bplogo011719a021.jpg

Boston Private Reports Second Quarter 2020 Results

Second Quarter 2020 Highlights include:

Net loss of $(3.3) million, or $(0.04) per diluted share
Return on average common equity (non-GAAP) of (1.6)%
Return on average tangible common equity (non-GAAP) of (1.4)%
Average total deposits of $7.3 billion, a 10% increase year-over-year
Average total loans of $7.3 billion, a 4% increase year-over-year
Total assets under management/advisory (“AUM”) of $16.0 billion, a 2% decrease year-over-year
Total net flows of negative $40 million, with net inflows of $60 million in the Wealth Management and Trust segment
Total provision for credit losses of $25.4 million reflecting the deterioration of the macroeconomic outlook as a result of the COVID-19 pandemic
Funded $380 million of loans from the Small Business Administration's Paycheck Protection Program ("PPP"), resulting in $284 million of average loan balances during the quarter
Board of Directors declared a cash dividend of $0.06 per common share

Boston, MA - July 28, 2020 - Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported second quarter 2020 Net loss attributable to the Company of $(3.3) million, compared to Net income attributable to the Company of $0.8 million for the first quarter of 2020 and $19.4 million for the second quarter of 2019. Second quarter 2020 Diluted loss per share were $(0.04), compared to Diluted earnings per share of $0.01 in the first quarter of 2020 and $0.22 in the second quarter of 2019.
"I am proud of the way our employees continue to prioritize the health and financial well-being of our clients as we all navigated the challenging environment during the second quarter," said Anthony DeChellis, CEO of Boston Private. "This quarter's financial reflects continued reserve build related to the uncertain macroeconomic environment as a result of the pandemic. Our pre-tax, pre-provision income increased linked quarter, while our Wealth Management & Trust segment delivered net inflows for the second straight quarter.
"Our board declared a dividend of $0.06 per common share, compared to $0.12 in the prior quarter. This prudent action reflects our Company's conservative approach to liquidity and capital management as we adjust our dividend policy to reflect our current strategy."
Summary Financial Results - Reported
% Change
($ in millions, except for per share data)2Q201Q202Q19LQY/Y
Net income/(loss)$(3.3)$0.8$19.4nmnm
Diluted earnings/(loss) per share$(0.04)$0.01$0.22nmnm
Non-GAAP Financial Measures:
Pre-tax, pre-provision income$20.1$17.9$26.213 %(23)%
Return on average common equity ("ROACE")(1.6)%0.4 %9.8 %
Return on average tangible common equity ("ROATCE")(1.4)%0.7 %11.1 %
nm = not meaningful
The Company's reported financial results decreased linked quarter and year-over-year primarily as a result of the total provision for credit losses of $25.4 million in the second quarter of 2020. Pre-tax, pre-provision income increased 13% linked quarter primarily driven by higher other income and net interest income, partially offset by higher noninterest expense.
1



Net Interest Income and Margin
% Change
($ in millions)2Q201Q202Q19LQY/Y
Net interest income$58.9$57.3$57.5%%
Net interest margin2.75 %2.76 %2.78 %
Net interest income for the second quarter of 2020 was $58.9 million, a 3% increase linked quarter and a 3% increase year-over-year. The linked quarter increase was primarily driven by lower funding costs, PPP-related income and prepayment penalties, partially offset by lower interest income.
Net interest margin decreased 1 basis point on a linked quarter basis to 2.75%. Total cost of funds declined 33 basis points to 0.50% driven by lower deposit costs, while yields on interest earning assets declined 32 basis points to 3.22%.
Noninterest Income
% Change
($ in millions)2Q201Q202Q19LQY/Y
Wealth management and trust fees$17.3$18.4$18.9(6)%(9)%
Investment management fees1.81.92.5(8)%(28)%
Private banking fees 1
2.6  2.6  2.9  — %(11)%
Total core fees and income$21.6$22.9$24.3(5)%(11)%
Total other income1.0  (1.4) 0.1  nmnm
Total noninterest income$22.7$21.5$24.4%(7)%
1 Private banking fees includes Other banking fee income and Gain/(loss) on sale of loans, net
Total core fees and income for the second quarter of 2020 was $21.6 million, a 5% decrease linked quarter. The linked quarter decrease was primarily driven by lower Wealth management and trust fees, which declined as a result of lower equity market values at the end of the first quarter of 2020.
Assets Under Management / Advisory
% Change
($ in millions)2Q201Q202Q19LQY/Y
Wealth Management and Trust$14,889$13,497$14,64910 %%
Other 2
1,0671,0161,550%(31)%
Total assets under management / advisory$15,956$14,513$16,19910 %(2)%
2 Includes results from Dalton, Greiner, Hartman, Maher & Co, LLC ("DGHM")
Total assets under management / advisory were $16.0 billion at the end of the second quarter of 2020, a 10% increase linked quarter. The linked quarter increase was primarily driven by the impact of favorable market action during the second quarter.
Total net flows were negative $40 million during the second quarter of 2020. The Wealth Management and Trust segment had net inflows of $60 million.
2



Noninterest Expense
% Change
($ in millions)2Q201Q202Q19LQY/Y
Salaries and employee benefits$33.9$35.1$32.7(3)%%
Occupancy and equipment7.6  7.6  7.9  (1)%(4)%
Information systems7.1  6.7  5.1  %38 %
Professional services3.4  3.6  3.3  (4)%%
Marketing and business development2.3  1.9  1.9  22 %20 %
Amortization of intangibles0.7  0.7  0.7  (2)%%
FDIC insurance0.8  —  0.6  nm31 %
Other5.6  5.2  3.5  %62 %
Total noninterest expense$61.5$60.9$55.7%10 %
Memo: Excluding Off-Balance Sheet Provision
Provision expense for unfunded loan commitments$2.8$1.8—  55 %nm
Total noninterest expense (non-GAAP)$58.6$59.1$55.7(1)%%
Total noninterest expense for the second quarter of 2020 was $61.5 million, which includes $2.8 million of provision expense related to unfunded loan commitments recognized in Other expense.
Excluding the provision expense for unfunded loan commitments, total noninterest expense (non-GAAP) for the second quarter of 2020 was $58.6 million, a decrease of 1% linked quarter and an increase of 5% year-over-year. The linked quarter decrease was driven primarily by lower salaries and benefits expense, while the year-over-year increase was driven primarily by higher Information systems expense from technology initiatives placed in service.
Income Tax Expense
The Company's effective tax rate for the second quarter of 2020 was negative as a result of moderate positive income tax expense despite a pre-tax loss.
Loans - QTD Averages & Yields
% Change
($ in millions)2Q201Q202Q19LQY/Y
Commercial and industrial$1,037$1,149$1,092(10)%(5)%
Paycheck Protection Program ("PPP")284nmnm
Commercial real estate2,6592,5822,507%%
Construction and land233233203— %15 %
Residential2,8632,8513,009— %(5)%
Home equity888691%(3)%
Other consumer124132125(6)%— %
Total loans$7,289$7,034$7,026%%
Total loans, excluding PPP (non-GAAP)$7,005$7,034$7,026— %— %
Total loan yields3.42 %3.75 %4.07 %(0.33)%(0.65)%
Average total loans in the second quarter of 2020 increased 4% year-over-year reflecting the addition of $283.6 million of PPP loans in the second quarter of 2020.
Average total loans, excluding PPP (non-GAAP) in the second quarter of 2020 were flat linked quarter and year-over-year.
Linked quarter, Commercial and industrial loans declined 10% primarily driven by the payoff of large loans and lower line usage.
Linked quarter, Commercial real estate loans increased 3% primarily driven by increased loan balances attributable to the debt service reserve program. Excluding the debt service reserve program, Commercial real estate loans were flat for the quarter.
3



Deposits - QTD Averages & Costs
% Change
($ in millions)2Q201Q202Q19LQY/Y
Non-interest bearing deposits2,2142,0461,927%15 %
Interest bearing deposits5,0365,0614,664— %%
Total deposits$7,250$7,107$6,590%10 %
Cost of total deposits0.41 %0.72 %0.88 %(0.31)%(0.47)%
Cost of total interest-bearing deposits0.59 %1.02 %1.25 %(0.43)%(0.66)%
Average total deposits in the second quarter of 2020 increased 2% linked quarter and 10% year-over-year.
Linked quarter, average total deposits increased primarily driven by a higher average non-interest bearing deposits of commercial clients.
Year-over-year, average non-interest bearing deposits increased 15% primarily driven by higher commercial client balances.
Year-over-year, average interest bearing deposits increased 8%, primarily driven by higher commercial client money market balances and wealth sweep deposits, partially offset by lower brokered CD balances.
Provision and Asset Quality
($ in millions)2Q201Q204Q193Q192Q19
Provision and Allowance
Provision/(credit) for loan losses$22.6$17.0$(3.7)$0.2$1.4
Provision for unfunded loan commitments2.81.8
Total Provision for credit losses$25.4$18.8$(3.7)$0.2$1.4
Allowance for loan losses as a % of Total loans1.22 %0.97 %1.03 %1.07 %1.06 %
Asset Quality
Total net loans (charged-off)/ recovered(1.5)(0.3)0.30.1(0.1)
Total nonaccrual loans25.624.316.117.617.2
Nonaccrual loans as a % of Total loans0.35 %0.35 %0.23 %0.25 %0.24 %
Special Mention Loans (Criticized Loans)$191.9$92.6$52.0$58.1$70.7
Classified Loans114.2112.374.080.871.0
Total criticized and classified loans$306.1$204.9$126.1$139.0$141.7
Total Provision for credit losses of $25.4 million during the second quarter of 2020 was primarily driven by the deterioration of the macroeconomic outlook as a result of the COVID-19 pandemic and increased weightings of more severe scenarios in the CECL model. The allowance for loan losses as a percentage of total loans excluding PPP loans was 1.28% as of June 30, 2020.
Total criticized and classified loans as of June 30, 2020 was $306.1 million, an increase of $101.2 million, or 49%, linked quarter and $164.4 million, or 116%, year-over-year. The increase in criticized and classified loans during the second quarter of 2020 was primarily driven by the downgrade of commercial real estate loans to the special mention category, which represents loans where the borrower is affected by unfavorable economic conditions or has adverse operating trends but has not yet reached the point of jeopardizing loan repayment.
4



Capital
2Q201Q204Q193Q192Q19
Tangible common equity/ Tangible assets (non-GAAP)8.3 %8.8 %8.6 %8.6 %8.4 %
Tangible book value per share (non-GAAP)$9.25$9.31$9.02$8.90$8.71
Regulatory Capital Ratios: 3
Tier 1 common equity11.1 %11.2 %11.4 %11.2 %11.2 %
Tier 1 risk-based capital12.6 %12.7 %13.0 %12.8 %12.7 %
Total risk-based capital13.9 %13.8 %14.1 %13.9 %13.9 %
Tier 1 leverage capital9.2 %9.7 %9.8 %9.7 %9.6 %
3 Current quarter information is presented based on estimated data.
The Company's regulatory capital ratios remained generally flat linked quarter. The declines in Tangible common equity/Tangible assets (non-GAAP) and the Tier 1 leverage ratio are primarily driven by asset growth, which was associated with PPP loans.
Dividend Payments
Concurrent with the release of second 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 August 7, 2020, and the payment date is August 21, 2020.
Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.
These non-GAAP financial measures include: return on average common equity; return on average tangible common equity; pre-tax, pre-provision income; tangible common equity / tangible assets, total noninterest expense excluding intangibles; total noninterest expense excluding provision for off-balance sheet commitments; and 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; 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 Wednesday, July 29, 2020, to discuss the financial results, business highlights and outlook. To access the call:
Dial In #: (888) 317-6003
Elite Entry Number: 3768361

Replay Information:
Available from July 29, 2020 at 12:00 p.m. Eastern Time until August 5, 2020
Dial In #: (877) 344-7529
Conference Number: 10146449

The call will be simultaneously webcast and may be accessed on www.bostonprivate.com.
5




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

6



BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Balance Sheets
Unaudited ($ in thousands, except share and per share data)
 2Q201Q204Q193Q192Q19
ASSETS:
Cash and cash equivalents$179,027  $61,714  $292,479  $78,010  $65,756  
Investment securities available-for-sale1,002,970  993,166  978,284  935,538  966,731  
Investment securities held-to-maturity42,495  45,395  48,212  51,379  54,482  
Equity securities at fair value24,492  23,080  18,810  21,780  19,092  
Stock in Federal Home Loan Bank and Federal Reserve Bank42,407  45,273  39,078  47,756  64,453  
Loans held for sale9,786  7,671  7,386  6,658  3,640  
Loans7,332,954  7,043,338  6,976,704  7,067,151  7,080,260  
Less: Allowance for loan losses89,324  68,211  71,982  75,359  75,067  
Loans, net of allowance for loan losses7,243,630  6,975,127  6,904,722  6,991,792  7,005,193  
Premises and equipment, net43,805  43,544  44,527  42,658  40,244  
Goodwill57,607  57,607  57,607  57,607  57,607  
Intangible assets, net8,935  9,637  10,352  10,622  10,884  
Accrued interest receivable24,918  24,054  24,175  24,851  26,411  
Deferred income taxes, net9,116  5,630  11,383  15,704  17,183  
Right-of-use assets94,143  98,896  102,075  107,045  110,880  
Other assets375,575  355,532  291,411  299,544  270,317  
TOTAL ASSETS$9,158,906  $8,746,326  $8,830,501  $8,690,944  $8,712,873  
LIABILITIES:
Deposits$7,427,397  $6,835,572  $7,241,476  $6,658,242  $6,437,963  
Securities sold under agreements to repurchase46,623  45,319  53,398  48,860  62,372  
Federal funds purchased—  145,000  —  230,000  135,000  
Federal Home Loan Bank borrowings426,313  491,254  350,829  570,904  920,068  
Junior subordinated debentures106,363  106,363  106,363  106,363  106,363  
Lease liabilities108,234  113,574  117,214  122,799  126,740  
Other liabilities218,771  180,452  140,820  143,607  124,370  
TOTAL LIABILITIES8,333,701  7,917,534  8,010,100  7,880,775  7,912,876  
REDEEMABLE NONCONTROLLING INTERESTS (“RNCI”)—  —  1,383  1,481  1,786  
SHAREHOLDERS' EQUITY:
Common stock, $1.00 par value; authorized: 170,000,000 shares82,058  81,800  83,266  83,242  83,774  
Additional paid-in capital594,463  593,167  600,708  599,877  603,869  
Retained earnings118,647  131,761  127,469  116,210  106,443  
Accumulated other comprehensive income30,037  22,064  7,575  9,359  4,125  
TOTAL SHAREHOLDERS' EQUITY825,205  828,792  819,018  808,688  798,211  
TOTAL LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY$9,158,906  $8,746,326  $8,830,501  $8,690,944  $8,712,873  

7




BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Income Statements
Unaudited ($ in thousands, except share and per share data)
 2Q201Q204Q193Q192Q19
REVENUE:
Interest income$68,819  $73,082  $75,291  $77,604  $78,728  
Interest expense9,881  15,825  19,166  21,451  21,268  
Net interest income58,938  57,257  56,125  56,153  57,460  
Provision/(credit) for loan losses 4
22,604  16,962  (3,668) 167  1,363  
Net interest income after provision/(credit) for loan losses36,334  40,295  59,793  55,986  56,097  
Wealth management and trust fees 5
17,261  18,371  18,720  19,067  18,912  
Investment management fees1,770  1,925  2,554  2,496  2,455  
Private banking fee income2,395  2,490  2,924  2,658  2,867  
Gain on sale of loans, net204  100  557  934  58  
Total core fees and income21,630  22,886  24,755  25,155  24,292  
Total other income1,032  (1,365) 2,038  (29) 88  
TOTAL REVENUE 6
81,600  78,778  82,918  81,279  81,840  
NONINTEREST EXPENSE:
Salaries and employee benefits33,937  35,096  34,186  31,684  32,706  
Occupancy and equipment7,560  7,646  7,578  8,260  7,852  
Information systems7,113  6,725  6,476  5,169  5,137  
Professional services3,446  3,601  3,920  4,435  3,313  
Marketing and business development2,313  1,890  2,017  1,403  1,934  
Amortization of intangibles702  715  676  671  672  
FDIC insurance767  —  (19) 59  585  
Other 4
5,615  5,235  3,623  3,856  3,460  
TOTAL NONINTEREST EXPENSE61,453  60,908  58,457  55,537  55,659  
INCOME/(LOSS) BEFORE INCOME TAXES(2,457) 908  28,129  25,575  24,818  
Income tax expense841  102  6,788  5,517  5,369  
Net income/(loss) before attribution to noncontrolling interests(3,298) 806  21,341  20,058  19,449  
Less: Net income attributable to noncontrolling interests—   97  96  69  
NET INCOME/(LOSS) ATTRIBUTABLE TO THE COMPANY$(3,298) $800  $21,244  $19,962  $19,380  
Adjustments, treasury stock method 7
—  414  98  304  (816) 
NET INCOME/(LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS$(3,298) $1,214  $21,342  $20,266  $18,564  
COMMON SHARE DATA:
Weighted average basic shares outstanding81,929,752  83,005,064  83,238,982  83,631,403  83,565,780  
Weighted average diluted shares outstanding 8
81,929,752  83,318,041  83,637,786  83,956,708  84,048,972  
Diluted earnings/(loss) per share$(0.04) $0.01  $0.26  $0.24  $0.22  
4 In the first and second quarter of 2020, there was a $17.0 million and $22.6 million provision expense for loan losses, respectively. Additionally, in the first and second quarter of 2020, there was a $1.8 million and $2.8 million provision expense related to the off-balance sheet commitments included in Other expense, respectively.

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/(loss).

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.

8




BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Income Statements
Unaudited ($ in thousands, except share and per share data)
 Six months ended June 30,
 20202019
REVENUE:
Interest income$141,901  $155,552  
Interest expense25,706  39,754  
Net interest income116,195  115,798  
Provision/(credit) for loan losses 4
39,566  (63) 
Net interest income after provision/(credit) for loan losses76,629  115,861  
Wealth management and trust fees 5
35,632  37,970  
Investment management fees3,695  5,105  
Private banking fee income4,885  5,366  
Gain on sale of loans, net304  131  
Total core fees and income44,516  48,572  
Total other income(333) 1,056  
TOTAL REVENUE 6
160,378  165,426  
NONINTEREST EXPENSE:
Salaries and employee benefits69,033  68,432  
Occupancy and equipment15,206  16,200  
Information systems13,838  10,997  
Professional services7,047  6,873  
Marketing and business development4,203  3,019  
Amortization of intangibles1,417  1,344  
FDIC insurance 767  1,245  
Restructuring—  1,646  
Other 4
10,850  6,456  
TOTAL NONINTEREST EXPENSE122,361  116,212  
INCOME/(LOSS) BEFORE INCOME TAXES(1,549) 49,277  
Income tax expense943  10,286  
Net income/(loss) before attribution to noncontrolling interests(2,492) 38,991  
Less: Net income attributable to noncontrolling interests 169  
NET INCOME/(LOSS) ATTRIBUTABLE TO THE COMPANY$(2,498) $38,822  
Adjustments, treasury stock method 7
414  741  
NET INCOME/(LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS$(2,084) $39,563  
COMMON SHARE DATA
Weighted average basic shares outstanding82,464,438  83,426,213  
Weighted average diluted shares outstanding 8
82,464,438  84,036,050  
Diluted earnings/(loss) per share$(0.03) $0.47  
4 In the first and second quarter of 2020, there was a $17.0 million and $22.6 million provision expense for loan losses, respectively. Additionally, in the first and second quarter of 2020, there was a $1.8 million and $2.8 million provision expense related to the off-balance sheet commitments included in Other expense, respectively.

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/(loss).

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.


9




BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Financial Highlights
Unaudited ($ in thousands, except share and per share data)
2Q201Q204Q193Q192Q19
KEY STATISTICS:
Return on average assets (non-GAAP) 9
(0.15)%0.04 %0.96 %0.91 %0.90 %
ROACE (non-GAAP) 9
(1.58)%0.39 %10.29 %9.80 %9.83 %
ROATCE (non-GAAP) 9
(1.43)%0.72 %11.51 %10.99 %11.06 %
Efficiency ratio (non-GAAP) 9
74.4 %76.4 %69.7 %67.5 %67.2 %
Noninterest income to total revenue27.8 %27.3 %32.3 %30.9 %29.8 %
Net interest margin2.75 %2.76 %2.70 %2.72 %2.78 %
Average loan to average deposit ratio100.5 %99.0 %101.6 %105.9 %106.6 %
Cost of total deposits0.41 %0.72 %0.86 %0.92 %0.88 %
Cost of interest-bearing deposits0.59 %1.02 %1.20 %1.31 %1.25 %
Cost of total funding0.50 %0.83 %0.99 %1.12 %1.11 %
Allowance for loan loss / Total loans1.22 %0.97 %1.03 %1.07 %1.06 %
Nonperforming loans / Total loans0.35 %0.35 %0.23 %0.25 %0.24 %
Net (charge-offs)/recoveries / Total loans 9
(0.08)%(0.02)%0.02 %0.01 %(0.01)%
CAPITAL HIGHLIGHTS:
Tier 1 common equity 3
$731,316  $742,044  $745,926  $732,980  $726,872  
Tier 1 capital 3
$831,338  $842,066  $846,337  $833,431  $827,299  
Total capital 3
$913,936  $914,572  $919,573  $910,076  $903,675  
Risk-weighted assets ("RWA") 3
$6,593,981  $6,627,339  $6,530,804  $6,533,884  $6,491,184  
Average assets for leverage 3
$9,009,565  $8,691,254  $8,659,944  $8,588,358  $8,617,803  
Tier 1 common equity ratio 3
11.09 %11.20 %11.42 %11.22 %11.20 %
Tier 1 risk-based capital ratio 3
12.61 %12.71 %12.96 %12.76 %12.74 %
Total risk-based capital ratio 3
13.86 %13.80 %14.08 %13.93 %13.92 %
Tier 1 leverage capital ratio 3
9.23 %9.69 %9.77 %9.70 %9.60 %
Total equity / Total assets9.01 %9.48 %9.27 %9.30 %9.16 %
Tangible common equity / Tangible assets (non-GAAP)8.34 %8.77 %8.57 %8.59 %8.44 %
End of period market price per share$6.88  $7.15  $12.03  $11.66  $12.07  
End of period shares outstanding82,058,48381,800,48683,265,67483,241,95283,774,335
Book value per common share$10.06  $10.13  $9.84  $9.71  $9.53  
Tangible book value per share (non-GAAP)$9.25  $9.31  $9.02  $8.90  $8.71  
Common Equity Repurchase Program:
Total shares of common stock repurchased—  1,565,060  —  678,165  —  
Average price paid per share of common stock$—  $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.

10



BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated AUM and Balance Sheet - End of Period Balances
Unaudited ($ in thousands)
2Q201Q204Q193Q192Q19
ASSETS UNDER MANAGEMENT AND ADVISORY ("AUM"):
Wealth Management and Trust$14,889,000  $13,497,000  $15,224,000  $14,695,000  $14,649,000  
Other 2
1,067,000  1,016,000  1,544,000  1,533,000  1,550,000  
TOTAL AUM$15,956,000  $14,513,000  $16,768,000  $16,228,000  $16,199,000  
AUM Rollforward:
Beginning balance $14,513,000  $16,768,000  $16,228,000  $16,199,000  $16,122,000  
Net flows(40,000) 150,000  (209,000) (137,000) (269,000) 
Market 1,483,000  (2,405,000) 749,000  166,000  346,000  
Ending balance$15,956,000  $14,513,000  $16,768,000  $16,228,000  $16,199,000  
AUM Net Flows:
Wealth Management and Trust$60,000  $176,000  $(114,000) $(100,000) $(233,000) 
Other 2
(100,000) (26,000) (95,000) (37,000) (36,000) 
TOTAL NET FLOWS$(40,000) $150,000  $(209,000) $(137,000) $(269,000) 
DEPOSITS:
Demand deposits (non-interest bearing)$2,293,864  $2,020,440  $1,971,013  $1,947,363  $1,854,091  
Savings and NOW758,656  653,006  646,199  666,107  631,166