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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
FEBRUARY 13, 1998
BOSTON PRIVATE BANCORP, INC.
(Exact name of registrant as specified in charter)
MASSACHUSETTS 0-17089 04-2976299
(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
TEN POST OFFICE SQUARE, BOSTON, MASSACHUSETTS 02109
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(617) 912-1900
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ITEM 5. OTHER EVENTS.
Boston Private Bancorp, Inc. (the "Company") reported on January 28, 1998
net income for 1997 of $3,508,000, or $0.32 per share, after deducting
$1,226,000, or $0.11 per share, of non-recurring acquisition expenses net of
taxes in connection with its acquisition of Westfield Capital Management Company
on October 31, 1997. The Company's earnings, before deducting acquisition
expenses net of taxes, totaled $4,734,000, or $0.43 per share.
The acquisition of Westfield was accounted for as a pooling of interests.
Accordingly, all results reported in the Company's financial statements include
the results of Westfield. The Company's earnings in 1996 reflecting pooling of
interests treatment totaled $5,478,000, or $0.55 per share. Prior to reflecting
pooling of interests treatment the Company reported $2,240,000, or $0.36 per
share, in 1996.
In the fourth quarter of 1997, during which period the Westfield
acquisition expenses were substantially recorded, the Company reported net
income of $188,000, or $.02 per share, compared to $1,341,000, or $.13 per
share, in the fourth quarter of 1996. Earnings in the fourth quarter of 1997
totaled $1,342,000, or $.12 per share, before deducting $1,154,000 of
acquisition expenses net of taxes.
The Company completed 1997 with assets under management of $2.2
billion on a consolidated basis, which represents a 16% increase for $1.9
billion at year end 1996. Fee income accounted for 55% of the Company's total
revenue in 1997, the results of Westfield for the entire year. The addition of
Westfield increased this ratio from 29% prior to the acquisition. The Company's
balance sheet assets totaled $369 million, compared to $294 million at December
31, 1996. At year end, Commercial loans totaled $135 million, an increase from
$98 million at year end 1996. Residential Mortgage loans totaled $142 million,
compared to $108 million at year end 1996. The Company's total loan growth for
1997 was 34%. Total deposits increased from $209 million to $258 million in
1997, a 23% increase. The Company's Tier I capital to asset ratio was 7.03% at
December 31, 1997, well above regulatory standards. For 1997, the Company's
return on equity excluding the impact of acquisition expenses was 18.2%, and
after deducting acquisition expenses the ratio was 13.5%.
<TABLE>
<CAPTION>
Boston Private Bancorp, Inc.
Selected Financial Data
December 31, December 31,
1997 1996
------------ ------------
<S> <C> <C>
(Dollars in Thousands, (Unaudited)
Except Per Share Data)
Total Balance Sheet Assets $368,942 $293,879
Stockholders' Equity 25,935 25,801
Total Loans 276,825 206,107
</TABLE>
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<TABLE>
<S> <C> <C>
Allowance for Possible
Loan Losses 3,645 2,566
Nonperforming Loans 747 976
Other Real Estate Owed 85 85
Nonperforming Assets 832 1,061
Deposits 258,301 209,302
Borrowings 79,684 53,659
Book Value Per Share $2.44 $2.50
Market Price Per Share $8.00 $5.38
Client Assets Under Management $2,245,000 $1,941,000
FINANCIAL RATIOS:
Stockholders' Equity/Total Assets 7.03% 8.78%
Nonperforming Loans/Total Loans 0.27% 0.47%
Allowance for Loan Losses/
Nonperforming Loans 487.95% 262.91%
Nonperforming Assets/
Total Assets 0.23% 0.36%
</TABLE>
<TABLE>
<CAPTION>
Year End Three Months Ended
(Dollars In Thousands, Except Per Share Data)
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
OPERATING RESULTS:
Net Interest Income $11,394 $ 9,311 $3,109 $2,525
Investment Management
and Other Fees 13,784 12,831 3,358 3,518
Total Revenue 25,178 22,142 6,467 6,043
Loan Loss Provision 810 619 551 196
Operating Expense 17,441 14,829 3,327 4,179
Merger Expense 1,510 - 1,390 -
Income Before Tax 5,417 6,694 1,199 1,668
Income Tax Expense 1,909 1,216 1,011 327
Net Income (A) $ 3,508 $ 5,478 $ 188 $1,341
</TABLE>
3
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<TABLE>
<S> <C> <C> <C> <C>
Per Share Data:
Basic Earnings Per Share $0.33 $0.57 $0.02 $0.13
Diluted Earnings
Per Share (A) $0.32 $0.55 $0.02 $0.13
Average Common Shares
Outstanding 10,590,000 9,597,000 10,639,000 10,062,000
Average Diluted Shares
Outstanding 10,960,000 9,880,000 11,020,000 10,062,000
Pro forma Information:
Net Income $3,508 $5,478 $188 $1,341
Pro forma adjustment for
income taxes of
acquired entity
previously filing as
an S Corporation 186 1,233 (294) 281
Pro forma Net Income
After Adjustment for
Income Taxes $3,322 $4,245 $482 $1,060
Pro forma Net Income
Per Basic shares
Outstanding $0.31 $0.44 $0.05 $0.11
Pro forma Net Income
Per Diluted Shares
Outstanding $0.30 $0.43 $0.04 $0.11
OPERATING RATIOS:
Return on Average Equity 13.50% 26.37% 2.83% 24.67%
Return on Average Assets 1.13% 2.11% 0.22% 1.94%
Net Interest Margin 3.87% 3.80% 3.81% 3.85%
Total Fees/Total
Revenue 54.75% 57.95% 51.93% 58.22%
Efficiency Ratio 75.27% 66.97% 72.94% 69.15%
</TABLE>
(A) After deducting $1.2 million of non-recurring merger expenses, operating net
income for the fourth quarter and the year ended 12/31/97 is $1.3 million, or
$0.12 per share, and $4.7 million, or $0.43 per share, respectively.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired
Not applicable.
(b) Pro Forma Financial Information
Not applicable.
(c) Exhibits
99.1 Press release
5
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BOSTON PRIVATE BANCORP, INC.
Date: February 13, 1998 By: /s/ Walter M. Pressey
------------------------------------
Walter M. Pressey, Senior Vice President
and Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 Press release
<PAGE> 1
EXHIBIT 99.1
Boston Private Bancorp, Inc. Announces Earnings
BOSTON, Jan 28 -- Boston Private Bancorp, Inc. (OTC:BPBC - news) today reported
net income for 1997 of $3,508,000, or $0.32 per share, after deducting
$1,226,000, or $0.11 per share, of non-recurring acquisition expenses net of
taxes in connection with its acquisition of Westfield Capital Management Company
on October 31, 1997. The Company's earnings, before deducting acquisition
expenses net of taxes, totaled $4,734, 000, or $0.43 per share.
The acquisition of Westfield was accounted for as a pooling of interests.
Accordingly, all results reported in the Company's financial statements include
the results of Westfield. The Company's earnings in 1996 reflecting pooling of
interests treatment totaled $5,478,000, or $0.55 per share. Prior to reflecting
pooling of interests treatment the Company reported $2,240,000, or $0.36 per
share, in 1996.
In the fourth quarter of 1997, during which period the Westfield acquisition
expenses were substantially recorded, the Company reported net income of
$188,000, or $.02 per share, compared to $1,341,000, or $.13 per share, in the
fourth quarter of 1996. Earnings in the fourth quarter of 1997 totaled
$1,342,000, or $.12 per share, before deducting $1,154,000 of acquisition
expenses net of taxes.
The Company completed 1997 with assets under management of $2.2 billion on a
consolidated basis, which represents a 16% increase for $1.9 billion at year end
1996. Fee income accounted for 55% of the Company's total revenue in 1997, the
results of Westfield for the entire year. The addition of Westfield increased
this ratio from 29% prior to the acquisition. The Company's balance sheet assets
totaled $369 million, compared to $294 million at December 31, 1996. At year
end, Commercial loans totaled $135 million, an increase from $98 million at year
end 1996. Residential Mortgage loans totaled $142 million, compared to
$108 million at year end 1996. The Company's total loan growth for 1997 was 34%.
Total deposits increased from $209 million to $258 million in 1997, a 23%
increase. The Company's Tier I capital to asset ratio was 7.03% at December 31,
1997, well above regulatory standards. For 1997, the Company's return on equity
excluding the impact of acquisition expenses was 18.2%, and after deducting
acquisition expenses the ratio was 13.5%.
In announcing the results, Company President and CEO Timothy L. Vaill said, "We
experienced strong growth in all of our business areas in 1997, reflecting the
demand for the types of services we offer. The marketplace clearly appears to be
responsive to establishing banking and investment relationships which
accommodate the broad spectrum of the financial asset life cycle, and which
withstand the test of time."
The acquisition of Boston-based Westfield Capital Management Company, an
investment firm
1
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with assets under management of $1.3 billion, represented the Company's second
investment management acquisition since 1995. Said Mr. Vaill, "This acquisition
reinforces our position in the marketplace as a leading provider of private
banking services with investment management as a principal focus. Immediately,
it resulted in our having over $2 billion in client assets under management and
broadened our range of product offerings. In addition, Westfield's CEO, Mike
Hazard, and his team, give us significantly greater depth and experience in
investment management." Westfield Capital Management specializes in separately
managed, growth equity portfolios, with specific emphasis on small to mid-cap
positions.
The Company's bank subsidiary, Boston Private Bank & Trust Company specializes
in providing private banking and investment services to individuals, their
families and their businesses, as well as to foundations and selected
institutional clients. Its investment emphasis is on mid to large cap equity
portfolios and active management of fixed income accounts. Mr. Vaill continues,
"The lending, cash management and individual trust and investment products
provided by the Bank, combined with our world class personal service and
high-touch, high-tech approach, give us a special niche in this highly
competitive marketplace. This has been reinforced with our relatively strong
performance in recent years." In addition the Bank has announced plans to open a
full-service private banking office in Wellesley in the spring of 1998.
The Company offers a full range of banking, commercial and residential lending,
and trust and investment management services to its domestic and international
clientele with a commitment to exceptional service. The Bank also offers a First
Time Homebuyer program, and "soft second" mortgage financing. Under its
Accessible Banking program, the Bank is an active provider of real estate
financing for affordable housing, economic development, and small businesses.
Boston Private Bancorp, Inc.
Selected Financial Data
<TABLE>
<CAPTION>
December 31, December 31,
1997 1996
------------ ------------
<S> <C> <C>
(Dollars in Thousands, (Unaudited)
Except Per Share Data)
Total Balance Sheet Assets $368,942 $293,879
Stockholders' Equity 25,935 25,801
Total Loans 276,825 206,107
Allowance for Possible Loan Losses 3,645 2,566
Nonperforming Loans 747 976
Other Real Estate Owed 85 85
Nonperforming Assets 832 1,061
</TABLE>
2
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<TABLE>
<S> <C> <C>
Deposits 258,301 209,302
Borrowings 79,684 53,659
Book Value Per Share $2.44 $2.50
Market Price Per Share $8.00 $5.38
Client Assets Under Management $2,245,000 $1,941,000
FINANCIAL RATIOS:
Stockholders' Equity/Total Assets 7.03% 8.78%
Nonperforming Loans/Total Loans 0.27% 0.47%
Allowance for Loan Losses/
Nonperforming Loans 487.95% 262.91%
Nonperforming Assets/Total Assets 0.23% 0.36%
</TABLE>
<TABLE>
<CAPTION>
Year End Three Months Ended
(Dollars In Thousands, Except Per Share Data)
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
OPERATING RESULTS:
Net Interest Income $11,394 $ 9,311 $3,109 $2,525
Investment Management
and Other Fees 13,784 12,831 3,358 3,518
Total Revenue 25,178 22,142 6,467 6,043
Loan Loss Provision 810 619 551 196
Operating Expense 17,441 14,829 3,327 4,179
Merger Expense 1,510 - 1,390 -
Income Before Tax 5,417 6,694 1,199 1,668
Income Tax Expense 1,909 1,216 1,011 327
Net Income (A) $ 3,508 $ 5,478 $188 $1,341
Per Share Data:
Basic Earnings Per Share $ 0.33 $ 0.57 $ 0.02 $ 0.13
Diluted Earnings
</TABLE>
3
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<TABLE>
<S> <C> <C> <C> <C>
Per Share (A) $0.32 $0.55 $0.02 $0.13
Average Common Shares
Outstanding 10,590,000 9,597,000 10,639,000 10,062,000
Average Diluted Shares
Outstanding 10,960,000 9,880,000 11,020,000 10,062,000
Pro forma Information:
Net Income $3,508 $5,478 $188 $1,341
Pro forma adjustment for
income taxes of
acquired entity
previously filing as
an S Corporation 186 1,233 (294) 281
Pro forma Net Income
After Adjustment for
Income Taxes $3,322 $4,245 $482 $1,060
Pro forma Net Income
Per Basic shares
Outstanding $0.31 $0.44 $0.05 $0.11
Pro forma Net Income
Per Diluted Shares
Outstanding $0.30 $0.43 $0.04 $0.11
OPERATING RATIOS:
Return on Average Equity 13.50% 26.37% 2.83% 24.67%
Return on Average Assets 1.13% 2.11% 0.22% 1.94%
Net Interest Margin 3.87% 3.80% 3.81% 3.85%
Total Fees/Total
Revenue 54.75% 57.95% 51.93% 58.22%
Efficiency Ratio 75.27% 66.97% 72.94% 69.15%
</TABLE>
(A) After deducting $1.2 million of non-recurring merger expenses, operating net
income for the fourth quarter and the year ended 12/31/97 is $1.3 million, or
$0.12 per share, and $4.7 million, or $0.43 per share, respectively.
