<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
---------------------
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
OCTOBER 31, 1997
BOSTON PRIVATE BANCORP, INC.
--------------------------------------------------
(Exact name of registrant as specified in charter)
<TABLE>
<S> <C> <C>
MASSACHUSETTS 0-17089 04-2976299
- ---------------------------- ------------------------ ----------------------------
(State or other jurisdiction (Commission file number) (IRS employer identification
of incorporation) number)
</TABLE>
TEN POST OFFICE SQUARE, BOSTON, MASSACHUSETTS 02109
---------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (617) 912-1900
--------------
<PAGE> 2
Item 7 - FINANCIAL STATEMENTS, PROFORMA FINANCIAL INFORMATION, AND EXHIBITS
(a) Financial Statements of Business Acquired
(i) Audited Balance Sheets of Westfield Capital Management
("Westfield") as of December 31, 1996 and 1995 and
unaudited Balance Sheets of Westfield as of September
30, 1997 and 1996;
(ii) Audited Statements of Income and Retained Earnings of
Westfield for the years ended December 31, 1996 and
1995 and unaudited Statements of Income and Retained
Earnings of Westfield for the nine month periods ended
September 30, 1997 and 1996;
(iii) Audited Statements of Cash flows of Westfield for the
years ended December 31, 1996 and 1995 and unaudited
Statements of Cash Flows of Westfield for the nine
month periods ended September 30, 1997 and 1996; and
(iv) Notes to audited and unaudited Financial Statements of
Westfield.
2
<PAGE> 3
WESTFIELD CAPITAL MANAGEMENT
COMPANY, INC.
COMPILED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1997 AND 1996
<PAGE> 4
WESTFIELD CAPITAL MANAGEMENT COMPANY, INC.
FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1997 AND 1996
TABLE OF CONTENTS
PAGE
----
Compilation Report 1
Balance Sheets 2
Statements of Income and Retained Earnings 3
Statements of Cash Flows 4
Notes to Financial Statements 5-8
<PAGE> 5
[BARIL & SMITH LETTERHEAD]
================================================================================
CERTIFIED PUBLIC ACCOUNTANTS
October 30, 1997
To the Board of Directors and Stockholders of
Westfield Capital Management Company, Inc.
We have compiled the accompanying balance sheets of Westfield Capital
Management Company, Inc. as of September 30, 1997 and 1996 and the related
statements of income and retained earnings and cash flows for the nine months
then ended in accordance with Statements on Standards for Accounting and Review
Services issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
and supplementary schedules information that is the representation of
management. We have not audited or reviewed the accompanying financial
statements and supplementary schedules and, accordingly, do not express an
opinion or any other form of assurance on them.
/s/ Baril & Smith
-1-
- --------------------------------------------------------------------------------
<PAGE> 6
WESTFIELD CAPITAL MANAGEMENT COMPANY, INC.
BALANCE SHEETS
SEPTEMBER 30, 1997 AND 1996
<TABLE>
<CAPTION>
ASSETS
1997 1996
---- ----
<S> <C> <C>
Current assets:
Cash and cash equivalents $2,493,575 $2,657,798
Management fees receivable (net of allowance for
doubtful accounts of $45,312 for 1997) 2,606,978 2,109,083
Prepaid expenses 141,480 46,470
---------- ----------
Total current assets 5,242,033 4,813,351
---------- ----------
Property and equipment (Note 2) 802,956 603,584
Less - Accumulated depreciation 223,570 124,033
---------- ----------
579,386 479,551
Investment in partnerships (Note 3) 492,830 1,005,082
---------- ----------
$6,314,249 $6,297,984
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 41,032 $ 266,368
Accrued expenses 2,529,893 1,822,952
---------- ----------
Total current liabilities 2,570,925 2,089,320
---------- ----------
Deferred compensation (Note 4) 1,475,526 1,418,194
---------- ----------
Commitments (Note 5)
Stockholders' equity (Note 7):
Common stock:
Class A; par value $.01 per share
Authorized - 100,000 shares
Issued and outstanding - 750 shares 8 8
Class B; par value $.01 per share
Authorized - 100,000 shares
Issued and outstanding - 905 shares
(825 shares in 1996) 9 8
Additional paid-in capital 1,010,786 452,316
Retained earnings 1,929,948 2,628,699
---------- ----------
2,940,751 3,081,031
Less - stock subscriptions receivable 672,953 290,561
---------- ----------
2,267,798 2,790,470
---------- ----------
$6,314,249 $6,297,984
========== ==========
</TABLE>
READ ACCOMPANYING NOTES AND ACCOUNTANTS' REPORT
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<PAGE> 7
WESTFIELD CAPITAL MANAGEMENT COMPANY, INC.
STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Management fee revenue $ 6,736,654 $ 5,698,627
----------- -----------
Operating expenses:
Salaries 4,281,472 3,044,535
Profit sharing contribution (Note 6) 250,785 193,000
Rent expense, net 249,573 109,752
Travel and entertainment 166,307 137,561
Payroll taxes 131,322 76,024
Depreciation 120,665 77,000
Professional fees 118,265 94,228
Employee benefits 87,307 65,849
Provision for uncollectible accounts 45,312 -
Supplies and copying 39,347 38,639
Telephone 37,114 35,046
Insurance 24,837 18,974
Professional development 23,339 42,176
Automobile expense 17,608 10,248
Repairs and maintenance 17,479 11,232
Office supplies and expense 15,472 10,207
Contributions 14,200 10,400
Delivery and storage expense 11,386 10,375
Other taxes 5,036 9,802
Other operating expenses 12,076 18,033
----------- -----------
5,668,902 4,013,081
----------- -----------
Income from operations 1,067,752 1,685,546
----------- -----------
Other income (loss):
Equity in earnings of partnership investments 274,435 856,129
Interest income 63,571 49,567
Loss on disposal of property and equipment (9,701) (13,684)
----------- -----------
328,305 892,012
Income before provision for state income taxes 1,396,057 2,577,558
Provision for state income taxes 78,000 77,500
----------- -----------
Net income 1,318,057 2,500,058
Retained earnings at beginning of period 2,701,090 1,357,032
Dividends paid (2,089,199) (1,228,391)
----------- -----------
Retained earnings at end of period $ 1,929,948 $ 2,628,699
=========== ===========
</TABLE>
READ ACCOMPANYING NOTES AND ACCOUNTANTS' REPORT
-3-
<PAGE> 8
WESTFIELD CAPITAL MANAGEMENT COMPANY, INC.
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 1,318,057 $ 2,500,058
Adjustments to reconcile net income to net
cash provided by operating activities:
Undistributed earnings of partnership investments (274,435) (856,129)
Depreciation 120,665 77,000
Deferred compensation 9,116 145,000
Loss on disposal of property and equipment 9,701 13,684
Provision for uncollectible accounts 45,312
(Increase) decrease in operating assets:
Management fee receivable (591,982) (466,823)
Prepaid expenses (70,269) (6,600)
Increase (decrease) in operating liabilities:
Accounts payable (217,526) 203,564
Accrued expenses 2,146,730 1,561,985
----------- -----------
Net cash provided by operating activities 2,495,369 3,171,739
----------- -----------
INVESTING ACTIVITIES
Proceeds from the sale of property and equipment 800
Purchase of property and equipment (219,352) (483,482)
Distributed earnings of partnership investments 1,089,199 1,227,881
Capital contribution for partnership investment (20,000)
----------- -----------
Net cash provided by investing activities 849,847 745,199
----------- -----------
FINANCING ACTIVITIES
Dividends paid (2,089,199) (2,003,881)
Proceeds from stock subscriptions receivable 174,309 21,284
----------- -----------
Net cash used by financing activities (1,914,890) (1,982,597)
----------- -----------
Increase in cash and cash equivalents 1,430,326 1,934,341
Cash and cash equivalents at beginning of period 1,063,249 723,457
----------- -----------
Cash and cash equivalents at end of period $ 2,493,575 $ 2,657,798
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
State income taxes $ 141,501 $ 9,802
</TABLE>
READ ACCOMPANYING NOTES AND ACCOUNTANTS' REPORT
-4-
<PAGE> 9
WESTFIELD CAPITAL MANAGEMENT COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
NOTE 1 - BUSINESS ACTIVITIES AND ACCOUNTING POLICIES
BUSINESS ACTIVITIES
The Company was incorporated March 15, 1989 under the laws of the
Commonwealth of Massachusetts to provide investment management advice.
ACCOUNTING POLICIES
The Company's policy is to prepare its financial statements on the basis of
generally accepted accounting principles. This basis of accounting involves the
application of accrual accounting; consequently, revenues and gains are
recognized when earned and expenses and losses are recognized when incurred.
Financial statements items are recorded at historical costs and often involve
the utilization of estimates. Consequently, financial statement items do not
necessarily represent current values.
The significant accounting policies utilized by the Company are described
below:
USE OF ESTIMATES
The process of preparing financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions
regarding certain types of assets, liabilities, revenues and expenses. Such
estimates primarily relate to unsettled transactions and events as of the date
of the financial statements. Accordingly, upon settlement, actual results may
differ from estimated amounts.
CASH AND CASH EQUIVALENTS
The Company has established a policy of defining cash equivalents as all
highly liquid investments with a maturity of three months or less when
purchased.
CONCENTRATION OF CREDIT RISK
Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist primarily of cash, cash equivalents and
accounts receivable. Cash and cash equivalents include cash on deposit in
checking, savings and money market accounts. These cash and cash equivalents are
maintained with high credit quality financial institutions.
-5-
<PAGE> 10
NOTE 1 - BUSINESS ACTIVITIES AND ACCOUNTING POLICIES - CONTINUED
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost and depreciation is provided using
the straight-line method and accelerated methods. Expenditures for repairs and
maintenance are charged to operations as incurred. Renewals and betterments
which extend the lives of the assets are capitalized. The cost of property
retired or sold, together with the related accumulated depreciation, is removed
from the appropriate accounts and any resulting gain or loss is included in
operations.
INVESTMENT IN PARTNERSHIPS
The investments are accounted for under the equity method of accounting.
Accordingly, the Company recognizes its proportionate share of the income or
loss from its partnership investments in the current period and records the
income or loss as an increase or decrease in its investment.
MANAGEMENT FEES EARNED
The Company records asset management fees, which are based upon a
percentage of the assets under management, in the period services are rendered.
INCOME TAXES
The Company has elected to be taxed as an S Corporation. For Federal income
tax purposes, the undistributed taxable income of the Company at the end of its
taxable year is included in the income of the Company's stockholders in
proportion to their stock ownership.
Massachusetts recognizes S Corporation status which allows the
undistributed taxable income of the Company to be included in the income of the
stockholders, but imposes an additional income tax on corporations with gross
receipts over six million, at a rate of 3%.
NOTE 2 - PROPERTY AND EQUIPMENT
The cost of property and equipment and the estimated useful lives used for
computing depreciation at September 30, 1997 and 1996 are:
<TABLE>
<CAPTION>
ESTIMATED
USEFUL LIFE 1997 1996
----------- ---- ----
<S> <C> <C> <C>
Office equipment 5-7 years $ 74,471 $ 68,310
Furniture and fixtures 7 years 459,494 284,688
Leasehold improvements 5 years 112,886 109,409
Computer equipment 3-5 years 156,105 141,177
-------- --------
$802,956 $603,584
======== ========
</TABLE>
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<PAGE> 11
NOTE 3 - RELATED PARTY TRANSACTIONS
The Company is a general and limited partner and the Company's chief
executive officer and spouse are limited partners in the Westfield Performance
Fund Limited Partnership. As general partner, the Company receives a quarterly
maintenance fee at rate of .25% of the net asset value of the Partnership which
amounted to $250,858 and $290,127 as of September 30, 1997 and 1996,
respectively.
The Company is also entitled to an allocation of net income at the end of
each performance period (generally a calendar year) equal to 15% of the excess
over the performance base (defined as net income less any performance loss
carryforward). This allocation, if any, becomes vested as a partnership interest
at year end. The net allocation amounted to $54,657 and $815,408 for the nine
months ended September 30, 1997 and 1996, respectively.
In 1996, the Company agreed to invest $87,000 for a general partnership
position in the Westfield Technology Fund Limited Partnership. As general
partner, the Company receives a quarterly maintenance fee at a rate of .25% of
the net asset value of the partnership which amounted to $62,423 and $18,272 as
of September 30, 1997 and 1996, respectively. The general partner is also
entitled to share in 20% of the partnership's realized and unrealized profits at
the end of each performance period (defined as "profit share" less any losses
carried over from a previous performance period). The general partner shall also
share 1% in all profits and losses of the partnership after the maintenance fee
and the "profit share".
NOTE 4 - DEFERRED COMPENSATION
The Company has a deferred compensation agreement with the chief executive
officer that provides for continued payments over a ten year period commencing
with his retirement, disability or death. The payments are determined by formula
and subject to escalation clauses.
The estimated present value of the obligation is $1,475,526 at September
30, 1997 and has been charged to operations ratably over his employment term.
The 1997 charge amounted to $9,116.
Effective October, 1997 the deferred compensation agreement has been
terminated.
NOTE 5 - COMMITMENTS
The Company leases its office facilities under an operating lease which
expires August 2001 and is renewable for an additional five years. Minimum lease
payments under the noncancellable term are as follows:
<TABLE>
<S> <C>
1997 $365,070
1998 365,070
1999 365,070
2000 365,070
2001 243,380
</TABLE>
Rent expense amounted to $274,592 for the nine months ended September 30,
1997.
-7-
<PAGE> 12
NOTE 5 - COMMITMENTS - CONTINUED
The Company also subleases approximately 13% of the office space to a
tenant under a noncancellable lease which expires August 2001. The minimum
future rental revenues are as follows:
<TABLE>
<S> <C>
1997 $47,250
1998 47,250
1999 47,250
2000 47,250
2001 31,500
</TABLE>
Rental income amounted to $35,438 for the nine months ended September 30,
1997.
NOTE 6 - PROFIT-SHARING PLAN
The Company has a defined contribution employee profit-sharing plan which
covers all of its eligible employees. The annual contribution to the plan is
determined by the Board of Directors of the Company. The Company has accrued
$250,785 and $193,000 for the nine months ended September 30, 1997 and 1996,
respectively.
NOTE 7 - STOCKHOLDER'S EQUITY
The Company has issued 185 shares of Class B common stock in 1995 and 1996
under subscription agreements for a total consideration of $872,000. Payment is
over a five year period with interest at the prevailing treasury rates at the
time of issuance.
Under a stock transfer agreement, the Company and its stockholders have the
right of first refusal before the purchase of an and all shares by an outside
party from a selling shareholder. The agreement also provides for the purchase
of shares by the Company in the case of death, incapacitation or termination of
employment. The agreement provides a formula for determining the value of the
shares to be purchased based on specific circumstances.
NOTE 8 - BUSINESS COMBINATION
On August 13, 1997, an Agreement and Plan of Merger was entered into
between the Company, its' shareholders, Boston Private Bancorp, Inc. and Boston
Private Investment Management, Inc. Under the agreement the shareholders of
Westfield Capital Management Company, Inc. will receive 3,918,367 common shares
of Boston Private Bancorp, Inc. in exchange for 100% of the Company's
outstanding common stock. The merger was completed October 31, 1997 and will be
accounted for as a pooling of interests.
-8-
<PAGE> 13
WESTFIELD CAPITAL MANAGEMENT
COMPANY, INC.
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 1996 AND 1995
<PAGE> 14
WESTFIELD CAPITAL MANAGEMENT COMPANY, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
TABLE OF CONTENTS
PAGE
----
Independent Auditor's Report 1
Balance Sheets 2
Statements of Income and Retained Earnings 3
Statements of Cash Flows 4
Notes to Financial Statements 5-8
<PAGE> 15
[BARIL & SMITH LETTERHEAD]
================================================================================
CERTIFIED PUBLIC ACCOUNTANTS
March 11, 1997
To the Board of Directors and Stockholders of
Westfield Capital Management Company, Inc.
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of Westfield Capital
Management Company, Inc. as of December 31, 1996 and 1995 and the related
statements of income and retained earnings, and cash flows for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statements presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above presents fairly,
in all material respects, the financial position of Westfield Capital Management
Company, Inc. as of December 31, 1996 and 1995 and the results of its operations
and cash flows for the years then ended, in conformity with generally accepted
accounting principles.
/s/ Baril & Smith
-1-
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<PAGE> 16
WESTFIELD CAPITAL MANAGEMENT COMPANY, INC.
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
ASSETS
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Current assets:
Cash and cash equivalents $1,063,249 $ 723,457
Management fees receivable 2,060,308 1,642,260
Prepaid expenses 71,211 29,795
---------- ----------
Total current assets 3,194,768 2,395,512
---------- ----------
Property and equipment, (Note 2) 641,387 236,375
Less - Accumulated depreciation 150,987 140,416
---------- ----------
490,400 95,959
---------- ----------
Investment in partnerships (Note 4) 1,287,594 1,376,834
---------- ----------
$4,972,762 $3,868,305
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 258,558 $ 62,804
Accrued expenses 383,163 260,967
Dividends payable 775,490
---------- ----------
Total current liabilities 641,721 1,099,261
---------- ----------
Deferred compensation (Note 3) 1,466,410 1,273,194
---------- ----------
Commitments (Note 5)
Stockholders' equity (Note 7):
Common stock:
Class A; par value $.01 per share 8 8
100,000 shares Authorized
750 shares Issued and outstanding
Class B; par value $.01 per share 9 7
100,000 shares Authorized
905 shares Issued and outstanding
Additional paid-in capital 1,010,786 223,853
Retained earnings 2,701,090 1,357,032
---------- ----------
3,711,893 1,580,900
Less - stock subscriptions receivable 847,262 85,050
---------- ----------
2,864,631 1,495,850
---------- ----------
$4,972,762 $3,868,305
========== ==========
</TABLE>
READ ACCOMPANYING NOTES AND ACCOUNTANTS' REPORT
-2-
<PAGE> 17
WESTFIELD CAPITAL MANAGEMENT COMPANY, INC.
STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Management fee revenue $ 7,770,047 $ 5,471,627
----------- -----------
Operating expenses:
Salaries 4,148,283 3,143,983
Profit sharing contribution (Note 6) 257,512 234,644
Professional fees 225,265 152,899
Rent expense, net 203,388 120,508
Travel and entertainment 191,003 160,743
Payroll taxes 130,667 101,896
Depreciation 103,086 37,288
Employee benefits 87,767 94,060
Supplies and copying 52,502 53,911
Telephone 52,072 27,381
Professional development 51,086 27,197
Insurance 26,599 8,670
Office supplies and expense 26,221 19,938
Delivery and storage expense 17,106 9,035
Repairs and maintenance 16,529 7,101
Automobile expense 15,861 11,615
Contributions 13,095 9,275
Other taxes 5,933 -
Other operating expenses 21,945 19,317
----------- -----------
5,645,920 4,239,461
----------- -----------
Income from operations 2,124,127 1,232,166
----------- -----------
Other income (loss):
Equity in earnings of partnership investments 1,138,641 1,321,858
Interest income, net 89,645 43,271
Loss on disposal of property and equipment (13,684)
----------- -----------
1,214,602 1,365,129
----------- -----------
Income before provision for state income taxes
and extraordinary item 3,338,729 2,597,295
Provision for state income taxes 100,500
----------- -----------
Income before extraordinary item 3,238,229 2,597,295
Extraordinary item - gain on early extinguishment of
indebtedness (Note 8) - 64,831
----------- -----------
Net income 3,238,229 2,662,126
Retained earnings at beginning of year 1,357,032 (72,104)
Dividends paid (1,894,171) (1,232,990)
----------- -----------
Retained earnings at end of year $ 2,701,090 $ 1,357,032
=========== ===========
</TABLE>
READ ACCOMPANYING NOTES AND ACCOUNTANTS' REPORT
-3-
<PAGE> 18
WESTFIELD CAPITAL MANAGEMENT COMPANY, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 3,238,229 $ 2,662,126
Adjustments to reconcile net income to net
cash provided by operating activities:
Undistributed earnings of partnership investments (1,138,641) (1,321,858)
Depreciation 103,086 37,288
Deferred compensation 193,216 350,867
Loss on disposal of property and equipment 13,684
Early extinguishment of indebtedness - (64,831)
Original issue discount interest expense - 8,293
(Increase) decrease in operating assets:
Management fee receivable (418,048) (567,172)
Prepaid expenses (41,416) (16,556)
Increase (decrease) in operating liabilities:
Accounts payable 195,754 17,653
Accrued expenses 122,196 102,437
----------- -----------
Net cash provided by operating activities 2,268,060 1,208,247
----------- -----------
INVESTING ACTIVITIES
Proceeds from the sale of property and equipment 10,075
Purchase of property and equipment (521,284) (50,990)
Distributed earnings of partnership investments 1,227,881
----------- -----------
Net cash provided (used) by investing activities 716,672 (50,990)
----------- -----------
FINANCING ACTIVITIES
Dividends paid (2,669,661) (457,500)
Proceeds from stock subscriptions receivable 24,721
Payment of long-term debt - (600,000)
Proceeds from purchase of treasury stock - 623,700
----------- -----------
Net cash used by financing activities (2,644,940) (433,800)
----------- -----------
Increase in cash and cash equivalents 339,792 723,457
Cash and cash equivalents at beginning of year 723,457 0
----------- -----------
Cash and cash equivalents at end of year $ 1,063,249 $ 723,457
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during year for:
State income taxes $ 60,342 --
</TABLE>
READ ACCOMPANYING NOTES AND ACCOUNTANTS' REPORT
-4-
<PAGE> 19
WESTFIELD CAPITAL MANAGEMENT COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE 1 - BUSINESS ACTIVITIES AND ACCOUNTING POLICIES
BUSINESS ACTIVITIES
The Company was incorporated March 15, 1989 under the laws of the
Commonwealth of Massachusetts to provide investment management advice.
ACCOUNTING POLICIES
The Company's policy is to prepare its financial statements on the basis of
generally accepted accounting principles. This basis of accounting involves the
application of accrual accounting; consequently, revenues and gains are
recognized when earned and expenses and losses are recognized when incurred.
Financial statements items are recorded at historical costs and often involve
the utilization of estimates. Consequently, financial statement items do not
necessarily represent current values.
The significant accounting policies utilized by the Company are described
below:
USE OF ESTIMATES
The process of preparing financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions
regarding certain types of assets, liabilities, revenues and expenses. Such
estimates primarily relate to unsettled transactions and events as of the date
of the financial statements. Accordingly, upon settlement, actual results may
differ from estimated amounts.
CASH AND CASH EQUIVALENTS
The Company has established a policy of defining cash equivalents as all
highly liquid investments with a maturity of three months or less when
purchased.
CONCENTRATION OF CREDIT RISK
Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist primarily of cash, cash equivalents and
accounts receivable. Cash and cash equivalents include cash on deposit in
checking, savings and money market accounts. These cash and cash equivalents are
maintained with high credit quality financial institutions.
MANAGEMENT FEES EARNED
The Company records asset management fees, which are based upon a
percentage of the assets under management, in the period services are rendered.
-5-
<PAGE> 20
NOTE 1 - BUSINESS ACTIVITIES AND ACCOUNTING POLICIES - CONTINUED
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost and depreciation is provided using
the straight-line method and accelerated methods. Expenditures for repairs and
maintenance are charged to operations as incurred. Renewals and betterments
which extend the lives of the assets are capitalized. The cost of property
retired or sold, together with the related accumulated depreciation, is removed
from the appropriate accounts and any resulting gain or loss is included in
operations.
INVESTMENT IN PARTNERSHIPS
The investments are accounted for under the equity method of accounting.
Accordingly, the Company recognizes its proportionate share of the income or
loss from its partnership investments in the current period and records the
income or loss as an increase or decrease in its investment.
INCOME TAXES
The Company has elected to be taxed as an S Corporation. For Federal income
tax purposes, the undistributed taxable income of the Company at the end of its
taxable year is included in the income of the Company's stockholders in
proportion to their stock ownership.
Massachusetts recognizes S Corporation status which allows the
undistributed taxable income of the Company to be included in the income of the
stockholders, but imposes an additional income tax on corporations with gross
receipts over six million, at a rate of 3%.
NOTE 2 - PROPERTY AND EQUIPMENT
The cost of property and equipment and the estimated useful lives used for
computing depreciation at December 31, 1996 and 1995 are:
<TABLE>
<CAPTION>
ESTIMATED
USEFUL LIFE 1996 1995
----------- ---- ----
<S> <C> <C> <C>
Office equipment 5-7 years $228,114 $131,971
Furniture and fixtures 7 years 300,389 95,725
Leasehold improvements 39 years 112,884 8,679
-------- --------
$641,387 $236,375
======== ========
</TABLE>
NOTE 3 - DEFERRED COMPENSATION
The Company has a deferred compensation agreement with the chief executive
officer that provides for continued payments over a ten year period commencing
with his retirement, disability or death. The payments are determined by formula
and subject to escalation clauses.
The estimated present value of the obligation is $1,466,410 at December 31,
1996 and has been charged to operations ratably over his employment term. The
1996 charge amounted to $193,000.
-6-
<PAGE> 21
NOTE 4 - RELATED PARTY TRANSACTIONS
The Company is a general and limited partner and the Company's chief
executive officer and spouse are limited partners in the Westfield Performance
Fund Limited Partnership. As general partner, the Company receives a quarterly
maintenance fee at rate of .25% of the net asset value of the Partnership which
amounted to $390,854 and $261,225 in 1996 and 1995, respectively.
The Company is also entitled to an allocation of net income at the end of
each performance period (generally a calendar year) equal to 15% of the excess
over the performance base (defined as net income less any performance loss
carryforward). This allocation, if any, becomes vested as a partnership interest
at year end. The net allocation amounted to $1,087,211 and $1,226,280 for the
years ended December 31, 1996 and 1995, respectively.
In 1996, the Company agreed to invest $87,000 for a general partnership
position in the Westfield Technology Fund Limited Partnership. As general
partner, the Company receives a quarterly maintenance fee at a rate of .25% of
the net asset value of the partnership which amounted to $37,661 in 1996. The
general partner is also entitled to share in 20% of the partnership's realized
and unrealized profits at the end of each performance period (defined as "profit
share" less any losses carried over from a previous performance period). The
general partner shall also share 1% in all profits and losses of the partnership
after the maintenance fee and the "profit share".
NOTE 5 - COMMITMENTS
The Company leases its office facilities under an operating lease which
expires August 2001 and is renewable for an additional five years. Minimum lease
payments under the noncancellable term are as follows:
<TABLE>
<S> <C>
1997 $365,070
1998 365,070
1999 365,070
2000 365,070
2001 243,380
</TABLE>
Rent expense amounted to $230,550 for the year ended December 31, 1996.
The Company also subleases approximately 13% of the office space to a
tenant under a noncancellable lease which expires August 2001. The minimum
future rental revenues are as follows:
<TABLE>
<S> <C>
1997 $47,250
1998 47,250
1999 47,250
2000 47,250
2001 31,500
</TABLE>
Rental income amounted to $38,669 for the year ended December 31, 1996.
-7-
<PAGE> 22
NOTE 6 - PROFIT-SHARING PLAN
The Company has a defined contribution employee profit-sharing plan which
covers all of its eligible employees. The annual contribution to the plan is
determined by the Board of Directors of the Company. The Company has contributed
$257,512 and $234,644 for the years ended December 31, 1996 and 1995,
respectively.
NOTE 7 - STOCKHOLDER'S EQUITY
The Company has issued 185 shares of Class B common stock in 1995 and 1996
under subscription agreements for a total consideration of $872,000. Payment is
over a five year period with interest at the prevailing treasury rates at the
time of issuance.
Under a stock transfer agreement, the Company and its stockholders have the
right of first refusal before the purchase of any and all shares by an outside
party from a selling shareholder. The agreement also provides for the purchase
of shares by the Company in the case of death, incapacitation or termination of
employment. The agreement provides a formula for determining the value of the
shares to be purchased based on specific circumstances.
NOTE 8 - EARLY EXTINGUISHMENT OF DEBT
On March 15, 1995, the Company entered into an agreement with a former
shareholder to retire debt related to a 1994 stock redemption for a lump sum
payment of $600,000. A gain of $64,831 resulted from this transaction.
-8-
<PAGE> 23
(b) Proforma Financial Information
(i) Consolidated Balance Sheet of Boston Private Bancorp,
Inc. and subsidiaries as of September 30, 1997;
(ii) Consolidated Income Statement of Boston Private
Bancorp, Inc. and subsidiaries for the nine month
period ended September 30, 1997;
(iii) Consolidated Income Statement of Boston Private
Bancorp, Inc. and subsidiaries for the nine month
period ended September 30, 1996;
(iv) Consolidated Income Statement of Boston Private
Bancorp, Inc. and subsidiaries for the year ended
December 31, 1996;
(v) Consolidated Income Statement of Boston Private
Bancorp, Inc. and subsidiaries for the year ended
December 31, 1995;
(v) Consolidated Income Statement of Boston Private
Bancorp, Inc. and subsidiaries for the year ended
December 31, 1994; and
(vi) Footnotes to Consolidated Financial Statements.
-3-
<PAGE> 24
BOSTON PRIVATE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
----------------------------------------------------------
PROFORMA
BPB WCM ADJUSTMENTS COMBINED
----------------------------------------------------------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C>
ASSETS:
Cash and due from banks $ 8,050 $2,494 $ -- $ 10,544
Federal funds sold 1,250 -- -- 1,250
Investment securities available for sale
(amortized cost of $32,368) 32,385 -- -- 32,385
Investment securities held to maturity (market
value of $7,635) 7,782 -- -- 7,782
Mortgage-backed securities held to maturity
(market value of $20,023) 19,817 -- -- 19,817
Loans receivable:
Commercial 107,130 -- -- 107,130
Residential mortgage 120,234 -- -- 120,234
Home equity 14,733 -- -- 14,733
Other 396 -- -- 396
----------------------------------------------------------
Total loans 242,493 -- -- 242,493
Less allowance for loan losses (3,084) -- -- (3,084)
----------------------------------------------------------
Net loans 239,409 -- -- 239,409
Stock in the Federal Home Loan Bank of Boston 3,317 -- -- 3,317
Other real estate owned 85 -- -- 85
Premises and equipment, net 2,320 579 -- 2,899
Excess of cost over net assets acquired, net 3,827 -- -- 3,827
Management fees receivable 569 2,607 -- 3,176
Accrued interest receivable 2,148 -- -- 2,148
Other assets 2,126 634 -- 2,760
----------------------------------------------------------
Total assets $323,085 $6,314 $ -- $329,399
==========================================================
LIABILITIES:
Deposits $236,100 $ -- $ -- $236,100
Securities sold under agreements to repurchase 6,879 -- -- 6,879
Federal funds purchased 2,000 -- -- 2,000
FHLB borrowings 50,330 -- -- 50,330
Accrued interest payable 439 -- -- 439
Other liabilities 1,883 4,046 1,226 (1) 7,155
----------------------------------------------------------
Total liabilities 297,631 4,046 1,226 302,903
----------------------------------------------------------
STOCKHOLDERS' EQUITY:
Common stock, $1.00 par value per share;
authorized: 18,000,000 shares
issued: 10,637,000 shares 6,719 -- 3,918 (2) 10,637
Additional paid-in capital 15,023 1,011 (3,918)(2) 12,116
Retained earnings 3,701 1,930 (1,226)(1) 4,405
Stock subscriptions receivable -- (673) -- (673)
Unrealized gain (loss) on securities available for sale, net 11 -- -- 11
----------------------------------------------------------
Total stockholders' equity 25,454 2,268 (1,226) 26,496
----------------------------------------------------------
Total liabilities and stockholders' equity $323,085 $6,314 $ -- $329,399
==========================================================
</TABLE>
-4-
<PAGE> 25
BOSTON PRIVATE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1997
---------------------------------------------------------------
PROFORMA
BPB WCM ADJUSTMENTS COMBINED
---------------------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Interest and dividend income:
Commercial loans $ 6,882 $ -- $ -- $ 6,882
Residential mortgage loans 5,902 -- -- 5,902
Home equity and other loans 827 -- -- 827
Investment securities 1,328 -- -- 1,328
Mortgage-backed securities 1,049 -- -- 1,049
FHLB stock dividends 160 -- -- 160
Federal funds sold 118 -- -- 118
Deposits in banks 75 64 -- 139
---------------------------------------------------------------
Total interest and dividend income 16,341 64 -- 16,405
Interest expense:
Savings and NOW 260 -- -- 260
Money market 2,545 -- -- 2,545
Certificates of deposit 2,697 -- -- 2,697
Federal funds purchased 267 -- -- 267
Securities sold under agreements to repurchase 256 -- -- 256
FHLB borrowings 2,079 -- -- 2,079
Payable due to acquisition 16 -- -- 16
---------------------------------------------------------------
Total interest expense 8,120 -- -- 8,120
---------------------------------------------------------------
Net interest income 8,221 64 -- 8,285
Provision for loan losses 259 -- -- 259
---------------------------------------------------------------
Net interest income after provision for loan losses 3,425 64 -- 8,062
Fees and other income:
Investment management and trust 3,045 6,737 -- 9,782
Deposit account service charges 160 -- -- 160
Equity in earnings of partnerships -- 274 -- 274
Gain on sale of loans 43 -- -- 43
Loss on sale of fixed assets -- (10) -- (10)
Other 177 -- -- 177
---------------------------------------------------------------
Total fees and other income 3,425 7,001 -- 10,426
Operating expense:
Salaries and employee benefits 5,275 4,768 -- 10,043
Occupancy and equipment 782 388 -- 1,170
Legal expense 212 -- -- 212
Marketing 252 180 -- 432
Amortization of intangibles 283 -- -- 283
Other 1,761 333 -- 2,094
---------------------------------------------------------------
Total operating expense 8,565 5,669 -- 14,234
---------------------------------------------------------------
Income before income taxes 2,822 1,396 -- 4,218
Income tax expense 820 78 -- 898
---------------------------------------------------------------
Net income $ 2,002 $1,318 $ -- $ 3,320
===============================================================
Per share data:
Earnings per common and common equivalent share $ 0.28 $ -- $ -- $ 0.30
===============================================================
Average common and common equivalent shares
outstanding 7,056,981 -- 3,918,367 10,975,348
===============================================================
Proforma information:
Net income $ 2,002 $1,318 $ -- $ 3,320
Proforma adjustment for income taxes of
acquired entity previously filing as an S
Corporation -- -- 480(3) 480
---------------------------------------------------------------
Proforma net income after adjustment for
income taxes $ 2,002 $1,318 $ (480) $ 2,840
===============================================================
Proforma net income per common and common
equivalent share $ 0.28 $ -- $ -- $ 0.26
===============================================================
</TABLE>
-5-
<PAGE> 26
BOSTON PRIVATE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1996
---------------------------------------------------------------
PROFORMA
BPB WCM ADJUSTMENTS COMBINED
---------------------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Interest and dividend income:
Commercial loans $ 5,403 $ -- $ -- $ 5,403
Residential mortgage loans 4,625 -- -- 4,625
Home equity and other loans 575 -- -- 575
Investment securities 1,389 -- -- 1,389
Mortgage-backed securities 1,350 -- -- 1,350
FHLB stock dividends 159 -- -- 159
Federal funds sold 58 -- -- 58
Deposits in banks 53 50 -- 103
---------------------------------------------------------------
Total interest and dividend income 13,612 50 -- 13,662
Interest expense:
Savings and NOW 252 -- -- 252
Money market 2,161 -- -- 2,161
Certificates of deposit 2,235 -- -- 2,235
Federal funds purchased 125 -- -- 125
Securities sold under agreements to
repurchase 248 -- -- 248
FHLB borrowings 1,802 -- -- 1,802
Payable due to acquisition 53 -- -- 53
---------------------------------------------------------------
Total interest expense 6,876 -- -- 6,876
---------------------------------------------------------------
Net interest income 6,736 50 -- 6,786
Provision for loan losses 423 -- -- 423
---------------------------------------------------------------
Net interest income after provision for
loan losses 6,313 50 -- 6,363
Fees and other income:
Investment management and trust 2,384 5,699 -- 8,083
Deposit account service charges 121 -- -- 121
Equity in earnings of partnerships -- 856 -- 856
Gain on sale of loans 88 -- -- 88
Gain on sale of investments 6 -- -- 6
Loss on sale of fixed assets -- (14) -- (14)
Other 173 -- -- 173
---------------------------------------------------------------
Total fees and other income 2,772 6,541 -- 9,313
Operating expense:
Salaries and employee benefits 3,960 3,390 -- 7,350
Occupancy and equipment 599 198 -- 797
Legal expense 201 -- -- 201
Marketing 244 148 -- 392
Amortization of intangibles 242 -- -- 242
Other 1,391 277 -- 1,668
---------------------------------------------------------------
Total operating expense 6,637 4,013 -- 10,650
---------------------------------------------------------------
Income before income taxes 2,448 2,578 -- 5,026
Income tax expense 811 78 -- 889
---------------------------------------------------------------
Net income $ 1,637 $2,500 $ -- $ 4,137
===============================================================
Per share data:
Earnings per common and common
equivalent share $ 0.27 $ -- $ -- $ 0.42
===============================================================
Average common and common equivalent
shares outstanding 6,089,000 -- 3,695,808 9,784,808
===============================================================
Proforma information:
Net income $ 1,637 $2,500 $ -- $ 4,137
Proforma adjustment for income taxes of
acquired entity previously filing as an S
Corporation -- -- 952(3) 952
---------------------------------------------------------------
Proforma net income after adjustment
for income taxes $ 1,637 $2,500 $ (952) $ 3,185
===============================================================
Proforma net income per common and
common equivalent share $ 0.27 $ -- $ -- $ 0.33
===============================================================
</TABLE>
-6-
<PAGE> 27
BOSTON PRIVATE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
---------------------------------------------------------------
PROFORMA
BPB WCM ADJUSTMENTS COMBINED
---------------------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Interest and dividend income:
Commercial loans $ 7,482 $ -- $ -- $ 7,482
Residential mortgage loans 6,358 -- -- 6,358
Home equity and other loans 810 -- -- 810
Investment securities 1,799 -- -- 1,799
Mortgage-backed securities 1,758 -- -- 1,758
FHLB stock dividends 212 -- -- 212
Federal funds sold 110 -- -- 110
Deposits in banks 69 90 -- 159
---------------------------------------------------------------
Total interest and dividend income 18,598 90 -- 18,688
Interest expense:
Savings and NOW 343 -- -- 343
Money market 2,990 -- -- 2,990
Certificates of deposit 3,070 -- -- 3,070
Federal funds purchased 146 -- -- 146
Securities sold under agreements to
repurchase 336 -- -- 336
FHLB borrowings 2,426 -- -- 2,426
Payable due to acquisition 66 -- -- 66
---------------------------------------------------------------
Total interest expense 9,377 -- -- 9,377
---------------------------------------------------------------
Net interest income 9,221 90 -- 9,311
Provision for loan losses 619 -- -- 619
---------------------------------------------------------------
Net interest income after provision for
loan losses 8,602 90 -- 8,692
Fees and other income:
Investment management and trust 3,252 7,770 -- 11,022
Deposit account service charges 156 -- -- 156
Equity in earnings of partnerships -- 1,139 -- 1,139
Gain on sale of loans 112 -- -- 112
Gain on sale of investments 33 -- -- 33
Loss on sale of fixed assets -- (14) -- (14)
Other 383 -- -- 383
---------------------------------------------------------------
Total fees and other income 3,936 8,895 -- 12,831
Operating expense:
Salaries and employee benefits 5,457 4,640 -- 10,097
Occupancy and equipment 807 323 -- 1,130
Legal expense 200 -- -- 200
Marketing 362 204 -- 566
Amortization of intangibles 322 -- -- 322
Other 2,035 479 -- 2,514
---------------------------------------------------------------
Total operating expense 9,183 5,646 -- 14,829
---------------------------------------------------------------
Income before income taxes 3,355 3,339 -- 6,694
Income tax expense 1,115 101 -- 1,216
---------------------------------------------------------------
Net income $ 2,240 $3,238 $ -- $ 5,478
===============================================================
Per share data:
Earnings per common and common
equivalent share $ 0.36 $ -- $ -- $ 0.55
===============================================================
Average common and common equivalent
shares outstanding 6,241,000 -- 3,728,960 9,969,960
===============================================================
Proforma information:
Net income $ 2,240 $3,238 $ -- $ 5,478
Proforma adjustment for income taxes of
acquired entity previously filing as an S
Corporation -- -- 1,233(3) 1,233
---------------------------------------------------------------
Proforma net income after adjustment
for income taxes $ 2,240 $3,238 $ (1,233) $ 4,245
===============================================================
Proforma net income per common and
common equivalent share $ 0.36 $ -- $ -- $ 0.43
===============================================================
</TABLE>
-7-
<PAGE> 28
BOSTON PRIVATE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
---------------------------------------------------------------
PROFORMA
BPB WCM ADJUSTMENTS COMBINED
---------------------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Interest and dividend income:
Commercial loans $ 5,871 $ -- $ -- $ 5,871
Residential mortgage loans 4,730 -- -- 4,730
Home equity and other loans 679 -- -- 679
Investment securities 2,148 -- -- 2,148
Mortgage-backed securities 2,012 -- -- 2,012
FHLB stock dividends 234 -- -- 234
Federal funds sold 204 -- -- 204
Deposits in banks 28 43 -- 71
---------------------------------------------------------------
Total interest and dividend income 15,906 43 -- 15,949
Interest expense:
Savings and NOW 407 -- -- 407
Money market 2,046 -- -- 2,046
Certificates of deposit 3,102 -- -- 3,102
Federal funds purchased 91 -- -- 91
Securities sold under agreements to
repurchase 324 -- -- 324
FHLB borrowings 2,430 -- -- 2,430
Payable due to acquisition 51 -- -- 51
---------------------------------------------------------------
Total interest expense 8,451 -- -- 8,451
---------------------------------------------------------------
Net interest income 7,455 43 -- 7,498
Provision for loan losses 618 -- -- 618
---------------------------------------------------------------
Net interest income after provision for
loan losses 6,837 43 -- 6,880
Fees and other income:
Investment management and trust 1,562 5,472 -- 7,034
Deposit account service charges 134 -- -- 134
Equity in earnings of partnerships -- 1,321 -- 1,321
Gain on sale of loans 80 -- -- 80
Gain on sale of investments 237 -- -- 237
Other 159 65 -- 224
---------------------------------------------------------------
Total fees and other income 2,172 6,858 -- 9,030
Operating expense:
Salaries and employee benefits 4,052 3,587 -- 7,639
Occupancy and equipment 708 165 -- 873
Legal expense 251 -- -- 251
Marketing 263 170 -- 433
Amortization of intangibles 156 -- -- 156
Other 1,735 317 -- 2,052
---------------------------------------------------------------
Total operating expense 7,165 4,239 -- 11,404
---------------------------------------------------------------
Income before income taxes 1,844 2,662 -- 4,506
Income tax expense 104 -- -- 104
---------------------------------------------------------------
Net income $ 1,740 $2,662 $ -- $ 4,402
===============================================================
Per share data:
Earnings per common and common
equivalent share $ 0.30 $ -- $ -- $ 0.47
===============================================================
Average common and common
equivalent shares outstanding 5,843,000 -- 3,551,390 9,394,390
===============================================================
Proforma information:
Net income $ 1,740 $2,662 $ -- $ 4,402
Proforma adjustment for income taxes of
acquired entity previously filing as an S
Corporation -- -- 1,063(3) 1,063
---------------------------------------------------------------
Proforma net income after adjustment
for income taxes $ 1,740 $2,622 $ (1,063) $ 3,339
===============================================================
Proforma net income per common and
common equivalent share $ 0.30 $ -- $ -- $ 0.36
===============================================================
</TABLE>
-8-
<PAGE> 29
BOSTON PRIVATE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1994
---------------------------------------------------------------
PROFORMA
BPB WCM ADJUSTMENTS COMBINED
---------------------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Interest and dividend income:
Commercial loans $ 3,633 $ -- $ -- $ 3,633
Residential mortgage loans 2,876 -- -- 2,876
Home equity and other loans 468 -- -- 468
Investment securities 1,341 -- -- 1,341
Mortgage-backed securities 1,509 -- -- 1,509
FHLB stock dividends 212 -- -- 212
Federal funds sold 92 -- -- 92
Deposits in banks 5 -- -- 5
---------------------------------------------------------------
Total interest and dividend income 10,136 -- -- 10,136
Interest expense:
Savings and NOW 498 -- -- 498
Money market 957 -- -- 957
Certificates of deposit 1,379 -- -- 1,379
Securities sold under agreements to
repurchase 220 -- -- 220
FHLB borrowings 1,505 -- -- 1,505
Interest on payables -- 3 -- 3
---------------------------------------------------------------
Total interest expense 4,559 3 -- 4,562
---------------------------------------------------------------
Net interest income 5,577 (3) -- 5,574
Provision for loan losses 355 -- -- 355
---------------------------------------------------------------
Net interest income after provision for
loan losses 5,222 (3) -- 5,219
Fees and other income:
Investment management and trust 456 4,179 -- 4,635
Deposit account service charges 164 -- -- 164
Equity in earnings of partnerships -- (25) -- (25)
Gain on sale of loans 55 -- -- 55
Gain on sale of investments (8) (17) -- (25)
Loss on sale of fixed assets -- (4) -- (4)
Other 122 -- -- 122
---------------------------------------------------------------
Total fees and other income 789 4,133 -- 4,922
Operating expense:
Salaries and employee benefits 2,813 2,398 -- 5,211
Occupancy and equipment 336 142 -- 478
Legal expense 299 -- -- 299
Marketing 149 162 -- 311
Amortization of intangibles 37 -- -- 37
Other 1,474 242 -- 1,716
---------------------------------------------------------------
Total operating expense 5,108 2,944 -- 8,052
---------------------------------------------------------------
Income before income taxes 903 1,186 -- 2,089
Income tax expense (300) -- -- (300)
---------------------------------------------------------------
Net income $ 1,203 $1,186 $ -- $ 2,389
===============================================================
Per share data:
Earnings per common and common
equivalent share $ 0.22 $ -- $ -- $ 0.26
===============================================================
Average common and common
equivalent shares outstanding 5,567,000 -- 3,551,390 9,118,390
===============================================================
Proforma information:
Net income $ 1,203 $1,186 $ -- $ 2,389
Proforma adjustment for income taxes of
acquired entity previously filing as an S
Corporation -- -- 474(3) 474
---------------------------------------------------------------
Proforma net income after adjustment
for income taxes $ 1,203 $1,186 $ (474) $ 1,915
===============================================================
Proforma net income per common and
common equivalent share $ 0.22 $ -- $ -- $ 0.21
===============================================================
</TABLE>
-9-
<PAGE> 30
BOSTON PRIVATE BANCORP, INC. AND SUBSIDIARIES
FOOTNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Represents an adjustment to other liabilities to record an accrual for the
costs incurred in connection with the pooling transaction, net of approximately
$285,000 of tax expense. The merger expenses consist mainly of investment
banking fees, legal fees and accounting fees. These costs were recorded by both
entities on the transaction date of October 31, 1997.
(2) Represents the par value of common shares of Boston Private Bancorp, Inc.
issued to the shareholders of Westfield Capital Management in connection with
the pooling transaction on October 31, 1997, with related adjustment to
additional paid-in capital.
(3) Represents an adjustment to record the amount of income tax expense that
would have been recorded in each period had Westfield Capital Management been a
taxable entity prior to the pooling transaction.
-10-
<PAGE> 31
(c) Exhibits
2.1 Agreement and Plan of Merger by and among Boston Private Bancorp, Inc.,
Boston Private Investment Management, Inc., Westfield Capital Management
Company, Inc. and the individual stockholders of Westfield Capital Management
Company, Inc. dated as of August 13, 1997 incorporated by reference to the
Company's Current Report on Form 8-K, filed with the Securities and Exchange
Commission on August 21, 1997.
2.2 Registration Rights Agreement by and among the Company and the individual
stockholders of Westfield Capital Management Company, Inc. dated as of August
13, 1997 incorporated by reference to the Company's Current Report on Form 8-K,
filed with the Securities and Exchange Commission on August 21, 1997.
23.1 Consent of Baril & Smith
-11-
<PAGE> 32
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
BOSTON PRIVATE BANCORP, INC.
DATE: January 13, 1998 By: /s/ Walter M. Pressey
-----------------------------------
Walter M. Pressey, Senior Vice President
and Chief Financial Officer
-12-
<PAGE> 33
EXHIBIT INDEX
Exhibit No. Description Page No.
- ----------- ----------- --------
2.1 Agreement and Plan of Merger by and among Boston *
Private Bancorp, Inc., Boston Private Investment
Management, Inc., Westfield Capital Management
Company, Inc. and the individual stockholders of
Westfield Capital Management Company, Inc. dated
as of August 13, 1997 incorporated by reference to the
Company's Current Report on Form 8-K, filed with the
Securities and Exchange Commission on August 21, 1997.
2.2 Registration Rights Agreement by and among the Company *
and the individual stockholders of Westfield Capital
Management Company, Inc. dated as of August 13, 1997
incorporated by reference to the Company's Current Report
on Form 8-K, filed with the Securities and Exchange
Commission on August 21, 1997.
23.1 Consent of Baril & Smith 14
* Previously filed
-13-
<PAGE> 1
EXHIBIT 23.1
[Letterhead of Baril & Smith Certified Public Accountants, Inc.]
Accountant's Consent
We hereby consent to the use in the Current Report on Form 8-K/A of our
report dated March 11, 1997 relating to the balance sheets as of December 31,
1996 and 1995 and the released statements of income and retained earnings, and
cash flows for the years then ended of Westfield Capital Management, Inc., which
report appears in such Form 8-K/A, and use of our name and reference thereto as
independent certified public accounts as discussed in rule 2-01 under Regulation
S-X. We further consent to the incorporation by reference in Registration
Statements (Nos. 333-30755, 33-93634, 33-2617, 33-26133 and 2-98875) on Forms
S-8 and in Registration Statement (No. 333-19823) on Form S-3 of Boston Private
Bancorp, Inc. of such report.
/s/ Baril & Smith
Baril & Smith Certified
Public Accountants, Inc.
January 13, 1998
-14-
