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- 1. Boston Private: Long-Term Value Creation Q2 2007 Timothy L. Vaill Chairman and Chief Executive Officer Walter M. Pressey President and Interim Chief Financial Officer
- 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 factors include, among others, strategic growth rates, the strength of the company's business, the quality of the companys loan portfolio, changes in the interest rate environment, adverse conditions in the capital markets and the impact of such conditions on Boston Privates asset management activities, competitive pressures from other financial institutions, the risk that goodwill and intangibles recorded in the Companys financial statements will become impaired, and risks related to the identification and implementation of acquisitions, as well as theother 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.
- 3. Agenda
- Overview
- Strategy
- Results
- Future
- Conclusion
- 4. Overview Boston Private Today
- 5. Boston Privates Mission: To provide wealth management solutions to successful people, their families, private companies and selected institutions through trusted relationships that help preserve, grow and transfer assets over the clients financial lifecycle.
- 6. Corporate Profile
- Six regions
- 14 affiliates
- 45 offices
- 1,039 employees
- Experienced team in the field
- Shared values and culture
- Key Driver: client service
- Annualized Revenues: $368 million
- Annualized Net income: $52 million
- Q1 2007 EPS:GAAP $0.34
- Cash $0.44
- Market cap: $1 billion
- 7. Wealth Management Members Private Banking Wealth Advisory Investment Management
- 8. Recent Events
- On March 5, 2007, Boston Private announced the acquisition of Charter Bank in Bellevue, Washington
- Charter is a $320 million commercial bank with 4 locations in key demographic areas
- Charter will work closely with Coldstream Capital Management to bring comprehensive wealth management services to the HNW and small business markets
- 9. Recent Events (cont)
- Charter had double-digit growth over last 5 years in loans deposit and net income
- Entire management team has been retained
- The transaction will close in the third quarter
- 10. National Association of Corporate Directors Board of the Year Award
- 30-year old national organization
- Inaugural NACD Board of the Year Award
- Honoring excellence across the Board
- Outstanding contributions to the Company
- Maintaining high levels of professional standards
- 11. Primary Focus:High Net Worth Market Preserve, grow and transfer assets. . . Private Banking Trust Services Jumbo Mortgages Business Loans Investment Management Estate Planning Tax Strategies Financial Planning Philanthropy . . . and create a unique customer experience
- 12. Corporate Leadership Team Extensive experience across business disciplines Edgar, Dunn Consulting 30+ President, Western Region Jon Parker State Street Global Advisors 20+ President, Eastern Region Jay Cromarty Lesavoy Financial Planning 10+ Corporate Development Katie Kearney Ropes & Gray, Loomis Sayles 20+ General Counsel Megan ChambersThe Boston Company 35+ President Walt Pressey The Boston Company35+ Chairman & CEO Tim Vaill Previous Years Title Executive
- 13. Strategy Capitalizing on a Unique Business Model
- 14. Boston Privates Strategic Vision: To build a national wealth management franchise that is broadly recognizedparticularly among the newly affluent--as the preferred place to have financial assets managed, and to generate an above average total return to our shareholders over the long-term
- 15. How are we different? Sustainable Organic Growth Capital Stewardship Unique Business Model Enabled by Strategic Acquisitions Targeted Market Research Adding Distribution Channels Guided by Foundation of HC Support Diversification Focus BalancedAffiliate Management In - Market Business Expansion
- 16. Targeted Market Research Source:CapGemini; World Wealth Report 2005.8.4% Annually HNW Investable Assets and Related Fee Income Focus on HNW demographic and private companies Percent of Millionaires Who Own Private Companies Source:VIP Forum $45B $75B
- 17. Strategic Acquisitions Follow intellectual and investment capital Intellectual Capital Investment Capital Business Formation Infrastructure Support Attractive Regions For Acquisitions Wealth Accumulation
- 18. In - Market Business Expansion
- Fund expansion and growth in numerous ways
- Local tie-in acquisitions
- Encino, Kanon Bloch Carre, CH&P
- Experienced team lift-outs with clients and AUM
- New office development
- Beverly, Hingham, Lexington, Los Altos, Naples, New York
- Aggressive marketing and sales programs
- Advertising campaigns, sales training
- 19. Adding Distribution Channels
- Small platform, high-touch environments
- Firms embedded in local communities
- Centers-of-influence
- National intermediaries
- Broker/Dealers
- Institutional consultants
- Managed accounts
- Sub-advisory and SMA
- 20. Foundation of Support
- Intellectual Capital
- Market research
- Strategic advice and counsel
- Legal, compliance, HR
- Leadership/succession planning
- Financial Strength
- Access to public capital
- Co-investing for business growth
- Consolidated balance sheet
- Liquidity for principals
- Entrepreneurial Culture
- Consultative advisor
- Safety net enables risk taking
- Support autonomy
- Communications Network
- Exchange of best practices
- Professional forums
- Internet/Intranet development
- 21. Capital Stewardship Efficient cash management and capital deployment Holding Company External Capital Dividends toShareholders Capital Users Capital Generators
- 22. Diversification Focus Foundations & Endowments:11% ERISA /Public: 23% High Net Worth: 49% Sub-Advisory: 14% Equity(Growth): 40% Equity (Value): 31% Fixed Income: 7% Corporate: 3% Alternative: 8% Balanced: 14% Banking Activity DEPOSITS$4.1B MMDA: 50% DDAs: 18% CDs: 23% Commercial:58% Residential Mortgage: 36% NOW: 9% Consumer & Home Equity: 6% LOANS$4.5B Private Banking: 50% Wealth Advisory: 8% Investment Management: 42% AUM By Client Type AUM By Investment Style New York: 8% Florida: 15% New England: 53% N. California: 16% Revenue By Geography Revenue By Business Type S. California: 8% Enables sustainable & non-volatile returns
- 23. Balanced Affiliate Management Autonomy with strong governance Governance Compliance Capital Market / ClientsEmployees Operations Holding Company Affiliate Partners Oversight Independence
- 24. Results Unique Business Model Overall Business Growth Sustainable Organic Growth
- 25. Overall Revenue Growth10 Year CAGR 25% $344.9 $263.3 $196.8 $116.0 $133.6 $82.5 $105.4 $66.3 $53.2 $36.6 $45.1 $30.4 Q1 07 Total Revenues:$92 million
- 26. Overall AUM Growth $2.2B $2.6B $3.7B $5.7B $6.5B $6.4B $11.0B $19.3B $21.3B $0.7B 10 Year CAGR 46% $29.8 Q1 07 Total AUM:$34 billion
- 27. Overall Loan and Deposit Growth* 10 Year CAGR 36% 10 Year CAGR 35% $206M $4.3B $209M $4.1B * Includes Acquisitions Q1 07 Total Loans and Deposits:$4.5 and $4.1 billion
- 28. Overall Net Income Growth 10 Year CAGR 23% Q1 07 Net Income:$13.1 million
- 29. Overall Earnings Per Share Growth 10 Year CAGR 16% Cash Basis Cash Basis 10 Year CAGR 15% GAAP Basis $1.82 Q1 07 Cash and GAAP EPS:$0.44 and $0.34
- 30. Sustainable Organic Growth Organic GrowthAfter 3 Years Ownershipby Boston Private Note:Based on Revenues
- 31. Sustainable Organic Growth Westfield AUM: +686% Borel Net Income: +103% Boston Private BankAssets:+2,860%No acquisitions during this time 5 Year Organic Growth Recordin New England Organic Growth at Affiliates Since Acquisition
- 32. Executive Retention Rates * Absent normal retirements or forced terminations Retenti