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BPFH Boston Private Financial

Filed: 22 Apr 21, 4:30pm


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Boston Private Reports First Quarter 2021 Results

First Quarter 2021 Highlights include:

Net income of $10.7 million, or $0.13 per diluted share
Return on average common equity (non-GAAP) of 4.9%
Return on average tangible common equity (non-GAAP) of 5.6%
Average total deposits of $8.8 billion, a 24% increase year-over-year
Average total loans of $7.1 billion, a 1% increase year-over-year
Total assets under management/advisory (“AUM”) of $17.2 billion, a 19% increase year-over-year driven by favorable market action
Total provision credit of $9.0 million

Boston, MA - April 22, 2021 - 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)1Q214Q201Q20LQY/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
1



Net Interest Income and Margin
% Change
($ in millions)1Q214Q201Q20LQY/Y
Net interest income$59.5$59.4$57.3— %%
Net interest margin2.45 %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)1Q214Q201Q20LQY/Y
Wealth management and trust fees$19.1$19.0$18.4%%
Investment management fees0.51.21.9(58)%(75)%
Private banking fees 1
3.2 5.0 2.6 nm22 %
Total core fees and income$22.8$25.2$22.9(10)% %
Total other income3.4 1.4 (1.4)nmnm
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)1Q214Q201Q20LQY/Y
Wealth Management and Trust$17,002$16,574$13,497%26 %
Other 2
1965261,016(63)%(81)%
Total assets under management/advisory$17,198$17,100$14,5131 %19 %
Net flows
Wealth Management and Trust$(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.
2



Noninterest Expense
% Change
($ in millions)1Q214Q201Q20LQY/Y
Salaries and employee benefits$40.9$36.0$35.114 %17 %
Occupancy and equipment8.2 7.7 7.6 %%
Information systems9.7 8.6 6.7 13 %45 %
Professional services3.3 2.7 3.6 20 %(8)%
Merger costs10.7 — — nmnm
Marketing and business development0.6 1.2 1.9 (46)%(67)%
Amortization of intangibles0.7 0.6 0.7 18 %(7)%
FDIC insurance1.0 0.9 — 10 %n/a
Other0.9 0.2 5.2 nm(83)%
Total noninterest expense$75.9$58.0$60.931 %25 %
Memo: Excluding Off-Balance Sheet Provision
Reserve for unfunded loan commitments$(2.0)$(2.4)$1.8(16)%nm
Total noninterest expense, excluding Reserve for unfunded loan commitments (non-GAAP)$77.9$60.4$59.129 %32 %
Total noninterest expense for the first quarter of 2021 was $75.9 million, a 31% increase linked quarter and a 25% increase year-over-year. The increase was primarily driven by $10.7 million of transaction costs within Merger costs expense related to the proposed merger with SVB. The linked quarter increase was also driven by seasonal compensation expense for bonuses and payroll taxes, and both the linked quarter and year-over-year increases were also driven by higher Information systems expense from technology initiatives placed in service.
Income Tax Expense
The Company's effective tax rate for the first quarter of 2021 was 36.3%. The effective tax rate is higher primarily due to the expected non-deductibility of certain transaction costs related to the proposed merger with SVB.
Loans - QTD Averages & Yields
% Change
($ in millions)1Q214Q201Q20LQY/Y
Commercial and industrial$1,034$1,036$1,149— %(10)%
Paycheck Protection Program327349(6)%nm
Commercial real estate2,7232,7112,582— %%
Construction and land165172233(4)%(29)%
Residential2,6672,7212,851(2)%(6)%
Home equity767986(4)%(11)%
Consumer and other122121132%(8)%
Total loans$7,115$7,189$7,034(1)%1 %
Total loans, excluding PPP (non-GAAP)$6,789$6,840$7,034(1)%(3)%
Total loan yields3.26 %3.31 %3.75 %
Average total loans, excluding PPP (non-GAAP) in the first quarter of 2021 decreased 1% linked quarter and decreased 3% year-over-year.
Average Commercial and industrial loans decreased 10% year-over-year driven by lower revolving line usage
Average Residential mortgage loans decreased 6% year-over-year, driven by the sale of $72 million of loans late in the third quarter of 2020 and slowed originations throughout 2020
Average Commercial real estate loans increased 5% year-over-year, driven by increased loan balances attributable to the debt service reserve program and the conversion of two loans from construction to permanent financing during the fourth quarter of 2020
3



Average PPP loans decreased 6% linked quarter. End-of-period PPP loans increased 12% linked quarter as $130 million of originations late in the quarter were partially offset by the SBA's forgiveness of $75 million of loans early in the first quarter of 2021
Deposits - QTD Averages & Costs
% Change
($ in millions)1Q214Q201Q20LQY/Y
Noninterest bearing deposits$2,552$2,483$2,046%25 %
Interest bearing deposits6,2775,8685,061%24 %
Total deposits$8,829$8,351$7,1076 %24 %
Cost of total deposits0.22 %0.26 %0.72 %
Cost of total interest-bearing deposits0.30 %0.37 %1.02 %
Average total deposits in the first quarter of 2021 increased 6% linked quarter and 24% year-over-year to $8.8 billion, driven by a combination of existing and new client balances.
Provision and Asset Quality
($ in millions)1Q214Q203Q202Q201Q20
Provision and Allowance
Provision/(credit) for loan losses$(7.0)$(3.0)$(4.6)$22.6$17.0
Reserve for unfunded loan commitments(2.0)(2.4)1.82.81.8
Total Provision/(credit) for credit losses$(9.0)$(5.4)$(2.8)$25.4$18.8
Allowance for loan losses as a % of Total loans1.03 %1.14 %1.17 %1.22 %0.97 %
Asset Quality
Total net loans (charged-off)/ recovered$(0.2)$(0.3)$(0.2)$(1.5)$(0.3)
Total nonaccrual loans$25.8$23.9$41.3$25.6$24.3
Nonaccrual loans as a % of Total loans0.36 %0.34 %0.57 %0.35 %0.35 %
Special mention loans (criticized loans)$152.5$187.2$199.5$191.9$92.6
Classified loans161.9130.7123.1114.2112.3
Total criticized and classified loans$314.4$318.0$322.6$306.1$204.9
The Company recorded a Total provision credit for credit losses of $9.0 million during the first quarter of 2021. The provision release was primarily driven by an improved economic forecast related to the current expected credit losses methodology and a change in the weighting of forecast scenarios used. The Allowance for loan losses as a percentage of Total loans, excluding PPP loans (non-GAAP), was 1.08% in the first quarter of 2021, compared to 1.19% in the fourth quarter of 2020.
Total nonaccrual loans as of March 31, 2021 were $25.8 million, an increase of $1.9 million, or 8%, on a linked quarter basis, primarily driven by one Commercial real estate relationship in New England and one Commercial and industrial relationship in Northern California.
Total criticized and classified loans as of March 31, 2021 were $314.4 million, a decrease of $3.6 million, or 1%, linked quarter. Classified loans increased 24% to $161.9 million in the first quarter of 2021, primarily driven by the downgrade of three Commercial real estate loans in New England and Northern California.
As of March 31, 2021:
Residential loans on deferral totaled approximately $20 million, or 2.7% of total residential loans, compared to a peak of approximately $220 million, or 7% of total Residential loans, in the second quarter of 2020. This represents a decrease of 91% from the peak in the second quarter of 2020
Commercial and industrial loans on deferral totaled approximately $6 million, or 0.5% of total Commercial and industrial loans, compared to a peak of approximately $125 million, or 13% of total Commercial and industrial loans, in the second quarter of 2020. This represents a decrease of 95% from the peak in the second quarter of 2020
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Borrowers with loans totaling $1.3 billion that qualified for and accepted the Commercial real estate debt service reserve program remain in the program, representing a total loan balance of approximately $70 million, or 2.7% of total Commercial real estate loans. The twelve month coverage period for debt service reserve balances will elapse in the second quarter of 2021
Capital
1Q214Q203Q202Q201Q20
Tangible common equity/ Tangible assets (non-GAAP)7.6 %8.0 %8.3 %8.3 %8.8 %
Tangible book value per share (non-GAAP)$9.61$9.73$9.48$9.25$9.31
Regulatory Capital Ratios: 3
Tier 1 common equity11.4 %11.5 %11.3 %11.1 %11.2 %
Tier 1 risk-based capital12.8 %13.0 %12.8 %12.6 %12.7 %
Total risk-based capital14.0 %14.3 %14.1 %13.9 %13.8 %
Tier 1 leverage capital8.7 %8.9 %9.2 %9.2 %9.7 %
3 Current quarter information is presented based on estimated data.
The Company's tangible book value per share increased 3% year-over-year to $9.61 in the first quarter of 2021.
Dividend Payments
Concurrent with the release of first quarter 2021 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 May 7, 2021, and the payment date is May 21, 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 14 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
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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 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 2020 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.

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

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BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Balance Sheets
Unaudited ($ in thousands, except share and per share data)
 1Q214Q203Q202Q201Q20
ASSETS:
Cash and cash equivalents$1,389,943 $1,055,588 $546,263 $179,027 $61,714 
Investment securities available-for-sale1,339,408 1,243,693 1,011,327 1,002,970 993,166 
Investment securities held-to-maturity31,943 35,223 38,600 42,495 45,395 
Equity securities at fair value39,708 41,452 32,818 24,492 23,080 
Stock in Federal Home Loan Bank and Federal Reserve Bank28,651 28,663 36,618 42,407 45,273 
Loans held for sale8,434 17,421 15,074 9,786 7,671 
Loans7,216,325 7,104,309 7,222,569 7,332,954 7,043,338 
Less: Allowance for loan losses74,010 81,238 84,551 89,324 68,211 
Loans, net of Allowance for loan losses7,142,315 7,023,071 7,138,018 7,243,630 6,975,127 
Premises and equipment, net41,637 44,087 42,907 43,805 43,544 
Goodwill57,607 57,607 57,607 57,607 57,607 
Intangible assets, net8,389 9,056 8,898 8,935 9,637 
Accrued interest receivable26,029 26,191 25,935 24,918 24,054 
Deferred income taxes, net11,353 6,774 8,250 9,116 5,630 
Right-of-use assets93,224 97,859 94,879 94,143 98,896 
Other assets319,851 362,048 374,111 375,575 355,532 
TOTAL ASSETS$10,538,492 $10,048,733 $9,431,305 $9,158,906 $8,746,326 
LIABILITIES:
Deposits$9,147,618 $8,595,366 $7,827,719 $7,427,397 $6,835,572 
Securities sold under agreements to repurchase46,262 53,472 42,544 46,623 45,319 
Federal funds purchased — — — 145,000 
Federal Home Loan Bank borrowings115,019 114,659 296,236 426,313 491,254 
Junior subordinated debentures106,363 106,363 106,363 106,363 106,363 
Lease liabilities107,143 112,339 108,932 108,234 113,574 
Other liabilities157,664 198,526 203,342 218,771 180,452 
TOTAL LIABILITIES9,680,069 9,180,725 8,585,136 8,333,701 7,917,534 
SHAREHOLDERS' EQUITY:
Common stock, $1.00 par value; authorized: 170,000,000 shares82,455 82,334 82,255 82,058 81,800 
Additional paid-in capital600,089 597,558 597,113 594,463 593,167 
Retained earnings162,137 156,431 136,394 118,647 131,761 
Accumulated other comprehensive income13,742 31,685 30,407 30,037 22,064 
TOTAL SHAREHOLDERS' EQUITY858,423 868,008 846,169 825,205 828,792 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$10,538,492 $10,048,733 $9,431,305 $9,158,906 $8,746,326 

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BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Income Statements
Unaudited ($ in thousands, except share and per share data)
 1Q214Q203Q202Q201Q20
REVENUE:
Interest income$64,893 $66,351 $65,453 $68,819 $73,082 
Interest expense5,416 6,944 7,629 9,881 15,825 
Net interest income59,477 59,407 57,824 58,938 57,257 
Provision/(credit) for loan losses 4
(7,004)(2,999)(4,569)22,604 16,962 
Net interest income after Provision/(credit) for loan losses66,481 62,406 62,393 36,334 40,295 
Wealth management and trust fees 5
19,136 19,016 18,240 17,261 18,371 
Investment management fees489 1,173 1,393 1,770 1,925 
Private banking fee income2,411 4,304 1,320 2,395 2,490 
Gain on sale of loans, net747 718 1,006 204 100 
Total core fees and income22,783 25,211 21,959 21,630 22,886 
Total other income3,387 1,445 1,086 1,032 (1,365)
TOTAL REVENUE 6
85,647 86,063 80,869 81,600 78,778 
NONINTEREST EXPENSE:
Salaries and employee benefits40,904 36,022 34,671 33,937 35,096 
Occupancy and equipment8,205 7,723 8,150 7,560 7,646 
Information systems9,719 8,633 7,096 7,113 6,725 
Professional services3,302 2,744 4,025 3,446 3,601 
Merger costs10,665 — — — — 
Marketing and business development624 1,154 935 2,313 1,890 
Amortization of intangibles667 566 714 702 715 
FDIC insurance967 876 960 767 — 
Other 4
870 249 4,386 5,615 5,235 
TOTAL NONINTEREST EXPENSE75,923 57,967 60,937 61,453 60,908 
INCOME/(LOSS) BEFORE INCOME TAXES16,728 31,095 24,501 (2,457)908 
Income tax expense6,076 6,124 1,821 841 102 
Net income/(loss) before attribution to noncontrolling interests10,652 24,971 22,680 (3,298)806 
Less: Net income attributable to noncontrolling interests — — — 
NET INCOME/(LOSS) ATTRIBUTABLE TO THE COMPANY$10,652 $24,971 $22,680 $(3,298)$800 
Adjustments, treasury stock method 7
 — — — 414 
NET INCOME/(LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS$10,652 $24,971 $22,680 $(3,298)$1,214 
COMMON SHARE DATA:
Weighted average basic shares outstanding82,429,162 82,292,450 82,221,705 81,929,752 83,005,064 
Weighted average diluted shares outstanding 8
83,934,107 82,764,339 82,362,338 81,929,752 83,318,041 
Diluted earnings/(loss) per share$0.13 $0.30 $0.28 $(0.04)$0.01 
4 Total Provision/(credit) 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") 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, 2020.

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BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Financial Highlights
Unaudited ($ in thousands, except share and per share data)
1Q214Q203Q202Q201Q20
KEY STATISTICS:
Return on average assets (non-GAAP) 9
0.42 %1.00 %0.96 %(0.15)%0.04 %
ROACE (non-GAAP) 9
4.91 %11.50 %10.68 %(1.58)%0.39 %
ROATCE (non-GAAP) 9
5.58 %12.69 %11.88 %(1.43)%0.72 %
Efficiency ratio (non-GAAP) 9
87.9 %66.7 %74.5 %74.4 %76.4 %
Noninterest income to total revenue30.6 %31.0 %28.5 %27.8 %27.3 %
Net interest margin2.45 %2.52 %2.61 %2.75 %2.76 %
Average loan to average deposit ratio80.6 %86.1 %94.6 %100.5 %99.0 %
Cost of total deposits0.22 %0.26 %0.33 %0.41 %0.72 %
Cost of interest-bearing deposits0.30 %0.37 %0.48 %0.59 %1.02 %
Cost of total funding0.24 %0.32 %0.37 %0.50 %0.83 %
Allowance for loan losses / Total loans1.03 %1.14 %1.17 %1.22 %0.97 %
Nonperforming loans / Total loans0.36 %0.34 %0.57 %0.35 %0.35 %
Net (charge-offs)/recoveries / Total loans 9
(0.01)%(0.02)%(0.01)%(0.08)%(0.02)%
CAPITAL HIGHLIGHTS:
Tier 1 common equity 3
$782,687$773,017$752,492$731,316$742,044
Tier 1 capital 3
$882,709$873,039$852,514$831,338$842,066
Total capital 3
$961,191$956,919$935,887$913,936$914,572
Risk-weighted assets 3
$6,877,450$6,706,524$6,659,752$6,593,957$6,627,339
Average assets for leverage 3
$10,180,856$9,790,852$9,237,942$9,009,565$8,691,254
Tier 1 common equity ratio 3
11.38 %11.53 %11.30 %11.09 %11.20 %
Tier 1 risk-based capital ratio 3
12.83 %13.02 %12.80 %12.61 %12.71 %
Total risk-based capital ratio 3
13.98 %14.27 %14.05 %13.86 %13.80 %
Tier 1 leverage capital ratio 3
8.67 %8.92 %9.23 %9.23 %9.69 %
Total equity / Total assets8.15 %8.64 %8.97 %9.01 %9.48 %
Tangible common equity / Tangible assets (non-GAAP)7.57 %8.03 %8.33 %8.34 %8.77 %
End of period market price per share$13.32 $8.45 $5.52 $6.88 $7.15 
End of period shares outstanding82,455,43282,334,25782,254,59482,058,48381,800,486
Book value per common share$10.41 $10.54 $10.29 $10.06 $10.13 
Tangible book value per share (non-GAAP)$9.61 $9.73 $9.48 $9.25 $9.31 
Common Equity Repurchase Program:
Total shares of common stock repurchased   — 1,565,060 
Average price paid per share of common stock$ $ $ $— $8.18 
Aggregate repurchases of common stock ($ in millions)$ $ $ $— $12.8 
3 Current quarter information is presented based on estimated data.
9 Annualized.

9




BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated AUM and Balance Sheet - End of Period Balances
Unaudited ($ in thousands)
1Q214Q203Q202Q201Q20
ASSETS UNDER MANAGEMENT AND ADVISORY ("AUM"):
Wealth Management and Trust$17,002,000 $16,574,000 $15,581,000 $14,889,000 $13,497,000 
Other 2
196,000 526,000 672,000 1,067,000 1,016,000 
TOTAL AUM$17,198,000 $17,100,000 $16,253,000 $15,956,000 $14,513,000 
AUM Rollforward:
Beginning balance$17,100,000 $16,253,000 $15,956,000 $14,513,000 $16,768,000 
Net flows(408,000)(396,000)(407,000)(40,000)150,000 
Market returns506,000 1,243,000 704,000 1,483,000 (2,405,000)
Ending balance$17,198,000 $17,100,000 $16,253,000 $15,956,000 $14,513,000 
AUM Net Flows:
Wealth Management and Trust$(20,000)$(128,000)$(12,000)$60,000 $176,000 
Other 2
(388,000)(268,000)(395,000)(100,000)(26,000)
TOTAL NET FLOWS$(408,000)$(396,000)$(407,000)$(40,000)$150,000 
DEPOSITS:
Demand deposits (noninterest bearing)$2,651,733 $2,481,676 $2,346,126 $2,293,864 $2,020,440 
Savings and NOW906,892 905,692 756,797 758,656 653,006 
Money market5,106,911 4,699,882 4,187,657 3,753,228 3,468,701 
Certificates of deposit482,082 508,116 537,139 621,649 693,425 
TOTAL DEPOSITS$9,147,618 $8,595,366 $7,827,719 $7,427,397 $6,835,572 
LOANS:
Commercial and industrial$668,217 $558,343 $583,145 $565,748 $670,744 
Paycheck Protection Program351,170 312,356 371,496 370,034 — 
Commercial tax-exempt488,507 442,159 472,342 419,264 445,319 
Commercial real estate2,697,677 2,757,375 2,659,890 2,676,708 2,626,299 
Construction and land181,482 159,204 211,697 240,211 238,293 
Residential2,632,554 2,677,464 2,729,164 2,859,627 2,841,926 
Home equity71,752 77,364 81,797 84,588 89,350 
Consumer and other124,966 120,044 113,038 116,774 131,407 
TOTAL LOANS$7,216,325 $7,104,309 $7,222,569 $7,332,954 $7,043,338 
2 Includes results from Dalton, Greiner, Hartman, Maher & Co, LLC ("DGHM")

10




BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Provision and Asset Quality
Unaudited ($ in thousands)
1Q214Q203Q202Q201Q20
PROVISION:
Provision/(credit) for loan losses$(7,004)$(2,999)$(4,569)$22,604 $16,962 
Reserve for unfunded loan commitments 4
(2,016)(2,386)1,750 2,829 1,827 
TOTAL PROVISION/(CREDIT) FOR CREDIT LOSSES$(9,020)$(5,385)$(2,819)$25,433 $18,789 
CHARGE-OFFS:
Loan charge-offs$(297)$(511)$(245)$(1,546)$(528)
Loan recoveries73 197 41 55 180 
NET (CHARGE-OFFS)/RECOVERIES$(224)$(314)$(204)$(1,491)$(348)
Net charge-offs to average loans (annualized)(0.01)%(0.02)%(0.01)%(0.08)%(0.02)%
Net (Charge-offs)/Recoveries by Loan Type:
Commercial and industrial$(258)$(474)$(136)$(337)$(473)
Commercial real estate 160 — — — 
Residential3 — — — — 
Home equity — — (1,157)132 
Consumer and other31 — (68)(7)
NET (CHARGE-OFFS)/RECOVERIES$(224)$(314)$(204)$(1,491)$(348)
LOAN QUALITY DATA:
Special mention loans$152,472 $187,237 $199,509 $191,882 $92,623 
Accruing classified loans 10
136,130 106,883 81,827 88,586 87,948 
Nonaccrual loans25,764 23,851 41,263 25,604 24,314 
Total classified161,894 130,734 123,090 114,190 112,262 
Criticized and classified loans$314,366 $317,971 $322,599 $306,072 $204,885 
Loans 30-89 days past due and accruing 11
$7,249 $19,862 $5,635 $5,535 $14,852 
4 Total Provision/(credit) 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.




11




BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Average Balances, Yields, and Rates
Unaudited ($ in thousands)
Average BalanceInterest Income/ExpenseAverage Yield/Rate
1Q214Q201Q201Q214Q201Q201Q214Q201Q20
INTEREST-EARNING ASSETS
Cash and investments:
Taxable investment securities$203,856 $209,143 $201,174 $782 $849 $868 1.54 %1.62 %1.73 %
Non-taxable investment securities322,057 318,291 315,681 2,045 1,973 1,998 2.54 %2.48 %2.53 %
Mortgage-backed securities810,754 598,616 520,629 3,437 2,585 2,787 1.70 %1.73 %2.14 %
Short-term investments and other1,238,677 976,344 147,482 593 687 1,071 0.19 %0.28 %2.89 %
Total cash and investments2,575,344 2,102,394 1,184,966 6,857 6,094 6,724 1.07 %1.16 %2.27 %
Loans: 12
Commercial and industrial1,034,369 1,035,783 1,148,986 8,352 8,504 10,724 3.23 %3.21 %3.69 %
Paycheck Protection Program326,695 348,827 — 3,629 3,798 — 4.44 %4.26 %— %
Commercial real estate2,723,249 2,711,396 2,582,305 23,187 24,096 27,482 3.41 %3.48 %4.21 %
Construction and land165,350 171,873 233,324 1,605 1,642 2,572 3.88 %3.74 %4.36 %
Residential2,667,440 2,720,733 2,850,833 20,226 21,041 23,468 3.03 %3.09 %3.29 %
Home equity76,336 79,485 86,048 551 676 952 2.93 %3.38 %4.45 %
Consumer and other121,900 121,139 132,237 486 500 1,160 1.62 %1.64 %3.53 %
Total loans7,115,339 7,189,236 7,033,733 58,036 60,257 66,358 3.26 %3.31 %3.75 %
Total earning assets9,690,683 9,291,630 8,218,699 64,893 66,351 73,082 2.68 %2.82 %3.54 %
LESS: Allowance for loan losses81,125 84,679 51,730 
Cash and due from banks38,897 38,732 49,571 
Other assets631,970 651,008 562,851 
TOTAL AVERAGE ASSETS$10,280,425 $9,896,691 $8,779,391 
INTEREST-BEARING LIABILITIES
Interest-bearing deposits: 13
Savings and NOW$877,100 $793,923 $638,926 $180 $200 $232 0.08 %0.10 %0.15 %
Money market4,911,146 4,551,046 3,753,045 3,831 4,255 9,657 0.32 %0.37 %1.03 %
Certificates of deposit489,037 522,567 668,818 680 981 2,907 0.56 %0.75 %1.75 %
Total interest-bearing deposits 13
6,277,283 5,867,536 5,060,789 4,691 5,436 12,796 0.30 %0.37 %1.02 %
Junior subordinated debentures106,363 106,363 106,363 481 481 917 1.81 %1.77 %3.41 %
FHLB borrowings and other180,234 267,865 455,813 244 1,027 2,112 0.54 %1.50 %1.83 %
Total interest-bearing liabilities 13
6,563,880 6,241,764 5,622,965 5,416 6,944 15,825 0.33 %0.44 %1.13 %
Noninterest bearing demand deposits 13
2,551,651 2,482,969 2,046,102 
Payables and other liabilities285,453 310,820 270,371 
Total average liabilities9,400,984 9,035,553 7,939,438 
Redeemable noncontrolling interests — 1,018 
Average shareholders’ equity879,441 861,138 838,935 
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY$10,280,425 $9,896,691 $8,779,391 
Net interest income$59,477 $59,407 $57,257 
Interest rate spread2.35 %2.38 %2.41 %
Net interest margin2.45 %2.52 %2.76 %
Average total deposits 13
$8,828,934 $8,350,505 $7,106,891 0.22 %0.26 %0.72 %
Average total deposits and borrowings 13
$9,115,531 $8,724,733 $7,669,067 0.24 %0.32 %0.83 %
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 noninterest bearing demand deposits. Average total deposits and borrowings is the sum of Average total interest-bearing liabilities and Average noninterest bearing demand deposits.

12



BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Regional Loan Data 14
Unaudited ($ in thousands)
1Q214Q203Q202Q201Q20
New England$3,735,757 $3,593,925 $3,669,746 $3,781,603 $3,724,959 
Northern California1,759,812 1,776,682 1,763,556 1,741,255 1,618,668 
Southern California1,720,756 1,733,702 1,789,267 1,810,096 1,699,711 
Total loans$7,216,325 $7,104,309 $7,222,569 $7,332,954 $7,043,338 
Loans (charged-off)/recovered, net:
New England$20 $162 $(111)$$15 
Northern California9 (147)— 122 
Southern California(253)(329)(93)(1,501)(485)
Total net loans (charged-off)/recovered$(224)$(314)$(204)$(1,491)$(348)
Special mention loans:
New England$72,359 $94,235 $103,060 $83,026 $61,741 
Northern California57,751 64,361 63,192 75,609 5,947 
Southern California22,362 28,641 33,257 33,247 24,935 
Total special mention loans$152,472 $187,237 $199,509 $191,882 $92,623 
Accruing classified loans:
New England$106,375 $89,582 $74,682 $53,124 $50,483 
Northern California13,147 340 4,589 21,712 24,843 
Southern California16,608 16,961 2,556 13,750 12,622 
Total accruing classified loans$136,130 $106,883 $81,827 $88,586 $87,948 
Nonaccruing loans:
New England$14,197 $12,643 $11,807 $11,630 $11,965 
Northern California6,791 6,331 25,133 9,459 6,575 
Southern California4,776 4,877 4,323 4,515 5,774 
Total nonaccruing loans$25,764 $23,851 $41,263 $25,604 $24,314 
14 The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lenders' regional offices.




















13




BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP Financial Measures
Unaudited ($ in thousands, except share and per share data)
1Q214Q203Q202Q201Q20
ROACE AND ROATCE:
Net income/(loss) attributable to the Company (GAAP) (A)$10,652$24,971$22,680$(3,298)$800
ADD: Amortization of intangibles, net of tax527447564555565
Tangible common net income/(loss) (non-GAAP) (B)$11,179$25,418$23,244$(2,743)$1,365
Total average shareholders’ equity (C)$879,441$861,138$842,606$834,882$838,935
LESS: Average goodwill and intangibles, net(66,351)(66,253)(66,246)(66,877)(67,586)
Average tangible common equity (non-GAAP) (D)$813,090$794,885$776,360$768,005$771,349
ROACE (annualized) (A/C)4.91 %11.50 %10.68 %(1.58)%0.39 %
ROATCE (annualized) (B/D)5.58 %12.69 %11.88 %(1.43)%0.72 %
PRE-TAX, PRE-PROVISION INCOME:
Income/(loss) before income taxes (GAAP)$16,728$31,095$24,501$(2,457)$908
ADD BACK: Provision/(credit) for loan losses(7,004)(2,999)(4,569)22,60416,962
Pre-tax, pre-provision income (non-GAAP)$9,724$28,096$19,932$20,147$17,870
TANGIBLE COMMON EQUITY:
Total shareholders’ equity (GAAP)$858,423$868,008$846,169$825,205$828,792
LESS: Goodwill and intangibles, net(65,996)(66,663)(66,505)(66,542)(67,244)
Tangible common equity (non-GAAP) (A)$792,427$801,345$779,664$758,663$761,548
Total assets (GAAP)$10,538,492$10,048,733$9,431,305$9,158,906$8,746,326
LESS: Goodwill and intangibles, net(65,996)(66,663)(66,505)(66,542)(67,244)
Tangible assets (non-GAAP) (B)$10,472,496$9,982,070$9,364,800$9,092,364$8,679,082
End of period shares outstanding (C)82,455,43282,334,25782,254,59482,058,48381,800,486
Tangible common equity/ Tangible assets (non-GAAP) (A/B)7.57 %8.03 %8.33 %8.34 %8.77 %
Tangible book value per share (non-GAAP) (A/C)$9.61$9.73$9.48$9.25$9.31
AVERAGE LOANS:
Total loans$7,115,339$7,189,236$7,282,598$7,288,644$7,033,733
LESS: PPP(326,695)(348,827)(373,047)(283,619)
Total loans, excluding PPP (non-GAAP)$6,788,644$6,840,409$6,909,551$7,005,025$7,033,733
Total loan yields, excluding PPP (non-GAAP)3.21 %3.26 %3.27 %3.47 %3.75 %



14



BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP Financial Measures
Unaudited ($ in thousands, except share and per share data)
1Q214Q203Q202Q201Q20
RETURN ON AVERAGE ASSETS:
Net income/(loss) attributable to the Company (GAAP) (A)$10,652$24,971$22,680$(3,298)$800
Average assets (non-GAAP) (B)10,280,4259,896,6919,346,5639,109,2018,779,391
Return on average assets (annualized) (non-GAAP) (A/B)0.42 %1.00 %0.96 %(0.15)%0.04 %
EFFICIENCY RATIO:
Total noninterest expense (GAAP) (A)$75,923$57,967$60,937$61,453$60,908
LESS: Amortization of intangibles667566714702715
Total noninterest expense, excluding Amortization of intangibles (non-GAAP) (B)$75,256$57,401$60,223$60,751$60,193
Net interest income (GAAP)$59,477$59,407$57,824$58,938$57,257
Total core fees and income (GAAP)22,78325,21121,95921,63022,886
Total other income (GAAP)3,3871,4451,0861,032(1,365)
Total revenue (GAAP) (C)$85,647$86,063$80,869$81,600$78,778
Efficiency ratio (GAAP) (A/C)88.6 %67.4 %75.4 %75.3 %77.3 %
Efficiency ratio, excluding Amortization of intangibles (non-GAAP) (B/C)87.9 %66.7 %74.5 %74.4 %76.4 %
NET INCOME/(LOSS) ATTRIBUTABLE TO THE COMPANY:
Net income/(loss) attributable to the Company (GAAP)$10,652$24,971$22,680$(3,298)$800
LESS: Gain on fair value of contingent considerations receivable 15
891
Tax effect at statutory rate258
Net income/(loss) attributable to the Company (non-GAAP)$10,652$24,971$22,047$(3,298)$800
NET INCOME/(LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Net income/(loss) attributable to common shareholders (GAAP)$10,652$24,971$22,680$(3,298)$1,214
LESS: Gain on fair value of contingent considerations receivable 15
891
Tax effect at statutory rate258
Net income/(loss) attributable to the common shareholders, treasury stock method, excluding notable items (non-GAAP)$10,652$24,971$22,047$(3,298)$1,214
Weighted average diluted shares outstanding83,934,107 82,764,339 82,362,338 81,929,752 83,318,041 
Diluted earnings/(loss) per share (GAAP)$0.13$0.30$0.28$(0.04)$0.01
Diluted earnings/(loss) per share, excluding notable items (non-GAAP)$0.13$0.30$0.27$(0.04)$0.01
Average common equity (non-GAAP)$879,441$861,138$842,606$834,882$838,935
Average tangible common equity (non-GAAP)$813,090$794,885$776,360$768,005$771,349
ROACE, excluding notable items (non-GAAP)4.91 %11.50 %10.38 %(1.58)%0.39 %
ROATCE, excluding notable items (non-GAAP)5.58 %12.69 %11.55 %(1.43)%0.72 %
Pre-tax, pre-provision income (non-GAAP)$9,724$28,096$19,932$20,147$17,870
LESS: Gain on fair value of contingent considerations receivable 15
891
Pre-tax, pre-provision income, excluding notable items (non-GAAP)$9,724$28,096$19,041$20,147$17,870
15 In the third quarter of 2020, there was a gain of $0.9 million related to the revaluation of a receivable from the divestiture of a former affiliate, Bingham, Osborn & Scarborough, LLC ("BOS").

15