Boston Private Financial Holdings, Inc. Reports Third Quarter 2017 Results

Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported third quarter 2017 GAAP Net Income Attributable to the Company of $19.8 million, compared to $23.4 million for the second quarter of 2017 and $19.6 million for the third quarter of 2016. Third quarter 2017 diluted earnings per share were $0.22, compared to $0.27 in the second quarter of 2017, and $0.22 in the third quarter of 2016.

“Our Company demonstrated good underlying business performance during the third quarter,” said Clayton G. Deutsch, CEO. “Our Private Bank delivered strong year-over-year revenue growth driven by double-digit net interest income growth and core Net Interest Margin expansion. Our Wealth Management & Trust segment recorded a fourth consecutive quarter of improvement in net flows and a second consecutive quarter of positive EBITDA, while our Wealth Advisory and Investment Management segments delivered sequential earnings improvement and margins above our targets.”

Core Fees and Income/Assets Under Management

Total Core Fees and Income for the third quarter were $39.1 million, a 5% increase on a linked quarter basis and a 3% increase year-over-year. The increase reflects higher levels of AUM in the Wealth Management & Trust, Investment Management, and Wealth Advisory segments on both a linked quarter basis and year-over-year basis. Private Banking fees increased linked quarter, while decreasing year-over-year due to changes in swap fee income.

AUM was $29.8 billion at the end of the third quarter, an increase of 2% from the previous quarter and 8% year-over-year. AUM increased due to positive market action, partially offset by negative net flows. The Company experienced net flows of negative $109 million during the third quarter, compared to negative $180 million and negative $336 million in the second quarter of 2017 and third quarter of 2016, respectively. During the third quarter, net flows by segment were $114 million for Wealth Management & Trust, negative $152 million for Investment Management, and negative $71 million for Wealth Advisory.

Net Interest Income

Net Interest Income for the third quarter was $56.6 million, a decrease of 1% from $57.1 million for the second quarter of 2017 and an increase of 14% from $49.9 million for the third quarter of 2016. The current quarter includes $0.1 million of interest recovered on previous nonaccrual loans compared to $2.0 million for the second quarter and $0.3 million for the third quarter of 2016. Excluding interest recovered on previous nonaccrual loans, Net Interest Income on an FTE basis increased 2% linked quarter and 14% year-over-year.

Net Interest Margin was 3.02% for the third quarter of 2017, a decrease of 5 basis points from the second quarter of 2017 and an increase of 14 basis points from the third quarter of 2016. Excluding interest recovered on previous nonaccrual loans, Net Interest Margin for the third quarter was 3.02%, an increase of 5 basis points from the second quarter of 2017 and an increase of 16 basis points from the third quarter of 2016.

Total Operating Expense

Total Operating Expense for the third quarter of 2017 was $69.3 million, up 2% linked quarter from $67.8 million and 12% year-over-year primarily due to increased compensation expense and technology initiatives.

Provision and Asset Quality

The Company recorded a provision credit of $0.4 million for the third quarter of 2017, compared to a provision credit of $6.1 million for the second quarter of 2017 and $0.1 million for the third quarter of 2016. The provision credit in the third quarter of 2017 was due to net recoveries and improved loss factors, partially offset by an increase in Criticized Loans and loan growth.

Criticized Loans as of September 30, 2017 were $146.0 million, an increase of 13% linked quarter and a decrease of 8% year-over-year. Nonaccrual Loans (“Nonaccruals”) as of September 30, 2017 were $13.6 million, a decrease of 16% linked quarter and 17% year-over-year. As a percentage of Total Loans, Nonaccruals were 21 basis points as of September 30, 2017, down 5 basis points compared to June 30, 2017, and down 7 basis points from September 30, 2016.

Additional credit metrics are listed below:

(In millions)			September 30, 2017					June 30, 2017					March 31, 2017					December 31, 2016					September 30, 2016
Total Criticized Loans			$	146.0				$	129.5				$	135.1				$	118.5				$	158.8
Total Loans 30-89 Days Past Due and Accruing (13)			$	5.3				$	3.2				$	28.7				$	15.1				$	4.6
Total Net Loans (Charged-off)/ Recovered			$	0.3				$	3.1				$	0.1				$	1.5				$	2.1
Allowance for Loan Losses/ Total Loans			1.17		%			1.19		%			1.25		%			1.28		%			1.32		%

Capital Ratios

The Company's capital ratios are listed below:

			September 30, 2017				June 30, 2017				March 31, 2017				December 31, 2016				September 30, 2016
BPFH Ratios:
Total Risk-Based Capital *			14.3	%			14.1	%			13.8	%			13.9	%			14.0	%
Tier I Risk-Based Capital *			13.0	%			12.9	%			12.6	%			12.6	%			12.7	%
Tier I Leverage Capital *			9.4	%			9.3	%			9.2	%			9.4	%			9.5	%
TCE/TA (4)			7.4	%			7.4	%			7.0	%			7.1	%			7.4	%
Tier I Common Equity/ Risk Weighted Assets *			10.4	%			10.3	%			10.0	%			10.0	%			10.0	%

*September 30, 2017 information is presented based on estimated data.

Dividend Payments
Concurrent with the release of third quarter 2017 earnings, the Board of Directors of the Company declared a cash dividend to common shareholders of $0.11 per share. The record date for this dividend is November 3, 2017, and the payment date is November 17, 2017.

The Board of Directors of the Company also declared a cash dividend to holders of the Non-Cumulative Perpetual Preferred Stock, Series D of $17.375 per share, which will result in a dividend of $0.434375 per depositary share. The record date for this dividend is November 15, 2017, and the payment date is December 15, 2017.

Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.

These non-GAAP financial measures include tangible book value per share; the TCE/TA ratio; return on average common equity; return on average tangible common equity; pre-tax, pre-provision income; total operating expense excluding intangibles, goodwill impairment, and restructuring; the efficiency ratio (FTE basis); the efficiency ratio (FTE basis) excluding amortization of intangibles, goodwill impairment, and restructuring; net income attributable to the Company excluding notable items; diluted earnings per share excluding notable items; and net interest income and net interest margin excluding interest recovered on previous nonaccrual loans, also referred to as core net interest margin.

A detailed reconciliation table of the Company's GAAP to non-GAAP measures is attached.

Conference Call
Management will hold a conference call at 8 a.m. Eastern Time on Thursday, October 19, 2017, to discuss the financial results, business highlights and outlook. To access the call:

Dial In #: (888) 317-6003
Elite Entry Number: 5396726

Replay Information:
Available from October 19, 2017 at 12 noon until October 26, 2017
Dial In #: (877) 344-7529
Conference Number: 10112880

The call will be simultaneously webcast and may be accessed on www.bostonprivate.com.

Boston Private Financial Holdings, Inc.
Boston Private Financial Holdings, Inc. is a national financial services organization that owns Wealth Management, Trust, and Private Banking affiliates with offices in Boston, New York, Los Angeles, San Francisco, San Jose, Florida, and Wisconsin. The Company has total assets of approximately $8 billion, and manages over $29 billion of client assets.

The Company's affiliates serve the high net worth marketplace with high quality products and services of unique appeal to private clients. The Company also provides strategic oversight and access to resources, both financial and intellectual, to support affiliate management, marketing, compliance and legal activities. (NASDAQ: BPFH)

For more information about BPFH, visit the Company's website at www.bostonprivate.com.

Forward-Looking Statements
Certain statements in this press release that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. These statements include, among others, statements regarding our strategy, evaluations of future interest rate trends and liquidity, prospects for growth in assets, and prospects for overall results over the long term. You should not place undue reliance on our forward-looking statements. You should exercise caution in interpreting and relying on forward-looking statements because they are subject to significant risks, uncertainties and other factors which are, in some cases, beyond the Company's control. Forward-looking statements are based on the current assumptions and beliefs of management and are only expectations of future results. The Company's actual results could differ materially from those projected in the forward-looking statements as a result of, among other factors, adverse conditions in the capital and debt markets and the impact of such conditions on the Company's private banking, investment management, wealth advisory, and trust activities; changes in interest rates; competitive pressures from other financial institutions; the effects of weakness in general economic conditions on a national basis or in the local markets in which the Company operates; changes in loan defaults and charge-off rates; changes in the value of securities and other assets, adequacy of loan loss reserves, or decreases in deposit levels necessitating increased borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; changes in government regulation; the risk that goodwill and intangibles recorded in the Company's financial statements will become impaired; the risk that the Company's deferred tax asset may not be realized; risks related to the identification and implementation of acquisitions, dispositions and restructurings; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Company's Annual Report on Form 10-K and updated by the Company's Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statement is made.

Note to Editors:
Boston Private Financial Holdings, Inc. is not to be confused with Boston Private Bank & Trust Company. Boston Private Bank & Trust Company is a wholly-owned subsidiary of BPFH. The information reported in this press release is related to the performance and results of BPFH.

Boston Private Financial Holdings, Inc. Selected Financial Data (Unaudited)
			September 30, 2017					June 30, 2017					March 31, 2017					December 31, 2016					September 30, 2016
			(In thousands, except share and per share data)
Assets:
Cash and cash equivalents			$	110,440				$	97,032				$	165,186				$	106,557				$	67,631
Investment securities available-for-sale			1,189,827					1,188,720					1,256,208					1,264,132					1,249,578
Investment securities held-to-maturity			84,090					99,024					98,424					93,079					98,881
Stock in Federal Home Loan Bank and Federal Reserve Bank			61,714					45,568					50,133					44,077					36,084
Loans held for sale			1,957					2,870					350					3,464					5,316
Total loans			6,413,201					6,279,928					6,250,217					6,114,354					5,869,498
Less: Allowance for loan losses			74,873					75,009					78,031					78,077					77,669
Net loans			6,338,328					6,204,919					6,172,186					6,036,277					5,791,829
Other real estate owned (“OREO”)			—					—					—					1,690					1,800
Premises and equipment, net			36,546					34,135					32,974					31,827					32,089
Goodwill			142,554					142,554					142,554					142,554					152,082
Intangible assets, net			22,447					23,873					25,299					26,725					28,267
Fees receivable			12,560					12,639					12,230					13,400					11,185
Accrued interest receivable			21,823					20,680					20,790					20,479					18,062
Deferred income taxes, net			46,088					49,827					53,686					55,460					39,319
Other assets			201,024					185,805					185,100					130,753					149,427
Total assets			$	8,269,398				$	8,107,646				$	8,215,120				$	7,970,474				$	7,681,550
Liabilities:
Deposits			$	6,262,347				$	6,381,339				$	6,246,620				$	6,085,146				$	5,812,243
Deposits held for sale			—					—					—					—					105,788
Securities sold under agreements to repurchase			59,903					29,232					67,249					59,624					77,466
Federal funds purchased			70,000					40,000					—					80,000					125,000
Federal Home Loan Bank borrowings			812,773					618,989					885,445					734,205					522,681
Junior subordinated debentures			106,363					106,363					106,363					106,363					106,363
Other liabilities			127,069					115,088					110,310					119,683					134,322
Total liabilities			7,438,455					7,291,011					7,415,987					7,185,021					6,883,863
Redeemable Noncontrolling Interests (“RNCI”)			15,882					17,216					17,232					16,972					16,199
Shareholders’ Equity:
Preferred stock, $1.00 par value; authorized: 2,000,000 shares			47,753					47,753					47,753					47,753					47,753
Common stock, $1.00 par value; authorized: 170,000,000 shares			84,082					84,015					84,134					83,732					83,195
Additional paid-in capital			606,802					602,507					602,748					597,454					597,209
Retained earnings			76,455					66,807					53,510					47,929					39,415
Accumulated other comprehensive income/ (loss)			(4,823		)			(6,038		)			(10,237		)			(12,548		)			10,134
Total Company’s shareholders’ equity			810,269					795,044					777,908					764,320					777,706
Noncontrolling interests			4,792					4,375					3,993					4,161					3,782
Total shareholders’ equity			815,061					799,419					781,901					768,481					781,488
Total liabilities, redeemable noncontrolling interests and shareholders’ equity			$	8,269,398				$	8,107,646				$	8,215,120				$	7,970,474				$	7,681,550

Boston Private Financial Holdings, Inc. Selected Financial Data (Unaudited)
			Three Months Ended
			September 30, 2017					June 30, 2017					March 31, 2017					December 31, 2016					September 30, 2016
Interest and dividend income:			(In thousands, except share and per share data)
Loans			$	58,096				$	57,736				$	53,636				$	51,499				$	50,074
Taxable investment securities			1,569					1,592					1,670					1,592					1,537
Non-taxable investment securities			1,664					1,655					1,606					1,520					1,444
Mortgage-backed securities			3,267					3,495					3,504					3,290					3,079
Federal funds sold and other			916					831					600					508					469
Total interest and dividend income			65,512					65,309					61,016					58,409					56,603
Interest expense:
Deposits			5,356					4,949					4,531					4,152					4,163
Federal Home Loan Bank borrowings			2,657					2,489					2,111					1,987					1,929
Junior subordinated debentures			761					716					671					674					591
Repurchase agreements and other short-term borrowings			111					10					61					77					49
Total interest expense			8,885					8,164					7,374					6,890					6,732
Net interest income			56,627					57,145					53,642					51,519					49,871
Provision/ (credit) for loan losses			(432		)			(6,114		)			(181		)			(1,128		)			(138		)
Net interest income after provision/ (credit) for loan losses			57,059					63,259					53,823					52,647					50,009
Fees and other income:
Investment management fees			11,274					11,081					10,839					12,408					10,717
Wealth advisory fees			13,279					12,961					12,823					12,568					12,750
Wealth management and trust fees			11,619					11,161					10,826					11,031					10,826
Other banking fee income			2,726					1,964					1,694					2,387					3,447
Gain on sale of loans, net			169					59					138					105					156
Total core fees and income			39,067					37,226					36,320					38,499					37,896
Gain/ (loss) on sale of investments, net			230					237					19					2					273
Gain/ (loss) on OREO, net			—					—					(46		)			(110		)			137
Gain on sale of offices			—					—					—					2,862					—
Other			970					555					213					2,705					1,706
Total other income			1,200					792					186					5,459					2,116
Total revenue			96,894					95,163					90,148					95,477					89,883
Operating expense:
Salaries and employee benefits			45,168					43,493					45,825					39,669					40,924
Occupancy and equipment			11,283					10,779					10,649					10,039					9,521
Professional services			3,308					3,106					3,314					2,756					2,290
Marketing and business development			2,216					1,971					1,660					2,022					1,623
Contract services and data processing			1,608					1,641					1,580					1,743					1,865
Amortization of intangibles			1,426					1,426					1,426					1,542					1,568
Impairment of goodwill			—					—					—					9,528					—
FDIC insurance			647					879					766					727					722
Restructuring			—					—					—					—					—
Other			3,690					4,526					3,560					3,817					3,157
Total operating expense			69,346					67,821					68,780					71,843					61,670
Income before income taxes			27,980					33,456					21,549					24,762					28,351
Income tax expense			8,289					9,963					6,553					7,247					8,652
Net income from continuing operations			19,691					23,493					14,996					17,515					19,699
Net income from discontinued operations (1)			1,186					1,063					1,632					1,184					1,047
Net income before attribution to noncontrolling interests			20,877					24,556					16,628					18,699					20,746
Less: Net income attributable to noncontrolling interests			1,074					1,150					966					1,147					1,110
Net income attributable to the Company			$	19,803				$	23,406				$	15,662				$	17,552				$	19,636

Boston Private Financial Holdings, Inc. Selected Financial Data (Unaudited)
			Nine Months Ended
			September 30, 2017					September 30, 2016
Interest and dividend income:			(In thousands, except share and per share data)
Loans			$	169,468				$	149,851
Taxable investment securities			4,831					4,638
Non-taxable investment securities			4,925					4,234
Mortgage-backed securities			10,266					9,126
Federal funds sold and other			2,347					1,381
Total interest and dividend income			191,837					169,230
Interest expense:
Deposits			14,836					12,420
Federal Home Loan Bank borrowings			7,257					6,021
Junior subordinated debentures			2,148					1,753
Repurchase agreements and other short-term borrowings			182					117
Total interest expense			24,423					20,311
Net interest income			167,414					148,919
Provision/ (credit) for loan losses			(6,727		)			(5,806		)
Net interest income after provision/ (credit) for loan losses			174,141					154,725
Fees and other income:
Investment management fees			33,194					32,002
Wealth advisory fees			39,063					38,013
Wealth management and trust fees			33,606					32,950
Other banking fee income			6,384					9,662
Gain on sale of loans, net			366					562
Total core fees and income			112,613					113,189
Gain/ (loss) on sale of investments, net			486					519
Gain/ (loss) on OREO, net			(46		)			417
Other			1,738					704
Total other income			2,178					1,640
Total revenue			282,205					263,748
Operating expense:
Salaries and employee benefits			134,486					124,098
Occupancy and equipment			32,711					29,036
Professional services			9,728					8,820
Marketing and business development			5,847					5,604
Contract services and data processing			4,829					5,281
Amortization of intangibles			4,278					4,740
FDIC insurance			2,292					2,757
Restructuring			—					2,017
Other			11,776					10,757
Total operating expense			205,947					193,110
Income before income taxes			82,985					76,444
Income tax expense			24,805					23,716
Net income from continuing operations			58,180					52,728
Net income from discontinued operations (1)			3,881					4,357
Net income before attribution to noncontrolling interests			62,061					57,085
Less: Net income attributable to noncontrolling interests			3,190					3,010
Net income attributable to the Company			$	58,871				$	54,075

Boston Private Financial Holdings, Inc. Selected Financial Data (Unaudited)
			Three Months Ended
PER SHARE DATA:			September 30, 2017					June 30, 2017					March 31, 2017					December 31, 2016					September 30, 2016
			(In thousands, except share and per share data)
Calculation of Income for EPS:
Net income attributable to the Company			$	19,803				$	23,406				$	15,662				$	17,552				$	19,636
Adjustments to Net Income Attributable to the Company to arrive at Net Income Attributable to Common Shareholders, treasury stock method (2)			(1,146		)			(577		)			(1,166		)			(1,798		)			(1,006		)
Net Income Attributable to the Common Shareholders, treasury stock method			$	18,657				$	22,829				$	14,496				$	15,755				$	18,630
End of Period Common Shares Outstanding			84,082,250					84,015,141					84,134,104					83,731,769					83,194,714
Weighted Average Shares Outstanding:
Weighted average basic shares outstanding			82,556,225					82,298,493					81,951,179					81,217,391					81,301,499
Weighted average diluted shares outstanding (3)			84,888,311					84,741,680					84,560,918					83,438,137					83,562,283
Diluted Total Earnings per Share			$	0.22				$	0.27				$	0.17				$	0.19				$	0.22

			Nine Months Ended
PER SHARE DATA:			September 30, 2017					September 30, 2016
			(In thousands, except share and per share data)
Calculation of Income for EPS:
Net income attributable to the Company			$	58,871				$	54,075
Adjustments to Net Income Attributable to the Company to arrive at Net Income Attributable to Common Shareholders, treasury stock method (2)			(2,889		)			(2,265		)
Net Income Attributable to the Common Shareholders, treasury stock method			$	55,982				$	51,810
Weighted Average Shares Outstanding:
Weighted average basic shares outstanding			82,270,849					81,280,014
Weighted average diluted shares outstanding (3)			84,741,172					83,430,480
Diluted Total Earnings per Share			$	0.66				$	0.62

Boston Private Financial Holdings, Inc. Selected Financial Data (Unaudited)
(In thousands, except per share data)			September 30, 2017					June 30, 2017					March 31, 2017					December 31, 2016					September 30, 2016
FINANCIAL DATA:
Book Value Per Common Share			$	9.13				$	8.95				$	8.73				$	8.61				$	8.82
Tangible Book Value Per Share (4)			$	7.16				$	6.97				$	6.73				$	6.59				$	6.65
Market Price Per Share			$	16.55				$	15.35				$	16.40				$	16.55				$	12.83
ASSETS UNDER MANAGEMENT AND ADVISORY:
Wealth Management and Trust			$	7,703,000				$	7,429,000				$	7,260,000				$	7,008,000				$	7,334,000
Investment Managers			11,083,000					10,901,000					10,907,000					10,571,000					10,176,000
Wealth Advisory			10,992,000					10,744,000					10,579,000					9,989,000					10,028,000
Less: Inter-company Relationship			(11,000		)			(11,000		)			(11,000		)			(11,000		)			(11,000		)
Total Assets Under Management and Advisory			$	29,767,000				$	29,063,000				$	28,735,000				$	27,557,000				$	27,527,000
FINANCIAL RATIOS:
Total Equity/ Total Assets			9.86		%			9.86		%			9.52		%			9.64		%			10.17		%
Tangible Common Equity/ Tangible Assets (4)			7.43		%			7.37		%			7.04		%			7.07		%			7.38		%
Tier I Common Equity/ Risk Weighted Assets (4)			10.42		%			10.28		%			9.97		%			10.00		%			10.02		%
Allowance for Loan Losses/ Total Loans			1.17		%			1.19		%			1.25		%			1.28		%			1.32		%
Allowance for Loan Losses/ Nonaccrual Loans			550		%			464		%			373		%			451		%			471		%
Return on Average Assets - Three Months Ended (Annualized)			0.96		%			1.15		%			0.79		%			0.89		%			1.03		%
Return on Average Common Equity - Three Months Ended (Annualized) (5)			9.87		%			12.12		%			8.26		%			9.07		%			10.20		%
Return on Average Tangible Common Equity - Three Months Ended (Annualized) (5)			13.24		%			16.27		%			11.43		%			12.75		%			14.30		%
Efficiency Ratio - Three Months Ended (6)			68.06		%			67.69		%			72.45		%			61.87		%			65.04		%
DEPOSIT DETAIL:
Demand deposits (noninterest-bearing)			$	1,850,833				$	1,935,622				$	1,772,854				$	1,753,648				$	1,770,631
NOW			636,013					631,973					620,280					578,657					557,482
Savings			74,333					69,892					74,293					74,162					73,480
Money market			3,009,779					3,055,642					3,176,472					3,102,048					2,879,952
Certificates of deposit			691,389					688,210					602,721					576,631					530,698
Total Deposits			$	6,262,347				$	6,381,339				$	6,246,620				$	6,085,146				$	5,812,243

Boston Private Financial Holdings, Inc. Selected Financial Data (Unaudited)
			Average Balance															Interest Income/Expense															Average Yield/Rate
(In thousands)			Three Months Ended															Three Months Ended															Three Months Ended
AVERAGE BALANCE SHEET:			09/30/17					06/30/17					09/30/16					09/30/17					06/30/17					09/30/16					09/30/17				06/30/17				09/30/16
AVERAGE ASSETS
Interest-Earning Assets:
Cash and Investments:
Taxable investment securities			$	353,374				$	363,166				$	372,852				$	1,569				$	1,592				$	1,537				1.77	%			1.75	%			1.65	%
Non-taxable investment securities (9)			295,727					294,836					271,864					2,559					2,546					2,221					3.46	%			3.45	%			3.27	%
Mortgage-backed securities			631,052					653,201					629,748					3,267					3,495					3,079					2.07	%			2.14	%			1.96	%
Federal funds sold and other			146,285					199,230					152,892					916					831					469					2.47	%			1.66	%			1.20	%
Total Cash and Investments			1,426,438					1,510,433					1,427,356					8,311					8,464					7,306					2.33	%			2.24	%			2.05	%
Loans (10):
Commercial and Industrial (9)			994,388					987,144					1,065,787					10,001					9,773					10,626					3.94	%			3.92	%			3.90	%
Commercial Real Estate (9)			2,381,583					2,358,409					1,976,327					25,579					26,433					19,860					4.20	%			4.43	%			3.93	%
Construction and Land			113,562					119,366					117,183					1,415					1,377					1,263					4.88	%			4.56	%			4.22	%
Residential			2,567,044					2,489,072					2,300,392					20,423					19,574					17,812					3.18	%			3.15	%			3.10	%
Home Equity			106,744					109,942					122,505					1,128					1,085					1,105					4.19	%			3.96	%			3.59	%
Other Consumer			187,184					195,384					182,315					1,554					1,526					1,154					3.29	%			3.13	%			2.52	%
Total Loans			6,350,505					6,259,317					5,764,509					60,100					59,768					51,820					3.73	%			3.79	%			3.55	%
Total Earning Assets			7,776,943					7,769,750					7,191,865					68,411					68,232					59,126					3.48	%			3.49	%			3.25	%
LESS: Allowance for Loan Losses			75,166					80,614					76,424
Cash and due From Banks (Non-Interest Bearing)			42,031					42,166					39,301
Other Assets			455,820					450,703					445,517
TOTAL AVERAGE ASSETS			$	8,199,628				$	8,182,005				$	7,600,259
AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY
Interest-Bearing Liabilities:
Interest-Bearing Deposits (10):
NOW			$	630,282				$	640,378				$	551,085				$	189				$	172				$	120				0.12	%			0.11	%			0.09	%
Savings			71,900					71,505					76,999					16					15					25					0.09	%			0.08	%			0.13	%
Money Market			3,065,059					3,173,768					2,922,687					3,436					3,244					2,877					0.44	%			0.41	%			0.39	%
Certificates of Deposit			671,992					665,668					560,546					1,715					1,518					1,141					1.01	%			0.91	%			0.81	%
Total Interest-Bearing Deposits (14)			4,439,233					4,551,319					4,111,317					5,356					4,949					4,163					0.48	%			0.44	%			0.40	%
Junior Subordinated Debentures			106,363					106,363					106,363					761					716					591					2.80	%			2.67	%			2.17	%
FHLB Borrowings and Other			736,035					703,149					624,528					2,768					2,499					1,978					1.47	%			1.41	%			1.24	%
Total Interest-Bearing Liabilities			5,281,631					5,360,831					4,842,208					8,885					8,164					6,732					0.66	%			0.61	%			0.55	%
Non-interest Bearing Demand Deposits (10) (14)			1,966,479					1,899,916					1,824,548
Payables and Other Liabilities			121,288					106,657					135,901
Total Average Liabilities			7,369,398					7,367,404					6,802,657
Redeemable Noncontrolling Interests			21,634					21,075					19,504
Average Shareholders' Equity			808,596					793,526					778,098
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY			$	8,199,628				$	8,182,005				$	7,600,259
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE)																		$	59,526				$	60,068				$	52,394
LESS: FTE Adjustment (9)																		2,899					2,923					2,523
Net Interest Income (GAAP Basis)																		$	56,627				$	57,145				$	49,871
Interest Rate Spread																																	2.82	%			2.88	%			2.70	%
Bank only Net Interest Margin																																	3.07	%			3.12	%			2.92	%
Net Interest Margin																																	3.02	%			3.07	%			2.88	%

Boston Private Financial Holdings, Inc. Selected Financial Data (Unaudited)
			Average Balance										Interest Income/Expense										Average Yield/Rate
(In thousands)			Nine Months Ended										Nine Months Ended										Nine Months Ended
AVERAGE BALANCE SHEET:			09/30/17					09/30/16					09/30/17					09/30/16					09/30/17				09/30/16
AVERAGE ASSETS
Interest-Earning Assets:
Cash and Investments:
Taxable investment securities			$	369,929				$	373,273				$	4,831				$	4,638				1.74	%			1.66	%
Non-taxable investment securities (9)			295,195					265,280					7,576					6,512					3.42	%			3.27	%
Mortgage-backed securities			652,159					594,461					10,266					9,126					2.10	%			2.05	%
Federal funds sold and other			169,114					160,114					2,347					1,381					1.55	%			1.14	%
Total Cash and Investments			1,486,397					1,393,128					25,020					21,657					2.21	%			2.07	%
Loans (10):
Commercial and Industrial (9)			988,449					1,072,051					29,077					32,358					3.88	%			3.97	%
Commercial Real Estate (9)			2,354,996					1,915,839					75,556					59,216					4.23	%			4.06	%
Construction and Land			115,629					147,548					4,036					4,367					4.60	%			3.89	%
Residential			2,494,151					2,262,262					58,988					52,555					3.15	%			3.10	%
Home Equity			111,423					121,849					3,302					3,260					3.96	%			3.57	%
Other Consumer			191,550					172,578					4,500					3,193					3.14	%			2.47	%
Total Loans			6,256,198					5,692,127					175,459					154,949					3.71	%			3.60	%
Total Earning Assets			7,742,595					7,085,255					200,479					176,606					3.43	%			3.30	%
LESS: Allowance for Loan Losses			77,957					78,008
Cash and due From Banks (Non-Interest Bearing)			42,006					39,869
Other Assets			436,373					432,005
TOTAL AVERAGE ASSETS			$	8,143,017				$	7,479,121
AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY
Interest-Bearing Liabilities:
Interest-Bearing Deposits (10):
NOW			$	616,054				$	549,429				$	472				$	311				0.10	%			0.08	%
Savings			72,831					75,958					49					71					0.09	%			0.13	%
Money Market			3,149,545					2,958,051					9,801					8,615					0.42	%			0.39	%
Certificates of Deposit			642,820					566,022					4,514					3,423					0.94	%			0.81	%
Total Interest-Bearing Deposits (14)			4,481,250					4,149,460					14,836					12,420					0.44	%			0.40	%
Junior Subordinated Debentures			106,363					106,363					2,148					1,753					2.66	%			2.17	%
FHLB Borrowings and Other			722,087					623,030					7,439					6,138					1.36	%			1.29	%
Total Interest-Bearing Liabilities			5,309,700					4,878,853					24,423					20,311					0.61	%			0.55	%
Non-interest Bearing Demand Deposits (10) (14)			1,903,709					1,691,872
Payables and Other Liabilities			115,622					121,601
Total Average Liabilities			7,329,031					6,692,326
Redeemable Noncontrolling Interests			21,341					20,225
Average Shareholders' Equity			792,645					766,570
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY			$	8,143,017				$	7,479,121
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE)													$	176,056				$	156,295
LESS: FTE Adjustment (9)													8,642					7,376
Net Interest Income (GAAP Basis)													$	167,414				$	148,919
Interest Rate Spread																							2.82	%			2.75	%
Bank only Net Interest Margin																							3.06	%			2.96	%
Net Interest Margin																							3.01	%			2.92	%

Boston Private Financial Holdings, Inc. Selected Financial Data (Unaudited)
(In thousands)			September 30, 2017					June 30, 2017					March 31, 2017					December 31, 2016					September 30, 2016
LOAN DATA (11):
Other Commercial and Industrial Loans:
New England			$	503,322				$	429,598				$	458,687				$	493,451				$	461,201
San Francisco Bay Area			50,686					49,163					55,289					50,578					59,936
Southern California			64,248					62,995					66,378					67,341					67,583
Total Other Commercial and Industrial Loans			$	618,256				$	541,756				$	580,354				$	611,370				$	588,720
Commercial Tax Exempt Loans:
New England			$	320,172				$	312,783				$	318,137				$	317,691				$	263,418
San Francisco Bay Area			99,540					91,666					79,517					69,064					69,366
Southern California			11,638					11,708					11,778					11,849					11,918
Total Commercial Tax Exempt Loans			$	431,350				$	416,157				$	409,432				$	398,604				$	344,702
Total Commercial and Industrial Loans			$	1,049,606				957,913					989,786					1,009,974					933,422
Commercial Real Estate Loans:
New England			$	988,788				$	993,426				$	1,017,565				$	1,012,284				$	987,758
San Francisco Bay Area			698,148					688,751					686,019					637,042					611,224
Southern California			676,223					674,168					665,043					652,918					621,336
Total Commercial Real Estate Loans			$	2,363,159				$	2,356,345				$	2,368,627				$	2,302,244				$	2,220,318
Construction and Land Loans:
New England			$	61,635				$	74,919				$	58,737				$	47,434				$	56,268
San Francisco Bay Area			20,893					22,177					28,148					29,629					26,400
Southern California			35,763					33,808					30,122					27,776					16,028
Total Construction and Land Loans			$	118,291				$	130,904				$	117,007				$	104,839				$	98,696
Residential Loans:
New England			$	1,558,587				$	1,540,393				$	1,508,138				$	1,456,592				$	1,409,385
San Francisco Bay Area			510,956					488,854					474,294					473,102					476,986
Southern California			531,245					495,978					481,184					450,167					429,719
Total Residential Loans			$	2,600,788				$	2,525,225				$	2,463,616				$	2,379,861				$	2,316,090
Home Equity Loans:
New England			$	72,149				$	71,953				$	80,904				$	87,280				$	90,592
San Francisco Bay Area			26,052					28,400					26,006					25,129					23,826
Southern California			9,026					8,196					7,626					6,408					6,851
Total Home Equity Loans			$	107,227				$	108,549				$	114,536				$	118,817				$	121,269
Other Consumer Loans:
New England			$	150,309				$	175,644				$	175,096				$	186,680				$	167,140
San Francisco Bay Area			15,302					17,909					17,163					7,517					6,764
Southern California			8,519					7,439					4,386					4,422					5,799
Total Other Consumer Loans			$	174,130				$	200,992				$	196,645				$	198,619				$	179,703
Total Loans:
New England			$	3,654,962				$	3,598,716				$	3,617,264				$	3,601,412				$	3,435,762
San Francisco Bay Area			1,421,577					1,386,920					1,366,436					1,292,061					1,274,502
Southern California			1,336,662					1,294,292					1,266,517					1,220,881					1,159,234
Total Loans			$	6,413,201				$	6,279,928				$	6,250,217				$	6,114,354				$	5,869,498

Boston Private Financial Holdings, Inc. Selected Financial Data (Unaudited)
(In thousands)			September 30, 2017					June 30, 2017					March 31, 2017					December 31, 2016					September 30, 2016
CREDIT QUALITY (11):
Special Mention Loans:
New England			$	37,569				$	34,538				$	21,596				$	14,750				$	25,248
San Francisco Bay Area			23,898					23,399					23,850					21,901					22,786
Southern California			17,207					4,327					4,350					884					6,278
Total Special Mention Loans			$	78,674				$	62,264				$	49,796				$	37,535				$	54,312
Accruing Substandard Loans (12):
New England			$	8,196				$	10,185				$	12,157				$	10,972				$	19,748
San Francisco Bay Area			11,622					6,574					15,824					15,890					19,157
Southern California			33,923					34,339					36,398					36,809					49,148
Total Accruing Substandard Loans			$	53,741				$	51,098				$	64,379				$	63,671				$	88,053
Nonaccruing Loans:
New England			$	7,380				$	9,880				$	14,407				$	10,081				$	11,020
San Francisco Bay Area			1,494					1,857					2,312					2,989					3,543
Southern California			4,749					4,439					4,226					4,245					1,928
Total Nonaccruing Loans			$	13,623				$	16,176				$	20,945				$	17,315				$	16,491
Other Real Estate Owned:
New England			$	—				$	—				$	—				$	1,690				$	1,800
San Francisco Bay Area			—					—					—					—					—
Southern California			—					—					—					—					—
Total Other Real Estate Owned			$	—				$	—				$	—				$	1,690				$	1,800
Loans 30-89 Days Past Due and Accruing (13):
New England			$	4,664				$	3,182				$	9,843				$	10,311				$	2,735
San Francisco Bay Area			430					12					10,111					591					1,018
Southern California			198					—					8,771					4,235					836
Total Loans 30-89 Days Past Due and Accruing			$	5,292				$	3,194				$	28,725				$	15,137				$	4,589
Loans (Charged-off)/ Recovered, Net for the Three Months Ended:
New England			$	73				$	667				$	79				$	1,120				$	1,704
San Francisco Bay Area			206					2,856					35					384					318
Southern California			17					(431		)			21					33					32
Total Net Loans (Charged-off)/ Recovered			$	296				$	3,092				$	135				$	1,537				$	2,054
Loans (Charged-off)/ Recovered, Net for the Nine Months Ended:
New England			$	819																			$	834
San Francisco Bay Area			3,097																				4,309
Southern California			(393		)																		(168		)
Total Net Loans (Charged-off)/ Recovered			$	3,523																			$	4,975

Boston Private Financial Holdings, Inc.  Selected Financial Data (Unaudited)
FOOTNOTES:
(1)		Net income from discontinued operations consists of contingent payments or expenses related to our divested affiliates, including Westfield Capital Management Company, LLC.
(2)		Adjustments to net income attributable to the Company to arrive at net income attributable to the common shareholders, as presented in these tables, include decrease/ (increase) in noncontrolling interests redemption value and dividends paid on preferred stock.
(3)		When the Company has positive net income from continuing operations attributable to the common shareholders, the Company adds additional shares to basic weighted average shares outstanding to arrive at diluted weighted average shares outstanding for the diluted earnings per share calculation. These additional shares reflect the assumed exercise, conversion, or contingent issuance of dilutive securities. If the additional shares would result in anti-dilution they would be excluded from the diluted earnings per share calculation. The potential dilutive shares relate to: unexercised stock options, unvested restricted stock, and unexercised stock warrants. See Part II. Item 8. “Financial Statements and Supplementary Data - Note 16: Earnings Per Share” in the Company's Annual Report on Form 10-K for the year ended December 31, 2016 for additional information.
(4)		The Company uses certain non-GAAP financial measures, such as: Tangible Book Value Per Share and the Tangible Common Equity (“TCE”) to Tangible Assets (“TA”) ratio to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.
		Reconciliations from the Company's GAAP Total Equity to Total Assets ratio to the Non-GAAP TCE to TA ratio, and from GAAP Book Value to Non-GAAP Tangible Book Value are presented below:
		The Company calculates Tangible Assets by adjusting Total Assets to exclude Goodwill and Intangible Assets.
		The Company calculates Tangible Common Equity by adjusting Total Equity to exclude non-convertible Series D Preferred stock and exclude Goodwill and Intangible Assets, net.
		(In thousands, except share and per share data)			September 30, 2017					June 30, 2017					March 31, 2017					December 31, 2016					September 30, 2016
		Total Balance Sheet Assets			$	8,269,398				$	8,107,646				$	8,215,120				$	7,970,474				$	7,681,550
		LESS: Goodwill and Intangible Assets, net			(165,001		)			(166,427		)			(167,853		)			(169,279		)			(180,349		)
		Tangible Assets (non-GAAP)			$	8,104,397				$	7,941,219				$	8,047,267				$	7,801,195				$	7,501,201
		Total Shareholders' Equity			$	815,061				$	799,419				$	781,901				$	768,481				$	781,488
		LESS: Series D Preferred Stock (non-convertible)			(47,753		)			(47,753		)			(47,753		)			(47,753		)			(47,753		)
		LESS: Goodwill and Intangible Assets, net			(165,001		)			(166,427		)			(167,853		)			(169,279		)			(180,349		)
		Total adjusting items			(212,754		)			(214,180		)			(215,606		)			(217,032		)			(228,102		)
		Tangible Common Equity (non-GAAP)			$	602,307				$	585,239				$	566,295				$	551,449				$	553,386
		Total Equity/Total Assets			9.86		%			9.86		%			9.52		%			9.64		%			10.17		%
		Tangible Common Equity/Tangible Assets (non-GAAP)			7.43		%			7.37		%			7.04		%			7.07		%			7.38		%
		Total Risk Weighted Assets *			$	5,831,558				$	5,765,471				$	5,806,853				$	5,716,037				$	5,534,711
		Tier I Common Equity *			$	607,822				$	592,845				$	578,941				$	571,663				$	554,368
		Tier I Common Equity/ Risk Weighted Assets			10.42		%			10.28		%			9.97		%			10.00		%			10.02		%
		End of Period Shares Outstanding			84,082,250					84,015,141					84,134,104					83,731,769					83,194,714
		Book Value Per Common Share			$	9.13				$	8.95				$	8.73				$	8.61				$	8.82
		Tangible Book Value Per Share (non-GAAP)			$	7.16				$	6.97				$	6.73				$	6.59				$	6.65
		* Risk Weighted Assets and Tier I Common Equity for September 30, 2017 are presented based on estimated data.

Boston Private Financial Holdings, Inc.  Selected Financial Data (Unaudited)
(5)		The Company uses certain non-GAAP financial measures, such as: Return on Average Common Equity and Return on Average Tangible Common Equity to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.
		Reconciliations from the Company's GAAP Return on Average Equity ratio to the Non-GAAP Return on Average Common Equity ratio, and the Non-GAAP Return on Average Tangible Common Equity ratio are presented below:
		The Company annualizes income data based on the number of days in the period presented and a 365 day year. The Company calculates Average Common Equity by adjusting Average Equity to exclude Average Preferred Equity. The Company calculates Average Tangible Common Equity by adjusting Average Equity to exclude Average Goodwill and Intangible Assets, net and Average Preferred Equity.
					Three Months Ended
		(In thousands)			September 30, 2017					June 30, 2017					March 31, 2017					December 31, 2016					September 30, 2016
		Total average shareholders' equity			$	808,596				$	793,526				$	774,251				$	777,466				$	778,098
		LESS: Average Series D preferred stock (non-convertible)			(47,753		)			(47,753		)			(47,753		)			(47,753		)			(47,753		)
		Average common equity (non-GAAP)			760,843					745,773					726,498					729,713					730,345
		LESS: Average goodwill and intangible assets, net			(165,766		)			(167,204		)			(168,681		)			(179,535		)			(181,191		)
		Average Tangible Common Equity (non-GAAP)			$	595,077				$	578,569				$	557,817				$	550,178				$	549,154
		Net income attributable to the Company			$	19,803				$	23,406				$	15,662				$	17,552				$	19,636
		LESS: Dividends on Series D preferred stock			(868		)			(869		)			(869		)			(869		)			(868		)
		Common net income (non-GAAP)			18,935					22,537					14,793					16,683					18,768
		ADD: Amortization of intangibles, net of tax (35%)			927					927					927					1,002					1,019
		Tangible common net income (non-GAAP)			$	19,862				$	23,464				$	15,720				$	17,685				$	19,787
		Return on Average Equity - (Annualized)			9.72		%			11.83		%			8.20		%			8.96		%			10.01		%
		Return on Average Common Equity - (Annualized) (non-GAAP)			9.87		%			12.12		%			8.26		%			9.07		%			10.20		%
		Return on Average Tangible Common Equity - (Annualized) (non-GAAP)			13.24		%			16.27		%			11.43		%			12.75		%			14.30		%

			Nine Months Ended
(In thousands)			September 30, 2017					September 30, 2016
Total average shareholders' equity			$	792,645				$	766,570
LESS: Average Series D preferred stock (non-convertible)			(47,753		)			(47,753		)
Average common equity (non-GAAP)			744,892					718,817
LESS: Average goodwill and intangible assets, net			(167,209		)			(182,794		)
Average Tangible Common Equity (non-GAAP)			$	577,683				$	536,023
Net income attributable to the Company			$	58,871				$	54,075
LESS: Dividends on Series D preferred stock			(2,606		)			(2,606		)
Common net income (non-GAAP)			56,265					51,469
ADD: Amortization of intangibles, net of tax (35%)			2,781					3,081
Tangible common net income (non-GAAP)			$	59,046				$	54,550
Return on Average Equity - (Annualized)			9.93		%			9.43		%
Return on Average Common Equity - (Annualized) (non-GAAP)			10.10		%			9.57		%
Return on Average Tangible Common Equity - (Annualized) (non-GAAP)			13.67		%			13.61		%

		Boston Private Financial Holdings, Inc.  Selected Financial Data (Unaudited)
(6)		The Company uses certain non-GAAP financial measures, such as: pre-tax, pre-provision income, total operating expenses excluding amortization of intangibles, goodwill impairment, and restructuring expense, and the efficiency ratio to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.
		Reconciliations from the Company's GAAP income from continuing operations before income taxes to non-GAAP pre-tax, pre-provision income; from GAAP total operating expense to non-GAAP total operating expense excluding amortization of intangibles, goodwill impairment, and restructuring; and from GAAP efficiency ratio to Non-GAAP efficiency ratio (FTE basis), excluding amortization of intangibles, goodwill impairment, and restructuring, are presented below:
					Three Months Ended
		(In thousands)			September 30, 2017					June 30, 2017					March 31, 2017					December 31, 2016					September 30, 2016
		Income before income taxes (GAAP)			$	27,980				$	33,456				$	21,549				$	24,762				$	28,351
		ADD BACK: Provision/ (credit) for loan losses			(432		)			(6,114		)			(181		)			(1,128		)			(138		)
		Pre-tax, pre-provision income (non-GAAP)			$	27,548				$	27,342				$	21,368				$	23,634				$	28,213
		Total operating expense (GAAP)			$	69,346				$	67,821				$	68,780				$	71,843				$	61,670
		Less: Amortization of intangibles			1,426					1,426					1,426					1,542					1,568
		Less: Goodwill impairment			—					—					—					9,528					—
		Total operating expense (excluding amortization of intangibles, goodwill impairment, and restructuring) (non-GAAP)			$	67,920				$	66,395				$	67,354				$	60,773				$	60,102
		Net interest income			$	56,627				$	57,145				$	53,642				$	51,519				$	49,871
		Total core fees and income			39,067					37,226					36,320					38,499					37,896
		Total other income			1,200					792					186					5,459					2,116
		FTE income			2,899					2,923					2,820					2,754					2,523
		Total revenue (FTE basis)			$	99,793				$	98,086				$	92,968				$	98,231				$	92,406
		Efficiency Ratio (GAAP)			71.57		%			71.27		%			76.30		%			75.25		%			68.61		%
		Efficiency Ratio, FTE Basis excluding amortization of intangibles, goodwill impairment, and restructuring (non-GAAP)			68.06		%			67.69		%			72.45		%			61.87		%			65.04		%

			Nine Months Ended
(In thousands)			September 30, 2017					September 30, 2016
Income before income taxes (GAAP)			$	82,985				$	76,444
ADD BACK: Provision/ (credit) for loan losses			(6,727		)			(5,806		)
Pre-tax, pre-provision income (non-GAAP)			$	76,258				$	70,638
Total operating expense (GAAP)			$	205,947				$	193,110
Less: Amortization of intangibles			4,278					4,740
Less: Restructuring			—					2,017
Total operating expense (excluding amortization of intangibles, goodwill impairment, and restructuring) (non-GAAP)			$	201,669				$	186,353
Net interest income			$	167,414				$	148,919
Total core fees and income			112,613					113,189
Total other income			2,178					1,640
FTE income			8,642					7,376
Total revenue (FTE basis)			$	290,847				$	271,124
Efficiency Ratio (GAAP)			72.98		%			73.22		%
Efficiency Ratio, FTE Basis excluding amortization of intangibles, goodwill impairment, and restructuring (non-GAAP)			69.34		%			68.73		%

(7)		The Company uses certain non-GAAP financial measures, such as: net income attributable to the Company excluding notable items and diluted earnings per share excluding notable items to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.
		Reconciliations from the Company's GAAP net income attributable to the Company to non-GAAP net income attributable to the Company excluding notable items and from GAAP diluted earnings per share to non-GAAP diluted earnings per share excluding notable items are presented below:
					Three Months Ended
		(In thousands, except share and per share data)			September 30, 2017					June 30, 2017					March 31, 2017					December 31, 2016					September 30, 2016
		Net income attributable to the Company (GAAP)			$	19,803				$	23,406				$	15,662				$	17,552				$	19,636
		LESS: Gain on sale of offices			—					—					—					2,862					—
		ADD BACK: Impairment of goodwill			—					—					—					9,528					—
		Tax effect at 35% statutory rate			—					—					—					(2,333		)			—
		Net income attributable to the Company excluding notable items (non-GAAP)			$	19,803				$	23,406				$	15,662				$	21,885				$	19,636
		Net Income Attributable to the Common Shareholders, treasury stock method (GAAP)			$	18,657				$	22,829				$	14,496				$	15,755				$	18,630
		LESS: Gain on sale of offices			—					—					—					2,862					—
		ADD BACK: Impairment of goodwill			—					—					—					9,528					—
		Tax effect at 35% statutory rate			—					—					—					(2,333		)			—
		Net Income Attributable to the Common Shareholders, treasury stock method, excluding notable items (non-GAAP)			$	18,657				$	22,829				$	14,496				$	20,088				$	18,630
		Weighted average diluted shares outstanding (3)			84,888,311					84,741,680					84,560,918					83,438,137					83,562,283
		Diluted Total Earnings per Share (GAAP)			$	0.22				$	0.27				$	0.17				$	0.19				$	0.22
		Diluted Total Earnings per Share, excluding notable items (non-GAAP)			$	0.22				$	0.27				$	0.17				$	0.24				$	0.22

(8)		The Company uses certain non-GAAP financial measures, such as: net interest income excluding interest recovered on previous nonaccrual loans and net interest margin excluding interest recovered on previous nonaccrual loans, also referred to as core net interest margin, to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.
		Reconciliations from the Company's GAAP net interest income to non-GAAP net interest income excluding interest recovered on previous nonaccrual loans; and from GAAP net interest margin to non-GAAP net interest margin excluding interest recovered on previous nonaccrual loans, are presented below:
					Three Months Ended
		(In thousands)			September 30, 2017					June 30, 2017					March 31, 2017					December 31, 2016					September 30, 2016
		Net interest income (GAAP basis)			$	56,627				$	57,145				$	53,642				$	51,519				$	49,871
		ADD: FTE income			2,899					2,923					2,820					2,754					2,523
		Net interest income, FTE basis			59,526					60,068					56,462					54,273					52,394
		LESS: Interest recovered on previously nonaccrual loans			133					1,971					299					365					343
		Net interest income, FTE basis, excluding interest recovered on previously nonaccrual loans (non-GAAP)			59,393					58,097					56,163					53,908					52,051
		Net Interest Margin (FTE basis)			3.02		%			3.07		%			2.94		%			2.88		%			2.88		%
		Net Interest Margin, FTE basis, excluding interest recovered on previously nonaccrual loans (non-GAAP) - also referred to as core Net Interest Margin			3.02		%			2.97		%			2.92		%			2.86		%			2.86		%
(9)		Interest income on Non-taxable Investments and Loans are presented on an FTE basis using the federal statutory rate of 35% for each period presented.
(10)		Average Loans includes Loans Held for Sale and Nonaccrual Loans. Average Deposits includes Deposits Held for Sale, if any.
(11)		The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lender's regional offices.
(12)		Accruing substandard loans include loans that are classified as substandard but are still accruing interest income. Boston Private Bank & Trust Company may classify a loan as substandard where known information about possible credit problems of the related borrowers causes management to have doubts as to the ability of such borrowers to comply with the present repayment terms and which may result in disclosure of such loans as nonaccrual at some time in the future.
(13)		At September 30, 2017 June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, the Company had no loans outstanding more than 90 days past due but still on accrual status.
(14)		Average Total Deposits is the sum of Average Total Interest-Bearing Deposits and Average Noninterest Bearing Demand Deposits.

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Boston Private Financial Holdings, Inc.
Adam Bromley
(617) 912-4386
[email protected]