Second Quarter Highlights:
- Revenue Growth: Total Revenue
increased 9% year-over-year and was flat on a linked quarter basis
at $87.7 million. The year-over-year increase was driven by the
acquisition of Banyan Partners LLC and organic growth.
- Deposit and Loan Growth: Average
Total Deposits increased 6% year-over-year to $5.4 billion. On a
linked quarter basis, Average Total Deposits decreased 1%, while
Average Total Loans grew 4% year-over-year and 1% linked quarter.
The Average Loan-to-Deposit ratio was 99% at the end of the second
quarter, down from 102% in the second quarter of 2014.
- No Provision for Loan Loss: The
Company recorded no provision for loan loss due to net recoveries
of $1.0 million in the quarter and payoffs of classified loans,
offset by loan growth and loan downgrades.
- Assets Under Management: Total
Assets Under Management/Advisory (“AUM”) increased 17%
year-over-year to $29.6 billion, reflecting the acquisition of
Banyan Partners and organic growth. On a linked quarter basis, AUM
were down 1%, due to negative net flows and market action.
Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the
“Company” or “BPFH”) today reported second quarter 2015 GAAP Net
Income Attributable to the Company of $17.6 million, compared to
$18.8 million for the first quarter of 2015. Second quarter 2015
diluted earnings per share were $0.20, compared to $0.21 in the
first quarter of 2015, and $0.25 in the second quarter of 2014. In
the second quarter of 2014 the Company sold $57 million of
Commercial Loans, which resulted in a $1.6 million gain on sale of
loans and a $1.2 million provision credit.
“Our integrated Private Bank and Wealth Management business
reached a number of important milestones in the second quarter,"
said Clayton G. Deutsch, CEO. "In June, we substantially completed
the integration of Banyan Partners and announced the opening of the
new Boston Private Wealth headquarters at One Federal Street in
Boston. Now that we have met this goal, our focus will shift full
time to building our private clients business in our select markets
nationally."
Core Fees and Income Increased 18% Year-Over-Year
Core Fees and Income increased 18% year-over-year to $40.3
million. The increase reflects revenue from Banyan Partners, which
was acquired in October 2014, as well as organic growth. On a
linked quarter basis, Core Fees and Income were flat.
Total Assets Under Management decreased to $29.6 billion in the
second quarter, down 1% from $30.0 billion in the first quarter of
2015. AUM increased 17% year-over-year. The year-over-year increase
includes AUM related to the Banyan Partners acquisition and
positive market action, partially offset by net outflows. The
Company experienced second quarter 2015 AUM net outflows of $193
million, as compared to first quarter 2015 AUM net outflows of $382
million. AUM net outflows for the second quarter 2014 were $86
million. AUM net outflows for the year to date 2015 were $575
million as compared to net inflows of $17 million for the same
period of 2014.
Net Interest Income
Net Interest Income for the second quarter was $45.1 million,
down 2% from $46.1 million for the first quarter of 2015. On a
year-over-year basis, Net Interest Income decreased 3% from $46.3
million. The current quarter includes $0.1 million of interest
recovered on previous non-accrual loans while the first quarter of
2015 and the second quarter of 2014 includes recoveries of $1.7
million and $2.5 million, respectively. Excluding interest
recovered on previous non-accrual loans, Net Interest Income
increased 2% linked quarter and 4% year-over-year.
Net Interest Margin was 2.90% for the second quarter, down 10
basis points from 3.00% for the first quarter of 2015. Net Interest
Margin was down 24 basis points from 3.14% in the second quarter of
2014. Excluding interest recovered on previous nonaccrual loans,
Net Interest Margin was up one basis point linked quarter and down
seven basis points year-over-year.
Other Income
Other income was $2.3 million in the second quarter of 2015
compared to $1.1 million in the first quarter of 2015. The second
quarter of 2015 included $1.1 million related to the market value
adjustment for the Banyan Partners earnout and $0.6 million in
gains on partnership investments, while first quarter included a
$0.4 million market value adjustment for the Banyan Partners
earnout and $0.2 million in gains on partnership investments.
Total Operating Expenses
Total Operating Expenses for the second quarter of 2015 were
$62.4 million, down 2% from $63.4 million for the first quarter of
2015. On a year-over-year basis, Total Operating Expenses increased
15% from $54.4 million, primarily due to the impact of the Banyan
Partners acquisition.
Provision and Asset Quality
The Company recorded no provision for loan loss for the second
quarter of 2015, compared to a provision credit of $2.5 million for
the first quarter of 2015. The lack of provision was due to net
recoveries of $1.0 million in the quarter and payoffs of classified
loans, offset by loan growth and loan downgrades.
Criticized Loans increased 2% on a linked quarter basis and
decreased 11% year-over-year. Nonaccrual Loans (“Nonaccruals”)
decreased 7% to $29.9 million on a linked quarter basis. On a
year-over-year basis, Nonaccruals decreased 28% from $41.6 million.
As a percentage of Total Loans, Nonaccruals were 55 basis points at
June 30, 2015, down 6 basis points from March 31, 2015, and down 27
basis points from June 30, 2014.
Additional credit metrics are listed below on a linked quarter
and year-over-year basis:
(In millions)
June 30, 2015
March 31, 2015
June 30, 2014 Total Criticized Loans $
167.3 $ 164.1 $ 188.2 Total Loans 30-89
Days Past Due and Accruing (11) $ 4.3 $ 25.4 $ 6.0 Total Net Loans
(Charged-off)/ Recovered $ 1.0 $ 3.9 $ 2.9 Allowance for Loan
Losses/ Total Loans 1.43 % 1.46 % 1.46 %
Capital Ratios
Capital ratios are listed below on a linked quarter and
year-over-year basis:
June 30, 2015
March 31, 2015 June 30,
2014 BPFH Ratios: Total Risk-Based Capital * 13.8 %
14.0 % 14.7 % Tier I Risk-Based Capital * 12.2 % 12.3 % 13.4 % Tier
I Leverage Capital * 9.7 % 9.5 % 10.4 % TCE/TA 7.2 % 7.2 % 7.8 %
Tier I Common Equity/ Risk Weighted Assets * 9.7 % 9.8 % 10.0 %
*June 30, 2015 information is presented based on estimated
data.
Dividend Payments
Concurrent with the release of second quarter 2015 earnings, the
Board of Directors of the Company declared a cash dividend to
common stock shareholders of $0.09 per share. The record date for
this dividend is August 7, 2015, and the payment date is August 21,
2015.
The Board of Directors of the Company also declared a cash
dividend to holders of the Non-Cumulative Perpetual Preferred
Stock, Series D of $17.375 per share, which will result in a
dividend of $0.434375 per depositary share. The record date for
this dividend is August 14, 2015, and the payment date is September
15, 2015.
Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures, such as
tangible book value per share; the TCE/TA ratio; return on average
common equity; return on average tangible common equity; pre-tax,
pre-provision earnings; and the efficiency ratio (FTE basis), 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 a.m. Eastern Time on
Thursday, July 16, 2015, to discuss the financial results, business
highlights and outlook. To access the call:
Dial In #: (888) 317-6003Elite Entry Number: 0224623
Replay Information:Available from July 16, 2015 at 12 noon until
July 30, 2015Dial In #: (877) 344-7529Conference Number:
10068908
The call will be simultaneously webcast and may be accessed on
www.bostonprivatefinancial.com
Boston Private Financial Holdings,
Inc.
Boston Private Financial Holdings, Inc. is a national financial
services organization that owns Wealth Management and Private
Banking affiliates with offices in Boston, New York, Los Angeles,
San Francisco, San Jose, Atlanta, Florida, Wisconsin, and Texas.
The Company has a $7 billion Private Banking balance sheet, and
manages approximately $30 billion of client assets.
The Company positions its affiliates to serve the high net worth
marketplace with high quality products and services of unique
appeal to private clients. The Company also provides strategic
oversight and access to resources, both financial and intellectual,
to support affiliate management, marketing, compliance and legal
activities. (NASDAQ: BPFH)
For more information about BPFH, visit the Company's website
at www.bostonprivatefinancial.com.
Forward-Looking Statements
Certain statements in this press release that are not historical
facts may constitute 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 regarding 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, 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 weakness in general economic
conditions on a national basis or in the local markets in which the
Company operates; changes in loan defaults and charge-off rates;
changes in the value of securities and other assets, adequacy of
loan loss reserves, or decreases in deposit levels necessitating
increased borrowing to fund loans and investments; changes in
government regulation; the risk that goodwill and intangibles
recorded in the Company's financial statements will become
impaired; the risk that the Company's deferred tax asset may not be
realized; risks related to the identification and implementation of
acquisitions, dispositions and restructurings; 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. Forward-looking statements speak only as of
the date on which they are made. 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 statement is made.
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 wholly-owned subsidiary of BPFH. The
information reported in this press release is related to the
performance and results of BPFH.
Boston Private Financial Holdings, Inc. Selected
Financial Data (Unaudited) (In
thousands, except share and per share data)
6/30/2015
3/31/2015 6/30/2014
Assets: Cash and cash equivalents
$
63,099 $ 88,118 $ 139,181 Investment securities available
for sale
992,007 971,842 683,590 Investment securities held
to maturity
128,258 134,978 138,380 Stock in Federal Home
Loan Banks
35,668 32,761 35,276 Loans held for sale
19,512 10,570 2,841 Total loans
5,463,250 5,295,013
5,106,051 Less: Allowance for loan losses
78,251
77,263 74,547 Net loans
5,384,999 5,217,750 5,031,504 Other real estate owned
(“OREO”)
929 929 921 Premises and equipment, net
31,337 30,999 28,410 Goodwill
152,082 152,082 110,180
Intangible assets, net
36,461 38,116 18,506 Fees receivable
12,486 12,519 11,957 Accrued interest receivable
16,383 15,990 14,337 Deferred income taxes, net
47,388 45,614 50,516 Other assets
125,330
117,504 123,224 Total assets
$ 7,045,939 $ 6,869,772 $ 6,388,823
Liabilities: Deposits
$ 5,429,028 $
5,373,407 $ 4,951,852 Securities sold under agreements to
repurchase
26,660 52,237 137,334 Federal funds purchased
100,000 50,000 — Federal Home Loan Bank borrowings
541,529 450,022 416,579 Junior subordinated debentures
106,363 106,363 106,363 Other liabilities
95,074 97,773 93,149
Total liabilities
6,298,654 6,129,802
5,705,277
Redeemable Noncontrolling
Interests 19,200 19,911 20,895
Shareholders’
Equity: Preferred stock, $1.00 par value; authorized: 2,000,000
shares
47,753 47,753 47,753 Common stock, $1.00 par value;
authorized: 170,000,000 shares; issued and outstanding: 83,539,785
shares at June 30, 2015; 83,051,675 shares at March 31, 2015;
80,394,009 shares at June 30, 2014
83,540 83,052 80,394
Additional paid-in capital
597,424 604,146 603,652
Accumulated deficit
(1,003 ) (18,613 ) (67,838 )
Accumulated other comprehensive income/ (loss)
(2,525
) 1,120 (1,542 ) Total Company’s
shareholders’ equity
725,189 717,458
662,419 Noncontrolling interests
2,896 2,601 232 Total
shareholders’ equity
728,085 720,059
662,651 Total liabilities, redeemable
noncontrolling interests and shareholders’ equity
$
7,045,939 $ 6,869,772 $ 6,388,823
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited) Three Months
Ended Six Months Ended (In thousands, except share and
per share data)
6/30/2015 3/31/2015
6/30/2014 6/30/2015
6/30/2014 Interest and dividend
income: Loans
$ 46,663 $ 48,000 $ 49,396
$
94,663 $ 96,610 Taxable investment securities
1,075
995 730
2,070 1,366 Non-taxable investment securities
1,125 1,021 914
2,146 1,818 Mortgage-backed
securities
2,775 2,614 1,689
5,389 3,625 Federal
funds sold and other
282 234 253
516 599 Total interest
and dividend income
51,920 52,864
52,982
104,784 104,018
Interest expense: Deposits
3,822 3,892 3,375
7,714 6,591 Federal Home Loan Bank borrowings
2,017
1,931 2,359
3,948 4,685 Junior subordinated debentures
967 956 965
1,923 1,920 Repurchase agreements and
other short-term borrowings
29 13
15
42 32 Total
interest expense
6,835 6,792
6,714
13,627 13,228 Net
interest income
45,085 46,072 46,268
91,157 90,790
Provision/ (credit) for loan losses
— (2,500 )
(5,000 )
(2,500 ) (6,200 ) Net
interest income after provision/ (credit) for loan losses
45,085 48,572 51,268
93,657 96,990
Fees and other
income: Investment management fees
11,731 11,714 11,754
23,445 23,215 Wealth advisory fees
12,678 12,675
11,979
25,353 23,452 Wealth management and trust fees
13,545 13,558 7,043
27,103 14,004 Other banking fee
income
2,031 1,910 1,677
3,941 3,357 Gain on sale of
loans, net
362 303 1,694
665 1,783 Total core fees and
income
40,347 40,160 34,147
80,507 65,811 Gain on
repurchase of debt
— — —
— — Gain/ (loss) on sale of
investments, net
8 8 —
16 1 Gain/ (loss) on OREO, net
— 89 19
89 838 Other
2,305 1,088
208
3,393 457
Total other income
2,313 1,185
227
3,498 1,296
Operating expense: Salaries and employee benefits
39,816 42,127 34,338
81,943 70,912 Occupancy and
equipment
9,095 9,035 7,349
18,130 15,146
Professional services
3,214 3,021 3,526
6,235 6,369
Marketing and business development
1,706 1,348 2,730
3,054 4,156 Contract services and data processing
1,495 1,437 1,447
2,932 2,885 Amortization of
intangibles
1,655 1,602 1,045
3,257 2,098 FDIC
insurance
963 1,011 854
1,974 1,750 Restructuring
220 — —
220 — Other
4,254 3,846
3,113
8,100 6,054
Total operating expense
62,418 63,427
54,402
125,845
109,370 Income before income taxes
25,327 26,490
31,240
51,817 54,727 Income tax expense
8,000
8,572 10,333
16,572
17,471 Net income from continuing operations
17,327 17,918 20,907
35,245 37,256 Net income from
discontinued operations (1)
1,546 2,094
1,450
3,640 3,378
Net income before attribution to noncontrolling interests
18,873 20,012 22,357
38,885 40,634 Less: Net income
attributable to noncontrolling interests
1,263
1,229 1,025
2,492
2,261
Net income attributable to the Company $
17,610 $ 18,783 $ 21,332
$
36,393 $ 38,373
Boston
Private Financial Holdings, Inc. Selected Financial Data
(Unaudited) (In thousands, except share and per share data)
Three Months Ended Six Months Ended PER SHARE
DATA: 6/30/2015 3/31/2015
6/30/2014 6/30/2015
6/30/2014 Calculation of Income for
EPS: Net income attributable to the Company
$
17,610 $ 18,783 $ 21,332
$ 36,393 $ 38,373
Adjustments to Net Income Attributable to the Company to Arrive at
Net Income Attributable to Common Shareholders (2)
(1,064 ) (1,005 ) (1,195 )
(2,069 ) (2,256 )
Net Income Attributable
to the Common Shareholders 16,546 17,778 20,137
34,324 36,117 LESS: Amount allocated to participating
securities
(33 ) (60 ) (132 )
(92 ) (255 )
Net Income Attributable
to the Common Shareholders, after allocation to participating
securities $ 16,513 $ 17,718 $
20,005
$ 34,232 $ 35,862
End of Period Common Shares Outstanding 83,539,785
83,051,675 80,394,009
Weighted Average Shares
Outstanding: Weighted average basic shares, including
participating securities
81,074,380 80,983,916 79,195,082
81,029,398 79,151,765 LESS: Participating securities
(295,818 ) (469,557 ) (756,446 )
(382,207
) (859,044 ) PLUS: Dilutive potential common shares
2,259,919 2,079,966 1,859,789
2,181,638 1,866,121
Weighted Average Diluted Shares (3) 83,038,481
82,594,325 80,298,425
82,828,829 80,158,842
Diluted
Total Earnings per Share $ 0.20 $ 0.21 $ 0.25
$ 0.41 $ 0.45
Boston Private Financial Holdings, Inc. Selected
Financial Data (Unaudited) (In thousands, except per
share data)
FINANCIAL DATA: 6/30/2015
3/31/2015 6/30/2014 Book
Value Per Common Share
$ 8.14 $ 8.10 $ 7.65 Tangible
Book Value Per Share (4)
$ 5.89 $ 5.80 $ 6.05 Market
Price Per Share
$ 13.41 $ 12.15 $ 13.44
ASSETS UNDER MANAGEMENT AND ADVISORY: Wealth Management and
Trust
$ 9,028,000 $ 9,305,000 $ 4,716,000 Investment
Managers
10,695,000 10,730,000 10,917,000 Wealth Advisory
9,941,000 10,012,000 9,760,000 Less: Inter-company
Relationship
(22,000 ) (22,000 )
(23,000 ) Total Assets Under Management and Advisory
$
29,642,000 $ 30,025,000 $ 25,370,000
BPFH FINANCIAL RATIOS: Total Equity/ Total Assets
10.33 % 10.48 % 10.37 % Tangible Common Equity/
Tangible Assets (4)
7.17 % 7.22 % 7.77 % Tier I
Common Equity/ Risk Weighted Assets (4)
9.70 % 9.76 %
9.99 % Allowance for Loan Losses/ Total Loans
1.43 %
1.46 % 1.46 % Allowance for Loan Losses/ Nonaccrual Loans
262 % 240 % 179 % Return on Average Assets - Three
Months Ended (Annualized)
1.02 % 1.10 % 1.32 % Return
on Average Common Equity - Three Months Ended (Annualized) (5)
9.91 % 10.94 % 13.53 % Return on Average Tangible
Common Equity - Three Months Ended (Annualized) (5)
14.63
% 16.25 % 17.77 % Efficiency Ratio - Three Months Ended (6)
66.99 % 68.74 % 64.39 %
Boston
Private Financial Holdings, Inc. Selected Financial Data
(Unaudited) Average Balance Interest
Income/Expense Average Yield/Rate (In thousands)
Three Months Ended Three Months Ended Three Months
Ended AVERAGE BALANCE SHEET: 06/30/15
03/31/15
06/30/14 06/30/15
03/31/15 06/30/14
06/30/15 03/31/15
06/30/14 AVERAGE ASSETS
Interest-Earning Assets: Cash and Investments: Taxable investment
securities
$ 342,259 $ 320,373 $ 262,253
$
1,075 $ 995 $ 730
1.26 % 1.24 % 1.12 %
Non-taxable investment securities (7)
242,387 230,251
224,634
1,731 1,571 1,406
2.86 % 2.73 % 2.50 %
Mortgage-backed securities
538,688 516,032 332,928
2,775 2,614 1,689
2.06 % 2.03 % 2.03 % Federal
funds sold and other
90,616
147,999 187,722
282
234 253
1.23 %
0.64 % 0.62 % Total Cash and
Investments
1,213,950 1,214,655
1,007,537
5,863
5,414 4,078
1.93 %
1.78 % 1.64 % Loans (8): Commercial and
Construction (7)
2,874,547 2,851,801 2,856,603
30,013
31,366 33,397
4.13 % 4.40 % 4.62 % Residential
2,160,987 2,140,525 2,039,146
16,637 16,656 15,984
3.08 % 3.11 % 3.14 % Home Equity and Other Consumer
290,029 277,967
242,988
2,038 1,953
1,744
2.82 % 2.85
% 2.88 % Total Loans
5,325,563
5,270,293 5,138,737
48,688 49,975
51,125
3.63 % 3.80 % 3.95
% Total Earning Assets
6,539,513
6,484,948 6,146,274
54,551
55,389 55,203
3.32
% 3.42 % 3.57 % LESS: Allowance
for Loan Losses
77,938 77,039 79,071 Cash and due From Banks
(Non-Interest Bearing)
41,596 38,062 32,016 Other Assets
410,296 406,799
366,833
TOTAL AVERAGE ASSETS $
6,913,467 $ 6,852,770 $
6,466,052
AVERAGE LIABILITIES, REDEEMABLE NONCONTROLLING
INTERESTS, AND SHAREHOLDERS' EQUITY Interest-Bearing
Liabilities: Interest-Bearing Deposits: Savings and NOW
$
589,123 $ 599,695 $ 601,104
$ 87 $ 103 $ 111
0.06 % 0.07 % 0.07 % Money Market
2,754,817
2,812,827 2,509,400
2,551 2,596 1,994
0.37 %
0.37 % 0.32 % Certificates of Deposit
597,617
604,404 615,325
1,184 1,193 1,270
0.79 % 0.80 % 0.83 %
Total Interest-Bearing Deposits
3,941,557 4,016,926
3,725,829
3,822 3,892 3,375
0.39 % 0.39 % 0.36
% Junior Subordinated Debentures
106,363 106,363 106,363
967 956 965
3.60 % 3.59 % 3.59 % FHLB
Borrowings and Other
576,403
470,392 527,418
2,046
1,944 2,374
1.40 %
1.65 % 1.78 % Total Interest-Bearing
Liabilities
4,624,323 4,593,681
4,359,610
6,835
6,792 6,714
0.59 %
0.60 % 0.61 % Noninterest Bearing Demand
Deposits
1,443,228 1,422,202 1,334,791 Payables and Other
Liabilities
97,641 102,255
93,539 Total Average Liabilities
6,165,192 6,118,138 5,787,940 Redeemable Noncontrolling
Interests
22,760 22,748 23,850 Average Shareholders' Equity
725,515 711,884
654,262
TOTAL AVERAGE LIABILITIES, REDEEMABLE
NONCONTROLLING INTERESTS, AND SHAREHOLDERS' EQUITY $
6,913,467 $ 6,852,770 $
6,466,052 Net Interest Income - on a Fully Taxable Equivalent Basis
(FTE)
$ 47,716 $ 48,597 $ 48,489 LESS: FTE Adjustment
(7)
2,631 2,525
2,221 Net Interest Income (GAAP Basis)
$
45,085 $ 46,072 $ 46,268
Interest Rate Spread
2.73 % 2.82 % 2.96 % Bank only
Net Interest Margin
2.97 % 3.07 % 3.21 % Net Interest
Margin
2.90 % 3.00 % 3.14 %
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited) Average
Balance Interest Income/Expense Average
Yield/Rate (In thousands)
Six Months Ended Six Months
Ended Six Months Ended AVERAGE BALANCE
SHEET: 06/30/15
06/30/14 06/30/15
06/30/14 06/30/15
06/30/14 AVERAGE ASSETS Interest-Earning
Assets: Cash and Investments: Taxable investment securities
$ 331,565 $ 258,470
$ 2,070 $ 1,366
1.25 % 1.06 % Non-taxable investment securities (7)
236,352 224,346
3,301 2,797
2.79 % 2.49
% Mortgage-backed securities
527,423 336,982
5,389
3,625
2.04 % 2.15 % Federal funds sold and other
118,749 195,632
516 599
0.93 %
0.62 % Total Cash and Investments
1,214,089
1,015,430
11,276
8,387
1.87 % 1.66 % Loans (8):
Commercial and Construction (7)
2,863,237 2,845,103
61,379 64,317
4.26 % 4.50 % Residential
2,150,813 2,037,200
33,292 32,154
3.10
% 3.16 % Home Equity and Other Consumer
284,031 244,285
3,992
3,549
2.83 % 2.93
% Total Loans
5,298,081
5,126,588
98,663 100,020
3.71 % 3.89 % Total Earning Assets
6,512,170 6,142,018
109,939 108,407
3.37 %
3.52 % LESS: Allowance for Loan Losses
77,491
78,155 Cash and due From Banks (Non-Interest Bearing)
39,894
36,835 Other Assets
411,724
367,856
TOTAL AVERAGE ASSETS $ 6,886,297
$ 6,468,554
AVERAGE LIABILITIES, REDEEMABLE
NONCONTROLLING INTERESTS, AND SHAREHOLDERS' EQUITY
Interest-Bearing Liabilities: Interest-Bearing Deposits: Savings
and NOW
$ 594,380 $ 573,691
$ 191 $ 209
0.06 % 0.07 % Money Market
2,783,569 2,499,981
5,146 3,839
0.37 % 0.31 % Certificates of
Deposit
600,992 619,884
2,377 2,543
0.80 %
0.83 % Total Interest-Bearing Deposits
3,978,941
3,693,556
7,714 6,591
0.39 % 0.36 % Junior
Subordinated Debentures
106,363 106,363
1,923 1,920
3.60 % 3.59 % FHLB Borrowings and Other
523,691 517,198
3,990
4,717
1.52 % 1.81
% Total Interest-Bearing Liabilities
4,608,995
4,317,117
13,627
13,228
0.59 % 0.61 % Noninterest
Bearing Demand Deposits
1,434,460 1,380,285 Payables and
Other Liabilities
100,529
100,221 Total Average Liabilities
6,143,984 5,797,623
Redeemable Noncontrolling Interests
22,205 23,285 Average
Shareholders' Equity
720,108
647,646
TOTAL AVERAGE LIABILITIES, REDEEMABLE NONCONTROLLING
INTERESTS, AND SHAREHOLDERS' EQUITY $ 6,886,297
$ 6,468,554 Net Interest Income - on a Fully Taxable
Equivalent Basis (FTE)
$ 96,312 $ 95,179 LESS: FTE
Adjustment (7)
5,155 4,389 Net
Interest Income (GAAP Basis)
$ 91,157 $
90,790 Interest Rate Spread
2.78 % 2.91 % Bank only
Net Interest Margin
3.02 % 3.16 % Net Interest Margin
2.95 % 3.09 %
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited) (In thousands)
LOAN DATA (9): 6/30/2015
3/31/2015 6/30/2014 Commercial and Industrial
Loans: New England
$ 793,897 $ 786,334 $ 715,814 San
Francisco Bay
121,477 122,418 119,554 Southern California
87,038 58,086 47,095 Total Commercial
and Industrial Loans
$ 1,002,412 $ 966,838 $ 882,463
Commercial Real Estate Loans: New England
$ 728,820 $
684,395 $ 717,166 San Francisco Bay
629,258 601,305 626,744
Southern California
469,337 477,341
436,991 Total Commercial Real Estate Loans
$
1,827,415 $ 1,763,041 $ 1,780,901 Construction and Land
Loans: New England
$ 102,068 $ 91,764 $ 81,453 San
Francisco Bay
45,221 31,012 58,042 Southern California
13,637 14,318 10,927 Total Construction
and Land Loans
$ 160,926 $ 137,094 $ 150,422
Residential Loans: New England
$ 1,316,705 $
1,295,955 $ 1,231,902 San Francisco Bay
466,155 459,310
452,864 Southern California
392,648 387,771
354,306 Total Residential Loans
$ 2,175,508 $
2,143,036 $ 2,039,072 Home Equity Loans: New England
$
85,057 $ 82,716 $ 81,465 San Francisco Bay
30,013
29,835 27,804 Southern California
5,395 3,639
3,235 Total Home Equity Loans
$ 120,465 $
116,190 $ 112,504 Other Consumer Loans: New England
$
164,522 $ 156,042 $ 128,698 San Francisco Bay
6,793
7,245 6,917 Southern California
5,209 5,527
5,074 Total Other Consumer Loans
$ 176,524 $
168,814 $ 140,689 Total Loans: New England
$
3,191,069 $ 3,097,206 $ 2,956,498 San Francisco Bay
1,298,917 1,251,125 1,291,925 Southern California
973,264 946,682 857,628 Total Loans
$
5,463,250 $ 5,295,013 $ 5,106,051
Boston Private Financial Holdings,
Inc. Selected Financial Data (Unaudited) (In
thousands)
CREDIT QUALITY (9): 6/30/2015
3/31/2015 6/30/2014 Special
Mention Loans: New England
$ 53,626 $ 47,635 $ 55,882
San Francisco Bay
17,150 16,350 24,264 Southern California
5,659 22,161 26,455 Total
Special Mention Loans
$ 76,435 $ 86,146 $ 106,601
Accruing Substandard Loans (10): New England
$
16,666 $ 18,534 $ 12,849 San Francisco Bay
20,396
21,996 25,838 Southern California
24,554 5,472
1,306 Total Accruing Substandard Loans
$
61,616 $ 46,002 $ 39,993 Nonaccruing Loans: New
England
$ 17,943 $ 18,271 $ 19,818 San Francisco Bay
9,163 9,347 16,487 Southern California
2,785
4,515 5,315 Total Nonaccruing Loans
$
29,891 $ 32,133 $ 41,620 Other Real Estate Owned: New
England
$ 344 $ 344 $ 336 San Francisco Bay
585 585 585 Southern California
— —
— Total Other Real Estate Owned
$ 929 $
929 $ 921 Loans 30-89 Days Past Due and Accruing (11): New
England
$ 3,873 $ 18,236 $ 3,547 San Francisco Bay
110 3,398 487 Southern California
356
3,760 1,950 Total Loans 30-89 Days Past Due and
Accruing
$ 4,339 $ 25,394 $ 5,984 Loans
(Charged-off)/ Recovered, Net for the Three Months Ended: New
England
$ 106 $ 890 $ (622 ) San Francisco Bay
833 2,738 1,959 Southern California
49
297 1,605 Total Net Loans (Charged-off)/ Recovered
$ 988 $ 3,925 $ 2,942 Loans (Charged-off)/
Recovered, Net for the Six Months Ended: New England
$
996 $ (82 ) San Francisco Bay
3,571 2,599 Southern
California
346 1,859 Total Net Loans
(Charged-off)/ Recovered
$ 4,913 $ 4,376
Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited) FOOTNOTES: (1 ) Net income from
discontinued operations consists of contingent payments or expenses
related to our divested affiliates, including Davidson Trust
Company; Boston Private Value Investors, Inc.; Sand Hill Advisors,
LLC; RINET Company, LLC; Gibraltar Private Bank & Trust
Company; and Westfield Capital Management Company, LLC. (2 )
Adjustments to net income attributable to the Company to arrive at
net income attributable to the common shareholders, as presented in
these tables, include decrease/ (increase) in noncontrolling
interests redemption value, dividends paid on preferred stock, and
dividends on participating securities. (3 ) When the Company
has positive net income from continuing operations attributable to
the common shareholders, the Company adds additional shares to
basic weighted average shares outstanding to arrive at diluted
weighted average shares outstanding for the diluted earnings per
share calculation. These additional shares reflect the assumed
exercise, conversion, or contingent issuance of dilutive
securities. If the additional shares would result in anti-dilution
they would be excluded from the diluted earnings per share
calculation. The potential dilutive shares relate to: unexercised
stock options, unvested non-participating restricted stock, and
unexercised stock warrants. See Part II. Item 8. "Financial
Statements and Supplementary Data - Note 16: Earnings Per Share" in
the Company's Annual Report on Form 10-K for the year ended
December 31, 2014 for additional information. (4 ) The
Company uses certain non-GAAP financial measures, such as: Tangible
Book Value Per Share and the Tangible Common Equity ("TCE") to
Tangible Assets ("TA") ratio to provide information for investors
to effectively analyze financial trends of ongoing business
activities, and to enhance comparability with peers across the
financial sector. Reconciliations from the Company's GAAP Total
Equity to Total Assets ratio to the Non-GAAP TCE to TA ratio, and
from GAAP Book Value to Non-GAAP Tangible Book Value are 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 non-convertible Series D Preferred stock and exclude
Goodwill and Intangible Assets, net. (In thousands, except per
share data)
6/30/2015 3/31/2015
6/30/2014 Total Balance Sheet Assets
$ 7,045,939 $ 6,869,772 $ 6,388,823 LESS: Goodwill
and Intangible Assets, net
(188,543 )
(190,198 ) (128,686 ) Tangible Assets (non-GAAP)
$
6,857,396 $ 6,679,574 $ 6,260,137 Total Shareholders' Equity
$ 728,085 $ 720,059 $ 662,651 LESS: Series D
Preferred Stock (non-convertible)
(47,753 ) (47,753 )
(47,753 ) LESS: Goodwill and Intangible Assets, net
(188,543 ) (190,198 ) (128,686 ) Total
adjusting items
(236,296 ) (237,951 )
(176,439 ) Tangible Common Equity (non-GAAP)
$
491,789 $ 482,108 $ 486,212 Total
Equity/Total Assets
10.33 % 10.48 % 10.37 % Tangible
Common Equity/Tangible Assets (non-GAAP)
7.17 % 7.22
% 7.77 % Total Risk Weighted Assets *
$
5,312,412 $ 5,159,205 $ 4,923,431 Tier I Common Equity *
$ 515,546 $ 503,323 $ 491,982 Tier I Common Equity/
Risk Weighted Assets
9.70 % 9.76 % 9.99 % End
of Period Shares Outstanding
83,540 83,052 80,394
Book Value Per Common Share
$ 8.14 $ 8.10 $ 7.65
Tangible Book Value Per Share (non-GAAP)
$ 5.89 $
5.80 $ 6.05 * Risk Weighted Assets and Tier I Common Equity for
June 30, 2015 are presented based on estimated data. (5 )
The Company uses certain non-GAAP financial measures, such as:
Return on Average Common Equity and Return on Average Tangible
Common Equity to provide information for investors to effectively
analyze financial trends of ongoing business activities, and to
enhance comparability with peers across the financial sector.
Reconciliations from the Company's GAAP Return on Average Equity
ratio to the Non-GAAP Return on Average Common Equity ratio, and
the Non-GAAP Return on Average Tangible Common Equity ratio are
presented below: The Company annualizes income data based on the
number of days in the period presented and a 365 day year. The
Company calculates Average Common Equity by adjusting Average
Equity to exclude Average Preferred Equity. The Company calculates
Average Tangible Common Equity by adjusting Average Equity to
exclude Average Goodwill and Intangible Assets, net and Average
Preferred Equity.
Three Months Ended Six months ended
(In thousands)
6/30/2015
3/31/2015 6/30/2014
6/30/2015 6/30/2014 Total
average shareholders' equity
$ 725,515 $ 711,884 $
654,262 $ 720,108 $ 647,646 LESS: Average Series D preferred stock
(non-convertible)
(47,753 ) (47,753 )
(47,753 ) (47,753 ) (47,753 ) Average common
equity (non-GAAP)
677,762 664,131
606,509 672,355 599,893
LESS: Average goodwill and intangible assets, net
(189,420 ) (191,053 ) (129,216 )
(190,233 ) (129,742 ) Total adjusting items
(189,420 ) (191,053 ) (129,216 )
(190,233 ) (129,742 ) Average Tangible Common Equity
(non-GAAP)
$ 488,342 $ 473,078 $
477,293 $ 482,122 $ 470,151 Net income
attributable to the Company
$ 17,610 $ 18,783 $
21,332 $ 36,393 $ 38,373 LESS: Dividends on Series D preferred
stock
(869 ) (869 ) (869 )
(1,738 ) (1,738 ) Common net income (non-GAAP)
16,741 17,914 20,463 34,655 36,635 ADD: Amortization of
intangibles, net of tax (35%)
1,076
1,041 679 2,117 1,364
Tangible common net income (non-GAAP)
$ 17,817
$ 18,955 $ 21,142 $ 36,772 $ 37,999
Return on Average Equity - (Annualized)
9.74
% 10.70 % 13.08 % 10.19 % 11.95 % Return on Average Common
Equity - (Annualized) (non-GAAP)
9.91 % 10.94 % 13.53
% 10.39 % 12.32 % Return on Average Tangible Common Equity -
(Annualized) (non-GAAP)
14.63 % 16.25 % 17.77 % 15.38
% 16.30 % (6 ) The Company uses certain non-GAAP financial
measures, such as: pre-tax, pre-provision earnings and the
efficiency ratio to provide information for investors to
effectively analyze financial trends of ongoing business
activities, and to enhance comparability with peers across the
financial sector. Reconciliations from the Company's GAAP income
from continuing operations before income taxes to non-GAAP pre-tax,
pre-provision earnings; and from GAAP efficiency ratio to Non-GAAP
efficiency ratio (FTE basis), excluding restructuring, are
presented below:
Three Months Ended Six months ended
(In thousands)
6/30/2015
3/31/2015 6/30/2014
6/30/2015 6/30/2014 Income
before income taxes (GAAP)
$ 25,327 $ 26,490 $ 31,240
$ 51,817 $ 54,727 ADD BACK: Provision/ (credit) for
loan losses
— (2,500 ) (5,000 )
(2,500 ) (6,200 ) Pre-tax,
pre-provision earnings (non-GAAP)
$ 25,327 $ 23,990 $
26,240
$ 49,317 $ 48,527 Total operating
expense (GAAP)
$ 62,418 $ 63,427 $ 54,402
$
125,845 $ 109,370 Less: Amortization of intangibles
1,655 1,602 1,045
3,257 2,098 Less: Restructuring
220 — —
220 — Total operating expense
(excluding amortization of intangibles and restructuring)
(non-GAAP)
$ 60,543 $ 61,825 $ 53,357
$
122,368 $ 107,272 Net interest income
$
45,085 $ 46,072 $ 46,268
$ 91,157 $ 90,790
Total core fees and income
40,347 40,160 34,147
80,507 65,811 Total other income
2,313 1,185 227
3,498 1,296 FTE income
2,631
2,525 2,221
5,155
4,389 Total revenue (FTE basis)
$ 90,376 $
89,942 $ 82,863
$ 180,317 $ 162,286 Efficiency Ratio,
before deduction of intangible amortization (GAAP)
71.14
% 72.56 % 67.46 %
71.84 % 69.27 % Efficiency
Ratio, FTE Basis (non-GAAP)
66.99 % 68.74 % 64.39 %
67.86 % 66.10 % (7 ) Interest Income on
Non-taxable Investments and Loans are presented on an FTE basis
using the federal statutory rate of 35% for each period presented.
(8 ) Includes Loans Held for Sale and Nonaccrual Loans.
(9 ) The concentration of the Private Banking loan data and
credit quality is primarily based on the location of the lender's
regional offices. (10 ) Accruing substandard loans include
loans that are classified as substandard but are still accruing
interest income. Boston Private Bank & Trust Company may
classify a loan as substandard where known information 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 nonaccrual at some time in the future. (11 )
In addition to loans 30-89 days past due and accruing, at June 30,
2015 and March 31, 2015 the Company had no loans that were more
than 90 days past due but still on accrual status. At June 30,
2014, the Company had two loans totaling $0.1 million that were
more than 90 days past due but still on accrual status. These loans
originated in the New England region.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150715006435/en/
Boston Private Financial Holdings, Inc.Steven Gaven,
617-912-3793Vice President Corporate Finance and Director of
Investor Relationssgaven@bostonprivate.com
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