Boston Private Financial Holdings, Inc. Reports Fourth Quarter and Full Year 2012 Results; Announces Dividend Increase and Share

  Boston Private Financial Holdings, Inc. Reports Fourth Quarter and Full Year
  2012 Results; Announces Dividend Increase and Share Repurchase Program

Fourth Quarter and Full Year Highlights:

  *Earnings increase 36% year-over-year: Full year 2012  GAAP Net Income
    increased to $53.3 million from $39.1 million in 2011. Full year diluted
    2012 EPS increased to $0.61 from $0.46 in 2011.
  *Steady Net Interest Income: Net Interest Income increased 2% to $183.3
    million for the full year of 2012. Full year NIM of 3.22% decreased 3
    basis points year-over-year.
  *Core Fees and Income increase for the fourth straight quarter: Fourth
    quarter  Core Fees and Income increased 13% year-over-year and 5% on a
    linked quarter basis.  AUM increased 2% to $20.4 billion in the quarter,
    and 13% year-over-year. Fourth quarter AUM net inflows were $298 million,
    up from $223 million linked quarter, and up from AUM net outflows of
    ($142) million in the fourth quarter of 2011.
  *Provision decreases: Provision for Loan Losses was a credit of ($5.0)
    million in the quarter, compared to a provision credit of ($4.0) million
    in the third quarter of 2012.
  *Capital builds: Tangible Common Equity/Tangible Assets ratio increased by
    30 basis points to 7.7% on a year-over-year basis, and was flat on a
    linked quarter basis.
  *Dividend increase and share repurchase program announced: The Board of
    Directors approved a cash dividend of $0.05 per share, up from $0.01 per
    share last quarter, and a share repurchase program of up to 5% of the
    Company’s outstanding shares as of January 16, 2013.

Business Wire

BOSTON -- January 16, 2013

Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or
“BPFH”) today reported fourth quarter 2012 GAAP Net Income Attributable to the
Company of $13.1 million, compared to $16.5 million in the third quarter of
2012. BPFH reported fourth quarter diluted earnings per share of $0.15
compared to $0.19 in the third quarter of 2012.

For the full year of 2012, BPFH reported GAAP Net Income Attributable to the
Company of $53.3 million, compared to $39.1 million for the full year of 2011.
BPFH reported diluted earnings per share of $0.61 compared to $0.46 for the
full year of 2011.

“The year-over-year increases we saw in loan, deposit, and AUM balances
confirm that the power of our Private Banking and Wealth Management model is
taking hold,” said Clayton G. Deutsch, CEO and President. “We continue to be
pleased with the ongoing improvement in our quality metrics as evidenced by
the 24% decline in criticized loans on a year-over-year basis, and the
continued strengthening of our capital base. In 2013, we remain committed to
growing our fee-based revenues, defending our Net Interest Margin and
achieving our 11% ROE target.”

Net Interest Income, Core Fees Increase Year-Over-Year

Net Interest Income in the fourth quarter was $45.5 million, down 2% from
$46.4 million in the third quarter of 2012. For the full year of 2012, Net
Interest Income was $183.3 million, up 2% from $179.0 million in 2011. Core
Fees and Income (Investment Management and Trust Fees, Private Bank Investment
Management and Trust Fees, Wealth Advisory Fees, Other Banking Fee Income and
Gain on Sale of Loans) for the fourth quarter increased 5% to $29.1 million
from $27.6 million in the third quarter of 2012. The increase was driven by
fee increases in all three business segments and by a $0.9 million gain on
sale of residential mortgage loans that the Company sold during the fourth
quarter. For the full year of 2012, Core Fees and Income increased 2% to
$109.4 million.

Net Interest Margin was 3.19% in the fourth quarter, up 8 basis points from
3.11% in the third quarter. On a year-over-year basis, Net Interest Margin
increased 2 basis points from 3.17%. For the full year of 2012, Net Interest
Margin decreased 3 basis points to 3.22%.

Total Assets Under Management/Advisory (“AUM”) increased to $20.4 billion, up
2% from $20.1 billion in the third quarter of 2012. AUM increased 13% from
$18.1 billion in the fourth quarter of 2011. The Company experienced fourth
quarter 2012 AUM net inflows of $298 million, as compared to AUM net inflows
of $223 million in the third quarter of 2012. AUM net outflows for the fourth
quarter of 2011 were ($142) million. AUM net inflows for the full year of 2012
were $621 million, as compared to AUM net outflows of ($492) million in 2011.

Total Expenses Increase in Q4 Due to Non-Cash Benefit Charges and Liabilities
Restructuring

Total Expenses (including restructuring costs of $1.6 million) in the fourth
quarter of 2012 were $62.7 million, up 8% from $58.2 million (including third
quarter restructuring costs of $3.6 million) on a linked quarter basis. For
the full year of 2012, Total Expenses (including restructuring costs of $5.9
million) were $231.9 million, down 1% from Total Expenses (including
restructuring costs of $8.1 million) of $233.9 million for the full year of
2011.

“Total Expenses in the quarter were impacted by unusual items totaling $7.6
million, including non-cash benefit charges of $2.0 million, seasonal
marketing costs of $1.1 million, liability restructuring costs of $2.0
million, severance costs of $1.6 million and variable compensation costs of
$900 thousand,” said David J. Kaye, Chief Financial Officer. “It is important
to note that the costs associated with the restructuring of expenses and
liabilities will benefit the Company in 2013.”

Q4 Provision Credit Due Primarily to Sale of Pacific Northwest Offices

Provision for Loan Losses in the fourth quarter was a credit of ($5.0)
million, compared to a provision credit of ($4.0) million in the third quarter
of 2012. The ($5.0) million provision credit was primarily driven by the
agreement to sell the Pacific Northwest offices, which the Company announced
in December. For the full year of 2012, there was a provision credit of ($3.3)
million, as compared to a Provision for Loan Losses of $13.2 million in 2011.

Nonaccrual Loans (“Nonaccruals”) decreased 17% to $60.7 million on a linked
quarter basis. On a year-over-year basis, Nonaccruals were down 11%. As a
percentage of Total Loans, Nonaccruals were 1.26% in the fourth quarter of
2012, down 22 basis points from 1.48% in the third quarter of 2012. On a
year-over-year basis, Nonaccruals as a percentage of Total Loans declined 20
basis points from 1.46%.

Additional credit metrics are listed below on a linked quarter and
year-over-year basis:

(In millions)                  December     September     December
                                   31, 2012         30, 2012          31, 2011
Total Criticized Loans         $235.0       $275.5        $309.3
Total Loans 30-89 Days         $46.4        $9.5          $27.0
Past Due and Accruing (10)
Total Net Loans                ($2.1)       ($3.9)        ($0.1)
(Charged-off)/Recovered
Allowance for Loan             1.75%        1.83%         2.07%
Losses/Total Loans
                                                         

Capital Ratios Strengthen in Q4, Dividend Increase and Share Repurchase
Program Announced

Most regulatory risk-based capital ratios and tangible common equity ratios
increased on a linked quarter basis and year-over-year. The Board of Directors
today announced a dividend increase to $0.05 per share, up from $0.01 per
share last quarter.

“We believe now is the time to begin returning capital to our shareholders
given our outlook and confidence in our continued risk management, capital
build and earnings power,” said Mr. Deutsch. “Increasing our dividend is a
prudent decision which will allow us to reward shareholders while adequately
funding our strategy. We will continuously evolve our dividend level while
assessing other shareholder friendly transactions. We are committed to
managing our capital in a hyper-efficient manner.”

In addition, on January 16, 2013, the Board of Directors also approved a share
repurchase program of up to 5% of the Company’s outstanding shares. Under the
program, shares may be repurchased from time to time in the open market for a
two-year period.

Capital ratios are listed below on a linked quarter and year-over-year basis:

                         December 31,     September     December
                              2012                 30, 2012          31, 2011
Total Risk-Based          14.7%            14.7%         15.2%
Capital*
Tier I Risk-Based         13.4%            13.1%         12.7%
Capital*
Tier I Leverage           9.9%             9.2%          9.0%
Capital*
TCE/TA                    7.7%             7.7%          7.4%
TCE/Risk Weighted         10.5%            10.4%         10.3%
Assets*
*December 31, 2012 data is presented based on estimated data.


Dividend Payments

Concurrent with the release of the fourth quarter 2012 earnings, the Board of
Directors of the Company declared a cash dividend to shareholders of $0.05 per
share. The record date for this dividend is February 14, 2013, and the payment
date is February 28, 2013.

Non-GAAP Financial Measures

The Company uses certain non-GAAP financial measures, such as the TCE/TA and
TCE/Risk Weighted Assets ratios, and Operating Expenses excluding
restructuring charges, to provide information for investors to effectively
analyze financial trends of ongoing business activities, and to enhance
comparability with peers across the financial sector. A detailed
reconciliation table of the Company’s GAAP to the non-GAAP measures is
attached.

Conference Call

Management will hold a conference call at 8 a.m. Eastern Time on Thursday,
January 17, to discuss the financial results, business highlights and outlook.
To access the call:

Dial In #: (888) 317-6003
International Dial In #: (412) 317-6061
Elite Entry Number: 5890660

Replay Information:
Available from January 17 at 12 noon until January 24
Dial In #: (877) 344-7529
International Dial In #: (412) 317-0088
Conference Number: 10023251

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

Boston Private Financial Holdings, Inc.

Boston Private Financial Holdings, Inc. is a national financial services
organization with Wealth Management and Private Banking affiliates in Boston,
New York, Los Angeles, San Francisco and Seattle. The Company has a $6 billion
Private Banking balance sheet, and manages over $20 billion of client assets.

The Company positions its affiliates to serve the high net worth marketplace
with high quality products and services of unique appeal to private clients.
The Company also provides strategic oversight and access to resources, both
financial and intellectual, to support affiliate management, marketing,
compliance and legal activities. (NASDAQ: BPFH)

For more information about BPFH, visit the Company's website
atwww.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 Section27A of the
Securities Act of 1933, as amended, and Section21E of the Securities Exchange
Act of 1934, as amended, and are intended to be covered by the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve risks and uncertainties. These statements
include, among others, statements regarding our strategy, evaluations of
future interest rate trends and liquidity, prospects for growth in assets, and
prospects for overall results over the long term. You should not place undue
reliance on our forward-looking statements. You should exercise caution in
interpreting and relying on forward-looking statements because they are
subject to significant risks, uncertainties and other factors which are, in
some cases, beyond the Company’s control. Forward-looking statements are based
on the current assumptions and beliefs of management and are only expectations
of future results. The Company’s actual results could differ materially from
those projected in the forward-looking statements as a result of, among other
factors, adverse conditions in the capital and debt markets and the impact of
such conditions on the Company’s private banking, investment management and
wealth advisory activities; changes in interest rates; competitive pressures
from other financial institutions; the effects of continued weakness in
general economic conditions on a national basis or in the local markets in
which the Company operates, including changes which adversely affect
borrowers’ ability to service and repay our loans; changes in loan defaults
and charge-off rates; changes in the value of securities and other assets,
adequacy of loan loss reserves, or decreases in deposit levels necessitating
increased borrowing to fund loans and investments; increasing government
regulation; the risk that goodwill and intangibles recorded in the Company’s
financial statements will become impaired; the risk that the Company’s
deferred tax asset may not be realized; risks related to the identification
and implementation of acquisitions, dispositions and restructurings; changes
in assumptions used in making such forward-looking statements; and the other
risks and uncertainties detailed in the Company’s Annual Report on Form 10-K
and updated by the Company’s Quarterly Reports on Form 10-Q; and other filings
submitted to the Securities and Exchange Commission. Forward looking
statements speak only as of the date on which they are made. The Company does
not undertake any obligation to update any forward-looking statement to
reflect circumstances or events that occur after the date the forward-looking
statements are made.

Note to Editors:

Boston Private Financial Holdings, Inc. is not to be confused with Boston
Private Bank & Trust Company. Boston Private Bank & Trust Company is a
wholly-owned subsidiary of BPFH. The information reported in this press
release is related to the performance and results of BPFH.



Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
                                                        
(In thousands, except
share and per share             12/31/2012     9/30/2012     12/31/2011 
data)
Assets:
Cash and cash                  $ 308,744        $ 83,585        $ 203,354
equivalents
Investment securities            699,300          755,125         844,496
available for sale
Loans held for sale              308,390          135,169         12,069
(1)
Total loans                      4,814,136        4,967,607       4,651,228
Less: Allowance for             84,057         91,129        96,114     
loan losses
Net loans                        4,730,079        4,876,478       4,555,114
Other real estate                3,616            3,186           5,103
owned (“OREO”)
Stock in Federal Home            41,981           42,886          43,714
Loan Banks
Premises and                     27,081           28,390          29,224
equipment, net
Goodwill                         110,180          110,180         110,180
Intangible assets, net           24,874           25,306          28,569
Fees receivable                  8,836            9,460           8,147
Accrued interest                 14,723           16,731          16,875
receivable
Deferred income taxes,           63,840           62,964          66,782
net
Other assets                     123,361          123,324         115,069
Assets of discontinued          -              -             10,676     
operations (2)
Total assets                   $ 6,465,005     $ 6,272,784    $ 6,049,372  
Liabilities:
Deposits                       $ 4,885,059      $ 4,662,794     $ 4,530,411
Deposits held for sale           194,084          -               -
(1)
Securities sold under
agreements to                    116,319          106,713         130,791
repurchase
Federal funds                    -                85,000          -
purchased
Federal Home Loan Bank           408,121          552,946         521,827
borrowings
Junior subordinated              143,647          158,647         182,053
debentures
Other liabilities                95,386           91,407          94,811
Liabilities of
discontinued                    -              -             1,663      
operations (2)
Total liabilities               5,842,616      5,657,507     5,461,556  
Redeemable
Noncontrolling                   19,287           19,675          21,691
Interests
The Company’s
Shareholders’ Equity:
Preferred stock, $1.00
par value; authorized:
2,000,000 shares;
Series B, issued and
outstanding
(contingently
convertible): 401
shares at December 31,           58,089           58,089          58,089
2012, September 30,
2012, and December 31,
2011; liquidation
value: $100,000 per
share
Common stock, $1.00
par value; authorized:
170,000,000 shares;
issued and
outstanding:
78,743,518 shares at             78,744           78,930          78,023
December 31, 2012;
78,929,750 shares at
September 30, 2012;
and 78,023,317 shares
at December 31, 2011
Additional paid-in               640,891          644,801         656,436
capital
Accumulated deficit              (176,746   )     (189,838  )     (230,017   )
Accumulated other               2,124          3,620         3,594      
comprehensive income
Total shareholders’             603,102        595,602       566,125    
equity
Total liabilities,
redeemable
noncontrolling                 $ 6,465,005     $ 6,272,784    $ 6,049,372  
interests and
shareholders’ equity
                                                                
                                                                

Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)

                      Three Months Ended                               Twelve Months Ended
(In thousands,
except share and           12/31/2012    9/30/2012    12/31/2011     12/31/2012    12/31/2011
per share data)
Interest and
dividend income:
Loans                     $ 51,398         $ 52,533        $ 51,857         $ 209,280        $ 212,047
Taxable
investment                  650              890             1,332            3,875            5,561
securities
Non-taxable
investment                  846              782             846              3,228            3,768
securities
Mortgage-backed             1,443            1,537           1,775            6,186            7,297
securities
Federal funds              208            290           226            719            1,069
sold and other
Total interest
and dividend               54,545         56,032        56,036         223,288        229,742
income
Interest expense:
Deposits                    4,096            4,206           5,608            17,640           24,479
Federal Home Loan           3,295            3,501           4,059            14,488           16,915
Bank borrowings
Junior
subordinated                1,308            1,507           1,786            6,258            7,434
debentures
Repurchase
agreements and             300            452           434            1,626          1,960
other short-term
borrowings
Total interest             8,999          9,666         11,887         40,012         50,788
expense
Net interest                45,546           46,366          44,149           183,276          178,954
income
Provision/
(credit) for loan          (5,000     )    (4,000    )    (2,500     )    (3,300     )    13,160
losses
Net interest
income after               50,546         50,366        46,649         186,576        165,794
provision for
loan losses
Fees and other
income:
Investment
management and
trust fees -                10,094           10,017          9,085            39,163           39,803
Investment
Managers
Investment
management and              6,086            5,889           5,689            23,645           23,553
trust fees - Bank
Wealth advisory             9,745            9,495           8,881            37,659           34,553
fees
Other banking fee           1,455            1,547           1,537            5,664            6,503
income
Gain on sale of            1,726          648           593            3,225          2,489
loans, net
Total core fees            29,106         27,596        25,785         109,356        106,901
and income
Gain on
repurchase of               874              976             2,392            3,444            4,230
debt
Gain/(loss) on
sale of                     (7         )     25              109              871              798
investments, net
Gain/(loss) on              624              (104      )     1,261            845              5,372
OREO, net
Other                      (302       )    111           62             (154       )    1,140
Total other                1,189          1,008         3,824          5,006          11,540
income
Operating
expense:
Salaries and                37,781           34,688          38,665           143,852          142,872
employee benefits
Occupancy and               7,516            8,078           7,570            30,790           29,649
equipment
Professional                3,698            3,455           2,748            13,113           16,810
services
Marketing and
business                    2,968            1,346           2,032            7,422            6,802
development
Contract services
and data                    1,391            1,446           1,141            5,380            4,644
processing
Amortization of             1,106            1,082           1,121            4,369            4,800
intangibles
FDIC insurance              1,003            1,138           1,253            3,972            6,139
Restructuring               1,631            3,581           653              5,911            8,055
expense
Other                      5,644          3,336         2,783          17,041         14,083
Total operating            62,738         58,150        57,966         231,850        233,854
expense
Income/(loss)
before income               18,103           20,820          18,292           69,088           50,381
taxes
Income tax                 6,115          5,124         5,722          20,330         14,280
expense/(benefit)
Net income/(loss)
from continuing             11,988           15,696          12,570           48,758           36,101
operations
Net income/(loss)
from discontinued          1,819          1,672         1,374          7,635          6,184
operations (2)
Net income/(loss)
before
attribution to              13,807           17,368          13,944           56,393           42,285
noncontrolling
interests
Less: Net income/
(loss)
attributable to            715            855           882            3,122          3,148
noncontrolling
interests
Net income/(loss)
attributable to           $ 13,092        $ 16,513       $ 13,062        $ 53,271        $ 39,137
the Company
                                                                                               
                                                                                               

Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)

(In thousands,
except share        Three Months Ended                                Twelve Months Ended
and per share
data)
PER SHARE DATA:          12/31/2012    9/30/2012     12/31/2011     12/31/2012    12/31/2011 
Calculation of
Income/(Loss)
for EPS:
Net
income/(loss)           $ 13,092         $ 16,513         $ 13,062         $ 53,271         $ 39,137
attributable to
the Company
                                                                                                         
Adjustments to
Net
Income/(Loss)
Attributable to
the Company to
Arrive at Net            (239       )    (435       )    (86        )    (781       )    (888       )
Income/(Loss)
Attributable to
Common
Shareholders
(3)
                                                                                                         
Net
Income/(Loss)
Attributable to           12,853           16,078           12,976           52,490           38,249
the Common
Shareholders
LESS: Amount
allocated to             (1,281     )    (1,632     )    (1,333     )    (5,320     )    (3,813     )
participating
securities
Net
Income/(Loss)
Attributable to
the Common
Shareholders,           $ 11,572        $ 14,446        $ 11,643        $ 47,170        $ 34,436     
after
allocation to
participating
securities
                                                                                            
End of Period
Common Shares             78,743,518       78,929,750       78,023,317
Outstanding
                                                                                            
Weighted
Average Shares
Outstanding:
Weighted
average basic
shares,                   85,386,014       85,392,074       84,658,931       85,186,796       84,288,834
including
participating
securities
LESS:
Participating             (9,047,609 )     (9,101,692 )     (9,235,208 )     (9,166,805 )     (9,119,223 )
securities
PLUS: Dilutive
potential                1,066,155      1,077,229      869,517        953,525        311,417    
common shares
Weighted
Average Diluted          77,404,560     77,367,611     76,293,240     76,973,516     75,481,028 
Shares (4)
                                                                                            
Diluted Total
Earnings/(Loss)         $ 0.15           $ 0.19           $ 0.15           $ 0.61           $ 0.46
per Share
                                                                                                         
                                                                                                         

Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)

(In thousands, except                                    
per share data)
FINANCIAL DATA:                12/31/2012     9/30/2012      12/31/2011 
Book Value Per Common         $ 6.92           $ 6.81           $ 6.51
Share
Tangible Book Value           $ 5.64           $ 5.49           $ 5.10
Per Share (5)
Market Price Per              $ 9.01           $ 9.59           $ 7.94
Share
                                                                
ASSETS UNDER
MANAGEMENT AND
ADVISORY:
Private Banking               $ 3,941,000      $ 3,784,000      $ 3,571,000
Investment Managers             8,444,000        8,553,000        7,594,000
Wealth Advisory                 8,052,000        7,797,000        6,994,000
Less: Inter-company            (20,000    )    (20,000    )    (19,000    )
Relationship
Assets Under
Management and                  20,417,000       20,114,000       18,140,000
Advisory of
Continuing Operations
Assets Under
Management and
Advisory of                    -              -              985,000    
Discontinued
Operations (2)
Total Assets Under
Management and                $ 20,417,000    $ 20,114,000    $ 19,125,000 
Advisory
                                                                
FINANCIAL RATIOS:
Total Equity/Total              9.33       %     9.50       %     9.36       %
Assets
Tangible Common
Equity/Tangible                 7.67       %     7.70       %     7.37       %
Assets (5)
Tangible Common
Equity/Risk Weighted            10.55      %     10.39      %     10.27      %
Assets (5)
Allowance for Loan              1.75       %     1.83       %     2.07       %
Losses/Total Loans
Allowance for Loan
Losses/Nonaccrual               138        %     124        %     141        %
Loans
Return on Average
Assets - Three Months           0.82       %     1.00       %     0.85       %
Ended (Annualized)
Return on Average
Equity - Three Months           8.72       %     11.30      %     9.37       %
Ended (Annualized)
Efficiency Ratio -
Three Months Ended              80.12      %     75.25      %     76.78      %
(Annualized)
                                                                             
                                                                             

Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)

                     Average Balance                        Interest Income/Expense                Average Yield/Rate
(In Thousands)           Three Months Ended                      Three Months Ended                      Three Months Ended
AVERAGE BALANCE           12/31/2012  9/30/2012  12/31/2011    12/31/2012  9/30/2012  12/31/2011   12/31/2012  9/30/2012  12/31/2011 
SHEET:
AVERAGE ASSETS
Interest-Earning
Assets:
Cash and
Investments:
Taxable
investment               $ 202,970    $ 271,990   $ 398,668      $ 650        $ 890       $ 1,332        1.28       % 1.31      % 1.33       %
securities
Non-taxable
investment                 202,971      188,183     191,206        1,320        1,221       1,321        2.60       % 2.60      % 2.76       %
securities (6)
Mortgage-backed            309,359      257,680     245,423        1,443        1,537       1,775        1.87       % 2.38      % 2.89       %
securities
Federal funds             221,457     440,586    378,292       208         290        226          0.37       % 0.26      % 0.24       %
sold and other
Total Cash and            936,757     1,158,439  1,213,589     3,621       3,938      4,654        1.54       % 1.36      % 1.53       %
Investments
Loans: (7)
Commercial and             2,773,478    2,768,279   2,417,467      33,660       33,932      32,103       4.83       % 4.88      % 5.26       %
Construction (6)
Residential                2,024,279    2,038,277   1,810,530      17,626       18,230      18,189       3.48       % 3.58      % 4.02       %
Home Equity and           269,954     280,366    318,035       2,104       2,236      2,829        3.10       % 3.17      % 3.48       %
Other Consumer
Total Loans               5,067,711   5,086,922  4,546,032     53,390      54,398     53,121       4.20       % 4.26      % 4.64       %
Total Earning             6,004,468   6,245,361  5,759,621     57,011      58,336     57,775       3.78       % 3.72      % 3.98       %
Assets
LESS: Allowance            90,931       99,778      99,520
for Loan Losses
Cash and due
From Banks                 46,916       42,688      41,968
(Non-Interest
Bearing)
Other Assets (8)          395,646     412,559    420,468
TOTAL AVERAGE            $ 6,356,099  $ 6,600,830 $ 6,122,537
ASSETS
AVERAGE
LIABILITIES,
REDEEMABLE
NONCONTROLLING
INTERESTS, AND
SHAREHOLDERS'
EQUITY
Interest-Bearing
Liabilities:
Deposits (9):
Savings and NOW          $ 494,960    $ 458,499   $ 492,959      $ 168        $ 127       $ 285          0.13       % 0.11      % 0.23       %
Money Market               2,377,447    2,260,748   1,971,631      2,287        2,206       2,418        0.38       % 0.39      % 0.49       %
Certificates of           712,358     805,540    985,530       1,641       1,873      2,905        0.92       % 0.92      % 1.17       %
Deposit
Total Deposits             3,584,765    3,524,787   3,450,120      4,096        4,206       5,608        0.45       % 0.47      % 0.64       %
Junior
Subordinated               150,089      168,288     186,496        1,308        1,507       1,786        3.41       % 3.50      % 3.83       %
Debentures
FHLB Borrowings           599,248     637,471    638,690       3,595       3,953      4,493        2.35       % 2.43      % 2.75       %
and Other
Total
Interest-Bearing          4,334,102   4,330,546  4,275,306     8,999       9,666      11,887       0.82       % 0.88      % 1.10       %
Liabilities
Noninterest
Bearing Demand             1,304,276    1,561,135   1,157,151
Deposits
Other                     98,279      105,914    110,193
Liabilities (8)
Total Average              5,736,657    5,997,595   5,542,650
Liabilities
Redeemable
Noncontrolling             18,780       18,496      22,314
Interests
Average
Shareholders'             600,662     584,739    557,573
Equity
TOTAL AVERAGE
LIABILITIES,
REDEEMABLE
NONCONTROLLING           $ 6,356,099  $ 6,600,830 $ 6,122,537
INTERESTS, AND
SHAREHOLDERS'
EQUITY
Net Interest
Income - on a
Fully Taxable                                                    $ 48,012     $ 48,670    $ 45,888
Equivalent Basis
(FTE)
LESS: FTE                                                         2,466       2,304      1,739
Adjustment (6)
Net Interest
Income (GAAP                                                     $ 45,546     $ 46,366    $ 44,149
Basis)
Interest Rate                                                                                            2.96       % 2.84      % 2.88       %
Spread
Net Interest                                                                                             3.19       % 3.11      % 3.17       %
Margin
                                                                                                                                             
                                                                                                                                             

Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)

                     Average Balance            Interest Income/Expense    Average Yield/Rate
(In Thousands)           Twelve Months Ended         Twelve Months Ended        Twelve Months Ended
AVERAGE BALANCE           12/31/2012  12/31/2011    12/31/2012  12/31/2011  12/31/2012  12/31/2011 
SHEET:
AVERAGE ASSETS
Interest-Earning
Assets:
Cash and
Investments:
Taxable
investment               $ 297,646    $ 377,812      $ 3,875      $ 5,561       1.30       % 1.47       %
securities
Non-taxable
investment                 192,913      191,513        5,038        5,764       2.61       % 3.01       %
securities (6)
Mortgage-backed            266,114      236,435        6,186        7,297       2.32       % 3.09       %
securities
Federal funds             239,371     446,953       719         1,069       0.30       % 0.24       %
sold and other
Total Cash and            996,044     1,252,713     15,818      19,691      1.59       % 1.57       %
Investments
Loans: (7)
Commercial and             2,706,444    2,399,402      134,755      130,441     4.98       % 5.44       %
Construction (6)
Residential                1,962,192    1,761,736      71,664       75,071      3.65       % 4.26       %
Home Equity and           290,680     312,507       9,435       11,697      3.25       % 3.74       %
Other Consumer
Total Loans               4,959,316   4,473,645     215,854     217,209     4.35       % 4.86       %
Total Earning             5,955,360   5,726,358     231,672     236,900     3.89       % 4.14       %
Assets
LESS: Allowance            97,094       100,483
for Loan Losses
Cash and due
From Banks                 56,022       58,349
(Non-Interest
Bearing)
Other Assets (8)          424,278     417,893
TOTAL AVERAGE            $ 6,338,566  $ 6,102,117
ASSETS
AVERAGE
LIABILITIES,
REDEEMABLE
NONCONTROLLING
INTERESTS, AND
SHAREHOLDERS'
EQUITY
Interest-Bearing
Liabilities:
Deposits (9):
Savings and NOW          $ 500,084    $ 517,659      $ 827        $ 1,375       0.17       % 0.27       %
Money Market               2,189,344    1,898,999      8,777        10,524      0.40       % 0.55       %
Certificates of           810,590     1,027,347     8,036       12,580      0.99       % 1.22       %
Deposit
Total Deposits             3,500,018    3,444,005      17,640       24,479      0.50       % 0.71       %
Junior
Subordinated               167,786      190,473        6,258        7,434       3.73       % 3.90       %
Debentures
FHLB Borrowings           663,165     656,772       16,114      18,875      2.43       % 2.87       %
and Other
Total
Interest-Bearing          4,330,969   4,291,250     40,012      50,788      0.92       % 1.18       %
Liabilities
Noninterest
Bearing Demand             1,304,514    1,141,563
Deposits
Other                     103,271     109,970
Liabilities (8)
Total Average              5,738,754    5,542,783
Liabilities
Redeemable
Noncontrolling             19,822       21,018
Interests
Average
Shareholders'             579,990     538,316
Equity
TOTAL AVERAGE
LIABILITIES,
REDEEMABLE
NONCONTROLLING           $ 6,338,566  $ 6,102,117
INTERESTS, AND
SHAREHOLDERS'
EQUITY
Net Interest
Income - on a
Fully Taxable                                        $ 191,660    $ 186,112
Equivalent Basis
(FTE)
LESS: FTE                                             8,384       7,158
Adjustment (6)
Net Interest
Income (GAAP                                         $ 183,276    $ 178,954
Basis)
Interest Rate                                                                   2.97       % 2.96       %
Spread
Net Interest                                                                    3.22       % 3.25       %
Margin
                                                                                                        
                                                                                                        

Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)

(In Thousands)                                             
LOAN DATA (10):                       12/31/2012    9/30/2012    12/31/2011
Commercial and Industrial
Loans:
New England                          $ 691,863      $ 642,141     $ 531,632
San Francisco Bay                      61,191         65,034        72,850
Southern California                    53,272         31,181        38,539
Pacific Northwest                     -             47,979       35,027
Total Commercial and                 $ 806,326      $ 786,335     $ 678,048
Industrial Loans
Commercial Real Estate
Loans:
New England                          $ 663,442      $ 645,222     $ 643,263
San Francisco Bay                      647,659        663,753       679,995
Southern California                    380,249        354,097       233,416
Pacific Northwest                     -             141,739      121,600
Total Commercial Real Estate         $ 1,691,350    $ 1,804,811   $ 1,678,274
Loans
Construction and Land Loans:
New England                          $ 93,489       $ 116,783     $ 106,385
San Francisco Bay                      33,655         36,747        36,339
Southern California                    10,426         8,590         5,622
Pacific Northwest                     -             2,771        5,363
Total Construction and Land          $ 137,570      $ 164,891     $ 153,709
Loans
Residential Loans:
New England                          $ 1,173,741    $ 1,168,492   $ 1,247,975
San Francisco Bay                      431,550        391,782       322,352
Southern California                    300,798        306,001       192,708
Pacific Northwest                     -             74,942       60,368
Total Residential Loans              $ 1,906,089    $ 1,941,217   $ 1,823,403
Home Equity Loans:
New England                          $ 79,947       $ 81,473      $ 85,118
San Francisco Bay                      36,730         37,122        48,182
Southern California                    6,874          7,280         6,265
Pacific Northwest                     -             2,377        4,133
Total Home Equity Loans              $ 123,551      $ 128,252     $ 143,698
Other Consumer Loans:
New England                          $ 131,999      $ 116,951     $ 147,356
San Francisco Bay                      9,581          11,551        12,526
Southern California                    7,148          8,964         10,123
Pacific Northwest                      -              1,678         1,622
Eliminations and other, net           522           2,957        2,469
Total Other Consumer Loans           $ 149,250      $ 142,101     $ 174,096
Total Loans
New England                          $ 2,834,481    $ 2,771,062   $ 2,761,729
San Francisco Bay                      1,220,366      1,205,989     1,172,244
Southern California                    758,767        716,113       486,673
Pacific Northwest                      -              271,486       228,113
Eliminations and other, net           522           2,957        2,469
Total Loans                          $ 4,814,136    $ 4,967,607   $ 4,651,228
                                                                    
                                                                    

Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)

(In Thousands)                                           
CREDIT QUALITY (10):            12/31/2012     9/30/2012     12/31/2011 
Special Mention Loans:
New England                    $ 40,389         $ 33,174        $ 36,680
San Francisco Bay                24,566           26,443          59,065
Southern California              19,784           26,967          36,048
Pacific Northwest               -              7,838         11,328     
Total Special Mention          $ 84,739        $ 94,422       $ 143,121    
Loans
Accruing Substandard
Loans (11):
New England                    $ 28,201         $ 39,707        $ 23,133
San Francisco Bay                49,204           49,754          57,199
Southern California              12,724           13,588          15,723
Pacific Northwest               -              4,757         2,186      
Total Accruing                 $ 90,129        $ 107,806      $ 98,241     
Substandard Loans
Nonaccruing Loans:
New England                    $ 29,203         $ 36,919        $ 33,411
San Francisco Bay                24,932           28,710          25,598
Southern California              6,610            6,817           7,323
Pacific Northwest               -              948           1,777      
Total Nonaccruing              $ 60,745        $ 73,394       $ 68,109     
Loans
Other Real Estate
Owned:
New England                    $ 1,744          $ 191           $ 98
San Francisco Bay                1,395            2,383           2,194
Southern California              -                -               1,143
Pacific Northwest               477            612           1,668      
Total Other Real               $ 3,616         $ 3,186        $ 5,103      
Estate Owned
Loans 30-89 Days Past
Due and Accruing (12):
New England                    $ 20,751         $ 4,832         $ 9,834
San Francisco Bay                11,771           3,751           11,446
Southern California              13,854           917             5,677
Pacific Northwest               -              -             -          
Total Loans 30-89 Days         $ 46,376        $ 9,500        $ 26,957     
Past Due and Accruing
Loans (Charged-off)/
Recovered, Net for the
Three Months Ended:
New England                    $ (1,148     )   $ (3,528    )   $ (1,379     )
San Francisco Bay                (1,094     )     189             1,612
Southern California              168              231             (393       )
Pacific Northwest               2              (817      )    15         
Total Net Loans
(Charged-off)/                 $ (2,072     )   $ (3,925    )   $ (145       )
Recovered
Loans (Charged-off)/
Recovered, Net for the
Twelve Months Ended:
New England                    $ (5,593     )                   $ (3,532     )
San Francisco Bay                (2,768     )                     (14,979    )
Southern California              289                              4,066
Pacific Northwest               (685       )                    (1,004     )
Total Net Loans
(Charged-off)/                 $ (8,757     )                   $ (15,449    )
Recovered
                                                                             
                                                                             

      Boston Private Financial Holdings, Inc.
       Selected Financial Data
       (Unaudited)
                                                                                          
FOOTNOTES:

       On December 17, 2012, Boston Private Bank & Trust Company announced that it had entered into an agreement
       to sell its three offices in the Pacific Northwest region. Accordingly, the assets and liabilities to be
       sold as part of this transaction have been classified as held for sale at December 31, 2012. Within loans
       held for sale on the consolidated balance sheet, $276.7 million of the balance at December 31, 2012
(1)    relate to the Pacific Northwest transaction. All of the deposits held for sale at December 31, 2012
       relate to the Pacific Northwest transaction. All other assets and liabilities that will be included in
       the Pacific Northwest transaction have been classified as other assets held for sale or other liabilities
       held for sale and are included within other assets or other liabilities on the consolidated balance sheet
       at December 31, 2012.
                                                                                                    
       In the second quarter of 2012, the Company completed the sale of its affiliate Davidson Trust Company. In
       2009, the Company completed the sale of its affiliates Boston Private Value Investors, Inc.; Sand Hill
(2)    Advisors, LLC; RINET Company, LLC; Gibraltar Private Bank & Trust Company; and Westfield Capital
       Management Company, LLC. Accordingly, prior period and current financial information related to the
       divested companies are included with discontinued operations.
                                                                                                    
       Adjustments to Net Income/(Loss) Attributable to the Company to arrive at Net Income/(Loss) Attributable
(3)    to the Common Shareholders, as presented in these tables, include decrease/ (increase) in Noncontrolling
       Interests Redemption Value and Dividends on Participating Securities.
                                                                                                    
       When the Company has positive Net Income from Continuing Operations Attributable to the Common
       Shareholders, the Company adds additional shares to Basic Weighted Average Shares Outstanding to arrive
       at Diluted Weighted Average Shares Outstanding for the Diluted Earnings Per Share calculation to reflect
       the assumed exercise, conversion, or contingent issuance of dilutive securities. If the additional shares
       would result in anti-dilution they would be excluded from the Diluted Earning Per Share calculation. The
       potential dilutive shares relate to: unexercised stock options, unvested non-participating restricted
(4)    stock, unexercised stock warrants, and unconverted Convertible Trust Preferred securities. The amount of
       shares that were anti-dilutive for the three and twelve months ended December 31, 2012 was 0.3 million in
       both periods. The amount of shares that were anti-dilutive for the three and twelve months ended December
       31, 2011 were 1.5 million in both periods. The amount of shares that were anti-dilutive for the three
       months ended September 30, 2012 was 0.8 million. See Part II. Item 8. "Financial Statements and
       Supplementary Data - Note 1: Basis of Presentation and Summary of Significant Accounting Policies" in the
       Company's Annual Report on Form 10-K for the year ended December 31, 2011 for additional information.
                                                                                                    
       The Company uses certain non-GAAP financial measures, such as: Tangible Book Value; the Tangible Common
       Equity ("TCE") to Tangible Assets ("TA") ratio; the TCE to Risk Weighted Assets ratio; pre-tax,
(5)    pre-provision earnings; and operating expenses excluding restructuring costs to provide information for
       investors to effectively analyze financial trends of ongoing business activities, and to enhance
       comparability with peers across the financial sector.
       
       Reconciliations from the Company's GAAP Total Equity to Total Assets ratio to the Non-GAAP TCE to TA
       ratio, and the Non-GAAP TCE to Risk Weighted Assets ratio, and from GAAP Book Value to Non-GAAP Tangible
       Book Value are presented below:
       
       The Company calculates Tangible Assets by adjusting Total Assets to exclude Goodwill and Intangible
       Assets.
       
         The Company calculates Tangible Common Equity by adjusting Total Equity to exclude Goodwill and
         Intangible Assets, net and includes the difference between Redemption Value and value per ASC 810,
         Consolidation ("ASC 810"), for Redeemable Noncontrolling Interests.
         
                                                                                                    
         (In thousands,
         except per               12/31/2012     9/30/2012     12/31/2011 
         share data)
         Total Balance           $ 6,465,005      $ 6,272,784     $ 6,049,372
         Sheet Assets
         LESS: Goodwill
         and Intangible           (135,054   )    (135,486  )    (145,600   )
         Assets, net *
         Tangible Assets         $ 6,329,951      $ 6,137,298     $ 5,903,772
         (non-GAAP)
         Total Equity            $ 603,102        $ 595,602       $ 566,125
         LESS: Goodwill
         and Intangible            (135,054   )     (135,486  )     (145,600   )
         Assets, net
         ADD: Difference
         between
         Redemption
         Value of                 17,201         12,744        14,381     
         Non-controlling
         Interests and
         value under ASC
         810
         Total adjusting           (117,853   )     (122,742  )     (131,219   )
         items
         Tangible Common
         Equity                  $ 485,249        $ 472,860       $ 434,906
         (non-GAAP)
         Total
         Equity/Total              9.33       %     9.50      %     9.36       %
         Assets
         Tangible Common
         Equity/Tangible           7.67       %     7.70      %     7.37       %
         Assets
         (non-GAAP)
                                                                                                    
         Total Risk
         Weighted Assets         $ 4,601,499      $ 4,551,665     $ 4,234,280
         **
         Tangible Common
         Equity/Total
         Risk Weighted             10.55      %     10.39     %     10.27      %
         Assets
         (non-GAAP)
                                                                                                    
         End of Period
         Shares                    78,744           78,930          78,023
         outstanding
         EOP Carlyle
         Common                   7,261          7,261         7,261      
         Convertible
         Shares
         Common
         Equivalent               86,005         86,191        85,284     
         Shares
                                                                                                    
         Book Value Per          $ 6.92           $ 6.81          $ 6.51
         Common Share
         Tangible Book
         Value Per Share         $ 5.64           $ 5.49          $ 5.10
         (non-GAAP)
                                                                                                    
         * For the TCE to TA ratio, Goodwill and Intangible Assets, net includes Goodwill and Intangible Assets
         of discontinued operations for December 31, 2011, which are included on the consolidated balance sheet
         with Assets of Discontinued Operations.
         ** Risk Weighted Assets for December 31, 2012 is presented based on estimated data.
                                                                                                    
       Reconciliations from the Company's GAAP income from continuing operations before income taxes to Non-GAAP
       pre-tax, pre-provision earnings and from GAAP operating expenses to Non-GAAP operating expenses excluding
       restructuring costs are presented below:
       
                                 Three Months Ended                                Twelve months ended
         (In Thousands)           12/31/2012     9/30/2012     12/31/2011     12/31/2012     12/31/2011
         Income/(loss)
         before income           $ 18,103         $ 20,820        $ 18,292         $ 69,088         $ 50,381
         taxes (GAAP)
         ADD BACK:
         Provision/               (5,000     )    (4,000    )    (2,500     )    (3,300     )    13,160
         (credit) for
         loan losses
         Pre-tax,
         pre-provision           $ 13,103         $ 16,820        $ 15,792         $ 65,788         $ 63,541
         earnings
         (Non-GAAP)
                                                                                                    
         Total operating         $ 62,738         $ 58,150        $ 57,966         $ 231,850        $ 233,854
         expense (GAAP)
         LESS:
         Restructuring            1,631          3,581         653            5,911          8,055
         expense
         Total operating
         expenses
         (excluding              $ 61,107         $ 54,569        $ 57,313         $ 225,939        $ 225,799
         restructuring
         costs)
         (Non-GAAP)
                                                                                                    
                                                                                                    
(6)    Interest Income on Non-taxable Investments and Loans are presented on an FTE basis using the federal
       statutory rate of 35% for each period presented.
                                                                                                    
(7)    Includes Loans Held for Sale and Nonaccrual Loans.
                                                                                                    
(8)    Assets and liabilities of discontinued operations are included in other assets and other liabilities in
       the average balance sheet presentation.
                                                                                                    
(9)    Includes Deposits Held for Sale.
                                                                                                    
       The concentration of the Private Banking loan data and credit quality is primarily based on the location
       of the lender's regional offices. Loans in the Pacific Northwest region not expected to be included the
(10)   sale of that region's offices have been included with New England at December 31, 2012, as those
       remaining loans will be managed out of the New England offices after the sale. Net loans from the Holding
       Company to certain principals of the Company's affiliate partners, loans at the Company's non-banking
       segments, and inter-company loan eliminations are identified as “Eliminations and other, net”.
                                                                                                    
       Accruing substandard loans include loans that are classified as substandard but are still accruing
       interest income. The Bank may classify a loan as substandard where known information about possible
(11)   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.
                                                                                                    
       In addition to loans 30-89 days past due and accruing, at December 31, 2012, the Company had three loans
       totaling $3.6 million that were more than 90 days past due but still on accrual status. These loans
(12)   originated in the New England region. At September 30, 2012, the Company had three loans totaling $2.7
       million that were more than 90 days past due but still on accrual status. These loans originated in the
       New England and San Francisco regions. At December 31, 2011, there were two loans totaling less than $0.1
       million that were more than 90 days past due but still on accrual status.

Contact:

Boston Private Financial Holdings, Inc.
Jeanne Hess, 617-912-3798
Vice President, Investor Relations
jhess@bostonprivate.com
 
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