Boston Private Financial Holdings, Inc. Reports Second Quarter 2019 Results

Second Quarter 2019 Highlights include:

  • GAAP Net income was $19.4 million, or $0.22 per diluted share
  • Return on average common equity was 9.8%
  • Return on average tangible common equity was 11.1%
  • Average total loans were $7.0 billion, a 5% increase year-over-year
  • Average total deposits were $6.6 billion, a 4% increase year-over-year
  • Total assets under management/advisory (“AUM”) were $16.2 billion, a decrease of 4% year-over-year
  • Total net flows were negative $269 million, of which $127 million were attributable to the Wealth Management & Trust segment and $142 million were attributable to Affiliate Partners

BOSTON--()--Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported second quarter 2019 GAAP Net income attributable to the Company of $19.4 million, compared to $19.4 million for the first quarter of 2019 and $6.4 million for the second quarter of 2018. Second quarter 2019 GAAP Diluted earnings per share were $0.22, compared to $0.25 in the first quarter of 2019 and $0.03 in the second quarter of 2018.

 

Summary Financial Results - Reported

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Change

($ in millions, except for per share data)

 

2Q19

 

1Q19

 

2Q18

 

LQ

 

Y/Y

Net income

 

$19.4

 

$19.4

 

$6.4

 

%

 

nm

Diluted earnings per share

 

$0.22

 

$0.25

 

$0.03

 

(12

)%

 

nm

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Financial Measures:

 

 

 

 

 

 

 

 

 

 

Pre-tax, pre-provision income

 

$26.2

 

$23.0

 

$25.3

 

14

%

 

4

%

Return on average common equity (“ROACE”)

 

9.8%

 

10.3%

 

3.0%

 

 

 

 

Return on average tangible common equity (“ROATCE”)

 

11.1%

 

11.6%

 

3.9%

 

 

 

 

nm = not meaningful

 

 

 

 

 

 

 

 

 

 

The Company's reported financial results increased year-over-year primarily as a result of a $12.7 million income tax expense related to the divestiture of Anchor Capital Advisors LLC in the second 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 financial measures, see page 7. A full reconciliation of GAAP to non-GAAP results can be found in the footnotes beginning on page 17.

 

Summary Financial Results - Operating Basis (non-GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Change

($ in millions, except for per share data)

 

2Q19

 

1Q191

 

2Q182

 

LQ

 

Y/Y

Net income

 

$19.4

 

$20.7

 

$19.5

 

(7

)%

 

(1

)%

Diluted earnings per share

 

$0.22

 

$0.27

 

$0.21

 

(17

)%

 

4

%

 

 

 

 

 

 

 

 

 

 

 

Pre-tax, pre-provision income

 

$26.2

 

$24.7

 

$25.7

 

6

%

 

2

%

Return on average common equity

 

9.8%

 

11.0%

 

10.1%

 

 

 

 

Return on average tangible common equity

 

11.1%

 

12.4%

 

12.2%

 

 

 

 

1 1Q19 results adjusted to exclude the net after-tax impact of $1.6 million restructuring expense
2 2Q18 results adjusted to exclude $12.7 million income tax expense related to the divestiture of Anchor and net after-tax impact of $0.4 million information services expense related to efficiency initiatives

"During the first half of 2019, we have been focused on beginning the process of implementing our strategic vision for growth," said Anthony DeChellis, CEO of Boston Private. "Our second quarter results reflect improvement in pre-tax, pre-provision profitability measures as we exercise expense discipline and realize the benefits from efficiency initiatives. Looking ahead, we will continue to improve our efficiency as we transition our company to achieve the growth objectives we discussed during our Investor Day."

Divested Affiliates

The Company completed the sale of Anchor Capital Advisors LLC ("Anchor") and Bingham, Osborn & Scarborough LLC ("BOS") (together, "the Divested Affiliates") during 2018. Financial results from the Divested Affiliates remain consolidated in the Company's financial results through the closing dates of the divestitures. The Anchor divestiture closing date was April 13, 2018, and the BOS divestiture closing date was December 3, 2018.

For presentation purposes, the Divested Affiliates' AUM are excluded from AUM amounts, but are included in the calculation of Core fees and income. The discussion below includes non-GAAP measures that exclude the contributions from these affiliates in order to enhance comparability of trends in the core business.

Net Interest Income and Margin

 

 

 

 

 

 

 

 

 

 

 

 

% Change

($ in millions)

 

2Q19

 

1Q19

 

2Q18

 

LQ

 

Y/Y

Net interest income

 

$57.5

 

 

$58.3

 

 

$57.5

 

 

(2

)%

 

%

Less: Interest recovered on previous nonaccrual loans

 

 

 

0.3

 

 

 

 

nm

 

nm

Core net interest income (non-GAAP)

 

$57.5

 

 

$58.1

 

 

$57.5

 

 

(1

)%

 

%

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

2.78

%

 

2.90

%

 

2.85

%

 

 

 

 

Core net interest margin (non-GAAP)

 

2.78

%

 

2.89

%

 

2.85

%

 

 

 

 

Net interest income for the second quarter of 2019 was $57.5 million, a decrease of 2% linked quarter while remaining flat year-over-year. Core net interest income, which excludes interest recovered on previous nonaccrual loans, decreased 1% linked quarter and while remaining flat year-over-year. The linked quarter decrease was primarily driven by higher funding costs and higher borrowing volumes, partially offset by higher average interest-earning asset volumes.

The Company’s Core net interest margin, which excludes interest recovered on previous nonaccrual loans, decreased 11 basis points on a linked quarter basis to 2.78%, primarily driven by higher funding costs and higher borrowing volumes, while interest earning asset yields remained stable.

Noninterest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Change

($ in millions)

 

2Q19

 

1Q19

 

2Q18

 

LQ

 

Y/Y

Investment management fees

 

$2.5

 

$2.7

 

$4.2

 

(7

)%

 

(42

)%

Wealth advisory fees

 

8.1

 

8.2

 

13.7

 

— %

 

(41

)%

Wealth management and trust fees

 

10.8

 

10.9

 

11.2

 

(1

)%

 

(4

)%

Private banking fees 3

 

2.9

 

2.6

 

2.8

 

14

%

 

4

%

Total core fees and income

 

$24.3

 

$24.3

 

$31.9

 

%

 

(24

)%

Total other income

 

0.1

 

1.0

 

0.2

 

(91

)%

 

(56

)%

Total noninterest income

 

$24.4

 

$25.2

 

$32.1

 

(3

)%

 

(24

)%

 

 

 

 

 

 

 

 

 

 

 

Memo: Excluding Divested Affiliates

 

 

 

 

Investment management fees (non-GAAP) 4

 

2.5

 

2.7

 

3.1

 

(7

)%

 

(20

)%

Wealth advisory fees (non-GAAP) 5

 

8.1

 

8.2

 

8.0

 

— %

 

2

%

Wealth management and trust fees

 

10.8

 

10.9

 

11.2

 

(1

)%

 

(4

)%

Private banking fees3

 

2.9

 

2.6

 

2.8

 

14

%

 

4

%

Total core fees and income (non-GAAP) 4 5

 

$24.3

 

$24.3

 

$25.0

 

%

 

(3

)%

Total other income (non-GAAP)

 

0.1

 

1.0

 

0.2

 

(91

)%

 

(48

)%

Total noninterest income (non-GAAP) 4 5

 

$24.4

 

$25.2

 

$25.2

 

(3

)%

 

(3

)%

3 Private banking fees includes Other banking fee income and Gain/ (loss) on sale of loans, net
4 Excludes Anchor revenue of $1.2 million in 2Q18
5 Excludes BOS revenue of $5.8 million in 2Q18

Total core fees and income for the second quarter of 2019 was $24.3 million, flat linked quarter and a decline of 24% year-over-year. The year-over-year decline was primarily driven by the divestitures of Anchor and BOS.

Excluding Divested Affiliates, Total core fees and income decreased 3% year-over-year, primarily driven by lower Investment management fees and Wealth management and trust fees.

 

Assets Under Management / Advisory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Change

($ in millions)

 

2Q19

 

1Q19

 

2Q18

 

LQ

 

Y/Y

Wealth Management and Trust

 

$7,595

 

$7,593

 

$7,789

 

%

 

(2

)%

Affiliate Partners 6

 

8,604

 

8,529

 

9,072

 

1

%

 

(5

)%

Total assets under management / advisory 7

 

$16,199

 

$16,122

 

$16,861

 

%

 

(4

)%

Total net flows 7

 

$(269)

 

$(963)

 

$(97)

 

 

 

 

6 Segment includes Dalton, Greiner, Hartman, Maher & Co., LLC ("DGHM") and KLS Professional Advisors Group, LLC ("KLS")
7 Excludes Divested Affiliates

Total assets under management / advisory were $16.2 billion at the end of the second quarter of 2019, flat linked quarter and a decrease of 4% year-over-year. The linked quarter comparison was impacted by positive market action offset by negative net flows, while the year-over-year decrease was primarily driven by negative net flows in excess of positive market action.

Net flows during the second quarter of 2019 in the Wealth Management and Trust segment were negative $127 million, while net flows in the Affiliate Partners segment were negative $142 million.

 

Operating Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Change

($ in millions)

 

2Q19

 

1Q19

 

2Q18

 

LQ

 

Y/Y

Salaries and employee benefits

 

$32.7

 

$35.7

 

$39.4

 

(8)%

 

(17)%

Occupancy and equipment

 

7.9

 

8.3

 

8.2

 

(6)%

 

(5)%

Professional services

 

3.3

 

3.6

 

2.9

 

(7)%

 

15%

Marketing and business development

 

1.9

 

1.1

 

2.1

 

78%

 

(7)%

Information systems

 

5.1

 

5.9

 

6.8

 

(12)%

 

(24)%

Amortization of intangibles

 

0.7

 

0.7

 

0.7

 

—%

 

(10)%

FDIC insurance

 

0.6

 

0.7

 

0.7

 

(11)%

 

(17)%

Restructuring

 

 

1.6

 

 

nm

 

nm

Other

 

3.5

 

3.0

 

3.6

 

15%

 

(3)%

Total operating expense

 

$55.7

 

$60.6

 

$64.4

 

(8)%

 

(14)%

 

 

 

 

 

 

 

 

 

 

 

Memo: Excluding Notable Items8 and Divested Affiliates

 

 

 

 

 

 

 

 

 

 

Information systems 9

 

 

 

0.4

 

nm

 

nm

Restructuring

 

 

1.6

 

 

nm

 

nm

Divested Affiliates operating expense

 

 

 

4.7

 

nm

 

nm

Total operating expense (non-GAAP)

 

$55.7

 

$59.0

 

$59.2

 

(6)%

 

(6)%

8 "Notable Items" include adjustments made to GAAP results in prior periods
9 $0.4 million of Information services expense was reclassified to Restructuring expense in conjunction with the Company's formal restructuring plan announced in 4Q18

Total operating expense decreased 8% linked quarter, primarily driven by lower salaries and employee benefits expense, restructuring expense, information systems expense, and occupancy and equipment expense, partially offset by higher marketing and business development expense. Salaries and employee benefits expense declined linked quarter primarily as a result of seasonal payroll tax expense incurred during the first quarter of 2019. Restructuring expense incurred during the first quarter of 2019 was related to executive departures. Information systems expense declined linked quarter primarily as a result of savings attributable to information technology infrastructure consolidation. The year-over-year decline in Total operating expense of 14% was primarily driven by expenses associated with Divested Affiliates that are included in the second quarter of 2018 results.

Excluding Notable Items and Divested Affiliates, Total operating expense for the second quarter of 2019 was $55.7 million, down 6% linked quarter and 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 second quarter of 2019 was 21.6%.

 

Loans and Deposits - QTD Averages

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Change

($ in millions)

 

2Q19

 

1Q19

2Q18

 

LQ

 

Y/Y

Commercial and industrial

 

$1,092

 

$1,070

$974

 

2

%

 

12

%

Commercial real estate

 

2,507

 

2,398

2,478

 

5

%

 

1

%

Construction and land

 

203

 

211

167

 

(4

)%

 

22

%

Residential

 

3,009

 

2,973

2,775

 

1

%

 

8

%

Home equity

 

91

 

91

94

 

1

%

 

(3

)%

Other consumer

 

125

 

134

180

 

(7

)%

 

(31

)%

Total loans

 

$7,026

 

$6,877

$6,668

 

2

%

 

5

%

 

 

 

 

 

 

 

 

 

 

Non-interest bearing deposits

 

1,927

 

1,975

1,908

 

(2

)%

 

1

%

Interest bearing deposits

 

4,664

 

4,792

4,441

 

(3

)%

 

5

%

Total deposits

 

$6,590

 

$6,767

$6,349

 

(3

)%

 

4

%

 

 

 

 

 

 

 

 

 

 

Non-interest bearing deposits as a % of Total deposits

 

29

%

 

29

%

30

%

 

 

 

 

 

Average total loans in the second quarter of 2019 increased 5% year-over-year, primarily driven by increases in Residential loans and Commercial and industrial loans.

Average total deposits increased 4% year-over-year, primarily driven by growth in money market accounts, certificates of deposits, and demand deposit accounts, partially offset by declines in savings and NOW accounts. Deposits declined 3% linked quarter

The cost of total deposits was 0.88%, an increase of 4 basis points linked quarter and 35 basis points year-over-year.

 

Provision and Asset Quality

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in millions)

 

2Q19

 

1Q19

 

4Q18

 

3Q18

 

2Q18

Provision/ (credit) for loan loss

 

$1.4

 

$(1.4)

 

$0.1

 

$(0.9)

 

$0.5

Total criticized loans

 

141.7

 

141.3

 

146.6

 

134.7

 

114.4

Total nonaccrual loans

 

17.2

 

12.0

 

14.1

 

12.1

 

15.7

Total loans 30-89 days past due and accruing

 

2.4

 

17.7

 

22.3

 

11.6

 

5.0

Total net loans (charged-off)/ recovered

 

(0.1)

 

(0.1)

 

1.7

 

1.0

 

0.1

 

 

 

 

 

 

 

 

 

 

 

Ratios:

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses as a % of Total loans

 

1.06

%

 

1.07

%

 

1.09

%

 

1.09

%

 

1.09

%

Nonaccrual loans as a % of Total loans

 

0.24

%

 

0.17

%

 

0.20

%

 

0.18

%

 

0.23

%

 

The Company recorded a provision expense of $1.4 million for the second quarter of 2019, compared to a provision credit of $1.4 million for the first quarter of 2019 and an expense of $0.5 million in the second quarter of 2018. The provision expense in the second quarter of 2019 was primarily driven by loan growth.

Total criticized loans as of June 30, 2019 was $141.7 million, flat linked quarter and an increase of 24% year-over-year. Total nonaccrual loans as of June 30, 2019 was $17.2 million, or 24 basis points of total loans, compared to $12.0 million, or 17 basis points of total loans as of March 31, 2019, and $15.7 million, or 23 basis points of total loans as of June 30, 2018.

 

Capital

 

 

 

 

 

 

 

 

 

 

($ in millions, except for per share data)

 

2Q19

 

1Q19

 

4Q18

 

3Q18

 

2Q18

Tangible common equity/ Tangible assets 10

 

8.4%

 

8.3%

 

8.1%

 

7.8%

 

7.5%

Tangible book value per share 10

 

$8.71

 

$8.47

 

$8.18

 

$7.67

 

$7.62

 

 

 

 

 

 

 

 

 

 

 

Regulatory Capital Ratios: 11

 

 

 

 

 

 

 

 

 

 

Tier 1 common equity

 

11.2%

 

11.4%

 

11.4%

 

11.1%

 

10.9%

Total risk-based capital

 

13.9%

 

14.2%

 

14.3%

 

14.1%

 

13.8%

Tier 1 risk-based capital

 

12.7%

 

13.0%

 

13.0%

 

12.8%

 

12.6%

Tier 1 leverage capital

 

9.6%

 

9.7%

 

9.5%

 

9.2%

 

9.2%

 

 

 

 

 

 

 

 

 

 

 

Common Equity Repurchase Program:

 

 

 

 

 

 

 

 

 

 

Total shares of common stock repurchased

 

 

 

1,505,521

 

137,144

 

Average price paid per share of common stock

 

 

 

$12.02

 

$13.89

 

Aggregate repurchases of common equity ($ in millions)

 

 

 

$18.1

 

$1.9

 

10 See footnote 6 for a GAAP to non-GAAP reconciliation.
11 Current quarter information is presented based on estimated data.

Tangible book value per share as of June 30, 2019 increased 3% linked quarter and 14% year-over-year to $8.71. 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, while the year-over-year increase was primarily driven by the divestiture of BOS, higher Accumulated other comprehensive income and increased retained earnings, partially offset by common share repurchases.

EPS Calculation

For calculation of income for EPS, second quarter 2019 Net income attributable to the common shareholders was negatively impacted by $0.8 million, or $0.01 per share, related to the changes in value of Redeemable noncontrolling interests (“RNCI”).

Dividend Payments

Concurrent with the release of second 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 August 9, 2019, and the payment date is August 23, 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: tangible book value per share; the TCE/TA ratio; return on average common equity; return on average tangible common equity; pre-tax, pre-provision income; total operating expense excluding intangibles, and restructuring, if any; the efficiency ratio; the efficiency ratio excluding amortization of intangibles, and restructuring, if any; 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; 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 operating expenses.

A detailed reconciliation table of the Company’s GAAP to non-GAAP measures is included in the footnotes of the attached financial schedules.

Conference Call

Management will hold a conference call at 8:00 a.m. Eastern Time on Thursday, July 25, 2019, to discuss the financial results, business highlights and outlook. To access the call:

Dial In #: (888) 317-6003
Elite Entry Number: 5871776

Replay Information:
Available from July 25, 2019 at 12:00 p.m. Eastern Time until August 1, 2019
Dial In #: (877) 344-7529
Conference Number: 10132971

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, 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 commercial and private banking, investment management, wealth advisory, and trust 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.

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.

 

 

June 30,
2019

 

March 31,
2019

 

December 31,
2018

 

September 30,
2018

 

June 30,
2018

 

(In thousands, except share and per share data)

Assets:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

65,756

 

 

$

96,211

 

 

$

127,259

 

 

$

92,634

 

 

$

364,539

 

Investment securities available-for-sale

966,731

 

 

981,951

 

 

994,065

 

 

1,056,261

 

 

1,069,025

 

Investment securities held-to-maturity

54,482

 

 

67,548

 

 

70,438

 

 

75,468

 

 

78,955

 

Equity securities at fair value

19,092

 

 

7,491

 

 

14,228

 

 

7,079

 

 

7,942

 

Stock in Federal Home Loan Bank and Federal Reserve Bank

64,453

 

 

47,053

 

 

49,263

 

 

48,727

 

 

70,127

 

Loans held for sale

3,640

 

 

280

 

 

2,812

 

 

3,344

 

 

4,622

 

Total loans

7,080,260

 

 

6,926,968

 

 

6,893,158

 

 

6,720,420

 

 

6,767,123

 

Less: Allowance for loan losses

75,067

 

 

73,814

 

 

75,312

 

 

73,500

 

 

73,464

 

Net loans

7,005,193

 

 

6,853,154

 

 

6,817,846

 

 

6,646,920

 

 

6,693,659

 

Other real estate owned (“OREO”)

 

 

 

 

401

 

 

108

 

 

108

 

Premises and equipment, net

40,244

 

 

42,938

 

 

45,412

 

 

47,399

 

 

46,421

 

Goodwill (1)

57,607

 

 

57,607

 

 

57,607

 

 

75,598

 

 

75,598

 

Intangible assets, net

10,884

 

 

11,555

 

 

12,227

 

 

13,834

 

 

14,584

 

Fees receivable

3,611

 

 

3,982

 

 

5,101

 

 

10,445

 

 

10,405

 

Accrued interest receivable

26,411

 

 

25,935

 

 

24,366

 

 

24,641

 

 

23,732

 

Deferred income taxes, net

17,183

 

 

22,844

 

 

26,638

 

 

27,833

 

 

26,316

 

Right-of-use assets

110,880

 

 

104,644

 

 

 

 

 

 

 

Other assets

266,706

 

 

248,950

 

 

246,962

 

 

245,549

 

 

230,170

 

Total assets

$

8,712,873

 

 

$

8,572,143

 

 

$

8,494,625

 

 

$

8,375,840

 

 

$

8,716,203

 

Liabilities:

 

 

 

 

 

 

 

 

 

Deposits

$

6,437,963

 

 

$

6,779,845

 

 

$

6,781,170

 

 

$

6,768,723

 

 

$

6,620,179

 

Securities sold under agreements to repurchase

62,372

 

 

58,329

 

 

36,928

 

 

39,453

 

 

58,824

 

Federal funds purchased

135,000

 

 

 

 

250,000

 

 

120,000

 

 

 

Federal Home Loan Bank borrowings

920,068

 

 

615,070

 

 

420,144

 

 

441,836

 

 

1,056,938

 

Junior subordinated debentures

106,363

 

 

106,363

 

 

106,363

 

 

106,363

 

 

106,363

 

Lease liabilities

126,740

 

 

120,162

 

 

 

 

 

 

 

Other liabilities

124,370

 

 

112,893

 

 

143,540

 

 

149,770

 

 

129,175

 

Total liabilities

7,912,876

 

 

7,792,662

 

 

7,738,145

 

 

7,626,145

 

 

7,971,479

 

Redeemable noncontrolling interests (“RNCI”)

1,786

 

 

662

 

 

2,526

 

 

11,686

 

 

10,747

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

 

Common stock, $1.00 par value; authorized: 170,000,000 shares

83,774

 

 

83,774

 

 

83,656

 

 

84,603

 

 

84,479

 

Additional paid-in capital

603,869

 

 

604,288

 

 

600,196

 

 

614,157

 

 

613,918

 

Retained earnings

106,443

 

 

97,155

 

 

87,821

 

 

64,618

 

 

56,912

 

Accumulated other comprehensive income/ (loss)

4,125

 

 

(6,398

)

 

(17,719

)

 

(27,578

)

 

(23,328

)

Total Company’s shareholders’ equity

798,211

 

 

778,819

 

 

753,954

 

 

735,800

 

 

731,981

 

Noncontrolling interests

 

 

 

 

 

 

2,209

 

 

1,996

 

Total shareholders’ equity

798,211

 

 

778,819

 

 

753,954

 

 

738,009

 

 

733,977

 

Total liabilities, RNCI and shareholders’ equity

$

8,712,873

 

 

$

8,572,143

 

 

$

8,494,625

 

 

$

8,375,840

 

 

$

8,716,203

 

 
 

 

Three Months Ended

 

June 30,
2019

 

March 31,
2019

 

December 31,
2018

 

September 30,
2018

 

June 30,
2018

Interest and dividend income:

(In thousands, except share and per share data)

Loans

$

71,943

 

 

$

69,933

 

 

$

69,294

 

 

$

68,254

 

 

$

64,048

 

Investment securities

5,728

 

 

5,983

 

 

6,242

 

 

6,230

 

 

6,302

 

Short-term investments and other

1,057

 

 

908

 

 

1,356

 

 

1,617

 

 

1,205

 

Total interest and dividend income

78,728

 

 

76,824

 

 

76,892

 

 

76,101

 

 

71,555

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

14,515

 

 

14,058

 

 

13,470

 

 

11,487

 

 

8,365

 

Borrowings

6,753

 

 

4,428

 

 

3,425

 

 

4,973

 

 

5,645

 

Total interest expense

21,268

 

 

18,486

 

 

16,895

 

 

16,460

 

 

14,010

 

Net interest income

57,460

 

 

58,338

 

 

59,997

 

 

59,641

 

 

57,545

 

Provision/ (credit) for loan losses

1,363

 

 

(1,426

)

 

93

 

 

(949

)

 

453

 

Net interest income after provision/ (credit) for loan losses

56,097

 

 

59,764

 

 

59,904

 

 

60,590

 

 

57,092

 

Noninterest income:

 

 

 

 

 

 

 

 

 

Investment management fees

2,455

 

 

2,650

 

 

2,831

 

 

3,245

 

 

4,227

 

Wealth advisory fees

8,141

 

 

8,165

 

 

12,111

 

 

13,995

 

 

13,693

 

Wealth management and trust fees

10,771

 

 

10,893

 

 

11,677

 

 

11,510

 

 

11,169

 

Other banking fee income

2,867

 

 

2,499

 

 

2,033

 

 

2,775

 

 

2,745

 

Gain on sale of loans, net

58

 

 

73

 

 

39

 

 

67

 

 

63

 

Total core fees and income

24,292

 

 

24,280

 

 

28,691

 

 

31,592

 

 

31,897

 

Gain/ (loss) on sale of investments, net

 

 

 

 

(596

)

 

 

 

7

 

Gain/ (loss) on OREO, net

 

 

91

 

 

 

 

 

 

 

Gain on sale of affiliate

 

 

 

 

18,142

 

 

 

 

 

Other

88

 

 

877

 

 

(392

)

 

722

 

 

191

 

Total other income

88

 

 

968

 

 

17,154

 

 

722

 

 

198

 

Total revenue (2)

81,840

 

 

83,586

 

 

105,842

 

 

91,955

 

 

89,640

 

Operating expense:

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

32,706

 

 

35,726

 

 

36,007

 

 

38,944

 

 

39,433

 

Occupancy and equipment

7,852

 

 

8,348

 

 

7,975

 

 

8,164

 

 

8,229

 

Professional services

3,313

 

 

3,560

 

 

4,229

 

 

2,877

 

 

2,872

 

Marketing and business development

1,934

 

 

1,085

 

 

2,275

 

 

1,710

 

 

2,070

 

Information systems

5,137

 

 

5,860

 

 

6,296

 

 

6,233

 

 

6,770

 

Amortization of intangibles

672

 

 

672

 

 

680

 

 

750

 

 

749

 

FDIC insurance

585

 

 

660

 

 

739

 

 

674

 

 

708

 

Restructuring

 

 

1,646

 

 

2,065

 

 

5,763

 

 

 

Other

3,460

 

 

2,996

 

 

3,291

 

 

3,442

 

 

3,553

 

Total operating expense

55,659

 

 

60,553

 

 

63,557

 

 

68,557

 

 

64,384

 

Income before income taxes

24,818

 

 

24,459

 

 

42,192

 

 

24,347

 

 

24,803

 

Income tax expense

5,369

 

 

4,917

 

 

8,651

 

 

5,461

 

 

17,399

 

Net income from continuing operations

19,449

 

 

19,542

 

 

33,541

 

 

18,886

 

 

7,404

 

Net income/ (loss) from discontinued operations (3)

 

 

 

 

306

 

 

 

 

(2

)

Net income before attribution to noncontrolling interests

19,449

 

 

19,542

 

 

33,847

 

 

18,886

 

 

7,402

 

Less: Net income attributable to noncontrolling interests

69

 

 

100

 

 

545

 

 

924

 

 

968

 

Net income attributable to the Company

$

19,380

 

 

$

19,442

 

 

$

33,302

 

 

$

17,962

 

 

$

6,434

 

 

 

 

 

 

 

 

 

 

 

Adjustments, treasury stock method (4)

(816

)

 

1,557

 

 

2,694

 

 

(829

)

 

(3,524

)

Net income attributable to common shareholders, treasury stock method

$

18,564

 

 

$

20,999

 

 

$

35,996

 

 

$

17,133

 

 

$

2,910

 

 

 

 

 

 

 

 

 

 

 

Weighted average basic shares outstanding

83,565,780

 

 

83,285,095

 

 

83,750,785

 

 

84,017,284

 

 

83,509,115

 

Weighted average diluted shares outstanding (5)

84,048,972

 

 

84,010,450

 

 

84,863,779

 

 

85,498,568

 

 

85,413,575

 

Diluted total earnings per share

$

0.22

 

 

$

0.25

 

 

$

0.42

 

 

$

0.20

 

 

$

0.03

 

 

 
 

 

Six Months Ended

 

June 30,
2019

 

June 30,
2018

Interest and dividend income:

(In thousands, except share and per share data)

Loans

$

141,876

 

 

$

124,977

 

Investment securities

11,711

 

 

12,720

 

Short-term investments and other

1,965

 

 

2,214

 

Total interest and dividend income

155,552

 

 

139,911

 

Interest expense:

 

 

 

Deposits

28,573

 

 

14,889

 

Borrowings

11,181

 

 

10,094

 

Total interest expense

39,754

 

 

24,983

 

Net interest income

115,798

 

 

114,928

 

Provision/ (credit) for loan losses

(63

)

 

(1,342

)

Net interest income after provision/ (credit) for loan losses

115,861

 

 

116,270

 

Fees and other income:

 

 

 

Investment management fees

5,105

 

 

15,652

 

Wealth advisory fees

16,306

 

 

27,205

 

Wealth management and trust fees

21,664

 

 

23,320

 

Other banking fee income

5,366

 

 

5,018

 

Gain on sale of loans, net

131

 

 

137

 

Total core fees and income

48,572

 

 

71,332

 

Gain/ (loss) on sale of investments, net

 

 

(17

)

Gain/ (loss) on OREO, net

91

 

 

 

Other

965

 

 

523

 

Total other income

1,056

 

 

506

 

Total revenue (2)

165,426

 

 

186,766

 

Operating expense:

 

 

 

Salaries and employee benefits

68,432

 

 

86,517

 

Occupancy and equipment

16,200

 

 

15,977

 

Professional services

6,873

 

 

6,049

 

Marketing and business development

3,019

 

 

3,663

 

Information systems

10,997

 

 

12,656

 

Amortization of intangibles

1,344

 

 

1,499

 

FDIC insurance

1,245

 

 

1,452

 

Restructuring

1,646

 

 

 

Other

6,456

 

 

7,428

 

Total operating expense

116,212

 

 

135,241

 

Income before income taxes

49,277

 

 

52,867

 

Income tax expense

10,286

 

 

23,425

 

Net income from continuing operations

38,991

 

 

29,442

 

Net income from discontinued operations (3)

 

 

1,696

 

Net income before attribution to noncontrolling interests

38,991

 

 

31,138

 

Less: Net income attributable to noncontrolling interests

169

 

 

2,018

 

Net income attributable to the Company

$

38,822

 

 

$

29,120

 

 

 

 

 

Adjustments, treasury stock method (4)

741

 

 

(3,547

)

Net income attributable to common shareholders, treasury stock method

$

39,563

 

 

$

25,573

 

 

 

 

 

Weighted average basic shares outstanding

83,426,213

 

 

83,304,573

 

Weighted average diluted shares outstanding (5)

84,036,050

 

 

85,221,974

 

Diluted total earnings per share

$

0.47

 

 

$

0.30

 

 

 
 

(In thousands, except per share data)

June 30,
2019

 

March 31,
2019

 

December 31,
2018

 

September 30,
2018

 

June 30,
2018

FINANCIAL DATA:

Book value per common share

$

9.53

 

 

$

9.30

 

 

$

9.01

 

 

$

8.72

 

 

$

8.69

 

Tangible book value per share (6)

$

8.71

 

 

$

8.47

 

 

$

8.18

 

 

$

7.67

 

 

$

7.62

 

Market price per share

$

12.07

 

 

$

10.96

 

 

$

10.57

 

 

$

13.65

 

 

$

15.90

 

 

 

 

 

 

 

 

 

 

 

ASSETS UNDER MANAGEMENT AND ADVISORY ("AUM"):

 

 

 

 

 

 

 

 

Wealth Management and Trust

$

7,595,000

 

 

$

7,593,000

 

 

$

7,602,000

 

 

$

8,335,000

 

 

$

7,789,000

 

Affiliate Partners, excluding BOS

8,604,000

 

 

8,529,000

 

 

8,319,000

 

 

9,388,000

 

 

9,072,000

 

Total AUM, excluding BOS (7)

16,199,000

 

 

16,122,000

 

 

15,921,000

 

 

17,723,000

 

 

16,861,000

 

AUM at BOS

 

 

 

 

 

 

4,714,000

 

 

4,525,000

 

Less: Inter-company relationship

 

 

 

 

 

 

(7,000

)

 

(7,000

)

Total AUM

$

16,199,000

 

 

$

16,122,000

 

 

$

15,921,000

 

 

$

22,430,000

 

 

$

21,379,000

 

 

 

 

 

 

 

 

 

 

 

FINANCIAL RATIOS:

 

 

 

 

 

 

 

 

 

Total equity/ Total assets

9.16

%

 

9.09

%

 

8.88

%

 

8.81

%

 

8.42

%

Tangible common equity/ Tangible assets (6)

8.44

%

 

8.35

%

 

8.12

%

 

7.83

%

 

7.46

%

Tier 1 common equity/ Risk weighted assets (6)

11.19

%

 

11.38

%

 

11.40

%

 

11.14

%

 

10.90

%

Allowance for loan losses/ Total loans

1.06

%

 

1.07

%

 

1.09

%

 

1.09

%

 

1.09

%

Allowance for loan losses/ Nonaccrual loans

438

%

 

614

%

 

536

%

 

608

%

 

469

%

Return on average assets (annualized)

0.90

%

 

0.93

%

 

1.56

%

 

0.84

%

 

0.31

%

ROACE (annualized) (non-GAAP) (8)

9.83

%

 

10.29

%

 

17.87

%

 

9.67

%

 

3.03

%

ROATCE (annualized) (non-GAAP) (8)

11.06

%

 

11.63

%

 

20.46

%

 

11.37

%

 

3.90

%

Efficiency ratio (annualized) (non-GAAP) (9)

67.19

%

 

69.67

%

 

57.14

%

 

67.04

%

 

70.29

%

 

 

 

 

 

 

 

 

 

 

DEPOSIT DETAIL:

 

 

 

 

 

 

 

 

 

Demand deposits (non-interest bearing)

$

1,854,091

 

 

$

2,016,838

 

 

$

1,951,274

 

 

$

2,001,275

 

 

$

2,089,373

 

NOW

563,130

 

 

605,852

 

 

626,685

 

 

568,148

 

 

635,841

 

Savings

68,036

 

 

68,102

 

 

73,834

 

 

72,967

 

 

73,675

 

Money market

3,228,608

 

 

3,302,244

 

 

3,338,892

 

 

3,363,062

 

 

3,128,211

 

Certificates of deposit

724,098

 

 

786,809

 

 

790,485

 

 

763,271

 

 

693,079

 

Total deposits

$

6,437,963

 

 

$

6,779,845

 

 

$

6,781,170

 

 

$

6,768,723

 

 

$

6,620,179

 

 
 

 

Average Balance

 

Interest Income/Expense

 

Average Yield/Rate

(In thousands)

Three Months Ended

 

Three Months Ended

 

Three Months Ended

AVERAGE BALANCE SHEET:

06/30/19

03/31/19

06/30/18

 

06/30/19

03/31/19

06/30/18

 

06/30/19

03/31/19

06/30/18

AVERAGE ASSETS

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and investments (10):

 

 

 

 

 

 

 

 

 

 

 

Taxable investment securities

$

227,029

 

$

244,230

 

$

326,482

 

 

$

1,121

 

$

1,185

 

$

1,501

 

 

1.98

%

1.94

%

1.84

%

Non-taxable investment securities

304,309

 

306,868

 

297,852

 

 

1,901

 

1,901

 

1,752

 

 

2.50

%

2.48

%

2.35

%

Mortgage-backed securities

508,033

 

521,788

 

570,845

 

 

2,706

 

2,897

 

3,049

 

 

2.13

%

2.22

%

2.14

%

Short-term investments and other

130,363

 

79,603

 

157,878

 

 

1,057

 

908

 

1,205

 

 

3.23

%

4.58

%

3.03

%

Total cash and investments

1,169,734

 

1,152,489

 

1,353,057

 

 

6,785

 

6,891

 

7,507

 

 

2.32

%

2.39

%

2.22

%

Loans (10) (11):

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

1,091,903

 

1,070,161

 

974,443

 

 

11,170

 

10,979

 

9,201

 

 

4.05

%

4.10

%

3.74

%

Commercial real estate

2,506,637

 

2,398,413

 

2,477,634

 

 

29,953

 

28,151

 

27,387

 

 

4.73

%

4.69

%

4.37

%

Construction and land

202,609

 

211,351

 

166,736

 

 

2,559

 

2,641

 

2,011

 

 

5.00

%

5.00

%

4.77

%

Residential

3,008,753

 

2,972,945

 

2,775,239

 

 

25,735

 

25,545

 

22,590

 

 

3.42

%

3.44

%

3.26

%

Home equity

91,384

 

90,646

 

94,445

 

 

1,146

 

1,121

 

1,041

 

 

5.03

%

5.02

%

4.42

%

Other consumer

124,778

 

133,937

 

179,684

 

 

1,380

 

1,496

 

1,818

 

 

4.43

%

4.53

%

4.06

%

Total loans

7,026,064

 

6,877,453

 

6,668,181

 

 

71,943

 

69,933

 

64,048

 

 

4.07

%

4.07

%

3.82

%

Total earning assets

8,195,798

 

8,029,942

 

8,021,238

 

 

78,728

 

76,824

 

71,555

 

 

3.82

%

3.83

%

3.55

%

LESS: Allowance for loan losses

73,856

 

75,537

 

72,998

 

 

 

 

 

 

 

 

 

Cash and due from banks (non-interest bearing)

45,705

 

46,172

 

45,337

 

 

 

 

 

 

 

 

 

Other assets

511,859

 

493,148

 

396,744

 

 

 

 

 

 

 

 

 

TOTAL AVERAGE ASSETS

$

8,679,506

 

$

8,493,725

 

$

8,390,321

 

 

 

 

 

 

 

 

 

AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits (12):

 

 

 

 

 

 

 

 

 

 

 

Savings and NOW

$

684,507

 

$

674,872

 

$

719,159

 

 

$

276

 

$

296

 

$

304

 

 

0.16

%

0.18

%

0.17

%

Money market

3,226,569

 

3,341,397

 

3,033,306

 

 

10,476

 

10,072

 

5,543

 

 

1.30

%

1.22

%

0.73

%

Certificates of deposit

752,500

 

775,817

 

688,567

 

 

3,763

 

3,690

 

2,518

 

 

2.01

%

1.93

%

1.47

%

Total interest-bearing deposits (12)

4,663,576

 

4,792,086

 

4,441,032

 

 

14,515

 

14,058

 

8,365

 

 

1.25

%

1.19

%

0.76

%

Junior subordinated debentures

106,363

 

106,363

 

106,363

 

 

1,080

 

1,121

 

1,008

 

 

4.02

%

4.22

%

3.75

%

FHLB borrowings and other

952,645

 

615,985

 

1,022,636

 

 

5,673

 

3,307

 

4,637

 

 

2.36

%

2.15

%

1.79

%

Total interest-bearing liabilities (12)

5,722,584

 

5,514,434

 

5,570,031

 

 

21,268

 

18,486

 

14,010

 

 

1.48

%

1.36

%

1.00

%

Non-interest bearing demand deposits (12)

1,926,591

 

1,974,526

 

1,908,037

 

 

 

 

 

 

 

 

 

Other liabilities

238,544

 

236,426

 

122,175

 

 

 

 

 

 

 

 

 

Total average liabilities

7,887,719

 

7,725,386

 

7,600,243

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling interests

943

 

2,056

 

14,129

 

 

 

 

 

 

 

 

 

Average shareholders’ equity

790,844

 

766,283

 

775,949

 

 

 

 

 

 

 

 

 

TOTAL AVERAGE LIABILITIES, RNCI,
AND SHAREHOLDERS’ EQUITY

$

8,679,506

 

$

8,493,725

 

$

8,390,321

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

57,460

 

$

58,338

 

$

57,545

 

 

 

 

 

Interest rate spread

 

 

 

 

 

 

 

 

2.34

%

2.47

%

2.55

%

Bank only net interest margin

 

 

 

 

 

 

 

 

2.84

%

2.96

%

2.90

%

Net interest margin

 

 

 

 

 

 

 

 

2.78

%

2.90

%

2.85

%

 

 

 

 

 

 

 

 

 

 

 

 

Average total deposits (12)

6,590,167

 

6,766,612

 

6,349,069

 

 

 

 

 

 

0.88

%

0.84

%

0.53

%

Average total deposits and borrowings (12)

7,649,175

 

7,488,960

 

7,478,068

 

 

 

 

 

 

1.11

%

1.00

%

0.75

%

 
 

 

Average Balance

 

Interest Income/Expense

 

Average Yield/Rate

(In thousands)

Six Months Ended

 

Six Months Ended

 

Six Months Ended

AVERAGE BALANCE SHEET:

06/30/19

06/30/18

 

06/30/19

06/30/18

 

06/30/19

06/30/18

AVERAGE ASSETS

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

Cash and investments:

 

 

 

 

 

 

 

 

Taxable investment securities

$

235,218

 

$

330,220

 

 

$

2,306

 

$

3,011

 

 

1.92

%

1.83

%

Non-taxable investment securities (10)

305,581

 

297,407

 

 

3,802

 

3,482

 

 

2.49

%

2.34

%

Mortgage-backed securities

514,872

 

579,604

 

 

5,603

 

6,227

 

 

2.18

%

2.15

%

Short-term investments and other

105,610

 

158,853

 

 

1,965

 

2,214

 

 

3.61

%

2.78

%

Total cash and investments

1,161,281

 

1,366,084

 

 

13,676

 

14,934

 

 

2.34

%

2.19

%

Loans (11):

 

 

 

 

 

 

 

 

Commercial and industrial (10)

1,081,092

 

953,940

 

 

22,150

 

17,661

 

 

4.08

%

3.68

%

Commercial real estate (10)

2,452,824

 

2,459,525

 

 

58,104

 

53,538

 

 

4.71

%

4.33

%

Construction and land (10)

206,956

 

168,052

 

 

5,200

 

3,948

 

 

5.00

%

4.67

%

Residential

2,990,948

 

2,738,980

 

 

51,280

 

44,356

 

 

3.43

%

3.24

%

Home equity

91,017

 

95,810

 

 

2,267

 

2,083

 

 

5.02

%

4.39

%

Other consumer

129,332

 

182,623

 

 

2,875

 

3,391

 

 

4.48

%

3.74

%

Total loans

6,952,169

 

6,598,930

 

 

141,876

 

124,977

 

 

4.07

%

3.78

%

Total earning assets

8,113,450

 

7,965,014

 

 

155,552

 

139,911

 

 

3.82

%

3.50

%

LESS: Allowance for loan losses

74,692

 

73,911

 

 

 

 

 

 

 

Cash and due from banks (non-interest bearing)

46,010

 

48,725

 

 

 

 

 

 

 

Other assets

502,068

 

408,810

 

 

 

 

 

 

 

TOTAL AVERAGE ASSETS

$

8,586,836

 

$

8,348,638

 

 

 

 

 

 

 

AVERAGE LIABILITIES, RNCI, AND
SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

Interest-bearing deposits (12):

 

 

 

 

 

 

 

 

Savings and NOW

$

679,716

 

$

718,051

 

 

$

572

 

$

519

 

 

0.17

%

0.15

%

Money market

3,283,891

 

3,086,710

 

 

20,549

 

9,857

 

 

1.26

%

0.64

%

Certificates of deposit

764,094

 

672,736

 

 

7,452

 

4,513

 

 

1.97

%

1.35

%

Total interest-bearing deposits (12)

4,727,701

 

4,477,497

 

 

28,573

 

14,889

 

 

1.22

%

0.67

%

Junior subordinated debentures

106,363

 

106,363

 

 

2,201

 

1,854

 

 

4.17

%

3.52

%

FHLB borrowings and other

785,245

 

950,763

 

 

8,980

 

8,240

 

 

2.27

%

1.72

%

Total interest-bearing liabilities (12)

5,619,309

 

5,534,623

 

 

39,754

 

24,983

 

 

1.42

%

0.91

%

Non-interest bearing demand deposits (12)

1,950,088

 

1,890,184

 

 

 

 

 

 

 

Payables and other liabilities

236,894

 

126,601

 

 

 

 

 

 

 

Total average liabilities

7,806,291

 

7,551,408

 

 

 

 

 

 

 

Redeemable noncontrolling interests

1,619

 

17,644

 

 

 

 

 

 

 

Average shareholders’ equity

778,926

 

779,586

 

 

 

 

 

 

 

TOTAL AVERAGE LIABILITIES, RNCI, AND
SHAREHOLDERS’ EQUITY

$

8,586,836

 

$

8,348,638

 

 

 

 

 

 

 

Net interest income

 

 

 

$

115,798

 

$

114,928

 

 

 

 

Interest rate spread

 

 

 

 

 

 

2.40

%

2.59

%

Bank only net interest margin

 

 

 

 

 

 

2.89

%

2.92

%

Net interest margin

 

 

 

 

 

 

2.84

%

2.87

%

 

 

 

 

 

 

 

 

 

Average total deposits (12)

6,677,789

 

6,367,681

 

 

 

 

 

0.86

%

0.47

%

Average total deposits and borrowings (12)

7,569,397

 

7,424,807

 

 

 

 

 

1.06

%

0.68

%

 
 

(In thousands)

June 30,
2019

 

March 31,
2019

 

December 31,
2018

 

September 30,
2018

 

June 30,
2018

LOAN DATA (13):

 

 

 

 

Other commercial and industrial loans:

 

 

 

 

 

 

 

 

 

New England

$

524,319

 

 

$

492,800

 

 

$

503,201

 

 

$

460,409

 

 

$

481,081

 

San Francisco Bay Area

41,131

 

 

39,829

 

 

43,702

 

 

41,256

 

 

35,220

 

Southern California

90,736

 

 

82,741

 

 

76,134

 

 

81,549

 

 

66,892

 

Total other commercial and industrial loans

$

656,186

 

 

$

615,370

 

 

$

623,037

 

 

$

583,214

 

 

$

583,193

 

New England

$

343,359

 

 

$

342,270

 

 

$

344,079

 

 

$

330,753

 

 

$

332,572

 

San Francisco Bay Area

95,825

 

 

96,024

 

 

96,387

 

 

96,775

 

 

94,959

 

Southern California

11,123

 

 

11,198

 

 

11,205

 

 

11,279

 

 

11,351

 

Total commercial tax-exempt loans

$

450,307

 

 

$

449,492

 

 

$

451,671

 

 

$

438,807

 

 

$

438,882

 

Total commercial and industrial loans

$

1,106,493

 

 

$

1,064,862

 

 

$

1,074,708

 

 

$

1,022,021

 

 

$

1,022,075

 

Commercial real estate loans:

 

 

 

 

 

 

 

 

 

New England

$

1,071,073

 

 

$

1,068,619

 

 

$

1,022,061

 

 

$

1,043,494

 

 

$

1,069,942

 

San Francisco Bay Area

770,312

 

 

720,276

 

 

714,449

 

 

724,243

 

 

739,769

 

Southern California

689,171

 

 

650,153

 

 

659,182

 

 

631,343

 

 

694,810

 

Total commercial real estate loans

$

2,530,556

 

 

$

2,439,048

 

 

$

2,395,692

 

 

$

2,399,080

 

 

$

2,504,521

 

Construction and land loans:

 

 

 

 

 

 

 

 

 

New England

$

144,986

 

 

$

136,097

 

 

$

153,929

 

 

$

114,411

 

 

$

88,068

 

San Francisco Bay Area

24,725

 

 

43,130

 

 

41,516

 

 

40,755

 

 

37,783

 

Southern California

30,667

 

 

31,391

 

 

44,861

 

 

42,358

 

 

46,173

 

Total construction and land loans

$

200,378

 

 

$

210,618

 

 

$

240,306

 

 

$

197,524

 

 

$

172,024

 

Residential loans:

 

 

 

 

 

 

 

 

 

New England

$

1,708,501

 

 

$

1,692,421

 

 

$

1,689,318

 

 

$

1,650,989

 

 

$

1,643,039

 

San Francisco Bay Area

574,937

 

 

570,132

 

 

559,578

 

 

554,502

 

 

533,394

 

Southern California

742,320

 

 

730,579

 

 

700,077

 

 

657,388

 

 

631,773

 

Total residential loans

$

3,025,758

 

 

$

2,993,132

 

 

$

2,948,973

 

 

$

2,862,879

 

 

$

2,808,206

 

Home equity loans:

 

 

 

 

 

 

 

 

 

New England

$

58,806

 

 

$

59,074

 

 

$

57,617

 

 

$

61,291

 

 

$

61,125

 

San Francisco Bay Area

19,232

 

 

18,279

 

 

19,722

 

 

19,769

 

 

17,366

 

Southern California

11,892

 

 

11,267

 

 

13,082

 

 

12,330

 

 

13,310

 

Total home equity loans

$

89,930

 

 

$

88,620

 

 

$

90,421

 

 

$

93,390

 

 

$

91,801

 

Other consumer loans:

 

 

 

 

 

 

 

 

 

New England

$

106,177

 

 

$

110,363

 

 

$

120,402

 

 

$

121,685

 

 

$

145,726

 

San Francisco Bay Area

12,279

 

 

11,956

 

 

12,663

 

 

14,228

 

 

14,659

 

Southern California

8,689

 

 

8,369

 

 

9,993

 

 

9,613

 

 

8,111

 

Total other consumer loans

$

127,145

 

 

$

130,688

 

 

$

143,058

 

 

$

145,526

 

 

$

168,496

 

Total loans:

 

 

 

 

 

 

 

 

 

New England

$

3,957,221

 

 

$

3,901,644

 

 

$

3,890,607

 

 

$

3,783,032

 

 

$

3,821,553

 

San Francisco Bay Area

1,538,441

 

 

1,499,626

 

 

1,488,017

 

 

1,491,528

 

 

1,473,150

 

Southern California

1,584,598

 

 

1,525,698

 

 

1,514,534

 

 

1,445,860

 

 

1,472,420

 

Total loans

$

7,080,260

 

 

$

6,926,968

 

 

$

6,893,158

 

 

$

6,720,420

 

 

$

6,767,123

 
 

(In thousands)

June 30,
2019

 

March 31,
2019

 

December 31,
2018

 

September 30,
2018

 

June 30,
2018

CREDIT QUALITY (13):

 

 

 

 

Special mention loans:

 

 

 

 

 

 

 

 

 

New England

$

35,235

 

 

$

34,675

 

 

$

31,147

 

 

$

20,382

 

 

$

18,515

 

San Francisco Bay Area

10,360

 

 

23,486

 

 

18,585

 

 

18,359

 

 

19,255

 

Southern California

25,082

 

 

28,626

 

 

28,796

 

 

28,665

 

 

15,678

 

Total special mention loans

$

70,677

 

 

$

86,787

 

 

$

78,528

 

 

$

67,406

 

 

$

53,448

 

Accruing classified loans (14):

 

 

 

 

 

 

 

 

 

New England

$

13,012

 

 

$

15,830

 

 

$

10,392

 

 

$

10,083

 

 

$

11,493

 

San Francisco Bay Area

25,957

 

 

20,801

 

 

24,584

 

 

24,252

 

 

12,766

 

Southern California

14,914

 

 

5,890

 

 

19,119

 

 

21,045

 

 

21,194

 

Total accruing classified loans

$

53,883

 

 

$

42,521

 

 

$

54,095

 

 

$

55,380

 

 

$

45,453

 

Nonaccruing loans:

 

 

 

 

 

 

 

 

 

New England

$

8,837

 

 

$

6,161

 

 

$

6,728

 

 

$

5,131

 

 

$

7,282

 

San Francisco Bay Area

2,644

 

 

2,480

 

 

2,488

 

 

1,169

 

 

1,319

 

Southern California

5,674

 

 

3,378

 

 

4,841

 

 

5,797

 

 

7,050

 

Total nonaccruing loans

$

17,155

 

 

$

12,019

 

 

$

14,057

 

 

$

12,097

 

 

$

15,651

 

Loans 30-89 days past due and accruing (15):

 

 

 

 

 

 

 

 

 

New England

$

1,747

 

 

$

7,232

 

 

$

15,961

 

 

$

9,193

 

 

$

4,653

 

San Francisco Bay Area

6

 

 

2,021

 

 

2,246

 

 

1,651

 

 

 

Southern California

681

 

 

8,462

 

 

4,092

 

 

763

 

 

324

 

Total loans 30-89 days past due and accruing

$

2,434

 

 

$

17,715

 

 

$

22,299

 

 

$

11,607

 

 

$

4,977

 

Loans (charged-off)/ recovered, net:

 

 

 

 

 

 

 

 

 

New England

$

31

 

 

$

222

 

 

$

(100

)

 

$

232

 

 

$

(73

)

San Francisco Bay Area

20

 

 

18

 

 

1,804

 

 

706

 

 

91

 

Southern California

(161

)

 

(312

)

 

15

 

 

47

 

 

95

 

Total net loans (charged-off)/ recovered

$

(110

)

 

$

(72

)

 

$

1,719

 

 

$

985

 

 

$

113

 

Loans (charged-off)/ recovered, net for the year ended:

 

 

 

 

 

 

 

 

 

New England

$

253

 

 

 

 

 

 

 

 

$

(358

)

San Francisco Bay Area

38

 

 

 

 

 

 

 

 

158

 

Southern California

(473

)

 

 

 

 

 

 

 

264

 

Total Net Loans (Charged-off)/ Recovered

$

(182

)

 

 

 

 

 

 

 

$

64

 

 
 

FOOTNOTES:

 

(1)

On April 13, 2018, the Company completed the sale of its ownership interest in Anchor to the management team of Anchor for an upfront cash payment and future payments. Anchor’s results remain consolidated in the Company’s results through the closing date. For presentation purposes, Anchor’s AUM is excluded from prior period AUM amounts, whereas it is included in the calculation of Core fees and income through the closing date. For regulatory purposes, the goodwill and intangible assets of Anchor are included in consolidated calculations through the closing date.

 

 

 

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 presentation purposes, BOS' AUM is excluded from prior period AUM amounts, whereas it is included in the calculation of Core fees and income through the closing date. For regulatory purposes, the goodwill and intangible assets of BOS are included in consolidated calculations through the closing date.

 

 

 

See footnotes 6 and 8 below.

 

 

(2)

Total revenue is the sum of Net interest income, Total core fees and income, and Total other income.

 

 

(3)

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 when annual tax returns were filed.

 

 

(4)

Adjustments to Net income attributable to the Company to arrive at Net income attributable to the 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.

 

 

(5)

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 Weighted average diluted 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 units, and unexercised stock warrants, if any. 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, 2018 for additional information.

 

 

(6)

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 TA by adjusting Total assets to exclude Goodwill and intangible assets. The Company calculates TCE by adjusting Total equity to exclude Goodwill and intangible assets, net.

 
 

(In thousands, except share and per share data)

June 30,
2019

 

March 31,
2019

 

December 31,
2018

 

September 30,
2018

 

June 30,
2018

Total balance sheet assets

$

8,712,873

 

 

$

8,572,143

 

 

$

8,494,625

 

 

$

8,375,840

 

 

$

8,716,203

 

LESS: Goodwill and intangible assets, net

(68,491

)

 

(69,162

)

 

(69,834

)

 

(89,432

)

 

(90,182

)

Tangible assets (non-GAAP)

$

8,644,382

 

 

$

8,502,981

 

 

$

8,424,791

 

 

$

8,286,408

 

 

$

8,626,021

 

Total shareholders’ equity

$

798,211

 

 

$

778,819

 

 

$

753,954

 

 

$

738,009

 

 

$

733,977

 

LESS: Goodwill and intangible assets, net

(68,491

)

 

(69,162

)

 

(69,834

)

 

(89,432

)

 

(90,182

)

Tangible common equity (non-GAAP)

$

729,720

 

 

$

709,657

 

 

$

684,120

 

 

$

648,577

 

 

$

643,795

 

Total equity/ Total assets

9.16

%

 

9.09

%

 

8.88

%

 

8.81

%

 

8.42

%

Tangible common equity/ Tangible assets (non-GAAP)

8.44

%

 

8.35

%

 

8.12

%

 

7.83

%

 

7.46

%

 

 

 

 

 

 

 

 

 

 

Total risk weighted assets *

$

6,494,049

 

 

$

6,304,444

 

 

$

6,161,677

 

 

$

6,057,002

 

 

$

6,104,586

 

Tier 1 common equity *

$

726,872

 

 

$

717,138

 

 

$

702,728

 

 

$

674,641

 

 

$

665,628

 

Tier 1 common equity/ Risk weighted assets *

11.19

%

 

11.38

%

 

11.40

%

 

11.14

%

 

10.90

%

 

 

 

 

 

 

 

 

 

 

End of period shares outstanding

83,774,335

 

 

83,773,650

 

 

83,655,651

 

 

84,602,519

 

 

84,478,858

 

 

 

 

 

 

 

 

 

 

 

Book value per common share

$

9.53

 

 

$

9.30

 

 

$

9.01

 

 

$

8.72

 

 

$

8.69

 

Tangible book value per share (non-GAAP)

$

8.71

 

 

$

8.47

 

 

$

8.18

 

 

$

7.67

 

 

$

7.62

 

* Risk weighted assets and Tier 1 common equity for June 30, 2019 are presented based on estimated data.

 

(7)

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.

 

 

(8)

The Company uses certain non-GAAP financial measures, such as ROACE and ROATCE 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 ROACE and the non-GAAP ROATCE ratios 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, if any. The Company calculates Average tangible common equity by adjusting Average equity to exclude Average goodwill and intangible assets, net and Average preferred equity, if any.

 

 

Three Months Ended

(In thousands)

June 30,
2019

 

March 31,
2019

 

December 31,
2018

 

September 30,
2018

 

June 30,
2018

Total average shareholders’ equity

$

790,844

 

 

$

766,283

 

 

$

739,313

 

 

$

737,188

 

 

$

775,949

 

LESS: Average Series D preferred stock

 

 

 

 

 

 

 

 

(39,881

)

Average common equity (non-GAAP)

790,844

 

 

766,283

 

 

739,313

 

 

737,188

 

 

736,068

 

LESS: Average goodwill and intangible assets, net

(68,889

)

 

(69,498

)

 

(83,153

)

 

(89,830

)

 

(102,533

)

Average tangible common equity (non-GAAP)

$

721,955

 

 

$

696,785

 

 

$

656,160

 

 

$

647,358

 

 

$

633,535

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to the Company

$

19,380

 

 

$

19,442

 

 

$

33,302

 

 

$

17,962

 

 

$

6,434

 

LESS: Dividends on Series D preferred stock

 

 

 

 

 

 

 

 

(869

)

Common net income (non-GAAP)

19,380

 

 

19,442

 

 

33,302

 

 

17,962

 

 

5,565

 

ADD: Amortization of intangibles, net of tax

531

 

 

531

 

 

537

 

 

593

 

 

592

 

Tangible common net income (non-GAAP)

$

19,911

 

 

$

19,973

 

 

$

33,839

 

 

$

18,555

 

 

$

6,157

 

 

 

 

 

 

 

 

 

 

 

Return on average equity - (annualized)

9.83

%

 

10.29

%

 

17.87

%

 

9.67

%

 

3.33

%

ROACE - (annualized) (non-GAAP)

9.83

%

 

10.29

%

 

17.87

%

 

9.67

%

 

3.03

%

ROATCE - (annualized) (non-GAAP)

11.06

%

 

11.63

%

 

20.46

%

 

11.37

%

 

3.90

%

 
 

 

Six Months Ended

(In thousands)

June 30,
2019

 

June 30,
2018

Total average shareholders’ equity

$

778,926

 

 

$

779,586

 

LESS: Average Series D preferred stock (non-convertible)

 

 

(43,795

)

Average common equity (non-GAAP)

778,926

 

 

735,791

 

LESS: Average goodwill and intangible assets, net

(69,211

)

 

(117,839

)

Average tangible common equity (non-GAAP)

$

709,715

 

 

$

617,952

 

 

 

 

 

Net income attributable to the Company

$

38,822

 

 

$

29,120

 

LESS: Dividends on Series D preferred stock

 

 

(1,738

)

Common net income (non-GAAP)

38,822

 

 

27,382

 

ADD: Amortization of intangibles, net of tax

1,062

 

 

1,184

 

Tangible common net income (non-GAAP)

$

39,884

 

 

$

28,566

 

 

 

 

 

Return on average equity

10.05

%

 

7.53

%

Return on average common equity (non-GAAP)

10.05

%

 

7.50

%

Return on average tangible common equity (non-GAAP)

11.33

%

 

9.32

%

 

(9)

The Company uses certain non-GAAP financial measures, such as Pre-tax, pre-provision income; Total operating expenses excluding amortization of intangibles and restructuring expense, if any; 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 income; from GAAP Total operating expense to non-GAAP Total operating expense excluding amortization of intangibles and restructuring, if any; and from GAAP Efficiency ratio to non-GAAP Efficiency ratio, excluding amortization of intangibles, impairment of goodwill, and restructuring, if any, are presented below:

 

 

Three Months Ended

(In thousands)

June 30,
2019

 

March 31,
2019

 

December 31,
2018

 

September 30,
2018

 

June 30,
2018

Income before income taxes (GAAP)

$

24,818

 

 

$

24,459

 

 

$

42,192

 

 

$

24,347

 

 

$

24,803

 

ADD BACK: Provision/ (credit) for loan losses

1,363

 

 

(1,426

)

 

93

 

 

(949

)

 

453

 

Pre-tax, pre-provision income (non-GAAP)

$

26,181

 

 

$

23,033

 

 

$

42,285

 

 

$

23,398

 

 

$

25,256

 

 

 

 

 

 

 

 

 

 

 

Total operating expense (GAAP)

$

55,659

 

 

$

60,553

 

 

$

63,557

 

 

$

68,557

 

 

$

64,384

 

Less: Amortization of intangibles

672

 

 

672

 

 

680

 

 

750

 

 

749

 

Less: Restructuring

 

 

1,646

 

 

2,065

 

 

5,763

 

 

 

Total operating expense (non-GAAP)

$

54,987

 

 

$

58,235

 

 

$

60,812

 

 

$

62,044

 

 

$

63,635

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$

57,460

 

 

$

58,338

 

 

$

59,997

 

 

$

59,641

 

 

$

57,545

 

Total core fees and income

24,292

 

 

24,280

 

 

28,691

 

 

31,592

 

 

31,897

 

Gain on sale of affiliate

 

 

 

 

18,142

 

 

 

 

 

Total other income

88

 

 

968

 

 

(988

)

 

722

 

 

198

 

Total revenue (10)

$

81,840

 

 

$

83,586

 

 

$

105,842

 

 

$

91,955

 

 

$

89,640

 

Efficiency ratio (GAAP)

68.01

%

 

72.44

%

 

60.05

%

 

74.55

%

 

71.83

%

Efficiency ratio, excluding amortization of intangibles and restructuring, if any (non-GAAP) (10)

67.19

%

 

69.67

%

 

57.14

%

 

67.04

%

 

70.29

%

 
 

 

Six Months Ended

(In thousands)

June 30,
2019

 

June 30,
2018

Income before income taxes (GAAP)

$

49,277

 

 

$

52,867

 

ADD BACK: Provision/ (credit) for loan losses

(63

)

 

(1,342

)

Pre-tax, pre-provision income (non-GAAP)

$

49,214

 

 

$

51,525

 

 

 

 

 

Total operating expense (GAAP)

$

116,212

 

 

$

135,241

 

Less: Amortization of intangibles

1,344

 

 

1,499

 

Less: Restructuring

1,646

 

 

 

Total operating expense (non-GAAP)

$

113,222

 

 

$

133,742

 

 

 

 

 

Net interest income

$

115,798

 

 

$

114,928

 

Total core fees and income

48,572

 

 

71,332

 

Total other income

1,056

 

 

506

 

Total revenue (10)

$

165,426

 

 

$

186,766

 

Efficiency ratio (GAAP)

70.25

%

 

72.41

%

Efficiency ratio, excluding amortization of intangibles and restructuring, if any (non-GAAP) (10)

68.44

%

 

70.90

%

 

 

 

 

(10)

Currently, the FTE adjustment for interest income on Non-taxable investments and loans is immaterial and therefore has not been applied. For comparison purposes, GAAP amounts are shown for all periods presented.

 

 

(11)

Average loans includes Loans held for sale and Nonaccrual loans.

 

 

(12)

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.

 

 

(13)

The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lenders' regional offices.

 

 

(14)

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.

 

 

 

 

(15)

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.

 

 

(16)

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, also referred to as Core net interest margin, 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)

June 30,
2019

 

March 31,
2019

 

December 31,
2018

 

September 30,
2018

 

June 30,
2018

Net interest income (GAAP basis)

$

57,460

 

 

$

58,338

 

 

$

59,997

 

 

$

59,641

 

 

$

57,545

 

LESS: Interest recovered on previous nonaccrual loans

 

 

258

 

 

986

 

 

986

 

 

 

Net interest income, excluding interest recovered while loans on nonaccrual status (non-GAAP) - also referred to as Core net interest income (non-GAAP)

57,460

 

 

58,080

 

 

59,011

 

 

58,655

 

 

57,545

 

Net interest margin, excluding interest recovered while loans on nonaccrual status (non-GAAP) - also referred to as Core net interest margin (non-GAAP)

2.78

%

 

2.89

%

 

2.90

%

 

2.85

%

 

2.85

%

(17)

The Company uses certain non-GAAP financial measures, such as Net income attributable to the Company excluding notable items and Diluted earnings per share excluding notable items 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 income attributable to the Company to non-GAAP Net income attributable to the Company excluding notable items and from GAAP Diluted earnings per share to non-GAAP Diluted earnings per share excluding notable items are presented below:

 

Three Months Ended

(In thousands, except share and per share data)

June 30,
2019

 

March 31,
2019

 

December 31,
2018

 

September 30,
2018

 

June 30,
2018

Net income attributable to the Company (GAAP)

$

19,380

 

 

$

19,442

 

 

$

33,302

 

 

$

17,962

 

 

$

6,434

 

LESS: Gain on sale of affiliate

 

 

 

 

18,142

 

 

 

 

 

ADD BACK: Information services *

 

 

 

 

(441

)

 

 

 

441

 

ADD BACK: Restructuring

 

 

1,646

 

 

2,065

 

 

5,763

 

 

 

ADD BACK: Tax adjustments **

 

 

 

 

3,502

 

 

 

 

12,706

 

Tax effect at statutory rate

 

 

(346

)

 

(341

)

 

(1,210

)

 

(93

)

Net income attributable to the Company excluding notable items (non-GAAP)

$

19,380

 

 

$

20,742

 

 

$

19,945

 

 

$

22,515

 

 

$

19,488

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to the common shareholders, treasury stock method (GAAP)

$

18,564

 

 

$

20,999

 

 

$

35,996

 

 

$

17,133

 

 

$

2,910

 

ADD BACK: Deemed dividend due to redemption of Series D preferred stock

 

 

 

 

 

 

 

 

2,247

 

LESS: Gain on sale of affiliate

 

 

 

 

18,142

 

 

 

 

 

ADD BACK: Information services *

 

 

 

 

(441

)

 

 

 

441

 

ADD BACK: Restructuring

 

 

1,646

 

 

2,065

 

 

5,763

 

 

 

ADD BACK: Tax adjustments **

 

 

 

 

3,502

 

 

 

 

12,706

 

Tax effect at statutory rate

 

 

(346

)

 

(341

)

 

(1,210

)

 

(93

)

Net income attributable to the common shareholders, treasury stock method, excluding notable items (non-GAAP)

$

18,564

 

 

$

22,299

 

 

$

22,639

 

 

$

21,686

 

 

$

18,211

 

 

 

 

 

 

 

 

 

 

 

Weighted average diluted shares outstanding

84,048,972

 

 

84,010,450

 

 

84,863,779

 

 

85,498,568

 

 

85,413,575

 

 

 

 

 

 

 

 

 

 

 

Diluted total earnings per share (GAAP)

$

0.22

 

 

$

0.25

 

 

$

0.42

 

 

$

0.20

 

 

$

0.03

 

Diluted total earnings per share, excluding notable items (non-GAAP)

$

0.22

 

 

$

0.27

 

 

$

0.27

 

 

$

0.25

 

 

$

0.21

 

 

 

 

 

 

 

 

 

 

 

Average common equity (non-GAAP)

$

790,844

 

 

$

766,283

 

 

$

739,313

 

 

$

737,188

 

 

$

736,068

 

Average tangible common equity (non-GAAP)

$

721,955

 

 

$

696,785

 

 

$

656,160

 

 

$

647,358

 

 

$

633,535

 

Return on average common equity - (annualized), excluding notable items (non-GAAP)

9.83

%

 

10.98

%

 

10.70

%

 

12.12

%

 

10.15

%

Return on average tangible common equity - (annualized), excluding notable items (non-GAAP)

11.06

%

 

12.38

%

 

12.38

%

 

14.16

%

 

12.16

%

 

 

 

 

 

 

 

 

 

 

Pre-tax, pre-provision income (non-GAAP)

$

26,181

 

 

$

23,033

 

 

$

42,285

 

 

$

23,398

 

 

$

25,256

 

LESS: Gain on sale of affiliate

 

 

 

 

18,142

 

 

 

 

 

ADD BACK: Information services *

 

 

 

 

(441

)

 

 

 

441

 

ADD BACK: Restructuring

 

 

1,646

 

 

2,065

 

 

5,763

 

 

 

Pre-tax, pre-provision income, excluding notable items (non-GAAP)

$

26,181

 

 

$

24,679

 

 

$

25,767

 

 

$

29,161

 

 

$

25,697

 

*

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.

**

Additional tax expense in the second quarter of 2018 relates to the tax impact of the April 2018 completion of the sale of Anchor and additional expense in the fourth quarter of 2018 relates to the completion of the sale of BOS.

 

Contacts

Adam Bromley
(617) 912-4386
abromley@bostonprivate.com

Contacts

Adam Bromley
(617) 912-4386
abromley@bostonprivate.com