Boston Private Financial Holdings Inc (BPFH)

[ScovilleUnits]

BPFH to Sell Gibraltar Private Bank & Trust for $93 Million

8-K: http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=6518825

Thursday , September 17, 2009 16:46ET

BOSTON, Sep 17, 2009 (BUSINESS WIRE) -- Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) today announced that it has completed the sale of Coral Gables, Florida-based Gibraltar Private Bank & Trust for $93 million to private investors.

"This transaction improves our capital position, strengthens our balance sheet and improves our consolidated credit metrics," said Timothy L. Vaill, Chairman and CEO of BPFH. "It also increases our liquidity, creating flexibility that opens up a variety of options such as reallocating capital to our strongest performers to drive organic growth, reducing debt, and optimizing our capital structure."

The key elements of the Gibraltar Private sale include the following:

-- $93 million in cash proceeds

-- $1.4 billion reduction in total assets, boosting BPFH's key TCE/TA ratio by approximately 100 basis points to 6.2 percent (1)

-- $50 million reduction of non-performing assets, a 34% decline(1)

-- $91 million reduction in classified loans, a 39% decline(1)

-- One-time book loss of approximately $35 million, with a $17 million reduction to tangible capital(2)

"While Gibraltar has outperformed many of its South Florida peers, the market continues to experience economic stress with a long-term projected recovery. This sale enables BPFH to exit the Florida market while receiving fair value for our investment. We wish Gibraltar's CEO Steve Hayworth and his new private investors all the best for the future," Vaill added.

Gibraltar Private CEO Steve Hayworth will continue to serve as Gibraltar Private's CEO; bank personnel and management will also remain. The bank will continue to be headquartered in Coral Gables and retain its branch office in New York.

Footnotes

(1) June, 30, 2009 financials as reported adjusted (i) to exclude Gibraltar Private Bank financial results as of 6/30/09, and (ii) to include the net cash received as of the transaction date.

A reconciliation of Company's GAAP Total Equity to Total Assets ratio to the Non-GAAP Tangible Common Equity to Tangible Assets ratio is presented below:

The Company calculates tangible common equity by adjusting total equity to exclude goodwill and intangible assets as well as equity received from the TARP funding of $154 million. The Company calculates tangible assets by adjusting total assets to exclude goodwill and intangible assets. The Company uses certain non-GAAP financial measures, such as the Tangible Common Equity to Tangible Assets 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.

                                             June 30, 2009        June 30, 2009 
                                              As Reported          Pro Forma (1) 
 Total Balance Sheet Assets                   $    7,260,654       $    5,838,647 
 LESS: Goodwill and intangible assets, Net         (168,064  )          (151,158  ) 
 Tangible Assets (non-GAAP)                        7,092,590            5,687,489 
 Total Equity                                      648,035              614,531 
 LESS: Goodwill and intangible assets, Net         (168,064  )          (151,158  ) 
 TARP funding                                      (154,000  )          (154,000  ) 
 ADD: Difference between redemption value of       44,181               44,181 
 non-controlling 
 interests and value under ARB 51 
 Total adjusting items                             (277,883  )          (260,977  ) 
 Tangible Common Equity                            370,152              353,554 
 (non-GAAP) 
 Total Equity/Total Assets                         8.93      %          10.53     % 
 Tangible Common Equity/                           5.22      %          6.22      % 
 Tangible Assets (non-GAAP)

(2) Excludes transaction costs of approximately $2.5 million.

Conference Call

Management will hold a conference call at 9:00 a.m. Eastern Time on Friday, September 18, to discuss the transaction in more detail. To access the call:

Dial In #: [phone] International Dial In #: [phone] Passcode: 16154461

Replay Information: Available from 9/18/2009 to 9/25/2009 Dial In #: [phone] International Dial In #: [phone] Passcode: 27439348

Boston Private Financial Holdings

Boston Private Financial Holdings is a national financial services organization comprised of independently operated affiliates located in key regions of the U.S. that offer private banking, wealth advisory and investment management services to the high net worth marketplace, selected businesses and institutions. The Company enters demographically attractive markets through a very selective acquisition process and then expands by way of organic growth. It employs a distinct business strategy, empowering its affiliates to run independently such that they can best serve their clients at the local level, while at the same time providing strategic oversight and access to resources, both financial and intellectual, to support management, compliance, legal, marketing, and operations. (NASDAQ: BPFH).