<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 1, 2000
REGISTRATION STATEMENT NO. 333-42056
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
MASSACHUSETTS 04-2976299
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
</TABLE>
TEN POST OFFICE SQUARE
BOSTON, MASSACHUSETTS 02109
(617) 912-1900
(Address, including zip code and telephone number, including area code, of
registrant's principal executive offices)
TIMOTHY L. VAILL
PRESIDENT AND CHIEF EXECUTIVE OFFICER
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
TEN POST OFFICE SQUARE
BOSTON, MASSACHUSETTS 02109
(617) 912-1900
(Name, address, including zip code, and telephone number, including area code of
agent for service)
------------------------------
COPIES OF ALL COMMUNICATIONS SHOULD BE SENT TO:
<TABLE>
<S> <C>
WILLIAM P. MAYER, ESQ. LEE MEYERSON, ESQ.
ANDREW F. VILES, ESQ. SIMPSON THACHER & BARTLETT
GOODWIN, PROCTER & HOAR LLP 425 LEXINGTON AVENUE
EXCHANGE PLACE NEW YORK, NEW YORK
BOSTON, MASSACHUSETTS 02109-2881 (212) 455-2000
(617) 570-1000
</TABLE>
--------------------------
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. / /
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 MAXIMUM PROPOSED MAXIMUM
TITLE OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE(1) OFFERING PRICE(2) REGISTRATION FEE(2)
<S> <C> <C> <C> <C>
COMMON STOCK, $1.00 PAR VALUE.......... 3,514,000 $12.75 $44,803,500 $10,206
</TABLE>
(1) Based upon the average of the high and low sale prices reported on the
Nasdaq National Market on August 25, 2000 and estimated solely for purposes
of calculating the registration fee in accordance with Rule 457(c) under the
Securities Act of 1933.
(2) Includes $9,991 paid in connection with the initial filing of this
registration statement on July 24, 2000 and $215.43 being paid in connection
with the filing of this amendment and the registering of an additional
64,000 shares, in accordance with Rule 457(a) under the Securities Act of
1933.
------------------------------
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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION, DATED SEPTEMBER 1, 2000
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD 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.
3,064,000 SHARES
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
COMMON STOCK
$ PER SHARE
-----------------------------------------------------------------------------
This is a public offering of common stock of Boston Private Financial
Holdings, Inc. We are offering 3,000,000 shares of common stock with this
prospectus. The selling stockholders identified in this prospectus are
offering an additional 64,000 shares. See "Selling Stockholders." We will not
receive any of the proceeds from the sale of shares by the selling
stockholders. This is a firm commitment underwriting.
Our common stock is traded under the symbol "BPFH" on the Nasdaq National
Market. On August 31, 2000, the closing price for our common stock was
$13.3125.
OUR SHARES ARE NOT DEPOSIT ACCOUNTS OF ANY BANK AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DESCRIPTION OF THE RISK FACTORS
THAT YOU SHOULD CAREFULLY CONSIDER BEFORE YOU INVEST IN OUR COMMON STOCK.
<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- -----------
<S> <C> <C>
Price to public............................................. $ $
Underwriting discount.......................................
Proceeds to our company.....................................
Proceeds to the selling stockholders........................
</TABLE>
We have granted an over-allotment option to the underwriters. Under this
option, the underwriters may elect to purchase up to a maximum of 450,000
additional shares from us within 30 days following the date of this
prospectus to cover over-allotments.
-----------------------------------------------------------------------------
NEITHER THE SECURITIES AND 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.
CIBC WORLD MARKETS
THE ROBINSON-HUMPHREY COMPANY
TUCKER ANTHONY CAPITAL MARKETS
The date of this prospectus is , 2000.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Prospectus Summary.......................................... 4
Risk Factors................................................ 8
Forward-Looking Statements.................................. 14
Use of Proceeds............................................. 15
Capitalization.............................................. 16
Business.................................................... 17
Selling Stockholders........................................ 20
About This Prospectus....................................... 21
Where You Can Find More Information......................... 21
Underwriting................................................ 22
Legal Matters............................................... 24
Experts..................................................... 24
</TABLE>
The underwriters are offering the shares subject to various conditions and may
reject all or part of any order.
3
<PAGE>
PROSPECTUS SUMMARY
THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED IN OTHER PARTS OF THIS PROSPECTUS.
IT DOES NOT CONTAIN ALL OF THE INFORMATION THAT YOU SHOULD CONSIDER BEFORE
INVESTING IN SHARES OF OUR COMMON STOCK. YOU SHOULD READ THE ENTIRE PROSPECTUS
CAREFULLY.
BOSTON PRIVATE FINANCIAL HOLDINGS
We are a financial services holding company that focuses on providing wealth
management services to our high net worth client base.
We deliver banking, trust, investment management and financial planning services
through our four principal subsidiaries:
- Boston Private Bank & Trust Company, a Massachusetts chartered trust company
founded in 1987, provides banking, investment management and trust services,
- RINET, an investment adviser, offers strategic tax and estate planning, asset
allocation, investment management and family office services,
- Sand Hill Advisors, an investment management company, manages $1.0 billion of
assets for primarily high net worth individuals, and
- Westfield Capital Management, an investment management company, manages $2.1
billion of assets for high net worth individuals and institutions.
The following principles comprise our operational strategy:
- We offer a range of products to attract high net worth clients and support
their wealth creation and wealth transfer. These products include:
-- jumbo mortgage loans for established and emerging high net worth
clients,
-- commercial lending, cash management and deposit services for owner
managed, middle market companies,
-- financial planning services, including tax planning and preparation,
investment analysis, estate planning and trust management, and
-- private asset management products for high net worth clients.
- We are seeking to diversify geographically to targeted areas of new wealth in
the U.S., as exemplified by our recent acquisition of Sand Hill Advisors in
Menlo Park, California.
- We are expanding our range of financial product offerings to meet more of our
clients' needs at each point in their life.
- We are working to cross market our services among our subsidiaries to take
advantage of their respective expertises.
- We outsource all non-client related activities to minimize our overhead and
keep our management focused on delivering client service.
At June 30, 2000, we had, on a pro forma basis reflecting our recent acquisition
of Sand Hill Advisors, $4.9 billion in assets under management. Of these assets,
75% were invested in equity securities, 17% were invested in fixed income
accounts and the remaining 8% were held in cash. These assets include
approximately $300 million in restricted stock, which Sand Hill Advisors manages
at a discounted fee under a special program for high net worth clients employed
primarily in the high-tech sector.
At June 30, 2000, we managed assets for approximately 2,000 individual accounts.
We provide large and small cap growth styles of equity investing through
separate accounts, trust accounts and limited partnerships engaged primarily in
hedging activities. At June 30, 2000 we had total balance sheet assets of $730.5
million, total loans of $520.8 million, total deposits of $575.5 million and
shareholders' equity of $43.6 million. Over the past five years, our earnings
per share have grown 18.2% on a compounded annual basis. For the same period,
4
<PAGE>
our return on average common equity has averaged 21.60%. Our non-interest income
as a percentage of total revenue was 58.7% for the year ended December 31, 1999
and 54.7% for the six months ended June 30, 2000. The relative magnitude of our
non-interest income as a percentage of revenue underscores our success in
diversifying our business with fee-generating services. If we had completed the
Sand Hill Advisors acquisition at the beginning of the relevant period,
non-interest income as a percentage of total revenue would have been 61.9% for
the year ended December 31, 1999 and 58.1% for the six months ended June 30,
2000.
RECENT EVENTS
On July 20, 2000, we announced our second quarter results. Our net income for
the six months ended June 30, 2000 was $4.0 million, or $0.33 per diluted share,
which marked a 31.8% increase over the results for the same period in 1999. Our
net interest income increased by $2.8 million, or 33.8%, from period to period,
reflecting not only significant growth in average earning assets but also a
slight improvement in our net interest margin. We also announced that we would
pay our stockholders of record on August 1, 2000 a dividend of $0.03 per share
on August 15, 2000. We finished the second quarter with approximately $3.9
billion in assets under management, up nearly 31.6% from June 30, 1999, and up
7.1% from year-end. The acquisition of Sand Hill Advisors will add approximately
$1.0 billion to that total. At June 30, 2000, we had $730.5 million in assets,
an increase of 28.8% from the end of 1999. Loans increased 15.6% and deposits
increased 36.9% from levels at December 31, 1999. Finally, for the six months
ended June 30, 2000 we had a return on average equity of 19.41% and a return on
average assets of 1.24%.
On August 31, 2000, we acquired Sand Hill Advisors, Inc., an 18-year old
investment advisory firm servicing the wealth management market, primarily in
Northern California. Sand Hill Advisors operates as one of our wholly owned
subsidiaries from its offices in Menlo Park, California. At June 30, 2000, Sand
Hill Advisors had approximately 170 clients and $1.0 billion in assets under
management. We estimate the purchase price will be $16 million, after all of the
contingent payments have been made, and will be paid using a combination of
approximately 73% cash and 27% common stock. In connection with the transaction,
several of the principals of Sand Hill Advisors entered into long-term
employment agreements and non-competition/non-solicitation agreements with us.
OUR COMPANY
Boston Private Financial Holdings, Inc. was incorporated in Massachusetts in
1987 and is a registered bank holding company under the Bank Holding Company Act
of 1956. Our address is Ten Post Office Square, Boston, Massachusetts 02109
(telephone number (617) 912-1900).
5
<PAGE>
THE OFFERING
<TABLE>
<S> <C>
Common stock being offered by our company.... 3,000,000 shares (excluding shares which may
be issued pursuant to the over-allotment
option)
Common stock being offered by the selling
stockholders............................... 64,000 shares
Total shares being offered................... 3,064,000 shares
Common stock to be outstanding after this
offering................................... 14,776,488 shares
Use of proceeds.............................. Approximately $8.6 million to repay debt
incurred to finance the Sand Hill Advisors
acquisition and the remainder for general
corporate purposes
Nasdaq National Market symbol................ BPFH
Annual dividends per share, commenced
January 15, 2000........................... $0.12
</TABLE>
The number of shares that will be outstanding after this offering excludes
1,442,624 shares of common stock issuable upon the exercise of stock options
outstanding as of June 30, 2000.
6
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(dollars in thousands, except share and per share data)
<TABLE>
<CAPTION>
AS OF AND FOR THE
SIX MONTHS ENDED
AS OF AND FOR THE YEAR ENDED DECEMBER 31, JUNE 30,
-------------------------------------------------------------- -----------------------
1995 1996 1997 1998 1999 1999 2000
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS UNDER MANAGEMENT............. $1,683,000 $2,075,000 $2,410,000 $2,839,000 $3,660,000 $2,980,000 $3,921,000
OPERATING RATIOS
Return on average assets............ 1.99% 2.14% 1.13%(3) 1.34% 1.41% 1.25% 1.24%
Return on average common equity..... 27.05% 29.00% 13.39%(3) 18.54% 20.05% 17.51% 19.41%
Total fees and other income/total
revenue(1)........................ 59.31% 61.49% 58.71% 58.43% 58.74% 56.14% 54.67%
Net interest margin(2).............. 3.52% 3.85% 3.99% 3.78% 3.76% 3.68% 3.76%
INCOME STATEMENT
Net interest income................. $ 7,498 $ 9,311 $ 11,394 $ 14,148 $ 17,535 $ 8,301 $ 11,107
Total fees and other income......... 10,929 14,866 16,198 19,886 24,960 10,624 13,395
Net income (after tax).............. 4,402 5,493 3,526(3) 5,471 7,196 3,015 3,968
Diluted earnings per share.......... $0.43 $0.52 $0.30(3) $0.46 $0.60 $0.25 $0.33
Basic earnings per share............ $0.44 $0.53 $0.31 $0.48 $0.62 $0.26 $0.34
Average diluted shares
outstanding....................... 10,160,000 10,646,000 11,725,697 11,888,357 11,910,444 11,889,953 12,089,100
Average common shares outstanding... 9,957,000 10,363,000 11,355,697 11,483,814 11,590,757 11,568,670 11,696,838
BALANCE SHEET
Total assets........................ $ 245,926 $ 294,424 $ 369,543 $ 457,815 $ 567,373 $ 529,052 $ 730,536
Loans............................... 155,256 206,107 276,825 348,951 450,388 394,852 520,822
Deposits............................ 178,885 209,302 258,301 334,852 420,535 392,607 575,525
Borrowings.......................... 41,983 53,722 79,753 82,643 97,259 93,833 103,906
Shareholders' equity................ 19,224 26,140 26,292 32,613 39,145 35,448 43,621
ASSET QUALITY
Non-performing loans to total
loans............................. 0.41% 0.47% 0.27% 0.16% 0.29% 0.24% 0.21%
Non-performing assets to total
assets............................ 0.36% 0.36% 0.23% 0.12% 0.23% 0.18% 0.15%
Net loans charged-off to average
loans............................. (0.07)% (0.00)% (0.12)% 0.09% 0.01% (0.01)% (0.02)%
Allowance for loan losses to
total loans....................... 1.25% 1.25% 1.32% 1.26% 1.18% 1.22% 1.20%
Allowance for loan losses to
non-performing loans.............. 304.87% 262.10% 487.95% 776.28% 405.16% 510.89% 560.72%
CAPITAL ADEQUACY
Risk based capital ratio:
Tier 1............................ 11.38% 12.95% 9.94% 10.61% 10.59% 10.63% 10.06%
Total............................. 12.63% 14.20% 11.20% 11.87% 11.84% 11.88% 11.31%
Leverage ratio.................... 6.21% 7.90% 6.64% 6.54% 6.79% 6.76% 6.20%
</TABLE>
------------------------------
(1) Total revenue is defined as net interest income plus fees and other income.
(2) Net interest margin represents net interest income on a fully-taxable
equivalent basis as a percentage of average interest-earning assets.
(3) Before deducting $1.2 million of non-recurring merger expenses, net income
for the year ended December 31, 1997 was $4.7 million, or $0.40 per share,
return on average assets was 1.52% and return on average common equity was
17.94%.
7
<PAGE>
RISK FACTORS
BEFORE PURCHASING SHARES, YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS
DESCRIBED BELOW. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCURS, IT COULD
MATERIALLY ADVERSELY AFFECT OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF
OPERATIONS. THE RISKS AND UNCERTAINTIES BELOW ARE NOT THE ONLY ONES WE ARE
FACING. WE MAY HAVE OTHER RISKS OR UNCERTAINTIES OF WHICH WE ARE NOT YET AWARE
OR WHICH WE CURRENTLY BELIEVE ARE IMMATERIAL THAT MAY ALSO IMPAIR OUR BUSINESS
OPERATIONS. IF ANY OF THESE RISKS AND UNCERTAINTIES SHOULD OCCUR, THE TRADING
PRICE OF OUR COMMON STOCK COULD DECLINE AND YOU MAY LOSE ALL OR PART OF THE
MONEY YOU PAID TO BUY SHARES OF OUR COMMON STOCK.
A DECLINE IN SECURITIES PRICES COULD ADVERSELY AFFECT OUR BUSINESS
Our investment management business could be adversely affected by a decline in
the financial and securities markets. Declines in prevailing securities prices
could occur as a result of a number of factors, including an economic downturn
or financial crisis in the U.S. or abroad, political events, adverse public
perceptions of economic prospects or general market volatility, all of which are
beyond our control. In recent periods the U.S. and certain foreign securities
markets have experienced unprecedented levels of price fluctuations over short
periods of time. The increases in our assets under management over the past
several years have been attributable in part to rising market prices for equity
securities. A decline in prevailing market prices could have the opposite
effect. Because most of our investment advisory contracts provide for fees based
on the market value of the assets under management, declines in securities
prices may have a material adverse effect on our results of operations and
financial condition.
Moreover, Westfield Capital receives performance-based fees resulting from its
status as general partner or investment manager of three limited partnership
investment funds. The amounts of these fees are impacted directly by the
investment performance of Westfield Capital. As a result, the future revenues
from such fees are likely to fluctuate and may be affected by conditions in the
capital markets and other general economic conditions.
Even when securities prices are generally rising, performance can be affected by
investment style. We have historically focused on the growth style of investing,
which has been more successful in recent years than the value style. While we
have made efforts to diversify our investing styles over the past several years,
the small to mid cap growth style of investing remains our predominant investing
style. If market conditions were to change such that the value style of
investing became significantly more successful, our investment operations could
be adversely affected.
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.
8
<PAGE>
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 given
its relatively small capital base.
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. Because
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 subsidiaries,
Westfield Capital, Sand Hill Advisors and RINET, may not be able to attract and
retain investment management clients at current levels.
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.
Competition is based on a number of factors, including the range of products
offered, brand recognition, investment performance, the level of fees and
commissions charged for services and the customer perception of financial
strength. Many of our competitors have significantly greater capital and other
resources than we do and offer a broader line of products and services than we
do. The recent trend toward consolidation within the investment management,
securities and banking industries has increased these competitive pressures. In
addition, since there are relatively few barriers to entry by new investment
management firms, we expect additional competition in the future.
In addition, our ability to retain investment management clients may be impaired
by the fact that our investment management contracts are typically short-term in
nature. Substantially all of our investment management 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.
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 our 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 real estate or other assets 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.
9
<PAGE>
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.
Bank regulatory agencies also periodically review Boston Private Bank & Trust
Company's allowance for loan losses and the values attributed to real estate
acquired through foreclosure or other similar remedies. These regulatory
agencies may require Boston Private Bank & Trust Company to reduce its
determination of the value for these items.
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 typically consisting of income producing
residential and commercial properties, marketable securities or corporate assets
typically consisting of 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. In addition, because of the
concentration of loans in this region, a natural catastrophe such as a hurricane
could adversely affect the value of the collateral securing a substantial
portion of 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 such
as loans and investment securities and the interest expense incurred in
connection with interest-bearing liabilities such as 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
10
<PAGE>
and maturity of loans, investments and funding sources. However, we cannot
assure you that a significant change 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 BUSINESSES ARE HIGHLY REGULATED AND FAILURE TO COMPLY WITH THOSE REGULATIONS
COULD ADVERSELY AFFECT OUR BUSINESS
INVESTMENT MANAGEMENT
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, four of our subsidiaries, including Westfield Capital, Sand Hill
Advisors and RINET, 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 subadvisor and Sand Hill Advisors acts as an advisor to mutual funds
which are registered under the Investment Company Act of 1940 and are 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 related 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.
BANKING
Bank holding companies and 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
11
<PAGE>
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 Boston Private
Financial Holdings and Boston Private Bank & Trust Company may conduct business
and obtain financing.
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.
In connection with obtaining regulatory approvals for our recent acquisition of
Sand Hill Advisors, we committed to the Federal Reserve Board that we would
increase our regulatory capital ratios by September 30, 2000 to not less than
10% total risk weighted capital, 6% Tier 1 risk weighted capital and 5%
leverage. The common stock issued in this offering will enable us to meet these
commitments.
IN CONNECTION WITH OUR ACQUISITION OF SAND HILL ADVISORS AND 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, particularly to the extent we are entering
new geographic markets,
- 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.
WE WILL HAVE BROAD DISCRETION AS TO THE USE OF THE PROCEEDS FROM THIS OFFERING
AND MAY USE THE PROCEEDS IN A MANNER WITH WHICH YOU DISAGREE
Our board of directors and management will have broad discretion over the use of
the net proceeds of this offering. You may disagree with the judgment of our
board of directors and management regarding the application of the proceeds of
this offering.
12
<PAGE>
THE MARKET PRICE OF OUR COMMON STOCK HAS FLUCTUATED, AND COULD FLUCTUATE
SIGNIFICANTLY
The market price of our common stock has been volatile in the past and could
continue to be subject to wide fluctuations in response to quarterly variations
in our operating results, including fluctuations in the availability and price
of purchased loans, changes in earnings estimates by analysts, material
announcements by us or our competitors, governmental regulatory action, the
liquidity of the market for our common stock, changes in general economic or
market conditions and broad market fluctuations, or other events or factors,
many of which are beyond our control. The stock market has experienced extreme
price and volume fluctuations which have affected market prices of smaller
capitalization companies and which often have been unrelated to the operating
performance of such companies. In addition, our operating results may be below
the expectations of securities analysts and investors. In such event, the price
of our common stock would likely decline, perhaps substantially.
WE MAY NOT CONTINUE TO PAY DIVIDENDS ON OUR COMMON STOCK
Until the fourth quarter of 1999, we had never declared or paid cash dividends
on our common stock. Our ability to pay dividends is subject to regulatory
limitations. We are under no obligation to continue to pay dividends and we may
discontinue payment of dividends at any time.
THE ANTI-TAKEOVER PROVISIONS OF OUR GOVERNING DOCUMENTS MAY MAKE IT MORE
DIFFICULT FOR US TO BE ACQUIRED
Federal and state laws impose restrictions, including regulatory approval
requirements, on the acquisition of control of a bank holding company such as
Boston Private Financial Holdings. In addition, our Articles of Organization and
By-laws contain anti-takeover provisions, including a staggered board of
directors, a class of authorized but unissued preferred stock, and advance
notice provisions for proposals by stockholders at stockholder meetings. These
anti-takeover provisions may prevent a potential acquiror from taking us over
and, therefore, result in the loss of a take-over premium to our stockholders.
13
<PAGE>
FORWARD-LOOKING STATEMENTS
This prospectus includes and incorporates forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These forward-looking statements are subject to
a number of risks and uncertainties. All statements, other than statements of
historical facts included or incorporated in this prospectus, regarding our
strategy, future operations, financial position and estimated revenues,
projected costs, prospects, plans and objectives of management are
forward-looking statements. When used in this prospectus, the words "will,"
"believe," "anticipate," "intend," "estimate," "expect," "project" and similar
expressions are intended to identify forward-looking statements, although not
all forward-looking statements contain these identifying words. We cannot
guarantee future results, levels of activity, performance or achievements and
you should not place undue reliance on our forward-looking statements. Our
forward-looking statements do not reflect the potential impact of any future
acquisitions, mergers, dispositions, joint ventures or strategic investments.
Our actual results could differ materially from those anticipated in these
forward-looking statements as a result of various factors, including the risks
described under "Risk Factors" and elsewhere in this prospectus.
14
<PAGE>
USE OF PROCEEDS
Our net proceeds from the sale of the 3,000,000 shares of our common stock are
estimated to be $37.1 million ($42.8 million if the underwriters' over-allotment
option is exercised in full) at an assumed public offering price of $13.3125 per
share and after deducting the estimated underwriting discount and estimated
offering expenses payable by us. We will not receive any proceeds from the sale
of shares of common stock by the selling stockholders. See "Selling
Stockholders." We intend to use approximately $8.6 million of the net proceeds
from this offering to repay debt incurred to finance the acquisition of Sand
Hill Advisors. The remaining $28.5 million, or 76.8%, of the net proceeds will
be available for general corporate purposes, including potential capital
contributions to our subsidiaries to support the future growth of their
businesses. Our outstanding debt incurred to finance the acquisition of Sand
Hill Advisors bears interest at variable rates based on the federal funds rate
plus 1.75% and matures in August 2001. This interest rate was 8.25% at
August 30, 2000.
In connection with the acquisition of Sand Hill Advisors, we committed to the
Federal Reserve Board that we would increase our regulatory capital ratios by
September 30, 2000. A purpose of this offering is to obtain sufficient capital
to meet this commitment. We estimate that approximately $3.9 million of the
offering proceeds would have been needed on our balance sheet at June 30, 2000
in order to meet these regulatory capital ratios assuming completion of the
acquisition at that date. These proceeds will be used for general corporate
purposes.
We have not yet determined how the portion of the net proceeds allocated to
general corporate purposes will be used. Our board of directors and management
will have broad discretion over the use of this portion of the net proceeds. You
should read the risk factor entitled "We Will Have Broad Discretion as to the
Use of the Proceeds from this Offering and May Use the Proceeds in a Manner With
Which You Disagree" for a description of the risks accompanying this degree of
discretion in our application of the net proceeds of this offering.
15
<PAGE>
CAPITALIZATION
The following table sets forth our capitalization at June 30, 2000 on an actual
basis and as adjusted to reflect the sale by us of the 3,000,000 shares of
common stock offered by this prospectus at an assumed offering price of $13.3125
per share and the application of the net proceeds of this offering as set forth
under "Use of Proceeds."
<TABLE>
<CAPTION>
JUNE 30, 2000
-----------------------
AS
ACTUAL ADJUSTED
---------- ----------
(dollars in thousands)
<S> <C> <C>
Stockholders' equity:
Undesignated preferred stock, $1.00 par value, 2,000,000
shares authorized; none issued or outstanding............ -- --
Common stock, $1.00 par value, 30,000,000 shares
authorized; 11,776,488 shares issued and outstanding
actual; 14,776,488 issued and outstanding as
adjusted(1).............................................. $11,776 $14,776
Additional paid-in capital................................. 13,077 47,218
Retained earnings.......................................... 20,016 20,016
Accumulated other comprehensive (loss) income.............. (1,248) (1,248)
------- -------
Total stockholders' equity................................. 43,621 80,762
------- -------
Total capitalization........................................ $43,621 $80,762
======= =======
</TABLE>
------------------------------
(1) Excludes 1,442,624 shares of common stock which may be issued under stock
options outstanding at June 30, 2000.
16
<PAGE>
BUSINESS
OUR 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.
We conduct substantially all of our business through our wholly-owned
subsidiaries, Boston Private Bank & Trust Company, Westfield Capital, Sand Hill
Advisors and RINET. Westfield Capital is located at One Financial Center in
Boston, Massachusetts, Sand Hill Advisors is located at 3000 Sand Hill Road,
Menlo Park, California, RINET is located at 10 Post Office Square, Boston,
Massachusetts, and Boston Private Bank & Trust Company and our principal offices
are located at Ten Post Office Square, Boston, Massachusetts.
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.
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.
Through Sand Hill Advisors, we provide investment management and counseling
services primarily to individuals, families and trusts. Sand Hill Advisors
specializes in providing these services to clients acquiring wealth suddenly
through inheritance, divorce or separation from an employer. Our professionals
at Sand Hill Advisors work closely with clients on goal-setting, asset
diversification, reductions of restricted stock positions and establishing rate
of return targets.
Through RINET, we engage in financial planning, tax planning and investment
management services for affluent individuals and families. Services we offer
through RINET include tax preparation, asset allocation, estate planning,
charitable planning, and planning for employment benefits, including 401(k)
plans, alternative investment analysis and mutual fund investing.
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
17
<PAGE>
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.
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 locations 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
18
<PAGE>
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.
LEGAL PROCEEDINGS
We are not currently a party to any material legal proceedings. One of our
subsidiaries has recently received correspondence on behalf of one of its former
investment management clients claiming that the subsidiary is responsible for
underperformance of allegedly $5.1 million when compared to the former client's
portfolio performance targets. Our subsidiary disputes the former client's
allegations and, if legal action is commenced, we intend to defend the matter
vigorously.
19
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth the number of shares of our common stock
beneficially owned by the selling stockholders as of August 31, 2000, the number
of shares that the selling stockholders will sell in this offering and the
number of shares that the selling stockholders will beneficially own upon
completion of this offering. The selling stockholders have furnished to us the
information set forth below and this information is accurate to the best of our
knowledge.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO OFFERING(2) AFTER OFFERING
----------------------- SHARES TO ---------------------
NAME(1) SHARES PERCENT BE SOLD SHARES PERCENT
------- ---------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Richard N. Thielen(3)............................. 290,236 2.46% 59,000 231,236 1.96%
James D. Henderson(4)............................. 88,580 * 5,000 83,580 *
</TABLE>
------------------------
* Less than one percent.
(1) The address for Messrs. Thielen and Henderson is c/o Boston Private
Financial Holdings, Inc., Ten Post Office Square, Boston, Massachusetts
02109.
(2) In computing the number of shares of common stock beneficially owned by a
person, shares of common stock subject to options and warrants held by that
person that are currently exercisable or that become exercisable within 60
days of August 31, 2000 and shares of common stock issuable upon conversion
of currently convertible securities or securities that could become
convertible held by that person are deemed outstanding. For purposes of
computing the percentage of outstanding shares of common stock beneficially
owned by such person, the shares subject to options or warrants or
underlying convertible securities that are currently exercisable or
convertible within 60 days of August 31, 2000, are deemed to be outstanding
for such person but are not deemed to be outstanding for purposes of
computing the ownership percentage of any other person. As of August 31,
2000, a total of 11,776,488 shares of common stock were outstanding.
(3) Includes 1,250 shares of common stock subject to options exercisable within
60 days and 30,000 shares owned by Mr. Thielen's children, of which Mr.
Thielen disclaims beneficial ownership. Excludes 3,750 shares of common
stock subject to options that are not exercisable within 60 days.
Mr. Thielen is the President and Chief Executive Officer of RINET and a
member of our board of directors.
(4) Includes 66,620 shares of common stock subject to options exercisable within
60 days. Excludes 28,788 shares of common stock subject to options that are
not exercisable within 60 days. Mr. Henderson is the Executive Vice
President, Investment Management & Trust of Boston Private Bank & Trust
Company.
20
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement we filed with the Securities
and Exchange Commission, or SEC, to register the shares offered in this
offering. It does not repeat important information that you can find in our
registration statement or in the reports and other documents that we file with
the SEC. For further information about our company and our common stock, you
should read the registration statement and the exhibits to the registration
statement. Statements contained in this prospectus concerning documents we have
filed with the SEC as exhibits to the registration statement or otherwise are
not necessarily complete and, in each instance, you should refer to the actual
filed document.
We have not authorized anyone to provide you any information different from that
contained in this prospectus. The common stock may be offered for sale only in
jurisdictions where offers and sales are permitted. The information contained in
this prospectus is accurate only as of the date of this prospectus, regardless
of the time of delivery of this prospectus or of any sale of the common stock.
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 and copy any document we
file at the SEC's public reference rooms at 450 Fifth Street, Mail Stop 1-2,
N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available
from The Nasdaq Stock Market, Inc. and at the SEC's website at
http://www.sec.gov.
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 completion of the sale all the shares of common stock
offered under this prospectus:
- our Annual Report on Form 10-K for the fiscal year ended December 31, 1999,
- our Quarterly Report on Form 10-Q for the fiscal quarters ended March 31 and
June 30, 2000,
- our Current Reports on Form 8-K dated June 27 and July 21, 2000, 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).
21
<PAGE>
UNDERWRITING
Our company and the selling stockholders have entered into an underwriting
agreement with the underwriters named below. CIBC World Markets Corp., The
Robinson-Humphrey Company, LLC and Tucker Anthony Incorporated are acting as
representatives of the underwriters.
The underwriting agreement provides for the purchase of a specific number of
shares of common stock by each of the underwriters. The underwriters'
obligations are several, which means that each underwriter is required to
purchase a specified number of shares, but is not responsible for the commitment
of any other underwriter to purchase shares. Subject to the terms and conditions
of the underwriting agreement, each underwriter has severally agreed to purchase
the number of shares of common stock set forth opposite its name below:
<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
----------- ----------------
<S> <C>
CIBC World Markets Corp.....................................
The Robinson-Humphrey Company, LLC..........................
Tucker Anthony Incorporated.................................
---------
Total....................................................... 3,064,000
=========
</TABLE>
The underwriters have agreed to purchase all of the shares offered by this
prospectus (other than those covered by the over-allotment option described
below) if any are purchased. Under the underwriting agreement, if an underwriter
defaults in its commitment to purchase shares, the commitments of non-
defaulting underwriters may be increased or the underwriting agreement may be
terminated, depending on the circumstances.
The shares should be ready for delivery on or about , 2000 against payment
in immediately available funds. The representatives have advised our company
that the underwriters propose to offer the shares directly to the public at the
public offering price that appears on the cover page of this prospectus. In
addition, the representatives may offer some of the shares to other securities
dealers at such price less a concession of $ per share. The underwriters may
also allow, and such dealers may re-allow, a concession not in excess of $ per
share to other dealers. After the shares are released for sale to the public,
the representatives may change the offering price and other selling terms at
various times.
Our company has granted the underwriters an over-allotment option. This option,
which is exercisable for up to 30 days after the date of this prospectus,
permits the underwriters to purchase a maximum of 450,000 additional shares from
our company to cover over-allotments. If the underwriters exercise all or part
of this option, they will purchase shares covered by the option at the initial
public offering price that appears on the cover page of this prospectus, less
the underwriting discount. If this option is exercised in full, the total price
to public will be $ million and the total proceeds to our company will be
$ million. The underwriters have severally agreed that, to the extent the
over-allotment option is exercised, they will each purchase a number of
additional shares proportionate to the underwriter's initial amount reflected in
the foregoing table.
The following table provides information regarding the amount of the discount to
be paid to the underwriters by our company and the selling stockholders:
<TABLE>
<CAPTION>
TOTAL WITHOUT EXERCISE OF TOTAL WITH FULL EXERCISE OF
PER SHARE OVER-ALLOTMENT OPTION OVER-ALLOTMENT OPTION
--------- ------------------------- ---------------------------
<S> <C> <C> <C>
Boston Private.......................... $ $ $
Selling stockholders....................
Total...............................
</TABLE>
22
<PAGE>
Our company estimates that total expenses of the offering, excluding the
underwriting discount, will be approximately $300,000.
Our company and the selling stockholders have agreed to indemnify the
underwriters against certain liabilities, including liabilities under the
Securities Act of 1933.
Our company and its executive officers and directors have agreed to a 90-day
"lock up" with respect to 3,886,972 shares of common stock that they
beneficially own, including securities that are convertible into shares of
common stock and securities that are exchangeable or exercisable for shares of
common stock. This means that, for a period of 90 days following the date of
this prospectus, our company and such persons may not offer, sell, pledge or
otherwise dispose of our securities without the prior written consent of CIBC
World Markets Corp.
Rules of the SEC may limit the ability of the underwriters to bid for or
purchase shares before the distribution of the shares is completed. However, the
underwriters may engage in the following activities in accordance with the
rules:
- STABILIZING TRANSACTIONS--The representatives may make bids or purchases for
the purpose of pegging, fixing or maintaining the price of the shares, so
long as stabilizing bids do not exceed a specified maximum.
- OVER-ALLOTMENTS AND SYNDICATE COVERING TRANSACTIONS--The underwriters may
create a short position in the shares by selling more shares than are set
forth on the cover page of this prospectus. If a short position is created in
connection with the offering, the representatives may engage in syndicate
covering transactions by purchasing shares in the open market. The
representatives may also elect to reduce any short position by exercising all
or part of the over-allotment option.
- PENALTY BIDS--If the representatives purchase shares in the open market in a
stabilizing transaction or syndicate covering transaction, they may reclaim a
selling concession from the underwriters and selling group members who sold
those shares as part of this offering.
- PASSIVE MARKET MAKING--Market makers in the shares who are underwriters or
prospective underwriters may make bids for or purchases of shares, subject to
limitations, until the time, if ever, at which a stabilizing bid is made.
Stabilization and syndicate covering transactions may cause the price of the
shares to be higher than it would be in the absence of such transactions. The
imposition of a penalty bid might also have an effect on the price of the shares
if it discourages resales of the shares.
Neither our company, the selling stockholders nor the underwriters makes any
representation or prediction as to the effect that the transactions described
above may have on the price of the shares. These transactions may occur on the
Nasdaq National Market or otherwise. If such transactions are commenced, they
may be discontinued without notice at any time.
23
<PAGE>
LEGAL MATTERS
The validity of the issuance of the shares of common stock offered hereby will
be passed upon for our company by our counsel, Goodwin, Procter & Hoar LLP,
Boston, Massachusetts. Certain legal matters in connection with the offering
will be passed upon for the underwriters by their counsel, Simpson Thacher &
Bartlett, New York, New York. Simpson Thacher & Bartlett may rely as to matters
of Massachusetts law upon the opinion of Goodwin, Procter & Hoar LLP.
EXPERTS
The consolidated financial statements of our company and its subsidiaries
included in the Annual Report on Form 10-K for the year ended December 31, 1999
have been incorporated by reference in this prospectus and in the registration
statement in reliance upon the report of KPMG LLP, independent certified public
accountants, and upon the authority of said firm as experts in accounting and
auditing.
24
<PAGE>
--------------------------------------------------------------------------------
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
3,064,000 SHARES
COMMON STOCK
----------------
PROSPECTUS
-------------------
, 2000
CIBC WORLD MARKETS
THE ROBINSON-HUMPHREY
COMPANY
TUCKER ANTHONY
CAPITAL MARKETS
------------------------------------------------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. NO DEALER,
SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE INFORMATION THAT IS NOT
CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR IS IT
SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR
SALE IS NOT PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT
ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF THE DELIVERY
OF THIS PROSPECTUS OR ANY SALE OF THESE SECURITIES.
<PAGE>
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:
<TABLE>
<S> <C>
SEC Registration Fee........................................ $ 10,206
NASD Filing Fees............................................ $ 4,284
Printing Expenses........................................... $100,000
Legal Fees and Expenses..................................... $100,000
Accounting Fees and Expenses................................ $ 50,000
Blue Sky Qualification Fees and Expenses.................... $ 5,000
Transfer Agent and Registrar's Fees......................... $ 20,000
Miscellaneous Costs......................................... $ 10,510
--------
Total....................................................... $300,000
========
</TABLE>
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
II-1
<PAGE>
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.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
--------------------- -----------
<C> <C> <S>
*1.1 -- Form of Underwriting Agreement
*5.1 -- Opinion of Goodwin, Procter & Hoar LLP
23.1 -- Consent of KPMG LLP
*23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit
-- 5.1)
*24.1 -- Power of Attorney (included on signature page)
</TABLE>
------------------------
*Previously filed.
ITEM 17. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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.
B. 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.
C. The undersigned Registrant hereby undertakes that:
1. For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed
to be part of this registration statement as of the time it was declared
effective.
2. For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus
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.
II-2
<PAGE>
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 Amendment No. 2 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston, The Commonwealth of
Massachusetts on September 1, 2000.
<TABLE>
<S> <C> <C>
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
BY: /S/ WALTER M. PRESSEY
-----------------------------------------
Walter M. Pressey
CHIEF FINANCIAL OFFICER
</TABLE>
POWER OF ATTORNEY
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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
Chairman of the Board and
* Chief Executive Officer
------------------------------------------- (Principal Executive September 1, 2000
Timothy L. Vaill Officer)
Executive Vice President
and
/S/ WALTER M. PRESSEY Chief Financial Officer
------------------------------------------- (Principal Financial September 1, 2000
Walter M. Pressey Officer and Principal
Accounting Officer)
*
------------------------------------------- Director September 1, 2000
Herbert S. Alexander
*
------------------------------------------- Director September 1, 2000
Arthur J. Bauernfeind
*
------------------------------------------- Director September 1, 2000
Eugene S. Colangelo
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
*
------------------------------------------- Director September 1, 2000
C. Michael Hazard
*
------------------------------------------- Director September 1, 2000
Lynn Thompson Hoffman
*
------------------------------------------- Director September 1, 2000
Allen Sinai
*
------------------------------------------- Director September 1, 2000
Charles O. Wood, III
*
------------------------------------------- Director September 1, 2000
Peter C. Bennett
*
------------------------------------------- Director September 1, 2000
Richard Thielen
* WALTER M. PRESSEY
-------------------------------------------
Walter M. Pressey
ATTORNEY-IN-FACT
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
--------------------- -----------
<C> <C> <S>
*1.1 -- Form of Underwriting Agreement
*5.1 -- Opinion of Goodwin, Procter & Hoar LLP
23.1 -- Consent of KPMG LLP
*23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit
-- 5.1)
*24.1 -- Power of Attorney (included on signature page)
</TABLE>
------------------------
* Previously filed.
