Boston Private Financial Holdings, Inc. (NASDAQ:BPFH) Q1 2018 Earnings Conference Call - Preliminary Transcript

Apr 19, 2018 • 08:00 am ET

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Boston Private Financial Holdings, Inc. (NASDAQ:BPFH) Q1 2018 Earnings Conference Call - Preliminary Transcript

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Presentation
Operator
Operator

Good morning and welcome to the Boston Private Financial Holdings Q1 2018 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask questions. (Operator Instructions). Please note this event is being recorded.

And now, I would like to turn the conference over to Adam Bromley. Please go ahead, sir.

Executive
Adam Bromley

Thank you, Keith, and good morning, everyone. This is Adam Bromley, Director of Investor Relations at Boston Private Financial Holdings. We welcome you to this conference call to discuss our first quarter 2018 earnings.

Our call this morning includes references to an earnings presentation, which can be found in the Investor Relations section of our website bostonprivate.com. Joining me this morning are Clay Deutsch, Chief Executive Officer and Steve Gaven, Chief Financial Officer.

This call contains forward-looking statements regarding strategic objectives and expectations for future results of operations and financial prospects. They are based upon the current belief and expectations of Boston Private's management and are subject to certain risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.

I refer you also to the forward-looking statements qualifier contained in our earnings release, which identified a number of factors that could cause material differences between actual and anticipated results or other expectations expressed.

Additional factors that could cause Boston Private's results to differ materially from those described in the forward-looking statements can be found in the company's filings submitted to the SEC.

All subsequent written and oral forward-looking statements attributable to Boston Private or any person acting on our behalf are expressly qualified by these cautionary statements. Boston Private does not undertake any obligation to update any forward-looking statements to reflect circumstances or events that occur after the forward-looking statements are made.

With that, I will now turn it over to Clay Deutsch.

Executive
Clay Deutsch

Good morning. Thank you all for joining the call this morning.

In the first quarter our company generated net income of $22.7 million or $0.27 per share compared to $0.22 per share on an operating basis last quarter and $0.17 per share in the first quarter of 2017. Return on average common equity for the quarter was 12% and return on average tangible common equity was 15.2%.

Overall, we're pleased with this quarter's results. Our company demonstrated positive operating leverage of 470 basis points as pre-tax pre-provision earnings increased 23% year-over-year.

Driving operating leverage was strong revenue growth, with expense growth in line with our expectations. The private bank and our market-linked fee businesses offered balanced contributions to revenue growth, as net interest income increased 7% year-over-year and Wealth Management and Trust segment revenue increased 12% year-over-year.

Our affiliates contributed year-over-year revenue growth of 5%.

Our non-interest expense during the first quarter despite being impacted by seasonal compensation expenses, came in very much in line with expectations following investments in staffing and technology in 2017, a lower federal tax rate added further benefit to our bottom line.At the same time, the private