Boston Private Financial Holdings, Inc. Reports Second Quarter 2016 Results

Second Quarter Highlights:

  • Net Interest Income Growth: Net Interest Income increased 9% year-over-year and decreased 1% linked quarter to $49.2 million.
  • Deposit and Loan Growth: Average Total Deposits increased 6% and Average Total Loans grew 7% year-over-year. Average Total Deposits and Average Total Loans were both $5.7 billion for the quarter, reflecting a linked quarter decrease of 3% and an increase of 2%, respectively.
  • Assets Under Management: Total Assets Under Management/Advisory (“AUM”) decreased 8% year-over-year to $27.3 billion, reflecting negative net flows partly offset by positive market action. On a linked quarter basis, AUM increased 2% due to positive market action partly offset by negative net flows.
  • Provision Credit: The Company recorded a provision credit of $2.5 million due to net recoveries of $1.9 million and a decline in Criticized loans, compared to a provision credit of $3.1 million for the first quarter of 2016.

BOSTON--()--Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported second quarter 2016 GAAP Net Income Attributable to the Company of $16.4 million, compared to $18.0 million for the first quarter of 2016. Second quarter 2016 diluted earnings per share were $0.18, compared to $0.21 in the first quarter of 2016 and $0.20 in the second quarter of 2015.

"We are pleased with the Company's overall performance amid a turbulent macro environment," said Clayton G. Deutsch, CEO. "Our Private Bank continues to deliver steady performance, while our fee-based businesses demonstrated resiliency confronting market pressure. We are excited about the geographic balance of new business as we maintain our focus on improving our client offering and increasing client introductions to position the Company favorably for the long-term."

Core Fees and Income

Core Fees and Income were flat linked quarter at $37.6 million. Year-over-year, Core Fees and Income are down 7% due primarily to lower levels of AUM offset by higher Other Banking Fee Income.

AUM increased to $27.3 billion in the second quarter, up 2% from $26.8 billion in the first quarter of 2016, reflecting positive market action partly offset by negative net flows. AUM decreased 8% year-over-year due to negative net flows partly offset by positive market action. The Company experienced negative net flows of $199 million during the second quarter, compared to negative $761 million and negative $193 million in the first quarter of 2016 and second quarter of 2015, respectively. Net flows attributable to Boston Private Wealth for the second quarter were negative $39 million compared to negative $422 million in the first quarter of 2016 and negative $243 million in the second quarter of 2015.

Net Interest Income

Net Interest Income for the second quarter was $49.2 million, down 1% from $49.9 million for the first quarter of 2016. On a year-over-year basis, Net Interest Income increased 9% from $45.1 million. The current quarter includes $0.6 million of interest recovered on previous nonaccrual loans while the first quarter of 2016 and second quarter of 2015 includes interest recoveries of $1.1 million and $0.1 million, respectively. Excluding interest recovered on previous nonaccrual loans, Net Interest Income on an FTE basis was flat, while it increased 7% year-over-year.

Net Interest Margin was 2.91% for the second quarter, down five basis points from 2.96% for the first quarter of 2016. Net Interest Margin was up one basis point from 2.90% for the second quarter of 2015. Excluding interest recovered on previous nonaccrual loans, Net Interest Margin was down 2 basis points linked quarter and year-over-year to 2.88%.

Total Operating Expenses

Total Operating Expenses for the second quarter of 2016 were $64.7 million, down 3% from $66.7 million for the first quarter of 2016. On a year-over-year basis, Total Operating Expenses increased 4% from $62.4 million, primarily due to higher occupancy and restructuring expense. Restructuring Expense in the second quarter of 2016 was $0.9 million while the first quarter of 2016 and the second quarter of 2015 included Restructuring Expense of $1.1 million and $0.2 million, respectively.

Provision and Asset Quality

The Company recorded a provision credit of $2.5 million for the second quarter of 2016, compared to a provision credit of $3.1 million for the first quarter of 2016 and no provision for the second quarter of 2015. The provision credit was driven by net recoveries of $1.9 million and a decline in Criticized Loans.

Criticized Loans decreased 10% linked quarter and year-over-year to $150.7 million. Nonaccrual Loans (“Nonaccruals”) decreased 21% to $19.2 million on a linked quarter basis. On a year-over-year basis, Nonaccruals decreased 36% from $29.9 million. As a percentage of Total Loans, Nonaccruals were 33 basis points at June 30, 2016, down 10 basis points from March 31, 2016, and down 21 basis points from June 30, 2015.

Additional credit metrics are listed below:

         
(In millions) June 30,
2016 		March 31,
2016 		December 31,
2015 		September 30,
2015 		  June 30,
2015
Total Criticized Loans $ 150.7 $ 166.9 $ 154.1 $ 160.9 $ 167.3

Total Loans 30-89 Days Past Due and Accruing (12)

$ 7.6 $ 8.3 $ 13.1 $ 7.0 $ 4.3
Total Net Loans (Charged-off)/ Recovered $ 1.9 $ 1.1 $ 0.9 $ (1.6 ) $ 1.0

Allowance for Loan Losses/ Total Loans

1.32 % 1.35 % 1.37 % 1.41 % 1.43 %
 

Capital Ratios

Capital ratios are listed below:

         
June 30,
2016 		March 31,
2016 		December 31,
2015 		September 30,
2015 		  June 30,
2015
BPFH Ratios:
Total Risk-Based Capital * 14.0 % 14.0 % 13.9 % 13.8 % 13.9 %
Tier I Risk-Based Capital * 12.7 % 12.7 % 12.6 % 12.6 % 12.7 %
Tier I Leverage Capital * 9.6 % 9.5 % 9.5 % 9.6 % 9.9 %
TCE/TA (4) 7.4 % 7.3 % 7.0 % 7.2 % 7.2 %

Tier I Common Equity/ Risk Weighted Assets *

10.0 % 9.9 % 9.8 % 9.7 % 9.8 %

*June 30, 2016 information is presented based on estimated data.

 

Dividend Payments

Concurrent with the release of second quarter 2016 earnings, the Board of Directors of the Company declared a cash dividend to common shareholders of $0.10 per share. The record date for this dividend is August 5, 2016, and the payment date is August 19, 2016.

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 15, 2016, and the payment date is September 15, 2016.

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; total operating expense excluding restructuring; the efficiency ratio (FTE basis); and Net Interest Income and Net Interest Margin excluding interest recovered on previous nonaccrual loans; 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 21, 2016, to discuss the financial results, business highlights and outlook. To access the call:

Dial In #: (888) 317-6003

Elite Entry Number: 8680929

Replay Information:
Available from July 21, 2016 at 12 noon until July 28, 2016
Dial In #: (877) 344-7529
Conference Number: 10089337

The call will be simultaneously webcast and may be accessed on www.bostonprivate.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, Florida, Wisconsin, Texas and the Washington D.C. area. The Company has a Private Banking balance sheet of greater than $7 billion, and manages approximately $27 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.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 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)   6/30/2016   3/31/2016   12/31/2015     9/30/2015   6/30/2015  
Assets:
Cash and cash equivalents $ 126,167 $ 113,946 $ 238,694 $ 43,640 $ 63,099
Investment securities available for sale 1,191,523 1,151,529 1,084,510 1,023,255 992,007
Investment securities held to maturity 105,297 111,337 116,352 121,679 128,258
Stock in Federal Home Loan Banks 44,374 34,202 35,181 35,518 35,668
Loans held for sale 4,677 5,383 8,072 7,685 19,512
Total loans 5,751,497 5,658,181 5,719,212 5,607,472 5,463,250
Less: Allowance for loan losses   75,753   76,427   78,500     79,246   78,251  
Net loans 5,675,744 5,581,754 5,640,712 5,528,226 5,384,999
Other real estate owned (“OREO”) 2,042 98 776 776 929
Premises and equipment, net 31,752 31,575 31,036 30,841 31,337
Goodwill 152,082 152,082 152,082 152,082 152,082
Intangible assets, net 29,836 31,422 33,007 34,806 36,461
Fees receivable 11,129 11,041 11,258 11,308 12,486
Accrued interest receivable 18,061 17,590 17,950 17,039 16,383
Deferred income taxes, net 36,942 43,164 51,699 45,438 47,388
Other assets   149,975   128,540   121,179     128,235   125,330  
Total assets $ 7,579,601 $ 7,413,663 $ 7,542,508   $ 7,180,528 $ 7,045,939  
Liabilities:
Deposits $ 5,536,092 $ 5,786,860 $ 6,040,437 $ 5,647,859 $ 5,429,028
Deposits Held For Sale 110,558 — — — —
Securities sold under agreements to repurchase 43,304 63,182 58,215 35,698 26,660
Federal funds purchased 180,000 40,000 — 60,000 100,000
Federal Home Loan Bank borrowings 678,012 523,952 461,324 461,899 541,529
Junior subordinated debentures 106,363 106,363 106,363 106,363 106,363
Other liabilities   135,289   114,223   111,468     109,695   95,074  
Total liabilities   6,789,618   6,634,580   6,777,807     6,421,514   6,298,654  
Redeemable Noncontrolling Interests 15,843 16,938 18,088 18,257 19,200
Shareholders’ Equity:
Preferred stock, $1.00 par value; authorized: 2,000,000 shares 47,753 47,753 47,753 47,753 47,753
Common stock, $1.00 par value; authorized: 170,000,000 shares 83,380 83,024 83,411 83,645 83,540
Additional paid-in capital 597,989 599,825 600,670 598,968 597,424
Retained earnings/ (accumulated deficit) 28,985 21,740 12,886 5,960 (1,003 )
Accumulated other comprehensive income/ (loss)   12,654   6,687   (1,500 )   1,287   (2,525 )
Total Company’s shareholders’ equity   770,761   759,029   743,220     737,613   725,189  
Noncontrolling interests   3,379   3,116   3,393     3,144   2,896  
Total shareholders’ equity   774,140   762,145   746,613     740,757   728,085  
Total liabilities, redeemable noncontrolling interests and shareholders’ equity $ 7,579,601 $ 7,413,663 $ 7,542,508   $ 7,180,528 $ 7,045,939  
 
         
Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
Three Months Ended
(In thousands, except share and per share data)   6/30/2016     3/31/2016     12/31/2015     9/30/2015     6/30/2015
Interest and dividend income:
Loans $ 49,731 $ 50,046 $ 49,463 $ 48,058 $ 46,663
Taxable investment securities 1,507 1,594 1,239 1,094 1,075
Non-taxable investment securities 1,400 1,390 1,348 1,264 1,125
Mortgage-backed securities 2,982 3,065 2,863 2,681 2,775
Federal funds sold and other   405     507     449     425     282
Total interest and dividend income   56,025     56,602     55,362     53,522     51,920
Interest expense:
Deposits 4,075 4,182 4,281 4,007 3,822
Federal Home Loan Bank borrowings

2,139

1,953 1,960 2,051 2,017
Junior subordinated debentures 584 578 973 979 967
Repurchase agreements and other short-term borrowings  

58

    10     8     12     29
Total interest expense   6,856     6,723     7,222     7,049     6,835
Net interest income 49,169 49,879 48,140 46,473 45,085
Provision/ (credit) for loan losses   (2,535 )   (3,133 )   (1,655 )   2,600     —
Net interest income after provision/ (credit) for loan losses   51,704     53,012     49,795     43,873     45,085
Fees and other income:
Investment management fees 10,627 10,658 10,889 11,360 11,731
Wealth advisory fees 12,551 12,712 12,569 12,515 12,678
Wealth management and trust fees 11,208 10,916 11,782 12,424 13,545
Other banking fee income 2,982 3,233 1,719 2,780 2,031
Gain on sale of loans, net   197     209     178     364     362
Total core fees and income   37,565     37,728     37,137     39,443     40,347
Gain/ (loss) on sale of investments, net 245 1 215 5 8
Gain/ (loss) on OREO, net — 280 — 35 —
Other   (1,015 )   13     366     (37 )   2,305
Total other income   (770 )   294     581     3     2,313
Operating expense:
Salaries and employee benefits 40,614 42,560 39,520 37,938 39,816
Occupancy and equipment 9,928 9,587 9,989 9,064 9,095
Professional services 3,015 3,515 3,778 2,848 3,214
Marketing and business development 1,811 2,170 4,001 2,008 1,706
Contract services and data processing 1,737 1,679 1,505 1,600 1,495
Amortization of intangibles 1,586 1,586 1,799 1,655 1,655
FDIC insurance 1,015 1,020 1,089 916 963
Restructuring 905 1,112 2,000 1,504 220
Other   4,120     3,480     3,726     4,396     4,254
Total operating expense   64,731     66,709     67,407     61,929     62,418
Income before income taxes 23,768 24,325 20,106 21,390 25,327
Income tax expense   7,626     7,438     5,638     8,182     8,000
Net income from continuing operations 16,142 16,887 14,468 13,208 17,327
Net income from discontinued operations (1)   1,245     2,065     1,455     1,316     1,546
Net income before attribution to noncontrolling interests 17,387 18,952 15,923 14,524 18,873
Less: Net income attributable to noncontrolling interests   989     911     921     994     1,263
Net income attributable to the Company $ 16,398   $ 18,041   $ 15,002   $ 13,530   $ 17,610
 
   
Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
Six Months Ended
(In thousands, except share and per share data)   6/30/2016     6/30/2015  
Interest and dividend income:
Loans $ 99,777 $ 94,663
Taxable investment securities 3,101 2,070
Non-taxable investment securities 2,790 2,146
Mortgage-backed securities 6,047 5,389
Federal funds sold and other   912     516  
Total interest and dividend income   112,627     104,784  
Interest expense:
Deposits 8,257 7,714
Federal Home Loan Bank borrowings

4,092

3,948
Junior subordinated debentures 1,162 1,923
Repurchase agreements and other short-term borrowings  

68

    42  
Total interest expense   13,579     13,627  
Net interest income 99,048 91,157
Provision/ (credit) for loan losses   (5,668 )   (2,500 )
Net interest income after provision/ (credit) for loan losses   104,716     93,657  
Fees and other income:
Investment management fees 21,285 23,445
Wealth advisory fees 25,263 25,353
Wealth management and trust fees 22,124 27,103
Other banking fee income 6,215 3,941
Gain on sale of loans, net   406     665  
Total core fees and income   75,293     80,507  
Gain/ (loss) on sale of investments, net 246 16
Gain/ (loss) on OREO, net 280 89
Other   (1,002 )   3,393  
Total other income   (476 )   3,498  
Operating expense:
Salaries and employee benefits 83,174 81,943
Occupancy and equipment 19,515 18,130
Professional services 6,530 6,235
Marketing and business development 3,981 3,054
Contract services and data processing 3,416 2,932
Amortization of intangibles 3,172 3,257
FDIC insurance 2,035 1,974
Restructuring 2,017 220
Other   7,600     8,100  
Total operating expense   131,440     125,845  
Income before income taxes 48,093 51,817
Income tax expense   15,064     16,572  
Net income from continuing operations 33,029 35,245
Net income from discontinued operations (1)   3,310     3,640  
Net income before attribution to noncontrolling interests 36,339 38,885
Less: Net income attributable to noncontrolling interests   1,900     2,492  
Net income attributable to the Company $ 34,439   $ 36,393  
 
         
Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
(In thousands, except share and per share data) Three Months Ended
PER SHARE DATA:   6/30/2016     3/31/2016     12/31/2015     9/30/2015   6/30/2015  
Calculation of Income for EPS:
Net income attributable to the Company $ 16,398 $ 18,041 $ 15,002 $ 13,530 $ 17,610

Adjustments to Net Income Attributable to the Company to arrive at Net Income Attributable to Common Shareholders, treasury stock method (2)

  (970 )   (289 )   (1,182 )   159   (1,026 )

Net Income Attributable to the Common Shareholders, treasury stock method

$ 15,428   $ 17,752   $ 13,820   $ 13,689 $ 16,584  
 
End of Period Common Shares Outstanding

83,380,426

83,023,755

83,410,961 83,645,364

83,539,785

 
Weighted Average Shares Outstanding:
Weighted average basic shares outstanding 81,236,809 81,301,499 81,134,931 81,103,938 80,778,562
Weighted average diluted shares outstanding (3) 83,519,939 83,279,866 83,579,050 83,438,413 83,260,383
 
Diluted Total Earnings per Share $ 0.18 $ 0.21 $ 0.17 $ 0.16 $ 0.20
 
     
(In thousands, except share and per share data) Six Months Ended
PER SHARE DATA: June 30,

2016

June 30,

2015

Calculation of Income for EPS:
Net income attributable to the Company $ 34,439 $ 36,393

Adjustments to Net Income Attributable to the Company to arrive at Net Income Attributable to Common Shareholders, treasury stock method (2)

  (1,259 )   (1,989 )

Net Income Attributable to the Common Shareholders, treasury stock method

$ 33,180   $ 34,404  
 
Weighted Average Shares Outstanding:
Weighted average basic shares outstanding 81,269,154 80,647,191
Weighted average diluted shares outstanding (3) 83,391,057 83,111,228
 
Diluted Total Earnings per Share $ 0.40 $ 0.41
 
         
Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
(In thousands, except per share data)
FINANCIAL DATA:   6/30/2016     3/31/2016     12/31/2015     9/30/2015     6/30/2015  

Book Value Per Common Share

$ 8.71 $ 8.60 $ 8.38 $ 8.29 $ 8.14
Tangible Book Value Per Share (4) $ 6.53 $ 6.39 $ 6.16 $ 6.05 $ 5.89
Market Price Per Share $ 11.78 $ 11.45 $ 11.34 $ 11.70 $ 13.41
 
ASSETS UNDER MANAGEMENT AND ADVISORY:
Wealth Management and Trust $ 7,313,000 $ 7,137,000 7,976,000 8,060,000 $ 9,028,000
Investment Managers 10,006,000 9,838,000 9,952,000 9,830,000 10,695,000
Wealth Advisory 9,974,000 9,857,000 9,688,000 9,537,000 9,941,000
Less: Inter-company Relationship   (17,000 )   (21,000 )   (21,000 )   (21,000 )   (22,000 )
Total Assets Under Management and Advisory $ 27,276,000   $ 26,811,000     27,595,000     27,406,000   $ 29,642,000  
 
BPFH FINANCIAL RATIOS:
Total Equity/ Total Assets 10.21 % 10.28 % 9.90 % 10.32 % 10.33 %
Tangible Common Equity/ Tangible Assets (4) 7.36 % 7.34 % 6.98 % 7.24 % 7.17 %
Tier I Common Equity/ Risk Weighted Assets (4) 9.95 % 9.92 % 9.80 % 9.73 % 9.77 %
Allowance for Loan Losses/ Total Loans 1.32 % 1.35 % 1.37 % 1.41 % 1.43 %
Allowance for Loan Losses/ Nonaccrual Loans 395 % 314 % 295 % 258 % 262 %
Return on Average Assets - Three Months Ended (Annualized) 0.88 % 0.99 % 0.81 % 0.74 % 1.02 %
Return on Average Common Equity - Three Months Ended (Annualized) (5) 8.68 % 9.84 % 8.06 % 7.32 % 9.91 %
Return on Average Tangible Common Equity - Three Months Ended (Annualized) (5) 12.43 % 14.11 % 11.92 % 10.93 % 14.63 %
Efficiency Ratio - Three Months Ended (6) 70.41 % 70.87 % 71.59 % 66.18 % 66.99 %
 
DEPOSIT DETAIL:
Demand deposits (noninterest-bearing) $ 1,636,273 $ 1,609,669 $ 1,689,604 $ 1,555,609 $ 1,486,251
NOW 547,777 565,394 588,337 489,104 509,625
Savings 70,553 76,019 72,336 74,516 71,626
Money market 2,771,080 2,959,328 3,105,172 2,938,427 2,772,572
Certificates of deposit   510,409     576,450     584,988     590,203     588,954  
Total Deposits $ 5,536,092   $ 5,786,860   $ 6,040,437   $ 5,647,859   $ 5,429,028  
 
                 
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:   06/30/16     03/31/16     06/30/15   06/30/16     03/31/16     06/30/15 06/30/16   03/31/16   06/30/15
AVERAGE ASSETS
Interest-Earning Assets:
Cash and Investments:
Taxable investment securities $ 372,413 $ 392,579 $ 342,259 $ 1,507 $ 1,594 $ 1,075 1.62 % 1.63 % 1.26 %
Non-taxable investment securities (8) 261,678 262,227 242,387 2,153 2,138 1,731 3.29 % 3.26 % 2.86 %
Mortgage-backed securities 588,419 564,826 538,688 2,982 3,065 2,775 2.03 % 2.17 % 2.06 %
Federal funds sold and other   124,790     185,253     90,616   405     507     282 1.29 %   1.08 %   1.23 %
Total Cash and Investments   1,347,300     1,404,885     1,213,950   7,047     7,304     5,863 2.09 %   2.08 %   1.93 %
Loans (9):
Commercial and Industrial (8) 1,084,821 1,065,614 988,536 10,813 10,920 10,438 3.94 % 4.05 % 4.18 %
Commercial Real Estate 1,910,968 1,859,557 1,740,606 19,559 19,797 18,323 4.05 % 4.21 % 4.16 %
Construction and Land 150,927 174,867 145,405 1,456 1,648 1,252 3.82 % 3.73 % 3.41 %
Residential 2,256,296 2,229,680 2,160,987 17,441 17,302 16,637 3.09 % 3.10 % 3.08 %
Home Equity 123,687 119,349 120,303 1,073 1,082 1,058 3.49 % 3.65 % 3.53 %
Other Consumer   177,805     157,508     169,726   1,073     965     980 2.43 %   2.47 %   2.32 %
Total Loans   5,704,504     5,606,575     5,325,563   51,415     51,714     48,688 3.58 %   3.66 %   3.63 %
Total Earning Assets   7,051,804     7,011,460     6,539,513   58,462     59,018     54,551 3.30 %   3.35 %   3.32 %
LESS: Allowance for Loan Losses 77,345 80,273 77,938
Cash and due From Banks (Non-Interest Bearing) 40,253 39,943 41,596
Other Assets   427,013     420,909     410,296
TOTAL AVERAGE ASSETS $ 7,441,725   $ 7,392,039   $ 6,913,467
AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY
Interest-Bearing Liabilities:
Interest-Bearing Deposits (9):
NOW $ 554,565 $ 542,617 $ 517,281 $ 104 $ 87 $ 77 0.08 % 0.06 % 0.06 %
Savings 75,431 75,433 71,842 23 23 10 0.12 % 0.12 % 0.06 %
Money Market 2,897,151 3,055,242 2,754,817 2,836 2,902 2,551 0.39 % 0.38 % 0.37 %
Certificates of Deposit   559,271     578,310     597,617   1,112     1,170     1,184 0.80 %   0.81 %   0.79 %
Total Interest-Bearing Deposits (13) 4,086,418 4,251,602 3,941,557 4,075 4,182 3,822 0.40 % 0.40 % 0.39 %
Junior Subordinated Debentures 106,363 106,363 106,363 584 578 967 2.17 % 2.15 % 3.60 %
FHLB Borrowings and Other   719,655     524,892     576,403   2,197     1,963     2,046 1.21 %   1.48 %   1.40 %
Total Interest-Bearing Liabilities   4,912,436     4,882,857     4,624,323   6,856     6,723     6,835 0.56 %   0.55 %   0.59 %
Noninterest Bearing Demand Deposits (9) (13) 1,628,057 1,621,666 1,443,228
Payables and Other Liabilities   116,444     110,959     97,641
Total Average Liabilities 6,656,937 6,615,482 6,165,192
Redeemable Noncontrolling Interests 19,725 21,157 22,760
Average Shareholders' Equity   765,063     755,400     725,515
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY $ 7,441,725   $ 7,392,039   $ 6,913,467
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) $ 51,606 $ 52,295 $ 47,716
LESS: FTE Adjustment (8)   2,437     2,416     2,631
Net Interest Income (GAAP Basis) $ 49,169   $ 49,879   $ 45,085
Interest Rate Spread 2.74 % 2.80 % 2.73 %
Bank only Net Interest Margin 2.95 % 3.01 % 2.97 %
Net Interest Margin 2.91 % 2.96 % 2.90 %
 
           
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:   6/30/2016     6/30/2015   6/30/2016     6/30/2015 6/30/2016   6/30/2015
AVERAGE ASSETS
Interest-Earning Assets:
Cash and Investments:
Taxable investment securities $ 373,486 $ 331,565 $ 3,101 $ 2,070 1.66 % 1.25 %
Non-taxable investment securities (8) 261,952 236,352 4,291 3,301 3.28 % 2.79 %
Mortgage-backed securities 576,623 527,423 6,047 5,389 2.10 % 2.04 %
Federal funds sold and other   163,965     118,749   912     516 0.80 %   0.93 %
Total Cash and Investments   1,376,026     1,214,089   14,351     11,276 2.05 %   1.87 %
Loans (9):
Commercial and Industrial (8) 1,075,217 961,139 21,732 21,590 4.00 % 3.64 %
Commercial Real Estate 1,885,263 1,763,216 39,356 37,461 4.13 % 4.23 %
Construction and Land 162,897 138,882 3,104 2,328 3.77 % 3.33 %
Residential 2,242,988 2,150,813 34,743 33,292 3.10 % 3.10 %
Home Equity 121,518 118,001 2,155 2,071 3.57 % 3.54 %
Other Consumer   167,657     166,030   2,039     1,921 2.45 %   2.33 %
Total Loans   5,655,540     5,298,081   103,129     98,663 3.62 %   3.71 %
Total Earning Assets   7,031,566     6,512,170   117,480     109,939 3.31 %   3.37 %
LESS: Allowance for Loan Losses 78,809 77,491
Cash and due From Banks (Non-Interest Bearing) 40,136 39,894
Other Assets   424,402     411,724
TOTAL AVERAGE ASSETS $ 7,417,295   $ 6,886,297
AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY
Interest-Bearing Liabilities:
Interest-Bearing Deposits (9):
NOW $ 548,591 $ 522,414 $ 191 $ 154 0.07 % 0.06 %
Savings 75,432 71,966 47 37 0.12 % 0.10 %
Money Market 2,976,057 2,783,569 5,737 5,146 0.39 % 0.37 %
Certificates of Deposit   568,791     600,992   2,282     2,377 0.81 %   0.80 %
Total Interest-Bearing Deposits (13) 4,168,871 3,978,941 8,257 7,714 0.40 % 0.39 %
Junior Subordinated Debentures 106,363 106,363 1,162 1,923 2.16 % 3.60 %
FHLB Borrowings and Other   622,273     523,691   4,160     3,990 1.32 %   1.52 %
Total Interest-Bearing Liabilities   4,897,507     4,608,995   13,579     13,627 0.55 %   0.59 %
Noninterest Bearing Demand Deposits (9) (13) 1,624,928 1,434,460
Payables and Other Liabilities   113,747     100,529
Total Average Liabilities 6,636,182 6,143,984
Redeemable Noncontrolling Interests 20,497 22,205
Average Shareholders' Equity   760,616     720,108
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY $ 7,417,295   $ 6,886,297
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) $ 103,901 $ 96,312
LESS: FTE Adjustment (8)   4,853     5,155
Net Interest Income (GAAP Basis) $ 99,048   $ 91,157
Interest Rate Spread 2.76 % 2.78 %
Bank only Net Interest Margin 2.98 % 3.02 %
Net Interest Margin 2.93 % 2.95 %
 
         
Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
(In thousands)
LOAN DATA (10):   6/30/2016   3/31/2016   12/31/2015   9/30/2015   6/30/2015
Commercial and Industrial Loans:
New England $ 814,839 $ 849,615 $ 894,277 $ 827,301 $ 793,897
San Francisco Bay Area 116,224 118,385 122,754 125,093 121,477
Southern California   111,854   101,971   94,524   84,428   87,038
Total Commercial and Industrial Loans $ 1,042,917 $ 1,069,971 $ 1,111,555 $ 1,036,822 $ 1,002,412
Commercial Real Estate Loans:
New England $ 797,450 $ 816,324 $ 799,109 $ 766,253 $ 728,820
San Francisco Bay Area 633,735 611,461 622,123 625,145 629,258
Southern California   546,127   497,734   492,902   512,250   469,337
Total Commercial Real Estate Loans $ 1,977,312 $ 1,925,519 $ 1,914,134 $ 1,903,648 $ 1,827,415
Construction and Land Loans:
New England $ 90,408 $ 106,258 $ 106,048 $ 111,280 $ 102,068
San Francisco Bay Area 36,808 35,281 52,876 35,627 45,221
Southern California   15,333   25,135   24,510   23,504   13,637
Total Construction and Land Loans $ 142,549 $ 166,674 $ 183,434 $ 170,411 $ 160,926
Residential Loans:
New England $ 1,385,102 $ 1,361,547 $ 1,368,192 $ 1,356,057 $ 1,316,705
San Francisco Bay Area 470,694 463,645 462,327 462,630 466,155
Southern California   424,320   391,683   399,021   393,199   392,648
Total Residential Loans $ 2,280,116 $ 2,216,875 $ 2,229,540 $ 2,211,886 $ 2,175,508
Home Equity Loans:
New England $ 91,728 $ 84,693 $ 83,712 $ 81,796 $ 85,057
San Francisco Bay Area 26,714 26,134 28,966 27,076 30,013
Southern California   7,044   7,980   7,150   5,915   5,395
Total Home Equity Loans $ 125,486 $ 118,807 $ 119,828 $ 114,787 $ 120,465
Other Consumer Loans:
New England $ 166,998 $ 145,450 $ 152,984 $ 161,186 $ 164,522
San Francisco Bay Area 8,299 8,347 4,530 5,782 6,793
Southern California   7,820   6,538   3,207   2,950   5,209
Total Other Consumer Loans $ 183,117 $ 160,335 $ 160,721 $ 169,918 $ 176,524
Total Loans:
New England $ 3,346,525 $ 3,363,887 $ 3,404,322 $ 3,303,873 $ 3,191,069
San Francisco Bay Area 1,292,474 1,263,253 1,293,576 1,281,353 1,298,917
Southern California   1,112,498   1,031,041   1,021,314   1,022,246   973,264
Total Loans $ 5,751,497 $ 5,658,181 $ 5,719,212 $ 5,607,472 $ 5,463,250
 
         
Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
(In thousands)
CREDIT QUALITY (10):   6/30/2016     3/31/2016     12/31/2015   9/30/2015     6/30/2015
Special Mention Loans:
New England $ 27,903 $ 38,927 $ 40,121 $ 46,924 $ 53,626
San Francisco Bay Area 24,381 23,288 15,764 11,087 17,150
Southern California   15,044     24,710     13,326   12,718     5,659
Total Special Mention Loans $ 67,328   $ 86,925   $ 69,211 $ 70,729   $ 76,435
Accruing Substandard Loans (11):
New England $ 17,447 $ 19,157 $ 22,026 $ 16,996 $ 16,666
San Francisco Bay Area 19,750 20,235 19,990 20,108 20,396
Southern California   27,027     16,299     16,398   22,405     24,554
Total Accruing Substandard Loans $ 64,224   $ 55,691   $ 58,414 $ 59,509   $ 61,616
Nonaccruing Loans:
New England $ 13,028 $ 17,988 $ 19,572 $ 22,815 $ 17,943
San Francisco Bay Area 4,196 4,369 4,977 5,096 9,163
Southern California   1,964     1,999     2,022   2,816     2,785
Total Nonaccruing Loans $ 19,188   $ 24,356   $ 26,571 $ 30,727   $ 29,891
Other Real Estate Owned:
New England $ 2,042 $ 98 $ 191 $ 191 $ 344
San Francisco Bay Area — — 585 585 585
Southern California   —     —     —   —     —
Total Other Real Estate Owned $ 2,042   $ 98   $ 776 $ 776   $ 929
Loans 30-89 Days Past Due and Accruing (12):
New England $ 5,213 $ 4,723 $ 7,118 $ 6,733 $ 3,873
San Francisco Bay Area 70 986 2,806 14 110
Southern California   2,343     2,598     3,170   227     356
Total Loans 30-89 Days Past Due and Accruing $ 7,626   $ 8,307   $ 13,094 $ 6,974   $ 4,339
Loans (Charged-off)/ Recovered, Net for the Three Months Ended:
New England $

1,276

$ (2,146 ) $ 120 $ (1,618 ) $ 106
San Francisco Bay Area 537 3,454 703 (57 ) 833
Southern California   48     (248 )   86   70     49
Total Net Loans (Charged-off)/ Recovered $

1,861

  $ 1,060   $ 909 $ (1,605 ) $ 988
Loans (Charged-off)/ Recovered, Net for the Six Months Ended:
New England $

(870

) $ 996
San Francisco Bay Area 3,991 3,571
Southern California   (200 )   346
Total Net Loans (Charged-off)/ Recovered $

2,921

  $ 4,913
 
 
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 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 and dividends paid on preferred stock.
 
(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 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, 2015 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)   6/30/2016     3/31/2016     12/31/2015     9/30/2015     6/30/2015  
Total Balance Sheet Assets $ 7,579,601 $ 7,413,663 $ 7,542,508 $ 7,180,528 $ 7,045,939
LESS: Goodwill and Intangible Assets, net   (181,918 )   (183,504 )   (185,089 )   (186,888 )   (188,543 )
Tangible Assets (non-GAAP) $ 7,397,683 $ 7,230,159 $ 7,357,419 $ 6,993,640 $ 6,857,396
Total Shareholders' Equity $ 774,140 $ 762,145 $ 746,613 $ 740,757 $ 728,085
LESS: Series D Preferred Stock (non-convertible) (47,753 ) (47,753 ) (47,753 ) (47,753 ) (47,753 )
LESS: Goodwill and Intangible Assets, net   (181,918 )   (183,504 )   (185,089 )   (186,888 )   (188,543 )
Total adjusting items   (229,671 )   (231,257 )   (232,842 )   (234,641 )   (236,296 )
Tangible Common Equity (non-GAAP) $ 544,469   $ 530,888   $ 513,771   $ 506,116   $ 491,789  
Total Equity/Total Assets 10.21 % 10.28 % 9.90 % 10.32 % 10.33 %
Tangible Common Equity/Tangible Assets (non-GAAP) 7.36 % 7.34 % 6.98 % 7.24 % 7.17 %
 
Total Risk Weighted Assets * $ 5,464,531 $ 5,412,514 $ 5,449,239 $ 5,397,148 $ 5,278,052
Tier I Common Equity * $ 543,802 $ 536,925 $ 534,241 $ 525,004 $ 515,546
Tier I Common Equity/ Risk Weighted Assets 9.95 % 9.92 % 9.80 % 9.73 % 9.77 %
 
End of Period Shares Outstanding 83,380,426 83,023,755 83,410,961 83,645,364 83,539,785
 
Book Value Per Common Share $ 8.71 $ 8.60 $ 8.38 $ 8.29 $ 8.14
Tangible Book Value Per Share (non-GAAP) $ 6.53 $ 6.39 $ 6.16 $ 6.05 $ 5.89
* Risk Weighted Assets and Tier I Common Equity for June 30, 2016 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
(In thousands)   6/30/2016     3/31/2016     12/31/2015     9/30/2015     6/30/2015  
Total average shareholders' equity $ 765,063 $ 755,400 $ 743,150 $ 733,882 $ 725,515
LESS: Average Series D preferred stock (non-convertible)   (47,753 )   (47,753 )   (47,753 )   (47,753 )   (47,753 )
Average common equity (non-GAAP)   717,310     707,647     695,397     686,129     677,762  
LESS: Average goodwill and intangible assets, net   (182,787 )   (184,415 )   (185,983 )   (187,728 )   (189,420 )
Average Tangible Common Equity (non-GAAP) $ 534,523   $ 523,232   $ 509,414   $ 498,401   $ 488,342  
 
Net income attributable to the Company $ 16,398 $ 18,041 $ 15,002 $ 13,530 $ 17,610
LESS: Dividends on Series D preferred stock   (869 )   (869 )   (869 )   (869 )   (869 )
Common net income (non-GAAP) 15,529 17,172 14,133 12,661 16,741
ADD: Amortization of intangibles, net of tax (35%)   1,031     1,031     1,169     1,076     1,076  
Tangible common net income (non-GAAP) $ 16,560   $ 18,203   $ 15,302   $ 13,737   $ 17,817  
 
Return on Average Equity - (Annualized) 8.60 % 9.69 % 8.01 % 7.31 % 9.74 %
Return on Average Common Equity - (Annualized) (non-GAAP) 8.68 % 9.84 % 8.06 % 7.32 % 9.91 %
Return on Average Tangible Common Equity - (Annualized) (non-GAAP) 12.43 % 14.11 % 11.92 % 10.93 % 14.63 %
 
Six months ended
(In thousands)   6/30/2016     6/30/2015  
Total average shareholders' equity $ 760,616 $ 720,108
LESS: Average Series D preferred stock (non-convertible)   (47,753 )   (47,753 )
Average common equity (non-GAAP)   712,863     672,355  
LESS: Average goodwill and intangible assets, net   (183,601 )   (190,233 )
Average Tangible Common Equity (non-GAAP) $ 529,262   $ 482,122  
 
Net income attributable to the Company $ 34,439 $ 36,393
LESS: Dividends on Series D preferred stock   (1,738 )   (1,738 )
Common net income (non-GAAP) 32,701 34,655
ADD: Amortization of intangibles, net of tax (35%)   2,062     2,117  
Tangible common net income (non-GAAP) $ 34,763   $ 36,772  
 
Return on Average Equity - (Annualized) 9.13 % 10.19 %
Return on Average Common Equity - (Annualized) (non-GAAP) 9.25 % 10.39 %
Return on Average Tangible Common Equity - (Annualized) (non-GAAP) 13.25 % 15.38 %
 
(6) The Company uses certain non-GAAP financial measures, such as: pre-tax, pre-provision earnings, total operating expenses excluding restructuring expense, 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; from GAAP total operating expense to non-GAAP total operating expense excluding restructuring; and from GAAP efficiency ratio to Non-GAAP efficiency ratio (FTE basis), excluding restructuring, are presented below:
Three Months Ended
(In thousands)   6/30/2016     3/31/2016     12/31/2015     9/30/2015     6/30/2015  
Income before income taxes (GAAP) $ 23,768 $ 24,325 $ 20,106 $ 21,390 $ 25,327
ADD BACK: Provision/ (credit) for loan losses   (2,535 )   (3,133 )   (1,655 )   2,600     —  
Pre-tax, pre-provision earnings (non-GAAP) $ 21,233 $ 21,192 $ 18,451 $ 23,990 $ 25,327
 
Total operating expense (GAAP) $ 64,731 $ 66,709 $ 67,407 $ 61,929 $ 62,418
Less: Amortization of intangibles 1,586 1,586 1,799 1,655 1,655
Less: Restructuring   905     1,112     2,000     1,504     220  
Total operating expense (excluding amortization of intangibles and restructuring) (non-GAAP) $ 62,240 $ 64,011 $ 63,608 $ 58,770 $ 60,543
Total operating expense (excluding restructuring) (non-GAAP) 63,826 65,597 65,407 60,425 62,198
 
Net interest income $ 49,169 $ 49,879 $ 48,140 $ 46,473 $ 45,085
Total core fees and income 37,565 37,728 37,137 39,443 40,347
Total other income (770 ) 294 581 3 2,313
FTE income   2,437     2,416     2,997     2,883     2,631  
Total revenue (FTE basis) $ 88,401 $ 90,317 $ 88,855 $ 88,802 $ 90,376
Efficiency Ratio, before deduction of intangible amortization (GAAP) 75.30 % 75.89 % 78.51 % 72.08 % 71.14 %
Efficiency Ratio, FTE Basis excluding restructuring (non-GAAP) 70.41 % 70.87 % 71.59 % 66.18 % 66.99 %
 
Six months ended
(In thousands)   6/30/2016     6/30/2015  
Income before income taxes (GAAP) $ 48,093 $ 51,817
ADD BACK: Provision/ (credit) for loan losses   (5,668 )   (2,500 )
Pre-tax, pre-provision earnings (non-GAAP) $ 42,425 $ 49,317
 
Total operating expense (GAAP) $ 131,440 $ 125,845
Less: Amortization of intangibles 3,172 3,257
Less: Restructuring   2,017     220  
Total operating expense (excluding amortization of intangibles and restructuring) (non-GAAP) $ 126,251 $ 122,368
Total operating expense (excluding restructuring) (non-GAAP) 129,423 125,625
 
Net interest income $ 99,048 $ 91,157
Total core fees and income 75,293 80,507
Total other income (476 ) 3,498
FTE income   4,853     5,155  
Total revenue (FTE basis) $ 178,718 $ 180,317
Efficiency Ratio, before deduction of intangible amortization (GAAP) 75.60 % 71.84 %
Efficiency Ratio, FTE Basis excluding restructuring (non-GAAP) 70.64 % 67.86 %
 
(7) The Company uses certain non-GAAP financial measures, such as: net interest income excluding interest recovered on previous nonaccrual loans and net interest margin excluding interest recovered on previous nonaccrual loans 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 net interest income to non-GAAP net interest income excluding interest recovered on previous nonaccrual loans; and from GAAP net interest margin to non-GAAP net interest margin excluding interest recovered on previous nonaccrual loans, are presented below:
Three Months Ended
(In thousands)   6/30/2016     3/31/2016     12/31/2015     9/30/2015     6/30/2015  
Net interest income (GAAP basis) $ 49,169 $ 49,879 $ 48,140 $ 46,473 $ 45,085
ADD: FTE income   2,437     2,416     2,997     2,883     2,631  
Net interest income, FTE basis 51,606 52,295 51,137 49,356 47,716
LESS: Interest recovered on previously nonaccrual loans   565     1,089     255     298     69  
Net interest income, FTE basis, excluding interest recovered on previously nonaccrual loans (non-GAAP)   51,041     51,206     50,882     49,058     47,647  
 
Net Interest Margin (FTE basis) 2.91 % 2.96 % 2.88 % 2.84 % 2.90 %
Net Interest Margin, FTE basis, excluding interest recovered on previously nonaccrual loans (non-GAAP) 2.88 % 2.90 % 2.86 % 2.82 % 2.90 %
 
(8) 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.
 
(9) Average Loans includes Loans Held for Sale and Nonaccrual Loans. Average Deposits includes Deposits Held for Sale.
 
(10) The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lender's regional offices.
 
(11) 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.
 
(12) In addition to loans 30-89 days past due and accruing, at June 30, 2016, the Company had one loan totaling $0.1 million that was more than 90 days past due but still on accrual status. This loan originated in the San Francisco Bay Area region. At March 31, 2016, December 31, 2015, and June 30, 2015, the Company had no loans outstanding more than 90 days past due but still on accrual status. At September 30, 2015, the Company had one loan totaling $0.1 million that was more than 90 days past due but still on accrual status. This loan originated in the New England region.
 
(13) Average Total Deposits is the sum of Average Total Interest-Bearing Deposits and Average Noninterest Bearing Demand Deposits.

Contacts

Adam Bromley
Vice President Corporate Finance and Director of Investor Relations
Boston Private Financial Holdings, Inc.
(617) 912-4386
abromley@bostonprivate.com

Contacts

Adam Bromley
Vice President Corporate Finance and Director of Investor Relations
Boston Private Financial Holdings, Inc.
(617) 912-4386
abromley@bostonprivate.com