Exhibit 99.1
Boston Private Financial Holdings Reports Fourth Quarter 2010 Results
Boston, MA - January 27, 2011 - Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported a fourth quarter 2010 GAAP Net Loss Attributable to the Company of $10 million, compared to a $7.2 million net loss in the third quarter of 2010. The net loss for the fourth quarter was primarily driven by $32.6 million in Provision for Loan Losses, largely attributable to continued credit-related stress in the commercial real estate (“CRE”) portfolio at the Company's Northern California banking affiliate.
After accounting for non-cash equity adjustments and preferred dividends, BPFH reported a fourth quarter 2010 GAAP net loss per share of $0.14 compared to a $0.10 GAAP net loss per share in the third quarter of 2010.
For the full year 2010, the Company reported a GAAP net loss of $11 million, compared to GAAP net income of $5.2 million for 2009. After accounting for non-cash equity adjustments and preferred dividends, BPFH reported a 2010 GAAP net loss per share of $0.29, compared to a $0.52 GAAP net loss per share for 2009.
“Managing credit has been our top priority for the past several quarters, with a particular focus on Northern California,” said CEO and President Clay Deutsch. “Working out our problem assets continues to be the primary factor influencing our results. Further degradation of previously criticized loans, primarily in the Northern California CRE portfolio, was the main driver of our elevated provision in the fourth quarter of 2010.”
“We do see encouraging signs of balance sheet improvement,” continued Mr. Deutsch. “Our overall levels of classified and non-accrual loans were reduced substantially during the fourth quarter and we continue to see substantial paydowns in January. We continue to reduce construction exposure as evidenced by the 50% decline in construction loans outstanding year-over-year. This mix shift may sacrifice nominal yield, but it also lowers our risk profile substantially and reflects our commitment to focus on high performance private banking.”
“We also see a number of positive indicators that speak to the client attraction and development strengths of our core private banking and wealth management businesses,” continued Mr. Deutsch . “Year-over-year, our residential mortgage portfolio has increased 12%, our deposit base grew 5% at attractive funding costs and fee-based revenues have grown 10%.”
In addition to reporting fourth quarter results, the Company made two additional restructuring announcements.
The BPFH board of directors has approved a plan to merge the Company's four private banks into one consolidated banking entity. While subject to regulatory and related approvals, the Company intends to begin immediately working on a 12-month integration program.
“We are very committed to integrating o ur banks into one high-performing private bank,” said Mr. Deutsch. “Our primary motive is superior client service and client growth as we consistently deliver the full power of our Company's product set and skill set across all our markets. In addition, we will realize substantial gains in productivity and profitability.”
“We have developed a comprehensive transition plan to guide the next 12 months. Detailed analysis suggests an estimated cost savings of 8-9% of our current banking cost base when fully implemented, and a substantial improvement in building margins and overall profitability. Of the 8-9% in estimated savings, two-thirds is employment related, which translates into an 11% reduction in force in the Private Banking Group.”
In a separate announcement, BPFH's wealth advisory affiliate Coldstream Holdings, Inc. announced today that it has repurchased all of BPFH's stock holdings in the firm. BPFH had been a minority shareholder of Coldstream since 2002. Coldstream contributed less than $0.1 million to the Company's total revenue in 2010. This transaction is expected to result in a pre-tax gain of $0.5 million in the first quarter of 2011.
Key Financials (Note: All comparisons relate only to continuing operations).
| |
| • | Revenue for the fourth quarter was $76.4 million, an increase of $2.6 million, or 4%, from $73.7 million on a linked quarter basis. On a year to date basis, Revenue was up 2% to $292.5 million. |
| |
| ◦ | Net Interest Income for the fourth quarter was $45 million, a decre ase of $1.5 million, or 3%, from $46.4 |
| |
| ◦ | million on a linked quarter basis. On a year to date basis, Net Interest Income was up 13% to $180.7 million. |
| |
| ◦ | Fee Income (Investment Management, Wealth Advisory and Other Private Banking Fees) for the fourth quarter was $26.7 million, an increase of $1.2 million, or 5%, from $25.5 million on linked quarter basis. On a year to date basis, Fee Income was up 10%, to $103.5 million. |
| |
| • | Net Interest Margin for the fourth quarter was 3.18%, down 24 basis points from 3.42% on a linked quarter basis. Net Interest Margin for the year was 3.30%, up 21 basis points from the prior year. |
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| • | Operating Expenses for the fourth quarter were $63.2 million, an increa se of $2.2 million, or 4%, from $61 million on a linked quarter basis. On a year to date basis, Operating Expenses were up 6% to $236.9 million. |
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| • | Tangible Common Equity/Tangible Assets (“TCE/TA”) as of the end of the fourth quarter was 6.34%, down 46 basis points from 6.80% as of the end of the third quarter, and down 32 basis points from 6.66% as of the end of 2009. |
| |
| • | Total Balance Sheet Assets as of the end of the fourth quarter were $6.2 billion, an increase of $121.6 million, or 2%, from $6.0 billion as of the end of the third quarter and were up 2% from $6.0 billion as of the end of 2009. |
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| • | Provision for Loan Losses for the fourth quarter was $32.6 million, an increase of $0.5 million, or 2%, from $32.1 million on a linked quarter basis. On a year to date basis, Provision for Loan Losses was $87.2 million, up 94% from $45 million as of the end of 2009. |
| |
| • | Allowance for Loan Losses as a percentage of Total Loans as of the end of the fourth quarter was 2.20%, down 1 basis point fro m 2.21%, as of the end of the third quarter and up 61 basis points from 1.59% as of the end of 2009. |
“Our pro forma Tier 1 Risk-Based Capital Ratio remained solid in the fourth quarter at 13.1%, partially due to a continued mix shift away from higher risk construction loans and into residential mortgage,” said David Kaye, Chief Financial Officer. “Our Allowance for Loan Losses remains strong and now covers 93% of non-accrual loans compared to 71% in the third quarter.”
Total Deposits were flat on a linked quarter basis at $4.5 billion and were up 5% from $4.3 billion as of the end of 2009. Total Loans decreased 1% as of the end of the fourth quarter to $4.5 billion from the end of the th ird quarter, and were up 4% from $4.3 billion as of the end of 2009.
Non-Performing Loans as a percentage of Total Loans were 2.39% as of the end of the fourth quarter, down from 3.16% as of the end of the third quarter of 2010. Net Charge-offs for the fourth quarter 2010 were $34.2 million, which represented approximately 76 basis points of Total Loans, compared to $11.1 million of Net Charge-offs during the third quarter 2010, or 25 basis points of Total Loans. Past Due Loans (30-89 days) as a percentage of Total Loans increased 18 basis points on a linked quarter basis to 0.55%.
Total Assets Under Management/Advisory (“AUM”) increased 5%, or $932 million, to $19.5 billion in the fourth quarter. Total AUM was up 11% on a year-over-year basis. The Company experienced fourth quarter AUM inflows of $69 million, as compared to $2 million of inflows in the prior quarter. AUM inflows for the year were $151 million.
Dividend Payments
Concurrent with the release of the fourth quarter 2010 earnings, the Board of Directors of the Company declared a cash dividend to shareholders of $0.01 per share. The record date for this dividend is February 14, 2011 and the payment date is February 28, 2011.
Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures, such as the TCE/TA ratio and pre-tax, pre-provision income, to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. A detailed reconciliation table of the Company's GAAP to the non-GAAP measures is attached.
Conference Call
Management will hold a conference call at 8:00 a.m. Eastern Time on Friday, January 28, to discuss the financial results in more detail. To access the call:
Dial In #: 866-843-0890
International Dial In #: 412-317-9250
Elite Entry Number: 7112827
Replay Information:
Available from Jan. 28 at 10 a.m. to Feb. 9
Dial In #: 877-344-7529
International Dial In #: 412-317-0088
Conference Number: 447229
Boston Private Financial Holdings, Inc.
Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) is a national financial services organization comprised of affiliates located in key regions of the U.S. that offer private banking, wealth advisory and investment management services to the high net worth marketplace, selected businesses and institutions. The Company enters demographically attractive markets through selective acquisitions and then expands by way of organic growth. Its business strategy is to empower its affiliates to serve their clients at the local level, while at the same time providing strategic oversight and access to resources, both financial and intellectual, to support management, compliance and risk management, legal, marketing, and operations.
For more information about BPFH, visit the Company's website at www.bostonprivate.com.
Note to Editors:
Boston Private Financial Holdings, Inc. is not to be confused with Boston Private Bank & Trust Company. Boston Private Bank & Trust Company is a locally operated and wholly-owned subsidiary of BPFH. The information reported in this press release is related to the performance and results of BPFH.
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CONTACT:
Jeanne Hess
Assistant Vice President, Investor Relations
Boston Private Financial Holdings, Inc.
(617) 912-3798
jhess@bostonprivate.com
John Hartz
Sloan e & Company
857-598-4779
jhartz@sloanepr.com
Statements in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. These statements include, among others, statements regard ing our strategy, evaluations of future interest rate trends and liquidity, prospects for growth in assets, 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 the Company's control. Forward-looking statements are based on the current assumptions and beliefs of management and are only expectations of future results. The Company's actual results could differ materially from those projected in the forward-looking statements as a result of, among other factors, changes in assumptions or unanticipated factors adversely affecting the timing, among other matters, of expenses or cost savings relating to or resulting from the consolidation of the Company's banking subsidiaries; adverse conditions in the capital and debt markets and the impact of such conditions on the Company's private banking, investment management and wealth advisory activities; changes in interest rates; competitive pressures from other financial institutions; the effects of a continuing deterioration in general economic conditions on a national basis or in the local markets in which the Company operates, including changes which adversely affect borrowers' ability to service and repay our loans; changes in loan defaults and charge-off rates; changes in the value of securities and other assets, adequacy of loan loss reserves, or deposit levels necessitating increased borrowing to fund loans and investments; increasing government regulation, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; the risk that goodwill and intangibles recorded in the Company's financial statements will become impaired; risks related to the identification and implementation of acquisitions; changes in assumptions used in making such forward-looking statements;
and the other risks and uncertainties detailed in the Company's Annual Report on Form 10-K and updated by the Company's Quarterly Reports on Form 10-Q; and other filings submitted to the Securities and Exchange Commission. The Company 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 (1)
(In Thousands, except share data)
(Unaudited)
| | | | | | | | | |
| (In thousands, except per share data) | December 31, 2010 | December 31, 2009 | September 30, 2010 |
| FINANCIAL DATA: |
| Total Balance Sheet Assets (1) | $ | 6,152,901 | | $ | 6,049,265 | | $ | 6,031,266 | |
| Total Equity | 518,878 | | 651,154 | | 533,762 | |
| Cash and Investment Securities | 1,338,238 | | 1,387,483 | | 1,157,657 | |
| | | | |
| Commercial Loans | 2,356,233 | | 2,213,020 | | 2,386,378 | |
| Construction and Land Loans | 150,702 | | 315,661 | | 210,915 | |
| Residential Mortgage Loans | 1,673,934 | | 1,494,703 | | 1,634,958 | |
| Home Equity and Other Consumer Loans | 299,478 | | 283,656 | | 298,023 | |
| Total Loans | 4,480,347 | | 4,307,040 | | 4,530,274 | |
| | | | |
| Loans Held for Sale | 9,145 | | 12,714 | | 22,290 | |
| Other Real Estate Owned ("OREO") | 12,925 | | 16,600 | | 13,069 | |
| | | | |
| Deposits | 4,486,726 | | 4,255,219 | | 4,492,516 | |
| Borrowings | 1,027,925 | | 992,034 | | 886,741 | |
| | | | |
| Book Value Per Common Share | $ | 6.04 | | $ | 6.51 | | $ | 6.21 | |
| Market Price Per Share | $ | 6.55 | | $ | 5.77 | | $ | 6.54 | |
| | | | |
| ASSETS UNDER MANAGEMENT AND ADVISORY: | | | |
| Private Banking | $ | 3,592,000 | | $ | 3,479,000 | | $ | 3,561,000 | |
| Investment Managers | 8,140,000 | | 7,048,000 | | 7,521,000 | |
| Wealth Advisory | 7,836,000 | | 7,161,000 | | 7,553,000 | |
| Less: Inter-company Relationship | (19,000 | ) | (18,000 | ) | (18,000 | ) |
| Assets Under Management and Advisory | $ | 19,549,000 | | $ | 17,670,000 | | $ | 18,617,000 | ; |
| | | | |
| FINANCIAL RATIOS: | | | |
| Total Equity/Total Assets | 8.43 | % | 10.76 | % | 8.85 | % |
| Tangible Common Equity/Tangible Assets (2) | 6.34 | % | 6.66 | % | 6.80 | % |
| Allowance for Loan Losses/Total Loans | 2.20 | % | 1.59 | % | 2.21 | % |
| Allowance for Loan Losses/Non-Accrual Loans | 93 | % | 79 | % | 71 | % |
Boston Private Financia l Holdings, Inc.
Selected Financial Data (1)
(In Thousands, except share data)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | Three Months Ended | | Twelve Months Ended |
| | Dec 31, | Dec 31, | Sept 30, | | Dec 31, | Dec 31, |
| OPERATING RESULTS: | 2010 | 2009 | 2010 | | 2010 | 2009 |
| Net Interest Income | $ | 44,953 | | $ | 41,057 | | $ | 46,444 | | | $ | 180,725 | | $ | 159,485 | |
| Investment Management and Trust Fees: | | | | | | |
| Private Banking | 5,744 | | 5,482 | | 5,599 | | | 22,826 | | 20,810 | |
| Investment Managers | 9,682 | | 9,029 | | 8,712 | | | 36,941 | | 33,189 | |
| Total Investment Management and Trust Fees | 15,426 | | 14,511 | | 14,311 | | | 59,767 | | 53,999 | |
| Total Wealth Advisory Fees | 9,787 | | 9,138 | | 9,525 | | | 37,874 | | 34,834 | |
| Other Private Banking Fees | 1,513 | | 1,249 | | 1,678 | | | 5,832 | | 5,652 | |
| Total Fees | 26,726 | | 24,898 | | 25,514 | | | 103,473 | | 94,485 | |
| Gain on Repurchase of Debt | — | | 18,332 | | — | | | — | | 18,739 | |
| Gain/(Loss) on Sale of Loans and OREO, net | 3,385 | | (2,120 | ) | 713 | | | 2,410 | | 4,302 | |
| Other Revenue, Gains and (Losses), net (3) | 1,301 | | 1,254 | | 1,072 | | | 5,889 | | 8,923 | |
| Total Fees and Other Income | 31,412 | | 4 2,364 | | 27,299 | | | 111,772 | | 126,449 | |
| Total Revenue | 76,365 | | 83,421 | | 73,743 | | | 292,497 | | 285,934 | |
| | | | | | | |
| Provision for Loan Losses | 32,551 | | 13,804 | | 32,050 | | | 87,178 | | 44,959 | |
| | | | | | | |
| Salaries and Employee Benefits | 36,084 | | 32,434 | | 38,662 | | | 143,248 | | 127,707 | |
| Occupancy and Equipment | 7,254 | | 6,981 | | 7,036 | | | 27,773 | | 26,818 | |
| Professional Services | 5,470 | | 5,479 | | 4,857 | | | 19,495 | | 19,841 | |
| FDIC Insurance | 2,113 | | 2,012 | | 2,137 | | | 8,603 | | 9,746 | |
| Other Operating Expenses (4) | 12,256 | | 10,833 | | 8,287 | | | 37,736 | | 38,846 | |
| Total Operating Expense | 63,177 | | 57,739 | | 60,979 | | | 236,855 | | 222,958 | |
| | | | | | | |
| Income/(Loss) from Continuing Operations, before Tax | (19,363 | ) | 11,878 | | (19,286 | ) | | (31,536 | ) | 18,017 | |
| Income Tax Expense/(Benefit) | (8,172 | ) | 2 | | (12,412 | ) | | (19,451 | ) | 1,632 | |
| Net Income/(Loss) from Continuing Operations | (11,191 | ) | 11,876 | | (6,874 | ) | | (12,085 | ) | 16,385 | |
| Discontinued Operations, Net of Tax (1) | 1,917 | | 31,501 | | 267 | | | 3,729 | | (7,505 | ) |
| Net Income/(Loss) before Attribution to Noncontrolling Interest | (9,274 | ) | 43,377 | | (6,607 | ) | | (8,356 | ) | 8,880 | |
| Less: Net Income Attributable to the Noncontrolling Interest | 684 | | 1,169 | | 629 | | | 2,614 | | 3,649 | |
| Net Income/(Loss) Attributable to the Company | $ | (9,958 | ) | $ | 42,208 | | $ | (7,236 | ) | | $ | (10,970 | ) | $ | 5,231 | |
Boston Private Financial Holdings, Inc.
Selected Financial Data (1)
(In Thousands, except share data )
(Unaudited)
| | | | | | | | | | | | | | | | |
| | Three Months Ended | | Twelve Months Ended |
| | Dec 31, | Dec 31, | Sept 30, | | Dec 31, | Dec 31, |
| PER SHARE DATA: | 2010 | 2009 | 2010 | | 2010 | 2009 |
| Calculation of Income/(Loss) for EPS: | | | | | | |
| Net Income/(Loss) from Continuing Operations | $ | (11,191 | ) | $ | 11,876 | | $ | (6,874 | ) | | $ | (12,085 | ) | $ | 16,385 | |
| Less: Net Income Attributable to Noncontrolling Interests | 684 | | 1,169 | | 629 | | | 2,614 | | 3,649 | |
| Net Income/(Loss) from Continuing Operations Attributable to the Company | $ | (11,875 | ) | $ | 10,707 | | $ | (7,503 | ) | | $ | (14,699 | ) | $ | 12,736 | |
| Adjustments to Net Income/(Loss) Attributable to the Company to Arrive at Net Income/(Loss) Attributable to Common Shareholders (5) | (300 | ) | (13,873 | ) | 163 | | | (9,766 | ) | (40,231 | ) |
| Net Income/(Loss) from Continuing Operations Attributable to the Common Shareholders | $ | (12,175 | ) | $ | (3,166 | ) | $ | (7,340 | ) | | $ | (24,465 | ) | $ | (27,495 | ) |
| Net Income/(Loss) from Discontinued Operations | $ | 1,917 | | $ | 31,501 | | $ | 267 | | | $ | 3,729 | | $ | (7,505 | ) |
| Net Income/(L oss) Attributable to the Common Shareholder | $ | (10,258 | ) | $ | 28,335 | | $ | (7,073 | ) | | $ | (20,736 | ) | $ | (35,000 | ) |
| | | | | | &n bsp; | |
| Calculation of Average Shares Outstanding: | | | | | | |
| Weighted Average Basic and Diluted Shares | 74,371 | | 67,637 | | 74,154 | | | 71,321 | | 66,697 | |
| | | | | | | |
| Earnings/(Loss) per Share - Basic and Diluted | | | | | | |
| Earnings/(Loss) per Share from Continuing Operations | $ | (0.16 | ) | $ | (0.05 | ) | $ | (0.10 | ) | | $ | (0.34 | ) | $ | (0.41 | ) |
| Income/(Loss) per Share from Discontinued Operati ons | $ | 0.02 | | $ | 0.47 | | $ | — | | | $ | 0.05 | | $ | (0.11 | ) |
| Earnings/(Loss) per Share | $ | (0.14 | ) | $ | 0.42 | | $ | (0.10 | ) | | $ | (0.29 | ) | $ | (0.52 | ) |
Boston Private Financial Holdings, Inc.
Selected Financial Data (1)
(In Thousands, except share data)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Average Balance | Interest Income/Expense | Average Yeild/Rate |
| | Three Months Ended | Three Months Ended | Three Months Ended |
| | Dec 31, | Dec 31, | Sept 30, | Dec 31, | Dec 31, | Sept 30, | Dec 31, | Dec 31, | Sept 30, |
| AVERAGE BALANCE SHEET: | 2010 | 2009 | 2010 | 2010 | 2009 | 2010 | 2010 | 2009 | 2010 |
| AVERAGE ASSETS | | | | | | | | | |
| Earning Assets | | | | | | | | | |
| Cash and Investments (6) | $ | 1,303,356 | | $ | 1,412,415 | | $ | 1,084,506 | | $ | 5,518 | | $ | 6,684 | | $ | 5,689 | | 1.69 | % | 1.89 | % | 2.10 | % |
| Loans (7) | | | | | | | | | |
| Commercial and Construction (6) | 2,568,964 | | 2,637,992 | | 2,587,847 | | 34,920 | | 37,395 | | 36,481 | | 5.35 | % | 5.62 | % | 5.56 | % |
| Residential Mortgage | 1,660,775 | | 1,478,772 | | 1,637,831 | | 19,183 | | 18,883 | | 19,621 | | 4.61 | % | 5.11 | % | 4.79 | % |
| Home Equity and Other Consumer | 300,273 | | 214,088 | | 295,395 | | 3,064 | | 2,500 | | 3,116 | | 4.02 | % | 4.59 | % | 4.16 | % |
| Total Earning Assets | 5,833,368 | | 5,743,267 | | 5,605,579 | | 62,685 | | 65,462 | | 64,907 | | 4.25 | % | 4.53 | % | 4.59 | % |
| Allowance for Loan Losses | (99,025 | ) | (73,613 | ) | (81,543 | ) | | | | | | |
| Cash and due From Banks (Non-Interest Bearing) | 32,516 | | 27,113 | | 27,983 | | | &n bsp; | | | | |
| Other Assets | 441,632 | | 580,466 | | 443,124 | | | | | | | |
| TOTAL AVERAGE ASSETS | $ | 6,208,491 | | $ | 6,277,233 | | $ | 5,995,143 | | | | &nbs p; | | | |
| | | | | | | | | | |
| AVERAGE LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | |
| Interest-Bearing Liabilities: | | | | | | | | | |
| Deposits: | | | | | | | | | |
| Savings and NOW | $ | 608,474 | | $ | 492,295 | | $ | 559,413 | | 454 | | $ | 728 | | $ | 467 | | 0.30 | % | 0.59 | % | 0.33 | % |
| Money Market | 1,814,159 | | 1,576,760 | | 1,698,381 | | 3,718 | | 4,521 | | 3,821 | | 0.81 | % | 1.14 | % | 0.89 | % |
| Certificates of Deposits | 1,183,250 | | 1,569,426 | | 1,277,670 | | 3,877 | | 7,622 | | 4,422 | | 1.30 | % | 1.93 | % | 1.37 | % |
| Total Deposits | 3,605,883 | | 3,638,481 | | 3,535,464 | | 8,049 | | 12,871 | | 8,710 | | 0.89 | % | 1.40 | % | 0.98 | % |
| Junior Subordinated Debentures and Other Long-term Debt | 193,645 | | 215,895 | | 193,645 | | 2,523 | | 2,851 | | 2,511 | | 5.21 | % | 5.28 | % | 5.19 | % |
| FHLB Borrowings and Other | 685,208 | | 721,999 | | 614,459 | | 5,293 | | 6,916 | | 5,392 | | 3.02 | % | 3.75 | % | 3.43 | % |
| Total Interest-Bearing Liabilities | 4,484,736 | | 4,576,375 | | 4,343,568 | | 15,865 | | 22,638 | | 16,613 | | 1.40 | % | 1.96 | % | 1.51 | % |
| Non-interest Bearing Demand Deposits | 1,063,592 | | 906,351 | | 986,892 | | | | | | | |
| Payables and Other Liabilities | 112,406 | | 98,229 | | 104,806 | | | | | | | |
| Total Liabilities | 5,660,734 | | 5,580,955 | | 5,435,266 | | | | | | | |
| Redeemabl e Non-Controlling Interest | 19,070 | | 53,177 | | 19,542 | | | | | | | |
| Stockholders' Equ ity | 528,687 | | 643,101 | | 540,335 | | | | | | | |
| TOTAL AVERAGE LIABILITIES & STOCKHOLDERS' EQUITY | $ | 6,208,491 | | $ | 6,277,233 | | $ | 5,995,143 | | | | | | | |
| | | | | | | | | | |
| Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) | | | | $ | 46,820 | | $ | 42,824 | | $ | 48,294 | | | | |
| FTE Adjustment (6) | | | | 1,867 | | 1,767 | | 1,850 | | | | |
| Net Interest Income (GAAP Basis) | | | | $ | 44,953 | | $ | 41,057 | | $ | 46,444 | | | | |
| Interest Rate Spread | | | | | | | 2.85 | % | 2.57 | % | 3.08 | % |
| Net Interest Margin | | | | | | | 3.18 | % | 2.97 | % | 3.42 | % |
Boston Private Financial Holdings, Inc.
Selected Financial Data (1)
(In Thousands, except share data)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | Average Balance | Interest Income/Expense | Average Yeild/Rate |
| | Twelve Months Ended | Twelve Months Ended | Twelve Months Ended |
| | Dec 31, | Dec 31, | Dec 31, | Dec 31, | Dec 31, | Dec 31, |
| AVERAGE BALANCE SHEET: | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
| AVERAGE ASSETS | | | | | | |
| Earning Assets | | | | | | |
| Cash and Investments (6) | $ | 1,255,767 | | $ | 1,127,045 | | $ | 23,360 | | $ | 30,530 | | 1.86 | % | 2.71 | % |
| Loans (7) | | | | | | |
| Commercial and Construction (6) | 2,567,009 | | 2,679,722 | | 144,402 | | 154,358 | | 5.63 | % | 5.76 | % |
| Residential Mortgage | 1,595,056 | | 1,377,159 | | 76,940 | | 72,214 | | 4.82 | % | 5.24 | % |
| Home Equity and Other Consum er | 286,044 | | 206,894 | | 12,482 | | 9,321 | | 4.36 | % | 4.51 | % |
| Total Earning Assets | 5,703,876 | | 5,390,820 | &nbs p; | 257,184 | | 266,423 | | 4.51 | % | 4.94 | % |
| Allowance for Loan Losses | (81,393 | ) | (70,771 | ) | | | | |
| Cash and due From Banks (Non-Interest Bearing) | 30,375 | | 25,677 | &nb sp; | | | | |
| Other Assets | 485,170 | | 610,657 | | | | | |
| TOTAL AVERAGE ASSETS | $ | 6,138,028 | &nb sp; | $ | 5,956,383 | | | | | |
| | | | | | | |
| AVERAGE LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | |
| Interest-Bearing Liabilities: | | | | | | |
| Deposits: | | | | | | |
| Savings and NOW | $ | 555,244 | | $ | 457,280 | | $ | 2,029 | | $ | 3,240 | | 0.37 | % | 0.71 | % |
| Money Market | 1,701,772 | | 1,315,082 | | 15,223 | | 19,518 | | 0.89 | % | 1.48 | % |
| Certificates of Deposits | 1,316,818 | | 1,525,844 | | 19,518 | | 36,114 | | 1.48 | % | 2.37 | % |
| Total Deposits | 3,573,834 | | 3,298,206 | | 36,770 | | 58,872 | | 1.03 | % | 1.78 | % |
| Junior Subordinated Debentures and Other Long-term Debt | 193,645 | | 240,419 | | 10,028 | | 12,324 | | 5.18 | % | 5.13 | % |
| FHLB Borrowings and Other | 648,226 | | 817,830 | | 22,414 | | 28,633 | | 3.46 | % | 3.50 | % |
| Total Interest-Bearing Liabilities | 4,415,705 | | 4,356,455 | | 69,212 | | 99,829 | | 1.57 | % | 2.29 | % |
| Non-interest Bearing Demand Deposits | 1,025,431 | | 846,916 | | | | | |
| Payables and Other Liabilities | 103,836 | | 62,599 | | | | | |
| Total Liabilities | 5,544,972 | | 5,265,970 | | | | | |
| Redeemable Non-Controlling Interest | 20,175 | | 42,119 | | | | | |
| Stockholders' Equity | 572,881 | | 648,294 | | | | | |
| TOTAL AVERAGE LIABILITIES & STOCKHOLDERS' EQUITY | $ | 6,138,028 | | $ | 5,956,383 | | | | | |
| | | | | | | |
| Net Interest Income - on an FTE Basis | | | $ | 187,972 | | $ | 166,594 | | | |
| FTE Adjustment (6) | | | 7,247 | | 7,109 | | | |
| Net Interest Income (GAAP Basis) | | | $ | 180,725 | | $ | 159,485 | | | |
| Interest Rate Spread | | | | & nbsp; | 2.94 | % | 2.65 | % |
| Net Interest Margin | | | | | 3.30 | % | 3.09 | % |
| | | | | | | | |
| | Three Months Ended | | Twelve Months Ended |
| | Dec 31, | Dec 31, | Sept 30, | | Dec 31, | Dec 31, |
| | 2010 | 2009 | 2010 | | 2010 | 2009 |
| OPERATING RATIOS: | | | | | | |
| Return on Average Equity | (7.53%) | 26.25 | % | (5.36%) | | (1.91%) | 0.81 | % |
| Return on Average Assets | (0.64%) | 2.69 | % | (0.48%) | | (0.18%) | 0.09 | % |
Boston Private Financial Holdings, Inc.
Selected Financial Data (1)
(In Thousands, except share data)
(Unaudited)
| | | | | | | | | |
| LOAN DATA AND CREDIT QUALITY (8): | Dec 31, | Dec 31, | Sept 30, |
| | 2010 | 2009 | 2010 |
| Commercial Loans: | | | |
| New England | $ | 1,125,669 | | $ | 943,740 | | $ | 1,082,877 | |
| Northern California | 859,073 | | 927,074 | | 935,994 | |
| Southern California | 234,926 | | 231,684 | | 233,383 | |
| Pacific Northwest | 136,745 | | 111,039 | | 134,337 | & nbsp; |
| Eliminations and other, net | (180 | ) | (517 | ) | (213 | ) |
| Total Commercial Loans | $ | 2,356,233 | | $ | 2,213,020 | | $ | 2,386,378 | |
| | | | |
| Construction and Land Loans: | | | |
| New England | $ | 80,021 | | $ | 117,817 | | $ | 97,585 | |
| Northern California | 55,284 | | 161,839 | | 97,791 | |
| Southern California | 1,840 | | 7,719 | | 1,869 | |
| Pacific Northwest | 13,557 | | 28,286 | | 13,670 | |
| Total Construction and Land Loans | $ | 150,702 | | $ | 315,661 | | $ | 210,915 | |
| | | | |
| Residential Mortgage Loans: | | | |
| New England | $ | 1,181,399 | | $ | 1,113,842 | | $ | 1,154,671 | |
| Northern California | 293,622 | | 219,394 | | 277,321 | |
| Southern California | 153,102 | | 124,212 | | 159,321 | |
| Pacific Northwest | 45,811 | | 37,255 | | 43,645 | |
| Total Residential Mortgage Loans | $ | 1,673,934 | | $ | 1,494,703 | | $ | 1,634,958 | |
| | | | |
| Home Equity and Other Consumer Loans: | | | |
| New England | $ | 199,454 | | $ | 179,792 | | $ | 201,569 | |
| Northern California | 73,172 | | 74,192 | | 72,152 | |
| Southern California | 17,654 | | 20,947 | | 15,529 | |
| Pacific Northwest | 7,098 | | 5,278 | | 6,567 | |
| Eliminations and other, net | 2,100 | | 3,447 | | 2,206 | |
| Total Home Equity and Other Consumer Loans | $ | 299,478 | | $ | 283,656 | | $ | 298,023 | |
| | | | |
| Total Loans | | | |
| New England | $ | 2,586,543 | | $ | 2,355,191 | | $ | 2,536,702 | |
| Northern California | 1,281,151 | | 1,382,499 | | 1,383,258 | |
| Southern California | 407,522 | | 384,562 | | 410,102 | |
| Pacific Northwest | 203,211 | | 181,858 | | 198,219 | |
| Eliminations and other, net | 1,920 | | 2,930 | | 1,993 | |
| Total Loans | $ | 4,480,347 | | $ | 4,307,040 | | $ | 4,530,2 74 | |
Boston Private Financial Holdings, Inc.
Selected Financial Data (1)
(In Thousands, except share data) (Unaudited) | | | | | | | | | |
| | Dec 31, | Dec 31, | Sept 30, |
| | 2010 | 2009 | 2010 |
| Allowance for Loan Losses: | | | |
| New England | $ | 32,938 | | $ | 27,363 | | $ | 30,948 | |
| Northern California | 46,117 | | 19,950 | | 49,824 | |
| Southern California | 12,375 | | 11,659 | | 12,346 | |
| Pacific Northwest | 6,973 | | 9,472 | | 6,892 | |
| Total Allowance for Loan Losses | $ | 98,403 | | $ | 68,444 | | $ | 100,010 | |
| Special Mention Loans: | | | |
| New England | $ | 70,114 | | $ | 41,421 | | $ | 54,375 | |
| Northern California | 74,991 | | 20,577 | | 66,493 | |
| Southern California | 22,691 | | 8,900 | | 7,872 | |
| Pacific Northwest | 19,819 | | 18,255 | | 21,325 | |
| Total Special Mention Loans | $ | 187,615 | | $ | 89,153 | | $ | 150,065 | |
| Accruing Classified Loans (9): | | | |
| New England | $ | 19,745 | | $ | 14,534 | | $ | 19,228 | |
| Northern California | 62,518 | | 14,768 | | 66,061 | |
| Southern California | 6,802 | | 8,117 | | 11,467 | |
| Pacific Northwest | 8,373 | | 15,118 | | 9,308 | |
| Total Accruing Classified Loans | $ | 97,438 | | $ | 52,537 | | $ | 106,064 | |
| Non-performing Loans: | | | |
| New England | $ | 25,172 | | $ | 8,346 | | $ | 20,872 | |
| Northern California | 60,373 | | 37,584 | | 99,573 | |
| Southern California (10) | 10,663 | | 21,953 | | 12,585 | |
| Pacific Northwest | 10,783 | | 22,455 | | 10,060 | |
| Total Non-performing Loans | $ | 106,991 | | $ | 90,338 | | $ | 143,090 | |
| Other Real Estate Owned: | | | |
| New England | $ | — | | $ | 870 | | $ | 892 | |
| Northern California | 10,207 | | 9,025 | | 4,283 | |
| Southern California | 1,128 | | 4,382 | | 4,141 | &nbs p; |
| Pacific Northwest | 1,590 | | 2,323 | | 3,753 | |
| Total Other Real Estate Owned | $ | 12,925 | | $ | 16,600 | | $ | 13,069 | |
| Loans 30-89 Days Past Due: | | | |
| New England | $ | 12,844 | | $ | 6,658 | | $ | 5,515 | |
| Northern California | 11,219 | | 6,799 | | 8,270 | |
| Southern California | 682 | | 4,259 | | 2,860 | |
| Pacific Northwest | — | | 3,478 | | 226 | |
| Total Loans 30-89 Days Past Due | $ | 24,745 | | $ | 21,194 | | $ | 16,871 | |
| Loans Charged-off/(Recovered), Net for the Three Months Ended: | | | |
| New England | $ | 510 | | $ | 555 | | $ | 393 | |
| Northern California | 33,957 | | 6,937 | | 11,896 | |
| Southern California | (118 | ) | 5,065 | | (1,224 | ) |
| Pacific Northwest | (191 | ) | 5,813 | | 48 | |
| Total Net Loans Charged-off | $ | 34,158 | | $ | 18,370 | | $ | 11,113 | |
| Loans Charged-off/(Recovered), Net for the Twelve Months Ended: | | | &n bsp; |
| New England | $ | 3,725 | | $ | 2,495 | | |
| Northern California | 54,858 | | 8,387 | | |
| Southern California | (1,753 | ) | 13,017 | | |
| Pacific Northwest | 389 | | 16,707 | | |
| Total Net Loans Charged-off | $ | 57,219 | | $ | 40,606 | | |
Boston Private Financial Holdings, Inc.
Selected Financial Data (1)
(In Thousands, except share data)
(Unaudited)
(1) In 2009, the Company completed the sale of its affiliates Boston Private Value Investors, Sand Hill Advisors, RINET, Gibralt ar, and Westfield Capital Management. Accordingly, prior period and current financial information related to the divested companies are included with discontinued operations.
(2) The Company uses certain non-GAAP financial measures, such as the Tangible Common Equity to Tangible Assets ratio, and Pre-tax Pre-provision Income to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.
A reconciliation from the Company's GAAP Total Equity to Total Assets ratio to the Non-GAAP Tangible Common Equity to Tangible Assets ratio is presented below:
The Company calculates Tangible Assets by adjusting Total Assets to exclude Goodwill and Intangible Assets.
The Company calculates Tangible Common Equity by adjusting Total Equity to exclude: the equity from t he TARP funding, Goodwill and Intangible Assets, net and includes the difference between Redemption Value and value per ARB 51 for Redeemable Non-controlling Interests.
| | | | | | | | | |
| | Dec 31, | Dec 31, | Sept 30, |
| | 2010 | 2009 | 2010 |
| Total Balance Sheet Assets(1) | $ | 6,152,901 | | $ | 6,049,265 | | $ | 6,031,266 | |
| LESS: Goodwill and Intangible Assets, net | (151,212 | ) | (150,117 | ) | (146,153 | ) |
| Tangible Assets (non-GAAP) | 6,001,689 | | 5,899,148 | | 5,885,113 | |
| | | | |
| Total Equity | 518,878 | | 651,154 | | 533,762 | |
| | | | |
| LESS: Goodwill and Intangible Assets, net | (151,212 | ) | (150,117 | ) | (146,153 | ) |
| TARP Funding | — | | (154,000 | ) | — | |
| ADD: Difference between Redemption Value of Non-controlling Interests and value under ARB 51 | 12,578 | | 46,016 | | 12,608 | |
| Total adjusting items | (138,634 | ) | (258,101 | ) | (133,545 | ) |
| | | | |
| Tangible Common Equity (non-GAAP) | 380,244 | | 393,053 | | 400,217 | |
| | | | |
| Total Equity/Total Assets | 8.43 | % | 10.76 | % | 8.85 | % |
| Tangible Common Equity/Tangible Assets (non-GAAP) | 6.34 | % | 6.66 | % | 6.80 | % |
A reconciliation from the Company's GAAP Income/(Loss) from Continuing Operations, before tax to the Non-GAAP Income/(Loss) Pre-tax, Pre-provision is presented below:
The Company calculates Pre-tax Pre-provision income by adding the Provision for Loan Losses to Income/(Loss) from Continuing Operations, before Tax.
| | | | | | | | | | | | | | | | |
| | Three Months Ended | | Twelve Months Ended |
| | Dec 31, | Dec 31, | Sept 30, | | Dec 31, | Dec 31, |
| | 2010 | 2009 | 2010 | | 2010 | 2009 |
| Income/(Loss) from Continuing Operations, before Tax | $ | (19,363 | ) | $ | 11,878 | | $ | (19,286 | ) | | $ | (31,536 | ) | $ | 18,017 | |
| Provision for Loan Losses | 32,551 | | 13,804 | | 32,050 | | | 87,178 | | 44,959 | |
| Income/(Loss) Pre-tax, Pre-provision | $ | 13,188 | | $ | 25,682 | | $ | 12,764 | | | $ | 55,642 | | $ | 62,976 | |
(3) Other Revenue, Gains and (Losses), net, as presented in these tables include Gain on Sale of Investments, net; and Other Miscellaneous Revenue.
(4) Other Operating Expenses, as presented in these tables, include expenses related to Marketing and Business Development, Contract Services and Processing, Impairment Expense and Amortization of Intangibles.
Boston Private Financial Holdings, Inc.
Selected Financial Data (1)
(In Thousands, except share data)
(Unaudited)
(5) Adjustments to Net Income Attributable to the Company to arrive at Net Income/(Loss) Attributable to the Common Shareholders, as presented in these tables, include decrease/ (increase) in Noncontrolling Interests Redemption Value; Dividends on Preferred Securities; Accretion of Discount on Series C Preferred Stock; and Accretion of Series B Preferred Stock Beneficial Conversion Feature.
(6) Interest Income on Non-taxable Investments and Loans are presented on an FTE basis using the federal statutory rate.
(7) Includes Loans Held for Sale and Non-accrual Loans.
(8) The concentration of the Private Banking loan data and credit quality is based on the location of the lender. Net loans from the Holding Company to certain principals of the Company's affiliate partners, loans at the Company's non-banking segments, and inter-company loan eliminations are identified as “Eliminations and other, net”.
(9) Accruing classified loans include loans that are classified as substandard but are still accruing interest income. The Banks may classify a loan as substandard where known informatio n about possible credit problems of the related borrowers causes management to have doubts as to the ability of such borrowers to comply with the present repayment terms and which may result in disclosure of such loans as nonperforming at some time in the future.
(10) Includes the non-strategic loans held for sale of $1.5 million, $3.6 million, and $2.9 million, at Dec 31, 2010, Dec 31, 2009 and Sept 30, 2010, respectively.
