Boston Private Financial Holdings, Inc. Reports First Quarter 2015 GAAP EPS of $0.21

By: Boston Private Financial Holdings, Inc. via Business Wire News Releases

April 14, 2015 at 16:05 PM EDT

Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported first quarter 2015 GAAP Net Income Attributable to the Company of $18.8 million, compared to $12.2 million for the fourth quarter of 2014. First quarter 2015 diluted earnings per share were $0.21, a $0.08 increase from the fourth quarter of 2014, and a $0.01 increase from the first quarter of 2014.

“We continue to focus our efforts on expanding our private clients business,” said Clayton G. Deutsch, CEO and President. "In February, we officially introduced Boston Private Wealth to the marketplace, our newly formed wealth management subsidiary within Boston Private Bank & Trust Company. In addition, our West Coast Private Banking group has maintained the positive momentum it experienced in 2014 in the first quarter.”

Core Fees and Income Increased 27% Year-Over-Year

Core Fees and Income increased 27% year-over-year to $40.2 million. The increase reflects organic growth as well as increases from Banyan Partners LLC, which was acquired in October 2014. On a linked quarter basis, Core Fees and Income increased 1% from $39.6 million in the fourth quarter of 2014.

Total Assets Under Management/Advisory (“AUM”) were flat on a linked basis quarter and up 21% year-over-year to $30.0 billion. The year-over-year increase includes organic growth and AUM related to the Banyan acquisition.

Net Interest Income

Net Interest Income for the first quarter was $46.1 million, up 4% from $44.1 million for the fourth quarter of 2014. On a year-over-year basis, Net Interest Income increased 3% from $44.5 million. Included in the first quarter 2015 Net Interest Income is $1.7 million of interest recovered on previous non-accrual loans. Excluding the $1.7 million of interest recovered, Net Interest Income was $44.4 million.

Net Interest Margin was 3.00% for the first quarter, up 17 basis points from 2.83% for the fourth quarter of 2014. Net Interest Margin was down 4 basis points from 3.04% for the first quarter of 2014. Excluding interest recovered on previous nonaccrual loans, Net Interest Margin was 2.89% for the first quarter of 2015.

Total Operating Expenses

Total Operating Expenses for the first quarter of 2015 were $63.4 million, down 1% from $63.8 million for the fourth quarter of 2014. On a year-over-year basis, Total Operating Expenses increased 15% from $55.0 million, primarily due to the impact of the Banyan acquisition.

Provision and Asset Quality

The Company recorded a provision credit of $2.5 million for the first quarter of 2015, compared to a provision expense of $2.4 million for the fourth quarter of 2014. The provision credit was driven by net recoveries of $3.9 million, partially offset by loan downgrades. The Company recorded a provision credit of $1.2 million for the first quarter of 2014.

Criticized Loans increased 3% on a linked quarter basis and decreased 12% year-over-year. Nonaccrual Loans (“Nonaccruals”) decreased 27% to $32.1 million on a linked quarter basis. On a year-over-year basis, Nonaccruals decreased 24% from $42.1 million. As a percentage of Total Loans, Nonaccruals were 61 basis points at March 31, 2015, down 23 basis points from December 31, 2014, and down 20 basis points from March 31, 2014.

Additional credit metrics are listed below on a linked quarter and year-over-year basis:


(In millions)	March 31, 2015			December 31, 2014			March 31, 2014
Total Criticized Loans	$	164.1		$	159.6		$	187.3
Total Loans 30-89 Days Past Due and Accruing (11)	$	25.4		$	7.0		$	10.6
Total Net Loans (Charged-off)/ Recovered	$	3.9		$	(1.8	)	$	1.4
Allowance for Loan Losses/ Total Loans	1.46		%	1.44		%	1.48		%

Capital Ratios

Capital ratios are listed below on a linked quarter and year-over-year basis:


	March 31, 2015		December 31, 2014		March 31, 2014
BPFH Ratios:
Total Risk-Based Capital *	14.0	%	14.5	%	15.0	%
Tier I Risk-Based Capital *	12.3	%	13.3	%	13.7	%
Tier I Leverage Capital *	9.5	%	9.5	%	10.2	%
TCE/TA	7.2	%	7.0	%	7.1	%
Tier I Common Equity/ Risk Weighted Assets *	9.8	%	9.8	%	10.1	%

*March 31, 2015 information is presented based on estimated data and incorporates the implementation of Basel III.

Dividend Payments
Concurrent with the release of first quarter 2015 earnings, the Board of Directors of the Company declared a cash dividend to common stock shareholders of $0.09 per share. The record date for this dividend is May 8, 2015, and the payment date is May 22, 2015.

The Board of Directors of the Company also declared a cash dividend to holders of the Non-Cumulative Perpetual Preferred Stock, Series D of $17.375 per share, which will result in a dividend of $0.434375 per depositary share. The record date for this dividend is May 15, 2015, and the payment date is June 15, 2015.

Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures, such as tangible book value per share; the TCE/TA ratio; return on average common equity; return on average tangible common equity; pre-tax, pre-provision earnings; and the efficiency ratio (FTE basis), to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. A detailed reconciliation table of the Company's GAAP to the non-GAAP measures is attached.

Conference Call
Management will hold a conference call at 8 a.m. Eastern Time on Wednesday, April 15, 2015, to discuss the financial results, business highlights and outlook. To access the call:

Dial In #: (888) 317-6003
Elite Entry Number: 2955905

Replay Information:
Available from April 15, 2015 at 12 noon until April 22, 2015
Dial In #: (877) 344-7529
Conference Number: 10063688

The call will be simultaneously webcast and may be accessed on www.bostonprivate.com.

Boston Private Financial Holdings, Inc.
Boston Private Financial Holdings, Inc. is a national financial services organization that owns Wealth Management and Private Banking affiliates with offices in Boston, New York, Los Angeles, San Francisco, San Jose, Atlanta, Florida, Wisconsin, and Texas. The Company has a $7 billion Private Banking balance sheet, and manages approximately $30 billion of client assets.

The Company positions its affiliates to serve the high net worth marketplace with high quality products and services of unique appeal to private clients. The Company also provides strategic oversight and access to resources, both financial and intellectual, to support affiliate management, marketing, compliance and legal activities. (NASDAQ: BPFH)

For more information about BPFH, visit the Company's website at www.bostonprivate.com.

Forward-Looking Statements
Certain statements in this press release that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. These statements include, among others, statements regarding our strategy, evaluations of future interest rate trends and liquidity, prospects for growth in assets, and prospects for overall results over the long term. You should not place undue reliance on our forward-looking statements. You should exercise caution in interpreting and relying on forward-looking statements because they are subject to significant risks, uncertainties and other factors which are, in some cases, beyond the Company's control. Forward-looking statements are based on the current assumptions and beliefs of management and are only expectations of future results. The Company's actual results could differ materially from those projected in the forward-looking statements as a result of, among other factors, adverse conditions in the capital and debt markets and the impact of such conditions on the Company's private banking, investment management and wealth advisory activities; changes in interest rates; competitive pressures from other financial institutions; the effects of weakness in general economic conditions on a national basis or in the local markets in which the Company operates; changes in loan defaults and charge-off rates; changes in the value of securities and other assets, adequacy of loan loss reserves, or decreases in deposit levels necessitating increased borrowing to fund loans and investments; increasing government regulation; the risk that goodwill and intangibles recorded in the Company's financial statements will become impaired; the risk that the Company's deferred tax asset may not be realized; risks related to the identification and implementation of acquisitions, dispositions and restructurings; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Company's Annual Report on Form 10-K and updated by the Company's Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statement is made.

Note to Editors:
Boston Private Financial Holdings, Inc. is not to be confused with Boston Private Bank & Trust Company. Boston Private Bank & Trust Company is a wholly-owned subsidiary of BPFH. The information reported in this press release is related to the performance and results of BPFH.



Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)

(In thousands, except share and per share data)		3/31/2015			12/31/2014			3/31/2014
Assets:
Cash and cash equivalents	$	88,118		$	172,609		$	398,687
Investment securities available for sale		971,842			829,993			700,531
Investment securities held to maturity		134,978			140,727			127,938
Stock in Federal Home Loan Banks		32,761			32,281			37,450
Loans held for sale		10,570			7,099			2,297
Total loans		5,295,013			5,269,936			5,162,470
Less: Allowance for loan losses		77,263			75,838			76,605
Net loans		5,217,750			5,194,098			5,085,865
Other real estate owned (“OREO”)		929			929			921
Premises and equipment, net		30,999			32,199			29,045
Goodwill		152,082			152,082			110,180
Intangible assets, net		38,116			39,718			19,551
Fees receivable		12,519			12,517			11,039
Accrued interest receivable		15,990			16,071			15,057
Deferred income taxes, net		45,614			47,576			53,716
Other assets		117,504			119,975			113,143
Total assets	$	6,869,772		$	6,797,874		$	6,705,420
Liabilities:
Deposits	$	5,373,407		$	5,453,879		$	5,341,644
Securities sold under agreements to repurchase		52,237			30,496			93,550
Federal funds purchased		50,000			—			15,000
Federal Home Loan Bank borrowings		450,022			370,150			394,458
Junior subordinated debentures		106,363			106,363			106,363
Other liabilities		97,773			112,170			87,652
Total liabilities		6,129,802			6,073,058			6,038,667
Redeemable Noncontrolling Interests		21,280			20,905			20,774
Shareholders’ Equity:
Preferred stock, $1.00 par value; authorized: 2,000,000 shares		47,753			47,753			47,753
Common stock, $1.00 par value; authorized: 170,000,000 shares; issued and outstanding: 83,051,675 shares at March 31, 2015; 82,961,855 shares at December 31, 2014; 80,001,139 shares at March 31, 2014		83,052			82,962			80,001
Additional paid-in capital		604,386			610,903			610,590
Accumulated deficit		(18,613	)		(37,396	)		(89,170	)
Accumulated other comprehensive income/ (loss)		1,120			(697	)		(3,305	)
Total Company’s shareholders’ equity		717,698			703,525			645,869
Noncontrolling interests		992			386			110
Total shareholders’ equity		718,690			703,911			645,979
Total liabilities, redeemable noncontrolling interests and shareholders’ equity	$	6,869,772		$	6,797,874		$	6,705,420



Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
	Three Months Ended
(In thousands, except share and per share data)		3/31/2015			12/31/2014			3/31/2014
Interest and dividend income:
Loans	$	48,000		$	47,117		$	47,214
Taxable investment securities		995			920			636
Non-taxable investment securities		1,021			978			904
Mortgage-backed securities		2,614			1,695			1,936
Federal funds sold and other		234			381			346
Total interest and dividend income		52,864			51,091			51,036
Interest expense:
Deposits		3,892			3,908			3,216
Federal Home Loan Bank borrowings		1,931			2,069			2,326
Junior subordinated debentures		956			976			955
Repurchase agreements and other short-term borrowings		13			10			17
Total interest expense		6,792			6,963			6,514
Net interest income		46,072			44,128			44,522
Provision/ (credit) for loan losses		(2,500	)		2,400			(1,200	)
Net interest income after provision/ (credit) for loan losses		48,572			41,728			45,722
Fees and other income:
Investment management fees		11,714			11,897			11,461
Wealth advisory fees		12,675			12,352			11,473
Wealth management and trust fees		13,558			13,327			6,961
Other banking fee income		1,910			1,841			1,680
Gain on sale of loans, net		303			192			89
Total core fees and income		40,160			39,609			31,664
Gain/ (loss) on sale of investments, net		8			(16	)		1
Gain/ (loss) on OREO, net		89			(31	)		819
Other		1,088			360			249
Total other income		1,185			313			1,069
Operating expense:
Salaries and employee benefits		42,127			39,881			36,574
Occupancy and equipment		9,035			8,549			7,797
Professional services		3,021			3,308			2,843
Marketing and business development		1,348			2,425			1,426
Contract services and data processing		1,437			1,527			1,438
Amortization of intangibles		1,603			1,707			1,053
FDIC insurance		1,011			852			896
Restructuring		—			739			—
Other		3,845			4,772			2,941
Total operating expense		63,427			63,760			54,968
Income before income taxes		26,490			17,890			23,487
Income tax expense		8,572			5,901			7,138
Net income from continuing operations		17,918			11,989			16,349
Net income from discontinued operations (1)		2,094			1,510			1,928
Net income before attribution to noncontrolling interests		20,012			13,499			18,277
Less: Net income attributable to noncontrolling interests		1,229			1,322			1,236
Net income attributable to the Company	$	18,783		$	12,177		$	17,041

Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
(In thousands, except share and per share data)	Three Months Ended
PER SHARE DATA:		3/31/2015			12/31/2014			3/31/2014
Calculation of Income for EPS:
Net income attributable to the Company	$	18,783		$	12,177		$	17,041
Adjustments to Net Income Attributable to the Company to Arrive at Net Income Attributable to Common Shareholders (2)		(1,005	)		(1,176	)		(1,061	)
Net Income Attributable to the Common Shareholders		17,778			11,001			15,980
LESS: Amount allocated to participating securities		(60	)		(27	)		(117	)
Net Income Attributable to the Common Shareholders, after allocation to participating securities	$	17,718		$	10,974		$	15,863

End of Period Common Shares Outstanding		83,051,675			82,961,855			80,001,139

Weighted Average Shares Outstanding:
Weighted average basic shares, including participating securities		80,983,916			80,880,508			79,107,968
LESS: Participating securities		(469,557	)		(487,596	)		(962,783	)
PLUS: Dilutive potential common shares		2,079,966			2,096,172			1,865,705
Weighted Average Diluted Shares (3)		82,594,325			82,489,084			80,010,890

Diluted Total Earnings per Share	$	0.21		$	0.13		$	0.20



Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
(In thousands, except per share data)
FINANCIAL DATA:		3/31/2015			12/31/2014			3/31/2014
Book Value Per Common Share	$	8.08		$	7.91		$	7.48
Tangible Book Value Per Share (4)	$	5.79		$	5.60		$	5.86
Market Price Per Share	$	12.15		$	13.47		$	13.53

ASSETS UNDER MANAGEMENT AND ADVISORY:
Wealth Management and Trust	$	9,306,000		$	9,274,000		$	4,612,000
Investment Managers		10,730,000			10,772,000			10,505,000
Wealth Advisory		10,012,000			9,883,000			9,641,000
Less: Inter-company Relationship		(22,000	)		(22,000	)		(22,000	)
Total Assets Under Management and Advisory	$	30,026,000		$	29,907,000		$	24,736,000

BPFH FINANCIAL RATIOS:
Total Equity/ Total Assets		10.46	%		10.35	%		9.63	%
Tangible Common Equity/ Tangible Assets (4)		7.20	%		7.03	%		7.12	%
Tier I Common Equity/ Risk Weighted Assets (4)		9.76	%		9.76	%		10.11	%
Allowance for Loan Losses/ Total Loans		1.46	%		1.44	%		1.48	%
Allowance for Loan Losses/ Nonaccrual Loans		240	%		172	%		182	%
Return on Average Assets - Three Months Ended (Annualized)		1.10	%		0.71	%		1.06	%
Return on Average Common Equity - Three Months Ended (Annualized) (5)		10.79	%		6.97	%		10.91	%
Return on Average Tangible Common Equity - Three Months Ended (Annualized) (5)		16.03	%		10.69	%		14.58	%
Efficiency Ratio - Three Months Ended (6)		68.74	%		70.83	%		67.88	%

Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
	Average Balance						Interest Income/Expense						Average Yield/Rate
(In thousands)	Three Months Ended						Three Months Ended						Three Months Ended
AVERAGE BALANCE SHEET:		3/31/15		12/31/14		3/31/14		3/31/15		12/31/14		3/31/14	3/31/15		12/31/14		3/31/14
AVERAGE ASSETS
Interest-Earning Assets:
Cash and Investments:
Taxable investment securities	$	320,373	$	305,118	$	254,407	$	995	$	920	$	636	1.24	%	1.21	%	1.00	%
Non-taxable investment securities (7)		230,251		229,157		224,054		1,571		1,504		1,391	2.73	%	2.63	%	2.48	%
Mortgage-backed securities		516,032		350,312		341,082		2,614		1,695		1,936	2.03	%	1.93	%	2.27	%
Federal funds sold and other		147,999		389,833		204,157		234		381		346	0.64	%	0.39	%	0.68	%
Total Cash and Investments		1,214,655		1,274,420		1,023,700		5,414		4,500		4,309	1.78	%	1.41	%	1.68	%
Loans (8):
Commercial and Construction (7)		2,851,801		2,852,064		2,833,475		31,366		30,855		30,921	4.40	%	4.23	%	4.37	%
Residential		2,140,525		2,120,416		2,035,232		16,656		16,447		16,169	3.11	%	3.10	%	3.18	%
Home Equity and Other Consumer		277,967		254,387		245,596		1,953		1,799		1,805	2.85	%	2.80	%	2.98	%
Total Loans		5,270,293		5,226,867		5,114,303		49,975		49,101		48,895	3.80	%	3.71	%	3.83	%
Total Earning Assets		6,484,948		6,501,287		6,138,003		55,389		53,601		53,204	3.42	%	3.26	%	3.47	%
LESS: Allowance for Loan Losses		77,039		75,590		77,228
Cash and due From Banks (Non-Interest Bearing)		38,062		41,595		41,559
Other Assets		406,799		411,546		347,721
TOTAL AVERAGE ASSETS	$	6,852,770	$	6,878,838	$	6,450,055

AVERAGE LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND SHAREHOLDERS' EQUITY
Interest-Bearing Liabilities:
Interest-Bearing Deposits:
Savings and NOW	$	599,695	$	584,210	$	545,973	$	103	$	112	$	98	0.07	%	0.08	%	0.07	%
Money Market		2,812,827		2,836,731		2,490,836		2,596		2,589		1,845	0.37	%	0.36	%	0.30	%
Certificates of Deposit		604,404		597,460		624,547		1,193		1,207		1,273	0.80	%	0.80	%	0.83	%
Total Interest-Bearing Deposits		4,016,926		4,018,401		3,661,356		3,892		3,908		3,216	0.39	%	0.39	%	0.36	%
Junior Subordinated Debentures		106,363		106,363		106,363		956		976		955	3.59	%	3.59	%	3.59	%
FHLB Borrowings and Other		470,392		447,955		506,864		1,944		2,079		2,343	1.65	%	1.82	%	1.85	%
Total Interest-Bearing Liabilities		4,593,681		4,572,719		4,274,583		6,792		6,963		6,514	0.60	%	0.60	%	0.61	%
Noninterest Bearing Demand Deposits		1,422,202		1,465,145		1,422,928
Payables and Other Liabilities		102,255		121,318		91,863
Total Average Liabilities		6,118,138		6,159,182		5,789,374
Redeemable Noncontrolling Interests		22,748		22,802		20,132
Average Shareholders' Equity		711,884		696,854		640,549

TOTAL AVERAGE LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND SHAREHOLDERS' EQUITY	$	6,852,770	$	6,878,838	$	6,450,055
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE)							$	48,597	$	46,638	$	46,690
LESS: FTE Adjustment (7)								2,525		2,510		2,168
Net Interest Income (GAAP Basis)							$	46,072	$	44,128	$	44,522
Interest Rate Spread													2.82	%	2.66	%	2.86	%
Bank only Net Interest Margin													3.07	%	2.90	%	3.11	%
Net Interest Margin													3.00	%	2.83	%	3.04	%

Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
(In thousands)
LOAN DATA (9):		3/31/2015		12/31/2014		3/31/2014
Commercial and Industrial Loans:
New England	$	786,334	$	781,646	$	704,056
San Francisco Bay		122,418		117,105		108,365
Southern California		58,086		54,334		39,780
Total Commercial and Industrial Loans	$	966,838	$	953,085	$	852,201
Commercial Real Estate Loans:
New England	$	684,395	$	690,965	$	730,709
San Francisco Bay		601,305		619,222		644,108
Southern California		477,341		478,216		483,817
Total Commercial Real Estate Loans	$	1,763,041	$	1,788,403	$	1,858,634
Construction and Land Loans:
New England	$	91,764	$	85,272	$	94,966
San Francisco Bay		31,012		31,329		62,879
Southern California		14,318		8,748		16,871
Total Construction and Land Loans	$	137,094	$	125,349	$	174,716
Residential Loans:
New England	$	1,295,955	$	1,299,568	$	1,227,114
San Francisco Bay		459,310		462,497		456,372
Southern California		387,771		370,030		352,369
Total Residential Loans	$	2,143,036	$	2,132,095	$	2,035,855
Home Equity Loans:
New England	$	82,716	$	82,877	$	77,470
San Francisco Bay		29,835		27,575		28,159
Southern California		3,639		4,407		3,334
Total Home Equity Loans	$	116,190	$	114,859	$	108,963
Other Consumer Loans:
New England	$	156,042	$	143,166	$	119,500
San Francisco Bay		7,245		6,505		7,311
Southern California		5,527		6,474		5,246
Eliminations and other, net		—		—		44
Total Other Consumer Loans	$	168,814	$	156,145	$	132,101
Total Loans:
New England	$	3,097,206	$	3,083,494	$	2,953,815
San Francisco Bay		1,251,125		1,264,233		1,307,194
Southern California		946,682		922,209		901,417
Eliminations and other, net		—		—		44
Total Loans	$	5,295,013	$	5,269,936	$	5,162,470

Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
(In thousands)
CREDIT QUALITY (9):		3/31/2015		12/31/2014			3/31/2014
Special Mention Loans:
New England	$	47,635	$	32,254		$	41,920
San Francisco Bay		16,350		18,161			25,055
Southern California		22,161		26,325			36,452
Total Special Mention Loans	$	86,146	$	76,740		$	103,427
Accruing Substandard Loans (10):
New England	$	18,534	$	11,126		$	12,319
San Francisco Bay		21,996		23,403			26,294
Southern California		5,472		4,331			3,507
Total Accruing Substandard Loans	$	46,002	$	38,860		$	42,120
Nonaccruing Loans:
New England	$	18,271	$	26,205		$	21,569
San Francisco Bay		9,347		13,430			12,541
Southern California		4,515		4,547			7,944
Total Nonaccruing Loans	$	32,133	$	44,182		$	42,054
Other Real Estate Owned:
New England	$	344	$	344		$	336
San Francisco Bay		585		585			585
Southern California		—		—			—
Total Other Real Estate Owned	$	929	$	929		$	921
Loans 30-89 Days Past Due and Accruing (11):
New England	$	18,236	$	6,572		$	4,472
San Francisco Bay		3,398		375			2,577
Southern California		3,760		13			3,528
Total Loans 30-89 Days Past Due and Accruing	$	25,394	$	6,960		$	10,577
Loans (Charged-off)/ Recovered, Net for the Three Months Ended:
New England	$	890	$	(2,516	)	$	540
San Francisco Bay		2,738		607			640
Southern California		297		64			254
Total Net Loans (Charged-off)/ Recovered	$	3,925	$	(1,845	)	$	1,434

FOOTNOTES:

(1)						Net income from discontinued operations consists of contingent payments or expenses related to our divested affiliates, including Davidson Trust Company; Boston Private Value Investors, Inc.; Sand Hill Advisors, LLC; RINET Company, LLC; Gibraltar Private Bank & Trust Company; and Westfield Capital Management Company, LLC.

(2)						Adjustments to net income attributable to the Company to arrive at net income attributable to the common shareholders, as presented in these tables, include decrease/ (increase) in noncontrolling interests redemption value, dividends paid on preferred stock, and dividends on participating securities.

(3)						When the Company has positive net income from continuing operations attributable to the common shareholders, the Company adds additional shares to basic weighted average shares outstanding to arrive at diluted weighted average shares outstanding for the diluted earnings per share calculation. These additional shares reflect the assumed exercise, conversion, or contingent issuance of dilutive securities. If the additional shares would result in anti-dilution they would be excluded from the diluted earnings per share calculation. The potential dilutive shares relate to: unexercised stock options, unvested non-participating restricted stock, and unexercised stock warrants. See Part II. Item 8. "Financial Statements and Supplementary Data - Note 16: Earnings Per Share" in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 for additional information.

(4)						The Company uses certain non-GAAP financial measures, such as: Tangible Book Value Per Share and the Tangible Common Equity ("TCE") to Tangible Assets ("TA") ratio to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.

						Reconciliations from the Company's GAAP Total Equity to Total Assets ratio to the Non-GAAP TCE to TA ratio, and from GAAP Book Value to Non-GAAP Tangible Book Value are presented below:

						The Company calculates Tangible Assets by adjusting Total Assets to exclude Goodwill and Intangible Assets.

						The Company calculates Tangible Common Equity by adjusting Total Equity to exclude non-convertible Series D Preferred stock and exclude Goodwill and Intangible Assets, net.



(In thousands, except per share data)		3/31/2015			12/31/2014			3/31/2014
Total Balance Sheet Assets	$	6,869,772		$	6,797,874		$	6,705,420
LESS: Goodwill and Intangible Assets, net		(190,198	)		(191,800	)		(129,731	)
Tangible Assets (non-GAAP)	$	6,679,574		$	6,606,074		$	6,575,689
Total Shareholders' Equity	$	718,690		$	703,911		$	645,979
LESS: Series D Preferred Stock (non-convertible)		(47,753	)		(47,753	)		(47,753	)
LESS: Goodwill and Intangible Assets, net		(190,198	)		(191,800	)		(129,731	)
Total adjusting items		(237,951	)		(239,553	)		(177,484	)
Tangible Common Equity (non-GAAP)	$	480,739		$	464,358		$	468,495
Total Equity/Total Assets		10.46	%		10.35	%		9.63	%
Tangible Common Equity/Tangible Assets (non-GAAP)		7.20	%		7.03	%		7.12	%

Total Risk Weighted Assets *	$	5,159,073		$	4,803,633		$	4,707,604
Tier I Common Equity *	$	503,564		$	468,612		$	475,930
Tier I Common Equity/ Risk Weighted Assets		9.76	%		9.76	%		10.11	%

End of Period Shares Outstanding		83,052			82,962			80,001

Book Value Per Common Share	$	8.08		$	7.91		$	7.48
Tangible Book Value Per Share (non-GAAP)	$	5.79		$	5.60		$	5.86
* Risk Weighted Assets and Tier I Common Equity for March 31, 2015 are presented based on estimated data.

(5)						The Company uses certain non-GAAP financial measures, such as: Return on Average Common Equity and Return on Average Tangible Common Equity to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.

						Reconciliations from the Company's GAAP Return on Average Equity ratio to the Non-GAAP Return on Average Common Equity ratio, and the Non-GAAP Return on Average Tangible Common Equity ratio are presented below:

						The Company calculates Average Common Equity by adjusting Average Equity to exclude Average Preferred Equity.

						The Company calculates Average Tangible Common Equity by adjusting Average Equity to exclude Average Goodwill and Intangible Assets, net and Average Preferred Equity.



	Three Months Ended
(In thousands)		3/31/2015			12/31/2014			3/31/2014
Total average shareholders' equity	$	711,884		$	696,854		$	640,549
LESS: Average Series D preferred stock (non-convertible)		(47,753	)		(47,753	)		(47,753	)
Average common equity (non-GAAP)		664,131			649,101			592,796
LESS: Average goodwill and intangible assets, net		(191,053	)		(184,473	)		(130,272	)
Total adjusting items		(191,053	)		(184,473	)		(130,272	)
Average Tangible Common Equity (non-GAAP)	$	473,078		$	464,628		$	462,524

Net income attributable to the Company	$	18,783		$	12,177		$	17,041
LESS: Dividends on Series D preferred stock		(869	)		(869	)		(869	)
Common net income (non-GAAP)		17,914			11,308			16,172
ADD: Amortization of intangibles, net of tax (35%)		1,042			1,110			684
Tangible common net income (non-GAAP)	$	18,956		$	12,418		$	16,856

Return on Average Equity - (Annualized)		10.55	%		6.99	%		10.64	%
Return on Average Common Equity - (Annualized) (non-GAAP)		10.79	%		6.97	%		10.91	%
Return on Average Tangible Common Equity - (Annualized) (non-GAAP)		16.03	%		10.69	%		14.58	%

(6)						The Company uses certain non-GAAP financial measures, such as: pre-tax, pre-provision earnings and the efficiency ratio to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.

						Reconciliations from the Company's GAAP income from continuing operations before income taxes to non-GAAP pre-tax, pre-provision earnings; and from GAAP efficiency ratio to Non-GAAP efficiency ratio (FTE basis), excluding restructuring, are presented below:



	Three Months Ended
(In thousands)		3/31/2015			12/31/2014			3/31/2014
Income before income taxes (GAAP)	$	26,490		$	17,890		$	23,487
ADD BACK: Provision/ (credit) for loan losses		(2,500	)		2,400			(1,200	)
Pre-tax, pre-provision earnings (non-GAAP)	$	23,990		$	20,290		$	22,287

Total operating expense (GAAP)	$	63,427		$	63,760		$	54,968
Less: Amortization of intangibles		1,603			1,707			1,053
Less: Restructuring		—			739			—
Total operating expense (excluding amortization of intangibles and restructuring) (non-GAAP)	$	61,824		$	61,314		$	53,915

Net interest income	$	46,072		$	44,128		$	44,522
Total core fees and income		40,160			39,609			31,664
Total other income		1,185			313			1,069
FTE income		2,525			2,510			2,168
Total revenue (FTE basis)	$	89,942		$	86,560		$	79,423
Efficiency Ratio, before deduction of intangible amortization (GAAP)		72.56	%		75.86	%		71.15	%
Efficiency Ratio, FTE Basis (non-GAAP)		68.74	%		70.83	%		67.88	%

(7)						Interest Income on Non-taxable Investments and Loans are presented on an FTE basis using the federal statutory rate of 35% for each period presented.

(8)						Includes Loans Held for Sale and Nonaccrual Loans.

(9)						The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lender's regional offices. Net loans from the Company to certain principals of the Company's affiliate partners, loans at the Company's non-banking segments, and inter-company loan eliminations are identified as “Eliminations and other, net”.

(10)						Accruing substandard loans include loans that are classified as substandard but are still accruing interest income. Boston Private Bank & Trust Company may classify a loan as substandard where known information about possible credit problems of the related borrowers causes management to have doubts as to the ability of such borrowers to comply with the present repayment terms and which may result in disclosure of such loans as nonaccrual at some time in the future.

(11)						In addition to loans 30-89 days past due and accruing, at March 31, 2015 and December 31, 2014 the Company had no loans were more than 90 days past due but still on accrual status. At March 31, 2014, the Company had three loans totaling $0.6 million that were more than 90 days past due but still on accrual status. These loans originated in the New England region.

Contacts:

Boston Private Financial Holdings, Inc.
Steven Gaven, 617-912-3793
Vice President Corporate Finance and Director of Investor Relations
sgaven@bostonprivate.com