BOSTON PRIVATE FINANCIAL HOLDINGS INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - 8-K - BOSTON PRIVATE FINANCIAL HOLDINGS INC	bpfh-20201021.htm

Boston Private Reports Third Quarter 2020 Results

Third Quarter 2020 Highlights include:

•GAAP Net income of $22.7 million, or $0.28 per diluted share, and operating net income of $22.0 million, or $0.27 per diluted share

•Return on average common equity (non-GAAP) of 10.7%; operating return on average common equity of 10.4%

•Return on average tangible common equity (non-GAAP) of 11.9%; operating return on average tangible common equity of 11.6%

•Average total deposits of $7.7 billion, a 16% increase year-over-year

•Average total loans of $7.3 billion, a 3% increase year-over-year

•Total assets under management/advisory (“AUM”) of $16.3 billion, flat year-over-year

•Total net flows of negative $407 million driven by net flows of negative $395 million at Dalton, Greiner, Hartman, Maher & Co, LLC ("DGHM")

•Total net provision credit of $2.8 million

•Notable Item: $0.9 million gain related to the revaluation of a receivable from the divestiture of Bingham, Osborn & Scarborough, LLC ("BOS")

Boston, MA - October 21, 2020 - Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported third quarter 2020 Net income attributable to the Company of $22.7 million, compared to Net loss attributable to the Company of $(3.3) million for the second quarter of 2020 and Net income attributable to the Company of $20.0 million for the third quarter of 2019. Third quarter 2020 Diluted earnings per share were $0.28, compared to Diluted loss per share of $(0.04) in the second quarter of 2020 and Diluted earnings per share of $0.24 in the third quarter of 2019.

"We are proud of the dedication and commitment shown by the Boston Private employees guiding our clients through this challenging environment," said Anthony DeChellis, CEO of Boston Private. "This quarter's financial results include a provision credit and continued strong new business in our Wealth Management & Trust business. We strengthened our capital and liquidity position to provide flexibility as we navigate the uncertain environment. We remain committed to our strategic objectives and believe that we are well positioned for long-term success."


Summary Financial Results
							% Change
($ in millions, except for per share data)	3Q20		2Q20		3Q19		LQ		Y/Y
Net income/(loss) - GAAP	$22.7		$(3.3)		$20.0		nm		14	%
Net income/(loss) - Operating	22.0		(3.3)		20.0		nm		10	%
Diluted earnings/(loss) per share - GAAP	$0.28		$(0.04)		$0.24		nm		17	%
Diluted earnings/(loss) per share - Operating	$0.27		$(0.04)		$0.24		nm		13	%

Non-GAAP Financial Measures:
Pre-tax, pre-provision income	$19.9		$20.1		$25.7		(1)	%	(23)	%
Return on average common equity ("ROACE")	10.7	%	(1.6)	%	9.8	%
Return on average tangible common equity ("ROATCE")	11.9	%	(1.4)	%	11.0	%
nm = not meaningful

The Company's financial results improved linked quarter primarily driven by a lower loan loss provision, which changed from a $25.4 million provision expense during the second quarter of 2020 to a $2.8 million provision credit during the third quarter of 2020. The company’s operating results exclude the after-tax effect of a $0.9 million gain related to the revaluation of a receivable from the divestiture of BOS.


Net Interest Income and Margin
							% Change
($ in millions)	3Q20		2Q20		3Q19		LQ		Y/Y
Net interest income	$57.8		$58.9		$56.2		(2)	%	3	%











Net interest margin	2.61	%	2.75	%	2.72	%

Net interest income for the third quarter of 2020 was $57.8 million, a 2% decrease linked quarter and a 3% increase year-over-year. The linked quarter decrease was primarily driven by lower loan volumes, lower interest-earning asset yields, and prepayment penalties in the second quarter of 2020, partially offset by lower funding costs.

Net interest margin decreased 14 basis points on a linked quarter basis to 2.61%. The decline was primarily driven by lower asset yields, prepayment penalties in the second quarter of 2020 and excess cash balances, partially offset by lower funding costs.


Noninterest Income
				% Change
($ in millions)	3Q20	2Q20	3Q19	LQ		Y/Y
Wealth management and trust fees	$18.2	$17.3	$19.1	6	%	(4)	%
Investment management fees	1.4	1.8	2.5	(21)	%	(44)	%




Private banking fees ¹	2.3	2.6	3.6	(11)	%	(35)	%
Total core fees and income	$22.0	$21.6	$25.2	2	%	(13)	%
Total other income	1.1	1.0	—	5	%	nm
Total noninterest income	$23.0	$22.7	$25.1	2	%	(8)	%













nm = not meaningful
¹ Private banking fees includes Other banking fee income and Gain/(loss) on sale of loans, net

Total core fees and income for the third quarter of 2020 was $22.0 million, a 2% increase linked quarter. The linked quarter increase was primarily driven by higher Wealth management and trust fees, partially offset by lower Investment management fees. Total other income for the third quarter of 2020 includes a $0.9 million gain related to the revaluation of a receivable from the divestiture of BOS.


Assets Under Management / Advisory
				% Change
($ in millions)	3Q20	2Q20	3Q19	LQ		Y/Y
Wealth Management and Trust	$15,581	$14,889	$14,695	5	%	6	%


Other ³	672	1,067	1,533	(37)	%	(56)	%


Total assets under management / advisory	$16,253	$15,956	$16,228	2	%	—	%



Net flows
Wealth Management and Trust	$(12)	$60	$(100)
Other³	(395)	(100)	(37)


Total net flows	$(407)	$(40)	$(137)
³ Includes results from DGHM

Total assets under management / advisory were $16.3 billion at the end of the third quarter of 2020, a 2% increase linked quarter. The linked quarter increase was primarily driven by the impact of favorable market action, partially offset by outflows at DGHM.

Total net flows were negative $407 million during the third quarter of 2020, driven by net outflows of $395 million at DGHM. The Wealth Management and Trust segment had net flows of negative $12 million during the third quarter of 2020. Negative flows in the Wealth Management and Trust segment were primarily the result of client assets that transferred from fixed income products into bank deposit products and tax payments made during the quarter. Overall client attrition was low, while new business at Wealth Management & Trust improved linked quarter to $299 million for the third quarter of 2020 compared to $251 million for the second quarter of 2020.


Noninterest Expense
				% Change
($ in millions)	3Q20	2Q20	3Q19	LQ		Y/Y
Salaries and employee benefits	$34.7	$33.9	$31.7	2	%	9	%
Occupancy and equipment	8.2	7.6	8.3	8	%	(1)	%
Information systems	7.1	7.1	5.2	—	%	37	%
Professional services	4.0	3.4	4.4	17	%	(9)	%
Marketing and business development	0.9	2.3	1.4	(60)	%	(33)	%
Amortization of intangibles	0.7	0.7	0.7	2	%	6	%

FDIC insurance	1.0	0.8	0.1	nm		nm

Other	4.4	5.6	3.9	(22)	%	14	%
Total noninterest expense	$60.9	$61.5	$55.5	(1)	%	10	%

Memo: Excluding Off-Balance Sheet Provision
Reserve for unfunded loan commitments	$1.8	$2.8	—	(38)	%	nm
Total noninterest expense (non-GAAP)	$59.2	$58.6	$55.5	1	%	7	%

Total noninterest expense for the third quarter of 2020 was $60.9 million, which includes $1.8 million of reserve for unfunded loan commitments recognized in Other expense.

Excluding the reserve for unfunded loan commitments, total noninterest expense (non-GAAP) for the third quarter of 2020 was $59.2 million, an increase of 1% linked quarter and an increase of 7% year-over-year. The linked quarter increase was driven primarily by higher compensation expense, while the year-over-year increase was driven primarily by higher compensation expense and higher Information systems expense from technology initiatives placed in service.

Income Tax Expense

The Company's effective tax rate for the third quarter of 2020 was 7.4% as a result of lower pre-tax income during 2020.


Loans - QTD Averages & Yields
							% Change
($ in millions)	3Q20		2Q20		3Q19		LQ		Y/Y
Commercial and industrial	$1,033		$1,037		$1,102		—	%	(6)	%
Paycheck Protection Program ("PPP")	373		284		—		32	%	nm
Commercial real estate	2,653		2,659		2,518		—	%	5	%
Construction and land	218		233		196		(6)	%	11	%
Residential	2,810		2,863		3,016		(2)	%	(7)	%
Home equity	84		88		89		(5)	%	(5)	%
Other consumer	112		124		128		(10)	%	(13)	%
Total loans	$7,283		$7,289		$7,049		—	%	3	%

Total loans, excluding PPP (non-GAAP)	$6,910		$7,005		$7,049		(1)	%	(2)	%

Total loan yields	3.23	%	3.42	%	3.98	%

Average total loans, excluding PPP (non-GAAP) in the third quarter of 2020 decreased 1% linked quarter and year-over-year.

•Within Commercial and industrial loans, lower revolving line of credit usage was partially offset by Commercial tax-exempt loan growth of 3%

•Nearly all of the PPP loans remain outstanding

•The linked quarter decline in Residential loans was driven by the sale of $72 million of Residential loans


Deposits - QTD Averages & Costs
							% Change
($ in millions)	3Q20		2Q20		3Q19		LQ		Y/Y











Non-interest bearing deposits	2,321		2,214		1,953		5	%	19	%
Interest bearing deposits	5,378		5,036		4,705		7	%	14	%
Total deposits	$7,700		$7,250		$6,658		6	%	16	%

Cost of total deposits	0.33	%	0.41	%	0.92	%
Cost of total interest-bearing deposits	0.48	%	0.59	%	1.31	%

Average total deposits in the third quarter of 2020 increased 6% linked quarter and 16% year-over-year to $7.7 billion. The linked quarter increase was driven by a combination of existing and new client balances, client asset flows from the Wealth Management & Trust segment into deposit products, and an increase in wealth sweep deposits.


Provision and Asset Quality

($ in millions)	3Q20		2Q20		1Q20		4Q19		3Q19
Provision and Allowance
Provision/(credit) for loan losses	$(4.6)		$22.6		$17.0		$(3.7)		$0.2
Reserve for unfunded loan commitments	1.8		2.8		1.8		—		—
Total Provision for credit losses	$(2.8)		$25.4		$18.8		$(3.7)		$0.2
Allowance for loan losses as a % of Total loans	1.17	%	1.22	%	0.97	%	1.03	%	1.07	%


Asset Quality
Total net loans (charged-off)/ recovered	(0.2)		(1.5)		(0.3)		0.3		0.1
Total nonaccrual loans	41.3		25.6		24.3		16.1		17.6
Nonaccrual loans as a % of Total loans	0.57	%	0.35	%	0.35	%	0.23	%	0.25	%




Special mention loans (criticized loans)	$199.5		$191.9		$92.6		$52.0		$58.1


Classified loans	123.1		114.2		112.3		74.0		80.8
Total criticized and classified loans	$322.6		$306.1		$204.9		$126.1		$139.0

The Company recorded a provision credit of $2.8 million during the third quarter of 2020. The provision release was primarily driven by an improved economic forecast related to the current expected credit losses methodology and resulted in lower reserves on residential mortgages and construction and land loans. The allowance for loan losses as a percentage of total loans, excluding PPP loans (non-GAAP), was 1.23% in the third quarter of 2020, compared to 1.28% in the second quarter of 2020.

Total nonaccrual loans as of September 30, 2020 was $41.3 million, an increase of $15.7 million, or 61%, linked quarter primarily driven by the downgrade of a commercial & industrial relationship in Northern California.

Total criticized and classified loans as of September 30, 2020 was $322.6 million, an increase of $16.5 million, or 5%, linked quarter primarily driven by the downgrade of $71 million of loans, partially offset by $54 million of payoffs, paydowns and upgrades. Of the $71 million in downgrades in the third quarter of 2020, $62 million were Commercial real estate loans across 16 relationships, primarily with hospitality and retail clients.

As of September 30, 2020:

•Residential loans on deferral totaled approximately $100 million, or 3.6% of total residential loans, compared to a peak of approximately $220 million in the second quarter of 2020

•Commercial & industrial loans on deferral totaled approximately $50 million, or 4.7% of total Commercial & industrial loans, compared to a peak of approximately $125 million in the second quarter of 2020

•The majority of Commercial real estate clients that qualified for and accepted the debt service reserve program remain in the program, representing a total loan balance of approximately $78 million


Capital

	3Q20		2Q20		1Q20		4Q19		3Q19
Tangible common equity/ Tangible assets (non-GAAP)	8.3	%	8.3	%	8.8	%	8.6	%	8.6	%
Tangible book value per share (non-GAAP)	$9.48		$9.25		$9.31		$9.02		$8.90

Regulatory Capital Ratios: ³
Tier 1 common equity	11.3	%	11.1	%	11.2	%	11.4	%	11.2	%
Tier 1 risk-based capital	12.8	%	12.6	%	12.7	%	13.0	%	12.8	%
Total risk-based capital	14.1	%	13.9	%	13.8	%	14.1	%	13.9	%
Tier 1 leverage capital	9.2	%	9.2	%	9.7	%	9.8	%	9.7	%





³ Current quarter information is presented based on estimated data.

The Company's tangible book value per share increased to $9.48 in the third quarter of 2020, a 7% increase year-over-year. Risk-weighted regulatory capital ratios increased slightly linked quarter.

Dividend Payments

Concurrent with the release of third quarter 2020 earnings, the Board of Directors of the Company declared a cash dividend payable to common shareholders of $0.06 per share. The record date for this dividend is November 6, 2020, and the payment date is November 20, 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; tangible common equity / tangible assets; the efficiency ratio excluding amortization of intangibles; net income/(loss) attributable to the Company excluding notable items; net income/(loss) attributable to the common shareholders, treasury stock method, excluding notable items; diluted earnings/(loss) per share excluding notable items; and average total loans, excluding PPP.

A detailed reconciliation table of the Company’s GAAP to non-GAAP measures is included in the tables of this release and beginning on page 16 of the attached financial statements.

Conference Call

Management will hold a conference call at 8:00 a.m. Eastern Time on Thursday, October 22, 2020, to discuss the financial results, business highlights and outlook. To access the call:

Dial In #: (888) 317-6003

Elite Entry Number: 0457772

Replay Information:

Available from October 22, 2020 at 12 noon Eastern Time until October 29, 2020

Dial In #: (877) 344-7529

Conference Number: 10149141

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 individuals, families, businesses and nonprofits.

For more than 30 years, Boston Private has delivered comprehensive advice coupled with deep technical expertise to help clients simplify their lives and achieve their goals. The firm offers the capabilities of a large institution with the superior service of a boutique firm to clients across the United States.

Boston Private is the corporate brand of Boston Private Financial Holdings, Inc. (NASDAQ: BPFH).

For more information, visit www.bostonprivate.com.

Forward-Looking Statements

Certain statements in this press release that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. These statements include, among others, statements regarding our strategy; evaluations of interest rate trends and future liquidity; expectations as to changes in assets, deposits and results of operations; the impact of the COVID-19 pandemic; future operations; market position and financial position; and prospects, plans and objectives of management. You should not place undue reliance on our forward-looking statements. You should exercise caution in interpreting and relying on forward-looking statements because they are subject to significant risks, uncertainties and other factors which are, in some cases, beyond the Company’s control. Forward-looking statements are based on the current assumptions and beliefs of management and are only expectations of future results. The Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among other factors, the negative impacts and disruptions of the COVID-19 pandemic and measures taken to contain its spread on our employees, customers, business operations, credit quality, financial position, liquidity and results of operations; the length and extent of the economic contraction as a result of the COVID-19 pandemic; continued deterioration in employment levels, general business and economic conditions on a national basis and in the local markets in which the Company operates; changes in customer behavior; the possibility that future credits losses are higher than currently expected due to changes in economic assumptions, customer behavior or adverse economic developments; turbulence in the capital and debt markets; changes in interest rates; increases in loan defaults and charge-off rates; decreases in the value of securities and other assets; changes in loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and investments; competitive pressures from other financial institutions; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; changes in regulation; reputational risk relating to the Company’s participation in the Paycheck Protection Program and other pandemic-related legislative and regulatory initiatives and programs; risks that goodwill and intangibles recorded in the Company’s financial statements will become impaired; the risk that the Company’s deferred tax asset may not be realized; risks related to the identification and implementation of acquisitions, dispositions and restructurings; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Company’s Annual Report on Form 10-K and updated by the Company’s Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

###

CONTACT:

Adam Bromley

(617) 912-4386

abromley@bostonprivate.com


BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Balance Sheets
Unaudited ($ in thousands, except share and per share data)
	3Q20		2Q20		1Q20		4Q19		3Q19
ASSETS:
Cash and cash equivalents	$	546,263	$	179,027	$	61,714	$	292,479	$	78,010
Investment securities available-for-sale	1,011,327		1,002,970		993,166		978,284		935,538
Investment securities held-to-maturity	38,600		42,495		45,395		48,212		51,379
Equity securities at fair value	32,818		24,492		23,080		18,810		21,780
Stock in Federal Home Loan Bank and Federal Reserve Bank	36,618		42,407		45,273		39,078		47,756
Loans held for sale	15,074		9,786		7,671		7,386		6,658
Loans	7,222,569		7,332,954		7,043,338		6,976,704		7,067,151
Less: Allowance for loan losses	84,551		89,324		68,211		71,982		75,359
Loans, net of allowance for loan losses	7,138,018		7,243,630		6,975,127		6,904,722		6,991,792

Premises and equipment, net	42,907		43,805		43,544		44,527		42,658
Goodwill	57,607		57,607		57,607		57,607		57,607
Intangible assets, net	8,898		8,935		9,637		10,352		10,622

Accrued interest receivable	25,935		24,918		24,054		24,175		24,851
Deferred income taxes, net	8,250		9,116		5,630		11,383		15,704
Right-of-use assets	94,879		94,143		98,896		102,075		107,045
Other assets	374,111		375,575		355,532		291,411		299,544

TOTAL ASSETS	$	9,431,305	$	9,158,906	$	8,746,326	$	8,830,501	$	8,690,944

LIABILITIES:
Deposits	$	7,827,719	$	7,427,397	$	6,835,572	$	7,241,476	$	6,658,242

Securities sold under agreements to repurchase	42,544		46,623		45,319		53,398		48,860
Federal funds purchased	—		—		145,000		—		230,000
Federal Home Loan Bank borrowings	296,236		426,313		491,254		350,829		570,904
Junior subordinated debentures	106,363		106,363		106,363		106,363		106,363
Lease liabilities	108,932		108,234		113,574		117,214		122,799
Other liabilities	203,342		218,771		180,452		140,820		143,607
TOTAL LIABILITIES	8,585,136		8,333,701		7,917,534		8,010,100		7,880,775

REDEEMABLE NONCONTROLLING INTERESTS (“RNCI”)	—		—		—		1,383		1,481
SHAREHOLDERS' EQUITY:

Common stock, $1.00 par value; authorized: 170,000,000 shares	82,255		82,058		81,800		83,266		83,242
Additional paid-in capital	597,113		594,463		593,167		600,708		599,877
Retained earnings	136,394		118,647		131,761		127,469		116,210
Accumulated other comprehensive income	30,407		30,037		22,064		7,575		9,359
TOTAL SHAREHOLDERS' EQUITY	846,169		825,205		828,792		819,018		808,688


TOTAL LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY	$	9,431,305	$	9,158,906	$	8,746,326	$	8,830,501	$	8,690,944


BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Income Statements
Unaudited ($ in thousands, except share and per share data)
	3Q20		2Q20		1Q20		4Q19		3Q19
REVENUE:






Interest income	$	65,453	$	68,819	$	73,082	$	75,291	$	77,604






Interest expense	7,629		9,881		15,825		19,166		21,451
Net interest income	57,824		58,938		57,257		56,125		56,153
Provision/(credit) for loan losses ⁴	(4,569)		22,604		16,962		(3,668)		167
Net interest income after provision/(credit) for loan losses	62,393		36,334		40,295		59,793		55,986

Wealth management and trust fees ⁵	18,240		17,261		18,371		18,720		19,067
Investment management fees	1,393		1,770		1,925		2,554		2,496


Private banking fee income	1,320		2,395		2,490		2,924		2,658
Gain on sale of loans, net	1,006		204		100		557		934
Total core fees and income	21,959		21,630		22,886		24,755		25,155





Total other income	1,086		1,032		(1,365)		2,038		(29)
TOTAL REVENUE ⁶	80,869		81,600		78,778		82,918		81,279

NONINTEREST EXPENSE:
Salaries and employee benefits	34,671		33,937		35,096		34,186		31,684
Occupancy and equipment	8,150		7,560		7,646		7,578		8,260
Information systems	7,096		7,113		6,725		6,476		5,169
Professional services	4,025		3,446		3,601		3,920		4,435
Marketing and business development	935		2,313		1,890		2,017		1,403
Amortization of intangibles	714		702		715		676		671

FDIC insurance	960		767		—		(19)		59

Other ⁴	4,386		5,615		5,235		3,623		3,856
TOTAL NONINTEREST EXPENSE	60,937		61,453		60,908		58,457		55,537

INCOME/(LOSS) BEFORE INCOME TAXES	24,501		(2,457)		908		28,129		25,575
Income tax expense	1,821		841		102		6,788		5,517
Net income/(loss) before attribution to noncontrolling interests	22,680		(3,298)		806		21,341		20,058


Less: Net income attributable to noncontrolling interests	—		—		6		97		96
NET INCOME/(LOSS) ATTRIBUTABLE TO THE COMPANY	$	22,680	$	(3,298)	$	800	$	21,244	$	19,962

Adjustments, treasury stock method ⁷	—		—		414		98		304
NET INCOME/(LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	22,680	$	(3,298)	$	1,214	$	21,342	$	20,266

COMMON SHARE DATA:
Weighted average basic shares outstanding	82,221,705		81,929,752		83,005,064		83,238,982		83,631,403
Weighted average diluted shares outstanding ⁸	82,362,338		81,929,752		83,318,041		83,637,786		83,956,708

Diluted earnings/(loss) per share	$	0.28	$	(0.04)	$	0.01	$	0.26	$	0.24

⁴ Total Provision for credit losses includes the Provision/(credit) for loan losses and the Reserve for unfunded loan commitments within Other expense. ⁵ Wealth management and trust fees consists of revenue from Boston Private Wealth LLC ("BPW"), KLS Professional Advisors Group, LLC ("KLS") through the effective date of its merger with BPW, and the trust operations of Boston Private Bank & Trust Company. ⁶ Total revenue is the sum of Net interest income, Total core fees and income, and Total other income. ⁷ Adjustments to Net income/(loss) attributable to the Company to arrive at Net income/(loss) attributable to common shareholders, treasury stock method, as presented in these tables, include decrease/(increase) in Noncontrolling interests redemption value. ⁸ For a description of the Company's policies regarding Diluted earnings per share, please refer to Part II. Item 8. “Financial Statements and Supplementary Data - Note 16: Earnings Per Share” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.


BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Income Statements
Unaudited ($ in thousands, except share and per share data)
	Nine months ended September 30,
	2020		2019
REVENUE:






Interest income	$	207,354	$	233,156






Interest expense	33,335		61,205
Net interest income	174,019		171,951
Provision/(credit) for loan losses ⁴	34,997		104
Net interest income after provision/(credit) for loan losses	139,022		171,847

Wealth management and trust fees ⁵	53,872		57,037
Investment management fees	5,088		7,601


Private banking fee income	6,205		8,024
Gain on sale of loans, net	1,310		1,065
Total core fees and income	66,475		73,727





Total other income	753		1,027
TOTAL REVENUE ⁶	241,247		246,705

NONINTEREST EXPENSE:
Salaries and employee benefits	103,704		100,116
Occupancy and equipment	23,356		24,460
Information systems	20,934		16,166
Professional services	11,072		11,308
Marketing and business development	5,138		4,422
Amortization of intangibles	2,131		2,015

FDIC insurance	1,727		1,304
Restructuring	—		1,646
Other ⁴	15,236		10,312
TOTAL NONINTEREST EXPENSE	183,298		171,749

INCOME BEFORE INCOME TAXES	22,952		74,852
Income tax expense	2,764		15,803


Net income before attribution to noncontrolling interests	20,188		59,049
Less: Net income attributable to noncontrolling interests	6		265
NET INCOME ATTRIBUTABLE TO THE COMPANY	$	20,182	$	58,784

Adjustments, treasury stock method ⁷	414		1,045
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	20,596	$	59,829

COMMON SHARE DATA
Weighted average basic shares outstanding	82,382,050		83,495,361
Weighted average diluted shares outstanding ⁸	82,746,866		84,003,281
Diluted earnings per share	$	0.25	$	0.71

⁴ Total Provision for credit losses includes the Provision/(credit) for loan losses and the Reserve for unfunded loan commitments within Other expense. ⁵ Wealth management and trust fees consists of revenue from Boston Private Wealth LLC ("BPW"), KLS Professional Advisors Group, LLC ("KLS") through the effective date of its merger with BPW, and the trust operations of Boston Private Bank & Trust Company. ⁶ Total revenue is the sum of Net interest income, Total core fees and income, and Total other income. ⁷ Adjustments to Net income attributable to the Company to arrive at Net income attributable to common shareholders, treasury stock method, as presented in these tables, include decrease/(increase) in Noncontrolling interests redemption value. ⁸ For a description of the Company's policies regarding Diluted earnings per share, please refer to Part II. Item 8. “Financial Statements and Supplementary Data - Note 16: Earnings Per Share” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.


BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Financial Highlights
Unaudited ($ in thousands, except share and per share data)
	3Q20			2Q20			1Q20			4Q19			3Q19
KEY STATISTICS:
Return on average assets (non-GAAP) ⁹	0.96		%	(0.15)		%	0.04		%	0.96		%	0.91		%
ROACE (non-GAAP)⁹	10.68		%	(1.58)		%	0.39		%	10.29		%	9.80		%
ROATCE (non-GAAP) ⁹	11.88		%	(1.43)		%	0.72		%	11.51		%	10.99		%
Efficiency ratio (non-GAAP)⁹	74.5		%	74.4		%	76.4		%	69.7		%	67.5		%
Noninterest income to total revenue	28.5		%	27.8		%	27.3		%	32.3		%	30.9		%

Net interest margin	2.61		%	2.75		%	2.76		%	2.70		%	2.72		%
Average loan to average deposit ratio	94.6		%	100.5		%	99.0		%	101.6		%	105.9		%
Cost of total deposits	0.33		%	0.41		%	0.72		%	0.86		%	0.92		%
Cost of interest-bearing deposits	0.48		%	0.59		%	1.02		%	1.20		%	1.31		%
Cost of total funding	0.37		%	0.50		%	0.83		%	0.99		%	1.12		%

Allowance for loan losses / Total loans	1.17		%	1.22		%	0.97		%	1.03		%	1.07		%
Nonperforming loans / Total loans	0.57		%	0.35		%	0.35		%	0.23		%	0.25		%
Net (charge-offs)/recoveries / Total loans ⁹	(0.01)		%	(0.08)		%	(0.02)		%	0.02		%	0.01		%



CAPITAL HIGHLIGHTS:
Tier 1 common equity ³	$	752,492		$	731,316		$	742,044		$	745,926		$	732,980
Tier 1 capital ³	$	852,514		$	831,338		$	842,066		$	846,337		$	833,431
Total capital ³	$	935,824		$	913,936		$	914,572		$	919,573		$	910,076

Risk-weighted assets ("RWA") ³	$	6,654,690		$	6,593,957		$	6,627,339		$	6,530,804		$	6,533,884
Average assets for leverage ³	$	9,237,940		$	9,009,565		$	8,691,254		$	8,659,944		$	8,588,358

Tier 1 common equity ratio ³	11.31		%	11.09		%	11.20		%	11.42		%	11.22		%
Tier 1 risk-based capital ratio ³	12.81		%	12.61		%	12.71		%	12.96		%	12.76		%
Total risk-based capital ratio ³	14.06		%	13.86		%	13.80		%	14.08		%	13.93		%
Tier 1 leverage capital ratio ³	9.23		%	9.23		%	9.69		%	9.77		%	9.70		%

Total equity / Total assets	8.97		%	9.01		%	9.48		%	9.27		%	9.30		%
Tangible common equity / Tangible assets (non-GAAP)	8.33		%	8.34		%	8.77		%	8.57		%	8.59		%

End of period market price per share	$	5.52		$	6.88		$	7.15		$	12.03		$	11.66
End of period shares outstanding	82,254,594			82,058,483			81,800,486			83,265,674			83,241,952
Book value per common share	$	10.29		$	10.06		$	10.13		$	9.84		$	9.71
Tangible book value per share (non-GAAP)	$	9.48		$	9.25		$	9.31		$	9.02		$	8.90

Common Equity Repurchase Program:
Total shares of common stock repurchased	—			—			1,565,060			—			678,165
Average price paid per share of common stock	$	—		$	—		$	8.18		$	—		$	10.61
Aggregate repurchases of common stock ($ in millions)	$	—		$	—		$	12.8		$	—		$	7.2

³ Current quarter information is presented based on estimated data. ⁹ Annualized.


BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated AUM and Balance Sheet - End of Period Balances
Unaudited ($ in thousands)
	3Q20		2Q20		1Q20		4Q19		3Q19
ASSETS UNDER MANAGEMENT AND ADVISORY ("AUM"):

Wealth Management and Trust	$	15,581,000	$	14,889,000	$	13,497,000	$	15,224,000	$	14,695,000
Other ²	672,000		1,067,000		1,016,000		1,544,000		1,533,000



TOTAL AUM	$	16,253,000	$	15,956,000	$	14,513,000	$	16,768,000	$	16,228,000






AUM Rollforward:
Beginning balance	$	15,956,000	$	14,513,000	$	16,768,000	$	16,228,000	$	16,199,000
Net flows	(407,000)		(40,000)		150,000		(209,000)		(137,000)
Market returns	704,000		1,483,000		(2,405,000)		749,000		166,000
Ending balance	$	16,253,000	$	15,956,000	$	14,513,000	$	16,768,000	$	16,228,000

AUM Net Flows:
Wealth Management and Trust	$	(12,000)	$	60,000	$	176,000	$	(114,000)	$	(100,000)


Other ²	(395,000)		(100,000)		(26,000)		(95,000)		(37,000)
TOTAL NET FLOWS	$	(407,000)	$	(40,000)	$	150,000	$	(209,000)	$	(137,000)

DEPOSITS:

Demand deposits (non-interest bearing)	$	2,346,126	$	2,293,864	$	2,020,440	$	1,971,013	$	1,947,363
Savings and NOW	756,797		758,656		653,006		646,199		666,107



Money market	4,187,657		3,753,228		3,468,701		3,969,330		3,366,623
Certificates of deposit	537,139		621,649		693,425		654,934		678,149
TOTAL DEPOSITS	$	7,827,719	$	7,427,397	$	6,835,572	$	7,241,476	$	6,658,242

LOANS:
Commercial and industrial	$	583,145	$	565,748	$	670,744	$	694,034	$	695,029
Paycheck Protection Program	371,496		370,034		—		—		—
Commercial tax-exempt	472,342		419,264		445,319		447,927		448,488
Commercial real estate	2,659,890		2,676,708		2,626,299		2,551,274		2,533,346
Construction and land	211,697		240,211		238,293		225,983		209,741
Residential	2,729,164		2,859,627		2,841,926		2,839,155		2,964,042
Home equity	81,797		84,588		89,350		83,657		84,432
Consumer	113,038		116,774		131,407		134,674		132,073
TOTAL LOANS	$	7,222,569	$	7,332,954	$	7,043,338	$	6,976,704	$	7,067,151

² Includes results from Dalton, Greiner, Hartman, Maher & Co, LLC ("DGHM")


BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Provision and Asset Quality
Unaudited ($ in thousands)
	3Q20			2Q20			1Q20			4Q19			3Q19
PROVISION:
Provision/(credit) for loan losses	$	(4,569)		$	22,604		$	16,962		$	(3,668)		$	167
Reserve for unfunded loan commitments ⁴	1,750			2,829			1,827			(23)			(23)
Total Provision/(credit) for credit losses	$	(2,819)		$	25,433		$	18,789		$	(3,691)		$	144

CHARGE-OFFS:
Loan charge-offs	$	(245)		$	(1,546)		$	(528)		$	(285)		$	(185)
Loan recoveries	41			55			180			576			310
NET (CHARGE-OFFS)/RECOVERIES	$	(204)		$	(1,491)		$	(348)		$	291		$	125
Net charge-offs to average loans (annualized)	(0.01)		%	(0.08)		%	(0.02)		%	0.02		%	0.01		%

Net (Charge-offs)/Recoveries by Loan Type:

Commercial and industrial	$	(136)		$	(337)		$	(473)		$	118		$	95

Commercial real estate	—			—			—			183			27


Home equity	—			(1,157)			132			4			6
Consumer	(68)			3			(7)			(14)			(3)
NET (CHARGE-OFFS)/RECOVERIES	$	(204)		$	(1,491)		$	(348)		$	291		$	125

LOAN QUALITY DATA:




Special mention loans	$	199,509		$	191,882		$	92,623		$	52,026		$	58,133





Accruing classified loans ¹⁰	81,827			88,586			87,948			57,922			63,278




Nonaccrual loans	41,263			25,604			24,314			16,103			17,565









Total classified	123,090			114,190			112,262			74,025			80,843
Criticized and classified loans	$	322,599		$	306,072		$	204,885		$	126,051		$	138,976

Loans 30-89 days past due and accruing ¹¹	$	5,635		$	5,535		$	14,852		$	25,945		$	4,179

⁴ Total Provision for credit losses includes the Provision/(credit) for loan losses and the Reserve for unfunded loan commitments within Other expense. ¹⁰Accruing 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. ¹¹At June 30, 2020, the Company had one loan totaling less than $0.1 million that was more than 90 days past due but still on accrual status. This loan originated in the New England region. The Company had no other loans outstanding more than 90 days past due but still on accrual status in comparative periods.


BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Average Balances, Yields, and Rates
Unaudited ($ in thousands)
	Average Balance										Interest Income/Expense								Average Yield/Rate
	3Q20		2Q20		3Q19		3Q20		2Q20		3Q19		3Q20		2Q20		3Q19
INTEREST-EARNING ASSETS
Cash and investments:
Taxable investment securities	$	201,515	$	198,337	$	198,655	$	853	$	859	$	938	1.69	%	1.73	%	1.95	%
Non-taxable investment securities	313,130		316,513		305,108		1,974		2,005		1,924		2.52	%	2.53	%	2.52	%
Mortgage-backed securities	515,813		505,669		492,514		2,354		2,566		2,622		1.83	%	2.03	%	2.13	%
Short-term investments and other	432,117		186,895		101,958		654		582		1,084		0.59	%	1.23	%	4.06	%
Total cash and investments	1,462,575		1,207,414		1,098,235		5,835		6,012		6,568		1.59	%	1.99	%	2.39	%
Loans: ¹²
Commercial and industrial	1,032,816		1,037,285		1,101,672		8,314		9,708		11,523		3.15	%	3.70	%	4.09	%
Paycheck Protection Program	373,047		283,619		—		2,390		1,573		—		2.51	%	2.19	%	—	%
Commercial real estate	2,652,770		2,659,074		2,518,048		23,546		24,602		29,118		3.47	%	3.66	%	4.52	%
Construction and land	218,211		233,305		195,843		2,109		2,251		2,410		3.78	%	3.82	%	4.82	%
Residential	2,809,871		2,862,708		3,016,265		22,089		23,079		25,567		3.14	%	3.22	%	3.39	%
Home equity	84,226		88,307		89,068		623		650		1,121		2.94	%	2.96	%	4.99	%
Other consumer	111,657		124,346		127,987		547		944		1,297		1.95	%	3.05	%	4.02	%
Total loans	7,282,598		7,288,644		7,048,883		59,618		62,807		71,036		3.23	%	3.42	%	3.98	%
Total earning assets	8,745,173		8,496,058		8,147,118		65,453		68,819		77,604		2.96	%	3.22	%	3.76	%

LESS: Allowance for loan losses	89,370		68,473		75,199
Cash and due from banks	34,761		39,959		49,065
Other assets	655,999		641,657		544,368
TOTAL AVERAGE ASSETS	$	9,346,563	$	9,109,201	$	8,665,352

INTEREST-BEARING LIABILITIES
Interest-bearing deposits: ¹³


Savings and NOW	$	722,742	$	680,758	$	615,730	$	197	$	187	$	275	0.11	%	0.11	%	0.18	%
Money market	4,070,026		3,684,147		3,378,006		4,790		4,848		11,523		0.47	%	0.53	%	1.35	%
Certificates of deposit	585,729		671,470		711,299		1,447		2,300		3,689		0.98	%	1.38	%	2.06	%
Total interest-bearing deposits ¹³	5,378,497		5,036,375		4,705,035		6,434		7,335		15,487		0.48	%	0.59	%	1.31	%
Junior subordinated debentures	106,363		106,363		106,363		508		764		1,022		1.87	%	2.84	%	3.76	%
FHLB borrowings and other	388,412		610,856		833,535		687		1,782		4,942		0.69	%	1.15	%	2.32	%
Total interest-bearing liabilities ¹³	5,873,272		5,753,594		5,644,933		7,629		9,881		21,451		0.52	%	0.69	%	1.50	%

Non-interest bearing demand deposits ¹³	2,321,223		2,213,829		1,953,214
Payables and other liabilities	309,462		306,896		258,371
Total average liabilities	8,503,957		8,274,319		7,856,518
Redeemable noncontrolling interests	—		—		944
Average shareholders’ equity	842,606		834,882		807,890
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY	$	9,346,563	$	9,109,201	$	8,665,352


Net interest income							$	57,824	$	58,938	$	56,153

Interest rate spread													2.44	%	2.53	%	2.26	%


Net interest margin													2.61	%	2.75	%	2.72	%

Average total deposits ¹³	$	7,699,720	$	7,250,204	$	6,658,249							0.33	%	0.41	%	0.92	%
Average total deposits and borrowings ¹³	$	8,194,495	$	7,967,423	$	7,598,147							0.37	%	0.50	%	1.12	%

¹²Average loans includes Loans held for sale and Nonaccrual loans ¹³Average 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
	Nine Months Ended						Nine Months Ended						Nine Months Ended
INTEREST-EARNING ASSETS	9/30/20		9/30/19		9/30/20		9/30/19		9/30/20		9/30/19
Cash and investments:
Taxable investment securities	$	200,346	$	223,072	$	2,580	$	3,244	1.72	%	1.94	%
Non-taxable investment securities	315,101		305,422		5,977		5,726		2.53	%	2.50	%
Mortgage-backed securities	514,043		507,338		7,707		8,225		2.00	%	2.16	%
Short-term investments and other	256,143		104,225		2,307		3,049		1.19	%	3.78	%
Total cash and investments	1,285,633		1,140,057		18,571		20,244		1.92	%	2.36	%
Loans: ¹²
Commercial and industrial	1,074,159		1,088,027		28,746		33,673		3.51	%	4.08	%
Paycheck Protection Program	218,175		—		3,963		—		2.41	%	—	%
Commercial real estate	2,631,461		2,474,804		75,630		87,222		3.78	%	4.65	%
Construction and land	228,243		203,211		6,932		7,610		3.99	%	4.94	%
Residential	2,841,023		2,999,480		68,636		76,847		3.22	%	3.42	%
Home equity	86,186		90,361		2,225		3,388		3.44	%	5.01	%
Other consumer	122,706		128,879		2,651		4,172		2.88	%	4.33	%
Total loans	7,201,953		6,984,762		188,783		212,912		3.46	%	4.04	%
Total earning assets	8,487,586		8,124,819		207,354		233,156		3.23	%	3.80	%

LESS: Allowance for loan losses	69,929		74,863
Cash and due from banks	41,461		46,906
Other assets	620,313		516,642
TOTAL AVERAGE ASSETS	$	9,079,431	$	8,613,504

INTEREST-BEARING LIABILITIES
Interest-bearing deposits: ¹³


Savings and NOW	$	680,962	$	658,154	$	616	$	847	0.12	%	0.17	%
Money market	3,835,219		3,317,117		19,295		32,072		0.67	%	1.29	%
Certificates of deposit	641,800		746,453		6,654		11,141		1.38	%	2.00	%
Total interest-bearing deposits ¹³	5,157,981		4,721,724		26,565		44,060		0.69	%	1.25	%
Junior subordinated debentures	106,363		106,363		2,189		3,223		2.74	%	4.05	%
FHLB borrowings and other	484,674		801,519		4,581		13,922		1.24	%	2.29	%
Total interest-bearing liabilities ¹³	5,749,018		5,629,606		33,335		61,205		0.77	%	1.45	%

Non-interest bearing demand deposits ¹³	2,194,237		1,949,948
Payables and other liabilities	295,327		243,370
Total average liabilities	8,238,582		7,822,924
Redeemable noncontrolling interests	400		1,642
Average shareholders’ equity	840,449		788,938
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY	$	9,079,431	$	8,613,504
Net interest income					$	174,019	$	171,951


Interest rate spread									2.46	%	2.35	%


Net interest margin									2.71	%	2.80	%

Average total deposits ¹³	$	7,352,218	$	6,671,672					0.48	%	0.88	%
Average total deposits and borrowings ¹³	$	7,943,255	$	7,579,554					0.56	%	1.08	%
¹²Average loans includes Loans held for sale and Nonaccrual loans ¹³Average 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)
	3Q20		2Q20		1Q20		4Q19		3Q19





























































New England	$	3,669,746	$	3,781,603	$	3,724,959	$	3,776,747	$	3,868,690

Northern California	1,763,556		1,741,255		1,618,668		1,532,786		1,559,569
Southern California	1,789,267		1,810,096		1,699,711		1,667,171		1,638,892
Total loans	$	7,222,569	$	7,332,954	$	7,043,338	$	6,976,704	$	7,067,151

Loans (charged-off)/recovered, net:
New England	$	(111)	$	7	$	15	$	414	$	275
Northern California	—		3		122		(10)		6
Southern California	(93)		(1,501)		(485)		(113)		(156)
Total net loans (charged-off)/recovered	$	(204)	$	(1,491)	$	(348)	$	291	$	125

Special mention loans:
New England	$	103,060	$	83,026	$	61,741	$	21,691	$	19,828
Northern California	63,192		75,609		5,947		5,227		4,821
Southern California	33,257		33,247		24,935		25,108		33,484
Total special mention loans	$	199,509	$	191,882	$	92,623	$	52,026	$	58,133

Accruing classified loans:
New England	$	74,682	$	53,124	$	50,483	$	20,428	$	21,830
Northern California	4,589		21,712		24,843		24,946		23,938
Southern California	2,556		13,750		12,622		12,548		17,510
Total accruing classified loans	$	81,827	$	88,586	$	87,948	$	57,922	$	63,278

Nonaccruing loans:
New England	$	11,807	$	11,630	$	11,965	$	9,764	$	8,999
Northern California	25,133		9,459		6,575		319		2,395
Southern California	4,323		4,515		5,774		6,020		6,171
Total nonaccruing loans	$	41,263	$	25,604	$	24,314	$	16,103	$	17,565

¹⁴The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lenders' regional offices.


BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP Financial Measures
Unaudited ($ in thousands, except share and per share data)

	3Q20			2Q20			1Q20			4Q19			3Q19
ROACE AND ROATCE:
Net income/(loss) attributable to the Company (GAAP) (A)	$	22,680		$	(3,298)		$	800		$	21,244		$	19,962
ADD: Amortization of intangibles, net of tax	564			555			565			534			530
Tangible common net income/(loss) (non-GAAP) (B)	$	23,244		$	(2,743)		$	1,365		$	21,778		$	20,492

Total average shareholders’ equity (C)	$	842,606		$	834,882		$	838,935		$	818,816		$	807,890
LESS: Average goodwill and intangibles, net	(66,246)			(66,877)			(67,586)			(68,031)			(68,359)
Average tangible common equity (non-GAAP) (D)	$	776,360		$	768,005		$	771,349		$	750,785		$	739,531

ROACE (annualized) (A/C)	10.68		%	(1.58)		%	0.39		%	10.29		%	9.80		%
ROATCE (annualized) (B/D)	11.88		%	(1.43)		%	0.72		%	11.51		%	10.99		%


PRE-TAX, PRE-PROVISION INCOME:
Income/(loss) before income taxes (GAAP)	$	24,501		$	(2,457)		$	908		$	28,129		$	25,575
ADD BACK: Provision/(credit) for loan losses	(4,569)			22,604			16,962			(3,668)			167
Pre-tax, pre-provision income (non-GAAP)	$	19,932		$	20,147		$	17,870		$	24,461		$	25,742
















TANGIBLE COMMON EQUITY:
Total shareholders’ equity (GAAP)	$	846,169		$	825,205		$	828,792		$	819,018		$	808,688
LESS: Goodwill and intangibles, net	(66,505)			(66,542)			(67,244)			(67,959)			(68,229)
Tangible common equity (non-GAAP) (A)	$	779,664		$	758,663		$	761,548		$	751,059		$	740,459

Total assets (GAAP)	$	9,431,305		$	9,158,906		$	8,746,326		$	8,830,501		$	8,690,944
LESS: Goodwill and intangibles, net	(66,505)			(66,542)			(67,244)			(67,959)			(68,229)
Tangible assets (non-GAAP) (B)	$	9,364,800		$	9,092,364		$	8,679,082		$	8,762,542		$	8,622,715

End of period shares outstanding (C)	82,254,594			82,058,483			81,800,486			83,265,674			83,241,952


Tangible common equity/ Tangible assets (non-GAAP) (A/B)	8.33		%	8.34		%	8.77		%	8.57		%	8.59		%
Tangible book value per share (non-GAAP) (A/C)	$9.48			$9.25			$9.31			$9.02			$8.90

AVERAGE LOANS:
Total loans	$	7,282,598		$	7,288,644		$	7,033,733		$	7,072,710		$	7,048,883
LESS: PPP	373,047			283,619			—			—			—
Total loans, excluding PPP (non-GAAP)	$	6,909,551		$	7,005,025		$	7,033,733		$	7,072,710		$	7,048,883

Total loan yields, excluding PPP (non-GAAP)	3.27		%	3.47		%	3.75		%	3.83		%	3.98		%


BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP Financial Measures
Unaudited ($ in thousands, except share and per share data)
	3Q20			2Q20			1Q20			4Q19			3Q19
RETURN ON AVERAGE ASSETS:
Net income/(loss) (GAAP) (A)	$	22,680		$	(3,298)		$	800		$	21,244		$	19,962
Average assets (non-GAAP) (B)	9,346,563			9,109,201			8,779,391			8,738,750			8,665,352
Return on average assets (annualized) (non-GAAP) (A/B)	0.96		%	(0.15)		%	0.04		%	0.96		%	0.91		%


EFFICIENCY RATIO:
Total noninterest expense (GAAP) (A)	$	60,937		$	61,453		$	60,908		$	58,457		$	55,537
LESS: Amortization of intangibles	714			702			715			676			671

Total noninterest expense (non-GAAP) (B)	$	60,223		$	60,751		$	60,193		$	57,781		$	54,866

Net interest income (GAAP)	$	57,824		$	58,938		$	57,257		$	56,125		$	56,153
Total core fees and income (GAAP)	21,959			21,630			22,886			24,755			25,155

Total other income (GAAP)	1,086			1,032			(1,365)			2,038			(29)
Total revenue (GAAP) (C)	$	80,869		$	81,600		$	78,778		$	82,918		$	81,279

Efficiency ratio (GAAP) (A/C)	75.4		%	75.3		%	77.3		%	70.5		%	68.3		%
Efficiency ratio, excluding amortization of intangibles (non-GAAP) (B/C)	74.5		%	74.4		%	76.4		%	69.7		%	67.5		%









NET INCOME/(LOSS) ATTRIBUTABLE TO THE COMPANY:
Net income/(loss) attributable to the Company (GAAP)	$	22,680		$	(3,298)		$	800		$	21,244		$	19,962
LESS: Gain on fair value of contingent considerations receivable ¹⁵	891			—			—			1,109			—






Tax effect at statutory rate	258			—			—			322			—
Net income/(loss) attributable to the Company (non-GAAP)	$	22,047		$	(3,298)		$	800		$	20,457		$	19,962

NET INCOME/(LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Net income/(loss) attributable to common shareholders (GAAP)	$	22,680		$	(3,298)		$	1,214		$	21,342		$	20,266

LESS: Gain on fair value of contingent considerations receivable ¹⁵	891			—			—			1,109			—






Tax effect at statutory rate	258			—			—			322			—
Net income/(loss) attributable to the common shareholders, treasury stock method, excluding notable items (non-GAAP)	$	22,047		$	(3,298)		$	1,214		$	20,555		$	20,266

Weighted average diluted shares outstanding	82,362,338			81,929,752			83,318,041			83,637,786			83,956,708

Diluted earnings/(loss) per share (GAAP)	$	0.28		$	(0.04)		$	0.01		$	0.26		$	0.24
Diluted earnings/(loss) per share, excluding notable items (non-GAAP)	$	0.27		$	(0.04)		$	0.01		$	0.25		$	0.24

Average common equity (non-GAAP)	$	842,606		$	834,882		$	838,935		$	818,816		$	807,890
Average tangible common equity (non-GAAP)	$	776,360		$	768,005		$	771,349		$	750,785		$	739,531



ROACE, excluding notable items (non-GAAP)	10.38		%	(1.58)		%	0.39		%	9.91		%	9.80		%
ROATCE, excluding notable items (non-GAAP)	11.55		%	(1.43)		%	0.72		%	11.09		%	10.99		%

Pre-tax, pre-provision income (non-GAAP)	$	19,932		$	20,147		$	17,870		$	24,461		$	25,742
LESS: Gain on fair value of contingent considerations receivable ¹⁵	891			—			—			1,109			—





Pre-tax, pre-provision income, excluding notable items (non-GAAP)	$	19,041		$	20,147		$	17,870		$	23,352		$	25,742

¹⁵In the third quarter of 2020 and fourth quarter of 2019, there was a gain of $0.9 million and $1.1 million, respectively, related to the revaluation of a receivable from the divestiture of former affiliate, Bingham, Osborn & Scarborough, LLC ("BOS").

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BOSTON PRIVATE FINANCIAL HOLDINGS INC Reports