 3,183 | |
| | | | | | | | | | | | | | | | |
Dilutive potential common shares | | | — | | | | 4,743 | | | | 1,583 | | | | 4,636 | |
Weighted average diluted shares for EPS | | | 37,058 | | | | 40,807 | | | | 38,315 | | | | 40,089 | |
Weighted average diluted shares for Cash EPS | | | 41,960 | | | | 40,807 | | | | 41,499 | | | | 40,089 | |
| | | | |
Earnings per Share: | | | | | | | | | | | | | | | | |
Basic | | $ | (0.55 | ) | | $ | 0.43 | | | $ | 0.41 | | | $ | 1.53 | |
Diluted (6) | | $ | (0.55 | ) | | $ | 0.40 | | | $ | 0.39 | | | $ | 1.43 | |
| | | | |
RECONCILIATION OF GAAP EPS TO CASH EPS (1): | | | | | | | | | | | | | | | | |
(on a Diluted Basis) | | | | | | | | | | | | | | | | |
| | | | |
Earnings Per Share (GAAP Basis) | | $ | (0.55 | ) | | $ | 0.40 | | | $ | 0.39 | | | $ | 1.43 | |
Cash Basis Adjustment | | $ | 1.07 | | | $ | 0.10 | | | $ | 1.57 | | | $ | 0.39 | |
| | | | | | | | | | | | | | | | |
Cash Basis Earnings Per Diluted Share | | $ | 0.52 | | | $ | 0.50 | | | $ | 1.96 | | | $ | 1.82 | |
| | | | | | | | | | | | | | | | |
| | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 31,
2007 | | | December 31,
2006 | | | December 31,
2007 | | | December 31,
2006 | |
OPERATING RATIOS & STATISTICS: | | | | | | | | | | | | | | | | |
Return on Average Equity | | | -11.79 | % | | | 9.96 | % | | | 2.55 | % | | | 9.27 | % |
Return on Average Assets | | | -1.19 | % | | | 1.10 | % | | | 0.28 | % | | | 1.02 | % |
Net Interest Margin | | | 3.46 | % | | | 3.58 | % | | | 3.54 | % | | | 3.84 | % |
Core Net Interest Margin(3) | | | 3.70 | % | | | 3.85 | % | | | 3.79 | % | | | 4.12 | % |
Total Fees and Other Income/Total Revenue | | | 53.69 | % | | | 52.28 | % | | | 53.30 | % | | | 49.69 | % |
Efficiency Ratio | | | 69.59 | % | | | 67.29 | % | | | 69.42 | % | | | 68.27 | % |
Loans Charged-off, Net of (Recoveries) | | $ | 506 | | | $ | (39 | ) | | $ | 78 | | | $ | 399 | |
| | | | |
RECONCILIATION OF NIM TO CORE NIM | | | | | | | | | | | | | | | | |
Net Interest Margin | | | 3.46 | % | | | 3.58 | % | | | 3.54 | % | | | 3.84 | % |
Effect of Trust Preferred & Acquisition Financing | | | 0.24 | % | | | 0.27 | % | | | 0.25 | % | | | 0.28 | % |
Core Net Interest Margin(3) | | | 3.70 | % | | | 3.85 | % | | | 3.79 | % | | | 4.12 | % |
| | | | |
CASH OPERATING RATIOS: | | | | | | | | | | | | | | | | |
Return on Average Equity (4) | | | 12.09 | % | | | 12.54 | % | | | 13.38 | % | | | 11.89 | % |
Return on Average Assets (5) | | | 1.22 | % | | | 1.39 | % | | | 1.48 | % | | | 1.31 | % |
2
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
AVERAGE BALANCE SHEET:
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, 2007 | | | Three Months Ended December 31, 2006 | |
| | | Average
Balance | | | Income/
Expense | | Yield/
Rate | | | Average
Balance | | | Income/
Expense | | Yield/
Rate | |
AVERAGE ASSETS: | | | | | | | | | | | | | | | | | | | | |
Earnings Assets | | | | | | | | | | | | | | | | | | | | |
Cash and investment | | $ | 896,755 | | | $ | 11,095 | | 4.93 | % | | $ | 725,252 | | | $ | 8,625 | | 4.72 | % |
Loans | | | | | | | | | | | | | | | | | | | | |
Commercial and Construction | | | 3,109,737 | | | | 60,046 | | 7.59 | % | | | 2,411,415 | | | | 47,432 | | 7.74 | % |
Residential Mortgage | | | 1,754,303 | | | | 26,589 | | 6.06 | % | | | 1,535,098 | | | | 21,819 | | 5.69 | % |
Home Equity and Other Consumer | | | 305,759 | | | | 5,721 | | 7.32 | % | | | 273,830 | | | | 5,607 | | 7.78 | % |
| | | | | | | | | | | | | | | | | | | | |
Total Earning Assets | | | 6,066,554 | | | | 103,451 | | 6.74 | % | | | 4,945,595 | | | | 83,483 | | 6.66 | % |
| | | | | | | | | | | | | | | | | | | | |
Allowance for Loan Losses | | | (54,135 | ) | | | | | | | | | (42,634 | ) | | | | | | |
Cash and due From Banks | | | 67,231 | | | | | | | | | | 55,612 | | | | | | | |
Other Assets | | | 741,956 | | | | | | | | | | 693,800 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
TOTAL AVERAGE ASSETS | | $ | 6,821,606 | | | | | | | | | $ | 5,652,373 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | |
AVERAGE LIABILITIES AND STOCKHOLDERS' EQUITY: | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | | | | | |
Savings and NOW | | $ | 585,175 | | | $ | 3,068 | | 2.08 | % | | $ | 459,196 | | | $ | 2,167 | | 1.87 | % |
Money Market | | | 1,870,804 | | | | 15,731 | | 3.34 | % | | | 1,878,662 | | | | 15,439 | | 3.26 | % |
Certificate of Deposits | | | 1,161,921 | | | | 14,058 | | 4.80 | % | | | 871,428 | | | | 10,028 | | 4.57 | % |
| | | | | | | | | | | | | | | | | | | | |
Total Deposits | | | 3,617,900 | | | | 32,857 | | 3.60 | % | | | 3,209,286 | | | | 27,634 | | 3.42 | % |
Junior Subordinated Debentures and Other Long-Term Debt | | | 525,553 | | | | 5,985 | | 5.71 | % | | | 234,021 | | | | 3,318 | | 5.55 | % |
FHLB Borrowings and Other | | | 1,043,429 | | | | 11,564 | | 4.34 | % | | | 684,867 | | | | 7,571 | | 4.35 | % |
| | | | | | | | | | | | | | | | | | | | |
Total Interest-Bearing Liabilities | | | 5,186,882 | | | | 50,406 | | 3.84 | % | | | 4,128,174 | | | | 38,523 | | 3.49 | % |
| | | | | | | | | | | | | | | | | | | | |
Non-interest Bearing Demand Deposits | | | 794,829 | | | | | | | | | | 741,198 | | | | | | | |
Payables and Other Liabilities | | | 148,943 | | | | | | | | | | 155,861 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total Liabilities | | | 6,130,654 | | | | | | | | | | 5,025,233 | | | | | | | |
Stockholders' Equity | | | 690,952 | | | | | | | | | | 627,140 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
TOTAL AVERAGE LIABILITIES & STOCKHOLDERS' EQUITY | | $ | 6,821,606 | | | | | | | | | $ | 5,652,373 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net Interest Income (FTE) | | | | | | $ | 53,045 | | | | | | | | | $ | 44,960 | | | |
| | | | | | |
| AVERAGE BALANCE SHEET: | | | | | | | | | | | | | | | | | | | | |
| | |
| | | Twelve Months Ended December 31, 2007 | | | Twelve Months Ended December 31, 2006 | |
| | | Average
Balance | | | Income/
Expense | | Yield/
Rate | | | Average
Balance | | | Income/
Expense | | Yield/
Rate | |
| AVERAGE ASSETS: | | | | | | | | | | | | | | | | | | | | |
Earnings Assets | | | | | | | | | | | | | | | | | | | | |
Cash and investment | | $ | 774,907 | | | $ | 38,319 | | 4.94 | % | | $ | 701,653 | | | $ | 30,824 | | 4.39 | % |
Loans | | | | | | | | | | | | | | | | | | | | |
Commercial and Construction | | | 2,801,717 | | | | 222,176 | | 7.93 | % | | | 2,226,396 | | | | 172,002 | | 7.70 | % |
Residential Mortgage | | | 1,670,145 | | | | 95,296 | | 5.71 | % | | | 1,466,182 | | | | 82,255 | | 5.61 | % |
Home Equity and Other Consumer | | | 286,024 | | | | 21,978 | | 7.68 | % | | | 263,045 | | | | 20,714 | | 7.75 | % |
| | | | | | | | | | | | | | | | | | | | |
Total Earning Assets | | | 5,532,793 | | | | 377,769 | | 6.83 | % | | | 4,657,276 | | | | 305,795 | | 6.55 | % |
| | | | | | | | | | | | | | | | | | | | |
Allowance for Loan Losses | | | (50,333 | ) | | | | | | | | | (40,101 | ) | | | | | | |
Cash and due From Banks | | | 74,503 | | | | | | | | | | 60,681 | | | | | | | |
Other Assets | | | 703,517 | | | | | | | | | | 633,886 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
TOTAL AVERAGE ASSETS | | $ | 6,260,480 | | | | | | | | | $ | 5,311,742 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | |
AVERAGE LIABILITIES AND STOCKHOLDERS' EQUITY: | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | | | | | |
Savings and NOW | | $ | 564,758 | | | $ | 11,995 | | 2.12 | % | | $ | 453,587 | | | $ | 6,754 | | 1.49 | % |
Money Market | | | 1,864,603 | | | | 62,722 | | 3.36 | % | | | 1,768,655 | | | | 49,002 | | 2.77 | % |
Certificate of Deposits | | | 1,011,244 | | | | 48,428 | | 4.79 | % | | | 767,736 | | | | 31,506 | | 4.10 | % |
| | | | | | | | | | | | | | | | | | | | |
Total Deposits | | | 3,440,605 | | | | 123,145 | | 3.58 | % | | | 2,989,978 | | | | 87,262 | | 2.92 | % |
Junior Subordinated Debentures and Other Long-Term Debt | | | 365,845 | | | | 18,361 | | 5.67 | % | | | 234,021 | | | | 13,167 | | 5.63 | % |
FHLB Borrowings and Other | | | 895,963 | | | | 40,268 | | 4.49 | % | | | 624,955 | | | | 26,090 | | 4.13 | % |
| | | | | | | | | | | | | | | | | | | | |
Total Interest-Bearing Liabilities | | | 4,702,413 | | | | 181,774 | | 3.87 | % | | | 3,848,954 | | | | 126,519 | | 3.28 | % |
| | | | | | | | | | | | | | | | | | | | |
Non-interest Bearing Demand Deposits | | | 748,538 | | | | | | | | | | 735,224 | | | | | | | |
Payables and Other Liabilities | | | 141,414 | | | | | | | | | | 141,098 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total Liabilities | | | 5,592,365 | | | | | | | | | | 4,725,276 | | | | | | | |
Stockholders' Equity | | | 668,115 | | | | | | | | | | 586,466 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
TOTAL AVERAGE LIABILITIES & STOCKHOLDERS' EQUITY | | $ | 6,260,480 | | | | | | | | | $ | 5,311,742 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net Interest Income (FTE) | | | | | | $ | 195,995 | | | | | | | | | $ | 179,276 | | | |
3
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | |
| | | December 31,
2007 | | | December 31,
2006 | |
| Private Banking Data - Period End Data | | | | | | | | |
Loans: | | | | | | | | |
Boston Private Bank & Trust | | $ | 2,063,190 | | | $ | 1,784,579 | |
Borel Private Bank & Trust | | | 1,047,545 | | | | 888,147 | |
First Private Bank & Trust | | | 544,849 | | | | 417,852 | |
Gibraltar Private Bank & Trust | | | 1,353,617 | | | | 1,216,977 | |
Charter Bank | | | 246,807 | | | | — | |
Deposits: | | | | | | | | |
Boston Private Bank & Trust | | | 1,843,389 | | | | 1,822,304 | |
Borel Private Bank & Trust | | | 1,000,264 | | | | 865,025 | |
First Private Bank & Trust | | | 504,587 | | | | 459,413 | |
Gibraltar Private Bank & Trust | | | 832,818 | | | | 952,387 | |
Charter Bank | | | 221,477 | | | | — | |
| |
| | | Three Months Ended | |
| | | December 31,
2007 | | | December 31,
2006 | |
NIM: | | | | | | | | |
Boston Private Bank & Trust | | | 2.94 | % | | | 3.09 | % |
Borel Private Bank & Trust | | | 4.27 | % | | | 4.64 | % |
First Private Bank & Trust | | | 5.47 | % | | | 5.68 | % |
Gibraltar Private Bank & Trust | | | 3.62 | % | | | 3.90 | % |
Charter Bank | | | 4.71 | % | | | — | |
| | |
| | | December 31,
2007 | | | September 30,
2007 | |
FINANCIAL DATA: | | | | | | | | |
Total Balance Sheet Assets | | $ | 6,828,519 | | | $ | 6,595,539 | |
Stockholders' Equity | | | 673,246 | | | | 690,303 | |
Tangible Capital: | | | | | | | | |
Boston Private Bank & Trust | | | 180,815 | | | | 172,652 | |
Borel Private Bank & Trust | | | 105,267 | | | | 102,305 | |
First Private Bank & Trust | | | 53,513 | | | | 51,257 | |
Gibraltar Private Bank & Trust | | | 90,157 | | | | 86,907 | |
Charter Bank | | | 28,237 | | | | 26,653 | |
Investment Securities | | | 719,934 | | | | 620,821 | |
Goodwill | | | 349,889 | | | | 365,862 | |
Intangible Assets | | | 108,349 | | | | 124,442 | |
| | |
Commercial and Construction Loans | | | 3,183,139 | | | | 2,974,098 | |
Residential Mortgage Loans | | | 1,765,217 | | | | 1,761,538 | |
Home Equity and Other Consumer Loans | | | 312,602 | | | | 302,360 | |
| | | | | | | | |
Total Loans | | | 5,260,958 | | | | 5,037,996 | |
| | |
Loans Held for Sale | | | 6,782 | | | | 2,959 | |
Allowance for Loan Losses and Off-Balance Sheet Risk | | | 59,446 | | | | 56,161 | |
Non-performing Loans | | | 35,601 | | | | 25,574 | |
Repossessed Assets, Net | | | 475 | | | | 475 | |
Other Real Estate Owned | | | 711 | | | | 2,116 | |
Total Non-performing Assets | | | 36,787 | | | | 28,165 | |
Deposits | | | 4,375,101 | | | | 4,310,908 | |
Borrowings | | | 1,632,944 | | | | 1,465,000 | |
| | |
Book Value Per Share | | $ | 17.97 | | | $ | 18.46 | |
Market Price Per Share | | $ | 27.08 | | | $ | 27.84 | |
| | |
ASSETS UNDER MANAGEMENT AND ADVISORY: | | | | | | | | |
Boston Private Bank & Trust | | $ | 2,812,000 | | | $ | 2,784,000 | |
Borel Private Bank & Trust | | | 819,000 | | | | 740,000 | |
Gibraltar Private Bank & Trust | | | 1,082,000 | | | | 1,046,000 | |
First Private Bank & Trust | | | 25,000 | | | | 22,000 | |
| | | | | | | | |
Total Banks | | | 4,738,000 | | | | 4,592,000 | |
Westfield Capital Management | | | 13,140,000 | | | | 12,306,000 | |
Dalton, Greiner, Hartman, Maher & Co. | | | 1,509,000 | | | | 1,780,000 | |
Anchor Capital Holdings | | | 7,606,000 | | | | 7,648,000 | |
Boston Private Value Investors | | | 803,000 | | | | 870,000 | |
| | | | | | | | |
Total Asset Managers | | | 23,058,000 | | | | 22,604,000 | |
Sand Hill Advisors | | | 1,186,000 | | | | 1,205,000 | |
RINET Company | | | 1,457,000 | | | | 1,398,000 | |
KLS Professional Advisors Group | | | 4,315,000 | | | | 4,355,000 | |
Bingham, Osborn, & Scarborough (1) | | | 2,097,000 | | | | 2,098,000 | |
| | | | | | | | |
Total Wealth Advisors | | | 9,055,000 | | | | 9,056,000 | |
Less: Inter-company Relationship | | | (286,000 | ) | | | (254,000 | ) |
| | | | | | | | |
Consolidated Affiliate Assets Under Management and Advisory | | | 36,565,000 | | | | 35,998,000 | |
| | |
Coldstream Capital Management | | | 1,188,000 | | | | 1,188,000 | |
| | | | | | | | |
Total Unconsolidated Assets Under Management and Advisory | | $ | 37,753,000 | | | $ | 37,186,000 | |
| | |
FINANCIAL RATIOS (1): | | | | | | | | |
Stockholders' Equity/Total Assets | | | 9.86 | % | | | 10.47 | % |
Nonperforming Loans/Total Loans | | | 0.68 | % | | | 0.51 | % |
Allowance for Loan Losses and Off-Balance Sheet Risk/Total Loans | | | 1.13 | % | | | 1.11 | % |
Allowance for Loan Losses and Off-Balance | | | | | | | | |
Sheet Risk/Non-performing Assets | | | 161.60 | % | | | 199.40 | % |
Tangible Capital/Tangible Assets | | | 3.38 | % | | | 3.28 | % |
4
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | |
| | | Three Months Ended | |
| | | December 31,
2007 | | | September 30,
2007 | |
OPERATING RESULTS: | | | | | | | | |
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) | | $ | 53,045 | | | $ | 51,969 | |
FTE Adjustment | | | 1,837 | | | | 1,821 | |
| | | | | | | | |
Net Interest Income | | | 51,208 | | | | 50,148 | |
| | | | | | | | |
Investment Management & Trust Fees: | | | | | | | | |
Westfield Capital Management | | | 20,597 | | | | 19,405 | |
Boston Private Bank & Trust | | | 4,240 | | | | 4,021 | |
Boston Private Value Investors | | | 1,573 | | | | 1,737 | |
Borel Private Bank & Trust | | | 1,229 | | | | 1,256 | |
Gibraltar Private Bank & Trust | | | 2,149 | | | | 2,051 | |
Dalton, Greiner, Hartman, Maher & Co. | | | 3,778 | | | | 4,079 | |
First Private Bank & Trust | | | 42 | | | | 25 | |
Anchor Capital | | | 9,199 | | | | 9,229 | |
| | | | | | | | |
Total Investment Management & Trust Fees | | | 42,807 | | | | 41,803 | |
Wealth Advisory Fees | | | | | �� | | | |
RINET Company | | | 2,184 | | | | 2,403 | |
Sand Hill Advisors | | | 1,583 | | | | 1,629 | |
KLS Professional Advisors Group | | | 3,910 | | | | 3,760 | |
Bingham, Osborn, & Scarborough (1) | | | 3,386 | | | | 2,271 | |
Other | | | 53 | | | | 55 | |
| | | | | | | | |
Total Wealth Advisory Fees | | | 11,116 | | | | 10,118 | |
| | | | | | | | |
Other Fees | | | 2,876 | | | | 2,783 | |
| | | | | | | | |
Total Fees | | | 56,799 | | | | 54,704 | |
| | | | | | | | |
Earnings in Equity Investments | | | 2,120 | | | | 398 | |
Gain on Sale of Loans, Net | | | 440 | | | | 296 | |
Total Fees and Other Income | | | 59,359 | | | | 55,398 | |
| | | | | | | | |
Total Revenue | | | 110,567 | | | | 105,546 | |
| | | | | | | | |
Provision for Loan Losses | | | 3,347 | | | | 3,738 | |
| | | | | | | | |
Salaries and Benefits | | | 52,940 | | | | 50,312 | |
Occupancy and Equipment | | | 8,999 | | | | 8,708 | |
Professional Services | | | 4,341 | | | | 3,953 | |
Marketing and Business Development | | | 3,103 | | | | 2,548 | |
Contract Services and Processing | | | 1,816 | | | | 1,696 | |
Amortization of Intangibles | | | 3,699 | | | | 3,728 | |
Provision for Unfunded Loan Commitments | | | 116 | | | | (2,029 | ) |
Other | | | 5,244 | | | | 4,640 | |
| | | | | | | | |
Total Operating Expense | | | 80,258 | | | | 73,556 | |
| | | | | | | | |
Income before Minority Interest, Income Taxes & Impairment | | | 26,962 | | | | 28,252 | |
Impairment of Goodwill and Intangibles, net (7) | | | 37,150 | | | | — | |
Income before Minority Interest and Income Taxes | | | (10,188 | ) | | | 28,252 | |
Minority Interest | | | 1,511 | | | | 1,509 | |
Income Before Income Taxes | | | (11,699 | ) | | | 26,743 | |
Income Tax Expense | | | 8,673 | | | | 9,326 | |
| | | | | | | | |
Net (Loss) Income | | $ | (20,372 | ) | | $ | 17,417 | |
| |
| | | Three Months Ended | |
| | | December 31,
2007 | | | September 30,
2007 | |
RECONCILIATION OF GAAP EARNINGS TO CASH EARNINGS: | | | | | | | | |
Net (Loss) Income (GAAP Basis) | | $ | (20,372 | ) | | $ | 17,417 | |
| | |
Cash Basis Earnings | | | | | | | | |
Book Amortization of | | | | | | | | |
Purchased Intangibles, net of tax | | | 2,052 | | | | 2,002 | |
Cash Benefit of Tax Deductions from Purchased Intangibles & Goodwill | | | 1,098 | | | | 1,112 | |
Impairment of Goodwill and Intangibles, net (7) | | | 37,150 | | | | — | |
Stock options and ESPP, net of tax | | | 950 | | | | 1,036 | |
| | | | | | | | |
Total Cash Basis Adjustment | | | 41,250 | | | | 4,150 | |
| | | | | | | | |
Cash Basis Earnings | | $ | 20,878 | | | | 21,567 | |
| |
| | | Three Months Ended | |
| | | December 31,
2007 | | | September 30,
2007 | |
PER SHARE DATA: (In thousands, except per share data) | | | | | | | | |
Calculation of Net Income for EPS: | | | | | | | | |
| | |
Net (Loss )Income as reported and for basic EPS | | $ | (20,372 | ) | | $ | 17,417 | |
Interest on convertible trust preferred securities, net of tax (6) | | | — | | | | 750 | |
| | | | | | | | |
Net Income for diluted EPS | | $ | (20,372 | ) | | $ | 18,167 | |
| | |
Interest on convertible trust preferred securities, net of tax for Cash EPS (6) | | | 750 | | | | | |
| | |
Calculation of Average Shares Outstanding: | | | | | | | | |
Weighted average basic shares | | | 37,058 | | | | 36,976 | |
Dilutive effect of: | | | | | | | | |
Stock Options, Stock Grants, and Other (6) | | | — | | | | 1,463 | |
Convertible trust preferred securities (6) | | | — | | | | 3,184 | |
| | | | | | | | |
Dilutive potential common shares | | | — | | | | 4,647 | |
Weighted average diluted shares for EPS | | | 37,058 | | | | 41,623 | |
Weighted average diluted shares for Cash EPS | | | 41,960 | | | | 41,623 | |
| | |
Earnings per Share: | | | | | | | | |
Basic | | $ | (0.55 | ) | | $ | 0.47 | |
Diluted | | $ | (0.55 | ) | | $ | 0.44 | |
| | |
RECONCILIATION OF GAAP EPS TO CASH EPS (1): | | | | | | | | |
(on a Diluted Basis) | | | | | | | | |
| | |
Earnings Per Share (GAAP Basis) | | $ | (0.55 | ) | | $ | 0.44 | |
Cash Basis Adjustment | | $ | 1.07 | | | $ | 0.10 | |
| | | | | | | | |
Cash Basis Earnings Per Diluted Share | | $ | 0.52 | | | $ | 0.54 | |
| | | | | | | | |
| | |
OPERATING RATIOS & STATISTICS: | | | | | | | | |
Return on Average Equity | | | -11.79 | % | | | 10.29 | % |
Return on Average Assets | | | -1.19 | % | | | 1.07 | % |
Net Interest Margin | | | 3.46 | % | | | 3.59 | % |
Core Net Interest Margin (3) | | | 3.70 | % | | | 3.83 | % |
Total Fees and Other Income/Total Revenue | | | 53.69 | % | | | 52.49 | % |
Efficiency Ratio | | | 69.59 | % | | | 67.36 | % |
Loans Charged-off, Net of (Recoveries) | | $ | 506 | | | $ | 90 | |
| | |
RECONCILIATION OF NIM TO CORE NIM | | | | | | | | |
Net Interest Margin | | | 3.46 | % | | | 3.59 | % |
Effect of Trust Preferred, Net | | | 0.24 | % | | | 0.24 | % |
Core Net Interest Margin (3) | | | 3.70 | % | | | 3.83 | % |
5
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
AVERAGE BALANCE SHEET:
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, 2007 | | | Three Months Ended September 30, 2007 | |
| | | Average
Balance | | | Income/
Expense | | | Yield/ Rate | | | Average
Balance | | | Income/
Expense | | Yield/
Rate | |
AVERAGE ASSETS: | | | | | | | | | | | | | | | | | | | | | | |
Earnings Assets | | | | | | | | | | | | | | | | | | | | | | |
Cash and investment | | $ | 896,755 | | | $ | 11,095 | | | | 4.93 | % | | $ | 775,588 | | | $ | 8,631 | | 5.01 | % |
Loans | | | | | | | | | | | | | | | | | | | | | | |
Commercial and Construction | | | 3,109,737 | | | | 60,046 | | | | 7.59 | % | | | 2,922,801 | | | | 57,117 | | 7.79 | % |
Residential Mortgage | | | 1,754,303 | | | | 26,589 | | | | 6.06 | % | | | 1,733,467 | | | | 26,383 | | 6.09 | % |
Home Equity and Other Consumer | | | 305,759 | | | | 5,721 | | | | 7.32 | % | | | 296,020 | | | | 6,025 | | 7.94 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Total Earning Assets | | | 6,066,554 | | | | 103,451 | | | | 6.74 | % | | | 5,727,876 | | | | 98,156 | | 7.20 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Allowance for Loan Losses | | | (54,135 | ) | | | | | | | | | | | (52,170 | ) | | | | | | |
Cash and due From Banks | | | 67,231 | | | | | | | | | | | | 80,293 | | | | | | | |
Other Assets | | | 741,956 | | | | | | | | | | | | 738,978 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
TOTAL AVERAGE ASSETS | | $ | 6,821,606 | | | | | | | | | | | $ | 6,494,977 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
AVERAGE LIABILITIES AND STOCKHOLDERS' EQUITY: | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | | | | | | | |
Savings and NOW | | $ | 585,175 | | | $ | 3,068 | | | | 2.08 | % | | $ | 563,174 | | | $ | 2,983 | | 2.10 | % |
Money Market | | | 1,870,804 | | | | 15,731 | | | | 3.34 | % | | | 1,836,110 | | | | 15,554 | | 3.36 | % |
Certificate of Deposits | | | 1,161,921 | | | | 14,058 | | | | 4.80 | % | | | 1,067,439 | | | | 13,067 | | 4.86 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Total Deposits | | | 3,617,900 | | | | 32,857 | | | | 3.60 | % | | | 3,466,723 | | | | 31,604 | | 3.62 | % |
Junior Subordinated Debentures and Other Long-Term Debt | | | 525,553 | | | | 5,985 | | | | 5.71 | % | | | 507,174 | | | | 5,784 | | 5.47 | % |
FHLB Borrowings and Other | | | 1,043,429 | | | | 11,564 | | | | 4.34 | % | | | 932,362 | | | | 10,620 | | 4.44 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Total Interest-Bearing Liabilities | | | 5,186,882 | | | | 50,406 | | | | 3.84 | % | | | 4,906,259 | | | | 48,008 | | 4.47 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Non-interest Bearing Demand Deposits | | | 794,829 | | | | | | | | | | | | 762,768 | | | | | | | |
Payables and Other Liabilities | | | 148,943 | | | | | | | | | | | | 148,818 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Total Liabilities | | | 6,130,654 | | | | | | | | | | | | 5,817,845 | | | | | | | |
Stockholders' Equity | | | 690,952 | | | | | | | | | | | | 677,132 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
TOTAL AVERAGE LIABILITIES & STOCKHOLDERS' EQUITY | | $ | 6,821,606 | | | | | | | | | | | $ | 6,494,977 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Net Interest Income | | | | | | $ | 53,045 | | | | | | | | | | | $ | 50,148 | | | |
| | | |
| | | December 31,
2007 | | | September 30,
2007 | | | | |
Private Banking Data - Period End Data | | | | | | | | | |
Loans: | | | | | | | | | |
Boston Private Bank & Trust | | $ | 2,063,190 | | | $ | 1,959,709 | | |
Borel Private Bank & Trust | | | 1,047,545 | | | | 979,417 | | |
First Private Bank & Trust | | | 544,849 | | | | 521,730 | | |
Gibraltar Private Bank & Trust | | | 1,353,617 | | | | 1,326,385 | | |
Charter Bank | | | 246,807 | | | | 248,710 | | |
Deposits: | | | | | | | | | |
Boston Private Bank & Trust | | | 1,843,389 | | | | 1,825,365 | | |
Borel Private Bank & Trust | | | 1,000,264 | | | | 926,085 | | |
First Private Bank & Trust | | | 504,587 | | | | 527,171 | | |
Gibraltar Private Bank & Trust | | | 832,818 | | | | 847,070 | | |
Charter Bank | | | 221,477 | | | | 216,630 | | |
| | |
| | | Three Months Ended | | | | |
| | | December 31,
2007 | | | September 30,
2007 | | |
NIM: | | | | | | | | | |
Boston Private Bank & Trust | | | 2.94 | % | | | 3.04 | % | |
Borel Private Bank & Trust | | | 4.27 | % | | | 4.43 | % | |
First Private Bank & Trust | | | 5.47 | % | | | 5.67 | % | |
Gibraltar Private Bank & Trust | | | 3.62 | % | | | 3.77 | % | |
Charter Bank | | | 4.71 | % | | | 5.10 | % | |
SAME AFFILIATES Growth Excluding Acquisitions | | | | | | | | | |
| | | | | |
| | | As Reported
December 31,
2007 | | | December 31,
2006 | | | Acquisitions
December 31,
2007 | | | Same Affiliates
December 31,
2007 | | | | |
FINANCIAL DATA: | | | | | | | | | | | | | | | | | |
Total Balance Sheet Assets | | $ | 6,828,519 | | | $ | 5,763,544 | | | $ | 427,616 | | | $ | 6,400,903 | | |
Stockholders' Equity | | | 673,246 | | | | 635,197 | | | | 44,373 | | | | 628,873 | | |
Tangible Capital: | | | | | | | | | | | | | | | | | |
Boston Private Bank & Trust | | | 180,815 | | | | 160,639 | | | | — | | | | 180,815 | | |
Borel Private Bank & Trust | | | 105,267 | | | | 91,300 | | | | — | | | | 105,267 | | |
First Private Bank & Trust | | | 53,513 | | | | 48,388 | | | | — | | | | 53,513 | | |
Gibraltar Private Bank & Trust | | | 90,157 | | | | 75,340 | | | | — | | | | 90,157 | | |
Charter Bank | | | 28,237 | | | | — | | | | 28,237 | | | | — | | |
Investment Securities | | | 719,934 | | | | 577,903 | | | | 50,662 | | | | 669,272 | | |
Goodwill | | | 349,889 | | | | 335,633 | | | | 49,535 | | | | 300,354 | | |
Intangible Assets | | | 108,349 | | | | 125,331 | | | | 6,647 | | | | 101,702 | | |
Commercial and Construction Loans | | | 3,183,139 | | | | 2,496,234 | | | | 218,117 | | | | 2,965,022 | | |
Residential Mortgage Loans | | | 1,765,217 | | | | 1,546,965 | | | | 24,526 | | | | 1,740,691 | | |
Home Equity and Other Consumer Loans | | | 312,602 | | | | 268,053 | | | | 4,164 | | | | 308,438 | | |
| | | | | | | | | | | | | | | | | |
Total Loans | | | 5,260,958 | | | | 4,311,252 | | | | 246,807 | | | | 5,014,151 | | |
Loans Held for Sale | | | 6,782 | | | | 5,224 | | | | — | | | | 6,782 | | |
Allowance for Loan Losses and Off-Balance Sheet Risk | | | 59,446 | | | | 48,973 | | | | 2,704 | | | | 56,742 | | |
Non-performing Loans | | | 35,601 | | | | 9,999 | | | | — | | | | 35,601 | | |
Repossessed Assets, Net | | | 475 | | | | 550 | | | | — | | | | 475 | | |
Other Real Estate Owned, Net | | | 711 | | | | — | | | | | | | | 711 | | |
Total Non-performing Assets | | | 36,787 | | | | 10,549 | | | | — | | | | 36,787 | | |
Deposits | | | 4,375,101 | | | | 4,077,831 | | | | 221,477 | | | | 4,153,624 | | |
Borrowings | | | 1,632,944 | | | | 914,529 | | | | 102,410 | | | | 1,530,534 | | |
ASSETS UNDER MANAGEMENT AND ADVISORY: | | | | | | | | | | | | | | | | | |
Boston Private Bank & Trust | | $ | 2,812,000 | | | $ | 2,369,000 | | | | — | | | $ | 2,812,000 | | |
Borel Private Bank & Trust | | | 819,000 | | | | 731,000 | | | | — | | | | 819,000 | | |
Gibraltar Private Bank & Trust | | | 1,082,000 | | | | 907,000 | | | | — | | | | 1,082,000 | | |
First Private Bank & Trust | | | 25,000 | | | | 5,000 | | | | — | | | | 25,000 | | |
| | | | | | | | | | | | | | | | | |
Total Banks | | | 4,738,000 | | | | 4,012,000 | | | | — | | | | 4,738,000 | | |
Westfield Capital Management | | | 13,140,000 | | | | 10,102,000 | | | | — | | | | 13,140,000 | | |
Dalton, Greiner, Hartman, Maher & Co. | | | 1,509,000 | | | | 2,302,000 | | | | — | | | | 1,509,000 | | |
Anchor Capital Holdings | | | 7,606,000 | | | | 6,444,000 | | | | — | | | | 7,606,000 | | |
Boston Private Value Investors | | | 803,000 | | | | 961,000 | | | | — | | | | 803,000 | | |
| | | | | | | | | | | | | | | | | |
Total Asset Managers | | | 23,058,000 | | | | 19,809,000 | | | | — | | | | 23,058,000 | | |
Sand Hill Advisors | | | 1,186,000 | | | | 1,252,000 | | | | — | | | | 1,186,000 | | |
RINET Company | | | 1,457,000 | | | | 1,262,000 | | | | — | | | | 1,457,000 | | |
KLS Professional Advisors Group | | | 4,315,000 | | | | 3,727,000 | | | | — | | | | 4,315,000 | | |
Bingham, Osborn, & Scarborough (1) | | | 2,097,000 | | | | 1,777,000 | | | | — | | | | 2,097,000 | | |
| | | | | | | | | | | | | | | | | |
Total Wealth Advisors | | | 9,055,000 | | | | 8,018,000 | | | | — | | | | 9,055,000 | | |
Less: Inter-company Relationship | | | (286,000 | ) | | | (238,000 | ) | | | — | | | | (286,000 | ) | |
| | | | | | | | | | | | | | | | | |
Consolidated Affiliate Assets Under Management and Advisory | | $ | 36,565,000 | | | $ | 31,601,000 | | | | — | | | | 36,565,000 | | |
Coldstream Capital Management | | | 1,188,000 | | | | 1,090,000 | | | | — | | | | 1,188,000 | | |
| | | | | | | | | | | | | | | | | |
Total Assets Under Management and Advisory | | $ | 37,753,000 | | | $ | 32,691,000 | | | | — | | | $ | 37,753,000 | | |
6
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| | | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | As Reported
December 31,
2007 | | | December 31,
2006 | | Acquisitions
December 31,
2007 | | Same Affiliates
December 31,
2007 | |
OPERATING RESULTS : | | | | | | | | | | | | | | |
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) | | $ | 53,045 | | | $ | 44,960 | | $ | 3,528 | | $ | 49,517 | |
FTE Adjustment | | | 1,837 | | | | 1,575 | | | — | | | 1,837 | |
| | | | | | | | | | | | | | |
Net Interest Income | | | 51,208 | | | | 43,385 | | | 3,528 | | | 47,680 | |
| | | | | | | | | | | | | | |
Investment Management & Trust Fees: | | | | | | | | | | | | | | |
Westfield Capital Management | | | 20,597 | | | | 15,567 | | | — | | | 20,597 | |
Boston Private Bank & Trust | | | 4,240 | | | | 3,578 | | | — | | | 4,240 | |
Boston Private Value Investors | | | 1,573 | | | | 1,748 | | | — | | | 1,573 | |
Borel Private Bank & Trust | | | 1,229 | | | | 1,130 | | | — | | | 1,229 | |
Gibraltar Private Bank & Trust | | | 2,149 | | | | 1,764 | | | — | | | 2,149 | |
Dalton, Greiner, Hartman, Maher & Co. | | | 3,778 | | | | 5,043 | | | — | | | 3,778 | |
First Private Bank & Trust | | | 42 | | | | 5 | | | — | | | 42 | |
Anchor Capital Holdings | | | 9,199 | | | | 7,356 | | | — | | | 9,199 | |
| | | | | | | | | | | | | | |
Total Investment Management & Trust Fees | | | 42,807 | | | | 36,191 | | | — | | | 42,807 | |
Wealth Advisory Fees: | | | | | | | | | | | | | | |
RINET Company | | | 2,184 | | | | 2,135 | | | — | | | 2,184 | |
Sand Hill Advisors | | | 1,583 | | | | 1,556 | | | — | | | 1,583 | |
KLS Professional Advisors Group | | | 3,910 | | | | 3,336 | | | — | | | 3,910 | |
Bingham, Osborn, & Scarborough (1) | | | 3,386 | | | | — | | | — | | | 3,386 | |
Other | | | 53 | | | | 55 | | | — | | | 53 | |
| | | | | | | | | | | | | | |
Total Wealth Advisory Fees | | | 11,116 | | | | 7,082 | | | — | | | 11,116 | |
| | | | | | | | | | | | | | |
Other Fees | | | 2,876 | | | | 2,312 | | | 180 | | | 2,696 | |
| | | | | | | | | | | | | | |
Total Fees | | | 56,799 | | | | 45,585 | | | 180 | | | 56,619 | |
| | | | | | | | | | | | | | |
Earnings in Equity Investments | | | 2,120 | | | | 1,515 | | | — | | | 2,120 | |
Gain on Sale of Loans, Net | | | 440 | | | | 434 | | | — | | | 440 | |
| | | | | | | | | | | | | | |
Total Fees and Other Income | | | 59,359 | | | | 47,534 | | | 180 | | | 59,179 | |
| | | | | | | | | | | | | | |
Total Revenue | | | 110,567 | | | | 90,919 | | | 3,708 | | | 106,859 | |
| | | | | | | | | | | | | | |
Provision for Loan Losses | | | 3,347 | | | | 987 | | | 51 | | | 3,296 | |
| | | | | | | | | | | | | | |
Salaries and Employee Benefits | | | 52,940 | | | | 41,611 | | | 1,611 | | | 51,329 | |
Occupancy and Equipment | | | 8,999 | | | | 7,900 | | | 291 | | | 8,708 | |
Professional Services | | | 4,341 | | | | 3,651 | | | 151 | | | 4,190 | |
Marketing and Business Development | | | 3,103 | | | | 2,169 | | | 79 | | | 3,024 | |
Contract Services and Processing | | | 1,816 | | | | 1,321 | | | 76 | | | 1,740 | |
Amortization of Intangibles | | | 3,699 | | | | 3,874 | | | 272 | | | 3,427 | |
Provision for Unfunded Loan Commitments | | | 116 | | | | 240 | | | — | | | 116 | |
Other | | | 5,244 | | | | 4,272 | | | 360 | | | 4,884 | |
| | | | | | | | | | | | | | |
Total Operating Expense | | | 80,258 | | | | 65,038 | | | 2,840 | | | 77,418 | |
| | | | | | | | | | | | | | |
Income before Minority Interest, Income Taxes & Impairment | | | 26,962 | | | | 24,894 | | | 817 | | | 26,145 | |
Impairment of Goodwill and Intangibles, net (7) | | | 37,150 | | | | — | | | — | | | 37,150 | |
Income before Minority Interest and Income Taxes | | | (10,188 | ) | | | 24,894 | | | 817 | | | (11,005 | ) |
Minority Interest | | | 1,511 | | | | 1,020 | | | — | | | 1,511 | |
Income Before Income Taxes | | | (11,699 | ) | | | 23,874 | | | 817 | | | (12,516 | ) |
Income Tax Expense | | | 8,673 | | | | 8,266 | | | 192 | | | 8,481 | |
| | | | | | | | | | | | | | |
Net (Loss) Income | | $ | (20,372 | ) | | $ | 15,608 | | $ | 625 | | $ | (20,997 | ) |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | Twelve Months Ended | |
| | | As Reported
December 31,
2007 | | | December 31,
2006 | | Acquisitions
December 31,
2007 | | Same Affiliates
December 31,
2007 | |
OPERATING RESULTS: | | | | | | | | | | | | | | |
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) | | $ | 195,995 | | | $ | 179,276 | | $ | 7,360 | | $ | 188,635 | |
FTE Adjustment | | | 7,016 | | | | 5,763 | | | — | | | 7,016 | |
| | | | | | | | | | | | | | |
Net Interest Income | | | 188,979 | | | | 173,513 | | | 7,360 | | | 181,619 | |
| | | | | | | | | | | | | | |
Investment Management & Trust Fees: | | | | | | | | | | | | | | |
Westfield Capital Management | | | 75,411 | | | | 57,445 | | | — | | | 75,411 | |
Boston Private Bank & Trust | | | 15,804 | | | | 13,818 | | | — | | | 15,804 | |
Boston Private Value Investors | | | 6,809 | | | | 6,805 | | | — | | | 6,809 | |
Borel Private Bank & Trust | | | 4,853 | | | | 4,326 | | | — | | | 4,853 | |
Gibraltar Private Bank & Trust | | | 8,095 | | | | 6,479 | | | — | | | 8,095 | |
Dalton, Greiner, Hartman, Maher & Co. | | | 16,363 | | | | 26,182 | | | — | | | 16,363 | |
First Private Bank & Trust | | | 116 | | | | — | | | — | | | 116 | |
Anchor Capital Holdings | | | 35,164 | | | | 16,474 | | | 13,908 | | | 21,256 | |
| | | | | | | | | | | | | | |
Total Investment Management & Trust Fees | | | 162,615 | | | | 131,529 | | | 13,908 | | | 148,707 | |
Wealth Advisory Fees: | | | | | | | | | | | | | | |
RINET Company | | | 9,097 | | | | 8,181 | | | — | | | 9,097 | |
Sand Hill Advisors | | | 6,612 | | | | 6,198 | | | — | | | 6,612 | |
KLS Professional Advisors Group | | | 14,665 | | | | 12,375 | | | — | | | 14,665 | |
Bingham, Osborn, & Scarborough (1) | | | 5,657 | | | | — | | | — | | | 5,657 | |
Other | | | 201 | | | | 204 | | | — | | | 201 | |
| | | | | | | | | | | | | | |
Total Wealth Advisory Fees | | | 36,232 | | | | 26,958 | | | — | | | 36,232 | |
| | | | | | | | | | | | | | |
Other Fees | | | 11,135 | | | | 7,843 | | | 465 | | | 10,670 | |
| | | | | | | | | | | | | | |
Total Fees | | | 209,982 | | | | 166,330 | | | 14,373 | | | 195,609 | |
| | | | | | | | | | | | | | |
Earnings in Equity Investments | | | 3,782 | | | | 3,034 | | | — | | | 3,782 | |
Gain on Sale of Loans, Net | | | 1,963 | | | | 1,972 | | | — | | | 1,963 | |
| | | | | | | | | | | | | | |
Total Fees and Other Income | | | 215,727 | | | | 171,336 | | | 14,373 | | | 201,354 | |
| | | | | | | | | | | | | | |
Total Revenue | | | 404,706 | | | | 344,849 | | | 21,733 | | | 382,973 | |
| | | | | | | | | | | | | | |
Provision for Loan Losses | | | 9,006 | | | | 6,179 | | | 170 | | | 8,836 | |
| | | | | | | | | | | | | | |
Salaries and Employee Benefits | | | 196,524 | | | | 163,438 | | | 10,298 | | | 186,226 | |
Occupancy and Equipment | | | 33,684 | | | | 29,149 | | | 892 | | | 32,792 | |
Professional Services | | | 15,629 | | | | 13,346 | | | 344 | | | 15,285 | |
Marketing and Business Development | | | 11,083 | | | | 8,705 | | | 443 | | | 10,640 | |
Contract Services and Processing | | | 6,555 | | | | 5,125 | | | 239 | | | 6,316 | |
Amortization of Intangibles | | | 14,484 | | | | 13,649 | | | 1,915 | | | 12,569 | |
Provision for Unfunded Loan Commitments | | | (1,328 | ) | | | 839 | | | — | | | (1,328 | ) |
Other | | | 18,366 | | | | 16,198 | | | 897 | | | 17,469 | |
| | | | | | | | | | | | | | |
Total Operating Expense | | | 294,997 | | | | 250,449 | | | 15,028 | | | 279,969 | |
| | | | | | | | | | | | | | |
Income before Minority Interest, Income Taxes & Impairment | | | 100,703 | | | | 88,221 | | | 6,535 | | | 94,168 | |
Impairment of Goodwill and Intangibles, net (7) | | | 47,204 | | | | — | | | — | | | 47,204 | |
Income before Minority Interest and Income Taxes | | | 53,499 | | | | 88,221 | | | 6,535 | | | 46,964 | |
Minority Interest | | | 4,842 | | | | 3,699 | | | 891 | | | 3,951 | |
Income Before Income Taxes | | | 48,657 | | | | 84,522 | | | 5,644 | | | 43,013 | |
Income Tax Expense | | | 33,702 | | | | 30,154 | | | 2,104 | | | 31,598 | |
| | | | | | | | | | | | | | |
Net Income | | $ | 14,955 | | | $ | 54,368 | | $ | 3,540 | | $ | 11,415 | |
| | | | | | | | | | | | | | |
7
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
| (1) | The Company went from a minority to majority ownership of Bingham, Osborn, and Scarborough in Q3 2007. |
Prior period financial information is included with Earnings in Equity Investments.
Prior period AUM data is shown for comparative purposes as being included with the consolidated Company.
| (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 allocated to goodwill, 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 and $30 million of the convertible bond that was used for the purchase of Charter Bank. 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, stock options and restricted shares were anti-dilutive for the 4th quarter of 2007 and therefore excluded from diluted earnings per share. The convertible trust preferred was also anti-dilutive for the year, whereas the restricted stock and stock options were dilutive. 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. |
| (7) | Since Gibraltar Private Bank and Trust ("Gibraltar") was acquired pursuant to a tax-free reorganization, all goodwill generated by the acquisition of Gibraltar is not deductible for tax purposes. As a result, there is no tax benefit attributable to the $29.1 million impairment change related to Gibraltar. |
The acquisition of Dalton, Greiner, Hartman, Maher and Co ("DGHM") was acquired pursuant to a taxable transaction, all goodwill generated by the acquisition of DGHM is generally deductible for tax purposes. As a result, there is a $13.6 million tax benefit attributable to the $31.8 million impairment charge related to DGHM, which results in an impairment charge, net, of $18.2 million.
| (8) | The Company acquired Anchor Capital Holdings on June 1, 2006. |
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