Boston Private Reports Third Quarter 2020 Results

Rhea-AI Summary

Boston Private Financial Holdings (NASDAQ: BPFH) reported a net income of $22.7 million for Q3 2020, rebounding from a net loss of $(3.3) million in Q2 2020. This marks a 14% year-over-year increase as compared to Q3 2019's net income of $20.0 million. Diluted earnings per share increased to $0.28 from $(0.04) in Q2 2020. The company benefited from a provision credit of $2.8 million, while total assets under management rose to $16.3 billion, despite negative net flows of $407 million driven by outflows at DGHM. The firm declared a cash dividend of $0.06 per share.

Positive

• Net income rose to $22.7 million in Q3 2020 from a loss of $(3.3) million in Q2 2020.
• Diluted earnings per share increased to $0.28 from $(0.04) in the previous quarter.
• Provision credit of $2.8 million improved financial results significantly.
• Total assets under management reached $16.3 billion, a 2% increase linked quarter.

Negative

• Total net flows were negative $407 million, driven by outflows at DGHM.
• Net interest income decreased by 2% linked quarter to $57.8 million.
• Total criticized and classified loans increased to $322.6 million, a 5% rise linked quarter.

BOSTON--(BUSINESS WIRE)--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)
Other 3		(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.

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.   10 Accruing classified loans include loans that are classified as substandard but are still accruing interest income. Boston Private Bank & Trust Company may classify a loan as substandard where known information about possible credit problems of the related borrowers causes management to have doubts as to the ability of such borrowers to comply with the present repayment terms and which may result in disclosure of such loans as nonaccrual at some time in the future.   11 At June 30, 2020, the Company had one loan totaling less than $0.1 million that was more than 90 days past due but still on accrual status. This loan originated in the New England region. The Company had no other loans outstanding more than 90 days past due but still on accrual status in comparative periods.

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	%
12 Average loans includes Loans held for sale and Nonaccrual loans   13 Average total deposits is the sum of Average total interest-bearing deposits and Average 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	%
12 Average loans includes Loans held for sale and Nonaccrual loans   13 Average total deposits is the sum of Average total interest-bearing deposits and Average 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
14 The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lenders' regional offices.

BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP Financial Measures
Unaudited ($ in thousands, 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
15 In 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").