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EXCEL - IDEA: XBRL DOCUMENT - BOSTON PRIVATE FINANCIAL HOLDINGS INCFinancial_Report.xls
EX-32.2 - EXHIBIT 32.2 - BOSTON PRIVATE FINANCIAL HOLDINGS INCbpfhex322q12015.htm
EX-32.1 - EXHIBIT 32.1 - BOSTON PRIVATE FINANCIAL HOLDINGS INCbpfhex321q12015.htm
EX-31.1 - EXHIBIT 31.1 - BOSTON PRIVATE FINANCIAL HOLDINGS INCbpfhex311q12015.htm
EX-31.2 - EXHIBIT 31.2 - BOSTON PRIVATE FINANCIAL HOLDINGS INCbpfhex312q12015.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
 
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2015
Or
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             .
Commission File Number: 0-17089
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)  
 
 
Commonwealth of Massachusetts
04-2976299
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
 
 
Ten Post Office Square
Boston, Massachusetts
02109
(Address of principal executive offices)
(Zip Code)
 
 
Registrant’s telephone number, including area code: (617) 912-1900
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes x     No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes x     No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One)
Large accelerated filer x
 
 
 
Accelerated filer o    
Non-accelerated filer o   
 
(Do not check if a smaller reporting company)
 
Smaller reporting company o    
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes o No x
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of May 1, 2015:
Common Stock, Par Value $1.00 Per Share
83,050,966
(class)
(outstanding)
 



BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
FORM 10-Q
TABLE OF CONTENTS

PART I—FINANCIAL INFORMATION
Item 1
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 3
 
Item 4
 
PART II—OTHER INFORMATION
Item 1
 
Item 1A
 
Item 2
 
Item 3
 
Item 4
 
Item 5
 
Item 6
 
 
 
 
 
Certifications
 



i



PART I. FINANCIAL INFORMATION, ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
 
March 31, 2015
 
December 31, 2014
 
(In thousands, except share and per share data)
Assets:
 
 
 
Cash and cash equivalents
$
88,118

 
$
172,609

Investment securities available for sale (amortized cost of $964,802 and $826,858 at March 31, 2015 and December 31, 2014, respectively)
971,842

 
829,993

Investment securities held to maturity (fair value of $137,227 and $142,339 at March 31, 2015 and December 31, 2014, respectively)
134,978

 
140,727

Stock in Federal Home Loan Banks
32,761

 
32,281

Loans held for sale
10,570

 
7,099

Total loans
5,295,013

 
5,269,936

Less: Allowance for loan losses
77,263

 
75,838

Net loans
5,217,750

 
5,194,098

Other real estate owned (“OREO”)
929

 
929

Premises and equipment, net
30,999

 
32,199

Goodwill
152,082

 
152,082

Intangible assets, net
38,116

 
39,718

Fees receivable
12,519

 
12,517

Accrued interest receivable
15,990

 
16,071

Deferred income taxes, net
45,614

 
47,576

Other assets
117,504

 
119,975

Total assets
$
6,869,772

 
$
6,797,874

Liabilities:
 
 
 
Deposits
$
5,373,407

 
$
5,453,879

Securities sold under agreements to repurchase
52,237

 
30,496

Federal funds purchased
50,000

 

Federal Home Loan Bank borrowings
450,022

 
370,150

Junior subordinated debentures
106,363

 
106,363

Other liabilities
97,773

 
112,170

Total liabilities
6,129,802

 
6,073,058

Redeemable Noncontrolling Interests
19,911

 
20,905

Shareholders’ Equity:
 
 
 
Preferred stock, $1.00 par value; authorized: 2,000,000 shares;
 Series D, 6.95% Non-Cumulative Perpetual, issued and outstanding: 50,000 shares at March 31, 2015 and December 31, 2014; liquidation preference: $1,000 per share
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 and 82,961,855 shares at December 31, 2014
83,052

 
82,962

Additional paid-in capital
604,146

 
610,903

Accumulated deficit
(18,613
)
 
(37,396
)
Accumulated other comprehensive income/ (loss)
1,120

 
(697
)
Total Company’s shareholders’ equity
717,458

 
703,525

Noncontrolling interests
2,601

 
386

Total shareholders’ equity
720,059

 
703,911

Total liabilities, redeemable noncontrolling interests and shareholders’ equity
$
6,869,772

 
$
6,797,874

See accompanying notes to consolidated financial statements.

1


BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
 
Three months ended March 31,
 
2015
 
2014
 
(In thousands, except share and per share data)
Interest and dividend income:
 
 
 
Loans
$
48,000

 
$
47,214

Taxable investment securities
995

 
636

Non-taxable investment securities
1,021

 
904

Mortgage-backed securities
2,614

 
1,936

Federal funds sold and other
234

 
346

Total interest and dividend income
52,864

 
51,036

Interest expense:
 
 
 
Deposits
3,892

 
3,216

Federal Home Loan Bank borrowings
1,931

 
2,326

Junior subordinated debentures
956

 
955

Repurchase agreements and other short-term borrowings
13

 
17

Total interest expense
6,792

 
6,514

Net interest income
46,072

 
44,522

Provision/ (credit) for loan losses
(2,500
)
 
(1,200
)
Net interest income after provision/ (credit) for loan losses
48,572

 
45,722

Fees and other income:
 
 
 
Investment management fees
11,714

 
11,461

Wealth advisory fees
12,675

 
11,473

Wealth management and trust fees
13,558

 
6,961

Other banking fee income
1,910

 
1,680

Gain on sale of loans, net
303

 
89

Gain on sale of investments, net
8

 
1

Gain/ (loss) on OREO, net
89

 
819

Other
1,088

 
249

Total fees and other income
41,345

 
32,733

Operating expense:
 
 
 
Salaries and employee benefits
42,127

 
36,574

Occupancy and equipment
9,035

 
7,797

Professional services
3,021

 
2,843

Marketing and business development
1,348

 
1,426

Contract services and data processing
1,437

 
1,438

Amortization of intangibles
1,602

 
1,053

FDIC insurance
1,011

 
896

Other
3,846

 
2,941

Total operating expense
63,427

 
54,968

Income before income taxes
26,490

 
23,487

Income tax expense
8,572

 
7,138

Net income from continuing operations
17,918

 
16,349

Net income from discontinued operations
2,094

 
1,928

Net income before attribution to noncontrolling interests
20,012

 
18,277

(Continued)
 
 
 

2


 
Three months ended March 31,
 
2015
 
2014
 
(In thousands, except share and per share data)
Less: Net income attributable to noncontrolling interests
1,229

 
1,236

Net income attributable to the Company
$
18,783

 
$
17,041

Adjustments to net income attributable to the Company to arrive at net income attributable to common shareholders
$
(1,065
)
 
$
(1,178
)
Net income attributable to common shareholders for earnings per share calculation
$
17,718

 
$
15,863

Basic earnings per share attributable to common shareholders:
 
 
 
From continuing operations:
$
0.19

 
$
0.18

From discontinued operations:
$
0.03

 
$
0.02

Total attributable to common shareholders:
$
0.22

 
$
0.20

Weighted average basic common shares outstanding
80,514,359

 
78,145,185

Diluted earnings per share attributable to common shareholders:
 
 
 
From continuing operations:
$
0.19

 
$
0.18

From discontinued operations:
$
0.02

 
$
0.02

Total attributable to common shareholders:
$
0.21

 
$
0.20

Weighted average diluted common shares outstanding
82,594,325

 
80,010,890


 See accompanying notes to consolidated financial statements.

3


BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

 
Three months ended March 31,
 
2015
 
2014
 
(In thousands)
Net income attributable to the Company
$
18,783

 
$
17,041

Other comprehensive income/ (loss), net of tax:
 
 
 
Unrealized gain/ (loss) on securities available for sale
2,331

 
1,125

Reclassification adjustment for net realized gain/ (loss) included in net income
5

 
1

Net unrealized gain/ (loss) on securities available for sale
2,326

 
1,124

Unrealized gain/ (loss) on cash flow hedges
(1,100
)
 
(587
)
Reclassification adjustment for net realized gain/ (loss) included in net income
(591
)
 
(355
)
Net unrealized gain/ (loss) on cash flow hedges
(509
)
 
(232
)
Net unrealized gain/ (loss) on other

 

Other comprehensive income/ (loss), net of tax
1,817

 
892

Total comprehensive income attributable to the Company, net
$
20,600

 
$
17,933

 See accompanying notes to consolidated financial statements.


4


BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
 
Preferred
Stock
 
Common
Stock
 
Additional
Paid-in
Capital
 
Retained
Earnings/
(Accumulated
Deficit)
 
Accumulated
Other
Comprehensive
Income/
(Loss)
 
Non-
controlling
Interests
 
Total
 
(In thousands, except share data)
Balance, December 31, 2013
$
47,753

 
$
79,838

 
$
616,334

 
$
(106,211
)
 
$
(4,197
)
 
$
171

 
$
633,688

Net income attributable to the Company

 

 

 
17,041

 

 

 
17,041

Other comprehensive income/ (loss), net

 

 

 

 
892

 

 
892

Dividends paid to common shareholders: $0.08 per share

 

 
(6,386
)
 

 

 

 
(6,386
)
Dividends paid to preferred shareholders

 

 
(869
)
 

 

 

 
(869
)
Net change in noncontrolling interests

 

 

 

 

 
(61
)
 
(61
)
Net proceeds from issuance of:
 
 
 
 
 
 
 
 
 
 
 
 
 
61,440 shares of common stock

 
61

 
514

 

 

 

 
575

7,855 shares of incentive stock grants, net of 50,022 shares canceled or forfeited and 23,505 shares withheld for employee taxes

 
(66
)
 
(247
)
 

 

 

 
(313
)
Amortization of stock compensation and employee stock purchase plan

 

 
1,197

 

 

 

 
1,197

Stock options exercised

 
168

 
1,143

 

 

 

 
1,311

Tax benefit/ (deficiency) from certain stock compensation awards

 

 
(26
)
 

 

 

 
(26
)
Other equity adjustments

 

 
(1,070
)
 

 

 

 
(1,070
)
Balance, March 31, 2014
$
47,753

 
$
80,001

 
$
610,590

 
$
(89,170
)
 
$
(3,305
)
 
$
110

 
$
645,979

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2014
$
47,753

 
$
82,962

 
$
610,903

 
$
(37,396
)
 
$
(697
)
 
$
386

 
$
703,911

Net income attributable to the Company

 

 

 
18,783

 

 

 
18,783

Other comprehensive income/ (loss), net

 

 

 

 
1,817

 

 
1,817

Dividends paid to common shareholders: $0.09 per share

 

 
(7,424
)
 

 

 

 
(7,424
)
Dividends paid to preferred shareholders

 

 
(869
)
 

 

 

 
(869
)
Net change in noncontrolling interests

 

 

 

 

 
2,215

 
2,215

Net proceeds from issuance of:
 
 
 
 
 
 
 
 
 
 
 
 
 
59,315 shares of common stock

 
59

 
620

 

 

 

 
679

87,960 shares of incentive stock grants, net of 78,643 shares canceled or forfeited and 18,194 shares withheld for employee taxes

 
(9
)
 
(220
)
 

 

 

 
(229
)
Amortization of stock compensation and employee stock purchase plan

 

 
1,779

 

 

 

 
1,779

Stock options exercised

 
40

 
250

 

 

 

 
290

Tax benefit/ (deficiency) from certain stock compensation awards

 

 
(415
)
 

 

 

 
(415
)
Other equity adjustments

 

 
(478
)
 

 

 

 
(478
)
Balance, March 31, 2015
$
47,753

 
$
83,052

 
$
604,146

 
$
(18,613
)
 
$
1,120

 
$
2,601

 
$
720,059


See accompanying notes to consolidated financial statements.

5


BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
 
Three months ended March 31,
 
2015
 
2014
 
(In thousands)
Cash flows from operating activities:
 
 
 
Net income attributable to the Company
$
18,783

 
$
17,041

Adjustments to arrive at net income from continuing operations
 
 
 
Net income attributable to noncontrolling interests
1,229

 
1,236

Less: Net income from discontinued operations
(2,094
)
 
(1,928
)
Net income from continuing operations
17,918

 
16,349

Adjustments to reconcile net income from continuing operations to net cash provided by/ (used in) operating activities:
 
 
 
Depreciation and amortization
5,587

 
4,593

Net income attributable to noncontrolling interests
(1,229
)
 
(1,236
)
Equity issued as compensation
1,779

 
1,197

Provision/ (credit) for loan losses
(2,500
)
 
(1,200
)
Loans originated for sale
(38,131
)
 
(9,262
)
Proceeds from sale of loans held for sale
34,963

 
13,177

Deferred income tax expense/ (benefit)
314

 
1,088

Net decrease/ (increase) in other operating activities
(11,047
)
 
(4,437
)
Net cash provided by/ (used in) operating activities of continuing operations
7,654

 
20,269

Net cash provided by/ (used in) operating activities of discontinued operations
2,094

 
1,928

Net cash provided by/ (used in) operating activities
9,748

 
22,197

Cash flows from investing activities:
 
 
 
Investment securities available for sale:
 
 
 
Purchases
(180,244
)
 
(76,236
)
Sales
5,015

 
5,328

Maturities, redemptions, and principal payments
35,572

 
62,447

Investment securities held to maturity:
 
 
 
Purchases

 
(19,307
)
Principal payments
5,543

 
3,180

(Investments)/ distributions in trusts, net
(322
)
 
(137
)
(Purchase)/ redemption of Federal Home Loan Banks stock
(480
)
 
1,162

Net (increase)/ decrease in portfolio loans
(25,485
)
 
(50,496
)
Proceeds from recoveries of loans previously charged-off
3,979

 
1,579

Proceeds from sale of OREO

 
819

Capital expenditures, net of sale proceeds
(504
)
 
(1,636
)
Net cash provided by/ (used in) investing activities of continuing operations
(156,926
)
 
(73,297
)
Net cash provided by/ (used in) investing activities
(156,926
)
 
(73,297
)
(Continued)
 
 
 

6


 
Three months ended March 31,
 
2015
 
2014
 
(In thousands)
Cash flows from financing activities:
 
 
 
Net increase/ (decrease) in deposits
(80,472
)
 
231,274

Net increase/ (decrease) in securities sold under agreements to repurchase
21,741

 
(8,803
)
Net increase/ (decrease) in federal funds purchased
50,000

 
15,000

Net increase/ (decrease) in short-term Federal Home Loan Bank borrowings
70,000

 
30,000

Advances of long-term Federal Home Loan Bank borrowings
10,000

 
5,000

Repayments of long-term Federal Home Loan Bank borrowings
(128
)
 
(7,796
)
Dividends paid to common shareholders
(7,424
)
 
(6,386
)
Dividends paid to preferred shareholders
(869
)
 
(869
)
Tax benefit/ (deficiency) from certain stock compensation awards
(415
)
 
(26
)
Proceeds from stock option exercises
290

 
1,311

Proceeds from issuance of common stock, net
450

 
262

Distributions paid to noncontrolling interests
(1,060
)
 
(1,215
)
Other equity adjustments
574

 
154

Net cash provided by/ (used in) financing activities of continuing operations
62,687

 
257,906

Net cash provided by/ (used in) financing activities
62,687

 
257,906

Net increase/ (decrease) in cash and cash equivalents
(84,491
)
 
206,806

Cash and cash equivalents at beginning of year
172,609

 
191,881

Cash and cash equivalents at end of period
$
88,118

 
$
398,687

Supplementary schedule of non-cash investing and financing activities:
 
 
 
Cash paid for interest
$
6,574

 
$
6,324

Cash paid for income taxes, net of (refunds received)
1,890

 
2,666

Change in unrealized gain/ (loss) on securities available for sale, net of tax
2,326

 
1,124

Change in unrealized gain/ (loss) on cash flow hedges, net of tax
(509
)
 
(232
)
Change in unrealized gain/ (loss) on other, net of tax

 

Non-cash transactions:
 
 
 
Loans transferred into/ (out of) other real estate owned from/ (to) held for sale or portfolio

 
145

Loans charged-off
(54
)
 
(145
)

See accompanying notes to consolidated financial statements.


7

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements



1.     Basis of Presentation and Summary of Significant Accounting Policies
Boston Private Financial Holdings, Inc. (the “Company” or “BPFH”), is a bank holding company (the “Holding Company”) with four reportable segments: Private Banking, Wealth Management and Trust, Investment Management, and Wealth Advisory.
The Private Banking segment is comprised of the banking operations of Boston Private Bank & Trust Company (the “Bank” or “Boston Private Bank”), a trust company chartered by The Commonwealth of Massachusetts, insured by the Federal Deposit Insurance Corporation (the “FDIC”), and a wholly-owned subsidiary of the Company. Boston Private Bank currently operates in three geographic markets: New England, San Francisco Bay, and Southern California.
The Wealth Management and Trust segment is comprised for purposes of this segment of Boston Private Bank's existing trust business and Boston Private Wealth, LLC (“BP Wealth”). BP Wealth was formed in the first quarter of 2015 and combines Boston Private Bank's existing wealth management business and the business of Banyan Partners, LLC (“Banyan”), which Boston Private Bank purchased in the fourth quarter of 2014. The segment offers investment management, wealth management, family office, and trust services to individuals, families, and institutions. The Wealth Management and Trust segment operates in New England; South Florida; Texas; California; Atlanta, Georgia; and Madison, Wisconsin. For comparative purposes, the Wealth Management and Trust data that was previously included within the Private Banking segment has been reclassified into the Wealth Management and Trust segment.
The Investment Management segment has two consolidated affiliates, consisting of Dalton, Greiner, Hartman, Maher & Co., LLC (“DGHM”) and Anchor Capital Advisors, LLC (“Anchor”) (together, the “Investment Managers”).
The Wealth Advisory segment has two consolidated affiliates, consisting of KLS Professional Advisors Group, LLC (“KLS”) and Bingham, Osborn & Scarborough, LLC (“BOS”) (together, the “Wealth Advisors” and, together with the Wealth Management and Trust and Investment Management segments, the “Wealth and Investment businesses”).
The Company conducts substantially all of its business through its four reportable segments. All significant intercompany accounts and transactions have been eliminated in consolidation.
The unaudited interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), and include all necessary adjustments of a normal recurring nature which, in the opinion of management, are required for a fair presentation of the results of operations and financial condition of the Company. The interim results of consolidated operations are not necessarily indicative of the results for the entire year.
The information in this report should be read in conjunction with the consolidated financial statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the Securities and Exchange Commission (“SEC”). Prior period amounts are reclassified whenever necessary to conform to the current period presentation.
The Company’s significant accounting policies are described in Part II. Item 8. “Financial Statements and Supplementary Data - Note 1: Basis of Presentation and Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the SEC. For interim reporting purposes, the Company follows the same significant accounting policies.

2.    Earnings Per Share
The two class method of calculating earnings per share (“EPS”) is presented below for the three months ended March 31, 2015 and 2014. The following tables present the computations of basic and diluted EPS:

8

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)

 
Three months ended March 31,
 
2015
 
2014
(In thousands, except share and per share data)
 
Basic earnings per share - Numerator:
 
 
 
Net income from continuing operations
$
17,918

 
$
16,349

Less: Net income attributable to noncontrolling interests
1,229

 
1,236

Net income from continuing operations attributable to the Company
16,689

 
15,113

Decrease/ (increase) in noncontrolling interests’ redemption values (1)
(94
)
 
(116
)
Dividends on participating securities
(911
)
 
(945
)
Total adjustments to income attributable to common shareholders
(1,005
)
 
(1,061
)
Net income from continuing operations attributable to common shareholders, before allocation to participating securities
15,684

 
14,052

Less: Amount allocated to participating securities
(48
)
 
(94
)
Net income from continuing operations attributable to common shareholders, after allocation to participating securities
$
15,636

 
$
13,958

Net income from discontinued operations, before allocation to participating securities
$
2,094

 
$
1,928

Less: Amount allocated to participating securities
(12
)
 
(23
)
Net income from discontinued operations, after allocation to participating securities
$
2,082

 
$
1,905

Net income attributable to common shareholders, before allocation to participating securities
$
17,778

 
$
15,980

Less: Amount allocated to participating securities
(60
)
 
(117
)
Net income attributable to common shareholders, after allocation to participating securities
$
17,718

 
$
15,863

 
 
 
 
Basic earnings per share - Denominator:
 
 
 
Weighted average basic common shares outstanding
80,514,359

 
78,145,185

Per share data - Basic earnings per share from:
 
 
 
Continuing operations
$
0.19

 
$
0.18

Discontinued operations
$
0.03

 
$
0.02

Total attributable to common shareholders
$
0.22

 
$
0.20




9

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)

 
Three months ended March 31,
 
2015
 
2014
(In thousands, except share and per share data)
 
 
 
Diluted earnings per share - Numerator:
 
 
 
Net income from continuing operations attributable to common shareholders, after allocation to participating securities
$
15,636

 
$
13,958

Add back: income allocated to dilutive securities

 

Net income from continuing operations attributable to common shareholders, after allocation to participating securities, after assumed dilution
15,636

 
13,958

Net income from discontinued operations, after allocation to participating securities
2,082

 
1,905

Net income attributable to common shareholders, after allocation to participating securities, after assumed dilution
$
17,718

 
$
15,863

Diluted earnings per share - Denominator:
 
 
 
Weighted average basic common shares outstanding
80,514,359

 
78,145,185

Dilutive effect of:
 
 
 
 Stock options and non-participating performance-based and certain time-based restricted stock (2)
927,608

 
703,452

 Warrants to purchase common stock (2)
1,152,358

 
1,162,253

Dilutive common shares
2,079,966

 
1,865,705

Weighted average diluted common shares outstanding (2)
82,594,325

 
80,010,890

Per share data - Diluted earnings per share from:
 
 
 
Continuing operations
$
0.19

 
$
0.18

Discontinued operations
$
0.02

 
$
0.02

Total attributable to common shareholders
$
0.21

 
$
0.20

Dividends per share declared and paid on common stock
$
0.09

 
$
0.08

_____________________
(1)
See Part II. Item 8. “Financial Statements and Supplementary Data—Note 14: Noncontrolling Interests” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 for a description of the redemption values related to the redeemable noncontrolling interests. In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”), an increase in redemption value from period to period reduces income attributable to common shareholders. Decreases in redemption value from period to period increase income attributable to common shareholders, but only to the extent that the cumulative change in redemption value remains a cumulative increase since adoption of this standard in the first quarter of 2009.
(2)
The diluted EPS computations for the three months ended March 31, 2015 and 2014 do not assume the conversion, exercise, or contingent issuance of the following shares for the following periods because the result would have been anti-dilutive for the periods indicated. As a result of the anti-dilution, the potential common shares excluded from the diluted EPS computation are as follows:
 
Three months ended March 31,
(In thousands)
2015
 
2014
Shares excluded due to exercise price exceeding the average market price of common shares during the period (total outstanding):
 
Potential common shares from:
 
 
 
Stock options, restricted stock, or other dilutive securities
660

 
951

Total shares excluded due to exercise price exceeding the average market price of common shares during the period
660

 
951



10

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)

3.    Reportable segments
Management Reporting
The Company has four reportable segments (Private Banking, Wealth Management and Trust, Investment Management, and Wealth Advisory) and the Holding Company (Boston Private Financial Holdings, Inc.). The financial performance of the Company is managed and evaluated by these four areas. The segments are managed separately as a result of the concentrations in each function.
Measurement of Segment Profit and Assets
The accounting policies of the segments are the same as those described in Part II. Item 8. “Financial Statements and Supplementary Data - Note 1: Basis of Presentation and Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.
Revenues, expenses, and assets are recorded by each segment, and separate financial statements are reviewed by their management and the Company’s segment chief executive officers.
Reconciliation of Reportable Segment Items
The following tables present a reconciliation of the revenues, profits, assets, and other significant items of reportable segments as of and for the three months ended March 31, 2015 and 2014. Interest expense on junior subordinated debentures is reported at the Holding Company.

 
As of and for the three months ended March 31,
 
2015
 
2014
Private Banking
(In thousands)
Net interest income
$
46,990

 
$
45,405

Fees and other income
2,784

 
2,710

Total revenues
49,774

 
48,115

Provision/ (credit) for loan losses
(2,500
)
 
(1,200
)
Operating expense
28,805

 
28,034

Income before income taxes
23,469

 
21,281

Income tax expense
7,768

 
7,112

Net income from continuing operations
15,701

 
14,169

Net income attributable to the Company
$
15,701

 
$
14,169

 
 
 
 
Assets
$
6,688,472

 
$
6,521,284

Amortization of intangibles
$
46

 
$
67

Depreciation
$
1,205

 
$
1,408


11

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)

 
As of and for the three months ended March 31,
 
2015
 
2014
Wealth Management and Trust
(In thousands)
Fees and other income
$
13,957

 
$
6,961

Operating expense
12,331

 
5,610

Income before income taxes
1,626

 
1,351

Income tax expense
694

 
567

Net income from continuing operations
932

 
784

Net income attributable to the Company
$
932

 
$
784

 
 
 
 
Assets
$
79,139

 
$
4,821

AUM
$
9,306,000

 
$
4,612,000

Amortization of intangibles
$
571

 
$

Depreciation
$
187

 
$
22

 
As of and for the three months ended March 31,
 
2015
 
2014
Investment Management
(In thousands)
Net interest income
$
6

 
$
6

Fees and other income
11,722

 
11,462

Total revenues
11,728

 
11,468

Operating expense
8,686

 
8,334

Income before income taxes
3,042

 
3,134

Income tax expense
1,002

 
1,047

Net income from continuing operations
2,040

 
2,087

Noncontrolling interests
637

 
635

Net income attributable to the Company
$
1,403

 
$
1,452

 
 
 
 
Assets
$
101,036

 
$
100,788

AUM
$
10,730,000

 
$
10,505,000

Amortization of intangibles
$
739

 
$
739

Depreciation
$
70

 
$
59


12

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)

 
As of and for the three months ended March 31,
 
2015
 
2014
Wealth Advisory
(In thousands)
Net interest income
$
2

 
$
36

Fees and other income
12,707

 
11,464

Total revenues
12,709

 
11,500

Operating expense
9,132

 
7,783

Income before income taxes
3,577

 
3,717

Income tax expense
1,321

 
1,392

Net income from continuing operations
2,256

 
2,325

Noncontrolling interests
588

 
559

Net income attributable to the Company
$
1,668

 
$
1,766

 
 
 
 
Assets
$
76,042

 
$
71,057

AUM
$
10,012,000

 
$
9,641,000

Amortization of intangibles
$
246

 
$
247

Depreciation
$
211

 
$
72

 
As of and for the three months ended March 31,
 
2015
 
2014
Holding Company and Eliminations
(In thousands)
Net interest income
$
(926
)
 
$
(925
)
Fees and other income
175

 
136

Total revenues
(751
)
 
(789
)
Operating expense
4,473

 
5,207

Income/ (loss) before income taxes
(5,224
)
 
(5,996
)
Income tax expense/(benefit)
(2,213
)
 
(2,980
)
Net income/(loss) from continuing operations
(3,011
)
 
(3,016
)
Noncontrolling interests
4

 
42

Discontinued operations
2,094

 
1,928

Net income/(loss) attributable to the Company
$
(921
)
 
$
(1,130
)
 
 
 
 
Assets
$
(74,917
)
 
$
7,470

AUM
$
(22,000
)
 
$
(22,000
)
Depreciation
$
31

 
$
110


13

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)

 
As of and for the three months ended March 31,
 
2015
 
2014
Total Company
(In thousands)
Net interest income
$
46,072

 
$
44,522

Fees and other income
41,345

 
32,733

Total revenues
87,417

 
77,255

Provision/ (credit) for loan losses
(2,500
)
 
(1,200
)
Operating expense
63,427

 
54,968

Income before income taxes
26,490

 
23,487

Income tax expense
8,572

 
7,138

Net income from continuing operations
17,918

 
16,349

Noncontrolling interests
1,229

 
1,236

Discontinued operations
2,094

 
1,928

Net income attributable to the Company
$
18,783

 
$
17,041

 
 
 
 
Assets
$
6,869,772

 
$
6,705,420

AUM
$
30,026,000

 
$
24,736,000

Amortization of intangibles
$
1,602

 
$
1,053

Depreciation
$
1,704

 
$
1,671



14

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)

4.    Investments
The following table presents a summary of investment securities:
 
Amortized
Cost
 
Unrealized
 
Fair
Value
Gains
 
Losses
 
(In thousands)
As of March 31, 2015
 
 
 
 
 
 
 
Available for sale securities at fair value:
 
 
 
 
 
 
 
U.S. government and agencies
$
16,685

 
$
191

 
$
(45
)
 
$
16,831

Government-sponsored entities
293,321

 
2,796

 
(82
)
 
296,035

Municipal bonds
234,230

 
3,601

 
(189
)
 
237,642

Mortgage-backed securities (1)
405,338

 
2,977

 
(2,517
)
 
405,798

Other
15,228

 
332

 
(24
)
 
15,536

Total
$
964,802

 
$
9,897

 
$
(2,857
)
 
$
971,842

 
 
 
 
 
 
 
 
Held to maturity securities at amortized cost:
 
 
 
 
 
 
 
Mortgage-backed securities (1)
$
134,978

 
$
2,249

 
$

 
$
137,227

Total
$
134,978

 
$
2,249

 
$

 
$
137,227

 
 
 
 
 
 
 
 
As of December 31, 2014
 
 
 
 
 
 
 
Available for sale securities at fair value:
 
 
 
 
 
 
 
U.S. government and agencies
$
16,894

 
$
32

 
$
(44
)
 
$
16,882

Government-sponsored entities
273,538

 
983

 
(268
)
 
274,253

Municipal bonds
232,415

 
3,268

 
(435
)
 
235,248

Mortgage-backed securities (1)
284,403

 
2,191

 
(2,890
)
 
283,704

Other
19,608

 
309

 
(11
)
 
19,906

Total
$
826,858

 
$
6,783

 
$
(3,648
)
 
$
829,993

 
 
 
 
 
 
 
 
Held to maturity securities at amortized cost:
 
 
 
 
 
 
 
Mortgage-backed securities (1)
$
140,727

 
$
1,638

 
$
(26
)
 
$
142,339

Total
$
140,727

 
$
1,638

 
$
(26
)
 
$
142,339

___________________
(1)
 All mortgage-backed securities are guaranteed by U.S. government agencies or Government-sponsored entities.
The following table presents the maturities of investment securities available for sale, based on contractual maturity, as of March 31, 2015. Certain securities are callable before their final maturity. Additionally, certain securities (such as mortgage-backed securities) are shown within the table below based on their final (contractual) maturity, but due to prepayments and amortization are expected to have shorter lives.
 
Available for Sale Securities
Amortized
cost
 
Fair
value
(In thousands)
Within one year
$
43,864

 
$
44,378

After one, but within five years
404,426

 
407,753

After five, but within ten years
87,761

 
89,482

Greater than ten years
428,751

 
430,229

Total
$
964,802

 
$
971,842



15

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)

The following table presents the maturities of investment securities held to maturity, based on contractual maturity, as of March 31, 2015.
 
Held to Maturity Securities
Amortized
cost
 
Fair
value
(In thousands)
Within one year
$

 
$

After one, but within five years

 

After five, but within ten years

 

Greater than ten years
134,978

 
137,227

Total
$
134,978

 
$
137,227

The following table presents the proceeds from sales, gross realized gains and gross realized losses for securities available for sale that were sold during the following periods:
 
Three months ended March 31,
2015
 
2014
(In thousands)
Proceeds from sales
$
5,015

 
$
5,328

Realized gains
8

 
1

Realized losses

 

The following table presents information regarding securities as of March 31, 2015 having temporary impairment, due to the fair values having declined below the amortized cost of the individual securities, and the time period that the investments have been temporarily impaired.
 
Less than 12 months
 
12 months or longer
 
Total
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
 
# of
securities
Available for sale securities
(In thousands)
U.S. government and agencies
$
721

 
$
(14
)
 
$
591

 
$
(31
)
 
$
1,312

 
$
(45
)
 
2

Government-sponsored entities
9,982

 
(13
)
 
29,055

 
(69
)
 
39,037

 
(82
)
 
4

Municipal bonds
33,103

 
(144
)
 
4,399

 
(45
)
 
37,502

 
(189
)
 
22

Mortgage-backed securities
154,473

 
(626
)
 
81,724

 
(1,891
)
 
236,197

 
(2,517
)
 
47

Other
82

 
(21
)
 
9

 
(3
)
 
91

 
(24
)
 
11

Total
$
198,361

 
$
(818
)
 
$
115,778

 
$
(2,039
)
 
$
314,139

 
$
(2,857
)
 
86

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Held to maturity securities
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
$

 
$

 
$

 
$

 
$

 
$

 

Total
$

 
$

 
$

 
$

 
$

 
$

 

The U.S. government and agencies securities, government-sponsored entities securities and mortgage-backed securities in the table above as of March 31, 2015 had Standard and Poor’s credit ratings of AA+. The municipal bonds in the table above had Moody’s credit ratings of at least Aa2. The other securities consisted of equity securities.
As of March 31, 2015, the amount of investment securities in an unrealized loss position greater than 12 months, as well as in total, was primarily due to movements in interest rates. The Company has no intent to sell any securities in an unrealized loss position as of March 31, 2015 and it is not more likely than not that the Company would be forced to sell any of these securities prior to the full recovery of all unrealized loss amounts.
Cost method investments, which are included in other assets, can be temporarily impaired when the fair values decline below the amortized costs of the individual investments. There were no cost method investments with unrealized losses

16

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)

as of March 31, 2015 or December 31, 2014. The Company’s cost method investments primarily include low income housing partnerships which generate tax credits. The Company also holds partnership interests in venture capital funds formed to provide financing to small businesses and to promote community development. The Company had $25.6 million and $27.0 million in cost method investments included in other assets as of March 31, 2015 and December 31, 2014, respectively.

5.    Fair Value Measurements
Fair value is defined under GAAP as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The Company determines the fair values of its financial instruments based on the fair value hierarchy established in ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value. Financial instruments are considered Level 1 when valuation can be based on quoted prices in active markets for identical assets or liabilities. Level 2 financial instruments are valued using quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or models using inputs that are observable or can be corroborated by observable market data of substantially the full term of the assets or liabilities. Financial instruments are considered Level 3 when their values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable and when determination of the fair value requires significant management judgment or estimation.
The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014, aggregated by the level in the fair value hierarchy within which those measurements fall:
 
As of March 31, 2015
 
Fair value measurements at reporting date using:
Quoted prices in
active markets
for identical
assets (Level 1)
 
Significant 
other
observable
inputs (Level 2)
 
Significant
unobservable
inputs (Level 3)
(In thousands)
Assets:
 
 
 
 
 
 
 
Available for sale securities:
 
 
 
 
 
 
 
U.S. government and agencies
$
16,831

 
$
15,518

 
$
1,313

 
$

Government-sponsored entities
296,035

 

 
296,035

 

Municipal bonds
237,642

 

 
237,642

 

Mortgage-backed securities
405,798

 

 
405,798

 

Other
15,536

 
15,536

 

 

Total available for sale securities
971,842

 
31,054

 
940,788

 

Derivatives - interest rate customer swaps
6,577

 

 
6,577

 

Other investments
5,759

 
5,759

 

 

Liabilities:
 
 
 
 
 
 
 
Derivatives - interest rate customer swaps
$
6,694

 
$

 
$
6,694

 
$

Derivatives - interest rate swaps
2,811

 

 
2,811

 

Derivatives - junior subordinated debenture interest rate swap
1,362

 

 
1,362

 

Derivatives - risk participation agreement
15

 

 
15

 




17

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)

 
 
 
Fair value measurements at reporting date using:
As of December 31, 2014
 
Quoted prices in
active markets
for identical
assets (Level 1)
 
Significant 
other
observable
inputs (Level 2)
 
Significant
unobservable
inputs (Level 3)
(In thousands)
Assets:
 
 
 
 
 
 
 
Available for sale securities:
 
 
 
 
 
 
 
U.S. government and agencies
$
16,882

 
$
15,377

 
$
1,505

 
$

Government-sponsored entities
274,253

 

 
274,253

 

Municipal bonds
235,248

 

 
235,248

 

Mortgage-backed securities
283,704

 

 
283,704

 

Other
19,906

 
19,906

 

 

Total available for sale securities
829,993

 
35,283

 
794,710

 

Derivatives - interest rate customer swaps
5,323

 

 
5,323

 

Derivatives - interest rate swaps
34

 

 
34

 

Other investments
5,437

 
5,437

 

 

Liabilities:
 
 
 
 
 
 
 
Derivatives - interest rate customer swaps
$
5,434

 
$

 
$
5,434

 
$

Derivatives - interest rate swaps
1,584

 

 
1,584

 

Derivatives - junior subordinated debenture interest rate swap
1,768

 

 
1,768

 

As of March 31, 2015 and December 31, 2014, available for sale securities consisted primarily of U.S. government and agencies securities, government-sponsored entities securities, municipal bonds, mortgage-backed securities, and other available for sale securities. The equities (which are categorized as other available for sale securities) and two U.S. Treasury securities, are valued with prices quoted in active markets. Therefore, they have been categorized as a Level 1 measurement. The government-sponsored entities securities, municipal bonds, mortgage-backed securities, and certain investments in Small Business Administration (“SBA”) loans (which are categorized as U.S. government and agencies securities) generally have quoted prices but are traded less frequently than exchange-traded securities and can be priced using market data from similar assets. Therefore, they have been categorized as a Level 2 measurement. No investments held at March 31, 2015 or December 31, 2014 were categorized as Level 3.
The Company uses interest rate customer swaps, interest rate swaps, risk participation agreements, and a junior subordinated debenture interest rate swap to manage its interest rate risk, and customer foreign exchange forward contracts to manage its foreign exchange risk, if any. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. Therefore, they have been categorized as a Level 2 measurement as of March 31, 2015 and December 31, 2014. See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements-Note 8: Derivatives and Hedging Activities” for further details.
To comply with the provisions of ASC 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees. Counterparty exposure is evaluated by netting positions that are subject to master netting agreements, as well as considering the amount of collateral securing the position.
The Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, although the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy as of March 31, 2015 and December 31, 2014.

18

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)

Other investments, which are not considered available for sale investments, consist of deferred compensation trusts, which consist of publicly traded mutual fund investments that are valued at prices quoted in active markets. Therefore, they have been categorized as a Level 1 measurement as of March 31, 2015 and December 31, 2014. The remaining other investments categorized as Level 2 consist of the Company’s cost-method investments as of March 31, 2015 and December 31, 2014.
There were no Level 3 assets at March 31, 2015 or December 31, 2014.
The following tables present the Company’s assets and liabilities measured at fair value on a non-recurring basis during the periods ended March 31, 2015 and 2014, respectively, aggregated by the level in the fair value hierarchy within which those measurements fall:
 
As of March 31, 2015
 
Fair value measurements at reporting date using:
 
Gain (losses) from fair value changes
Quoted prices in
active markets
for identical
assets (Level 1)
 
Significant 
other
observable
inputs (Level 2)
 
Significant
unobservable
inputs (Level 3)
 
 
Three months ended March 31, 2015
(In thousands)
Assets:
 
 
 
 
 
 
 
 
 
 
Impaired loans (1)
$
757

 
$

 
$

 
$
757

 
 
$

___________________
(1)
Collateral-dependent impaired loans held at March 31, 2015 that had write-downs in fair value or whose specific reserve changed during the first three months of 2015.
 
As of March 31, 2014
 
Fair value measurements at reporting date using:
 
Gain (losses) from fair value changes
Quoted prices in
active markets
for identical
assets (Level 1)
 
Significant 
other
observable
inputs (Level 2)
 
Significant
unobservable
inputs (Level 3)
 
 
Three months ended March 31, 2014
(In thousands)
Assets:
 
 
 
 
 
 
 
 
 
 
Impaired loans (1)
$
803

 
$

 
$

 
$
803

 
 
$

________________
(1)
Collateral-dependent impaired loans held at March 31, 2014 that had write-downs in fair value or whose specific reserve changed during the first three months of 2014.
The following table presents additional quantitative information about assets measured at fair value on a non-recurring basis for which the Company has utilized Level 3 inputs to determine fair value:
 
As of March 31, 2015
 
Fair Value
 
Valuation
technique
 
Unobservable
Input
 
Range of
Inputs
Utilized
 
Weighted
Average of
Inputs
Utilized
 
(In thousands)
 
 
Impaired Loans
$
757

 
Appraisals of Collateral
 
Discount for costs to sell
 
11%
 
11%
Appraisal adjustments
 
0%
 
—%

19

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)

 
As of March 31, 2014
 
Fair Value
 
Valuation
technique
 
Unobservable
Input
 
Range of
Inputs
Utilized
 
Weighted
Average of
Inputs
Utilized
 
(In thousands)
 
 
Impaired Loans
$
803

 
Appraisals of Collateral
 
Discount for costs to sell
 
12%
 
12%
Appraisal adjustments
 
25%
 
25%
Impaired loans include those loans that were adjusted to the fair value of underlying collateral as required under ASC 310, Receivables. The amount does not include impaired loans that are measured based on expected future cash flows discounted at the respective loan’s original effective interest rate, as that amount is not considered a fair value measurement. The Company uses appraisals, which management may adjust to reflect estimated fair value declines, or apply other discounts to appraised values for unobservable factors resulting from its knowledge of the property or consideration of broker quotes. The appraisers use a market, income, and/or a cost approach in determining the value of the collateral. Therefore they have been categorized as a Level 3 measurement.
The following tables present the carrying values and fair values of the Company’s financial instruments that are not measured at fair value on a recurring basis (other than certain loans, as noted below):
 
As of March 31, 2015
Book Value
 
Fair Value
 
Quoted prices 
in active
markets for
identical assets 
(Level 1)
 
Significant 
other
observable
inputs (Level 2)
 
Significant
unobservable
inputs (Level 3)
(In thousands)
FINANCIAL ASSETS:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
88,118

 
$
88,118

 
$
88,118

 
$

 
$

Investment securities held to maturity
134,978

 
137,227

 

 
137,227

 

Loans, net
5,217,750

 
5,187,319