Boston Private Reports Fourth Quarter and Full Year 2020 Results
01/21/2021 - 04:45 PM
Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “Boston Private”) today reported fourth quarter 2020 Net income attributable to the Company of $25.0 million , compared to $22.7 million for the third quarter of 2020 and $21.2 million for the fourth quarter of 2019. Fourth quarter 2020 Diluted earnings per share were $0.30, compared to $0.28 in the third quarter of 2020 and $0.26 in the fourth quarter of 2019.
"Fourth quarter 2020 results were positively impacted by a release from our allowance for loan losses and Paycheck Protection Program revenue, while strong deposit growth enhanced on-balance sheet liquidity," said Anthony DeChellis, CEO of Boston Private. "I am extremely proud of our team's accomplishments throughout 2020. We continued to deliver exceptional client service in a challenging environment, while improving our client experience and executing on our strategic plan. We are excited about the prospects of our pending merger with SVB Financial Group. Together, we will be well positioned to grow and scale our business, while enhancing shareholder value."
Announced Merger
As previously announced, the Company entered into a definitive merger agreement with SVB Financial Group ("SVB") pursuant to which SVB will acquire Boston Private. The transaction has been unanimously approved by both companies' Boards of Directors and is expected to close in mid-2021, subject to the satisfaction of customary closing conditions, including receipt of customary regulatory approvals and approval by the shareholders of Boston Private.
Summary Financial Results
% Change
($ in millions, except for per share data)
4Q20
3Q20
4Q19
LQ
Y/Y
Net income - GAAP
$25.0
$22.7
$21.2
10
%
18
%
Net income - Operating (Non-GAAP)
25.0
22.0
20.5
13
%
22
%
Diluted earnings per share - GAAP
$0.30
$0.28
$0.26
7
%
15
%
Diluted earnings per share - Operating (Non-GAAP)
$0.30
$0.27
$0.25
11
%
20
%
Non-GAAP Financial Measures:
Pre-tax, pre-provision income
$28.1
$19.9
$24.5
41
%
15
%
Return on average common equity ("ROACE")
11.5
%
10.7
%
10.3
%
Return on average tangible common equity ("ROATCE")
12.7
%
11.9
%
11.5
%
The Company's financial results improved linked quarter and year-over-year primarily as a result of a Total provision credit of $5.4 million , Paycheck Protection Program ("PPP") fees, and higher swap fees in the fourth quarter of 2020.
Net Interest Income and Margin
% Change
($ in millions)
4Q20
3Q20
4Q19
LQ
Y/Y
Net interest income
$59.4
$57.8
$56.1
3
%
6
%
Net interest margin
2.52
%
2.61
%
2.70
%
Net interest income for the fourth quarter of 2020 was $59.4 million , a 3% increase linked quarter and a 6% increase year-over-year. The linked quarter and year-over-year increases were primarily driven by $3.8 million of PPP loan-related income, and prepayment penalties, partially offset by lower asset yields. The Small Business Administration ("SBA") forgave approximately $60 million of PPP loans in the fourth quarter of 2020, which drove the accelerated recognition of PPP income. Excluding the impact of PPP loans, prepayment penalties and interest recoveries, Net interest income was flat linked quarter.
Net interest margin decreased 9 basis points on a linked quarter basis to 2.52% . The decline was primarily driven by lower asset yields and excess cash balances, partially offset by lower funding costs.
Noninterest Income
% Change
($ in millions)
4Q20
3Q20
4Q19
LQ
Y/Y
Wealth management and trust fees
$19.0
$18.2
$18.7
4
%
2
%
Investment management fees
1.2
1.4
2.6
(16)
%
(54)
%
Private banking fees 1
5.0
2.3
3.5
nm
44
%
Total core fees and income
$25.2
$22.0
$24.8
15
%
2
%
Total other income
1.4
1.1
2.0
33
%
(29)
%
Total noninterest income
$26.7
$23.0
$26.8
16
%
(1)
%
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 fourth quarter of 2020 was $25.2 million , a 15% increase linked quarter. The linked quarter increase was primarily driven by higher swap fees and higher BOLI income in the fourth quarter of 2020.
Assets Under Management/Advisory
% Change
($ in millions)
4Q20
3Q20
4Q19
LQ
Y/Y
Wealth Management and Trust
$16,574
$15,581
$15,224
6
%
9
%
Other 2
526
672
1,544
(22)
%
(66)
%
Total assets under management/advisory
$17,100
$16,253
$16,768
5
%
2
%
Net flows
Wealth Management and Trust
$(128)
$(12)
$(114)
Other 2
(268)
(395)
(95)
Total net flows
$(396)
$(407)
$(209)
2 Includes results from DGHM
Total AUM were $17.1 billion as of December 31, 2020, a 5% increase linked quarter. The linked quarter increase was primarily driven by the impact of favorable market action, partially offset by net outflows.
Total net flows were negative $396 million during the fourth quarter of 2020, driven by net flows of negative $268 million at DGHM and negative $128 million in the Wealth Management and Trust segment. Negative flows in the Wealth Management and Trust segment were driven by distributions to existing clients during the quarter. New business at Wealth Management & Trust remained strong at $297 million for the fourth quarter of 2020, compared to $299 million for the third quarter of 2020 and $1.1 billion for the year 2020.
Noninterest Expense
% Change
($ in millions)
4Q20
3Q20
4Q19
LQ
Y/Y
Salaries and employee benefits
$36.0
$34.7
$34.2
4
%
5
%
Occupancy and equipment
7.7
8.2
7.6
(5)
%
2
%
Information systems
8.6
7.1
6.5
22
%
33
%
Professional services
2.7
4.0
3.9
(32)
%
(30)
%
Marketing and business development
1.2
0.9
2.0
23
%
(43)
%
Amortization of intangibles
0.6
0.7
0.7
(21)
%
(16)
%
FDIC insurance
0.9
1.0
—
(9)
%
nm
Other
0.2
4.4
3.6
(94)
%
(93)
%
Total noninterest expense
$58.0
$60.9
$58.5
(5)
%
(1)
%
Memo: Excluding Off-Balance Sheet Provision
Reserve for unfunded loan commitments
$(2.4)
$1.8
—
nm
nm
Total noninterest expense, excluding Reserve for unfunded loan commitments (non-GAAP)
$60.4
$59.2
$58.5
2
%
3
%
Total noninterest expense for the fourth quarter of 2020 was $58.0 million , a 5% decrease linked quarter. The improvement linked quarter was driven primarily by a provision credit for unfunded loan commitments of $2.4 million in the fourth quarter of 2020, compared to a $1.8 million expense in the third quarter of 2020, each of which are recognized in Other expense.
Excluding the Reserve for unfunded loan commitments, Total noninterest expense (non-GAAP) for the fourth quarter of 2020 was $60.4 million , an increase of 2% linked quarter and an increase of 3% year-over-year. The linked quarter and year-over-year increases are driven primarily by higher Information systems expense from technology initiatives placed in service and higher compensation expense.
Income Tax Expense
The Company's effective tax rate for the fourth quarter of 2020 was 19.7% . The increase in the effective tax rate linked quarter reflects the impact of higher pre-tax income.
Loans - QTD Averages & Yields
% Change
($ in millions)
4Q20
3Q20
4Q19
LQ
Y/Y
Commercial and industrial
$1,036
$1,033
$1,142
—
%
(9)
%
Paycheck Protection Program ("PPP")
349
373
—
(6)
%
nm
Commercial real estate
2,711
2,653
2,562
2
%
6
%
Construction and land
172
218
217
(21)
%
(21)
%
Residential
2,721
2,810
2,935
(3)
%
(7)
%
Home equity
79
84
85
(6)
%
(6)
%
Other consumer
121
112
132
8
%
(8)
%
Total loans
$7,189
$7,283
$7,073
(1)
%
2
%
Total loans, excluding PPP (non-GAAP)
$6,840
$6,910
$7,073
(1)
%
(3)
%
Total loan yields
3.31
%
3.23
%
3.83
%
Average total loans, excluding PPP (non-GAAP) in the fourth quarter of 2020 decreased 1% linked quarter and decreased 3% year-over-year.
Commercial and industrial loans decreased 9% year-over-year driven by lower revolving line of credit usage
PPP loans decreased 6% linked quarter driven by the SBA's forgiveness of approximately 200 loans totaling $60 million in the fourth quarter of 2020
Commercial real estate loans increased 2% linked quarter driven by the conversion of two loans from construction to permanent financing during the fourth quarter of 2020
Residential mortgage loans decreased 3% linked quarter and 7% year-over-year driven by the sale of $72 million of loans late in the third quarter of 2020
Deposits - QTD Averages & Costs
% Change
($ in millions)
4Q20
3Q20
4Q19
LQ
Y/Y
Non-interest bearing deposits
$2,483
$2,321
$2,002
7
%
24
%
Interest bearing deposits
5,868
5,378
4,957
9
%
18
%
Total deposits
$8,351
$7,700
$6,959
8
%
20
%
Cost of total deposits
0.26
%
0.33
%
0.86
%
Cost of total interest-bearing deposits
0.37
%
0.48
%
1.20
%
Average total deposits in the fourth quarter of 2020 increased 8% linked quarter and 20% year-over-year to $8.4 billion . The linked quarter and year-over-year increases were driven by a combination of existing and new client balances.
Provision and Asset Quality
($ in millions)
4Q20
3Q20
2Q20
1Q20
4Q19
Provision and Allowance
Provision/(credit) for loan losses
$(3.0)
$(4.6)
$22.6
$17.0
$(3.7)
Reserve for unfunded loan commitments
(2.4)
1.8
2.8
1.8
—
Total Provision/(credit) for credit losses
$(5.4)
$(2.8)
$25.4
$18.8
$(3.7)
Allowance for loan losses as a % of Total loans
1.14
%
1.17
%
1.22
%
0.97
%
1.03
%
Asset Quality
Total net loans (charged-off)/ recovered
$(0.3)
$(0.2)
$(1.5)
$(0.3)
$0.3
Total nonaccrual loans
$23.9
$41.3
$25.6
$24.3
$16.1
Nonaccrual loans as a % of Total loans
0.34
%
0.57
%
0.35
%
0.35
%
0.23
%
Special mention loans (criticized loans)
$187.2
$199.5
$191.9
$92.6
$52.0
Classified loans
130.7
123.1
114.2
112.3
74.0
Total criticized and classified loans
$318.0
$322.6
$306.1
$204.9
$126.1
The Company recorded a Total provision credit for credit losses of $5.4 million during the fourth quarter of 2020. The provision release was primarily driven by an improved economic forecast related to the current expected credit losses methodology, partially offset by increased qualitative reserves for Commercial real estate. The Allowance for loan losses as a percentage of Total loans, excluding PPP loans (non-GAAP), was 1.19% in the fourth quarter of 2020, compared to 1.23% in the third quarter of 2020.
Total nonaccrual loans as of December 31, 2020 was $23.9 million , a decrease of $17.4 million , or 42% , linked quarter primarily driven by the payoff of a Commercial and industrial relationship in Northern California.
Total criticized and classified loans as of December 31, 2020 was $318.0 million , a decrease of $4.6 million , or 1% , linked quarter. In the fourth quarter of 2020, there were:
$39 million of loan payoffs, paydowns and upgrades
$35 million of loan downgrades, including $31 million of Commercial real estate loans across 8 relationships, primarily with retail, office, and hospitality collateral
As of December 31, 2020:
Residential loans on deferral totaled approximately $15 million , or 0.6% of total residential loans, compared to a peak of approximately $220 million in the second quarter of 2020
Commercial and industrial loans on deferral totaled approximately $11 million , or 1.1% of total Commercial and industrial loans, compared to a peak of approximately $125 million in the second quarter of 2020
The majority of Commercial real estate clients that qualified for and accepted the debt service reserve program remain in the program, representing a total loan balance of approximately $72 million , or 2.6% of total Commercial real estate loans
Capital
4Q20
3Q20
2Q20
1Q20
4Q19
Tangible common equity/ Tangible assets (non-GAAP)
8.0
%
8.3
%
8.3
%
8.8
%
8.6
%
Tangible book value per share (non-GAAP)
$9.73
$9.48
$9.25
$9.31
$9.02
Regulatory Capital Ratios: 3
Tier 1 common equity
11.5
%
11.3
%
11.1
%
11.2
%
11.4
%
Tier 1 risk-based capital
13.0
%
12.8
%
12.6
%
12.7
%
13.0
%
Total risk-based capital
14.3
%
14.1
%
13.9
%
13.8
%
14.1
%
Tier 1 leverage capital
8.9
%
9.2
%
9.2
%
9.7
%
9.8
%
3 Current quarter information is presented based on estimated data.
The Company's tangible book value per share increased to $9.73 in the fourth quarter of 2020, a 8% increase year-over-year.
Dividend Payments
Concurrent with the release of fourth quarter 2020 earnings, the Board of Directors of the Company declared a cash dividend payable to common shareholders of $0.06 per share. The record date for this dividend is February 5, 2021, and the payment date is February 19, 2021.
Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.
These non-GAAP financial measures include: return on average common equity; return on average tangible common equity; return on average assets; tangible book value per share; pre-tax, pre-provision income; tangible common equity / tangible assets; the efficiency ratio excluding amortization of intangibles; net income/(loss) attributable to the Company excluding notable items; total noninterest expense, excluding reserve for unfunded loan commitments; net income/(loss) attributable to the common shareholders, treasury stock method, excluding notable items; diluted earnings/(loss) per share excluding notable items; average total loans, excluding PPP; and total loans, excluding PPP.
A detailed reconciliation table of the Company’s GAAP to non-GAAP measures is included in the tables of this release and beginning on page 16 of the attached financial statements.
About Boston Private
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. (NASDAQ: BPFH).
For more information, visit 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 interest rate trends and future liquidity; expectations as to changes in assets, deposits and results of operations; the impact of the COVID-19 pandemic; future operations; market position and financial position; and prospects, plans and objectives of management. 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, the negative impacts and disruptions of the COVID-19 pandemic and measures taken to contain its spread on our employees, customers, business operations, credit quality, financial position, liquidity and results of operations; the length and extent of the economic contraction as a result of the COVID-19 pandemic; continued deterioration in employment levels, general business and economic conditions on a national basis and in the local markets in which the Company operates; the failure to obtain our shareholder’s approval to our proposed merger with SVB; the risk that a condition to closing of the proposed merger may not be satisfied; the risk that a regulatory approval that may be required for the proposed merger is not obtained or is obtained subject to conditions that are not anticipated; the effect of the announcement of the proposed merger on our ability to maintain relationships with our key partners, customers and employees, and on our operating results and business generally; changes in customer behavior; the possibility that future credits losses are higher than currently expected due to changes in economic assumptions, customer behavior or adverse economic developments; turbulence in the capital and debt markets; changes in interest rates; increases in loan defaults and charge-off rates; decreases in the value of securities and other assets; changes in loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and investments; competitive pressures from other financial institutions; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; changes in regulation; reputational risk relating to the Company’s participation in the Paycheck Protection Program and other pandemic-related legislative and regulatory initiatives and programs; risks 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 statements are made.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Balance Sheets
Unaudited ($ in thousands, except share and per share data)
4Q20
3Q20
2Q20
1Q20
4Q19
ASSETS:
Cash and cash equivalents
$
1,055,588
$
546,263
$
179,027
$
61,714
$
292,479
Investment securities available-for-sale
1,243,693
1,011,327
1,002,970
993,166
978,284
Investment securities held-to-maturity
35,223
38,600
42,495
45,395
48,212
Equity securities at fair value
41,452
32,818
24,492
23,080
18,810
Stock in Federal Home Loan Bank and Federal Reserve Bank
28,663
36,618
42,407
45,273
39,078
Loans held for sale
17,421
15,074
9,786
7,671
7,386
Loans
7,104,309
7,222,569
7,332,954
7,043,338
6,976,704
Less: Allowance for loan losses
81,238
84,551
89,324
68,211
71,982
Loans, net of Allowance for loan losses
7,023,071
7,138,018
7,243,630
6,975,127
6,904,722
Premises and equipment, net
44,087
42,907
43,805
43,544
44,527
Goodwill
57,607
57,607
57,607
57,607
57,607
Intangible assets, net
9,056
8,898
8,935
9,637
10,352
Accrued interest receivable
26,191
25,935
24,918
24,054
24,175
Deferred income taxes, net
6,774
8,250
9,116
5,630
11,383
Right-of-use assets
97,859
94,879
94,143
98,896
102,075
Other assets
362,048
374,111
375,575
355,532
291,411
TOTAL ASSETS
$
10,048,733
$
9,431,305
$
9,158,906
$
8,746,326
$
8,830,501
LIABILITIES:
Deposits
$
8,595,366
$
7,827,719
$
7,427,397
$
6,835,572
$
7,241,476
Securities sold under agreements to repurchase
53,472
42,544
46,623
45,319
53,398
Federal funds purchased
—
—
—
145,000
—
Federal Home Loan Bank borrowings
114,659
296,236
426,313
491,254
350,829
Junior subordinated debentures
106,363
106,363
106,363
106,363
106,363
Lease liabilities
112,339
108,932
108,234
113,574
117,214
Other liabilities
198,526
203,342
218,771
180,452
140,820
TOTAL LIABILITIES
9,180,725
8,585,136
8,333,701
7,917,534
8,010,100
REDEEMABLE NONCONTROLLING INTERESTS (“RNCI”)
—
—
—
—
1,383
SHAREHOLDERS' EQUITY:
Common stock, $1.00 par value; authorized: 170,000,000 shares
82,334
82,255
82,058
81,800
83,266
Additional paid-in capital
597,558
597,113
594,463
593,167
600,708
Retained earnings
156,431
136,394
118,647
131,761
127,469
Accumulated other comprehensive income
31,685
30,407
30,037
22,064
7,575
TOTAL SHAREHOLDERS' EQUITY
868,008
846,169
825,205
828,792
819,018
TOTAL LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY
$
10,048,733
$
9,431,305
$
9,158,906
$
8,746,326
$
8,830,501
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Income Statements
Unaudited ($ in thousands, except share and per share data)
4Q20
3Q20
2Q20
1Q20
4Q19
REVENUE:
Interest income
$
66,351
$
65,453
$
68,819
$
73,082
$
75,291
Interest expense
6,944
7,629
9,881
15,825
19,166
Net interest income
59,407
57,824
58,938
57,257
56,125
Provision/(credit) for loan losses 4
(2,999
)
(4,569
)
22,604
16,962
(3,668
)
Net interest income after Provision/(credit) for loan losses
62,406
62,393
36,334
40,295
59,793
Wealth management and trust fees 5
19,016
18,240
17,261
18,371
18,720
Investment management fees
1,173
1,393
1,770
1,925
2,554
Private banking fee income
4,304
1,320
2,395
2,490
2,924
Gain on sale of loans, net
718
1,006
204
100
557
Total core fees and income
25,211
21,959
21,630
22,886
24,755
Total other income
1,445
1,086
1,032
(1,365
)
2,038
TOTAL REVENUE 6
86,063
80,869
81,600
78,778
82,918
NONINTEREST EXPENSE:
Salaries and employee benefits
36,022
34,671
33,937
35,096
34,186
Occupancy and equipment
7,723
8,150
7,560
7,646
7,578
Information systems
8,633
7,096
7,113
6,725
6,476
Professional services
2,744
4,025
3,446
3,601
3,920
Marketing and business development
1,154
935
2,313
1,890
2,017
Amortization of intangibles
566
714
702
715
676
FDIC insurance
876
960
767
—
(19
)
Other 4
249
4,386
5,615
5,235
3,623
TOTAL NONINTEREST EXPENSE
57,967
60,937
61,453
60,908
58,457
INCOME/(LOSS) BEFORE INCOME TAXES
31,095
24,501
(2,457
)
908
28,129
Income tax expense
6,124
1,821
841
102
6,788
Net income/(loss) before attribution to noncontrolling interests
24,971
22,680
(3,298
)
806
21,341
Less: Net income attributable to noncontrolling interests
—
—
—
6
97
NET INCOME/(LOSS) ATTRIBUTABLE TO THE COMPANY
$
24,971
$
22,680
$
(3,298
)
$
800
$
21,244
Adjustments, treasury stock method 7
—
—
—
414
98
NET INCOME/(LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS
$
24,971
$
22,680
$
(3,298
)
$
1,214
$
21,342
COMMON SHARE DATA:
Weighted average basic shares outstanding
82,292,450
82,221,705
81,929,752
83,005,064
83,238,982
Weighted average diluted shares outstanding 8
82,764,339
82,362,338
81,929,752
83,318,041
83,637,786
Diluted earnings/(loss) per share
$
0.30
$
0.28
$
(0.04
)
$
0.01
$
0.26
4 Total Provision for credit losses includes the Provision/(credit) for loan losses and the Reserve for unfunded loan commitments within Other expense.
5 Wealth management and trust fees consists of revenue from Boston Private Wealth LLC ("BPW"), KLS Professional Advisors Group, LLC ("KLS"), and the trust operations of Boston Private Bank & Trust Company.
6 Total revenue is the sum of Net interest income, Total core fees and income, and Total other income.
7 Adjustments to Net income/(loss) attributable to the Company to arrive at Net income/(loss) attributable to common shareholders, treasury stock method, as presented in these tables, include decreases/(increases) in Noncontrolling interests redemption value, if any.
8 For a description of the Company's policies regarding Diluted earnings per share, please refer to Part II. Item 8. “Financial Statements and Supplementary Data - Note 16: Earnings Per Share” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Income Statements
Unaudited ($ in thousands, except share and per share data)
Year ended December 31,
2020
2019
REVENUE:
Interest income
$
273,705
$
308,447
Interest expense
40,279
80,371
Net interest income
233,426
228,076
Provision/(credit) for loan losses 4
31,998
(3,564
)
Net interest income after Provision/(credit) for loan losses
201,428
231,640
Wealth management and trust fees 5
72,888
75,757
Investment management fees
6,261
10,155
Private banking fee income
10,509
10,948
Gain on sale of loans, net
2,028
1,622
Total core fees and income
91,686
98,482
Total other income
2,198
3,065
TOTAL REVENUE 6
327,310
329,623
NONINTEREST EXPENSE:
Salaries and employee benefits
139,726
134,302
Occupancy and equipment
31,079
32,038
Information systems
29,567
22,642
Professional services
13,816
15,228
Marketing and business development
6,292
6,439
Amortization of intangibles
2,697
2,691
FDIC insurance
2,603
1,285
Restructuring
—
1,646
Other 4
15,485
13,935
TOTAL NONINTEREST EXPENSE
241,265
230,206
INCOME BEFORE INCOME TAXES
54,047
102,981
Income tax expense
8,888
22,591
Net income before attribution to noncontrolling interests
45,159
80,390
Less: Net income attributable to noncontrolling interests
6
362
NET INCOME ATTRIBUTABLE TO THE COMPANY
$
45,153
$
80,028
Adjustments, treasury stock method 7
414
1,143
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS
$
45,567
$
81,171
COMMON SHARE DATA
Weighted average basic shares outstanding
82,359,528
83,430,740
Weighted average diluted shares outstanding 8
82,757,785
83,920,792
Diluted earnings per share
$
0.55
$
0.97
4 Total Provision for credit losses includes the Provision/(credit) for loan losses and the Reserve for unfunded loan commitments within Other expense.
5 Wealth management and trust fees consists of revenue from Boston Private Wealth LLC ("BPW"), KLS Professional Advisors Group, LLC ("KLS") through the effective date of its merger with BPW, and the trust operations of Boston Private Bank & Trust Company.
6 Total revenue is the sum of Net interest income, Total core fees and income, and Total other income.
7 Adjustments to Net income attributable to the Company to arrive at Net income attributable to common shareholders, treasury stock method, as presented in these tables, include decreases/(increases) in Noncontrolling interests redemption value, if any.
8 For a description of the Company's policies regarding Diluted earnings per share, please refer to Part II. Item 8. “Financial Statements and Supplementary Data - Note 16: Earnings Per Share” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Financial Highlights
Unaudited ($ in thousands, except share and per share data)
4Q20
3Q20
2Q20
1Q20
4Q19
KEY STATISTICS:
Return on average assets (non-GAAP) 9
1.00
%
0.96
%
(0.15)
%
0.04
%
0.96
%
ROACE (non-GAAP) 9
11.50
%
10.68
%
(1.58)
%
0.39
%
10.29
%
ROATCE (non-GAAP) 9
12.69
%
11.88
%
(1.43)
%
0.72
%
11.51
%
Efficiency ratio (non-GAAP) 9
66.7
%
74.5
%
74.4
%
76.4
%
69.7
%
Noninterest income to total revenue
31.0
%
28.5
%
27.8
%
27.3
%
32.3
%
Net interest margin
2.52
%
2.61
%
2.75
%
2.76
%
2.70
%
Average loan to average deposit ratio
86.1
%
94.6
%
100.5
%
99.0
%
101.6
%
Cost of total deposits
0.26
%
0.33
%
0.41
%
0.72
%
0.86
%
Cost of interest-bearing deposits
0.37
%
0.48
%
0.59
%
1.02
%
1.20
%
Cost of total funding
0.32
%
0.37
%
0.50
%
0.83
%
0.99
%
Allowance for loan losses / Total loans
1.14
%
1.17
%
1.22
%
0.97
%
1.03
%
Nonperforming loans / Total loans
0.34
%
0.57
%
0.35
%
0.35
%
0.23
%
Net (charge-offs)/recoveries / Total loans 9
(0.02)
%
(0.01)
%
(0.08)
%
(0.02)
%
0.02
%
CAPITAL HIGHLIGHTS:
Tier 1 common equity 3
$
773,017
$
752,492
$
731,316
$
742,044
$
745,926
Tier 1 capital 3
$
873,039
$
852,514
$
831,338
$
842,066
$
846,337
Total capital 3
$
956,789
$
935,887
$
913,936
$
914,572
$
919,573
Risk-weighted assets 3
$
6,696,025
$
6,659,752
$
6,593,957
$
6,627,339
$
6,530,804
Average assets for leverage 3
$
9,796,299
$
9,237,942
$
9,009,565
$
8,691,254
$
8,659,944
Tier 1 common equity ratio 3
11.54
%
11.30
%
11.09
%
11.20
%
11.42
%
Tier 1 risk-based capital ratio 3
13.04
%
12.80
%
12.61
%
12.71
%
12.96
%
Total risk-based capital ratio 3
14.29
%
14.05
%
13.86
%
13.80
%
14.08
%
Tier 1 leverage capital ratio 3
8.91
%
9.23
%
9.23
%
9.69
%
9.77
%
Total equity / Total assets
8.64
%
8.97
%
9.01
%
9.48
%
9.27
%
Tangible common equity / Tangible assets (non-GAAP)
8.03
%
8.33
%
8.34
%
8.77
%
8.57
%
End of period market price per share
$
8.45
$
5.52
$
6.88
$
7.15
$
12.03
End of period shares outstanding
82,334,257
82,254,594
82,058,483
81,800,486
83,265,674
Book value per common share
$
10.54
$
10.29
$
10.06
$
10.13
$
9.84
Tangible book value per share (non-GAAP)
$
9.73
$
9.48
$
9.25
$
9.31
$
9.02
Common Equity Repurchase Program:
Total shares of common stock repurchased
—
—
—
1,565,060
—
Average price paid per share of common stock
$
—
$
—
$
—
$
8.18
$
—
Aggregate repurchases of common stock ($ in millions)
$
—
$
—
$
—
$
12.8
$
—
3 Current quarter information is presented based on estimated data.
9 Annualized.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated AUM and Balance Sheet - End of Period Balances
Unaudited ($ in thousands)
4Q20
3Q20
2Q20
1Q20
4Q19
ASSETS UNDER MANAGEMENT AND ADVISORY ("AUM"):
Wealth Management and Trust
$
16,574,000
$
15,581,000
$
14,889,000
$
13,497,000
$
15,224,000
Other 2
526,000
672,000
1,067,000
1,016,000
1,544,000
TOTAL AUM
$
17,100,000
$
16,253,000
$
15,956,000
$
14,513,000
$
16,768,000
AUM Rollforward:
Beginning balance
$
16,253,000
$
15,956,000
$
14,513,000
$
16,768,000
$
16,228,000
Net flows
(396,000
)
(407,000
)
(40,000
)
150,000
(209,000
)
Market returns
1,243,000
704,000
1,483,000
(2,405,000
)
749,000
Ending balance
$
17,100,000
$
16,253,000
$
15,956,000
$
14,513,000
$
16,768,000
AUM Net Flows:
Wealth Management and Trust
$
(128,000
)
$
(12,000
)
$
60,000
$
176,000
$
(114,000
)
Other 2
(268,000
)
(395,000
)
(100,000
)
(26,000
)
(95,000
)
TOTAL NET FLOWS
$
(396,000
)
$
(407,000
)
$
(40,000
)
$
150,000
$
(209,000
)
DEPOSITS:
Demand deposits (non-interest bearing)
$
2,481,676
$
2,346,126
$
2,293,864
$
2,020,440
$
1,971,013
Savings and NOW
905,692
756,797
758,656
653,006
646,199
Money market
4,699,882
4,187,657
3,753,228
3,468,701
3,969,330
Certificates of deposit
508,116
537,139
621,649
693,425
654,934
TOTAL DEPOSITS
$
8,595,366
$
7,827,719
$
7,427,397
$
6,835,572
$
7,241,476
LOANS:
Commercial and industrial
$
558,343
$
583,145
$
565,748
$
670,744
$
694,034
Paycheck Protection Program
312,356
371,496
370,034
—
—
Commercial tax-exempt
442,159
472,342
419,264
445,319
447,927
Commercial real estate
2,757,375
2,659,890
2,676,708
2,626,299
2,551,274
Construction and land
159,204
211,697
240,211
238,293
225,983
Residential
2,677,464
2,729,164
2,859,627
2,841,926
2,839,155
Home equity
77,364
81,797
84,588
89,350
83,657
Consumer
120,044
113,038
116,774
131,407
134,674
TOTAL LOANS
$
7,104,309
$
7,222,569
$
7,332,954
$
7,043,338
$
6,976,704
2 Includes results from Dalton, Greiner, Hartman, Maher & Co, LLC ("DGHM")
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Provision and Asset Quality
Unaudited ($ in thousands)
4Q20
3Q20
2Q20
1Q20
4Q19
PROVISION:
Provision/(credit) for loan losses
$
(2,999
)
$
(4,569
)
$
22,604
$
16,962
$
(3,668
)
Reserve for unfunded loan commitments 4
(2,386
)
1,750
2,829
1,827
(23
)
Total Provision/(credit) for credit losses
$
(5,385
)
$
(2,819
)
$
25,433
$
18,789
$
(3,691
)
CHARGE-OFFS:
Loan charge-offs
$
(511
)
$
(245
)
$
(1,546
)
$
(528
)
$
(285
)
Loan recoveries
197
41
55
180
576
NET (CHARGE-OFFS)/RECOVERIES
$
(314
)
$
(204
)
$
(1,491
)
$
(348
)
$
291
Net charge-offs to average loans (annualized)
(0.02
)%
(0.01
)%
(0.08
)%
(0.02
)%
0.02
%
Net (Charge-offs)/Recoveries by Loan Type:
Commercial and industrial
$
(474
)
$
(136
)
$
(337
)
$
(473
)
$
118
Commercial real estate
160
—
—
—
183
Home equity
—
—
(1,157
)
132
4
Consumer
—
(68
)
3
(7
)
(14
)
NET (CHARGE-OFFS)/RECOVERIES
$
(314
)
$
(204
)
$
(1,491
)
$
(348
)
$
291
LOAN QUALITY DATA:
Special mention loans
$
187,237
$
199,509
$
191,882
$
92,623
$
52,026
Accruing classified loans 10
106,883
81,827
88,586
87,948
57,922
Nonaccrual loans
23,851
41,263
25,604
24,314
16,103
Total classified
130,734
123,090
114,190
112,262
74,025
Criticized and classified loans
$
317,971
$
322,599
$
306,072
$
204,885
$
126,051
Loans 30-89 days past due and accruing 11
$
19,862
$
5,635
$
5,535
$
14,852
$
25,945
4 Total Provision for credit losses includes the Provision/(credit) for loan losses and the Reserve for unfunded loan commitments within Other expense.
10 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.
11 At June 30, 2020, the Company had one loan totaling less than $0.1 million that was more than 90 days past due but still on accrual status. This loan originated in the New England region. The Company had no other loans outstanding more than 90 days past due but still on accrual status in comparative periods.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Average Balances, Yields, and Rates
Unaudited ($ in thousands)
Average Balance
Interest Income/Expense
Average Yield/Rate
4Q20
3Q20
4Q19
4Q20
3Q20
4Q19
4Q20
3Q20
4Q19
INTEREST-EARNING ASSETS
Cash and investments:
Taxable investment securities
$
209,143
$
201,515
$
201,535
$
849
$
853
$
869
1.62
%
1.69
%
1.72
%
Non-taxable investment securities
318,291
313,130
311,705
1,973
1,974
1,976
2.48
%
2.52
%
2.54
%
Mortgage-backed securities
598,616
515,813
489,927
2,585
2,354
2,568
1.73
%
1.83
%
2.10
%
Short-term investments and other
976,344
432,117
130,519
687
654
1,210
0.28
%
0.59
%
3.65
%
Total cash and investments
2,102,394
1,462,575
1,133,686
6,094
5,835
6,623
1.16
%
1.59
%
2.33
%
Loans: 12
Commercial and industrial
1,035,783
1,032,816
1,142,015
8,504
8,314
11,276
3.21
%
3.15
%
3.86
%
Paycheck Protection Program
348,827
373,047
—
3,798
2,390
—
4.26
%
2.51
%
—
%
Commercial real estate
2,711,396
2,652,770
2,562,380
24,096
23,546
28,285
3.48
%
3.47
%
4.32
%
Construction and land
171,873
218,211
216,754
1,642
2,109
2,588
3.74
%
3.78
%
4.67
%
Residential
2,720,733
2,809,871
2,934,786
21,041
22,089
24,275
3.09
%
3.14
%
3.31
%
Home equity
79,485
84,226
84,632
676
623
965
3.38
%
2.94
%
4.53
%
Other consumer
121,139
111,657
132,143
500
547
1,279
1.64
%
1.95
%
3.84
%
Total loans
7,189,236
7,282,598
7,072,710
60,257
59,618
68,668
3.31
%
3.23
%
3.83
%
Total earning assets
9,291,630
8,745,173
8,206,396
66,351
65,453
75,291
2.82
%
2.96
%
3.62
%
LESS: Allowance for loan losses
84,679
89,370
75,283
Cash and due from banks
38,732
34,761
48,287
Other assets
651,008
655,999
559,350
TOTAL AVERAGE ASSETS
$
9,896,691
$
9,346,563
$
8,738,750
INTEREST-BEARING LIABILITIES
Interest-bearing deposits: 13
Savings and NOW
$
793,923
$
722,742
$
644,502
$
200
$
197
$
252
0.10
%
0.11
%
0.16
%
Money market
4,551,046
4,070,026
3,632,258
4,255
4,790
11,449
0.37
%
0.47
%
1.25
%
Certificates of deposit
522,567
585,729
680,466
981
1,447
3,322
0.75
%
0.98
%
1.94
%
Total interest-bearing deposits 13
5,867,536
5,378,497
4,957,226
5,436
6,434
15,023
0.37
%
0.48
%
1.20
%
Junior subordinated debentures
106,363
106,363
106,363
481
508
966
1.77
%
1.87
%
3.56
%
FHLB borrowings and other
267,865
388,412
591,682
1,027
687
3,177
1.50
%
0.69
%
2.10
%
Total interest-bearing liabilities 13
6,241,764
5,873,272
5,655,271
6,944
7,629
19,166
0.44
%
0.52
%
1.34
%
Non-interest bearing demand deposits 13
2,482,969
2,321,223
2,001,714
Payables and other liabilities
310,820
309,462
261,503
Total average liabilities
9,035,553
8,503,957
7,918,488
Redeemable noncontrolling interests
—
—
1,446
Average shareholders’ equity
861,138
842,606
818,816
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY
$
9,896,691
$
9,346,563
$
8,738,750
Net interest income
$
59,407
$
57,824
$
56,125
Interest rate spread
2.38
%
2.44
%
2.28
%
Net interest margin
2.52
%
2.61
%
2.70
%
Average total deposits 13
$
8,350,505
$
7,699,720
$
6,958,940
0.26
%
0.33
%
0.86
%
Average total deposits and borrowings 13
$
8,724,733
$
8,194,495
$
7,656,985
0.32
%
0.37
%
0.99
%
12 Average loans includes Loans held for sale and Nonaccrual loans
13 Average total deposits is the sum of Average total interest-bearing deposits and Average non-interest bearing demand deposits. Average total deposits and borrowings is the sum of Average total interest-bearing liabilities and Average non-interest bearing demand deposits.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Average Balances, Yields, and Rates
Unaudited ($ in thousands)
Average Balance
Interest Income/Expense
Average Yield/Rate
Year Ended
Year Ended
Year Ended
INTEREST-EARNING ASSETS
12/31/20
12/31/19
12/31/20
12/31/19
12/31/20
12/31/19
Cash and investments:
Taxable investment securities
$
202,557
$
217,653
$
3,429
$
4,113
1.69
%
1.89
%
Non-taxable investment securities
315,903
307,005
7,950
7,702
2.52
%
2.51
%
Mortgage-backed securities
535,302
502,949
10,292
10,793
1.92
%
2.15
%
Short-term investments and other
437,177
110,877
2,994
4,259
0.69
%
3.84
%
Total cash and investments
1,490,939
1,138,484
24,665
26,867
1.65
%
2.36
%
Loans: 12
Commercial and industrial
1,064,512
1,101,635
37,250
44,949
3.50
%
4.08
%
Paycheck Protection Program
251,016
—
7,761
—
3.11
%
—
%
Commercial real estate
2,651,554
2,496,878
99,726
115,507
3.76
%
4.63
%
Construction and land
214,074
206,624
8,574
10,198
4.00
%
4.94
%
Residential
2,810,786
2,983,173
89,677
101,122
3.19
%
3.39
%
Home equity
84,502
88,917
2,901
4,353
3.43
%
4.90
%
Other consumer
122,312
129,701
3,151
5,451
2.58
%
4.20
%
Total loans
7,198,756
7,006,928
249,040
281,580
3.46
%
4.02
%
Total earning assets
8,689,695
8,145,412
273,705
308,447
3.15
%
3.79
%
LESS: Allowance for loan losses
73,636
74,969
Cash and due from banks
40,800
47,286
Other assets
628,049
527,269
TOTAL AVERAGE ASSETS
$
9,284,908
$
8,644,998
INTEREST-BEARING LIABILITIES
Interest-bearing deposits: 13
Savings and NOW
$
709,357
$
654,712
$
816
$
1,099
0.12
%
0.17
%
Money market
4,014,481
3,395,842
23,550
43,521
0.59
%
1.28
%
Certificates of deposit
611,829
730,693
7,635
14,463
1.25
%
1.98
%
Total interest-bearing deposits 13
5,335,667
4,781,247
32,001
59,083
0.60
%
1.24
%
Junior subordinated debentures
106,363
106,363
2,670
4,189
2.50
%
3.94
%
FHLB borrowings and other
430,176
748,628
5,608
17,099
1.30
%
2.28
%
Total interest-bearing liabilities 13
5,872,206
5,636,238
40,279
80,371
0.69
%
1.43
%
Non-interest bearing demand deposits 13
2,266,801
1,962,951
Payables and other liabilities
299,301
247,163
Total average liabilities
8,438,308
7,846,352
Redeemable noncontrolling interests
308
1,593
Average shareholders’ equity
846,292
797,053
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY
$
9,284,908
$
8,644,998
Net interest income
$
233,426
$
228,076
Interest rate spread
2.46
%
2.36
%
Net interest margin
2.69
%
2.80
%
Average total deposits 13
$
7,602,468
$
6,744,198
0.42
%
0.88
%
Average total deposits and borrowings 13
$
8,139,007
$
7,599,189
0.49
%
1.06
%
12 Average loans includes Loans held for sale and Nonaccrual loans
13 Average total deposits is the sum of Average total interest-bearing deposits and Average non-interest bearing demand deposits. Average total deposits and borrowings is the sum of Average total interest-bearing liabilities and Average non-interest bearing demand deposits.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Regional Loan Data 14
Unaudited ($ in thousands)
4Q20
3Q20
2Q20
1Q20
4Q19
New England
$
3,593,925
$
3,669,746
$
3,781,603
$
3,724,959
$
3,776,747
Northern California
1,776,682
1,763,556
1,741,255
1,618,668
1,532,786
Southern California
1,733,702
1,789,267
1,810,096
1,699,711
1,667,171
Total loans
$
7,104,309
$
7,222,569
$
7,332,954
$
7,043,338
$
6,976,704
Loans (charged-off)/recovered, net:
New England
$
162
$
(111
)
$
7
$
15
$
414
Northern California
(147
)
—
3
122
(10
)
Southern California
(329
)
(93
)
(1,501
)
(485
)
(113
)
Total net loans (charged-off)/recovered
$
(314
)
$
(204
)
$
(1,491
)
$
(348
)
$
291
Special mention loans:
New England
$
94,235
$
103,060
$
83,026
$
61,741
$
21,691
Northern California
64,361
63,192
75,609
5,947
5,227
Southern California
28,641
33,257
33,247
24,935
25,108
Total special mention loans
$
187,237
$
199,509
$
191,882
$
92,623
$
52,026
Accruing classified loans:
New England
$
89,582
$
74,682
$
53,124
$
50,483
$
20,428
Northern California
340
4,589
21,712
24,843
24,946
Southern California
16,961
2,556
13,750
12,622
12,548
Total accruing classified loans
$
106,883
$
81,827
$
88,586
$
87,948
$
57,922
Nonaccruing loans:
New England
$
12,643
$
11,807
$
11,630
$
11,965
$
9,764
Northern California
6,331
25,133
9,459
6,575
319
Southern California
4,877
4,323
4,515
5,774
6,020
Total nonaccruing loans
$
23,851
$
41,263
$
25,604
$
24,314
$
16,103
14 The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lenders' regional offices.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP Financial Measures
Unaudited ($ in thousands, except share and per share data)
4Q20
3Q20
2Q20
1Q20
4Q19
ROACE AND ROATCE:
Net income/(loss) attributable to the Company (GAAP) (A)
$
24,971
$
22,680
$
(3,298)
$
800
$
21,244
ADD: Amortization of intangibles, net of tax
447
564
555
565
534
Tangible common net income/(loss) (non-GAAP) (B)
$
25,418
$
23,244
$
(2,743)
$
1,365
$
21,778
Total average shareholders’ equity (C)
$
861,138
$
842,606
$
834,882
$
838,935
$
818,816
LESS: Average goodwill and intangibles, net
(66,253)
(66,246)
(66,877)
(67,586)
(68,031)
Average tangible common equity (non-GAAP) (D)
$
794,885
$
776,360
$
768,005
$
771,349
$
750,785
ROACE (annualized) (A/C)
11.50
%
10.68
%
(1.58)
%
0.39
%
10.29
%
ROATCE (annualized) (B/D)
12.69
%
11.88
%
(1.43)
%
0.72
%
11.51
%
PRE-TAX, PRE-PROVISION INCOME:
Income/(loss) before income taxes (GAAP)
$
31,095
$
24,501
$
(2,457)
$
908
$
28,129
ADD BACK: Provision/(credit) for loan losses
(2,999)
(4,569)
22,604
16,962
(3,668)
Pre-tax, pre-provision income (non-GAAP)
$
28,096
$
19,932
$
20,147
$
17,870
$
24,461
TANGIBLE COMMON EQUITY:
Total shareholders’ equity (GAAP)
$
868,008
$
846,169
$
825,205
$
828,792
$
819,018
LESS: Goodwill and intangibles, net
(66,663)
(66,505)
(66,542)
(67,244)
(67,959)
Tangible common equity (non-GAAP) (A)
$
801,345
$
779,664
$
758,663
$
761,548
$
751,059
Total assets (GAAP)
$
10,048,733
$
9,431,305
$
9,158,906
$
8,746,326
$
8,830,501
LESS: Goodwill and intangibles, net
(66,663)
(66,505)
(66,542)
(67,244)
(67,959)
Tangible assets (non-GAAP) (B)
$
9,982,070
$
9,364,800
$
9,092,364
$
8,679,082
$
8,762,542
End of period shares outstanding (C)
82,334,257
82,254,594
82,058,483
81,800,486
83,265,674
Tangible common equity/ Tangible assets (non-GAAP) (A/B)
8.03
%
8.33
%
8.34
%
8.77
%
8.57
%
Tangible book value per share (non-GAAP) (A/C)
$9.73
$9.48
$9.25
$9.31
$9.02
AVERAGE LOANS:
Total loans
$
7,189,236
$
7,282,598
$
7,288,644
$
7,033,733
$
7,072,710
LESS: PPP
348,827
373,047
283,619
—
—
Total loans, excluding PPP (non-GAAP)
$
6,840,409
$
6,909,551
$
7,005,025
$
7,033,733
$
7,072,710
Total loan yields, excluding PPP (non-GAAP)
3.26
%
3.27
%
3.47
%
3.75
%
3.83
%
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP Financial Measures
Unaudited ($ in thousands, except share and per share data)
4Q20
3Q20
2Q20
1Q20
4Q19
RETURN ON AVERAGE ASSETS:
Net income/(loss) attributable to the Company (GAAP) (A)
$
24,971
$
22,680
$
(3,298)
$
800
$
21,244
Average assets (non-GAAP) (B)
9,896,691
9,346,563
9,109,201
8,779,391
8,738,750
Return on average assets (annualized) (non-GAAP) (A/B)
1.00
%
0.96
%
(0.15)
%
0.04
%
0.96
%
EFFICIENCY RATIO:
Total noninterest expense (GAAP) (A)
$
57,967
$
60,937
$
61,453
$
60,908
$
58,457
LESS: Amortization of intangibles
566
714
702
715
676
Total noninterest expense, excluding Amortization of intangibles (non-GAAP) (B)
$
57,401
$
60,223
$
60,751
$
60,193
$
57,781
Net interest income (GAAP)
$
59,407
$
57,824
$
58,938
$
57,257
$
56,125
Total core fees and income (GAAP)
25,211
21,959
21,630
22,886
24,755
Total other income (GAAP)
1,445
1,086
1,032
(1,365)
2,038
Total revenue (GAAP) (C)
$
86,063
$
80,869
$
81,600
$
78,778
$
82,918
Efficiency ratio (GAAP) (A/C)
67.4
%
75.4
%
75.3
%
77.3
%
70.5
%
Efficiency ratio, excluding Amortization of intangibles (non-GAAP) (B/C)
66.7
%
74.5
%
74.4
%
76.4
%
69.7
%
NET INCOME/(LOSS) ATTRIBUTABLE TO THE COMPANY:
Net income/(loss) attributable to the Company (GAAP)
$
24,971
$
22,680
$
(3,298)
$
800
$
21,244
LESS: Gain on fair value of contingent considerations receivable 15
—
891
—
—
1,109
Tax effect at statutory rate
—
258
—
—
322
Net income/(loss) attributable to the Company (non-GAAP)
$
24,971
$
22,047
$
(3,298)
$
800
$
20,457
NET INCOME/(LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Net income/(loss) attributable to common shareholders (GAAP)
$
24,971
$
22,680
$
(3,298)
$
1,214
$
21,342
LESS: Gain on fair value of contingent considerations receivable 15
—
891
—
—
1,109
Tax effect at statutory rate
—
258
—
—
322
Net income/(loss) attributable to the common shareholders, treasury stock method, excluding notable items (non-GAAP)
$
24,971
$
22,047
$
(3,298)
$
1,214
$
20,555
Weighted average diluted shares outstanding
82,764,339
82,362,338
81,929,752
83,318,041
83,637,786
Diluted earnings/(loss) per share (GAAP)
$
0.30
$
0.28
$
(0.04)
$
0.01
$
0.26
Diluted earnings/(loss) per share, excluding notable items (non-GAAP)
$
0.30
$
0.27
$
(0.04)
$
0.01
$
0.25
Average common equity (non-GAAP)
$
861,138
$
842,606
$
834,882
$
838,935
$
818,816
Average tangible common equity (non-GAAP)
$
794,885
$
776,360
$
768,005
$
771,349
$
750,785
ROACE, excluding notable items (non-GAAP)
11.50
%
10.38
%
(1.58)
%
0.39
%
9.91
%
ROATCE, excluding notable items (non-GAAP)
12.69
%
11.55
%
(1.43)
%
0.72
%
11.09
%
Pre-tax, pre-provision income (non-GAAP)
$
28,096
$
19,932
$
20,147
$
17,870
$
24,461
LESS: Gain on fair value of contingent considerations receivable 15
—
891
—
—
1,109
Pre-tax, pre-provision income, excluding notable items (non-GAAP)
$
28,096
$
19,041
$
20,147
$
17,870
$
23,352
15 In the third quarter of 2020 and fourth quarter of 2019, there was a gain of $0.9 million and $1.1 million , respectively, related to the revaluation of a receivable from the divestiture of former affiliate, Bingham, Osborn & Scarborough, LLC ("BOS").
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP measures: Operating Adjustments
Unaudited ($ in thousands, except share and per share data)
Three Months Ended
Year Ended
December 31, 2020
December 31, 2020
GAAP or
Reported
Value
Notable
Items
Operating
Basis
(Non-GAAP)
GAAP or
Reported
Value
Notable
Items
Operating
Basis
(Non-GAAP)
Total revenue
$
86,063
$
—
$
86,063
$
327,310
$
(891)
$
326,419
Total noninterest expense
57,967
—
57,967
241,265
—
241,265
Pre-tax, pre-provision income
28,096
—
28,096
86,045
(891)
85,154
Income before income taxes
31,095
—
31,095
54,047
(891)
53,156
Income tax (expense)/benefit
6,124
—
6,124
8,888
(258)
8,630
Net income attributable to the Company
$
24,971
$
—
$
24,971
$
45,153
$
(633)
$
44,520
Net income attributable to common shareholders
$
24,971
$
—
$
24,971
$
45,567
$
(633)
$
44,934
Weighted average diluted shares outstanding
82,764,339
82,764,339
82,764,339
82,757,785
82,757,785
82,757,785
Diluted earnings per share
$
0.30
$
—
$
0.30
$
0.55
$
(0.01)
$
0.54
Average common equity
861,138
861,138
846,292
846,292
ROACE
11.50
%
11.50
%
5.34
%
5.26
%
Average tangible common equity
794,885
794,885
779,555
779,555
ROATCE
12.69
%
12.69
%
6.07
%
5.98
%
Effective tax rate
19.7
%
19.7
%
16.4
%
16.2
%
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