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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 27, 1999
REGISTRATION STATEMENT NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
MASSACHUSETTS 04-2976299
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
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TEN POST OFFICE SQUARE
BOSTON, MASSACHUSETTS 02109
(617) 556-1900
(Address, including zip code and telephone number, including
area code, of Registrant's principal executive offices)
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TIMOTHY L. VAILL
President and Chief Executive Officer
Boston Private Financial Holdings, Inc.
Ten Post Office Square
Boston, Massachusetts 02109
(617) 556-1900
(Name, address, including zip code, and telephone number, including area code
of agent for service)
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Copies of all communications should be sent to:
WILLIAM P. MAYER, ESQ.
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109-2881
(617) 570-1000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Shares to Be to Offering Price Aggregate Registration
Registered Be Registered Per Share(1) Offering Price(1) Fee
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<S> <C> <C> <C> <C>
Common Stock, $1.00 par value 800,000 Shares $6.6875 $5,350,000 $1,500
====================================================================================================================
</TABLE>
(1) Based upon the average of the high and low sale prices reported on the
Nasdaq National Market on April 20, 1999 and estimated solely for
purposes of calculating the registration fee in accordance with Rule
457(c) under the Securities Act of 1933.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
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The information in this prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer and sale is not
permitted.
SUBJECT TO COMPLETION, DATED APRIL 27, 1999
PROSPECTUS
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BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
800,000 SHARES OF COMMON STOCK
Five existing stockholders of Boston Private Financial Holdings, Inc.
are offering to sell 800,000 shares of common stock under this prospectus.
The selling stockholders may sell their shares in any manner described
in the "Plan of Distribution" section of this prospectus beginning on page 12.
Our common stock is traded under the symbol "BPFH" on the Nasdaq
National Market. On April 26, 1999, the closing price for our common stock was
$7.125.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DESCRIPTION OF THE RISK
FACTORS THAT YOU SHOULD CAREFULLY CONSIDER BEFORE YOU INVEST IN OUR COMMON
STOCK.
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NEITHER THE SECURITIES EXCHANGE COMMISSION, ANY STATE SECURITIES
COMMISSION, THE COMMISSIONER OF BANKS OF THE COMMONWEALTH OF MASSACHUSETTS, NOR
THE FEDERAL DEPOSIT INSURANCE CORPORATION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------------------
THESE SECURITIES ARE NOT DEPOSIT ACCOUNTS OF ANY BANK AND ARE NOT
INSURED TO ANY EXTENT BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY.
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THE DATE OF THIS PROSPECTUS IS ________, 1999.
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You should rely only on the information incorporated by reference or
contained in this prospectus or any supplement. We have not authorized anyone
else to provide you with different or additional information. You should not
assume that the information in this prospectus or any supplement is accurate as
of any date other than the date on the front of those documents. The selling
stockholders are not making an offer of the common stock in any state where the
offer is not permitted.
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TABLE OF CONTENTS
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Page
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RISK FACTORS..........................................................3
THE COMPANY...........................................................9
USE OF PROCEEDS......................................................11
REGISTRATION RIGHTS..................................................11
SELLING STOCKHOLDERS.................................................12
PLAN OF DISTRIBUTION.................................................12
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE......................13
LEGAL MATTERS........................................................13
EXPERTS ............................................................14
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Our address is Boston Financial Holdings, Inc., Ten Post Office Square,
Boston, Massachusetts 02109 (telephone number (617) 912-1900).
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RISK FACTORS
An investment in our common stock involves various risks. This
prospectus contains forward-looking statements within the meaning of the federal
securities laws. You are cautioned that these forward-looking statements are not
guarantees of future performance and involve risks and uncertainties. Actual
events or results may differ materially from those discussed in the
forward-looking statements as a result of a number of factors, including the
factors listed below and those referenced in our documents which are filed with
the SEC and which are incorporated by reference in this prospectus. In deciding
whether or not to invest in our common stock, you should carefully consider the
following risk factors:
WE MAY NOT BE ABLE TO ATTRACT AND RETAIN BANKING CUSTOMERS AT CURRENT LEVELS
Competition in the local banking industry coupled with our relatively
small size may limit the ability of our banking subsidiary, Boston Private Bank
& Trust Company, to attract and retain banking customers. Boston Private Bank &
Trust Company faces competition from the following:
- other banking 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.
In particular, Boston Private Bank & Trust Company'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. Areas of competition
include interest rates for loans and deposits, efforts to obtain deposits and
range and quality of services provided.
Because Boston Private Bank & Trust Company maintains a smaller staff
and has fewer financial and other resources than larger institutions with which
it competes, it may be limited in its ability to attract customers. In addition,
some of Boston Private Bank & Trust Company's current commercial banking
customers may seek alternative banking sources as they develop needs for credit
facilities larger than Boston Private Bank & Trust Company can accommodate.
If Boston Private Bank & Trust Company is unable to attract and retain
banking customers, it may be unable to continue its loan growth and its results
of operations and financial condition may otherwise be negatively impacted. In
as much as Boston Private Bank & Trust Company is our sole banking subsidiary,
its financial performance is very significant to our overall results of
operations and financial condition.
WE MAY NOT BE ABLE TO ATTRACT AND RETAIN INVESTMENT MANAGEMENT CLIENTS AT
CURRENT LEVELS
Due to the intense local competition and our relatively short history
and limited record of performance in the investment management business, Boston
Private Bank & Trust Company and our investment management subsidiary, Westfield
Capital Management Company, Inc., may not be able to attract and retain
investment management clients at current levels.
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In the investment management industry, we compete primarily with the
following:
- commercial banks and trust companies;
- mutual fund companies;
- investment advisory firms;
- stock brokerage firms;
- law firms; and
- other financial services companies.
Competition is especially keen in our geographic market area, because
there are numerous well established and successful investment management firms
in Boston. Many of our competitors have greater resources than we have.
The ability of Boston Private Bank & Trust Company and Westfield Capital
to successfully attract and retain investment management clients is dependent
upon the ability of each to compete with its competitors' investment products,
level of investment performance, client services and marketing and distribution
capabilities. If Boston Private Bank & Trust Company and Westfield Capital are
not successful, our results from operations and financial position may be
negatively impacted.
In addition, the ability of Boston Private Bank & Trust Company and
Westfield Capital to retain investment management clients may be impaired by the
fact that our investment management contracts are typically short-term in
nature. Approximately 47% of our revenues are derived from investment management
contracts which are typically terminable upon less than 30 days' notice. Most of
our clients may withdraw funds from accounts under management generally in their
sole discretion.
Moreover, Westfield Capital receives performance-based fees resulting
from its status as general partner or investment manager of three limited
partnership investment funds. The amount of these fees are impacted directly by
the investment performance of Westfield Capital. As a result, the future
revenues from such fees may fluctuate and may be affected by conditions in the
capital markets and other general economic conditions.
Westfield Capital is our major investment management subsidiary, and its
financial performance is a significant factor in our overall results of
operations and financial condition.
DEFAULTS IN THE REPAYMENT OF LOANS MAY NEGATIVELY IMPACT OUR BUSINESS.
Defaults in the repayment of loans by Boston Private Bank & Trust
Company's customers may negatively impact its business. A borrower's default on
its obligations under one or more of Boston Private Bank & Trust Company's loans
may result in lost principal and interest income and increased operating
expenses as a result of the allocation of management time and resources to the
collection and work-out of the loan.
In certain situations, where collection efforts are unsuccessful or
acceptable work-out arrangements cannot be reached, Boston Private Bank & Trust
Company may have to write-off the loan in whole or in part. In such situations,
Boston Private Bank & Trust Company may acquire any real estate or other assets,
if any, which secure the loan through foreclosure or other similar available
remedies. In such cases, the amount owed under the defaulted loan often exceeds
the value of the assets acquired.
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Boston Private Bank & Trust Company's management periodically makes a
determination of an allowance for loan losses based on available information,
including the quality of its loan portfolio, certain economic conditions, the
value of the underlying collateral and the level of its non-accruing loans.
Provisions to this allowance result in an expense for the period. If, as a
result of general economic conditions or an increase in defaulted loans,
management determines that additional increases in the allowance for loan losses
are necessary, Boston Private Bank & Trust Company will incur additional
expenses.
In addition, bank regulatory agencies periodically review Boston Private
Bank & Trust Company's allowance for loan losses and the values it attributes to
real estate acquired through foreclosure or other similar remedies. Such
regulatory agencies may require Boston Private Bank & Trust Company to adjust
its determination of the value for these items. These adjustments could
negatively impact Boston Private Bank & Trust Company's results of operations or
financial position.
A DOWNTURN IN THE LOCAL ECONOMY OR REAL ESTATE MARKET COULD NEGATIVELY IMPACT
OUR BANKING BUSINESS
A downturn in the local economy or real estate market could negatively
impact our banking business. Because Boston Private Bank & Trust Company serves
primarily individuals and smaller businesses located in eastern Massachusetts
and adjoining areas, with a particular concentration in the Greater Boston
Metropolitan Area, the ability of Boston Private Bank & Trust Company's
customers to repay their loans is impacted by the economic conditions in these
areas. Boston Private Bank & Trust Company's commercial loans are generally
concentrated in the following customer groups:
- real estate developers and investors;
- financial service providers;
- technology companies;
- manufacturing and communications companies;
- professional service providers;
- general commercial and industrial companies; and
- individuals.
Boston Private Bank & Trust Company's commercial loans, with limited
exceptions, are secured by either real estate (usually, income producing
residential and commercial properties), marketable securities or corporate
assets (usually, accounts receivable, equipment or inventory). Substantially all
of Boston Private Bank & Trust Company's residential mortgage and home equity
loans are secured by residential property in eastern Massachusetts. As a result,
conditions in the real estate market specifically, and the Massachusetts economy
generally, can materially impact the ability of Boston Private Bank & Trust
Company's borrowers to repay their loans and affect the value of the collateral
securing these loans.
FLUCTUATIONS IN INTEREST RATES MAY NEGATIVELY IMPACT OUR BANKING BUSINESS
Fluctuations in interest rates may negatively impact the business of
Boston Private Bank & Trust Company. Boston Private Bank & Trust Company's main
source of income from operations is net interest income, which is equal to the
difference between the interest income received on interest-bearing assets
(usually, loans and investment securities) and the interest expense incurred in
connection with interest-bearing
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liabilities (usually, deposits and borrowings). Boston Private Bank & Trust
Company's net interest income can be affected significantly by changes in market
interest rates. In particular, changes in relative interest rates may reduce
Boston Private Bank & Trust Company's net interest income as the difference
between interest income and interest expense decreases. As a result, Boston
Private Bank & Trust Company has adopted asset and liability management policies
to minimize the potential adverse effects of changes in interest rates on net
interest income, primarily by altering the mix and maturity of loans,
investments and funding sources. However, we cannot assure you that a decrease
in interest rates will not negatively impact Boston Private Bank & Trust
Company's results from operations or financial position.
An increase in interest rates could also have a negative impact on
Boston Private Bank & Trust Company's results of operations by reducing the
ability of borrowers to repay their current loan obligations, which could not
only result in increased loan defaults, foreclosures and write-offs, but also
necessitate further increases to Boston Private Bank & Trust Company's allowance
for possible loan losses.
OUR COST OF FUNDS FOR BANKING OPERATIONS MAY INCREASE AS A RESULT OF GENERAL
ECONOMIC CONDITIONS, INTEREST RATES AND COMPETITIVE PRESSURES
Our cost of funds for banking operations may increase as a result of
general economic conditions, interest rates and competitive pressures. Boston
Private Bank & Trust Company has traditionally obtained funds principally
through deposits and through borrowings. As a general matter, deposits are a
cheaper source of funds than borrowings, because interest rates paid for
deposits are typically less than interest rates charged for borrowings.
Historically and in comparison to commercial banking averages, Boston Private
Bank & Trust Company has had a higher percentage of its time deposits in
denominations of $100,000 or more. Within the banking industry, the amounts of
such deposits are generally considered more likely to fluctuate than deposits of
smaller denominations. If as a result of general economic conditions, market
interest rates, competitive pressures or otherwise, the value of deposits at
Boston Private Bank & Trust Company decreases relative to its overall banking
operations, Boston Private Bank & Trust Company may have to rely more heavily on
borrowings as a source of funds in the future.
OUR INVESTMENT MANAGEMENT BUSINESS MAY BE NEGATIVELY IMPACTED BY CHANGES IN
ECONOMIC AND MARKET CONDITIONS
Our investment management business may be negatively impacted by changes
in general economic and market conditions because the performance of such
business 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 (meaning that performance results can vary greatly within
short periods of time) 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 our control. We cannot assure you that broad
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
our performance and may adversely affect the assets which we manage.
In addition, Westfield Capital's management 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 a
material adverse effect on our results of operations and financial condition.
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OUR INVESTMENT MANAGEMENT BUSINESS IS HIGHLY REGULATED
Our investment management business is highly regulated, primarily at the
federal level. The failure of any of our subsidiaries that provide investment
management services 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.
Specifically, two of our subsidiaries, including Westfield Capital, are
registered investment advisers under the Investment Advisers Act of 1940. The
Investment Advisers Act imposes numerous obligations on registered investment
advisers, including fiduciary, record keeping, operational and disclosure
obligations. These subsidiaries, as investment advisers, are also subject to
regulation under the federal and state securities laws and the fiduciary laws of
certain states. In addition, Westfield Capital acts as a subadviser to a mutual
fund which is registered under the Investment Company Act of 1940 and is subject
to that act's provisions and regulations.
We are also subject to the provisions and regulations of ERISA to the
extent we act as a "fiduciary" under ERISA with respect to certain of our
clients. ERISA and the applicable provisions of the federal tax laws, impose a
number of duties on persons who are fiduciaries under ERISA and prohibit certain
transactions involving the assets of each ERISA plan which is a client of ours,
as well as certain transactions by the fiduciaries (and certain other related
parties) to such plans.
In addition, applicable law provides that all investment contracts with
mutual fund clients may be terminated by the 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.
Boston Private Financial Holdings itself does not manage investments for
clients, does not provide any investment management services and, therefore, is
not a registered investment adviser. Boston Private Bank & Trust Company is
exempt from the regulatory requirements of the Investment Advisors Act of 1940,
but is subject to extensive regulation by the Federal Deposit Insurance
Corporation and the Commissioner of Banks of The Commonwealth of Massachusetts.
OUR BANKING BUSINESS IS HIGHLY REGULATED
Bank holding companies and state chartered banks operate in a highly
regulated environment and are subject to supervision and examination by federal
and state regulatory agencies. Boston Private Financial Holdings is subject to
the federal Bank Holding Company Act of 1956, and to regulation and supervision
by the Federal Reserve Board. Boston Private Bank & Trust Company, as a
Massachusetts chartered trust company the deposits of which are insured by the
Federal Deposit Insurance Corporation, is subject to regulation and supervision
by the Massachusetts Commissioner of Banks and the FDIC.
Federal and state laws and regulations govern numerous matters including
changes in the ownership or control of banks and bank holding companies,
maintenance of adequate capital and the financial condition of a financial
institution, permissible types, amounts and terms of extensions of credit and
investments, permissible non-banking activities, the level of reserves against
deposits and restrictions on dividend payments. The FDIC and the Massachusetts
Commissioner of Banks possess cease and desist powers to prevent or remedy
unsafe or unsound practices or violations of law by banks subject to their
regulation, and the Federal Reserve Board possesses similar powers with respect
to bank holding companies. These and other restrictions limit the manner in
which the Boston Private Financial Holdings and Boston Private Bank & Trust
Company may conduct business and obtain financing.
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Furthermore, our banking business is affected not only by general
economic conditions, but also by the monetary policies of the Federal Reserve
Board. Changes in monetary or legislative policies may affect the interest rates
Boston Private Bank & Trust Company must offer to attract deposits and the
interest rates it must charge on its loans, as well as the manner in which it
offers deposits and makes loans. These monetary policies have had, and are
expected to continue to have, significant effects on the operating results of
depository institutions generally including Boston Private Bank & Trust Company.
TO THE EXTENT THAT WE ACQUIRE OTHER COMPANIES IN THE FUTURE, OUR BUSINESS MAY BE
NEGATIVELY IMPACTED BY CERTAIN RISKS INHERENT WITH SUCH ACQUISITIONS
Although we do not have an aggressive acquisition strategy, we have in
the past considered, and will in the future continue to consider, the
acquisition of other banking and investment management companies. To the extent
that we acquire other companies in the future, our business may be negatively
impacted by certain risks inherent with such acquisitions. These risks include
the following:
- the risk that the acquired business will not perform in
accordance with management's expectations;
- the risk that difficulties will arise in connection with the
integration of the operations of the acquired business with the
operations of our banking or investment management businesses;
- the risk that management will divert its attention from other
aspects of our business;
- the risk that we may lose key employees of the acquired business;
and
- the risks associated with entering into geographic and product
markets in which we have limited or no direct prior experience.
YEAR 2000 COMPLICATIONS MAY NEGATIVELY IMPACT OUR BUSINESS
The Year 2000 problem involves the inability of computer-based systems
to recognize properly and process date-sensitive information involving dates
after December 31, 1999. We have formed a Year 2000 project team to identify our
information and non-information technology systems, procedures and practices
that require modification or replacement. This team has also undertaken an
assessment of the potential Year 2000 complications of third parties with whom
we have a material relationship, including borrowers and material service
providers. We currently estimate that out-of-pocket expenses related to our Year
2000 readiness program will be less than $100,000. Historically, the
out-of-pocket expenses related to our Year 2000 readiness program have been
negligible. As a result, we have not separately tracked such expenses.
Our business is substantially dependent upon our data processing,
software and hardware systems and upon our ability to process information. If we
fail to be Year 2000 compliant, our business could be adversely impacted. In
addition, since we are regulated by various state and federal regulatory
agencies, our failure to be Year 2000 compliant could subject us to formal and
informal supervisory or enforcement actions, which could have a further adverse
impact on our business.
Because we rely on third parties for software and other support, we are
also subject to the risk that our operations could be disrupted by Year 2000
complications affecting the operations of these third parties. These risks
include the inability to process and underwrite loan applications, to credit
deposits and withdrawals from deposit accounts, to credit loan payments or track
delinquencies, to reconcile and record daily activity and to engage in normal
banking activities. We continue to discuss these matters with, obtain written
certifications
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from, and test the systems of, certain third parties; however, we cannot assure
you that these third parties will not experience Year 2000 complications or that
their complications will not negatively impact our business.
Additionally, to the extent any of our commercial borrowers who rely
heavily on automated systems experience Year 2000 complications affecting their
ability to make payments on their loans, our results of operations and financial
position could be negatively impacted by increases in loan defaults and the
consequences of such defaults, including increases to our allowance for possible
loan losses.
Moreover, we are subject to the potential risk that the Year 2000
problem will result in a general reduction in deposits by customers causing us
to seek alternative and more costly or otherwise less favorable funding sources
for our banking operations.
THE EXERCISE OF CERTAIN REGISTRATION RIGHTS MAY NEGATIVELY AFFECT THE MARKET
VALUE OF OUR COMMON STOCK AND COULD IMPACT OUR ABILITY TO OBTAIN ADDITIONAL
EQUITY FINANCING
The holders of 3,140,367 shares of common stock (which includes the
800,000 shares being offered under this prospectus) have the right in certain
circumstances to require us to register with the SEC up to 800,000 of their
shares annually for resale to the public. These holders also have the right to
include their shares in any registration statement we may otherwise file with
the SEC. These registration rights may enable the 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 these shares for future sale, could adversely affect the
market price for our common stock and could impair our ability to obtain
additional capital in the future through an offering of equity securities should
we desire to do so.
THE COMPANY
Boston Private Financial Holdings is a Massachusetts corporation and a
registered bank holding company under the Bank Holding Company Act of 1956. We
are the parent holding company of Boston Private Bank & Trust Company, our
wholly-owned bank subsidiary. Boston Private Bank & Trust Company is a trust
company chartered in Massachusetts and insured by the Federal Deposit Insurance
Corporation.
On October 31, 1997, we acquired Boston-based Westfield Capital
Management Company, Inc. In this transaction, which was accounted for as a
pooling of interests, the former stockholders of Westfield Capital received
3,918,367 shares of our common stock. The purchase price was based on the
average price of our common stock from January 1, 1997 through August 12, 1997,
which was approximately $61/8. In addition, the former stockholders of Westfield
Capital were granted registration rights in connection with the issuance of the
shares in this transaction. See "Registration Rights."
We conduct substantially all of our business through our wholly-owned
subsidiaries, Boston Private Bank & Trust Company and Westfield Capital.
Westfield Capital is located at One Financial Center in Boston, Massachusetts,
and our principal offices are located at Ten Post Office Square, Boston,
Massachusetts 02109.
Through Boston Private Bank & Trust Company, we pursue a "private
banking" business strategy and are 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. Boston Private Bank & Trust Company offers a
broad range of basic deposit services, including checking and savings accounts,
with automated teller machine access, and cash management services through sweep
accounts and repurchase agreements. Boston Private Bank & Trust Company also
offers commercial, residential mortgage, home equity and consumer loans. In
addition, Boston Private Bank & Trust Company provides investment advisory and
asset management services, securities custody and safekeeping services, trust
and estate administration and IRA and Keogh accounts.
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Through Westfield Capital, we serve the investment needs of individuals,
families, trusts, endowments, foundations, pension and profit-sharing plans and
401(k) plans. Westfield Capital invests primarily in equities of companies which
it expects to grow at above normal rates, and although Westfield Capital is not
limited to such investments, it has a particular focus on companies deemed to
have small to mid-sized capitalizations. In addition, Westfield Capital acts as
the managing general partner or investment manager of three limited
partnerships, one of which invests primarily in technology stocks and the other
two of which invest primarily in equities of growth companies.
INVESTMENT MANAGEMENT
We provide a range of investment management services to individuals,
families, trusts, endowments, foundations, pension and profit-sharing plans and
401(k) plans. These services include the 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.
TRUST ADMINISTRATION
Acting as a fiduciary, we provide trust administration and estate
settlement services. The services we provide include the ongoing fiduciary
review of trust instruments, 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.
CUSTODIAN SERVICES
We provide custodian services, including the safekeeping of securities,
the settlement of securities transactions, the execution of trades and the
automatic investment of cash balances.
LENDING ACTIVITIES
Through Boston Private Bank & Trust Company, we specialize in lending to
individuals and small businesses, including non-profit organizations,
partnerships and professional corporations and associations. Loans made by
Boston Private Bank & Trust Company 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 to businesses include commercial mortgage loans,
revolving lines of credit, working capital loans, equipment financing and
letters of credit. Generally, we lend only to borrowers located in eastern New
England or to borrowers who may be located farther away, but who have collateral
deposited with us in the form of cash or marketable securities or other
collateral within our market area.
ASSET AND LIABILITY MANAGEMENT
Generally, our objective with respect to asset and liability management
is to maximize profit potential while minimizing the vulnerability of our
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. Our actions in this regard are taken
under the guidance of an Asset and Liability Management Committee which is
comprised of members of senior management. This committee is involved in
formulating the economic assumptions that we use in our financial planning and
budgeting process and establishes policies which control and monitor the
sources, uses and pricing of funds. We have not engaged in any hedging
activities.
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INVESTMENT ACTIVITIES
Our investment activities are an integral part of our overall
asset/liability management. Our banking 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 we may invest
are subject to regulation and limited to securities which are considered
"investment grade" securities.
SOURCES OF FUNDS
Deposits made at Boston Private Bank & Trust Company's office location
and through ATMs provide a major source of funds for use in lending and for
other general business purposes. In addition, Boston Private Bank & Trust
Company also relies on borrowings as a source of funds for its operations. As a
result, Boston Private Bank & Trust Company has established various borrowing
arrangements, including Federal Home Loan Bank of Boston 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
We will not receive any proceeds from the sale by the selling
stockholders of the shares being offered by this prospectus.
REGISTRATION RIGHTS
The registration of the shares being sold in this offering will
discharge a portion of our obligations under the terms of a registration rights
agreement which we entered into in connection with the acquisition of Westfield
Capital.
Pursuant to the registration rights agreement, we agreed to pay all
expenses of registering the shares, including the legal fees of one legal
counsel for the selling stockholders as a group. However, we are not obligated
to pay any other legal expenses, brokerage and underwriting commissions, taxes
of any kind and any accounting and other similar expenses of the selling
stockholders. We also agreed 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 has severally agreed to indemnify Boston Private Financial Holdings
and its directors, officers and any person who controls Boston Private Financial
Holdings against all losses, claims, damages and expenses arising under the
securities laws insofar as such losses, claims, damages or expenses relate to
information furnished to Boston Private Financial Holdings by such selling
stockholder for use in the registration statement or this prospectus or any
amendment or supplement thereto or the failure by such selling stockholder
(through no fault of Boston Private Financial Holdings) to deliver or cause to
be delivered this prospectus or any amendment or supplement thereto to any
purchaser of shares covered by this prospectus.
11
<PAGE> 13
SELLING STOCKHOLDERS
The shares of common stock being sold under this prospectus are being
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 April 23, 1999. The amounts set forth below
are based upon information provided by the selling stockholders and are accurate
to the best of our knowledge.
<TABLE>
<CAPTION>
Shares of Shares of
Common Stock Shares of Common Stock Owned
Beneficially Owned Common Stock After the Offering
Selling Stockholder as of April 23, 1999(1) Offered Hereby Number(1) Percent (2)
- ------------------- ----------------------- -------------- --------- -----------
<S> <C> <C> <C> <C>
Arthur J. Bauernfeind(3)...................... 764,662 500,000 264,662 2.45%
Michael J. Chapman............................ 529,613 80,000 449,613 4.16
Jill A. Roeting(4)............................ 39,349 20,000 19,349 *
Hazard Family Foundation...................... 144,000 100,000 44,000 *
C. Michael Hazard(5).......................... 1,315,951 100,000 1,215,575 11.25
--------- ------- --------- -----
Total......................................... 2,649,575 800,000 1,849,575 17.11
</TABLE>
- -----------------
* Less than 1%.
(1) Includes options to purchase shares of common stock that are exercisable
within 60 days of April 23, 1999.
(2) Based on 10,812,613 outstanding shares of common stock as of April 23,
1999. Options to purchase shares of common stock that are exercisable
within 60 days of April 23, 1999 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.
(3) Includes 3,250 shares subject to options exercisable within 60 days of
April 23, 1999.
(4) Includes 3,010 shares subject to options exercisable within 60 days of
April 23, 1999.
(5) Includes 4,500 shares subject to options exercisable within 60 days of
April 23, 1999.
PLAN OF DISTRIBUTION
The shares of common stock covered by this prospectus may be offered and
sold from time to time by the selling stockholders. The selling stockholders
will act independently of Boston Private Financial Holdings in making decisions
with respect to the timing, manner and size of each sale. Such sales may be made
in transactions on the Nasdaq National 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 selling stockholders may sell their shares of common stock by one
or more of the following methods:
- purchases by a broker-dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus;
- ordinary brokerage transactions and transactions in which a
broker solicits purchasers; and
- block trades in which a broker-dealer 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.
12
<PAGE> 14
In offering the shares of common stock covered by this prospectus, 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.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This prospectus is part of a registration statement that we filed with
the SEC to register the common stock offered in this offering. It does not
repeat important information that you can find in the registration statement or
in the reports and other documents that we file with the SEC. The SEC allows us
to "incorporate by reference" the information we file with them. This means that
we can disclose important information to you by referring to other documents
that are legally considered to be part of this prospectus, and later information
that we file with the SEC will automatically update and supersede the
information in this prospectus and the documents listed below. We incorporate by
reference the documents listed below, and any future filings made with the SEC
under Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until the selling stockholders sell all the shares of common stock offered under
this prospectus:
- our Annual Report on Form 10-K for the fiscal year ended December
31, 1998; and
- the description of our common stock contained in the registration
statement on Form SB-2 filed on August 30, 1993, including all
amendments and reports updating such description.
You may request a copy of these filings at no cost by writing or
telephoning us at the following address: Boston Private Financial Holdings,
Inc., Ten Post Office Square, Boston, Massachusetts 02109, Attention: Corporate
Secretary (telephone number (617) 912-1900).
You should rely only on the information incorporated by reference or
contained in this prospectus or any supplement. We have not authorized anyone
else to provide you with different or additional information. You should not
assume that the information in this prospectus or any supplement is accurate as
of any date other than the date on the front of those documents. The selling
stockholders are not making an offer of these securities in any state where the
offer is not permitted.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information electronically with the SEC. You may read a copy of any
reports, statements or other information that we file with the SEC at the SEC's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. Please call
the SEC at 1-800- SEC-0330 for further information on the Public Reference Room.
Our SEC filings are also available from the Internet site maintained by the SEC
at http://www.sec.gov.
LEGAL MATTERS
The validity of the issuance of the shares of common stock offered
hereby will be passed upon for Boston Private Financial Holdings by its counsel,
Goodwin, Procter & Hoar LLP, Boston, Massachusetts.
13
<PAGE> 15
EXPERTS
The consolidated financial statements of Boston Private Financial
Holdings and its subsidiaries included in the Annual Report on Form 10-K for the
year ended December 31, 1998 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.
14
<PAGE> 16
================================================================================
800,000 SHARES
BOSTON PRIVATE
FINANCIAL HOLDINGS, INC.
COMMON STOCK
-------------------
PROSPECTUS
-------------------
_______, 1999
================================================================================
<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following are the estimated expenses of the distribution of the
shares of common stock being registered hereunder:
SEC Registration Fee..................................... $ 1,500
Legal Fees and Expenses.................................. 20,000
Blue Sky Qualification Fees and Expenses 2,000
Miscellaneous............................................ 1,500
-------
Total........................................... $25,000
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant is a Massachusetts corporation. Reference is made to
Chapter 156B, Section 13 of the Massachusetts Business Corporation Law (the
"MBCL"), which enables a corporation in its original articles of organization or
an amendment thereto to eliminate or limit the personal liability of a director
for monetary damages for violations of the director's fiduciary duty, except (i)
for any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) pursuant to Sections
61 and 62 of the MBCL (providing for liability of directors for authorizing
illegal distributions and for making loans to directors, officers and certain
stockholders) or (iv) for any transaction from which a director derived an
improper personal benefit. The Registrant has adopted such provisions in its
Articles of Organization.
Reference also is made to Chapter 156B, Section 67 of the MBCL, which
provides that a corporation may indemnify directors, officers, employees and
other agents and persons who serve at its request as directors, officers,
employees or other agents of another organization or who serve at its request in
any capacity with respect to any employee benefit plan, to the extent specified
or authorized by the articles of organization, a by-law adopted by the
stockholders or a vote adopted by the holders of a majority of the shares of
stock entitled to vote on the election of directors. Such indemnification may
include payment by the corporation of expenses incurred in defending a civil or
criminal action or proceeding in advance of the final disposition of such action
or proceeding, upon receipt of an undertaking by the person indemnified to repay
such payment if he shall be adjudicated to be not entitled to indemnification
under Section 67, which undertaking may be accepted without reference to the
financial ability of such person to make repayment. Any such indemnification may
be provided although the person to be indemnified is no longer an officer,
director, employee or agent of the corporation or of such other organization or
no longer serves with respect to any such employee benefit plan. No
indemnification shall be provided, however, for any person with respect to any
matter as to which he shall have been adjudicated in any proceeding not to have
acted in good faith in the reasonable belief that his action was in the best
interest of the corporation or to the extent that such matter relates to service
with respect to any employee benefit plan, in the best interests of the
participants or beneficiaries of such employee benefit plan. The Registrant's
Articles of Organization provide for indemnification to the full extent
permitted under Section 67.
The Registrant and its directors and officers currently carry liability
insurance.
II-1
<PAGE> 18
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.1 - Registration Rights Agreement dated as of August 13, 1997,
between Boston Private Bancorp, Inc. and the individual
stockholders of Westfield Capital Management Company, Inc.
(Incorporated by reference to the corresponding exhibit to
the Current Report on Form 8-K of the Registrant, as filed
with the Securities and Exchange Commission on August 21,
1997)
5.1 - Opinion of Goodwin, Procter & Hoar LLP
23.1 - Consent of KPMG Peat Marwick LLP
23.2 - Consent of Goodwin, Procter & Hoar LLP (included in
Exhibit 5.1)
24.1 - Power of Attorney (included on signature page)
ITEM 17. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes to:
1. File, during any period in which it offers or sells
securities, a post-effective amendment to this
Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) Reflect in the prospectus any facts or events
which, individually or together, represent a
fundamental change in the information in the
Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price
represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement.
(iii) Include any additional or changed material
information on the plan of distribution.
provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii)
herein do not apply if the information required in a
post-effective amendment is incorporated by reference from
periodic reports filed by the undersigned Registrant under the
Exchange Act.
2. For determining liability under the Securities Act, treat
each post-effective amendment as a new registration
statement of the securities offered, and the offering of
the securities at that time to be the initial bona fide
offering.
3. File a post-effective amendment to remove from
registration any of the securities that remain unsold at
the end of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each
filing of the Registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
II-2
<PAGE> 19
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston, The Commonwealth of Massachusetts on April
26, 1999.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
By: /s/ Timothy L. Vaill
-----------------------------------
Timothy L. Vaill
Chairman of the Board and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, each of the undersigned officers and
directors of Boston Private Financial Holdings, Inc. hereby severally
constitutes Timothy L. Vaill, Eugene S. Colangelo and Charles O. Wood, III and
each of them singly, his or her true and lawful attorneys with full power to
them, and each of them singly, to sign for the undersigned and in his or her
name in the capacity indicated below, the Registration Statement filed herewith
and any and all amendments to said Registration Statement, and generally to do
all such things in his or her name and in his or her capacity as an officer or
director to enable Boston Private Financial Holdings, Inc. to comply with the
provisions of the Securities Act of 1933, and all requirements of the Securities
and Exchange Commission, hereby ratifying and confirming his or her signature as
it may be signed by his or her said attorney, or any of them, to said
Registration Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Timothy L. Vaill Chairman of the Board and April 26, 1999
- -------------------------- Chief Executive Officer
Timothy L. Vaill (Principal Executive Officer)
/s/ Walter M. Pressey Executive Vice President and April 26, 1999
- -------------------------- Chief Financial Officer
Walter M. Pressey (Principal Financial Officer and
Principal Accounting Officer)
/s/ Herbert S. Alexander Director April 26, 1999
- --------------------------
Herbert S. Alexander
/s/ Arthur J. Bauernfeind Director April 19, 1999
- --------------------------
Arthur J. Bauernfeind
/s/ Eugene S. Colangelo Director April 20, 1999
- --------------------------
Eugene S. Colangelo
II-4
<PAGE> 21
Signature Title Date
- --------- ----- ----
/s/ C. Michael Hazard Director April 19, 1999
- --------------------------
C. Michael Hazard
/s/ Lynn Thompson Hoffman Director April 23, 1999
- --------------------------
Lynn Thompson Hoffman
/s/ Allen Sinai Director April 26, 1999
- --------------------------
Allen Sinai
/s/ Charles O. Wood, III Director April 26, 1999
- --------------------------
Charles O. Wood, III
/s/ Peter C. Bennett Director April 26, 1999
- --------------------------
Peter C. Bennett
II-5
<PAGE> 22
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
4.1 - Registration Rights Agreement dated as of August 13, 1997,
between Boston Private Bancorp, Inc. and the individual
stockholders of Westfield Capital Management Company, Inc.
(Incorporated by reference to the corresponding exhibit to
the Current Report on Form 8-K of the Registrant, as filed
with the Securities and Exchange Commission on August 21,
1997)
5.1 - Opinion of Goodwin, Procter & Hoar LLP
23.1 - Consent of KPMG Peat Marwick LLP
23.2 - Consent of Goodwin, Procter & Hoar LLP (included in
Exhibit 5.1)
24.1 - Power of Attorney (included on signature page)
<PAGE> 1
EXHIBIT 5.1
[Letterhead of Goodwin, Procter & Hoar LLP]
April 26, 1999
Boston Private Financial Holdings, Inc.
Ten Post Office Square
Boston, MA 02109
Ladies and Gentlemen:
This opinion is furnished in our capacity as special counsel to Boston
Private Financial Holdings, Inc., a Massachusetts corporation (the "Company"),
in connection with the registration, pursuant to the Securities Act of 1933 (the
"Securities Act"), of 800,000 shares (the "Shares") of common stock, par value
$1.00 per share, of the Company.
In connection with rendering this opinion, we have examined the Amended
and Restated Articles of Organization and the Bylaws of the Company, both as
amended to date; such records of the corporate proceedings of the Company as we
have deemed material; a registration statement on Form S-3 under the Securities
Act relating to the Shares and the prospectus contained therein; and such other
certificates, receipts, records and documents as we considered necessary for the
purposes of this opinion.
We are attorneys admitted to practice in The Commonwealth of
Massachusetts. We express no opinion concerning the laws of any jurisdiction
other than the laws of the United States of America and The Commonwealth of
Massachusetts.
Based upon the foregoing, we are of the opinion that the Shares are duly
authorized, legally issued, fully paid and nonassessable by the Company under
the Massachusetts Business Corporation Law.
The foregoing assumes that all requisite steps will be taken to comply
with the requirements of the Securities Act and applicable requirements of state
laws regulating the offer and sale of securities.
<PAGE> 2
Boston Private Financial Holdings, Inc.
April 26, 1999
Page 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the Prospectus.
Very truly yours,
/s/ Goodwin, Procter & Hoar LLP
GOODWIN, PROCTER & HOAR LLP
<PAGE> 1
EXHIBIT 23.1
Consent of Independent Auditors
The Board of Directors of
Boston Private Financial Holdings, Inc.
We consent to incorporation by reference in the registration statement
on Form S-3 of Boston Private Financial Holdings, Inc. of our report dated
January 19, 1999, relating to the consolidated balance sheets of Boston Private
Financial Holdings, Inc. and subsidiaries as of December 31, 1998 and 1997, and
the related consolidated statements of operations, changes in stockholders'
equity and cash flows for each of the years in the three year period ended
December 31, 1998, which report appears in the December 31, 1998 annual report
on Form 10-K of Boston Private Financial Holdings, Inc. We also consent to the
reference to our Firm under the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Boston, Massachusetts
April 26, 1999
