Exhibit 99.1
MARK D. THOMPSON
CEO & PRESIDENT
November 2008
Dear Friend,
Over the past four quarters, both the economy and the financial landscape have been vastly transformed. Although we have all faced myriad financial challenges and uncertainties this fall, Boston Private Bank & Trust Company continues to post healthy, double-digit increases in net income and balance sheet growth—and we continue to offer our full range of deposit and cash management, commercial banking, residential mortgage, investment management, and trust services for your personal and business needs.
I am pleased to report that as of September 30, 2008, our year-to-date net income rose 12% and the Bank’s balance sheet grew 13% to approximately $2.9 billion, year over year. Non-interest income was up 11% from the previous year, due primarily to increased business activity and solid investment management revenues. Also, our Commercial Lending area celebrated a significant milestone when its loan portfolio recently reached $1 billion.
How is it that Boston Private Bank remains strong in the following important measures—earnings, capital, liquidity, and asset quality—in the current environment? We have done it by staying true to our core mission, consistently taking a long-term perspective, and conscientiously putting our clients’ interests first, delivering exceptional service and direct access to a private banker. Three years ago, we decided that we would avoid subprime lending and other risky investment alternatives such as auction-rate preferred securities, non-agency mortgage paper, credit default swaps, and Fannie Mae and Freddie Mac preferred stocks. As a result, not only is our asset quality sound, but, as I reported last quarter, for the eighth consecutive year we earned the FDIC’s highest rating for Community Reinvestment, serving low- and moderate-income people and neighborhoods—without resorting to subprime lending.
Our parent company, Boston Private Financial Holdings, Inc. (BPFH), has recently taken decisive steps to combat deteriorating economic conditions. After raising capital to strengthen its own balance sheet, BPFH announced its intention to sell its Southern California subsidiary’s non-strategic land and construction loan portfolio. By acting now, BPFH believes it can “clear the decks” at this subsidiary. Boston Private Bank & Trust Company is one of 15 subsidiaries of BPFH. Each subsidiary is managed and operated locally, allowing each to best serve its clients at the local level. It is important to note that these actions by BPFH have no impact on Boston Private Bank; neither our liquidity nor our regulatory capital ratios are affected. Boston Private Bank & Trust Company remains well-capitalized, with very strong liquidity and asset quality.
Please remember, as we all continue to weather these difficult financial times, that you have a trusted advisor at Boston Private Bank who is accessible and ready to help you. We value our client relationships and hope you will freely call on us with your questions and suggestions. As always, thank you for your confidence in us.
|
| Sincerely, |
|
 |
| Mark D. Thompson |
| | | | |
| | | |
 | | TEN POST OFFICE SQUARE • BOSTON, MASSACHUSETTS 02109 • TELEPHONE: (617) 912-4210 • (617) 912 4352
EMAIL: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
Consultant
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
STATEMENT
OF FINANCIAL
CONDITION
AS OF SEPTEMBER 30 , 2008
BOSTON PRIVATE BANK & TRUST COMPANY
Dear Friend,
Over the past four quarters, both the economy and the financial landscape have been vastly transformed. Although we have all faced myriad financial challenges and uncertainties this fall, Boston Private Bank & Trust Company continues to post healthy, double-digit increases in net income and balance sheet growth.
2008 Third Quarter Financial Highlights:
| | • | | Net income for the first nine months of 2008 reached $18.8 million, up 12% compared to the same period last year. |
| | • | | Assets under management were $2.7 billion as of September 30, down year over year by only 4% during a period of high volatility in the financial markets. |
| | • | | Balance sheet assets have grown 13% to finish at approximately $2.9 billion as of September 30. |
| | • | | Loans increased by 13% and deposits and client repurchase agreements grew 5% as compared to the same time last year. |
Please remember, as we all continue to weather these difficult financial times, that you have a trusted advisor at Boston Private Bank. We hope you will freely call on us with your questions and suggestions.
|
| Sincerely, |
|
|
| Mark D. Thompson |
| CEO & President |
Boston Private Bank & Trust Company
CONDENSED BALANCE SHEETS
(Unaudited)
| | | | | | | | |
| | | September 30, | |
($ in Thousands) | | 2008 | | | 2007 | |
Assets | | | | | | | | |
Cash & Short-Term Investments | | $ | 23,334 | | | $ | 77,098 | |
Investment Securities | | | 617,437 | | | | 479,865 | |
Loans Held for Sale | | | 1,556 | | | | 859 | |
Commercial Loans | | | 1,056,945 | | | | 929,319 | |
Mortgage Loans | | | 1,077,918 | | | | 982,848 | |
Home Equity & Other Loans | | | 83,461 | | | | 47,542 | |
| | | | | | | | |
Total Loans | | | 2,218,324 | | | | 1,959,709 | |
Less: Allowance for Loan Losses | | | 25,029 | | | | 21,825 | |
| | | | | | | | |
Net Loans | | | 2,193,295 | | | | 1,937,884 | |
Other Assets | | | 107,070 | | | | 105,323 | |
| | | | | | | | |
Total Assets | | $ | 2,942,692 | | | $ | 2,601,029 | |
| | | | | | | | |
Liabilities & Shareholder’s Equity | | | | | | | | |
Demand Deposits | | $ | 304,190 | | | $ | 302,715 | |
NOW Accounts | | | 130,464 | | | | 159,921 | |
Savings & Money Market | | | 870,051 | | | | 1,035,143 | |
Certificates of Deposit | | | 480,631 | | | | 327,585 | |
| | | | | | | | |
Total Deposits | | | 1,785,336 | | | | 1,825,364 | |
Client Repurchase Agreements | | | 254,059 | | | | 121,436 | |
Borrowings | | | 680,070 | | | | 458,267 | |
Other Liabilities | | | 21,262 | | | | 20,367 | |
| | | | | | | | |
Total Liabilities | | | 2,740,727 | | | | 2,425,434 | |
| | | | | | | | |
Shareholder’s Equity | | | 201,965 | | | | 175,595 | |
| | | | | | | | |
Total Liabilities & Shareholder’s Equity | | $ | 2,942,692 | | | $ | 2,601,029 | |
| | | | | | | | |
| |
Boston Private Bank & Trust Company CONDENSED STATEMENTS OF INCOME (Unaudited) | | | |
| |
| | | Nine Months Ended September 30, | |
($ in Thousands) | | 2008 | | | 2007 | |
Interest Income | | $ | 108,917 | | | $ | 103,951 | |
Interest Expense | | | 52,946 | | | | 53,696 | |
| | | | | | | | |
Net Interest Income | | | 55,971 | | | | 50,255 | |
Provision for Loan Losses | | | 4,640 | | | | 3,205 | |
| | | | | | | | |
Net Interest Income after Provision | | | 51,331 | | | | 47,050 | |
Investment Management Fees | | | 12,592 | | | | 11,564 | |
Banking Fees and Other Income | | | 4,737 | | | | 4,036 | |
Operating Expenses | | | 44,735 | | | | 40,995 | |
| | | | | | | | |
Income Before Income Taxes | | | 23,925 | | | | 21,655 | |
Income Taxes | | | 5,148 | | | | 4,919 | |
| | | | | | | | |
Net Income | | $ | 18,777 | | | $ | 16,736 | |
| | | | | | | | |
| |
Boston Private Bank & Trust Company SELECTED FINANCIAL DATA (Unaudited) | | | |
| |
| | | At or for the
Nine Months Ended September 30, | |
($ in Thousands) | | 2008 | | | 2007 | |
Assets Under Management | | $ | 2,669,000 | | | $ | 2,784,000 | |
Return on Average Assets | | | 0.86 | % | | | 0.89 | % |
Return on Average Equity | | | 12.84 | % | | | 13.39 | % |
Net Interest Margin | | | 2.92 | % | | | 3.04 | % |
Total Fees and Other Income / Revenues | | | 23.64 | % | | | 23.69 | % |
Allowance for Loan Losses / Total Loans | | | 1.13 | % | | | 1.11 | % |
