Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported fourth quarter 2016 GAAP Net Income Attributable to the Company of $17.6 million, compared to $19.6 million for the third quarter of 2016 and $15.0 million for the fourth quarter of 2015. Fourth quarter 2016 diluted earnings per share were $0.19, compared to $0.22 in the third quarter of 2016, and $0.17 in the fourth quarter of 2015. Excluding Notable Items and the related tax impact, adjusted Net Income Attributable to the Company for the fourth quarter of 2016 was $21.9 million, and adjusted diluted earnings per share were $0.24.

For the full year of 2016, BPFH reported GAAP Net Income Attributable to the Company of $71.6 million or $0.81 of diluted earnings per share, compared to $64.9 million or $0.74 of diluted earnings per share for the full year of 2015.

“2016 was a year of progress for the Company,” said Clayton G. Deutsch, CEO. "The overall Company delivered 10% annual profit growth despite the impact of a goodwill impairment charge, and returned record levels of capital to shareholders through dividends and share repurchases.

“Our Private Bank contributed pristine asset quality and reliable earnings growth throughout a challenging yield environment, while Wealth Management & Trust demonstrated ongoing progress towards stability. Our Investment Managers and Wealth Advisors continue to contribute high returns to Company-wide financial performance. As we enter 2017, we are focused on perfecting our client service offering, improving profitability in all of our businesses, and positioning for long term growth.”

Notable Items Impacting Fourth Quarter Results

During the fourth quarter, the Company recorded two Notable Items that resulted in a net after-tax charge of $4.3 million. The Notable Items include a pre-tax, non-cash charge of $9.5 million for goodwill impairment related to the Wealth Management & Trust segment, and a pre-tax net gain on sale of $2.9 million related to the divestiture of two Southern California offices. The office divestiture, which closed during the fourth quarter, included $104 million of deposits. The tax effect was calculated by applying the federal statutory rate of 35%.

Core Fees and Income/Assets Under Management

Core Fees and Income for the fourth quarter were $38.5 million, a 2% increase linked quarter and a 4% increase year-over-year. For the full year 2016, Core Fees and Income decreased 3% to $151.7 million due to lower AUM in the Wealth Management & Trust segment, partially offset by higher Other Banking Fee Income.

AUM was $27.6 billion at the end of the fourth quarter, flat from the previous quarter and year-over-year. The Company experienced net flows of negative $176 million during the fourth quarter, compared to negative $336 million and negative $543 million in the third quarter of 2016 and fourth quarter of 2015, respectively. During the fourth quarter, net flows by segment were negative $82 million for Wealth Management & Trust, negative $23 million for Investment Management, and negative $71 million for Wealth Advisory.

Net Interest Income

Net Interest Income for the fourth quarter was $51.5 million, an increase of 3% from $49.9 million for the third quarter of 2016 and an increase of 7% from $48.1 million for the fourth quarter of 2015. The current quarter includes $0.4 million of interest recovered on previous nonaccrual loans compared to $0.3 million for both the third quarter of 2016 and fourth quarter of 2015. Excluding interest recovered on previous nonaccrual loans, Net Interest Income on an FTE basis increased 4% linked quarter and 6% year-over-year.

Net Interest Margin was 2.88% for the fourth quarter of 2016, unchanged from both the third quarter of 2016 and the fourth quarter of 2015. Excluding interest recovered on previous nonaccrual loans, Net Interest Margin was 2.86%, also unchanged from the third quarter of 2016 and the fourth quarter of 2015.

Total Operating Expenses

Total Operating Expenses for the fourth quarter of 2016 were $71.8 million, up 16% from $61.7 million for the third quarter of 2016, primarily due to the goodwill impairment. Excluding the goodwill impairment, Total Operating Expenses for the fourth quarter were $62.3 million, a 1% increase from the previous quarter.

On a year-over-year basis, Total Operating Expenses increased 7% from $67.4 million. Excluding the fourth quarter 2016 goodwill impairment and a fourth quarter 2015 restructuring charge of $2.0 million, Total Operating Expenses declined 5% year-over-year.

Provision and Asset Quality

The Company recorded a provision credit of $1.1 million for the fourth quarter of 2016, compared to a provision credit of $0.1 million for the third quarter of 2016 and $1.7 million for the fourth quarter of 2015. The provision credit in the fourth quarter of 2016 was due to net recoveries and a decrease in Criticized and Classified loans, partially offset by an increase in loan volume.

Criticized Loans decreased 25% linked quarter and 23% year-over-year to $118.5 million. Nonaccrual Loans (“Nonaccruals”) increased 5% to $17.3 million on a linked quarter basis. On a year-over-year basis, Nonaccruals decreased 35% from $26.6 million. As a percentage of Total Loans, Nonaccruals were 28 basis points at December 31, 2016, flat compared to September 30, 2016, and down 18 basis points from December 31, 2015.

Additional credit metrics are listed below:

(

In millions)

      December 31,
2016		       September 30,
2016		       June 30,
2016		       March 31,
2016		       December 31,
2015
Total Criticized Loans $ 118.5 $ 158.8 $ 150.7 $ 166.9       $ 154.1
Total Loans 30-89 Days Past Due and Accruing (13) $ 15.1 $ 4.6 $ 7.6 $ 8.3 $ 13.1
Total Net Loans (Charged-off)/ Recovered $ 1.5 $ 2.1 $ 1.9 $ 1.1 $ 0.9
Allowance for Loan Losses/

Total Loans

1.28 % 1.32 % 1.32 % 1.35 % 1.37 %

Capital Ratios

Capital ratios are listed below:

    December 31,
2016		     September 30,
2016		     June 30,
2016		     March 31,
2016		     December 31,
2015
BPFH Ratios:    
Total Risk-Based Capital * 13.9 % 14.0 % 14.0 % 14.0 % 13.9 %
Tier I Risk-Based Capital * 12.7 % 12.7 % 12.7 % 12.7 % 12.6 %
Tier I Leverage Capital * 9.4 % 9.5 % 9.6 % 9.5 % 9.5 %
TCE/TA (4) 7.1 % 7.4 % 7.4 % 7.3 % 7.0 %
Tier I Common Equity/

Risk Weighted Assets *

10.0 % 10.0 % 10.0 % 9.9 % 9.8 %

*December 31, 2016 information is presented based on estimated data.

Dividend Payments
Concurrent with the release of fourth quarter 2016 earnings, the Board of Directors of the Company declared a cash dividend to common shareholders of $0.11 per share. The record date for this dividend is February 3, 2017, and the payment date is February 17, 2017.

The Board of Directors of the Company also declared a cash dividend to holders of the Non-Cumulative Perpetual Preferred Stock, Series D of $17.375 per share, which will result in a dividend of $0.434375 per depositary share. The record date for this dividend is February 15, 2017, and the payment date is March 15, 2017.

Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures, such as tangible book value per share; the TCE/TA ratio; return on average common equity; return on average tangible common equity; pre-tax, pre-provision earnings; total operating expense excluding intangibles, goodwill impairment, and restructuring; the efficiency ratio (FTE basis); the efficiency ratio (FTE basis) excluding amortization of intangibles, goodwill impairment, and restructuring; net income attributable to the Company excluding notable items; diluted earnings per share excluding notable items; and Net Interest Income and Net Interest Margin excluding interest recovered on previous nonaccrual loans; 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 19, 2017, to discuss the financial results, business highlights and outlook. To access the call:

Dial In #: (888) 317-6003
Elite Entry Number: 6886722

Replay Information:
Available from January 19, 2017 at 12 noon until January 26, 2017
Dial In #: (877) 344-7529
Conference Number: 10098672

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 that owns Wealth Management and Private Banking affiliates with offices in Boston, New York, Los Angeles, San Francisco, San Jose, Florida, and Wisconsin. The Company has total assets of approximately $8 billion, and manages over $27 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 at 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 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 weakness in general economic conditions on a national basis or in the local markets in which the Company operates; 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; changes in 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 statement is 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 data) 12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015
Assets:
Cash and cash equivalents $ 106,557 $ 67,631 $ 126,167 $ 113,946 $ 238,694
Investment securities available-for-sale 1,264,132 1,249,578 1,191,523 1,151,529 1,084,510
Investment securities held-to-maturity 93,079 98,881 105,297 111,337 116,352
Stock in Federal Home Loan Banks 44,077 36,084 44,374 34,202 35,181
Loans held for sale 3,464 5,316 4,677 5,383 8,072
Total loans 6,114,354 5,869,498 5,751,497 5,658,181 5,719,212
Less: Allowance for loan losses   78,077     77,669   75,753   76,427   78,500  
Net loans 6,036,277 5,791,829 5,675,744 5,581,754 5,640,712
Other real estate owned (“OREO”) 1,690 1,800 2,042 98 776
Premises and equipment, net 31,827 32,089 31,752 31,575 31,036
Goodwill 142,554 152,082 152,082 152,082 152,082
Intangible assets, net 26,725 28,267 29,836 31,422 33,007
Fees receivable 13,400 11,185 11,129 11,041 11,258
Accrued interest receivable 20,479 18,062 18,061 17,590 17,950
Deferred income taxes, net 55,460 39,319 36,942 43,164 51,699
Other assets   130,753     149,427   149,975   128,540   121,179  
Total assets $ 7,970,474   $ 7,681,550 $ 7,579,601 $ 7,413,663 $ 7,542,508  

Liabilities:

Deposits $ 6,085,146 $ 5,812,243 $ 5,536,092 $ 5,786,860 $ 6,040,437
Deposits held for sale — 105,788 110,558 — —
Securities sold under agreements to repurchase 59,624 77,466 43,304 63,182 58,215
Federal funds purchased 80,000 125,000 180,000 40,000 —
Federal Home Loan Bank borrowings 734,205 522,681 678,012 523,953 461,324
Junior subordinated debentures 106,363 106,363 106,363 106,363 106,363
Other liabilities   119,683     134,322   135,289   114,222   111,468  
Total liabilities   7,185,021     6,883,863   6,789,618   6,634,580   6,777,807  
Redeemable Noncontrolling Interests 16,972 16,199 15,843 16,938 18,088
Shareholders’ Equity:
Preferred stock, $1.00 par value; authorized: 2,000,000 shares 47,753 47,753 47,753 47,753 47,753
Common stock, $1.00 par value; authorized: 170,000,000 shares 83,732 83,195 83,380 83,024 83,411
Additional paid-in capital 597,454 597,209 597,989 599,825 600,670
Retained earnings 47,929 39,415 28,985 21,740 12,886
Accumulated other comprehensive income/ (loss)   (12,548 )   10,134   12,654   6,687   (1,500 )
Total Company’s shareholders’ equity   764,320     777,706   770,761   759,029   743,220  
Noncontrolling interests   4,161     3,782   3,379   3,116   3,393  
Total shareholders’ equity   768,481     781,488   774,140   762,145   746,613  
Total liabilities, redeemable noncontrolling interests and shareholders’ equity $ 7,970,474   $ 7,681,550 $ 7,579,601 $ 7,413,663 $ 7,542,508  
 
                             
Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
Three Months Ended
(In thousands, except share and per share data) 12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015
Interest and dividend income:
Loans $ 51,499 $ 50,074 $ 49,731 $ 50,046 $ 49,463
Taxable investment securities 1,592 1,537 1,507 1,594 1,239
Non-taxable investment securities 1,520 1,444 1,400 1,390 1,348
Mortgage-backed securities 3,290 3,079 2,982 3,065 2,863
Federal funds sold and other   508     469     405     507     449  
Total interest and dividend income   58,409     56,603     56,025     56,602     55,362  
Interest expense:
Deposits 4,152 4,163 4,075 4,182 4,281
Federal Home Loan Bank borrowings 1,987 1,929 2,139 1,953 1,960
Junior subordinated debentures 674 591 584 578 973
Repurchase agreements and other short-term borrowings   77     49     58     10     8  
Total interest expense   6,890     6,732     6,856     6,723     7,222  
Net interest income 51,519 49,871 49,169 49,879 48,140
Provision/ (credit) for loan losses   (1,128 )   (138 )   (2,535 )   (3,133 )   (1,655 )
Net interest income after provision/ (credit) for loan losses   52,647     50,009     51,704     53,012     49,795  
Fees and other income:
Investment management fees 12,408 10,717 10,627 10,658 10,889
Wealth advisory fees 12,568 12,750 12,551 12,712 12,569
Wealth management and trust fees 11,031 10,826 11,208 10,916 11,782
Other banking fee income 2,387 3,447 2,982 3,233 1,719
Gain on sale of loans, net   105     156     197     209     178  
Total core fees and income   38,499     37,896     37,565     37,728     37,137  
Gain/ (loss) on sale of investments, net 2 273 245 1 215
Gain/ (loss) on OREO, net (110 ) 137 — 280 —
Gain on sale of offices 2,862 — — — —
Other   2,705     1,706     (1,015 )   13     366  
Total other income   5,459     2,116     (770 )   294     581  
Operating expense:
Salaries and employee benefits 39,669 40,924 40,614 42,560 39,520
Occupancy and equipment 10,039 9,521 9,928 9,587 9,989
Professional services 2,756 2,290 3,015 3,515 3,778
Marketing and business development 2,022 1,623 1,811 2,170 4,001
Contract services and data processing 1,743 1,865 1,737 1,679 1,505
Amortization of intangibles 1,542 1,568 1,586 1,586 1,799
Impairment of goodwill 9,528 — — — —
FDIC insurance 727 722 1,015 1,020 1,089
Restructuring — — 905 1,112 2,000
Other   3,817     3,157     4,120     3,480     3,726  
Total operating expense   71,843     61,670     64,731     66,709     67,407  
Income before income taxes 24,762 28,351 23,768 24,325 20,106
Income tax expense   7,247     8,652     7,626     7,438     5,638  
Net income from continuing operations 17,515 19,699 16,142 16,887 14,468
Net income from discontinued operations (1)   1,184     1,047     1,245     2,065     1,455  
Net income before attribution to noncontrolling interests 18,699 20,746 17,387 18,952 15,923
Less: Net income attributable to noncontrolling interests   1,147     1,110     989     911     921  
Net income attributable to the Company $ 17,552   $ 19,636   $ 16,398   $ 18,041   $ 15,002  
 
Boston Private Financial Holdings, Inc.            
Selected Financial Data
(Unaudited)
Year Ended
(In thousands, except share and per share data) 12/31/2016 12/31/2015
Interest and dividend income:
Loans $ 201,349 $ 192,184
Taxable investment securities 6,230 4,403
Non-taxable investment securities 5,754 4,758
Mortgage-backed securities 12,416 10,933
Federal funds sold and other   1,890     1,390  
Total interest and dividend income   227,639     213,668  
Interest expense:
Deposits 16,571 16,002
Federal Home Loan Bank borrowings 8,008 7,959
Junior subordinated debentures 2,427 3,875
Repurchase agreements and other short-term borrowings   195     62  
Total interest expense   27,201     27,898  
Net interest income 200,438 185,770
Provision/ (credit) for loan losses   (6,935 )   (1,555 )
Net interest income after provision/ (credit) for loan losses   207,373     187,325  
Fees and other income:
Investment management fees 44,410 45,694
Wealth advisory fees 50,581 50,437
Wealth management and trust fees 43,980 51,309
Other banking fee income 12,050 8,440
Gain on sale of loans, net   667     1,207  
Total core fees and income   151,688     157,087  
Gain/ (loss) on sale of investments, net 521 236
Gain/ (loss) on OREO, net 306 124
Gain on sale of offices 2,862 —
Other   3,410     3,722  
Total other income   7,099     4,082  
Operating expense:
Salaries and employee benefits 163,767 159,401
Occupancy and equipment 39,075 37,183
Professional services 11,576 12,861
Marketing and business development 7,626 9,063
Contract services and data processing 7,024 6,037
Amortization of intangibles 6,282 6,711
Impairment of goodwill 9,528 —
FDIC insurance 3,484 3,979
Restructuring 2,017 3,724
Other   14,574     16,222  
Total operating expense   264,953     255,181  
Income before income taxes 101,207 93,313
Income tax expense   30,963     30,392  
Net income from continuing operations 70,244 62,921
Net income from discontinued operations (1)   5,541     6,411  
Net income before attribution to noncontrolling interests 75,785 69,332
Less: Net income attributable to noncontrolling interests   4,157     4,407  
Net income attributable to the Company $ 71,628   $ 64,925  
 
                               
Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
(In thousands, except share and per share data) Three Months Ended
PER SHARE DATA: 12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015
Calculation of Income for EPS:
Net income attributable to the Company $ 17,552 $ 19,636 $ 16,398 $ 18,041 $ 15,002
Adjustments to Net Income Attributable to the Company to arrive at Net Income Attributable to Common Shareholders, treasury stock method (2)   (1,798 )   (1,006 )   (970 )   (289 )   (1,182 )
Net Income Attributable to the Common Shareholders, treasury stock method $ 15,755   $ 18,630   $ 15,428   $ 17,752   $ 13,820  
 
End of Period Common Shares Outstanding 83,731,769 83,194,714 83,380,426 83,023,755 83,410,961
 
Weighted Average Shares Outstanding:
Weighted average basic shares outstanding 81,217,391 81,301,499 81,236,809 81,301,499 81,134,931
Weighted average diluted shares outstanding (3) 83,438,137 83,562,283 83,519,939 83,279,866 83,579,050
 
Diluted Total Earnings per Share $ 0.19 $ 0.22 $ 0.18 $ 0.21 $ 0.17
 
         
(In thousands, except share and per share data) Year Ended
PER SHARE DATA: 12/31/2016 12/31/2015
Calculation of Income for EPS:
Net income attributable to the Company $ 71,628 $ 64,925
Adjustments to Net Income Attributable to the Company to arrive at Net Income Attributable to Common Shareholders, treasury stock method (2)   (4,063 )   (3,011 )
Net Income Attributable to the Common Shareholders, treasury stock method $ 67,565   $ 61,914  
 
Weighted Average Shares Outstanding:
Weighted average basic shares outstanding 81,264,273 80,885,253
Weighted average diluted shares outstanding (3) 83,209,126 83,225,153
 
Diluted Total Earnings per Share $ 0.81 $ 0.74
 
                               
Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
(In thousands, except per share data)
FINANCIAL DATA: 12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015
Book Value Per Common Share $ 8.61 $ 8.82 $ 8.71 $ 8.60 $ 8.38
Tangible Book Value Per Share (4) $ 6.59 $ 6.65 $ 6.53 $ 6.39 $ 6.16
Market Price Per Share $ 16.55 $ 12.83 $ 11.78 $ 11.45 $ 11.34
 
ASSETS UNDER MANAGEMENT AND ADVISORY:
Wealth Management and Trust $ 7,008,000 $ 7,334,000 7,313,000 7,137,000 $ 7,976,000
Investment Managers 10,571,000 10,176,000 10,006,000 9,838,000 9,952,000
Wealth Advisory 9,989,000 10,028,000 9,974,000 9,857,000 9,688,000
Less: Inter-company Relationship   (11,000 )   (11,000 )   (17,000 )   (21,000 )   (21,000 )
Total Assets Under Management and Advisory $ 27,557,000   $ 27,527,000     27,276,000     26,811,000   $ 27,595,000  
 

FINANCIAL RATIOS:

Total Equity/ Total Assets 9.64 % 10.17 % 10.21 % 10.28 % 9.90 %
Tangible Common Equity/ Tangible Assets (4) 7.07 % 7.38 % 7.36 % 7.34 % 6.98 %
Tier I Common Equity/ Risk Weighted Assets (4) 10.00 % 10.02 % 9.95 % 9.92 % 9.80 %
Allowance for Loan Losses/ Total Loans 1.28 % 1.32 % 1.32 % 1.35 % 1.37 %
Allowance for Loan Losses/ Nonaccrual Loans 451 % 471 % 395 % 314 % 295 %
 
Return on Average Assets - Three Months Ended (Annualized) 0.89 % 1.03 % 0.88 % 0.99 % 0.81 %
Return on Average Common Equity - Three Months Ended (Annualized) (5) 9.07 % 10.20 % 8.68 % 9.84 % 8.06 %
Return on Average Tangible Common Equity - Three Months Ended (Annualized) (5) 12.75 % 14.30 % 12.43 % 14.11 % 11.92 %
Efficiency Ratio - Three Months Ended (6) 61.87 % 65.04 % 70.41 % 70.87 % 71.59 %
 
DEPOSIT DETAIL:
Demand deposits (noninterest-bearing) $ 1,753,648 $ 1,770,631 $ 1,636,273 $ 1,609,669 $ 1,689,604
NOW 578,657 556,096 547,777 565,394 588,337
Savings 74,162 74,866 70,553 76,019 72,336
Money market 3,102,048 2,879,952 2,771,080 2,959,328 3,105,172
Certificates of deposit   576,631     530,698     510,409     576,450     584,988  
Total Deposits $ 6,085,146   $ 5,812,243   $ 5,536,092   $ 5,786,860   $ 6,040,437  
 
                                             
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 SHEET: 12/31/16 09/30/16 12/31/15 12/31/16 09/30/16 12/31/15 12/31/16 09/30/16 12/31/15
AVERAGE ASSETS
Interest-Earning Assets:
Cash and Investments:
Taxable investment securities $ 375,913 $ 372,852 $ 368,573 $ 1,592 $ 1,537 $ 1,239 1.69 % 1.65 % 1.35 %
Non-taxable investment securities (9) 285,330 271,864 258,755 2,338 2,221 2,074 3.28 % 3.27 % 3.21 %
Mortgage-backed securities 679,644 629,748 526,987 3,290 3,079 2,863 1.94 % 1.96 % 2.17 %
Federal funds sold and other   130,740   152,892   220,618   508   469   449 1.53 % 1.20 % 0.80 %
Total Cash and Investments   1,471,627   1,427,356   1,374,933   7,728   7,306   6,625 2.10 % 2.05 % 1.92 %
Loans (10):
Commercial and Industrial (9) 1,110,268 1,065,787 1,053,290 10,892 10,626 10,865 3.84 % 3.90 % 4.04 %
Commercial Real Estate (9) 2,109,601 1,976,327 1,897,943 21,153 19,860 19,981 3.92 % 3.93 % 4.12 %
Construction and Land 96,242 117,183 182,648 1,018 1,263 1,634 4.14 % 4.22 % 3.50 %
Residential 2,350,644 2,300,392 2,224,614 17,999 17,812 17,272 3.06 % 3.10 % 3.11 %
Home Equity 117,985 122,505 117,892 1,050 1,105 1,015 3.54 % 3.59 % 3.41 %
Other Consumer   188,908   182,315   166,184   1,323   1,154   967 2.79 % 2.52 % 2.31 %
Total Loans   5,973,648   5,764,509   5,642,571   53,435   51,820   51,734 3.53 % 3.55 % 3.62 %
Total Earning Assets   7,445,275   7,191,865   7,017,504   61,163   59,126   58,359 3.25 % 3.25 % 3.28 %
LESS: Allowance for Loan Losses 79,440 76,424 79,389
Cash and due From Banks (Non-Interest Bearing) 39,133 39,301 39,453
Other Assets   427,545   445,517   411,642
TOTAL AVERAGE ASSETS $ 7,832,513 $ 7,600,259 $ 7,389,210
AVERAGE LIABILITIES, RNCI, AND

SHAREHOLDERS' EQUITY

Interest-Bearing Liabilities:
Interest-Bearing Deposits (10):
NOW $ 567,538 $ 551,085 $ 512,973 $ 126 $ 120 $ 82 0.09 % 0.09 % 0.06 %
Savings 76,033 76,999 73,380 18 25 23 0.09 % 0.13 % 0.12 %
Money Market 2,969,292 2,922,687 3,063,533 2,807 2,877 2,995 0.38 % 0.39 % 0.39 %
Certificates of Deposit   563,045   560,546   593,286   1,201   1,141   1,181 0.85 % 0.81 % 0.79 %
Total Interest-Bearing Deposits (14) 4,175,908 4,111,317 4,243,172 4,152 4,163 4,281 0.40 % 0.40 % 0.40 %
Junior Subordinated Debentures 106,363 106,363 106,363 674 591 973 2.48 % 2.17 % 3.58 %
FHLB Borrowings and Other   742,247   624,528   491,115   2,064   1,978   1,968 1.09 % 1.24 % 1.57 %
Total Interest-Bearing Liabilities   5,024,518   4,842,208   4,840,650   6,890   6,732   7,222 0.54 % 0.55 % 0.59 %
Noninterest Bearing Demand Deposits (10) (14) 1,870,130 1,824,548 1,673,122
Payables and Other Liabilities   140,006   135,901   110,951
Total Average Liabilities 7,034,654 6,802,657 6,624,723
Redeemable Noncontrolling Interests 20,393 19,504 21,337
Average Shareholders' Equity   777,466   778,098   743,150
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY $ 7,832,513 $ 7,600,259 $ 7,389,210
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) $ 54,273 $ 52,394 $ 51,137
LESS: FTE Adjustment (9)   2,754   2,523   2,997
Net Interest Income (GAAP Basis) $ 51,519 $ 49,871 $ 48,140
Interest Rate Spread 2.71 % 2.70 % 2.69 %
Bank only Net Interest Margin 2.91 % 2.92 % 2.94 %
Net Interest Margin 2.88 % 2.88 % 2.88 %
 
                             
Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
Average Balance Interest Income/Expense Average Yield/Rate
(In thousands) Year Ended Year Ended Year Ended
AVERAGE BALANCE SHEET: 12/31/16 12/31/15 12/31/16 12/31/15 12/31/16 12/31/15
AVERAGE ASSETS
Interest-Earning Assets:
Cash and Investments:
Taxable investment securities $ 373,937 $ 343,130 $ 6,230 $ 4,403 1.67 % 1.28 %
Non-taxable investment securities (9) 270,320 245,402 8,850 7,320 3.27 % 2.98 %
Mortgage-backed securities 615,873 527,057 12,416 10,933 2.02 % 2.07 %
Federal funds sold and other   152,616   167,847   1,890   1,390 1.24 % 0.83 %
Total Cash and Investments   1,412,746   1,283,436   29,386   24,046 2.08 % 1.87 %
Loans (10):
Commercial and Industrial (9) 1,081,658 1,000,139 43,250 42,879 4.00 % 4.29 %
Commercial Real Estate (9) 1,964,544 1,820,142 80,369 76,770 4.09 % 4.22 %
Construction and Land 134,651 156,669 5,385 5,404 4.00 % 3.45 %
Residential 2,284,478 2,183,830 70,553 67,648 3.09 % 3.10 %
Home Equity 120,878 117,520 4,310 4,084 3.57 % 3.48 %
Other Consumer   176,683   167,297   4,516   3,872 2.56 % 2.31 %
Total Loans   5,762,892   5,445,597   208,383   200,657 3.62 % 3.68 %
Total Earning Assets   7,175,638   6,729,033   237,769   224,703 3.31 % 3.34 %
LESS: Allowance for Loan Losses 78,368 78,164
Cash and due From Banks (Non-Interest Bearing) 39,669 39,513
Other Assets   430,972   410,375
TOTAL AVERAGE ASSETS $ 7,567,911 $ 7,100,757
AVERAGE LIABILITIES, RNCI, AND

SHAREHOLDERS' EQUITY

Interest-Bearing Liabilities:
Interest-Bearing Deposits (10):
NOW $ 553,981 $ 516,720 $ 437 $ 318 0.08 % 0.06 %
Savings 75,977 72,275 89 81 0.12 % 0.11 %
Money Market 2,960,702 2,894,615 11,422 10,871 0.39 % 0.38 %
Certificates of Deposit   565,274   597,153   4,623   4,732 0.82 % 0.79 %
Total Interest-Bearing Deposits (14) 4,155,934 4,080,763 16,571 16,002 0.40 % 0.39 %
Junior Subordinated Debentures 106,363 106,363 2,427 3,875 2.28 % 3.64 %
FHLB Borrowings and Other   652,998   516,237   8,203   8,021 1.26 % 1.55 %
Total Interest-Bearing Liabilities   4,915,295   4,703,363   27,201   27,898 0.55 % 0.59 %
Noninterest Bearing Demand Deposits (10) (14) 1,736,637 1,542,254
Payables and Other Liabilities   126,039   103,669
Total Average Liabilities 6,777,971 6,349,286
Redeemable Noncontrolling Interests 20,323 21,982
Average Shareholders' Equity   769,617   729,489
TOTAL AVERAGE LIABILITIES, RNCI, AND

SHAREHOLDERS' EQUITY

$ 7,567,911 $ 7,100,757
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) $ 210,568 $ 196,805
LESS: FTE Adjustment (9)   10,130   11,035
Net Interest Income (GAAP Basis) $ 200,438 $ 185,770
Interest Rate Spread 2.76 % 2.75 %
Bank only Net Interest Margin 2.95 % 2.99 %
Net Interest Margin 2.93 % 2.92 %
 
Boston Private Financial Holdings, Inc.                              
Selected Financial Data
(Unaudited)
(In thousands)

LOAN DATA (11):

   12/31/2016   9/30/2016   6/30/2016   3/31/2016   12/31/2015
Other Commercial and Industrial Loans:
New England $ 493,451 $ 461,201 $ 428,515 $ 457,520 $ 500,389
San Francisco Bay Area 50,578 59,936 64,762 66,629 70,702
Southern California   67,341   67,583   66,379   68,640   61,928
Total Other Commercial and Industrial Loans $ 611,370 $ 588,720 $ 559,656 $ 592,789 $ 633,019
Commercial Tax Exempt Loans:
New England $ 317,691 $ 263,418 $ 260,739 $ 268,270 $ 267,595
San Francisco Bay Area 69,064 69,366 51,462 51,756 52,052
Southern California   11,849   11,918   11,986   12,053   12,120
Total Commercial Tax Exempt Loans $ 398,604 $ 344,702 $ 324,187 $ 332,079 $ 331,767
Total Commercial and Industrial Loans $ 1,009,974 $ 933,422 $ 883,843 $ 924,868 $ 964,786
Commercial Real Estate Loans:
New England $ 1,012,284 $ 987,758 $ 923,035 $ 940,149 $ 925,402
San Francisco Bay Area 637,042 611,224 633,735 611,461 622,123
Southern California   652,918   621,336   579,616   519,012   513,378
Total Commercial Real Estate Loans $ 2,302,244 $ 2,220,318 $ 2,136,386 $ 2,070,622 $ 2,060,903
Construction and Land Loans:
New England $ 47,434 $ 56,268 $ 90,408 $ 106,258 $ 106,048
San Francisco Bay Area 29,629 26,400 36,808 35,281 52,876
Southern California   27,776   16,028   15,333   25,135   24,510
Total Construction and Land Loans $ 104,839 $ 98,696 $ 142,549 $ 166,674 $ 183,434
Residential Loans:
New England $ 1,456,592 $ 1,409,385 $ 1,385,102 $ 1,361,547 $ 1,368,192
San Francisco Bay Area 473,102 476,986 470,694 463,645 462,327
Southern California   450,167   429,719   424,320   391,683   399,021
Total Residential Loans $ 2,379,861 $ 2,316,090 $ 2,280,116 $ 2,216,875 $ 2,229,540
Home Equity Loans:
New England $ 87,280 $ 90,592 $ 91,728 $ 84,693 $ 83,712
San Francisco Bay Area 25,129 23,826 26,714 26,134 28,966
Southern California   6,408   6,851   7,044   7,980   7,150
Total Home Equity Loans $ 118,817 $ 121,269 $ 125,486 $ 118,807 $ 119,828
Other Consumer Loans:
New England $ 186,680 $ 167,140 $ 166,998 $ 145,450 $ 152,984
San Francisco Bay Area 7,517 6,764 8,299 8,347 4,530
Southern California   4,422   5,799   7,820   6,538   3,207
Total Other Consumer Loans $ 198,619 $ 179,703 $ 183,117 $ 160,335 $ 160,721
Total Loans:
New England $ 3,601,412 $ 3,435,762 $ 3,346,525 $ 3,363,887 $ 3,404,322
San Francisco Bay Area 1,292,061 1,274,502 1,292,474 1,263,253 1,293,576
Southern California   1,220,881   1,159,234   1,112,498   1,031,041   1,021,314
Total Loans $ 6,114,354 $ 5,869,498 $ 5,751,497 $ 5,658,181 $ 5,719,212
 
Boston Private Financial Holdings, Inc.                              
Selected Financial Data
(Unaudited)
(In thousands)

CREDIT QUALITY (11):

   12/31/2016     9/30/2016   6/30/2016   3/31/2016     12/31/2015  
Special Mention Loans:
New England $ 14,750 $ 25,248 $ 27,903 $ 38,927 $ 40,121
San Francisco Bay Area 21,901 22,786 24,381 23,288 15,764
Southern California   884     6,278   15,044   24,710     13,326  
Total Special Mention Loans $ 37,535   $ 54,312 $ 67,328 $ 86,925   $ 69,211  

Accruing Substandard Loans (12):

New England $ 10,972 $ 19,748 $ 17,447 $ 19,157 $ 22,026
San Francisco Bay Area 15,890 19,157 19,750 20,235 19,990
Southern California   36,809     49,148   27,027   16,299     16,398  
Total Accruing Substandard Loans $ 63,671   $ 88,053 $ 64,224 $ 55,691   $ 58,414  
Nonaccruing Loans:
New England $ 10,081 $ 11,020 $ 13,028 $ 17,988 $ 19,572
San Francisco Bay Area 2,989 3,543 4,196 4,369 4,977
Southern California   4,245     1,928   1,964   1,999     2,022  
Total Nonaccruing Loans $ 17,315   $ 16,491 $ 19,188 $ 24,356   $ 26,571  
Other Real Estate Owned:
New England $ 1,690 $ 1,800 $ 2,042 $ 98 $ 191
San Francisco Bay Area — — — — 585
Southern California   —     —   —   —     —  
Total Other Real Estate Owned $ 1,690   $ 1,800 $ 2,042 $ 98   $ 776  

Loans 30-89 Days Past Due and Accruing (13):

New England $ 10,311 $ 2,735 $ 5,213 $ 4,723 $ 7,118
San Francisco Bay Area 591 1,018 70 986 2,806
Southern California   4,235     836   2,343   2,598     3,170  
Total Loans 30-89 Days Past Due and Accruing $ 15,137   $ 4,589 $ 7,626 $ 8,307   $ 13,094  
Loans (Charged-off)/ Recovered, Net for the Three Months Ended:
New England $ 1,120 $ 1,704 $ 1,276 $ (2,146 ) $ 120
San Francisco Bay Area 384 318 537 3,454 703
Southern California   33     32   48   (248 )   86  
Total Net Loans (Charged-off)/ Recovered $ 1,537   $ 2,054 $ 1,861 $ 1,060   $ 909  
Loans (Charged-off)/ Recovered, Net for the Twelve Months Ended:
New England $ 1,954 $ (502 )
San Francisco Bay Area 4,693 4,217
Southern California   (135 )   502  
Total Net Loans (Charged-off)/ Recovered $ 6,512   $ 4,217  
 
         
Boston Private Financial Holdings, Inc.
Selected Financial Data
(Unaudited)
 
FOOTNOTES:
(1 ) Net income from discontinued operations consists of contingent payments or expenses related to our divested affiliates, including Westfield Capital Management Company, LLC.
 

(2

)

Adjustments to net income attributable to the Company to arrive at net income attributable to the common shareholders, as presented in these tables, include decrease/ (increase) in noncontrolling interests redemption value and dividends paid on preferred stock.
 
(3 ) 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. These additional shares 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 earnings per share calculation. The potential dilutive shares relate to: unexercised stock options, unvested restricted stock, and unexercised stock warrants. See 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, 2015 for additional information.
 
(4 )

The Company uses certain non-GAAP financial measures, such as: Tangible Book Value Per Share and the Tangible Common Equity ("TCE") to Tangible Assets ("TA") ratio 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 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 non-convertible Series D Preferred stock and exclude Goodwill and Intangible Assets, net.
 
(In thousands, except per share data)   12/31/2016     9/30/2016     6/30/2016     3/31/2016     12/31/2015  
Total Balance Sheet Assets $ 7,970,474 $ 7,681,550 $ 7,579,601 $ 7,413,663 $ 7,542,508
LESS: Goodwill and Intangible Assets, net   (169,279 )   (180,349 )   (181,918 )   (183,504 )   (185,089 )
Tangible Assets (non-GAAP) $ 7,801,195 $ 7,501,201 $ 7,397,683 $ 7,230,159 $ 7,357,419
Total Shareholders' Equity $ 768,481 $ 781,488 $ 774,140 $ 762,145 $ 746,613
LESS: Series D Preferred Stock (non-convertible) (47,753 ) (47,753 ) (47,753 ) (47,753 ) (47,753 )
LESS: Goodwill and Intangible Assets, net   (169,279 )   (180,349 )   (181,918 )   (183,504 )   (185,089 )
Total adjusting items   (217,032 )   (228,102 )   (229,671 )   (231,257 )   (232,842 )
Tangible Common Equity (non-GAAP) $ 551,449   $ 553,386   $ 544,469   $ 530,888   $ 513,771  
Total Equity/Total Assets 9.64 % 10.17 % 10.21 % 10.28 % 9.90 %
Tangible Common Equity/Tangible Assets (non-GAAP) 7.07 % 7.38 % 7.36 % 7.34 % 6.98 %
 
Total Risk Weighted Assets * $ 5,714,598 $ 5,534,711 $ 5,464,529 $ 5,412,514 $ 5,449,239
Tier I Common Equity * $ 571,665 $ 554,368 $ 543,801 $ 536,925 $ 534,241
Tier I Common Equity/ Risk Weighted Assets 10.00 % 10.02 % 9.95 % 9.92 % 9.80 %
 
End of Period Shares Outstanding 83,731,769 83,194,714 83,380,426 83,023,755 83,410,961
 
Book Value Per Common Share $ 8.61 $ 8.82 $ 8.71 $ 8.60 $ 8.38
Tangible Book Value Per Share (non-GAAP) $ 6.59 $ 6.65 $ 6.53 $ 6.39 $ 6.16
* Risk Weighted Assets and Tier I Common Equity for December 31, 2016 are presented based on estimated data.
 
(5 ) The Company uses certain non-GAAP financial measures, such as: Return on Average Common Equity and Return on Average Tangible Common Equity 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 Return on Average Equity ratio to the Non-GAAP Return on Average Common Equity ratio, and the Non-GAAP Return on Average Tangible Common Equity ratio are presented below:
 
The Company annualizes income data based on the number of days in the period presented and a 365 day year. The Company calculates Average Common Equity by adjusting Average Equity to exclude Average Preferred Equity. The Company calculates Average Tangible Common Equity by adjusting Average Equity to exclude Average Goodwill and Intangible Assets, net and Average Preferred Equity.
 
Three Months Ended
(In thousands)   12/31/2016     9/30/2016     6/30/2016     3/31/2016     12/31/2015  
Total average shareholders' equity $ 777,466 $ 778,098 $ 765,063 $ 755,400 $ 743,150
LESS: Average Series D preferred stock (non-convertible)   (47,753 )   (47,753 )   (47,753 )   (47,753 )   (47,753 )
Average common equity (non-GAAP)   729,713     730,345     717,310     707,647     695,397  
LESS: Average goodwill and intangible assets, net   (179,535 )   (181,191 )   (182,787 )   (184,415 )   (185,983 )
Average Tangible Common Equity (non-GAAP) $ 550,178   $ 549,154   $ 534,523   $ 523,232   $ 509,414  
 
Net income attributable to the Company $ 17,552 $ 19,636 $ 16,398 $ 18,041 $ 15,002
LESS: Dividends on Series D preferred stock   (869 )   (868 )   (869 )   (869 )   (869 )
Common net income (non-GAAP) 16,683 18,768 15,529 17,172 14,133
ADD: Amortization of intangibles, net of tax (35%)   1,002     1,019     1,031     1,031     1,169  
Tangible common net income (non-GAAP) $ 17,685   $ 19,787   $ 16,560   $ 18,203   $ 15,302  
 
Return on Average Equity - (Annualized) 8.96 % 10.01 % 8.60 % 9.69 % 8.01 %
Return on Average Common Equity - (Annualized) (non-GAAP) 9.07 % 10.20 % 8.68 % 9.84 % 8.06 %
Return on Average Tangible Common Equity - (Annualized) (non-GAAP) 12.75 % 14.30 % 12.43 % 14.11 % 11.92 %
 
Year ended
(In thousands)   12/31/2016     12/31/2015  
Total average shareholders' equity $ 769,617 $ 729,489
LESS: Average Series D preferred stock (non-convertible)   (47,753 )   (47,753 )
Average common equity (non-GAAP)   721,864     681,736  
LESS: Average goodwill and intangible assets, net   (181,976 )   (188,533 )
Average Tangible Common Equity (non-GAAP) $ 539,888   $ 493,203  
 
Net income attributable to the Company $ 71,628 $ 64,925
LESS: Dividends on Series D preferred stock   (3,475 )   (3,475 )
Common net income (non-GAAP) 68,153 61,450
ADD: Amortization of intangibles, net of tax (35%)   4,083     4,362  
Tangible common net income (non-GAAP) $ 72,236   $ 65,812  
 
Return on Average Equity - (Annualized) 9.31 % 8.90 %
Return on Average Common Equity - (Annualized) (non-GAAP) 9.44 % 9.01 %
Return on Average Tangible Common Equity - (Annualized) (non-GAAP) 13.38 % 13.34 %
 

(6

)

The Company uses certain non-GAAP financial measures, such as: pre-tax, pre-provision earnings, total operating expenses excluding amortization of intangibles, goodwill impairment, and restructuring expense, and the efficiency ratio 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 income from continuing operations before income taxes to non-GAAP pre-tax, pre-provision earnings; from GAAP total operating expense to non-GAAP total operating expense excluding amortization of intangibles, goodwill impairment, and restructuring; and from GAAP efficiency ratio to Non-GAAP efficiency ratio (FTE basis), excluding amortization of intangibles, goodwill impairment, and restructuring, are presented below:

 
Three Months Ended
(In thousands)   12/31/2016     9/30/2016     6/30/2016     3/31/2016     12/31/2015  
Income before income taxes (GAAP) $ 24,762 $ 28,351 $ 23,768 $ 24,325 $ 20,106
ADD BACK: Provision/ (credit) for loan losses   (1,128 )   (138 )   (2,535 )   (3,133 )   (1,655 )
Pre-tax, pre-provision earnings (non-GAAP) $ 23,634 $ 28,213 $ 21,233 $ 21,192 $ 18,451
 
Total operating expense (GAAP) $ 71,843 $ 61,670 $ 64,731 $ 66,709 $ 67,407
Less: Amortization of intangibles 1,542 1,568 1,586 1,586 1,799
Less: Goodwill impairment 9,528 — — — —
Less: Restructuring   —     —     905     1,112     2,000  

Total operating expense (excluding amortization of intangibles, goodwill impairment, and restructuring) (non-GAAP)

$ 60,773 $ 60,102 $ 62,240 $ 64,011 $ 63,608
 
Net interest income $ 51,519 $ 49,871 $ 49,169 $ 49,879 $ 48,140
Total core fees and income 38,499 37,896 37,565 37,728 37,137
Total other income 5,459 2,116 (770 ) 294 581
FTE income   2,754     2,523     2,437     2,416     2,997  
Total revenue (FTE basis) $ 98,231 $ 92,406 $ 88,401 $ 90,317 $ 88,855
Efficiency Ratio (GAAP) 75.25 % 68.61 % 75.30 % 75.89 % 78.51 %
Efficiency Ratio, FTE Basis excluding amortization of intangibles, goodwill impairment, and restructuring (non-GAAP) 61.87 % 65.04 % 70.41 % 70.87 % 71.59 %
 
Year ended
(In thousands)   12/31/2016     12/31/2015  
Income before income taxes (GAAP) $ 101,207 $ 93,313
ADD BACK: Provision/ (credit) for loan losses   (6,935 )   (1,555 )
Pre-tax, pre-provision earnings (non-GAAP) $ 94,272 $ 91,758
 
Total operating expense (GAAP) $ 264,953 $ 255,181
Less: Amortization of intangibles 6,282 6,711
Less: Goodwill impairment 9,528 —
Less: Restructuring   2,017     3,724  

Total operating expense (excluding amortization of intangibles, goodwill impairment, and restructuring) (non-GAAP)

$ 247,126 $ 244,746
 
Net interest income $ 200,438 $ 185,770
Total core fees and income 151,688 157,087
Total other income 7,099 4,082
FTE income   10,130     11,035  
Total revenue (FTE basis) $ 369,355 $ 357,974
Efficiency Ratio (GAAP) 73.76 % 73.55 %
Efficiency Ratio, FTE Basis excluding amortization of intangibles, goodwill impairment, and restructuring (non-GAAP) 66.91 % 68.37 %
 
(7 )

The Company uses certain non-GAAP financial measures, such as: net income attributable to the Company excluding notable items and diluted earnings per share excluding notable items 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 net income attributable to the Company to non-GAAP net income attributable to the Company excluding notable items and from GAAP diluted earnings per share to non-GAAP diluted earnings per share excluding notable items are presented below:
 
Three Months Ended

(In thousands, except share and per share data)

  12/31/2016     9/30/2016     6/30/2016     3/31/2016     12/31/2015  
Net income attributable to the Company (GAAP) $ 17,552 $ 19,636 $ 16,398 $ 18,041 $ 15,002
LESS: Gain on sale of offices 2,862 — — — —
ADD BACK: Impairment of goodwill 9,528 — — — —
Tax effect at 35% statutory rate   (2,333 )   —     —     —     —  
Net income attributable to the Company

excluding notable items (non-GAAP)

$ 21,885 $ 19,636 $ 16,398 $ 18,041 $ 15,002
 
Net Income Attributable to the Common Shareholders, treasury stock method (GAAP) $ 15,755 $ 18,630 $ 15,428 $ 17,752 $ 13,820
LESS: Gain on sale of offices 2,862 — — — —
ADD BACK: Impairment of goodwill 9,528 — — — —
Tax effect at 35% statutory rate   (2,333 )   —     —     —     —  
Net Income Attributable to the Common Shareholders, treasury stock method, excluding notable items (non-GAAP) $ 20,088 $ 18,630 $ 15,428 $ 17,752 $ 13,820
 
Weighted average diluted shares outstanding (3) 83,438,137 83,562,283 83,519,939 83,279,866 83,579,050
 
Diluted Total Earnings per Share (GAAP) $ 0.19 $ 0.22 $ 0.18 $ 0.21 $ 0.17
Diluted Total Earnings per Share, excluding notable items (non-GAAP) $ 0.24 $ 0.22 $ 0.18 $ 0.21 $ 0.17
 
(8 ) The Company uses certain non-GAAP financial measures, such as: net interest income excluding interest recovered on previous nonaccrual loans and net interest margin excluding interest recovered on previous nonaccrual loans 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 net interest income to non-GAAP net interest income excluding interest recovered on previous nonaccrual loans; and from GAAP net interest margin to non-GAAP net interest margin excluding interest recovered on previous nonaccrual loans, are presented below:
Three Months Ended
(In thousands)   12/31/2016     9/30/2016     6/30/2016     3/31/2016     12/31/2015  
Net interest income (GAAP basis) $ 51,519 $ 49,871 $ 49,169 $ 49,879 $ 48,140
ADD: FTE income   2,754     2,523     2,437     2,416     2,997  
Net interest income, FTE basis 54,273 52,394 51,606 52,295 51,137
LESS: Interest recovered on previously nonaccrual loans   365     343     565     1,089     255  
Net interest income, FTE basis, excluding interest recovered on previously nonaccrual loans (non-GAAP)   53,908     52,051     51,041     51,206     50,882  
 
Net Interest Margin (FTE basis) 2.88 % 2.88 % 2.91 % 2.96 % 2.88 %
Net Interest Margin, FTE basis, excluding interest recovered on previously nonaccrual loans (non-GAAP) 2.86 % 2.86 % 2.88 % 2.90 % 2.86 %
 
(9 ) 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.
 
(10 ) Average Loans includes Loans Held for Sale and Nonaccrual Loans. Average Deposits includes Deposits Held for Sale, if any.
 
(11 ) The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lender's regional offices.
 
(12 ) Accruing substandard 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.
 
(13 ) In addition to loans 30-89 days past due and accruing, at June 30, 2016, the Company had one loan totaling $0.1 million that was more than 90 days past due but still on accrual status. This loan originated in the San Francisco Bay Area region. At December 31, 2016, September 30, 2016, March 31, 2016, and December 31, 2015, the Company had no loans outstanding more than 90 days past due but still on accrual status.
 
(14 ) Average Total Deposits is the sum of Average Total Interest-Bearing Deposits and Average Noninterest Bearing Demand Deposits.