116 0 Kommentare Boston Private Reports Fourth Quarter and Full Year 2019 Results

Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported fourth quarter 2019 Net income attributable to the Company of $21.2 million, compared to $20.0 million for the third quarter of 2019 and $33.3 million for the fourth quarter of 2018. Fourth quarter 2019 Diluted earnings per share were $0.26, compared to $0.24 in the third quarter of 2019 and $0.42 in the fourth quarter of 2018.

"Our fourth quarter results reflect linked quarter net income growth as continued strength in asset quality drove a provision credit," said Anthony DeChellis, CEO of Boston Private. "During the quarter, we increased our client advisor count, while achieving key technology milestones. As we move into 2020 and execute on our growth initiatives, investing in talent and technology will remain the key priorities to achieving our strategic objectives."

Summary Financial Results - Reported
				% Change
($ in millions, except for per share data)	4Q19	3Q19	4Q18	LQ	Y/Y
Net income	$21.2	$20.0	$33.3	6%	(36)%
Diluted earnings per share	$0.26	$0.24	$0.42	8%	(38)%

Non-GAAP Financial Measures:
Pre-tax, pre-provision income	$24.5	$25.7	$42.3	(5)%	(42)%
Return on average common equity ("ROACE")	10.3%	9.8%	17.9%
Return on average tangible common equity ("ROATCE")	11.5%	11.0%	20.5%

The Company's reported financial results decreased year-over-year primarily as a result of a gain on sale related to the divestiture of BOS in the fourth quarter of 2018.

In addition to presenting the Company’s results in conformity with GAAP, the Company uses certain non-GAAP financial measures to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. For additional information on non-GAAP measures, see page 6. A reconciliation of GAAP to non-GAAP results can be found beginning on page 17.

Summary Financial Results - Operating Basis (non-GAAP)
				% Change
($ in millions, except for per share data)	4Q19¹	3Q19	4Q18²	LQ	Y/Y
Net income	$20.5	$20.0	$19.9	2%	3%
Diluted earnings per share	$0.25	$0.24	$0.27	2%	(8)%

Pre-tax, pre-provision income	$23.4	$25.7	$25.8	(9)%	(9)%
Return on average common equity	9.9%	9.8%	10.7%
Return on average tangible common equity	11.1%	11.0%	12.4%
¹4Q19 results adjusted to exclude the net after-tax impact of $1.1 million gain related to the revaluation of a receivable from the divestiture of BOS and $0.3 million of tax expense ²4Q18 results adjusted to exclude the net after-tax impact of $18.1 million gain on sale and $3.2 million tax expense related to the divestiture of BOS and $1.6 million restructuring expense

Divested Affiliates

The Company completed the sale of Bingham, Osborn & Scarborough LLC ("BOS") during 2018. Financial results from BOS remain consolidated in the Company's financial results through the closing date of December 3, 2018. For presentation purposes, BOS's AUM is excluded from AUM amounts, but is included in the calculation of Core fees and income. The discussion below includes non-GAAP measures that exclude the contributions from BOS in order to enhance comparability of trends in the core business.

Net Interest Income and Margin
				% Change
($ in millions)	4Q19	3Q19	4Q18	LQ	Y/Y
Net interest income	$56.1	$56.2	$60.0	—%	(6)%
Less: Interest recovered on previous nonaccrual loans	—	0.2	1.0	(87)%	(98)%
Core net interest income (non-GAAP)	$56.1	$56.0	$59.0	— %	(5)%

Net interest margin	2.70%	2.72%	2.94%
Core net interest margin (non-GAAP)	2.70%	2.71%	2.90%
nm = not meaningful

Net interest income for the fourth quarter of 2019 was $56.1 million, flat linked quarter and a 6% decrease year-over-year. Core net interest income, which excludes interest recovered on previous nonaccrual loans, was flat linked quarter and decreased 5% year-over-year. The linked quarter comparison was positively impacted by lower deposit costs, lower borrowing costs, and lower borrowing volumes, while it was negatively impacted by variable rate loans repricing lower.

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The Company’s Core net interest margin, which excludes interest recovered on previous nonaccrual loans, decreased 1 basis point on a linked quarter basis to 2.70% as net interest income was flat and interest-earning assets increased 1%. Client deposit inflows during the fourth quarter enabled the repayment of higher cost borrowings, which contributed to a linked quarter decrease of 13 basis points in the total cost of funds from 1.12% to 0.99%.

Noninterest Income
				% Change
($ in millions)	4Q19	3Q19	4Q18	LQ	Y/Y
Wealth management and trust fees	$18.7	$19.1	$23.8	(2)%	(21)%
Investment management fees	2.6	2.5	2.8	2%	(10)%
Private banking fees ³	3.5	3.6	2.1	(3)%	68%
Total core fees and income	$24.8	$25.2	$28.7	(2)%	(14)%
Total other income	2.0	—	17.2	nm	(88)%
Total noninterest income	$26.8	$25.1	$45.8	7 %	(42)%

Memo: Excluding BOS and Notable Items
Wealth management and trust fees (non-GAAP) ⁴	$18.7	$19.1	$20.0	(2)%	(6)%
Investment management fees	2.6	2.5	2.8	2%	(10)%
Private banking fees	3.5	3.6	2.1	(3)%	68%
Total core fees and income (non-GAAP) ⁴	$24.8	$25.2	$24.9	(2)%	— %
Total other income (non-GAAP) ⁵	0.9	—	(1.0)	nm	nm
Total noninterest income (non-GAAP) ^{4 5}	$25.7	$25.1	$23.9	2 %	8 %
³ Private banking fees includes Other banking fee income and Gain/ (loss) on sale of loans, net ⁴ Excludes BOS revenue of $3.9 million in 4Q18 ⁵ Excludes $18.1 million gain on sale related to BOS in 4Q18 and $1.1 gain related to revaluation of a receivable from the divestiture of BOS in 4Q19

Total core fees and income for the fourth quarter of 2019 was $24.8 million, a 2% decrease linked quarter, primarily driven by lower Wealth management and trust fees. The 14% decline year-over-year was primarily driven by the divestiture of BOS.

Excluding BOS and Notable Items, Total core fees and income (non-GAAP) were flat year-over-year primarily driven by higher Private banking fees associated with higher swap fees and gain on sale of loans, partially offset by lower Wealth management and trust fees associated with negative net flows.

Assets Under Management / Advisory
				% Change
($ in millions)	4Q19	3Q19	4Q18	LQ	Y/Y
Wealth Management and Trust	$15,224	$14,695	$14,206	4%	7%
Other ⁶	1,544	1,533	1,715	1%	(10)%
Total assets under management / advisory	$16,768	$16,228	$15,921	3 %	5 %
⁶ Includes results from Dalton, Greiner, Hartman, Maher & Co, LLC ("DGHM")

Total assets under management / advisory were $16.8 billion at the end of the fourth quarter of 2019, a 3% increase linked quarter and 5% increase year-over-year. The linked quarter and year-over-year comparisons were impacted by positive market action partially offset by negative net flows.

Total net flows were negative $209 million during the fourth quarter of 2019, of which $114 million were attributable to the Wealth Management and Trust segment.

Noninterest Expense
				% Change
($ in millions)	4Q19	3Q19	4Q18	LQ	Y/Y
Salaries and employee benefits	$34.2	$31.7	$36.0	8%	(5)%
Occupancy and equipment	7.6	8.3	8.0	(8)%	(5)%
Professional services	3.9	4.4	4.2	(12)%	(7)%
Marketing and business development	2.0	1.4	2.3	44%	(11)%
Information systems	6.5	5.2	6.3	25%	3%
Amortization of intangibles	0.7	0.7	0.7	1%	(1)%
FDIC insurance	—	0.1	0.7	nm	nm
Restructuring	—	—	2.1	—%	(100)%
Other	3.6	3.9	3.3	(6)%	10%
Total noninterest expense	$58.5	$55.5	$63.6	5 %	(8)%

Memo: Excluding Notable Items and BOS
Information systems ⁶	—	—	(0.4)	nm	(100)%
Restructuring	—	—	2.1	nm	(100)%
BOS noninterest expense	—	—	2.8	nm	(100)%
Total noninterest expense (non-GAAP)	$58.5	$55.5	$59.1	5 %	(1)%
⁶ $0.4 million of Information systems expense was reclassified to Restructuring expense in conjunction with a formal restructuring plan announced in 4Q18

Total noninterest expense increased 5% linked quarter primarily driven by higher salaries and employee benefits expense and Information systems expense related to technology investments placed in service during the fourth quarter of 2019, partially offset by lower occupancy and equipment and professional services.

Excluding Notable Items and BOS, Total noninterest expense (non-GAAP) for the fourth quarter of 2019 was $58.5 million, down 1% year-over-year, primarily driven by an FDIC insurance assessment credit received in the fourth quarter of 2019.

Income Tax Expense

The Company's effective tax rate for the fourth quarter of 2019 was 24.1%. This rate is higher than prior quarters of 2019 primarily as a result of a slight increase in the full year effective tax rate as compared to the estimated annual effective tax rate in prior quarters. The effective tax rate for the full year 2019 was 21.9%.

Loans and Deposits - QTD Averages
				% Change
($ in millions)	4Q19	3Q19	4Q18	LQ	Y/Y
Commercial and industrial	$1,142	$1,102	$1,027	4%	11%
Commercial real estate	2,562	2,518	2,402	2%	7%
Construction and land	217	196	209	11%	3%
Residential	2,935	3,016	2,907	(3)%	1%
Home equity	85	89	94	(5)%	(10)%
Other consumer	132	128	141	3%	(6)%
Total loans	$7,073	$7,049	$6,781	— %	4 %

Non-interest bearing deposits	2,002	1,953	2,092	2%	(4)%
Interest bearing deposits	4,957	4,705	4,826	5%	3%
Total deposits	$6,959	$6,658	$6,918	5 %	1 %

Non-interest bearing deposits as a % of Total deposits	29%	29%	30%

Average total loans in the fourth quarter of 2019 increased 4% year-over-year, while remaining flat linked quarter. Linked quarter averages were impacted by commercial real estate growth and increased line of credit borrowings (included in Commercial and industrial loans), partially offset by a residential loan sale of $100 million during the fourth quarter.

Average total deposits increased 1% year-over-year, primarily driven by an increase in money market accounts, partially offset by a decline in demand deposit accounts and certificates of deposits. The decline in certificates of deposit was driven by the run-off of brokered certificates of deposits, which declined $135 million year-over-year or 2% of fourth quarter 2018 total deposits.

The cost of total deposits was 0.86%, a decrease of 6 basis points linked quarter.

Provision and Asset Quality

($ in millions)	4Q19	3Q19	2Q19	1Q19	4Q18
Provision/ (credit) for loan loss	$(3.7)	$0.2	$1.4	$(1.4)	$0.1
Total criticized and classified loans	126.0	139.0	141.7	141.3	146.6
Total nonaccrual loans	16.1	17.6	17.2	12.0	14.1
Total loans 30-89 days past due and accruing	25.9	4.2	2.4	17.7	22.3
Total net loans (charged-off)/ recovered	0.3	0.1	(0.1)	(0.1)	1.7

Ratios:
Allowance for loan losses as a % of Total loans	1.03%	1.07%	1.06%	1.07%	1.09%
Nonaccrual loans as a % of Total loans	0.23%	0.25%	0.24%	0.17%	0.20%

The Company recorded a provision credit of $3.7 million for the fourth quarter of 2019, compared to a provision expense of $0.2 million for the third quarter of 2019 and a provision expense of $0.1 million in the fourth quarter of 2018. The provision credit in the fourth quarter of 2019 was primarily driven by a decrease in criticized and classified loans and a decrease in loss factors.

Total criticized and classified loans as of December 31, 2019 was $126.0 million, a decline of 10% linked quarter and 14% year-over-year. Total nonaccrual loans as of December 31, 2019 was $16.1 million, or 23 basis points of Total loans, compared to $17.6 million, or 25 basis points of Total loans, as of September 30, 2019, and $14.1 million, or 20 basis points of Total loans, as of December 31, 2018.

Capital

($ in millions, except for per share data)	4Q19	3Q19	2Q19	1Q19	4Q18
Tangible common equity/ Tangible assets (non-GAAP)	8.6%	8.6%	8.4%	8.3%	8.1%
Tangible book value per share (non-GAAP)	$9.02	$8.90	$8.71	$8.47	$8.18

Regulatory Capital Ratios: ⁷
Tier 1 common equity	11.4%	11.2%	11.2%	11.4%	11.4%
Total risk-based capital	14.1%	13.9%	13.9%	14.2%	14.3%
Tier 1 risk-based capital	13.0%	12.8%	12.7%	13.0%	13.0%
Tier 1 leverage capital	9.8%	9.7%	9.6%	9.7%	9.5%

Common Equity Repurchase Program:
Total shares of common stock repurchased	—	678,165	—	—	1,505,521
Average price paid per share of common stock	—	$10.61	—	—	$12.02
Aggregate repurchases of common equity	—	$7.2	—	—	$18.1
⁷ Current quarter information is presented based on estimated data.

The Company did not repurchase any common stock during the fourth quarter of 2019. The current program has $12.8 million remaining available to be repurchased.

Tangible book value per share (non-GAAP) as of December 31, 2019 increased 1% linked quarter and 10% year-over-year to $9.02. The linked quarter increase in Tangible book value per share was primarily driven by increased retained earnings, partially offset by dividends to shareholders.

Dividend Payments

Concurrent with the release of fourth quarter 2019 earnings, the Board of Directors of the Company declared a cash dividend payable to common shareholders of $0.12 per share. The record date for this dividend is February 7, 2020, and the payment date is February 21, 2020.

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; pre-tax, pre-provision income; net interest income and net interest margin excluding interest recovered on previous nonaccrual loans, also referred to as core net interest income, and core net interest margin, respectively; tangible common equity / tangible assets, total noninterest expense excluding intangibles and restructuring, if any; the efficiency ratio excluding amortization and intangibles, and restructuring, if any; net income attributable to the Company excluding notable items; net income attributable to the common shareholders, treasury stock method, excluding notable items; diluted earnings per share excluding notable items; operating basis total revenue; operating basis total noninterest expenses.

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 17 of the attached financial statements.

Conference Call

Management will hold a conference call at 8:00 a.m. Eastern Time on Thursday, January 23, 2020, to discuss the financial results, business highlights and outlook. To access the call:
Dial In #: (888) 317-6003
Elite Entry Number: 8476896

Replay Information:
Available from January 23, 2020 at 12:00 p.m Eastern Time until January 30, 2020
Dial In #: (877) 344-7529
Conference Number: 10137972

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

About Boston Private

Boston Private is a leading provider of integrated wealth management, trust and banking services to high-net-worth 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. The Company has total assets of greater than $8 billion, and manages over $16 billion of client assets.

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 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 business activities; changes in interest rates; competitive pressures from other financial institutions; the effects of weakness in general economic conditions on a national basis or in the local markets in which the Company operates; changes in loan defaults and charge-off rates; changes in the value of securities and other assets, adequacy of loan loss reserves, or decreases in deposit levels necessitating increased borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; changes in government regulation; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; the risk that the Company’s deferred tax asset may not be realized; risks related to the identification and implementation of acquisitions, dispositions and restructurings; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Company’s Annual Report on Form 10-K and updated by the Company’s Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statement is made.

BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Balance Sheets
Unaudited ($ in thousands, except share and per share data)
	4Q19		3Q19		2Q19		1Q19		4Q18
ASSETS:
Cash and cash equivalents	$	292,479	$	78,010	$	65,756	$	96,211	$	127,259
Investment securities available-for-sale	978,284		935,538		966,731		981,951		994,065
Investment securities held-to-maturity	48,212		51,379		54,482		67,548		70,438
Equity securities at fair value	18,810		21,780		19,092		7,491		14,228
Stock in Federal Home Loan Bank and Federal Reserve Bank	39,078		47,756		64,453		47,053		49,263
Loans held for sale	7,386		6,658		3,640		280		2,812
Loans	6,976,704		7,067,151		7,080,260		6,926,968		6,893,158
Less: Allowance for loan losses	71,982		75,359		75,067		73,814		75,312
Loans, net of allowance for loan losses	6,904,722		6,991,792		7,005,193		6,853,154		6,817,846
Other real estate owned (“OREO”)	—		—		—		—		401
Premises and equipment, net	44,527		42,658		40,244		42,938		45,412
Goodwill	57,607		57,607		57,607		57,607		57,607
Intangible assets, net	10,352		10,622		10,884		11,555		12,227
Accrued interest receivable	24,175		24,851		26,411		25,935		24,366
Deferred income taxes, net	11,383		15,704		17,183		22,844		26,638
Right-of-use assets	102,075		107,045		110,880		104,644		—
Other assets	291,411		299,544		270,317		252,932		252,063
TOTAL ASSETS	$	8,830,501	$	8,690,944	$	8,712,873	$	8,572,143	$	8,494,625

LIABILITIES:
Deposits	$	7,241,476	$	6,658,242	$	6,437,963	$	6,779,845	$	6,781,170
Securities sold under agreements to repurchase	53,398		48,860		62,372		58,329		36,928
Federal funds purchased	—		230,000		135,000		—		250,000
Federal Home Loan Bank borrowings	350,829		570,904		920,068		615,070		420,144
Junior subordinated debentures	106,363		106,363		106,363		106,363		106,363
Lease liabilities	117,214		122,799		126,740		120,162		—
Other liabilities	140,820		143,607		124,370		112,893		143,540
TOTAL LIABILITIES	8,010,100		7,880,775		7,912,876		7,792,662		7,738,145

REDEEMABLE NONCONTROLLING INTERESTS (“RNCI”)	1,383		1,481		1,786		662		2,526
SHAREHOLDERS' EQUITY:
Common stock, $1.00 par value; authorized: 170,000,000 shares	83,266		83,242		83,774		83,774		83,656
Additional paid-in capital	600,708		599,877		603,869		604,288		600,196
Retained earnings	127,469		116,210		106,443		97,155		87,821
Accumulated other comprehensive income/(loss)	7,575		9,359		4,125		(6,398)		(17,719)
TOTAL SHAREHOLDERS' EQUITY	819,018		808,688		798,211		778,819		753,954
TOTAL LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY	$	8,830,501	$	8,690,944	$	8,712,873	$	8,572,143	$	8,494,625

BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Income Statements
Unaudited ($ in thousands, except share and per share data)
	4Q19		3Q19		2Q19		1Q19		4Q18
REVENUE:
Interest income	$	75,291	$	77,604	$	78,728	$	76,824	$	76,892
Interest expense	19,166		21,451		21,268		18,486		16,895
Net interest income	56,125		56,153		57,460		58,338		59,997
Provision/(credit) for loan losses	(3,668)		167		1,363		(1,426)		93
Net interest income after provision/(credit) for loan losses	59,793		55,986		56,097		59,764		59,904

Wealth management and trust fees ⁸	18,720		19,067		18,912		19,058		23,788
Investment management fees	2,554		2,496		2,455		2,650		2,831
Private banking fee income	2,924		2,658		2,867		2,499		2,033
Gain on sale of loans, net	557		934		58		73		39
Total core fees and income	24,755		25,155		24,292		24,280		28,691
Total other income	2,038		(29)		88		968		17,154
TOTAL REVENUE ⁹	82,918		81,279		81,840		83,586		105,842

NONINTEREST EXPENSE:
Salaries and employee benefits	34,186		31,684		32,706		35,726		36,007
Occupancy and equipment	7,578		8,260		7,852		8,348		7,975
Information systems	6,476		5,169		5,137		5,860		6,296
Professional services	3,920		4,435		3,313		3,560		4,229
Marketing and business development	2,017		1,403		1,934		1,085		2,275
Amortization of intangibles	676		671		672		672		680
FDIC insurance	(19)		59		585		660		739
Restructuring	—		—		—		1,646		2,065
Other	3,623		3,856		3,460		2,996		3,291
TOTAL NONINTEREST EXPENSE	58,457		55,537		55,659		60,553		63,557

INCOME BEFORE INCOME TAXES	28,129		25,575		24,818		24,459		42,192
Provision for income taxes	6,788		5,517		5,369		4,917		8,651
Net income from continuing operations	21,341		20,058		19,449		19,542		33,541
Net income from discontinued operations ¹⁰	—		—		—		—		306
Net income before attribution to noncontrolling interests	21,341		20,058		19,449		19,542		33,847
Less: Net income attributable to noncontrolling interests	97		96		69		100		545
NET INCOME ATTRIBUTABLE TO THE COMPANY	$	21,244	$	19,962	$	19,380	$	19,442	$	33,302

Adjustments, treasury stock method ¹¹	98		304		(816)		1,557		2,694
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	21,342	$	20,266	$	18,564	$	20,999	$	35,996

COMMON SHARE DATA:
Weighted average basic shares outstanding	83,238,982		83,631,403		83,565,780		83,285,095		83,750,785
Weighted average diluted shares outstanding ¹²	83,637,786		83,956,708		84,048,972		84,010,450		84,863,779
Diluted total earnings per share	$	0.26	$	0.24	$	0.22	$	0.25	$	0.42

⁸ 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, BOS (through the closing date), and the trust operations of Boston Private Bank & Trust Company. ⁹ Total revenue is the sum of Net interest income, Total core fees and income, and Total other income. ¹⁰ Net income from discontinued operations consists of contingent payments, net of expenses, related to a divested affiliate, Westfield Capital Management Company, LLC. The Company received its final contingent payment in the first quarter of 2018 related to this affiliate and a tax benefit related to deferred taxes in the fourth quarter of 2018. ¹¹ 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 decrease/ (increase) in Noncontrolling interests redemption value. ¹² 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, 2018.

BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Income Statements
Unaudited ($ in thousands, except share and per share data)
	Year ended December 31,
	2019		2018
REVENUE:
Interest income	$	308,447	$	292,904
Interest expense	80,371		58,338
Net interest income	228,076		234,566
Provision/(credit) for loan losses	(3,564)		(2,198)
Net interest income after provision/(credit) for loan losses	231,640		236,764

Wealth management and trust fees ⁸	75,757		99,818
Investment management fees ¹³	10,155		21,728
Private banking fee income	10,948		9,826
Gain on sale of loans, net	1,622		243
Total core fees and income	98,482		131,615
Total other income	3,065		18,382
TOTAL REVENUE ⁹	329,623		384,563

NONINTEREST EXPENSE:
Salaries and employee benefits	134,302		161,468
Occupancy and equipment	32,038		32,116
Information systems	22,642		25,185
Professional services	15,228		13,155
Marketing and business development	6,439		7,648
Amortization of intangibles	2,691		2,929
FDIC insurance ⁹	1,285		2,865
Restructuring	1,646		7,828
Other	13,935		14,161
TOTAL NONINTEREST EXPENSE	230,206		267,355

INCOME BEFORE INCOME TAXES	102,981		119,406
Income tax expense	22,591		37,537
Net income from continuing operations	80,390		81,869
Net income from discontinued operations ¹⁰	—		2,002
Net income before attribution to noncontrolling interests	80,390		83,871
Less: Net income attributable to noncontrolling interests	362		3,487
NET INCOME ATTRIBUTABLE TO THE COMPANY	$	80,028	$	80,384

Adjustments, treasury stock method ¹¹	1,143		(1,682)
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	81,171	$	78,702

COMMON SHARE DATA
Weighted average basic shares outstanding	83,430,740		83,596,685
Weighted average diluted shares outstanding ¹²	83,920,792		85,331,314
Diluted total earnings per share	$	0.97	$	0.92

⁸ Wealth management and trust fees consists of revenue from BPW, KLS (through the effective date of its merger with BPW), Anchor Capital Advisors, LLC ("Anchor") and BOS (through the respective closing dates), and the trust operations of Boston Private Bank & Trust Company. ⁹ Total revenue is the sum of Net interest income, Total core fees and income, and Total other income. ¹⁰ Net income from discontinued operations consists of contingent payments, net of expenses, related to a divested affiliate, Westfield Capital Management Company, LLC. The Company received its final contingent payment in the first quarter of 2018 related to this affiliate and a tax benefit related to deferred taxes in the fourth quarter of 2018. ¹¹ 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 decrease/ (increase) in Noncontrolling interests redemption value and dividends paid on preferred stock, if any, including deemed dividends on redemption of the 6.95% non-cumulative perpetual preferred stock, Series D (“the Series D preferred stock”), if any. On June 15, 2018, the Company redeemed all $50 million of the outstanding Series D preferred stock. ¹² 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, 2018. ¹³ Investment management fees consists of revenue from DGHM and Anchor (through the closing date).

BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Financial Highlights
Unaudited ($ in thousands, except share and per share data)
	4Q19		3Q19		2Q19		1Q19		4Q18
KEY STATISTICS:
Return on average assets (non-GAAP) ¹⁴		0.96 %		0.91%		0.90%		0.93 %		1.56 %
ROACE (non-GAAP) ¹⁴		10.29 %		9.80%		9.83%		10.29 %		17.87 %
ROATCE (non-GAAP) ¹⁴		11.51 %		10.99%		11.06%		11.63 %		20.46 %
Efficiency ratio (non-GAAP) ¹⁴		69.7 %		67.5%		67.2%		69.7 %		57.1 %
Noninterest income to total revenue		32.3 %		30.9 %		29.8 %		30.2 %		43.3 %

Net interest margin		2.70 %		2.72 %		2.78 %		2.90 %		2.94 %
Average loan to average deposit ratio		101.6 %		105.9 %		106.6 %		101.6 %		98.0 %
Cost of total deposits		0.86 %		0.92 %		0.88 %		0.84 %		0.77 %
Cost of interest-bearing deposits		1.20 %		1.31 %		1.25 %		1.19 %		1.11 %
Cost of total funding		0.99 %		1.12 %		1.11 %		1.00 %		0.89 %

Allowance for Loan Loss / Total Loans		1.03 %		1.07 %		1.06 %		1.07 %		1.09 %
Nonperforming loans / Total Loans		0.23 %		0.25 %		0.24 %		0.17 %		0.20 %
Net (charge-offs)/recoveries / Total loans ¹⁴		0.02 %		0.01 %		(0.01) %		— %		0.10 %

CAPITAL HIGHLIGHTS:
Tier 1 common equity ¹⁵	$	745,887	$	732,980	$	726,872	$	717,138	$	702,728
Tier 1 capital ¹⁵	$	846,298	$	833,431	$	827,299	$	817,600	$	803,311
Total capital ¹⁵	$	919,534	$	910,076	$	903,675	$	892,764	$	879,927

Risk-weighted assets ("RWA") ¹⁵	$	6,529,626	$	6,533,884	$	6,491,184	$	6,304,444	$	6,161,677
Average assets for leverage ¹⁵	$	8,654,576	$	8,588,358	$	8,617,803	$	8,447,143	$	8,416,195

Tier 1 common equity ratio ¹⁵		11.42 %		11.22 %		11.20 %		11.38 %		11.40 %
Tier 1 risk-based capital ratio ¹⁵		12.96 %		12.76 %		12.74 %		12.97 %		13.04 %
Total risk-based capital ratio ¹⁵		14.08 %		13.93 %		13.92 %		14.16 %		14.28 %
Tier 1 leverage capital ratio ¹⁵		9.77 %		9.70 %		9.60 %		9.68 %		9.54 %

Total equity / Total assets		9.27 %		9.30 %		9.16 %		9.09 %		8.88 %
Tangible common equity / Tangible assets (non-GAAP)		8.57 %		8.59 %		8.44 %		8.35 %		8.12 %

Market price per share	$	12.03	$	11.66	$	12.07	$	10.96	$	10.57
End of period shares outstanding		83,265,674		83,241,952		83,774,335		83,773,650		83,655,651
Book value per common share	$	9.84	$	9.71	$	9.53	$	9.30	$	9.01
Tangible book value per share (non-GAAP)	$	9.02	$	8.90	$	8.71	$	8.47	$	8.18

Common Equity Repurchase Program:
Total shares of common stock repurchased		—		678,165		—		—		1,505,521
Average price paid per share of common stock	$	—	$	10.61	$	—	$	—	$	12.02
Aggregate repurchases of common equity ($ in millions)	$	—	$	7.2	$	—	$	—	$	18.1

¹⁴ Annualized. ¹⁵ Current quarter capital highlights are presented based on estimated data.

BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated AUM and Balance Sheet - End of Period Balances
Unaudited ($ in thousands)
	4Q19		3Q19		2Q19		1Q19		4Q18
ASSETS UNDER MANAGEMENT AND ADVISORY ("AUM"):
Wealth Management and Trust	$	15,224,000	$	14,695,000	$	14,649,000	$	14,564,000	$	14,206,000
Other	1,544,000		1,533,000		1,550,000		1,558,000		1,715,000
Total AUM	16,768,000		16,228,000		16,199,000		16,122,000		15,921,000

AUM Rollforward:
Beginning balance ¹⁶	$	16,228,000	$	16,199,000	$	16,122,000	$	15,921,000	$	17,723,000
Net flows	(209,000)		(137,000)		(269,000)		(963,000)		(143,000)
Market	749,000		166,000		346,000		1,164,000		(1,659,000)
Ending balance	$	16,768,000	$	16,228,000	$	16,199,000	$	16,122,000	$	15,921,000

AUM Net Flows:
Wealth Management and Trust	$	(114,000)	$	(100,000)	$	(233,000)	$	(580,000)	$	(137,000)
Other	(95,000)		(37,000)		(36,000)		(383,000)		(6,000)
Total Net flows	$	(209,000)	$	(137,000)	$	(269,000)	$	(963,000)	$	(143,000)

DEPOSITS:
Demand deposits (non-interest bearing)	$	1,971,013	$	1,947,363	$	1,854,091	$	2,016,838	$	1,951,274
Savings and NOW	646,199		666,107		631,166		673,954		700,519
Money market	3,969,330		3,366,623		3,228,608		3,302,244		3,338,892
Certificates of deposit	654,934		678,149		724,098		786,809		790,485
TOTAL DEPOSITS	$	7,241,476	$	6,658,242	$	6,437,963	$	6,779,845	$	6,781,170

LOANS:
Commercial and industrial	$	694,034	$	695,029	$	656,186	$	615,370	$	623,037
Commercial tax exempt	447,927		448,488		450,307		449,492		451,671
Commercial real estate	2,551,274		2,533,346		2,530,556		2,439,048		2,395,692
Construction and land	225,983		209,741		200,378		210,618		240,306
Residential	2,839,155		2,964,042		3,025,758		2,993,132		2,948,973
Home equity	83,657		84,432		89,930		88,620		90,421
Consumer	134,674		132,073		127,145		130,688		143,058
TOTAL LOANS	$	6,976,704	$	7,067,151	$	7,080,260	$	6,926,968	$	6,893,158

¹⁶ AUM have been reduced to exclude those assets managed or advised by BOS for period when BOS was owned by the Company

BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Asset Quality
Unaudited ($ in thousands)
	4Q19		3Q19		2Q19		1Q19		4Q18
CHARGE-OFFS:
Loan charge-offs	$	(285)	$	(185)	$	(195)	$	(564)	$	(370)
Loan recoveries		576		310		85		492		2,089
NET (CHARGE-OFFS)/RECOVERIES	$	291	$	125	$	(110)	$	(72)	$	1,719
Net charge-offs to average loans (annualized)		0.02 %		0.01%		(0.01)%	—%			0.10%

Net (Charge-offs)/Recoveries by Loan Type:
Commercial and industrial	$	118	$	95	$	(155)	$	188	$	(77)
Commercial real estate		183		27		30		189		1,394
Construction and land	—		—		—		—		—
Residential	—		—		—			100		402
Home equity		4		6	—			(562)	—
Consumer		(14)		(3)		15		13	—
NET (CHARGE-OFFS)/ RECOVERIES	$	291	$	125	$	(110)	$	(72)	$	1,719

LOAN QUALITY DATA:
Special mention loans	$	52,026	$	58,133	$	70,677	$	86,787	$	78,528

Accruing classified loans ¹⁷		57,922		63,278		53,883		42,521		54,095
Nonaccrual loans		16,103		17,565		17,155		12,019		14,057
Total classified		74,025		80,843		71,038		54,540		68,152
Criticized and classified loans	$	126,051	$	138,976	$	141,715	$	141,327	$	146,680

Loans 30-89 days past due and accruing ¹⁸	$	25,945	$	4,179	$	2,434	$	17,715	$	22,299

¹⁷ 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. ¹⁸ At June 30, 2019, the Company had one loan totaling $0.9 million that was more than 90 days past due but still on accrual status. This loan originated in the New England region. The Company had no 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
	4Q19		3Q19		4Q18		4Q19		3Q19		4Q18		4Q19		3Q19		4Q18
INTEREST-EARNING ASSETS
Cash and investments:
Taxable investment securities	$	201,535	$	198,655	$	317,230	$	869	$	938	$	1,486	1.72	%	1.95	%	1.87	%
Non-taxable investment securities	311,705		305,108		301,242		1,976		1,924		1,833		2.54	%	2.52	%	2.43	%
Mortgage-backed securities	489,927		492,514		536,264		2,568		2,622		2,923		2.10	%	2.13	%	2.18	%
Short-term investments and other	130,519		101,958		134,182		1,210		1,084		1,356		3.65	%	4.06	%	3.98	%
Total cash and investments	1,133,686		1,098,235		1,288,918		6,623		6,568		7,598		2.33	%	2.39	%	2.35	%
Loans: ¹⁹
Commercial and industrial	1,142,015		1,101,672		1,027,128		11,276		11,523		10,431		3.86	%	4.09	%	3.97	%
Commercial real estate	2,562,380		2,518,048		2,402,304		28,285		29,118		29,017		4.32	%	4.52	%	4.73	%
Construction and land	216,754		195,843		209,475		2,588		2,410		2,589		4.67	%	4.82	%	4.83	%
Residential	2,934,786		3,016,265		2,907,446		24,275		25,567		24,629		3.31	%	3.39	%	3.39	%
Home equity	84,632		89,068		93,656		965		1,121		1,148		4.53	%	4.99	%	4.86	%
Other consumer	132,143		127,987		140,591		1,279		1,297		1,480		3.84	%	4.02	%	4.18	%
Total loans	7,072,710		7,048,883		6,780,600		68,668		71,036		69,294		3.83	%	3.98	%	4.03	%
Total earning assets	8,206,396		8,147,118		8,069,518		75,291		77,604		76,892		3.62	%	3.76	%	3.76	%

LESS: Allowance for loan losses	75,283		75,199		75,006
Cash and due from banks	48,287		49,065		53,633
Other assets	559,350		544,368		397,153
TOTAL AVERAGE ASSETS	$	8,738,750	$	8,665,352	$	8,445,298

INTEREST-BEARING LIABILITIES
Interest-bearing deposits: ²⁰
Savings and NOW	$	644,502	$	615,730	$	649,937	$	252	$	275	$	377	0.16	%	0.18	%	0.23	%
Money market	3,632,258		3,378,006		3,392,039		11,449		11,523		9,502		1.25	%	1.35	%	1.11	%
Certificates of deposit	680,466		711,299		784,184		3,322		3,689		3,591		1.94	%	2.06	%	1.82	%
Total interest-bearing deposits ²⁰	4,957,226		4,705,035		4,826,160		15,023		15,487		13,470		1.20	%	1.31	%	1.11	%
Junior subordinated debentures	106,363		106,363		106,363		966		1,022		1,043		3.56	%	3.76	%	3.84	%
FHLB borrowings and other	591,682		833,535		515,734		3,177		4,942		2,382		2.10	%	2.32	%	1.81	%
Total interest-bearing liabilities ²⁰	5,655,271		5,644,933		5,448,257		19,166		21,451		16,895		1.34	%	1.50	%	1.23	%

Non-interest bearing demand deposits ²⁰	2,001,714		1,953,214		2,092,070
Payables and other liabilities	261,503		258,371		154,612
Total average liabilities	7,918,488		7,856,518		7,694,939
Redeemable noncontrolling interests	1,446		944		11,046
Average shareholders’ equity	818,816		807,890		739,313
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY	$	8,738,750	$	8,665,352	$	8,445,298
Net interest income							$	56,125	$	56,153	$	59,997
Interest rate spread													2.28	%	2.26	%	2.53	%
Net interest margin													2.70	%	2.72	%	2.94	%

Average total deposits ²⁰	$	6,958,940	$	6,658,249	$	6,918,230							0.86	%	0.92	%	0.77	%
Average total deposits and borrowings ²⁰	$	7,656,985	$	7,598,147	$	7,540,327							0.99	%	1.12	%	0.89	%
¹⁹ Average loans includes Loans held for sale and Nonaccrual loans ²⁰ 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	12/31/19		12/31/18		12/31/19		12/31/18		12/31/19		12/31/18
Cash and investments:
Taxable investment securities	$	217,653	$	325,159	$	4,113	$	6,007	1.89	%	1.85	%
Non-taxable investment securities	307,005		298,450		7,702		7,094		2.51	%	2.38	%
Mortgage-backed securities	502,949		561,929		10,793		12,091		2.15	%	2.15	%
Short-term investments and other	110,877		164,712		4,259		5,187		3.84	%	3.15	%
Total cash and investments	1,138,484		1,350,250		26,867		30,379		2.36	%	2.25	%
Loans: ¹⁹
Commercial and industrial	1,101,635		983,699		44,949		37,985		4.08	%	3.86	%
Commercial real estate	2,496,878		2,449,039		115,507		112,037		4.63	%	4.57	%
Construction and land	206,624		181,315		10,198		8,731		4.94	%	4.82	%
Residential	2,983,173		2,806,046		101,122		92,892		3.39	%	3.31	%
Home equity	88,917		94,823		4,353		4,320		4.90	%	4.56	%
Other consumer	129,701		167,139		5,451		6,560		4.20	%	3.92	%
Total loans	7,006,928		6,682,061		281,580		262,525		4.02	%	3.93	%
Total earning assets	8,145,412		8,032,311		308,447		292,904		3.79	%	3.65	%

LESS: Allowance for loan losses	74,969		74,174
Cash and due from banks	47,286		49,282
Other assets	527,269		402,821
TOTAL AVERAGE ASSETS	$	8,644,998	$	8,410,240

INTEREST-BEARING LIABILITIES
Interest-bearing deposits: ²⁰
Savings and NOW	$	654,712	$	694,674	$	1,099	$	1,197	0.17	%	0.17	%
Money market	3,395,842		3,202,616		43,521		27,469		1.28	%	0.86	%
Certificates of deposit	730,693		714,827		14,463		11,180		1.98	%	1.56	%
Total interest-bearing deposits ²⁰	4,781,247		4,612,117		59,083		39,846		1.24	%	0.86	%
Junior subordinated debentures	106,363		106,363		4,189		3,925		3.94	%	3.69	%
FHLB borrowings and other	748,628		795,050		17,099		14,567		2.28	%	1.83	%
Total interest-bearing liabilities ²⁰	5,636,238		5,513,530		80,371		58,338		1.43	%	1.06	%

Non-interest bearing demand deposits ²⁰	1,962,951		1,984,660
Payables and other liabilities	247,163		137,323
Total average liabilities	7,846,352		7,635,513
Redeemable noncontrolling interests	1,593		14,859
Average shareholders’ equity	797,053		759,868
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY	$	8,644,998	$	8,410,240
Net interest income					$	228,076	$	234,566
Interest rate spread									2.36	%	2.59	%
Net interest margin									2.80	%	2.92	%

Average total deposits ²⁰	$	6,744,198	$	6,596,777					0.88	%	0.60	%
Average total deposits and borrowings ²⁰	$	7,599,189	$	7,498,190					1.06	%	0.78	%
¹⁹ Average loans includes Loans held for sale and Nonaccrual loans ²⁰ 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
Unaudited ($ in thousands)
	4Q19		3Q19		2Q19		1Q19		4Q18
New England	$	3,776,747	$	3,868,690	$	3,957,221	$	3,901,644	$	3,890,607
Northern California	1,532,786		1,559,569		1,538,441		1,499,626		1,488,017
Southern California	1,667,171		1,638,892		1,584,598		1,525,698		1,514,534
Total loans	$	6,976,704	$	7,067,151	$	7,080,260	$	6,926,968	$	6,893,158

Loans (charged-off)/recovered, net:
New England	$	414	$	275	$	31	$	222	$	(100)
Northern California	(10)		6		20		18		1,804
Southern California	(113)		(156)		(161)		(312)		15
Total net loans (charged-off)/recovered	$	291	$	125	$	(110)	$	(72)	$	1,719

Special mention loans:
New England	$	21,691	$	19,828	$	35,235	$	34,675	$	31,147
Northern California	5,227		4,821		10,360		23,486		18,585
Southern California	25,108		33,484		25,082		28,626		28,796
Total special mention loans	$	52,026	$	58,133	$	70,677	$	86,787	$	78,528

Accruing classified loans:
New England	$	20,428	$	21,830	$	13,012	$	15,830	$	10,392
Northern California	24,946		23,938		25,957		20,801		24,584
Southern California	12,548		17,510		14,914		5,890		19,119
Total accruing classified loans	$	57,922	$	63,278	$	53,883	$	42,521	$	54,095

Nonaccruing loans:
New England	$	9,764	$	8,999	$	8,837	$	6,161	$	6,728
Northern California	319		2,395		2,644		2,480		2,488
Southern California	6,020		6,171		5,674		3,378		4,841
Total nonaccruing loans	$	16,103	$	17,565	$	17,155	$	12,019	$	14,057

²¹ 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)
	4Q19			3Q19			2Q19			1Q19			4Q18
ROACE AND ROATCE:
Net income attributable to the Company (GAAP) (A)	$	21,244		$	19,962		$	19,380		$	19,442		$	33,302
ADD: Amortization of intangibles, net of tax	534			530			531			531			537
Tangible common net income (non-GAAP) (B)	$	21,778		$	20,492		$	19,911		$	19,973		$	33,839

Total average shareholders’ equity (C)	$	818,816		$	807,890		$	790,844		$	766,283		$	739,313
LESS: Average goodwill and intangibles, net ²²	(68,031)			(68,359)			(68,889)			(69,498)			(83,153)
Average tangible common equity (non-GAAP) (D)	$	750,785		$	739,531		$	721,955		$	696,785		$	656,160

ROACE (annualized) (A/C)	10.29		%	9.80		%	9.83		%	10.29		%	17.87		%
ROATCE (annualized) (B/D)	11.51		%	10.99		%	11.06		%	11.63		%	20.46		%


PRE-TAX, PRE-PROVISION INCOME:
Income before income taxes (GAAP)	$	28,129		$	25,575		$	24,818		$	24,459		$	42,192
ADD BACK: Provision/ (credit) for loan losses	(3,668)			167			1,363			(1,426)			93
Pre-tax, pre-provision income (non-GAAP)	$	24,461		$	25,742		$	26,181		$	23,033		$	42,285


CORE NET INTEREST INCOME AND MARGIN:
Net interest income (GAAP)	$	56,125		$	56,153		$	57,460		$	58,338		$	59,997
LESS: Interest recovered on previous nonaccrual loans	24			180			—			258			986
Net interest income, excluding interest recovered while loans on nonaccrual status ("Core net interest income") (non-GAAP)	$	56,101		$	55,973		$	57,460		$	58,080		$	59,011
Net interest margin, excluding interest recovered while loans on nonaccrual status ("Core net interest margin") (non-GAAP)	2.70		%	2.71		%	2.78		%	2.89		%	2.90		%


TANGIBLE COMMON EQUITY:
Total Shareholders’ Equity (GAAP)	$	819,018		$	808,688		$	798,211		$	778,819		$	753,954
LESS: Goodwill and intangibles, net	(67,959)			(68,229)			(68,491)			(69,162)			(69,834)
Tangible common equity (non-GAAP) (A)	$	751,059		$	740,459		$	729,720		$	709,657		$	684,120

Total Assets (GAAP)	$	8,830,501		$	8,690,944		$	8,712,873		$	8,572,143		$	8,494,625
LESS: Goodwill and intangibles, net	(67,959)			(68,229)			(68,491)			(69,162)			(69,834)
Tangible assets (non-GAAP) (B)	$	8,762,542		$	8,622,715		$	8,644,382		$	8,502,981		$	8,424,791

End of Period Shares Outstanding (C)	83,265,674			83,241,952			83,774,335			83,773,650			83,655,651

Tangible common equity/ Tangible assets (non-GAAP) (A/B)	8.57		%	8.59		%	8.44		%	8.35		%	8.12		%
Tangible Book Value Per Share (non-GAAP) (A/C)	$9.02			$8.90			$8.71			$8.47			$8.18

²² Average goodwill and intangibles, net includes the balances of BOS through the closing date in 2018.

BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP Financial Measures
Unaudited ($ in thousands)
	4Q19			3Q19			2Q19			1Q19			4Q18
RETURN ON AVERAGE ASSETS:
Net income (GAAP) (A)	$	21,244		$	19,962		$	19,380		$	19,442		$	33,302
Average Assets (non-GAAP) (B)	8,738,750			8,665,352			8,679,506			8,493,725			8,445,298
Return on average assets (annualized) (non-GAAP) (A/B)	0.96		%	0.91		%	0.90		%	0.93		%	1.56		%


EFFICIENCY RATIO:
Total noninterest expense (GAAP) (A)	$	58,457		$	55,537		$	55,659		$	60,553		$	63,557
Less: Amortization of intangibles	676			671			672			672			680
Less: Restructuring	—			—			—			1,646			2,065
Total noninterest expense (non-GAAP) (B)	$	57,781		$	54,866		$	54,987		$	58,235		$	60,812

Net interest income (GAAP)	$	56,125		$	56,153		$	57,460		$	58,338		$	59,997
Total core fees and income (GAAP)	24,755			25,155			24,292			24,280			28,691
Gain on sale of affiliate (GAAP)	—			—			—			—			18,142
Total other income (GAAP)	2,038			(29)			88			968			(988)
Total revenue (GAAP) (C)	$	82,918		$	81,279		$	81,840		$	83,586		$	105,842

Efficiency ratio (GAAP) (A/C)	70.5		%	68.3		%	68.0		%	72.4		%	60.0		%
Efficiency ratio, excluding amortization of intangibles and restructuring, if any (non-GAAP) (B/C)	69.7		%	67.5		%	67.2		%	69.7		%	57.1		%


OTHER INCOME: (GAAP)
Gain/ (loss) on sale of investments, net	$	—		$	—		$	—		$	—		$	(596)
Gain/ (loss) on OREO, net	—			—			—			91			—
Gain on sale of affiliate	—			—			—			—			18,142
Other	2,038			(29)			88			877			(392)
Total other income (GAAP)	$	2,038		$	(29)		$	88		$	968		$	17,154

BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP measures: Operating Adjustments
Unaudited ($ in thousands, except share and per share data)
	4Q19			3Q19			2Q19			1Q19			4Q18
NET INCOME ATTRIBUTABLE TO THE COMPANY:
Net Income Attributable to the Company (GAAP)	$	21,244		$	19,962		$	19,380		$	19,442		$	33,302
LESS: Gain on fair value of contingent considerations receivable ²³	1,109			—			—			—			—
LESS: Gain on sale of affiliate	—			—			—			—			18,142
ADD: Information services ²⁴	—			—			—			—			(441)
ADD: Restructuring	—			—			—			1,646			2,065
ADD: Tax adjustments ²⁵	—			—			—			—			3,502
Tax effect at statutory rate	322			—			—			(346)			(341)
Net Income Attributable to the Company (non-GAAP)	$	20,457		$	19,962		$	19,380		$	20,742		$	19,945

NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Net Income Attributable to Common Shareholders (GAAP)	$	21,342		$	20,266		$	18,564		$	20,999		$	35,996
LESS: Gain on fair value of contingent considerations receivable ²³	1,109			—			—			—			—
LESS: Gain on sale of affiliate	—			—			—			—			18,142
ADD: Information services ²⁴	—			—			—			—			(441)
ADD: Restructuring	—			—			—			1,646			2,065
ADD: Tax adjustments ²⁵	—			—			—			—			3,502
Tax effect at statutory rate	322			—			—			(346)			(341)
Net income attributable to the common shareholders, treasury stock method, excluding notable items (non-GAAP)	$	20,555		$	20,266		$	18,564		$	22,299		$	22,639

Weighted average diluted shares outstanding	83,637,786			83,956,708			84,048,972			84,010,450			84,863,779
Diluted total earnings per share (GAAP)	$	0.26		$	0.24		$	0.22		$	0.25		$	0.42
Diluted total earnings per share, excluding notable items (non-GAAP)	$	0.25		$	0.24		$	0.22		$	0.27		$	0.27

Average common equity (non-GAAP)	$	818,816		$	807,890		$	790,844		$	766,283		$	739,313
Average tangible common equity (non-GAAP)	$	750,785		$	739,531		$	721,955		$	696,785		$	656,160
Return on average common equity, excluding notable items (non-GAAP)	9.91		%	9.80		%	9.83		%	10.98		%	10.70		%
Return on average tangible common equity, excluding notable items (non-GAAP)	11.09		%	10.99		%	11.06		%	12.38		%	12.38		%

Pre-tax, pre-provision income (non-GAAP)	$	24,461		$	25,742		$	26,181		$	23,033		$	42,285
LESS: Gain on fair value of contingent considerations receivable ²³	1,109			—			—			—			—
LESS: Gain on sale of affiliate	—			—			—			—			18,142
ADD: Information services ²⁴	—			—			—			—			(441)
ADD: Restructuring	—			—			—			1,646			2,065
Pre-tax, pre-provision income, excluding notable items (non-GAAP)	$	23,352		$	25,742		$	26,181		$	24,679		$	25,767

²³ In the fourth quarter of 2019, there was a $1.1 million gain related to the revaluation of the fair value of the estimated future cash flows related to the BOS contingent consideration receivable. ²⁴ In the fourth quarter of 2018, $0.4 million of Information services expense was reclassified to Restructuring expense in conjunction with the announcement of the Company's formal restructuring plan. ²⁵ Additional tax expense in the fourth quarter of 2018 relates to the completion of the sale of 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, 2019									December 31, 2019
	GAAP or Reported Value			Notable Items			Operating Basis (Non-GAAP)			GAAP or Reported Value			Notable Items			Operating Basis (Non-GAAP)
Total revenue	$	82,918		$	(1,109	)	$	81,809		$	329,623		$	(1,109	)	$	328,514
Total operating expense		58,457		—				58,457			230,206			(1,646	)		228,560
Pre-tax, pre-provision income		24,461			(1,109	)		23,352			99,417			537			99,954
Income before income taxes		28,129			(1,109	)		27,020			102,981			537			103,518
Income tax (expense)/benefit		6,788			(322	)		6,466			22,591			24			22,615
Net income attributable to the Company	$	21,244		$	(787	)	$	20,457		$	80,028		$	513		$	80,541
Net income attributable to the Common Shareholders	$	21,342		$	(787	)	$	20,555		$	81,171		$	513		$	81,684

Weighted average diluted shares outstanding		83,637,786			83,637,786			83,637,786			83,920,792			83,920,792			83,920,792
Diluted total earnings per share	$	0.26		$	(0.01	)	$	0.25		$	0.97		$	—		$	0.97

Average common equity		818,816						818,816			797,053						797,053
Return on average common equity		10.29	%					9.91	%		10.04	%					10.10	%

Average tangible common equity		750,785						750,785			728,370						728,370
Return on average tangible common equity		11.51	%					11.09	%		11.28	%					11.35	%

Effective tax rate on continuing operations		24.1	%					23.9	%		21.9	%					21.8	%