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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Boston Private Financial Holdings Inc | NASDAQ:BPFH | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 14.75 | 7.79 | 14.97 | 0 | 01:00:00 |
Third Quarter 2019 Highlights include:
Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported third quarter 2019 Net income attributable to the Company of $20.0 million, compared to $19.4 million for the second quarter of 2019 and $18.0 million for the third quarter of 2018. Third quarter 2019 Diluted earnings per share were $0.24, compared to $0.22 in the second quarter of 2019 and $0.20 in the third quarter of 2018.
"Our team is making strong progress building a platform to support the growth initiatives we shared during our Investor Day," said Anthony DeChellis, CEO of Boston Private. "Our third quarter results reflect disciplined expense management in a challenging net interest income environment, as we position our businesses to be more cohesive and competitive.
"This quarter, we welcomed John Longley as the President of the Western Region and Pat Dwyer as the Head of Strategic Business Development to help drive growth across the company. We also completed the formal integration of Boston Private Wealth and KLS Professional Advisors, a key milestone towards simplifying the BPFH business model and scaling Boston Private's ability to compete at the highest levels of the financial services industry."
Summary Financial Results - Reported
% Change
($ in millions, except for per share data)
3Q19
2Q19
3Q18
LQ
Y/Y
Net income
$20.0
$19.4
$18.0
3%
11%
Diluted earnings per share
$0.24
$0.22
$0.20
9%
20%
Non-GAAP Financial Measures:
Pre-tax, pre-provision income
$25.7
$26.2
$23.4
(2)%
10%
Return on average common equity ("ROACE")
9.8%
9.8%
9.7%
Return on average tangible common equity ("ROATCE")
11.0%
11.1%
11.4%
The Company's reported financial results increased year-over-year primarily as a result of a $5.8 million restructuring expense during the third quarter of 2018.
In addition to presenting the Company’s results in conformity with GAAP, the Company uses certain non-GAAP financial measures to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. For additional information on non-GAAP measures, see page 6. A reconciliation of GAAP to non-GAAP results can be found beginning on page 17.
Summary Financial Results - Operating Basis (non-GAAP)
% Change
($ in millions, except for per share data)
3Q19
2Q19
3Q181
LQ
Y/Y
Net income
$20.0
$19.4
$22.5
3%
(11)%
Diluted earnings per share
$0.24
$0.22
$0.25
9%
(5)%
Pre-tax, pre-provision income
$25.7
$26.2
$29.2
(2)%
(12)%
Return on average common equity
9.8%
9.8%
12.1%
Return on average tangible common equity
11.0%
11.1%
14.2%
1 3Q18 results adjusted to exclude the impact of $5.8 million restructuring expense, net of $1.2 million tax effect
Divested Affiliates
The Company completed the sale of Bingham, Osborn & Scarborough LLC ("BOS") during 2018. Financial results from BOS remain consolidated in the Company's financial results through the closing date of December 3, 2018.
For presentation purposes, BOS's AUM is excluded from AUM amounts, but is included in the calculation of Core fees and income. The discussion below includes non-GAAP measures that exclude the contributions from BOS in order to enhance comparability of trends in the core business.
Net Interest Income and Margin
% Change
($ in millions)
3Q19
2Q19
3Q18
LQ
Y/Y
Net interest income
$56.2
$57.5
$59.6
(2)%
(6)%
Less: Interest recovered on previous nonaccrual loans
0.2
—
1.0
nm
nm
Core net interest income (non-GAAP)
$56.0
$57.5
$58.7
(3)%
(5)%
Net interest margin
2.72
%
2.78
%
2.90
%
Core net interest margin (non-GAAP)
2.71
%
2.78
%
2.90
%
nm = not meaningful
Net interest income for the third quarter of 2019 was $56.2 million, a decrease of 2% linked quarter and 6% year-over-year. Core net interest income, which excludes interest recovered on previous nonaccrual loans, decreased 3% linked quarter and 5% year-over-year. The linked quarter decrease was primarily driven by the repricing of variable rate loans and lower interest-earning asset volumes, partially offset by lower borrowing volumes.
The Company’s Core net interest margin, which excludes interest recovered on previous nonaccrual loans, decreased 7 basis points on a linked quarter basis to 2.71%, primarily driven by lower interest-earning asset yields and higher deposit costs, partially offset by lower borrowing volumes.
Noninterest Income
% Change
($ in millions)
3Q19
2Q19
3Q18
LQ
Y/Y
Wealth management and trust fees
$19.1
$18.9
$25.5
1%
(25)%
Investment management fees
2.5
2.5
3.2
2%
(23)%
Private banking fees 2
3.6
2.9
2.8
23%
26%
Total core fees and income
$25.2
$24.3
$31.6
4%
(20)%
Total other income
—
0.1
0.7
(100)%
(100)%
Total noninterest income
$25.1
$24.4
$32.3
3%
(22)%
Memo: Excluding BOS
Wealth management and trust fees (non-GAAP) 3
$19.1
$18.9
$19.6
1%
(3)%
Investment management fees
2.5
2.5
3.2
2%
(23)%
Private banking fees
3.6
2.9
2.8
23%
26%
Total core fees and income (non-GAAP) 3
$25.2
$24.3
$25.7
4%
(2)%
Total other income
—
0.1
0.7
(100)%
(100)%
Total noninterest income (non-GAAP) 3
$25.1
$24.4
$26.4
3%
(5)%
2 Private banking fees includes Other banking fee income and Gain/ (loss) on sale of loans, net 3 Excludes BOS revenue of $5.9 million in 3Q18
As previously announced, KLS and Boston Private Wealth LLC now operate as a single registered investment advisor ("RIA"). Revenue from the RIA, the legacy affiliates, and the trust operations of Boston Private Bank & Trust Company is included as Wealth management and trust fees during the current period and all prior periods.
Total core fees and income for the third quarter of 2019 was $25.2 million, a 4% increase linked quarter, primarily driven by a gain on sale of loans associated with the sale of approximately $90 million of mortgage loans. The 20% decline year-over-year was primarily driven by the divestiture of BOS.
Excluding BOS, Total core fees and income (non-GAAP) decreased 2% year-over-year, primarily driven by lower Investment Management fees and Wealth management and trust fees as a result of negative net flows.
Assets Under Management / Advisory
% Change
($ in millions)
3Q19
2Q19
3Q18
LQ
Y/Y
Wealth Management and Trust
$14,695
$14,649
$15,598
—%
(6)%
Other 4
1,533
1,550
2,125
(1)%
(28)%
Total assets under management / advisory
$16,228
$16,199
$17,723
—%
(8)%
4 Includes results from Dalton, Greiner, Hartman, Maher & Co, LLC ("DGHM")
Total assets under management / advisory were $16.2 billion at the end of the third quarter of 2019, flat linked quarter and a decrease of 8% year-over-year. The linked quarter comparison was impacted by positive market action partially offset by negative net flows, while the year-over-year decrease was primarily driven by negative net flows in excess of positive market action.
Total net flows were negative $137 million during the third quarter of 2019, of which $100 million were attributable to the Wealth Management & Trust segment.
Noninterest Expense
% Change
($ in millions)
3Q19
2Q19
3Q18
LQ
Y/Y
Salaries and employee benefits
$31.7
$32.7
$38.9
(3)%
(19)%
Occupancy and equipment
8.3
7.9
8.2
5%
1%
Professional services
4.4
3.3
2.9
34%
54%
Marketing and business development
1.4
1.9
1.7
(27)%
(18)%
Information systems
5.2
5.1
6.2
1%
(17)%
Amortization of intangibles
0.7
0.7
0.8
—%
(11)%
FDIC insurance
0.1
0.6
0.7
(90)%
(91)%
Restructuring
—
—
5.8
—%
(100)%
Other
3.9
3.5
3.4
11%
12%
Total noninterest expense
$55.5
$55.7
$68.6
—%
(19)%
Memo: Excluding Notable Items5 and BOS
Restructuring
—
—
5.8
—%
(100)%
BOS noninterest expense
—
—
4.0
—%
(100)%
Total noninterest expense (non-GAAP)
$55.5
$55.7
$58.8
—%
(6)%
5 "Notable Items" include a $5.8 million restructuring expense in 3Q18
Total noninterest expense was flat linked quarter as lower salaries and employee benefits expense, marketing and business development expense, and an FDIC insurance assessment credit offset higher professional services expense and higher occupancy and equipment expense.
Excluding Notable Items and BOS, Total noninterest expense (non-GAAP) for the third quarter of 2019 was $55.5 million, flat linked quarter and down 6% year-over-year. The year-over-year decline was primarily attributable to efficiency initiatives primarily impacting compensation and technology.
Income Tax Expense
The Company's effective tax rate for the third quarter of 2019 was 21.6%.
Loans and Deposits - QTD Averages
% Change
($ in millions)
3Q19
2Q19
3Q18
LQ
Y/Y
Commercial and industrial
$1,102
$1,092
$999
1%
10%
Commercial real estate
2,518
2,507
2,475
—%
2%
Construction and land
196
203
179
(3)%
9%
Residential
3,016
3,009
2,837
—%
6%
Home equity
89
91
94
(3)%
(5)%
Other consumer
128
125
163
3%
(22)%
Total loans
$7,049
$7,026
$6,747
—%
4%
Non-interest bearing deposits
1,953
1,927
2,064
1%
(5)%
Interest bearing deposits
4,705
4,664
4,668
1%
1%
Total deposits
$6,658
$6,591
$6,732
1%
(1)%
Non-interest bearing deposits as a % of Total deposits
29%
29%
31%
Average total loans in the third quarter of 2019 increased 4% year-over-year, primarily driven by increases in Residential loans and Commercial and industrial loans. End of period residential loans declined $62 million linked quarter to $3.0 billion following a loan sale of approximately $90 million that was completed in September of 2019.
Average total deposits decreased 1% year-over-year, primarily driven by a decline in demand deposit accounts, partially offset by growth in money market accounts and certificates of deposits.
The cost of total deposits was 0.92%, an increase of 4 basis points linked quarter and 24 basis points year-over-year.
Provision and Asset Quality
($ in millions)
3Q19
2Q19
1Q19
4Q18
3Q18
Provision/ (credit) for loan loss
$0.2
$1.4
$(1.4)
$0.1
$(0.9)
Total criticized and classified loans
139.0
141.7
141.3
146.6
134.7
Total nonaccrual loans
17.6
17.2
12.0
14.1
12.1
Total loans 30-89 days past due and accruing
4.2
2.4
17.7
22.3
11.6
Total net loans (charged-off)/ recovered
0.1
(0.1)
(0.1)
1.7
1.0
Ratios:
Allowance for loan losses as a % of Total loans
1.07%
1.06%
1.07%
1.09%
1.09%
Nonaccrual loans as a % of Total loans
0.25%
0.24%
0.17%
0.20%
0.18%
The Company recorded a provision expense of $0.2 million for the third quarter of 2019, compared to a provision expense of $1.4 million for the second quarter of 2019 and a provision credit of $0.9 million in the third quarter of 2018. The provision expense in the third quarter of 2019 was primarily driven by required reserves for criticized and classified loans, partially offset by lower reserves for pass-rated loans.
Total criticized loans as of September 30, 2019 was $139.0 million, a 2% decline linked quarter and an increase of 3% year-over-year. Total nonaccrual loans as of September 30, 2019 was $17.6 million, or 25 basis points of Total loans, compared to $17.2 million, or 24 basis points of total loans as of June 30, 2019, and $12.1 million, or 18 basis points of Total loans as of September 30, 2018.
Capital
($ in millions, except for per share data)
3Q19
2Q19
1Q19
4Q18
3Q18
Tangible common equity/ Tangible assets (non-GAAP)
8.6%
8.4%
8.3%
8.1%
7.8%
Tangible book value per share (non-GAAP)
$8.90
$8.71
$8.47
$8.18
$7.67
Regulatory Capital Ratios: 6
Tier 1 common equity
11.2%
11.2%
11.4%
11.4%
11.1%
Total risk-based capital
13.9%
13.9%
14.2%
14.3%
14.1%
Tier 1 risk-based capital
12.8%
12.7%
13.0%
13.0%
12.8%
Tier 1 leverage capital
9.7%
9.6%
9.7%
9.5%
9.2%
Common Equity Repurchase Program:
Total shares of common stock repurchased
678,165
—
—
1,505,521
137,144
Average price paid per share of common stock
$10.61
—
—
$12.02
$13.89
Aggregate repurchases of common equity ($ in millions)
$7.2
—
—
$18.1
$1.9
6 Current quarter information is presented based on estimated data.
During the third quarter of 2019, the Company implemented a $20 million share repurchase program and repurchased 678,165 shares of common stock at an average cost of $10.61 per share. $12.8 million remains available to be repurchased under the current program.
Tangible book value per share as of September 30, 2019 increased 2% linked quarter and 16% year-over-year to $8.90. The linked quarter increase in Tangible book value per share was primarily driven by increased retained earnings and higher accumulated other comprehensive income related to unrealized securities gains, partially offset by common share repurchases.
EPS Calculation
For calculation of income for EPS, third quarter 2019 Net income attributable to the common shareholders was positively impacted by $0.3 million related to the change in value of Redeemable noncontrolling interests (“RNCI”).
Dividend Payments
Concurrent with the release of third quarter 2019 earnings, the Board of Directors of the Company declared a cash dividend payable to common shareholders of $0.12 per share. The record date for this dividend is November 8, 2019, and the payment date is November 22, 2019.
Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.
These non-GAAP financial measures include: return on average common equity; return on average tangible common equity; pre-tax, pre-provision income; net interest income and net interest margin excluding interest recovered on previous nonaccrual loans, also referred to as core net interest income, and core net interest margin, respectively; tangible common equity / tangible assets, total noninterest expense excluding intangibles and restructuring, if any; the efficiency ratio excluding amortization and intangibles, and restructuring, if any; net income attributable to the Company excluding notable items; net income attributable to the common shareholders, treasury stock method, excluding notable items; diluted earnings per share excluding notable items; operating basis total revenue; operating basis total noninterest expenses
A detailed reconciliation table of the Company’s GAAP to non-GAAP measures is included in the tables of this release and beginning on page 17 of the attached financial statements.
Conference Call
Management will hold a conference call at 8:00 a.m. Eastern Time on Friday, October 25, 2019, to discuss the financial results, business highlights and outlook. To access the call:
Dial In #: (888) 317-6003
Elite Entry Number: 9751347
Replay Information:
Available from October 25, 2019 at 12:00 p.m Eastern Time until November 1, 2019
Dial In #: (877) 344-7529
Conference Number: 10135524
The call will be simultaneously webcast and may be accessed on www.bostonprivate.com.
About Boston Private
Boston Private Financial Holdings, Inc. is a national financial services organization that owns Wealth Management, Trust, and Commercial and Private Banking affiliates with offices in Boston, New York, Los Angeles, San Francisco, San Jose, and Florida. The Company has total assets of greater than $8 billion, and manages over $16 billion of client assets.
The Company’s affiliates 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.bostonprivate.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 business 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; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; 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.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Balance Sheet
Unaudited ($ in thousands, except share and per share data)
3Q19
2Q19
1Q19
4Q18
3Q18
ASSETS:
Cash and cash equivalents
$
78,010
$
65,756
$
96,211
$
127,259
$
92,634
Investment securities available-for-sale
935,538
966,731
981,951
994,065
1,056,261
Investment securities held-to-maturity
51,379
54,482
67,548
70,438
75,468
Equity securities at fair value
21,780
19,092
7,491
14,228
7,079
Stock in Federal Home Loan Bank and Federal Reserve Bank
47,756
64,453
47,053
49,263
48,727
Loans held for sale
6,658
3,640
280
2,812
3,344
Loans
7,067,151
7,080,260
6,926,968
6,893,158
6,720,420
Less: Allowance for loan losses
75,359
75,067
73,814
75,312
73,500
Loans, net of allowance for loan losses
6,991,792
7,005,193
6,853,154
6,817,846
6,646,920
Other real estate owned (“OREO”)
—
—
—
401
108
Premises and equipment, net
42,658
40,244
42,938
45,412
47,399
Goodwill 7
57,607
57,607
57,607
57,607
75,598
Intangible assets, net 7
10,622
10,884
11,555
12,227
13,834
Accrued interest receivable
24,851
26,411
25,935
24,366
24,641
Deferred income taxes, net
15,704
17,183
22,844
26,638
27,833
Right-of-use assets
107,045
110,880
104,644
—
—
Other assets 7
299,544
270,317
252,932
252,063
255,994
TOTAL ASSETS
$
8,690,944
$
8,712,873
$
8,572,143
$
8,494,625
$
8,375,840
LIABILITIES:
Deposits
$
6,658,242
$
6,437,963
$
6,779,845
$
6,781,170
$
6,768,723
Securities sold under agreements to repurchase
48,860
62,372
58,329
36,928
39,453
Federal funds purchased
230,000
135,000
—
250,000
120,000
Federal Home Loan Bank borrowings
570,904
920,068
615,070
420,144
441,836
Junior subordinated debentures
106,363
106,363
106,363
106,363
106,363
Lease liabilities
122,799
126,740
120,162
—
—
Other liabilities 7
143,607
124,370
112,893
143,540
149,770
TOTAL LIABILITIES
7,880,775
7,912,876
7,792,662
7,738,145
7,626,145
REDEEMABLE NONCONTROLLING INTEREST (“RNCI”)
1,481
1,786
662
2,526
11,686
SHAREHOLDERS' EQUITY:
Common stock, $1.00 par value; authorized: 170,000,000 shares
83,242
83,774
83,774
83,656
84,603
Additional paid-in capital
599,877
603,869
604,288
600,196
614,157
Retained earnings
116,210
106,443
97,155
87,821
64,618
Accumulated other comprehensive income/ (loss)
9,359
4,125
(6,398
)
(17,719
)
(27,578
)
TOTAL COMPANY'S SHAREHOLDERS' EQUITY
808,688
798,211
778,819
753,954
735,800
Noncontrolling interests
—
—
—
—
2,209
TOTAL SHAREHOLDERS' EQUITY
808,688
798,211
778,819
753,954
738,009
TOTAL LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY
$
8,690,944
$
8,712,873
$
8,572,143
$
8,494,625
$
8,375,840
7 On December 3, 2018, the Company completed the sale of its ownership interest in BOS to the management team of BOS for an upfront cash payment and an eight-year revenue sharing agreement with BOS. For regulatory purposes, the goodwill and intangible assets of BOS are included in consolidated calculations through the closing date.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Income Statement
Unaudited ($ in thousands, except share and per share data)
3Q19
2Q19
1Q19
4Q18
3Q18
REVENUE:
Interest income
$
77,604
$
78,728
$
76,824
$
76,892
$
76,101
Interest expense
21,451
21,268
18,486
16,895
16,460
Net interest income
56,153
57,460
58,338
59,997
59,641
Provision/ (credit) for loan losses
167
1,363
(1,426
)
93
(949
)
Net interest income after provision/ (credit) for loan losses
55,986
56,097
59,764
59,904
60,590
Wealth management and trust fees 8
19,067
18,912
19,058
23,788
25,505
Investment management fees
2,496
2,455
2,650
2,831
3,245
Private banking fee income
2,658
2,867
2,499
2,033
2,775
Gain on sale of loans, net
934
58
73
39
67
Total core fees and income
25,155
24,292
24,280
28,691
31,592
Total other income
(29
)
88
968
17,154
722
TOTAL REVENUE 9
81,279
81,840
83,586
105,842
91,955
NONINTEREST EXPENSE:
Salaries and employee benefits
31,684
32,706
35,726
36,007
38,944
Occupancy and equipment
8,260
7,852
8,348
7,975
8,164
Professional services
4,435
3,313
3,560
4,229
2,877
Marketing and business development
1,403
1,934
1,085
2,275
1,710
Information systems
5,169
5,137
5,860
6,296
6,233
Amortization of intangibles
671
672
672
680
750
FDIC insurance
59
585
660
739
674
Restructuring
—
—
1,646
2,065
5,763
Other
3,856
3,460
2,996
3,291
3,442
TOTAL NONINTEREST EXPENSE
55,537
55,659
60,553
63,557
68,557
INCOME BEFORE INCOME TAXES
25,575
24,818
24,459
42,192
24,347
Provision for income taxes
5,517
5,369
4,917
8,651
5,461
Net income from continuing operations
20,058
19,449
19,542
33,541
18,886
Net income from discontinued operations 10
—
—
—
306
—
Net income before attribution to noncontrolling interests
20,058
19,449
19,542
33,847
18,886
Less: Net income attributable to noncontrolling interests
96
69
100
545
924
NET INCOME ATTRIBUTABLE TO THE COMPANY
$
19,962
$
19,380
$
19,442
$
33,302
$
17,962
Adjustments, treasury stock method 11
304
(816
)
1,557
2,694
(829
)
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS
$
20,266
$
18,564
$
20,999
$
35,996
$
17,133
COMMON SHARE DATA:
Weighted average basic shares outstanding
83,631,403
83,565,780
83,285,095
83,750,785
84,017,284
Weighted average diluted shares outstanding 12
83,956,708
84,048,972
84,010,450
84,863,779
85,498,568
Diluted total earnings per share
$
0.24
$
0.22
$
0.25
$
0.42
$
0.20
8 Wealth management and trust fees consists of revenue from Boston Private Wealth LLC, KLS Professional Advisors, BOS, and the trust operations of Boston Private Bank & Trust Company
9 Total revenue is the sum of Net interest income, Total core fees and income, and Total other income.
10 Net income from discontinued operations consists of contingent payments, net of expenses, related to a divested affiliate, Westfield Capital Management Company, LLC. The Company received its final contingent payment in the first quarter of 2018 related to this affiliate and a tax benefit related to deferred taxes in the fourth quarter of 2018
11 Adjustments to Net income attributable to the Company to arrive at Net income attributable to common shareholders, treasury stock method, as presented in these tables, include decrease/ (increase) in Noncontrolling interests redemption value.
12 For a description of the Company's policies regarding Diluted earnings per share, please refer to 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, 2018.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Income Statement
Unaudited ($ in thousands, except share and per share data)
Nine months ended September 30,
2019
2018
REVENUE:
Interest income
$
233,156
$
216,012
Interest expense
61,205
41,443
Net interest income
171,951
174,569
Provision/ (credit) for loan losses
104
(2,291
)
Net interest income after provision/ (credit) for loan losses
171,847
176,860
Wealth management and trust fees 8
57,037
76,030
Investment management fees
7,601
18,897
Private banking fee income
8,024
7,793
Gain on sale of loans, net
1,065
204
Total core fees and income
73,727
102,924
Total other income
1,027
1,228
TOTAL REVENUE 9
246,705
278,721
NONINTEREST EXPENSE:
Salaries and employee benefits
100,116
125,461
Occupancy and equipment
24,460
24,141
Professional services
11,308
8,926
Marketing and business development
4,422
5,373
Information systems
16,166
18,889
Amortization of intangibles
2,015
2,249
FDIC insurance
1,304
2,126
Restructuring
1,646
5,763
Other
10,312
10,870
TOTAL NONINTEREST EXPENSE
171,749
203,798
INCOME BEFORE INCOME TAXES
74,852
77,214
Income tax expense
15,803
28,886
Net income from continuing operations
59,049
48,328
Net income from discontinued operations 10
—
1,696
Net income before attribution to noncontrolling interests
59,049
50,024
Less: Net income attributable to noncontrolling interests
265
2,942
NET INCOME ATTRIBUTABLE TO THE COMPANY
$
58,784
$
47,082
Adjustments, treasury stock method 11
1,045
(4,376
)
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS
$
59,829
$
42,706
COMMON SHARE DATA
Weighted average basic shares outstanding
83,495,361
83,544,754
Weighted average diluted shares outstanding 12
84,003,281
85,254,295
Diluted total earnings per share
$
0.71
$
0.50
8 Wealth management and trust fees consists of revenue from Boston Private Wealth LLC, KLS Professional Advisors, BOS, and the trust operations of Boston Private Bank & Trust Company
9 Total revenue is the sum of Net interest income, Total core fees and income, and Total other income.
10 Net income from discontinued operations consists of contingent payments, net of expenses, related to a divested affiliate, Westfield Capital Management Company, LLC. The Company received its final contingent payment in the first quarter of 2018 related to this affiliate and a tax benefit related to deferred taxes in the fourth quarter of 2018
11 Adjustments to Net income attributable to the Company to arrive at Net income attributable to common shareholders, treasury stock method, as presented in these tables, include decrease/ (increase) in Noncontrolling interests redemption value and dividends paid on preferred stock, if any, including deemed dividends on redemption of the 6.95% non-cumulative perpetual preferred stock, Series D (“the Series D preferred stock”), if any. On June 15, 2018, the Company redeemed all $50 million of the outstanding Series D preferred stock.
12 For a description of the Company's policies regarding Diluted earnings per share, please refer to Part II. Item 8. “Financial Statements and Supplementary Data - Note 16: Earnings Per Share” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Financial Highlights
Unaudited ($ in thousands, except share and per share data)
3Q19
2Q19
1Q19
4Q18
3Q18
KEY STATISTICS:
Return on average assets (non-GAAP) 13
0.91
%
0.90
%
0.93
%
1.56
%
0.84
%
ROACE (non-GAAP) 13
9.80
%
9.83
%
10.29
%
17.87
%
9.67
%
ROATCE (non-GAAP) 13
10.99
%
11.06
%
11.63
%
20.46
%
11.37
%
Efficiency ratio (non-GAAP) 13
67.5
%
67.2
%
69.7
%
57.1
%
67.0
%
Noninterest income to total revenue
30.9
%
29.8
%
30.2
%
43.3
%
35.1
%
Net interest margin
2.72
%
2.78
%
2.90
%
2.94
%
2.90
%
Average loan to average deposit ratio
105.9
%
106.6
%
101.6
%
98.0
%
100.2
%
Cost of total deposits
0.92
%
0.88
%
0.84
%
0.77
%
0.68
%
Cost of interest-bearing deposits
1.31
%
1.25
%
1.19
%
1.11
%
0.98
%
Cost of total funding
1.12
%
1.11
%
1.00
%
0.89
%
0.86
%
Allowance for Loan Loss / Total Loans
1.07
%
1.06
%
1.07
%
1.09
%
1.09
%
Nonperforming loans / Total Loans
0.25
%
0.24
%
0.17
%
0.20
%
0.18
%
Net (charge-offs) / recoveries / Total loans 13
0.01
%
(0.01
)%
—
%
0.10
%
0.06
%
CAPITAL HIGHLIGHTS:
Tier 1 common equity 14
$
732,980
$
726,872
$
717,138
$
702,728
$
674,641
Tier 1 capital 14
$
833,431
$
827,299
$
817,600
$
803,311
$
776,328
Total capital 14
$
910,076
$
903,675
$
892,764
$
879,927
$
851,399
Risk-weighted assets ("RWA") 14
$
6,533,882
$
6,491,184
$
6,304,444
$
6,161,677
$
6,057,002
Average assets for leverage 14
$
8,588,358
$
8,617,803
$
8,447,143
$
8,416,195
$
8,436,411
TIer 1 common equity ratio 14
11.22
%
11.20
%
11.38
%
11.40
%
11.14
%
Tier 1 ratio 14
12.76
%
12.74
%
12.97
%
13.04
%
12.82
%
Total capital ratio 14
13.93
%
13.92
%
14.16
%
14.28
%
14.06
%
Leverage ratio 14
9.70
%
9.60
%
9.68
%
9.54
%
9.20
%
Total equity / Total assets
9.30
%
9.16
%
9.09
%
8.88
%
8.81
%
Tangible common equity / Tangible assets (non-GAAP)
8.59
%
8.44
%
8.35
%
8.12
%
7.83
%
Market price per share
$
11.66
$
12.07
$
10.96
$
10.57
$
13.65
End of period shares outstanding
83,241,952
83,774,335
83,773,650
83,655,651
84,602,519
Book value per common share
$
9.71
$
9.53
$
9.30
$
9.01
$
8.72
Tangible book value per share (non-GAAP)
$
8.90
$
8.71
$
8.47
$
8.18
$
7.67
Common Equity Repurchase Program:
Total shares of common stock repurchased
678,165
—
—
1,505,521
137,144
Average price paid per share of common stock
$
10.61
$
—
$
—
$
12.02
$
13.89
Aggregate repurchases of common equity ($ in millions)
$
7.2
$
—
$
—
$
18.1
$
1.9
13 Annualized
14 Current quarter capital highlights are presented based on estimated data.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated AUM and Balance Sheet - End of Period Balances
Unaudited ($ in thousands)
3Q19
2Q19
1Q19
4Q18
3Q18
ASSETS UNDER MANAGEMENT AND ADVISORY ("AUM"):
Wealth Management and Trust
$
14,695,000
$
14,649,000
$
14,564,000
$
14,206,000
$
15,598,000
Other
1,533,000
1,550,000
1,558,000
1,715,000
2,125,000
Total AUM, excluding BOS 15
16,228,000
16,199,000
16,122,000
15,921,000
17,723,000
AUM at BOS
—
—
—
—
4,714,000
Less: Inter-company relationship
—
—
—
—
(7,000
)
Total AUM
$
16,228,000
$
16,199,000
$
16,122,000
$
15,921,000
$
22,430,000
AUM Reconciliation:
Beginning balance
$
16,199,000
$
16,122,000
$
15,921,000
$
17,723,000
$
16,861,000
Net flows
(137,000
)
(269,000
)
(963,000
)
(143,000
)
260,000
Market
166,000
346,000
1,164,000
(1,659,000
)
602,000
Ending balance
$
16,228,000
$
16,199,000
$
16,122,000
$
15,921,000
$
17,723,000
AUM Net Flows:
Wealth Management & Trust
$
(100,000
)
$
(233,000
)
$
(580,000
)
$
(137,000
)
$
215,000
Other
(37,000
)
(36,000
)
(383,000
)
(6,000
)
45,000
Total Net flows
$
(137,000
)
$
(269,000
)
$
(963,000
)
$
(143,000
)
$
260,000
DEPOSITS:
Demand deposits (non-interest bearing)
$
1,947,363
$
1,854,091
$
2,016,838
$
1,951,274
$
2,001,275
NOW
598,048
563,130
605,852
626,685
568,148
Savings
68,059
68,036
68,102
73,834
72,967
Money market
3,366,623
3,228,608
3,302,244
3,338,892
3,363,062
Certificates of deposit
678,149
724,098
786,809
790,485
763,271
TOTAL DEPOSITS
$
6,658,242
$
6,437,963
$
6,779,845
$
6,781,170
$
6,768,723
LOANS:
Commercial and Industrial
$
695,029
$
656,186
$
615,370
$
623,037
$
583,214
Commercial tax exempt
448,488
450,307
449,492
451,671
438,807
Commercial real estate
2,533,346
2,530,556
2,439,048
2,395,692
2,399,080
Construction and land
209,741
200,378
210,618
240,306
197,524
Residential
2,964,042
3,025,758
2,993,132
2,948,973
2,862,879
Home Equity
84,432
89,930
88,620
90,421
93,390
Consumer
132,073
127,145
130,688
143,058
145,526
TOTAL LOANS
$
7,067,151
$
7,080,260
$
6,926,968
$
6,893,158
$
6,720,420
15 Assets under management and advisory have been reduced to exclude those assets managed or advised by BOS for periods when BOS was owned by the Company
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Asset Quality
Unaudited ($ in thousands)
3Q19
2Q19
1Q19
4Q18
3Q18
CHARGE-OFFS:
Loan charge-offs
$
(185
)
$
(195
)
$
(564
)
$
(370
)
$
—
Loan recoveries
310
85
492
2,089
985
NET (CHARGE-OFFS) / RECOVERIES
$
125
$
(110
)
$
(72
)
$
1,719
$
985
Net charge-offs to average loans (annualized)
0.01
%
(0.01
)%
—
%
0.10
%
0.06
%
Net Charge-offs by Loan Type:
Commercial and industrial
$
95
$
(155
)
$
188
$
(77
)
$
153
Commercial real estate
27
30
189
1,394
820
Construction and land
—
—
—
—
—
Residential
—
—
100
402
—
Home Equity
6
—
(562
)
—
—
Consumer
(3
)
15
13
—
12
NET (CHARGE-OFFS) / RECOVERIES
$
125
$
(110
)
$
(72
)
$
1,719
$
985
NONPERFORMING LOAN DATA:
Special mention loans
$
58,133
$
70,677
$
86,787
$
78,528
$
67,406
Accruing classified loans 16
63,278
53,883
42,521
54,095
55,380
Nonaccrual loans
17,565
17,155
12,019
14,057
12,097
Total Classified
80,843
71,038
54,540
68,152
67,477
Criticized and Classified Loans
$
138,976
$
141,715
$
141,327
$
146,680
$
134,883
Loans 30-89 days past due and accruing 17
$
4,179
$
2,434
$
17,715
$
22,299
$
11,607
16 Accruing classified 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.
17 In addition to loans 30-89 days past due and accruing, at June 30, 2019, the Company had one loan totaling $0.9 million that was more than 90 days past due but still on accrual status. This loan originated in the New England region. The Company had no loans outstanding more than 90 days past due but still on accrual status in comparative periods.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Average Balances, Yields, and Rates
Unaudited ($ in thousands)
Average Balance
Interest Income/Expense
Average Yield/Rate
3Q19
2Q19
3Q18
3Q19
2Q19
3Q18
3Q19
2Q19
3Q18
INTEREST-EARNING ASSETS
Cash and investments:
Taxable investment securities
$
198,655
$
227,029
$
324,583
$
938
$
1,121
$
1,510
1.95
%
1.98
%
1.86
%
Non-taxable investment securities
305,108
304,309
297,710
1,924
1,901
1,779
2.52
%
2.50
%
2.39
%
Mortgage-backed securities
492,514
508,033
552,820
2,622
2,706
2,941
2.13
%
2.13
%
2.13
%
Short-term investments and other
101,958
130,363
204,814
1,084
1,057
1,617
4.06
%
3.23
%
3.11
%
Total cash and investments
1,098,235
1,169,734
1,379,927
6,568
6,785
7,847
2.39
%
2.32
%
2.27
%
Loans: 18
Commercial and industrial
1,101,672
1,091,903
998,817
11,523
11,170
9,894
4.09
%
4.05
%
3.88
%
Commercial real estate
2,518,048
2,506,637
2,475,143
29,118
29,953
29,482
4.52
%
4.73
%
4.66
%
Construction and land
195,843
202,609
179,248
2,410
2,559
2,193
4.82
%
5.00
%
4.79
%
Residential
3,016,265
3,008,753
2,836,593
25,567
25,735
23,907
3.39
%
3.42
%
3.37
%
Home equity
89,068
91,384
94,050
1,121
1,146
1,089
4.99
%
5.03
%
4.59
%
Other consumer
127,987
124,778
163,224
1,297
1,380
1,689
4.02
%
4.43
%
4.11
%
Total loans
7,048,883
7,026,064
6,747,075
71,036
71,943
68,254
3.98
%
4.07
%
3.99
%
Total earning assets
8,147,118
8,195,798
8,127,002
77,604
78,728
76,101
3.76
%
3.82
%
3.70
%
LESS: Allowance for loan losses
75,199
73,856
73,861
Cash and due from banks
49,065
45,705
46,056
Other assets
544,368
511,859
392,757
TOTAL AVERAGE ASSETS
$
8,665,352
$
8,679,506
$
8,491,954
INTEREST-BEARING LIABILITIES
Interest-bearing deposits: 19
Savings and NOW
$
615,730
$
684,507
$
693,419
$
275
$
276
$
301
0.18
%
0.16
%
0.17
%
Money market
3,378,006
3,226,569
3,244,628
11,523
10,476
8,110
1.35
%
1.30
%
0.99
%
Certificates of deposit
711,299
752,500
730,117
3,689
3,763
3,076
2.06
%
2.01
%
1.67
%
Total interest-bearing deposits 19
4,705,035
4,663,576
4,668,164
15,487
14,515
11,487
1.31
%
1.25
%
0.98
%
Junior subordinated debentures
106,363
106,363
106,363
1,022
1,080
1,028
3.76
%
4.02
%
3.78
%
FHLB borrowings and other
833,535
952,645
768,015
4,942
5,673
3,945
2.32
%
2.36
%
2.01
%
Total interest-bearing liabilities 19
5,644,933
5,722,584
5,542,542
21,451
21,268
16,460
1.50
%
1.48
%
1.17
%
Non-interest bearing demand deposits 19
1,953,214
1,926,591
2,063,642
Other liabilities
258,371
238,544
135,508
Total average liabilities
7,856,518
7,887,719
7,741,692
Redeemable noncontrolling interests
944
943
13,074
Average shareholders’ equity
807,890
790,844
737,188
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY
$
8,665,352
$
8,679,506
$
8,491,954
Net interest income
$
56,153
$
57,460
$
59,641
Interest rate spread
2.26
%
2.34
%
2.53
%
Net interest margin
2.72
%
2.78
%
2.90
%
Average total deposits 19
$
6,658,249
$
6,590,167
$
6,731,806
0.92
%
0.88
%
0.68
%
Average total deposits and borrowings 19
$
7,598,147
$
7,649,175
$
7,606,184
1.12
%
1.11
%
0.86
%
18 Average loans includes Loans held for sale and Nonaccrual loans
19 Average total deposits is the sum of Average total interest-bearing deposits and Average non-interest bearing demand deposits. Average total deposits and borrowings is the sum of Average total interest-bearing liabilities and Average non-interest bearing demand deposits.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Average Balances, Yields, and Rates
Unaudited ($ in thousands)
Average Balance
Interest Income/Expense
Average Yield/Rate
Nine Months Ended
Nine Months Ended
Nine Months Ended
INTEREST-EARNING ASSETS
9/30/19
9/30/18
9/30/19
9/30/18
9/30/19
9/30/18
Cash and investments:
Taxable investment securities
$
223,072
$
328,054
$
3,244
$
4,521
1.94
%
1.84
%
Non-taxable investment securities
305,422
297,509
5,726
5,261
2.50
%
2.36
%
Mortgage-backed securities
507,338
570,578
8,225
9,168
2.16
%
2.14
%
Short-term investments and other
104,225
174,736
3,049
3,831
3.78
%
2.91
%
Total cash and investments
1,140,057
1,370,877
20,244
22,781
2.36
%
2.21
%
Loans: 18
Commercial and industrial
1,088,027
969,063
33,673
27,554
4.08
%
3.75
%
Commercial real estate
2,474,804
2,464,788
87,222
83,020
4.65
%
4.44
%
Construction and land
203,211
171,825
7,610
6,142
4.94
%
4.71
%
Residential
2,999,480
2,771,875
76,847
68,263
3.42
%
3.28
%
Home equity
90,361
95,217
3,388
3,172
5.01
%
4.45
%
Other consumer
128,879
176,086
4,172
5,080
4.33
%
3.86
%
Total loans
6,984,762
6,648,854
212,912
193,231
4.04
%
3.85
%
Total earning assets
8,124,819
8,019,731
233,156
216,012
3.80
%
3.57
%
LESS: Allowance for loan losses
74,863
73,894
Cash and due from banks (non-interest bearing)
46,906
47,859
Other assets
516,642
404,375
TOTAL AVERAGE ASSETS
$
8,613,504
$
8,398,071
INTEREST-BEARING LIABILITIES
Interest-bearing deposits: 19
Savings and NOW
$
658,154
$
709,751
$
847
$
820
0.17
%
0.15
%
Money market
3,317,117
3,139,107
32,072
17,967
1.29
%
0.77
%
Certificates of deposit
746,453
691,670
11,141
7,589
2.00
%
1.47
%
Total interest-bearing deposits 19
4,721,724
4,540,528
44,060
26,376
1.25
%
0.78
%
Junior subordinated debentures
106,363
106,363
3,223
2,882
4.05
%
3.62
%
FHLB borrowings and other
801,519
889,178
13,922
12,185
2.29
%
1.81
%
Total interest-bearing liabilities 19
5,629,606
5,536,069
61,205
41,443
1.45
%
1.00
%
Non-interest bearing demand deposits 19
1,949,948
1,948,573
Payables and other liabilities
243,370
130,410
Total average liabilities
7,822,924
7,615,052
Redeemable noncontrolling interests
1,642
16,294
Average shareholders’ equity
788,938
766,725
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY
$
8,613,504
$
8,398,071
Net interest income
$
171,951
$
174,569
Interest rate spread
2.35
%
2.57
%
Net interest margin
2.80
%
2.88
%
Average total deposits 19
$
6,671,672
$
6,489,101
0.88
%
0.54
%
Average total deposits and borrowings 19
$
7,579,554
$
7,484,642
1.08
%
0.74
%
18 Average loans includes Loans held for sale and Nonaccrual loans
19 Average total deposits is the sum of Average total interest-bearing deposits and Average non-interest bearing demand deposits. Average total deposits and borrowings is the sum of Average total interest-bearing liabilities and Average non-interest bearing demand deposits.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Regional Loan Data
Unaudited ($ in thousands)
3Q19
2Q19
1Q19
4Q18
3Q18
LOANS: 20
New England
$
3,868,690
$
3,957,221
$
3,901,644
$
3,890,607
$
3,783,032
San Francisco Bay Area
1,559,569
1,538,441
1,499,626
1,488,017
1,491,528
Southern California
1,638,892
1,584,598
1,525,698
1,514,534
1,445,860
Total loans
$
7,067,151
$
7,080,260
$
6,926,968
$
6,893,158
$
6,720,420
Loans (charged-off) / recovered, net:
New England
$
275
$
31
$
222
$
(100
)
$
232
San Francisco Bay Area
6
20
18
1,804
706
Southern California
(156
)
(161
)
(312
)
15
47
Total net loans (charged-off) / recovered
$
125
$
(110
)
$
(72
)
$
1,719
$
985
Special mention loans:
New England
$
19,828
$
35,235
$
34,675
$
31,147
$
20,382
San Francisco Bay Area
4,821
10,360
23,486
18,585
18,359
Southern California
33,484
25,082
28,626
28,796
28,665
Total special mention loans
$
58,133
$
70,677
$
86,787
$
78,528
$
67,406
Accruing classified loans:
New England
$
21,830
$
13,012
$
15,830
$
10,392
$
10,083
San Francisco Bay Area
23,938
25,957
20,801
24,584
24,252
Southern California
17,510
14,914
5,890
19,119
21,045
Total accruing classified loans
$
63,278
$
53,883
$
42,521
$
54,095
$
55,380
Nonaccruing loans:
New England
$
8,999
$
8,837
$
6,161
$
6,728
$
5,131
San Francisco Bay Area
2,395
2,644
2,480
2,488
1,169
Southern California
6,171
5,674
3,378
4,841
5,797
Total nonaccruing loans
$
17,565
$
17,155
$
12,019
$
14,057
$
12,097
20 The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lenders' regional offices.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP Financial Measures
Unaudited ($ in thousands)
3Q19
2Q19
1Q19
4Q18
3Q18
ROACE AND ROATCE:
Net income attributable to the Company (GAAP) (A)
$
19,962
$
19,380
$
19,442
$
33,302
$
17,962
ADD: Amortization of intangibles, net of tax
530
531
531
537
593
Tangible common net income (non-GAAP) (B)
$
20,492
$
19,911
$
19,973
$
33,839
$
18,555
Total average shareholders’ equity (C)
$
807,890
$
790,844
$
766,283
$
739,313
$
737,188
LESS: Average goodwill and intangible assets, net
(68,359
)
(68,889
)
(69,498
)
(83,153
)
(89,830
)
Average tangible common equity (non-GAAP) (D)
$
739,531
$
721,955
$
696,785
$
656,160
$
647,358
ROACE (annualized) (A / C)
9.80
%
9.83
%
10.29
%
17.87
%
9.67
%
ROATCE (annualized) (B / D)
10.99
%
11.06
%
11.63
%
20.46
%
11.37
%
PRE-TAX, PRE-PROVISION INCOME:
Income before income taxes (GAAP)
$
25,575
$
24,818
$
24,459
$
42,192
$
24,347
ADD BACK: Provision/ (credit) for loan losses
167
1,363
(1,426
)
93
(949
)
Pre-tax, pre-provision income (non-GAAP)
$
25,742
$
26,181
$
23,033
$
42,285
$
23,398
CORE NET INTEREST INCOME AND MARGIN:
Net interest income (GAAP)
$
56,153
$
57,460
$
58,338
$
59,997
$
59,641
LESS: Interest recovered on previous nonaccrual loans
180
—
258
986
986
Net interest income, excluding interest recovered while loans on nonaccrual status ("Core net interest income") (non-GAAP)
$
55,973
$
57,460
$
58,080
$
59,011
$
58,655
Net interest margin, excluding interest recovered while loans on nonaccrual status ("Core net interest margin") (non-GAAP)
2.71
%
2.78
%
2.89
%
2.90
%
2.90
%
TANGIBLE COMMON EQUITY:
Total Shareholders’ Equity (GAAP)
$
808,688
$
798,211
$
778,819
$
753,954
$
738,009
LESS: Goodwill and intangible assets, net
(68,229
)
(68,491
)
(69,162
)
(69,834
)
(89,432
)
Tangible common equity (non-GAAP) (A)
$
740,459
$
729,720
$
709,657
$
684,120
$
648,577
Total Assets (GAAP)
$
8,690,944
$
8,712,873
$
8,572,143
$
8,494,625
$
8,375,840
LESS: Goodwill and intangible assets, net
(68,229
)
(68,491
)
(69,162
)
(69,834
)
(89,432
)
Tangible assets (non-GAAP) (B)
$
8,622,715
$
8,644,382
$
8,502,981
$
8,424,791
$
8,286,408
End of Period Shares Outstanding (C)
83,241,952
83,774,335
83,773,650
83,655,651
84,602,519
Tangible common equity/ Tangible assets (non-GAAP) (A / B)
8.59
%
8.44
%
8.35
%
8.12
%
7.83
%
Tangible Book Value Per Share (non-GAAP) (A / C)
$
8.90
$
8.71
$
8.47
$
8.18
$
7.67
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP Financial Measures
Unaudited ($ in thousands)
3Q19
2Q19
1Q19
4Q18
3Q18
RETURN ON AVERAGE ASSETS:
Net income (GAAP) (A)
$
19,962
$
19,380
$
19,442
$
33,302
$
17,962
Average Assets (non-GAAP) (B)
8,665,352
8,679,506
8,493,725
8,445,298
8,491,954
Return on average assets (non-GAAP) (A / B)
0.91
%
0.90
%
0.93
%
1.56
%
0.84
%
EFFICIENCY RATIO:
Total noninterest expense (GAAP) (A)
$
55,537
$
55,659
$
60,553
$
63,557
$
68,557
Less: Amortization of intangibles
671
672
672
680
750
Less: Restructuring
—
—
1,646
2,065
5,763
Total noninterest expense (non-GAAP) (B)
$
54,866
$
54,987
$
58,235
$
60,812
$
62,044
Net interest income (GAAP)
$
56,153
$
57,460
$
58,338
$
59,997
$
59,641
Total core fees and income (GAAP)
25,155
24,292
24,280
28,691
31,592
Gain on sale of affiliate (GAAP)
—
—
—
18,142
—
Total other income (GAAP)
(29
)
88
968
(988
)
722
Total revenue (C)
$
81,279
$
81,840
$
83,586
$
105,842
$
91,955
Efficiency ratio (GAAP) (A / C)
68.3
%
68.0
%
72.4
%
60.0
%
74.6
%
Efficiency ratio, excluding amortization of intangibles and restructuring, if any (non-GAAP) (B / C)
67.5
%
67.2
%
69.7
%
57.1
%
67.0
%
OTHER INCOME: (GAAP)
Gain/ (loss) on sale of investments, net
$
—
$
—
$
—
$
(596
)
$
—
Gain/ (loss) on OREO, net
—
—
91
—
—
Gain on sale of affiliate
—
—
—
18,142
—
Other
(29
)
88
877
(392
)
722
Total other income (GAAP)
$
(29
)
$
88
$
968
$
17,154
$
722
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP measures: Operating Adjustments
Unaudited ($ in thousands, except share and per share data)
3Q19
2Q19
1Q19
4Q18
3Q18
NET INCOME ATTRIBUTABLE TO THE COMPANY:
NET INCOME ATTRIBUTABLE TO THE COMPANY (GAAP)
$
19,962
$
19,380
$
19,442
$
33,302
$
17,962
LESS: Gain on sale of affiliate
—
—
—
18,142
—
ADD: Information services 21
—
—
—
(441
)
—
ADD: Restructuring
—
—
1,646
2,065
5,763
ADD: Tax adjustments 22
—
—
—
3,502
—
Tax effect at statutory rate
—
—
(346
)
(341
)
(1,210
)
NET INCOME ATTRIBUTABLE TO THE COMPANY (NON-GAAP)
$
19,962
$
19,380
$
20,742
$
19,945
$
22,515
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS:
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS (GAAP)
$
20,266
$
18,564
$
20,999
$
35,996
$
17,133
LESS: Gain on sale of affiliate
—
—
—
18,142
—
ADD: Information services 21
—
—
—
(441
)
—
ADD: Restructuring
—
—
1,646
2,065
5,763
ADD: Tax adjustments 22
—
—
—
3,502
—
Tax effect at statutory rate
—
—
(346
)
(341
)
(1,210
)
Net income attributable to the common shareholders, treasury stock method, excluding notable items (non-GAAP)
$
20,266
$
18,564
$
22,299
$
22,639
$
21,686
Weighted average diluted shares outstanding
83,956,708
84,048,972
84,010,450
84,863,779
85,498,568
Diluted total earnings per share (GAAP)
$
0.24
$
0.22
$
0.25
$
0.42
$
0.20
Diluted total earnings per share, excluding notable items (non-GAAP)
$
0.24
$
0.22
$
0.27
$
0.27
$
0.25
Average common equity (non-GAAP)
$
807,890
$
790,844
$
766,283
$
739,313
$
737,188
Average tangible common equity (non-GAAP)
$
739,531
$
721,955
$
696,785
$
656,160
$
647,358
Return on average common equity, excluding notable items (non-GAAP)
9.80
%
9.83
%
10.98
%
10.70
%
12.12
%
Return on average tangible common equity, excluding notable items (non-GAAP)
10.99
%
11.06
%
12.38
%
12.38
%
14.16
%
Pre-tax, pre-provision income (non-GAAP)
$
25,742
$
26,181
$
23,033
$
42,285
$
23,398
LESS: Gain on sale of affiliate
—
—
—
18,142
—
ADD: Information services 21
—
—
—
(441
)
—
ADD: Restructuring
—
—
1,646
2,065
5,763
Pre-tax, pre-provision income, excluding notable items (non-GAAP)
$
25,742
$
26,181
$
24,679
$
25,767
$
29,161
21 In the fourth quarter of 2018, $0.4 million of Information services expense was reclassified to Restructuring expense in conjunction with the announcement of the Company's formal restructuring plan.
22 Additional tax expense in the fourth quarter of 2018 relates to the completion of the sale of BOS.
View source version on businesswire.com: https://www.businesswire.com/news/home/20191024005951/en/
Adam Bromley (617) 912-4386 abromley@bostonprivate.com
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