Boston Private Reports First Quarter 2021 Results
04/22/2021 - 04:30 PM
Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “Boston Private”) today reported first quarter 2021 Net income attributable to the Company of $10.7 million , compared to $25.0 million for the fourth quarter of 2020 and $0.8 million for the first quarter of 2020. First quarter 2021 Diluted earnings per share were $0.13, compared to $0.30 in the fourth quarter of 2021 and $0.01 in the first quarter of 2020.
"I am proud of the dedication and commitment shown by the Boston Private employees who continue to deliver exceptional client service and execute on our strategic objectives, while also preparing for our pending merger with SVB Financial Group," said Anthony DeChellis, CEO of Boston Private. "This quarter's financial results include transaction costs related to the pending merger with SVB Financial Group, a release from our allowance for loan losses, and continued strong deposit growth."
Announced Merger
As previously announced, the Company entered into a definitive merger agreement with SVB Financial Group ("SVB") pursuant to which SVB will acquire Boston Private. The transaction was unanimously approved by both companies' Boards of Directors and is expected to close in mid-2021, subject to the satisfaction of customary closing conditions, including receipt of customary regulatory approvals and approval by the shareholders of Boston Private.
Summary Financial Results
% Change
($ in millions, except for per share data)
1Q21
4Q20
1Q20
LQ
Y/Y
Net income - GAAP
$10.7
$25.0
$0.8
(57)
%
nm
Diluted earnings per share - GAAP
$0.13
$0.30
$0.01
(57)
%
nm
Non-GAAP Financial Measures:
Pre-tax, pre-provision income
$9.7
$28.1
$17.9
(65)
%
(46)
%
Return on average common equity ("ROACE")
4.9
%
11.5
%
0.4
%
Return on average tangible common equity ("ROATCE")
5.6
%
12.7
%
0.7
%
nm = not meaningful
The Company's financial results in the first quarter of 2021 were impacted by:
Transaction costs of $10.7 million related to the proposed merger with SVB, or ($0.09) per diluted share on a tax-effected basis
Gain of $2.4 million related to the revaluation of a receivable from the divestiture of former affiliate, Bingham, Osborn & Scarborough, LLC ("BOS"), or $0.02 per diluted share on a tax-effected basis
Total provision credit of $9.0 million , including a provision credit for loan losses of $7.0 million and a credit for unfunded loan commitments of $2.0 million , or $0.08 per diluted share on a tax-effected basis
Net Interest Income and Margin
% Change
($ in millions)
1Q21
4Q20
1Q20
LQ
Y/Y
Net interest income
$59.5
$59.4
$57.3
—
%
4
%
Net interest margin
2.45
%
2.52
%
2.76
%
Net interest income for the first quarter of 2021 was $59.5 million , flat linked quarter and a 4% increase year-over-year. The year-over-year increase was primarily driven by $3.6 million of Paycheck Protection Program ("PPP") loan-related income recognized in the first quarter of 2021. The Small Business Administration ("SBA") forgave $75 million of PPP loans in the first quarter of 2021, which drove the accelerated recognition of PPP income.
Net interest margin decreased 7 basis points on a linked quarter basis to 2.45% . The decline was primarily driven by excess cash and investments balances and lower asset yields, partially offset by lower funding costs.
Noninterest Income
% Change
($ in millions)
1Q21
4Q20
1Q20
LQ
Y/Y
Wealth management and trust fees
$19.1
$19.0
$18.4
1
%
4
%
Investment management fees
0.5
1.2
1.9
(58)
%
(75)
%
Private banking fees 1
3.2
5.0
2.6
nm
22
%
Total core fees and income
$22.8
$25.2
$22.9
(10)
%
—
%
Total other income
3.4
1.4
(1.4)
nm
nm
Total noninterest income
$26.2
$26.7
$21.5
(2)
%
22
%
nm = not meaningful
1 Private banking fees includes Other banking fee income and Gain/(loss) on sale of loans, net
Total core fees and income for the first quarter of 2021 were $22.8 million , a 10% decrease linked quarter. The linked quarter decrease was primarily driven by lower swap fee income within Private banking fees and lower Investment management fees in the first quarter of 2021.
Total other income includes a gain of $2.4 million for the first quarter of 2021 related to the revaluation of the BOS receivable.
Assets Under Management/Advisory
% Change
($ in millions)
1Q21
4Q20
1Q20
LQ
Y/Y
Wealth Management and Trust
$17,002
$16,574
$13,497
3
%
26
%
Other 2
196
526
1,016
(63)
%
(81)
%
Total assets under management/advisory
$17,198
$17,100
$14,513
1
%
19
%
Net flows
Wealth Management and Trust
$(20)
$(128)
$176
Other 2
(388)
(268)
(26)
Total net flows
$(408)
$(396)
$150
2 Includes results from DGHM
Total AUM was $17.2 billion as of March 31, 2021, a 1% increase linked quarter. The linked quarter increase was primarily driven by the impact of higher equity market values, partially offset by net outflows.
Total net flows were negative $408 million during the first quarter of 2021, driven by net flows of negative $388 million at DGHM and negative $20 million in the Wealth Management and Trust segment. New business into the Wealth Management & Trust segment was $231 million for the first quarter of 2021, compared to $297 million for the fourth quarter of 2020.
Noninterest Expense
% Change
($ in millions)
1Q21
4Q20
1Q20
LQ
Y/Y
Salaries and employee benefits
$40.9
$36.0
$35.1
14
%
17
%
Occupancy and equipment
8.2
7.7
7.6
6
%
7
%
Information systems
9.7
8.6
6.7
13
%
45
%
Professional services
3.3
2.7
3.6
20
%
(8)
%
Merger costs
10.7
—
—
nm
nm
Marketing and business development
0.6
1.2
1.9
(46)
%
(67)
%
Amortization of intangibles
0.7
0.6
0.7
18
%
(7)
%
FDIC insurance
1.0
0.9
—
10
%
n/a
Other
0.9
0.2
5.2
nm
(83)
%
Total noninterest expense
$75.9
$58.0
$60.9
31
%
25
%
Memo: Excluding Off-Balance Sheet Provision
Boston Private Financial Holdings Inc
BPFH Rankings
N/A Ranked by Stock Gains
BPFH Stock Data
Industry
Commercial Banking
Sector
Finance and Insurance
Tags
Finance, Regional Banks, Finance and Insurance, Commercial Banking
Country
United States
City
Boston
About BPFH
Boston Private is a leading provider of integrated wealth management, trust and banking services to individuals, families, businesses and nonprofits. For more than 30 years, Boston Private has delivered comprehensive advice coupled with deep technical expertise to help clients simplify their lives and achieve their goals. The firm offers the capabilities of a large institution with the superior service of a boutique firm to clients across the United States. Boston Private is the corporate brand of Boston Private Financial Holdings, Inc..
