BOSTON PRIVATE: A National Wealth Management Franchise

Transcription

1 BOSTON PRIVATE: A National Wealth Management Franchise Timothy L. Vaill Chairman and CEO Walter M. Pressey Vice Chairman & President David J. Kaye Chief Financial Officer Q1 2008

2 Forward Looking Statements Statements in this presentation that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These risks and uncertainties include, among others, strategic growth rates, the strength of the company's business, changes in the interest rate environment, adverse conditions in the capital markets and the impact of such conditions on Boston Private s private banking and asset management activities, competitive pressures from other financial institutions, the effects of national and local economic conditions, changes in asset quality and loan default rates, adequacy of loan loss reserves the risk that goodwill and intangibles recorded in the Company s financial statements will become impaired, and risks related to the identification and implementation of acquisitions, as well as the other risks and uncertainties detailed in Boston Private's Annual Report on Form 10-K and other filings submitted to the Securities and Exchange Commission. Boston Private does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made. 2

3 Agenda I. Company Overview II. III. 3

4 I. Company Overview

5 BOSTON PRIVATE: Is a unique group of private banks, wealth advisors and investment managers Provides wealth management services to the HNW market, private companies and selected institutions Has offices in highly desirable geographic regions Has affiliates who operate independently under their own brand names 5

6 The Boston Private Group Private Banking Wealth Advisory Investment Management 6

7 Value Proposition Boston Private affiliates deliver a special client experience over a lifetime by building trusted relationships Private Banking Business Loans Jumbo Mortgages Financial Planning Investment Management Tax Strategies Estate Planning Philanthropy Trust Services Grow Assets Preserve Assets Transfer Assets Client lifetime 7

8 Corporate Snapshot National Franchise Assets 7 regions 15 affiliates 46 offices AUM/advisory (1) : Bank B/S: Loans: Deposits: $38.8 billion $6.5 billion $5.3 billion $4.4 billion People Economics 12/31/07 Proven leadership teams Shared values and culture Low turnover 1,192 employees (1) Revenues (1) : $410 million Operating Income*: $51 million EPS: GAAP $0.11 Operating* $1.40 Cash $1.70 Market cap: $1 billion *GAAP without impairment (1) Includes pro-forma with Davidson 8

9 Boston Private Competitive Advantages Non-integrated business model Affiliate operating independence Resources and governing policies of parent Local delivery platform High-touch truly local service 2) Local Service Platform Relationship driven businesses Entrepreneurial work environment Safety net to explore new strategies Dynamic, satisfying workplace Revenue diversification Long term growth with less volatility Diversified by business type, client type, geography, and investment style 9

10 Diversification Provides Sustainable Growth Banking Activity Revenue By Business Type AUM By Client Type NOW: 10% DEPOSITS $4.4B CDs: 26% Wealth Advisory: 10% Corporate: 3% Foundations & Endowments: 10% Sub-Advisory: 13% MMDA: 47% DDAs: 17% Investment Management: 41% Private Banking: 49% ERISA /Public: 20% SMA: 21% High Net Worth: 33% LOANS $5.3B Revenue By Geography AUM By Investment Style Consumer & Home Equity: 6% Residential Mortgage: 34% Commercial: 60% S. California: 8% Florida: 14% New York: 8% Philly: 1% N. California: 15% Pacific NW: 2% New England: 52% Balanced: 15% Alternative: 7% Fixed Income: 10% Equity (Value): 25% Equity (Growth): 43% (Includes Davidson Trust Company at December 31, 2007) 10

11 Boston Private Creates Value Boston Private has consistently performed Total Return Performance (%) BPFH-US ( %) SNL Bank and Thrift (+58.60%) SNL Asset Manager ( %) S&P 500 (+64.15%) Source: SNL Dec-97 Dec-99 Dec-01 Dec-03 Dec-05 Dec-07 11

12 II.

13 Build a national franchise that is: Recognized by first-generation wealth as the preferred place to have assets managed Recognized by investors for superior total shareholder return over the long-term Tactics 1. Enhance/expand existing franchise 2. Invest for organic growth 3. Attract & retain top talent 4. Build corporate brand 13

14 Enhance/Expand Existing Franchise HNW market is potentially lucrative U.S. investable wealth growing at over 8% per year U.S. HNW Investable Assets and Associated Fee Incom e One-third of U.S. businesses will change hands a 10 year period Percent of Total US Businesses Expecting a Change in Ownership $9T 8.4% Annually $14T $45B $75B 9% 15% 8% In 6-10 Years ( ) In 3-5 Years ( ) Wi t h i n 2 Year s ( ) Source: CapGemini; World Wealth Report Source: 2005 Grant Thornton International Business Owner Survey 14

15 Enhance/Expand Existing Franchise Follow intellectual/investment capital to identify attractive regions for prospective partners Intellectual Capital Investment Capital Business Formation Wealth Accumulation Infrastructure Support Attractive Regions For Acquisitions 15

16 Enhance/Expand Existing Franchise Be located in the top newly-affluent regions in the next 5 years Median Household Income By County $60-90K $38-60K $4-37K Existing location Potential location Source: U.S. Census,

17 Invest for Organic Growth Provide centralized support to fuel affiliate growth Financial Capital Access to capital Consolidated balance sheet Liquidity for principals Intellectual Resources Marketing and research Strategic advice and counsel Legal, Compliance, HR Communications Forums Share best practices Professional forums Internet/Intranet development Entrepreneurial Guidance Safety net to explore new strategies Autonomy & independence Leadership/succession planning 17

18 Invest for Organic Growth Organic Growth After 3 Years of Ownership by Boston Private 78% 59% 71% 88% Based on Revenues Aggregate Wealth Advisory Investm ent Management Private Ban k ing 18

19 Invest for Organic Growth Case Study #1: Borel Private Bank Borel 5 Year Organic Growth: Pre-deal vs. Post-deal 25% 20% 15% 12% Borel Pre-Acquisition CAGR 13% 13% 21% 25% 20% 15% 16% Borel Post-Acquisition 2002-YTD 2007 CAGR 21% 15% 15% 10% 10% 5% 5% 0% Assets Loans Deposits Net Income 0% Assets Loans Deposits Net Income San Francisco Area Median Growth 19

20 Invest for Organic Growth Case Study #2: New England Region New England Affiliates Combined 5 Year Organic Growth* 25% 23% 5 yr CAGR 20% 15% 10% 14% 17% 16% 17% 5% 0% Revenue Net Income AUM Loans Deposits * No acquisitions during this time 20

21 Build a Corporate Brand Boston Private House of Brands: Unified by commitment to service excellence 21

22 III.

23 EPS Growth $1.37 $1.09 $0.98 $1.04 $0.88 $ Year CAGR 14% Cash Basis 10 Year CAGR 17% Operating Basis* $1.70 $1.82 $1.70 $0.45 $ *GAAP excluding impairment 23

24 Revenue Growth $ Year CAGR 25% $263.3 $344.9 $196.8 $45.1 $53.2 $66.3 $82.5 $105.4 $116.0 $ Private Banking Investment Management Wealth Advisory 24

25 Loan Growth $5.3B 10 Year CAGR 33% $3.6B $4.3B $2.2B $0.3B $0.3B $0.5B $0.9B $1.1B $1.3B $1.6B New England N. Cal S. Cal Flo rida Pac N.W. 25

26 Loan Portfolio Overview Diversified loan portfolio by loan type Consumer: 2% Home Equity: 4% Residential Mortgage: 34% Commercial: 60% Commercial Real Estate Unsecured Construction Commercial & Industrial Secured by Cash, Marketable Securities Residential Investment Properties 44% 3% 26% 10% 5% 5% As of 12/31/07 26

27 Excellent Long-term Deposit Growth $4.1B $4.4B 10 Year CAGR 31% $2.4B $3.7B $0.7B $1.1B $1.4B $1.7B $0.3B $0.3B $0.4B Checking Savings CDs 27

28 Robust AUM Growth $37.8B 10 Year CAGR 33% $19.3B $21.3B $29.8B $11.0B $2.2B $2.6B $3.7B $5.7B $6.5B $6.4B Private Banking Investment Management Wealth Adviso ry 28

29 Competitive Investment Performance Boston Private Affiliates Fall within Top Quartile for 1 and 3 Year Periods 79% of AUM Falls within Top Quartile 1 Year 76% of AUM Falls within Top Quartile 3 Year 3% 4% Top Decile (100%- 90%) Top Quartile (75%- 89%) 18% 29% 20% 74% 2nd Quartile (50% - 74%) Other (<50%) 2% 50% Note: Represents $19.3B of AUM Source: Evestment Alliance using ease Analytics System, 12/

30 Capital Account TANGIBLE EQUITY TO TANGIBLE ASSETS RATIO ($ Millions) (12/31/07) Credit Syndicate Regulatory View GAAP Calculation TANGIBLE EQUITY* $204 $204 $204 Trust Preferred 50% $115 $231 Tax Adjusted Goodwill $34 TANGIBLE EQUITY* $353 $435 N/A N/A $204 TANGIBLE ASSETS $6,360 $6,360 $6,360 RATIO TE/TA 5.55% 6.84% 3.21% *Based on mid-point of current range 30

31 Capital Stewardship Cash generators finance strategic capital investment SOURCES Dividends from Affiliates Raise new capital Borrow Earnings Holding Company USES Reinvest in Affiliates Acquisitions Repay debt Seed capital Dividends to Shareholders 31

32 Boston Private Has Created Long-Term Value For Shareholders Unique and validated business model Demonstrated acquisition success and organic growth Financial sustainability through diversification Attraction and retention of superior professionals Attractive total returns to shareholders over 10-years 32

33 BOSTON PRIVATE: A National Wealth Management Franchise Timothy L. Vaill Chairman and CEO Walter M. Pressey Vice Chairman & President David J. Kaye Chief Financial Officer Q1 2008