Exhibit 99.1
MARK D. THOMPSON
CEO & PRESIDENT
August 2008
Dear Friend,
When evaluating the strength of a Bank, there are four key areas to focus on: earnings, capital, liquidity, and asset quality. I am pleased to report that Boston Private Bank & Trust Company continues a long history of strength in each of these areas, and our financial performance has remained strong during the last six months despite a turbulent marketplace.
We finished the first half of 2008 with net income up 24% as compared to the same period last year. The Bank’s balance sheet grew 20% from June 30, 2007, to approximately $3.0 billion as of June 30, 2008. Non-interest income was up 16%, primarily due to increased business activity and solid investment management revenues. In addition, the Bank’s liquidity has been well managed, and asset quality has remained strong. We will continue to monitor our loan portfolio closely in light of the current economic conditions and are committed to working diligently to maintain our earnings and liquidity throughout the second half of 2008.
In July, our holding company, Boston Private Financial Holdings, Inc., announced a private and public capital raising plan to maintain its well-capitalized balance sheet and to protect against any further declines in the markets. It is important to note that Boston Private Bank remains well-capitalized on its own—in fact, Boston Private Bank has consistently been well-capitalized, generating strong earnings that put its capital ratios well above regulatory requirements.
In addition to Boston Private Bank’s strong financial performance in the second quarter, the Bank was recognized by theBoston Business Journal for being the ninth “Largest Bank,” the eighth “Biggest Asset Gainer,” and one of the “Top Corporate Contributors” in Massachusetts in 2007. Boston Private Bank & Trust Company maintains a deep commitment to its entire community, including low- and moderate-income people and neighborhoods. In recognition of this commitment, the Bank received the highest CRA rating again this year – maintaining an “Outstanding” rating for the past eight years.
The Bank’s growth can be attributed in large part to a “flight to quality” amid a tumultuous environment. Many clients and prospects are seeking a strong balance sheet, local expertise, and an integrated sales and service platform, where their private bankers, residential and commercial lenders, and investment management and trust professionals work together on their behalf. We have built our reputation on this model and on delivering exceptional client service; we plan to continue this tradition for many years to come.
We appreciate the trust and confidence you have placed in us. On behalf of everyone here at Boston Private Bank & Trust Company, I would like to thank you for your business and the opportunity to be of service to you. As always, I appreciate your questions and comments, so please do not hesitate to contact me.
|
| Sincerely, |
|
 |
| Mark D. Thompson |
| | | | |
 | | TEN POST OFFICE SQUARE • BOSTON, MASSACHUSETTS 02109 • TELEPHONE: (617) 912-4210 • (617) 912-4352 E-MAIL:MTHOMPSON@BOSTONPRIVATEBANK.COM WWW ..BOSTONPRIVATEBANK.COM | |  |
Policy Group
Mark D. Thompson
Chief Executive Officer & President
James C. Brown
Executive Vice President
Chief Lending Officer
Robert C. Buffum, Jr.
Senior Vice President
Chief Risk Officer
Gary L. Garber
Senior Vice President
Chief Information Officer
James D. Henderson
Executive Vice President
Pilar Pueyo
Senior Vice President
Anne L. Randall
Executive Vice President
Chief Financial & Administrative Officer
George G. Schwartz
Executive Vice President
Chief Operating Officer & Treasurer
John J. Sullivan
Executive Vice President
Board of Directors
Herbert S. Alexander
Managing Partner
Alexander, Aronson, Finning & Company
John H. Clymer
Senior Counsel
Nixon Peabody LLP
Eugene S. Colangelo
Chairman of the Board
Julio Enterprises
Chairman of the Board
Boston Private Bank & Trust Company
W. Pearce Coues
Former Chairman
MGI Properties
Senior Advisor
Eaton Vance
James D. Dawson
Chief Executive Officer, Private Banking Group
Boston Private Financial Holdings, Inc.
Kathleen M. Graveline
Private Investor
Charles T. Grigsby
Consultant
Susan P. Haney
Private Investor
E. Christopher Palmer
President & Managing Shareholder
Palmer and Corbett, PC
John D. Macomber
Founder & Chief Executive Officer
BuildingVision, Inc.
Patricia McGovern
General Counsel & Senior Vice President
Beth Israel Deaconess Medical Center
Michael F. Schiavo
Partner & Chief Financial Officer
Kodiak Venture Partners
James K. Schmidt
Private Investor
Alan D. Solomont
Chairman & Chief Executive Officer
Solomont Bailis Ventures
Mark D. Thompson
Chief Executive Officer & President
Boston Private Bank & Trust Company
Timothy L. Vaill
Chairman & Chief Executive Officer
Boston Private Financial Holdings, Inc.
Office Locations
Headquarters: Boston Office
Ten Post Office Square
Boston, Massachusetts
(617) 912-1900
Wellesley Office
336 Washington Street
Wellesley, Massachusetts
(781) 707-7700
Back Bay Office
500 Boylston Street
Boston, Massachusetts
(617) 912-4500
Jamaica Plain Loan Center
401c Centre Street
Jamaica Plain, Massachusetts
(617) 524-6050
Kendall Square Office
One Cambridge Center
Cambridge, Massachusetts
(617) 646-4800
Newton Centre Office
1223 Centre Street
Newton, Massachusetts
(617) 646-4850
Seaport Office
157 Seaport Boulevard
Boston, Massachusetts
(617) 646-4880
Lexington Office
1666 Massachusetts Avenue
Lexington, Massachusetts
(617) 912-3600
Hingham Office
7 Central Street
Hingham, Massachusetts
(781) 740-2405
Beverly Office
57 Enon Street, Route 1A
Beverly, Massachusetts
(978) 922-8000
HEADQUARTERS: TEN POST OFFICE SQUARE • BOSTON, MASSACHUSETTS 02109
TELEPHONE: 617-912-1900 •WWW.BOSTONPRIVATEBANK.COM
Dear Friend,
I am pleased to report that Boston Private Bank & Trust Company’s financial performance has remained strong during the past six months despite a turbulent marketplace.
2008 First Half Financial Highlights:
| | • | | Net income for the first half of 2008 reached $13 million, up 24% compared to last year. |
| | • | | Assets under management exceeded $2.8 billion as of June 30, 2008, up 8% compared to last year. |
| | • | | Balance sheet assets have grown 20% to finish at approximately $3 billion as of June 30. |
| | • | | Loans increased by 19% and deposits and client repurchase agreements grew 10% as compared to the same time last year. |
The Bank’s growth can be attributed in large part to a “flight to quality” amid a tumultuous environment. Many clients and prospects are seeking a strong balance sheet, local expertise, and an integrated sales and service platform, where their private bankers, residential and commercial lenders, and investment management and trust professionals work together on their behalf. We have built our reputation on this model and on delivering exceptional client service; we plan to continue this tradition for many years to come.
We appreciate the trust and confidence you have placed in us. On behalf of everyone here at Boston Private Bank & Trust Company, I would like to thank you for your business and the opportunity to be of service to you. As always, I appreciate your questions and comments, so please do not hesitate to contact me.
|
|
 |
| Mark D. Thompson |
| CEO & President |
| | | | | | | | |
Boston Private Bank & Trust Company | | | | | | | | |
CONDENSED BALANCE SHEETS | | | | | | | | |
| (Unaudited) | | | | | | | | |
| | | June 30, | |
($ in Thousands) | | 2008 | | | 2007 | |
Assets | | | | | | | | |
Cash & Short-Term Investments | | $ | 30,341 | | | $ | 31,724 | |
Investment Securities | | | 625,845 | | | | 481,556 | |
Loans Held for Sale | | | 5,744 | | | | 5,869 | |
Commercial Loans | | | 1,064,480 | | | | 899,003 | |
Mortgage Loans | | | 1,109,596 | | | | 945,381 | |
Home Equity & Other Loans | | | 69,801 | | | | 47,161 | |
| | | | | | | | |
Total Loans | | | 2,243,877 | | | | 1,891,545 | |
Less: Allowance for Loan Losses | | | 24,244 | | | | 19,650 | |
| | | | | | | | |
Net Loans | | | 2,219,633 | | | | 1,871,895 | |
Other Assets | | | 109,182 | | | | 104,607 | |
| | | | | | | | |
Total Assets | | $ | 2,990,745 | | | $ | 2,495,651 | |
| | | | | | | | |
Liabilities & Shareholder’s Equity | | | | | | | | |
Demand Deposits | | $ | 296,990 | | | $ | 273,654 | |
NOW Accounts | | | 200,842 | | | | 184,892 | |
Savings & Money Market | | | 884,434 | | | | 954,846 | |
Certificates of Deposit | | | 454,207 | | | | 304,522 | |
| | | | | | | | |
Total Deposits | | | 1,836,473 | | | | 1,717,914 | |
Borrowings | | | 940,976 | | | | 587,218 | |
Other Liabilities | | | 17,695 | | | | 21,472 | |
| | | | | | | | |
Total Liabilities | | | 2,795,144 | | | | 2,326,604 | |
| | | | | | | | |
Shareholder’s Equity | | | 195,601 | | | | 169,047 | |
| | | | | | | | |
Total Liabilities & Shareholder’s Equity | | $ | 2,990,745 | | | $ | 2,495,651 | |
| | | | | | | | |
Boston Private Bank & Trust Company | | | | | | | | |
CONDENSED STATEMENTS OF INCOME | | | | | | | | |
| (Unaudited) | | | | | | | | |
| | | Six Months Ended
June 30, | |
($ in Thousands) | | 2008 | | | 2007 | |
Interest Income | | $ | 72,910 | | | $ | 67,553 | |
Interest Expense | | | 35,689 | | | | 34,557 | |
| | | | | | | | |
Net Interest Income | | | 37,221 | | | | 32,996 | |
Provision for Loan Losses | | | 3,406 | | | | 1,031 | |
| | | | | | | | |
Net Interest Income after Provision | | | 33,815 | | | | 31,965 | |
Investment Management Fees | | | 8,471 | | | | 7,542 | |
Banking Fees and Other Income | | | 3,752 | | | | 2,952 | |
Operating Expenses | | | 29,921 | | | | 28,736 | |
| | | | | | | | |
Income Before Income Taxes | | | 16,117 | | | | 13,723 | |
Income Taxes | | | 2,978 | | | | 3,167 | |
| | | | | | | | |
Net Income | | $ | 13,139 | | | $ | 10,556 | |
| | | | | | | | |
Boston Private Bank & Trust Company | | | | | | | | |
SELECTED FINANCIAL DATA | | | | | | | | |
| (Unaudited) | | | | | | | | |
| | | At and for the Six Months Ended
June 30, | |
($ in Thousands) | | 2008 | | | 2007 | |
Assets Under Management | | $ | 2,813,000 | | | $ | 2,600,000 | |
Return on Average Assets | | | 0.92 | % | | | 0.86 | % |
Return on Average Equity | | | 13.66 | % | | | 12.84 | % |
Net Interest Margin | | | 2.95 | % | | | 3.05 | % |
Total Fees and Other Income / Revenues | | | 24.72 | % | | | 24.13 | % |
Allowance for Loan Losses / Total Loans | | | 1.08 | % | | | 1.04 | % |
