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Filed Pursuant to Rule 424(b)(5)
Registration No. 333-46391
PROSPECTUS SUPPLEMENT
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(TO PROSPECTUS DATED FEBRUARY 23, 1998)
778,000 SHARES
BOSTON PRIVATE BANCORP, INC.
COMMON STOCK
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All of the 778,000 shares of Common Stock, par value $1.00 per share
(the "Common Stock"), of Boston Private Bancorp, Inc. (the "Company") offered
pursuant to this Prospectus Supplement (the "Offering") are being offered by
certain stockholders of the Company (the "Selling Stockholders"). See "Plan of
Distribution" and "Selling Stockholders."
The Common Stock is traded on the Nasdaq SmallCap Market under the
symbol "BPBC". On February 23, 1998, the closing price of the Common Stock as
reported on the Nasdaq SmallCap was $8.75 per share.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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Keefe, Bruyette & Woods, Inc. ("KBW") has agreed to purchase from the
Selling Stockholders the shares of Common Stock offered hereby at a purchase
price of $7.96 per share, resulting in aggregate proceeds of $6,192,880 (before
expenses) to the Selling Stockholders. The Company has agreed to bear certain of
the expenses in connection with the registration and sale of the shares of
Common Stock including all registration, qualification and filing fees, all fees
and expenses of legal counsel, accountants and other persons retained by the
Company, and all other expenses incurred by the Company and the Selling
Stockholders (other than selling commissions payable by the Selling
Stockholders).
The Common Stock offered hereby may be offered by KBW from time to time
in one or more transactions (which may involve block transactions) on the Nasdaq
SmallCap Market or otherwise at market prices prevailing at the time of sale, at
prices related to such market prices or at negotiated prices. See "Plan of
Distribution."
The Company has agreed to indemnify KBW against certain liabilities in
connection with the Offering, including certain liabilities under the Securities
Act of 1933, as amended (the "Securities Act"). See "Plan of Distribution."
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The shares of Common Stock are offered by KBW, subject to prior sale,
when, as and if issued to and accepted by it, subject to certain conditions. KBW
reserves the right to withdraw, cancel or modify such offer and reject orders in
whole or in part. It is expected that delivery of the shares of Common Stock
will be made in New York, New York on or about March 2, 1998.
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KEEFE, BRUYETTE & WOODS, INC.
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The date of this Prospectus Supplement is February 24, 1998.
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KBW MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE
AFFECT THE PRICE OF THE COMMON STOCK. SUCH TRANSACTIONS MAY INCLUDE STABILIZING
AND THE PURCHASE OF COMMON STOCK TO COVER SYNDICATE SHORT POSITIONS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN OF DISTRIBUTION."
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The following information contained in this Prospectus Supplement is
qualified in its entirety by the detailed information appearing elsewhere in
this Prospectus Supplement or the accompanying Prospectus or incorporated
therein by reference.
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SELLING STOCKHOLDERS
The Shares are to be offered by and for the respective accounts of the
Selling Stockholders. The following table sets forth the name and number of
shares of Common Stock owned by each Selling Stockholder as of January 1, 1998
and the number of shares of Common Stock to be sold by each Selling Stockholder
pursuant to this Prospectus Supplement. The amounts set forth below are based
upon information provided by the Selling Stockholders and are accurate to the
best knowledge of the Company.
<TABLE>
<CAPTION>
Shares of
Shares of Common Stock Owned
Common Stock Shares of After the Offering (2)
Beneficially Owned Common Stock ----------------------
Selling Stockholder As of January 1, 1998(1) Offered Hereby Number(1) Percent
- ------------------- ------------------------ -------------- --------- -------
(3)
- ---
<S> <C> <C> <C> <C>
Arthur J. Bauernfeind........................... 912,037 150,000 762,037 7.2%
Michael J. Chapman(4)........................... 642,388 110,000 532,388 5.0
Stephen C. Demirjian(5)......................... 121,580 10,000 111,580 1.0
Hazard Family Foundation........................ 70,000 25,000 45,000 *
C. Michael Hazard............................... 1,871,426 460,000 1,411,426 13.3
William A. Muggia(6)............................ 86,066 10,000 76,066 *
B. Randall Watts(7)............................. 72,428 6,000 66,428 *
Murray State University Foundation.............. 35,000 7,000 28,000 *
---------- ---------- ----------
Total........................................... 3,810,925 778,000 3,032,925
</TABLE>
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* Less than 1%.
(1) Includes options to purchase shares of Common Stock of the Company that
are exercisable within 60 days of January 1, 1998.
(2) Assumes that all Shares are sold by the Selling Stockholders.
(3) Based on 10,641,100 outstanding shares of Common Stock of the Company
as of December 31, 1997. Options to purchase Common Stock that are
exercisable within 60 days of January 1, 1998 are deemed outstanding
for computing the ownership of each Selling Stockholder as a percentage
of the total number of shares outstanding, but are not deemed
outstanding for computing the percentage of any other person or group.
(4) Includes 2,800 shares subject to options exercisable within 60 days.
Does not include 11,200 shares subject to options not exercisable
within 60 days.
(5) Includes 3,200 shares subject to options exercisable within 60 days.
Does not include 12,800 shares subject to options not exercisable
within 60 days.
(6) Includes 3,200 shares subject to options exercisable within 60 days.
Does not include 12,800 shares subject to options not exercisable
within 60 days.
(7) Includes 1,400 shares subject to options exercisable within 60 days.
Does not include 5,600 shares subject to options not exercisable within
60 days.
PLAN OF DISTRIBUTION
KBW has agreed to purchase from the Selling Stockholders, and the
Selling Stockholders have agreed to sell to KBW an aggregate of 778,000 shares
of Common Stock. See "Selling Stockholders."
KBW's obligation to purchase the shares of Common Stock to be sold by
the Selling Stockholders is subject to the satisfaction of certain conditions.
The nature of KBW's obligation is such that it is committed to purchase all of
the shares of Common Stock if any are purchased.
KBW has advised the Company and the Selling Stockholders that it
proposes to offer the shares of Common Stock offered hereby for sale, from time
to time, to purchasers directly or through agents, or through brokers in
brokerage transactions on the Nasdaq SmallCap Market (which may include block
trades), or to dealers in negotiated transactions or in a combination of such
methods of sale, at fixed prices which may be changed, at
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market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Brokers, dealers, agents or others that participate in the distribution
of the Common Stock offered hereby may be deemed to be underwriters under the
Securities Act. Those who act as an underwriter, broker, dealer or agent in
connection with the sale of the Common Stock offered hereby will be selected by
KBW and may have other business relationships with the Company and its
subsidiaries or affiliates in the ordinary course of business.
Until the distribution of the shares of Common Stock is completed,
rules of the Securities and Exchange Commission may limit the ability of KBW to
bid for and purchase the Common Stock. As an exception to these rules, KBW is
permitted to engage in certain transactions that stabilize the price of the
Common Stock. Such transactions consist of bids or purchases for the purpose of
pegging, fixing or maintaining the price of the Common Stock.
If KBW creates a short position in the Common Stock in connection with
the Offering (i.e., if it sells more shares of Common Stock than are set forth
on the cover page of this Prospectus Supplement), KBW may reduce that short
position by purchasing Common Stock in the open market.
In general, purchases of a security for the purpose of stabilization or
to reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases.
Neither the Company nor KBW makes any representation or prediction as
to the direction or magnitude of any effect that the transactions described
above may have on the price of the Common Stock. In addition, neither the
Company nor KBW makes any representation that KBW will engage in such
transactions or that such transactions, once commenced, will not be discontinued
without notice.
The Company has agreed to indemnify KBW against certain liabilities in
connection with the Offering, including certain liabilities under the Securities
Act.
S-4
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PROSPECTUS
BOSTON PRIVATE BANCORP, INC.
789,500 Shares of Common Stock
This Prospectus relates to 789,500 shares (the "Shares") of common
stock, par value $1.00 per share (the "Common Stock"), of Boston Private
Bancorp, Inc. (the "Company") to be sold by certain stockholders of the Company
(the "Selling Stockholders") from time to time. The Selling Stockholders may
sell the Shares from time to time in transactions on the Nasdaq SmallCap Market
System, in negotiated transactions or by a combination of these methods, at
fixed prices that may be changed, at market prices at the time of sale, at
prices related to market prices or at negotiated prices. The Selling
Stockholders may effect these transactions by selling the Shares to or through
broker-dealers, who may receive compensation in the form of discounts or
commissions from the Selling Stockholders or from the purchasers of the Shares
for whom the broker-dealers may act as an agent or to whom they may sell as a
principal, or both. See "Selling Stockholders" and "Plan of Distribution." The
Common Stock of the Company is traded under the symbol "BPBC" on the Nasdaq
SmallCap Market. On February 12, 1998, the reported closing price for the Common
Stock on the Nasdaq SmallCap Market was $8 3/4.
The Company will not receive any of the proceeds from the sale of the
Shares. The Company has agreed to bear all of the expenses in connection with
the registration and sale of the Shares (other than underwriting discounts and
selling commissions).
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF CERTAIN
SPECIAL FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS IN
PURCHASING THE SHARES OF COMMON STOCK OFFERED HEREBY.
--------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
--------------------------------------------
THE DATE OF THIS PROSPECTUS IS FEBRUARY 23, 1998.
<PAGE> 6
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C. 20549, a Registration Statement (which term
shall include all amendments, exhibits and schedules thereto) on Form S-3 under
the Securities Act of 1933 (the "Securities Act") with respect to the shares of
Common Stock offered hereby. This Prospectus, which constitutes a part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission, to which Registration Statement
reference is hereby made. For further information with respect to the Company
and the securities covered hereby, reference is made to the Registration
Statement and to the exhibits thereto filed as a part thereof. The Registration
Statement and the exhibits thereto may be inspected and copied at prescribed
rates at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
regional offices of the Commission located at Seven World Trade Center, 13th
Floor, New York, New York 10048 and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and copies may be obtained at the prescribed rates from
the Public Reference section of the Commission at its principal office in
Washington, D.C. The Commission also maintains a Web site at http://www.sec.gov
containing reports, proxy and information statements and other information
regarding registrants, including the Company, that file electronically with the
Commission. Statements made in this Prospectus as to the contents of any
contract, agreement or other document referred to are not necessarily complete.
With respect to each such contract, agreement or other document filed as an
exhibit to the Registration Statement, reference is made to the exhibit for a
more complete description of the matter involved, and each such statement shall
be deemed qualified in its entirety by such reference.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files proxy statements, reports and other information with
the Commission. Such proxy statements, reports and other information filed by
the Company may be inspected and copied at prescribed rates at the
aforementioned public reference facilities maintained by the Commission. The
Common Stock of the Company is traded on the Nasdaq SmallCap Market System.
Reports and other information concerning the Company may be inspected at the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in, and made a part of, this Prospectus by reference as of their
respective dates: (1) the Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1996; (2) the Company's Quarterly Reports on Form 10-QSB
for the fiscal quarters ended March 31, June 30 and September 30, 1997; (3) the
definitive Proxy Statement of the Company for the Annual Meeting of Stockholders
held May 21, 1997; (4) the Company's Current Reports on Form 8-K, filed on
August 21, 1997, November 14, 1997, January 14, 1998 and February 13, 1998; and
(5) the description of the Common Stock of the Company contained in the
Company's Registration Statement on Form SB-2, filed on August 30, 1993,
including all amendments and reports updating such description.
Each document filed subsequent to the date of this Prospectus pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus and shall be a part hereof from the date of filing of such
document. The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon request, a copy of
any or all of the documents that have been incorporated by reference to the
Registration Statement of which this Prospectus is a part, other than exhibits
to such documents. Requests should be addressed to: Boston Private Bancorp,
Inc., Ten Post Office Square, Boston, Massachusetts 02109, Attention: Corporate
Secretary (telephone number (617) 912-1900).
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This Prospectus, including the information incorporated herein by
reference, contains forward-looking statements within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act. The Company's actual
results could differ materially from those projected in the forward-looking
statements set forth in this Prospectus including the information incorporated
herein by reference. Investors should carefully consider the discussion of risk
factors below, in addition to the other information contained in this
Prospectus, in connection with an investment in the Shares offered hereby.
RISK FACTORS
In addition to the other information contained or incorporated by
reference in this Prospectus, the following factors should be considered
carefully in evaluating an investment in the shares of Common Stock offered by
this Prospectus.
COMPETITION
The ability of Boston Private Bank & Trust Company (the "Bank"), a
wholly-owned subsidiary of the Company through which the Company conducts
substantially all of its banking business, to attract loans and deposits may be
limited by its small size relative to its competitors. The Bank maintains a
smaller staff and has fewer financial and other resources than larger
institutions with which it competes in its market area.
In particular, in attempting to attract deposits and making loans, the
Bank encounters competition from other institutions, including larger downtown
Boston and suburban-based commercial banking organizations, savings banks,
credit unions, other financial institutions and non-bank financial service
companies serving eastern Massachusetts and adjoining areas. The principal modes
of competition include the interest rates charged on loans, the interest rates
paid on deposits, efforts to obtain deposits, the range of services provided and
the quality of those services.
In this competitive environment, the Bank may be unable to attract
sufficient and high-quality loans in order to continue its loan growth, which
may materially adversely affect the Bank's results of operations and financial
condition, including the level of its non-performing assets. The Bank's
competitors include several major financial companies whose greater resources
may afford them a marketplace advantage by enabling them to maintain numerous
banking locations and mount extensive promotional and advertising campaigns. In
particular, the Bank's current commercial borrowing customers may develop needs
for credit facilities larger than it can accommodate.
In addition, the ability of the Bank and Westfield Capital Management
Company, Inc. (the "Westfield"), a wholly-owned subsidiary of the Company
through which the Company conducts a substantial portion of its investment
management business, to attract investment management and trust business may be
inhibited by their relatively short history and limited record of performance.
With respect to their investment management and trust services, the Bank and
Westfield compete primarily with commercial banks and trust companies, mutual
fund companies, investment advisory firms, stock brokerage firms, law firms and
other financial companies. Competition is especially keen in the Bank's and
Westfield's market area, because Boston has a well-established investment
management industry. Many of the Bank's and Westfield's competitors have greater
resources than the Company on a consolidated basis. In addition to competing
directly for clients, competition can impact the fee structures of the Bank and
Westfield. The Company believes that the ability of the Bank and Westfield to
compete effectively with other firms is dependent upon their products, level of
investment performance and client service, as well as the marketing and
distribution of their investment products. There can be no assurance that the
Bank and Westfield will be able to achieve favorable investment performance and
retain their existing clients.
ASSET QUALITY
The success of bank holding companies, such as the Company, depends to
a significant extent upon the quality of their assets. Non-performing assets of
the Company, which include non-performing loans and real estate acquired through
foreclosure proceedings and through acceptance of a deed in lieu of foreclosure
(collectively, other real estate owned or "OREO"), can lead to charge-offs and
an increase in the Bank's allowance for possible loan losses. Other adverse
effects of non-performing assets include, but are not limited to, foregone
interest income and increased operating expenses as a result of the allocation
of management time and resources to the collection and work-out of these
non-performing assets.
Management of the Bank determines the Bank's allowance for possible
loan losses based on the facts and circumstances available to it at the time of
determination. The net carrying value of OREO is determined by Management
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to equal the lower of (i) the assets' balances when transferred to OREO or (ii)
the estimated net fair value, after reduction for estimated selling costs, of
the property acquired. The allowance for possible loan losses, however, can only
be estimated by the Company, based upon, among other things, the quality of the
loan portfolio, economic conditions, the value of the underlying collateral and
the level of non-accruing loans held by the Bank. Future provisions to the
allowance for possible loan losses or provisions in carrying values of OREO
could become necessary as a result of deterioration in the real estate market
and/or the economy in the Company's primary market area, future increases in
non-performing assets or for other reasons. Such provisions could adversely
affect the Company's financial condition and results of operations.
In addition, bank regulatory agencies, as an integral part of their
examination process, periodically review the Bank's allowance for possible loan
losses and the carrying value of its OREO. Such agencies could require the Bank
to make further provisions to the allowance for possible loan losses and
adjustments to the carrying values of OREO based on their judgments at the time
of examination.
LOAN CONCENTRATIONS
The Bank's loans are concentrated with respect to geography, type of
customer and type of collateral. Because the Bank serves primarily individuals
and smaller businesses located in eastern Massachusetts and adjoining areas,
with a particular concentration in the Greater Boston Metropolitan Area, the
Bank's asset quality is affected by the economic conditions in these areas. The
Bank's commercial loans are generally concentrated in the following customer
groups: (i) real estate developers and investors, (ii) financial services, (iii)
technology, manufacturing and communications, (iv) professional services and (v)
general commercial, industrial and personal loans. The Bank's commercial loans,
with limited exceptions, are secured by either real estate (income producing
residential and commercial properties), marketable securities or corporate
assets (accounts receivable, equipment and inventory). Substantially all of the
Bank's residential mortgage and home equity loans are secured by residential
property in eastern Massachusetts. Conditions in the real estate market
specifically, and the Massachusetts economy generally, could impact the ability
of these borrowers to service their loans in the future and/or the value of the
collateral securing these loans. In addition, this loan concentration coupled
with adverse economic conditions in the area could negatively impact the asset
quality of the Company in future periods. See "--Asset Quality."
INTEREST RATE ENVIRONMENT
The general interest rate environment affects the Company's financial
results. The Bank's main source of income from banking operations is its net
interest income, which is defined as the difference between the interest income
received on its interest-bearing assets, including loans and investment
securities, and the interest expense incurred in connection with its
interest-bearing liabilities, including deposits and borrowings. The Bank's net
interest income can be affected significantly by changes in market interest
rates. In particular, decreasing interest rates may reduce the Bank's net
interest income as the spread between interest income and interest expense
decreases. The Bank has adopted asset and liability management policies to
minimize the potential adverse effects of changes in interest rates on its net
interest income, primarily by altering the mix and maturity of the Bank's loans,
investments and funding sources.
An increase in interest rates could also have a material adverse effect
on the Company's results of operations by reducing the ability of its borrowers
to service their current indebtedness, thereby increasing the Bank's delinquent
and non-performing loans and necessitating further provisions to the Bank's
allowance for possible loan losses.
SOURCES OF FUNDS
The Bank has traditionally obtained funds principally through deposits
and through borrowings. The Bank's ability to obtain deposits depends upon
general economic conditions, market interest rates and competitive pressures.
Thus, in order to provide liquidity and flexibility to its operations, the Bank
may have to rely more heavily on borrowings as a source of funds in the future.
Moreover, the volatility of the Bank's deposits may impact the Bank's
overall liquidity. Historically and in comparison to commercial banking
averages, the Bank has had a higher percentage of its time deposits in
denominations of $100,000 or more. Within the banking industry, these deposits
are generally considered to be volatile.
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<PAGE> 9
THE PERFORMANCE OF THE COMPANY MAY BE ADVERSELY AFFECTED BY CHANGES IN ECONOMIC
AND MARKET CONDITIONS
The Company offers a broad range of investment management services and
styles to institutional and retail investors. Consequently, the Company's
performance is directly affected by conditions in the financial and securities
markets.
The financial markets and the investment management industry in general
have experienced record performance and record growth in recent years. The
financial markets and businesses operating in the securities industry, however,
are highly volatile and are directly affected by, among other factors, domestic
and foreign economic conditions and general trends in business and finance, all
of which are beyond the control of the Company. There can be no assurance that
broader market performance will be favorable in the future. Any decline in the
financial markets or a lack of sustained growth may result in a corresponding
decline in performance by the Company and may adversely affect assets under
management and/or fees earned by the Company.
THE COMPANY'S INVESTMENT MANAGEMENT CONTRACTS ARE SUBJECT TO TERMINATION ON
SHORT NOTICE
Following the acquisition of Westfield in October 1997, the Company
expects that more than 50% of its revenues will be derived from investment
management contracts which are typically terminable upon less than 30 days'
notice. Because of this, clients of the Company may withdraw funds from accounts
under management generally in their sole discretion. In addition, the Company's
contracts generally provide for fees payable for investment management services
based on the market value of assets under management, although a portion also
provide for the payment of fees based on investment performance. Because most
contracts provide for a fee based on market values of securities, fluctuations
in securities prices may have an adverse effect on the Company's consolidated
results of operations and financial condition. Changes in the investment
patterns of clients will also affect the total assets under management. In
addition, in the case of contracts which provide for the payment of
performance-based fees, the investment performance of the Company will affect
the Company's results of operations and financial condition.
EXISTENCE OF REGISTRATION RIGHTS
The holders of 3,918,367 shares of Common Stock (which includes the
789,500 shares being registered hereunder) have the right in certain
circumstances to require the Company to register up to 800,000 of their shares
annually under the Securities Act for resale to the public, and the holders of
3,918,367 shares (which includes the 789,500 shares being registered hereunder)
have the right to include their shares in a registration statement filed by the
Company. These registration rights may enable such holders to publicly sell
shares which would otherwise be ineligible for sale in the public market. The
sale of a substantial number of shares of Common Stock into the public market,
or the availability of such shares for future sale, could adversely affect the
market price for the Common Stock and could impair the Company's ability to
obtain additional capital in the future through an offering of equity securities
should it desire to do so.
THE COMPANY'S INVESTMENT MANAGEMENT BUSINESS IS HIGHLY REGULATED
Each direct or indirect subsidiary of the Company which provides
investment management services is highly regulated, primarily at the federal
level. The failure of any such subsidiary to comply with applicable laws or
regulations could result in fines, suspensions of individual employees or other
sanctions, including revocation of such subsidiary's registration as an
investment adviser. Both Westfield and Boston Private Asset Management, Inc., a
wholly-owned subsidiary of the Bank ("BPAM"), are registered with the United
States Securities and Exchange Commission (the "Commission") as investment
advisers under the Investment Advisers Act of 1940, as amended (the "Investment
Advisers Act"), and are subject to the provisions of the Investment Advisers Act
and the Commission's regulations promulgated thereunder. The Investment Advisers
Act imposes numerous obligations on registered investment advisers, including
fiduciary, record keeping, operational and disclosure obligations. Both
Westfield and BPAM as investment advisers are also subject to regulation under
the securities laws and fiduciary laws of certain states. Westfield acts as a
subadviser to a mutual fund which is registered with the Commission under the
Investment Company Act of 1940, as amended (the "1940 Act"). As a subadviser to
a registered investment company, Westfield is subject to requirements under the
1940 Act and the Commission's regulations promulgated thereunder. In addition,
the Company is subject to the Employee Retirement Income Security Act of 1974
("ERISA"), and to regulations promulgated thereunder, insofar as it is a
"fiduciary" under ERISA with respect to certain of its clients. ERISA and the
applicable provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), impose certain duties on persons who are fiduciaries under ERISA, and
prohibit certain transactions involving the assets of each
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ERISA plan which is a client of the Company, as well as certain transactions by
the fiduciaries (and certain other related parties) to such plans.
In addition, applicable law provides that the investment management
contracts under which the Company manages assets for other parties either
terminate automatically if assigned, or are not assignable unless the applicable
client consents to the assignment. Assignment, as generally defined, includes
direct assignments as well as assignments which may be deemed to occur, under
certain circumstances, upon the direct or indirect transfer of a "controlling
block" of the voting securities of the Company. Moreover, applicable law
provides that all investment contracts with mutual fund clients may be
terminated by such clients, without penalty, upon no later than 60 days' notice.
Investment contracts with institutional and other clients are typically
terminable by the client, also without penalty, upon 30 days' notice.
The Company itself does not manage investments for clients, does not
provide any investment management services and, therefore, is not registered as
an investment adviser under federal or state law.
YEAR 2000
The Company's management has initiated an enterprise-wide program to
prepare the Company's computer systems and applications for the year 2000. The
approach of the year 2000 presents a problem in that many computer programs have
been written using two digits rather than four to define the applicable year.
Any of the Company's programs that have time-sensitive software may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result in
internal system failures or miscalculations, and also creates risk for the
Company from third parties with whom the Company deals on financial
transactions. The Company has conducted a comprehensive review of its computer
systems to identify the systems that could be affected by the year 2000, and has
developed an implementation plan to resolve this issue. The Company believes
that, with modifications to existing software and conversions to new software,
the year 2000 problem will not pose significant operational problems for the
Company as so modified or converted. The Company is also in the process of
assessing whether each of its suppliers of computer services are year 2000
compliant. The Company believes that this assessment will be completed by the
end of 1998. The Company is not purchasing any new software products or engaging
in any new contracts unless the products and counterparties are year 2000
compliant. Maintenance, testing and modification costs will be expensed as
incurred, while the costs of new software products will be capitalized and
amortized over their useful lives. The Company does not expect that the amounts
required to be expensed to resolve the year 2000 issue will have a material
effect on its financial condition or results of operations.
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THE COMPANY
The Company is incorporated under the laws of the Commonwealth of
Massachusetts and is registered with the Board of Governors of the Federal
Reserve System as a bank holding company under the Bank Holding Company Act of
1956, as amended. On July 1, 1988, the Company became the parent holding company
of Boston Private Bank & Trust Company (the "Bank"), a trust company chartered
by the Commonwealth of Massachusetts and insured by the Federal Deposit
Insurance Corporation.
On October 31, 1997, Boston Private Investment Management, Inc., an
investment arm of the Company, acquired Boston-based Westfield Capital
Management Company, Inc. In connection with the transaction, Boston Private
Investment Management, Inc. assumed the name Westfield Capital Management
Company, Inc. ("Westfield"). In this transaction, which was accounted for as a
pooling of interests, the former stockholders of Westfield Capital Management
Company, Inc. received 3,918,367 shares of common stock, par value $1.00 per
share, of the Company. The purchase price was based on the Company's average
common stock price from January 1, 1997 through August 12, 1997, which was
approximately 61/8. In addition, the Company granted certain demand and
piggyback registration rights to the stockholders of Westfield Capital
Management Company, Inc. in connection with the issuance of the shares in this
transaction. See "Registration Rights."
The Company conducts substantially all of its business through its
wholly-owned subsidiaries, the Bank and Westfield. Westfield is located at One
Financial Center in Boston, Massachusetts, and the Company's principal offices
are located at Ten Post Office Square, Boston, Massachusetts 02109.
The Bank pursues a "private banking" business strategy and is
principally engaged in providing banking, investment and fiduciary products to
high net worth individuals, their families and their businesses in the greater
Boston area and New England and, to a lesser extent, Europe and Latin America.
The Bank offers its clients a broad range of basic deposit services, including
checking and savings accounts, with automated teller machine ("ATM") access, and
cash management services through sweep accounts and repurchase agreements. The
Bank offers commercial, residential mortgage, home equity and consumer loans. In
addition, the Bank provides investment advisory and asset management services,
securities custody and safekeeping services, trust and estate administration and
IRA and Keogh accounts.
Westfield is an investment management firm serving the investment needs
of high net worth individuals and institutions with endowments, pension and
profit-sharing plans, and 401(k) plans. Westfield invests primarily in equities
of companies which it expects to grow at above normal rates, and although
Westfield is not limited to such investments, it has a particular focus on
companies deemed to have small to mid-sized capitalizations. In addition,
Westfield acts as the managing general partner for two limited partnerships, one
of which invests primarily in technology stocks and the other of which invests
primarily in equities of companies based outside the United States.
INVESTMENT MANAGEMENT. The Company provides a range of investment
management services to individuals, families, trusts, endowments, foundations
and retirement plans. These services include management of equity portfolios,
fixed income portfolios, balanced portfolios, liquid asset management portfolios
and mutual fund holdings. Portfolios are managed based on the investment
objectives of each client, with each portfolio being positioned to benefit from
long-term market trends. In addition, the Company offers advisory services with
respect to alternative forms of investment.
TRUST ADMINISTRATION. Acting as a fiduciary, the Company provides trust
administration and estate settlement services. The services provided by the
Company include the ongoing fiduciary review of the trust instrument, the
collection and safekeeping of assets, the investment of trust assets, the
distribution of income, the preparation of reports for court and tax purposes,
the preparation of tax returns, the distribution of assets as required and
communication with grantors, beneficiaries and co-trustees.
CUSTODY SERVICES. Custody services provided by the Company include the
safekeeping of securities, the settlement of security transactions, the
execution of trades and the automatic investment of cash balances.
LENDING ACTIVITIES. The Bank specializes in lending to individuals and
small businesses, including non-profit organizations, partnerships and
professional corporations and associations. Loans made by the Bank to
individuals include residential mortgage loans, unsecured and secured personal
lines of credit, home equity loans, mortgage loans on investment and vacation
properties, letters of credit and overdraft protection. Loans made by the Bank
to businesses include commercial mortgage loans, revolving lines of credit,
working capital loans, equipment financing and letters of credit. Generally, the
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<PAGE> 12
Bank lends only to borrowers located in eastern New England or to borrowers who
may be located farther away, but who have collateral deposited with the Bank in
the form of cash or marketable securities or other collateral within the Bank's
market area.
ASSET AND LIABILITY MANAGEMENT. The objective of the Company's asset
and liability management is to maximize profit potential while minimizing the
vulnerability of its operations to changes in interest rates by means of
managing the ratio of interest rate sensitive assets to interest rate sensitive
liabilities within specified maturities or repricing dates. The Company's
actions in this regard are taken under the guidance of the Asset and Liability
Management Committee which is comprised of members of senior management. This
committee is involved in formulating the economic assumptions that the Company
uses in its financial planning and budgeting process and establishes policies
which control and monitor the sources, uses and pricing of funds. The Company
has not engaged in any hedging activities.
INVESTMENT ACTIVITIES. The investment activity of the Company is an
integral part of the overall asset/liability management of the Company. The
Bank's investment policy is to establish a portfolio which will provide
liquidity necessary to facilitate funding of loans and to cover deposit
fluctuations while at the same time achieving a satisfactory return on the funds
invested. The securities in which the Bank may invest are subject to regulation
and limited to securities which are considered "investment grade" securities.
SOURCES OF FUNDS. Deposits made at the Bank's office location and
through ATM's have traditionally been the principal source of funds for use in
lending and for other general business purposes. However, while the Bank has not
traditionally placed significant reliance on borrowings as a source of
liquidity, it has established various borrowing arrangements, including Federal
Home Loan Bank of Boston ("FHLB") advances, the sale of securities to
institutional investors under repurchase agreements and, from time to time, the
purchase of federal funds from other banking institutions.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares
by the Selling Stockholders.
REGISTRATION RIGHTS
The registration of the Shares pursuant to the Registration Statement
of which this Prospectus is a part will discharge a portion of the Company's
obligations under the terms of a Registration Rights Agreement dated August 13,
1997, which the Company entered into in connection with the acquisition of
Westfield (the "Registration Rights Agreement").
Pursuant to the Registration Rights Agreement, the Company has agreed
to pay all expenses of registering the Shares (other than brokerage and
underwriting commissions, taxes of any kind and any legal, accounting and other
expenses incurred by a holder thereunder (other than one legal counsel for the
Selling Stockholders as a group). The Company also has agreed under the
Registration Rights Agreement to indemnify each Selling Stockholder and its
officers, directors and other affiliated persons and any person who controls any
Selling Stockholder against losses, claims, damages and expenses arising under
the securities laws in connection with the Registration Statement or this
Prospectus, subject to certain limitations. In addition, each Selling
Stockholder under the Registration Rights Agreement severally agreed to
indemnify the Company and its respective directors, officers and any person who
controls the Company against all losses, claims, damages and expenses arising
under the securities laws insofar as such loss, claim, damage or expense relates
to information furnished to the Company by such Selling Stockholder for use in
the Registration Statement or Prospectus or an amendment or supplement thereto
or the failure by such Selling Stockholder (through no fault of the Company) to
deliver or cause to be delivered this Prospectus or any amendment or supplement
thereto to any purchaser of Shares covered by the Registration Statement from
such Selling Stockholder.
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<PAGE> 13
SELLING STOCKHOLDERS
The Shares are to be offered by and for the respective accounts of the
Selling Stockholders. The following table sets forth the name and number of
shares of Common Stock owned by each Selling Stockholder as of January 1, 1998.
The Shares offered by this Prospectus may be offered from time to time by the
Selling Stockholders. Because the Selling Stockholders may sell all, some or
none of the Shares, the Company has assumed that the Selling Stockholders will
sell all of the Shares in determining the number and percentage of shares of
Common Stock that each Selling Stockholder will own upon completion of the
offering to which this Prospectus relates. The amounts set forth below are based
upon information provided by the Selling Stockholders and are accurate to the
best knowledge of the Company.
<TABLE>
<CAPTION>
Shares of
Shares of Common Stock Owned
Common Stock Shares of After the Offering (2)
Beneficially Owned Common Stock ----------------------
Selling Stockholder As of January 1, 1998(1) Offered Hereby Number(1) Percent (3)
- ------------------- ------------------------ -------------- --------- -----------
<S> <C> <C> <C> <C>
Arthur J. Bauernfeind........................... 912,037 150,000 762,037 7.2%
Michael J. Chapman(4)........................... 642,388 110,000 532,388 5.0
Stephen C. Demirjian(5)......................... 121,580 10,000 111,580 1.0
Hazard Family Foundation........................ 70,000 25,000 45,000 *
C. Michael Hazard............................... 1,871,426 460,000 1,411,426 13.3
William A. Muggia(6)............................ 86,066 10,000 76,066 *
B. Randall Watts(7)............................. 72,428 6,000 66,428 *
Murray State University Foundation.............. 35,000 7,000 28,000 *
University of Wisconsin Foundation.............. 11,500 11,500 - -
---------- ------------ ----------
Total........................................... 3,822,425 789,500 3,032,925
</TABLE>
- -----------------
* Less than 1%.
(1) Includes options to purchase shares of Common Stock of the Company that
are exercisable within 60 days of January 1, 1998.
(2) Assumes that all Shares are sold by the Selling Stockholders.
(3) Based on 10,641,100 outstanding shares of Common Stock of the Company
as of December 31, 1997. Options to purchase Common Stock that are
exercisable within 60 days of January 1, 1998 are deemed outstanding
for computing the ownership of each Selling Stockholder as a percentage
of the total number of shares outstanding, but are not deemed
outstanding for computing the percentage of any other person or group.
(4) Includes 2,800 shares subject to options exercisable within 60 days.
Does not include 11,200 shares subject to options not exercisable
within 60 days.
(5) Includes 3,200 shares subject to options exercisable within 60 days.
Does not include 12,800 shares subject to options not exercisable
within 60 days.
(6) Includes 3,200 shares subject to options exercisable within 60 days.
Does not include 12,800 shares subject to options not exercisable
within 60 days.
(7) Includes 1,400 shares subject to options exercisable within 60 days.
Does not include 5,600 shares subject to options not exercisable within
60 days.
PLAN OF DISTRIBUTION
Shares of Common Stock covered hereby may be offered and sold from time
to time by the Selling Stockholders. The Selling Stockholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. Such sales may be made in transactions on the
Nasdaq SmallCap Market or otherwise at prices related to the then current market
price or in negotiated transactions. The Selling Stockholders may also make
private sales either directly or through a broker or brokers. The Shares may be
sold by one or more of the following methods: (a) purchases by the broker-dealer
as principal and resale by such broker or dealer for its account pursuant to
this Prospectus; (b) ordinary brokerage transactions and transactions in which
the broker solicits purchasers; and (c) block trades in which the broker-dealer
so engaged will attempt to sell the Shares as agent, but may position and resell
a portion of the block as principal to facilitate the transaction. In effecting
sales, broker-dealers engaged by the Selling Stockholders may arrange for other
broker-dealers to participate. Broker-dealers will receive commissions or
discounts from the Selling Stockholders in amounts to be negotiated immediately
prior to the sale.
In offering the shares of Common Stock covered hereby, the Selling
Stockholders and any broker-dealers who execute sales for the Selling
Stockholders may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales, and any profits realized by the
Selling Stockholders and the compensation of such broker-dealer may be deemed to
be underwriting discounts and commissions under the Securities Act.
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<PAGE> 14
The Company has agreed to indemnify each Selling Stockholder against
any liabilities, under the Securities Act or otherwise, arising out of or based
upon any untrue or alleged untrue statement of a material fact in the
Registration Statement or this Prospectus or by any omission of a material fact
required to be stated therein except to the extent that such liabilities arise
out of or are based upon any untrue or alleged untrue statement or omission in
any information furnished in writing to the Company by the Selling Stockholder
expressly for use in the Registration Statement.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company, the Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
LEGAL MATTERS
The validity of the issuance of the Shares offered hereby will be
passed upon for the Company by its counsel, Goodwin, Procter & Hoar LLP, Boston,
Massachusetts.
EXPERTS
The consolidated financial statements of Boston Private Bancorp, Inc.
and its subsidiaries included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1996 have been incorporated by reference herein and
in the Registration Statement in reliance upon the report of KPMG Peat Marwick
LLP, independent certified public accountants, and upon the authority of said
firm as experts in accounting and auditing.
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No dealer, sales representative or any other person has been authorized
to give any information or to make any representations in connection with this
offering other than those contained in this Prospectus, and, if given or made,
such information or representations must not be relied upon as having been
authorized by the Company or any other person. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any securities
other than the shares of Common Stock to which it relates or an offer to, or a
solicitation of, any person in any jurisdiction where such an offer or
solicitation would be unlawful. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create any implication that
there has been no change in the affairs of the Company or that information
contained herein is correct as of any time subsequent to the date hereof.
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TABLE OF CONTENTS
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Prospectus Supplement
PAGE
Selling Stockholders.................................................. S-3
Plan of Distribution.................................................. S-3
Prospectus
Available Information................................................. 2
Incorporation of Certain Documents by Reference....................... 2
Risk Factors.......................................................... 3
The Company........................................................... 7
Use of Proceeds....................................................... 8
Registration Rights................................................... 8
Selling Stockholders.................................................. 9
Plan of Distribution.................................................. 9
Legal Matters......................................................... 10
Experts............................................................... 10
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778,000 SHARES
BOSTON PRIVATE
BANCORP, INC.
COMMON STOCK
-----------------------
PROSPECTUS SUPPLEMENT
-----------------------
KEEFE, BRUYETTE & WOODS, INC.
February 24, 1998
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