BOSTON PRIVATE FINANCIAL HOLDINGS INC (Form: 8-K, Received: 01/18/2017 16:32:45)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): January 18, 2017

Boston Private Financial Holdings, Inc.

(Exact Name of Registrant as Specified in its Charter)



Massachusetts	0-17089	04-2976299
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

Ten Post Office Square, Boston, Massachusetts 02109

(Address of principal executive offices)

(617) 912-1900

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Item 2.02.	Results of Operations and Financial Condition.

The information in this Current Report on Form 8-K furnished under this Item 2.02, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. Furthermore, the information in this Current Report on Form 8-K furnished under this Item 2.02, including Exhibit 99.1 attached hereto, shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.

On January 18, 2017 , Boston Private Financial Holdings, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter and year ended December 31, 2016 . The text of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On January 18, 2017, the Board of the Company adopted Amended and Restated By-Laws of the Company to provide for majority voting in uncontested director elections. Article 1, Section 8 of the Amended and Restated Bylaws provides that in order to be elected in an uncontested election, a director nominee must receive a majority of the votes cast as to such nominee by the shares entitled to vote in the election at a meeting at which a quorum is present. An incumbent director nominee who fails to receive at least a majority of the votes cast at such a meeting will be required to offer to resign from the Board. The Board will then consider such Director’s offer to resign, taking into consideration any such factors that it deems relevant in deciding whether to accept such Director’s resignation. The Amended and Restated By-Laws retain the plurality voting standard in contested elections where the number of nominees exceeds the number of directors to be elected.

The foregoing summary is qualified in its entirety by reference to the text of the Amended and Restated Bylaws, a copy of which is attached hereto as Exhibit 3.2 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

3.2 Amended and Restated Bylaws of Boston Private Financial Holdings, Inc., as amended on January 18, 2017.

99.1 Earnings Press Release of the Company dated January 18, 2017 .

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunder duly authorized.



	BOSTON PRIVATE FINANCIAL HOLDINGS, INC.

	By:	/S/ D AVID J. K AYE
	Name:	David J. Kaye
	Title:	Executive Vice President, Chief Financial and Administrative Officer
Date: January 18, 2017

EXHIBIT INDEX



Exhibit No.			Description
3.2			Amended and Restated Bylaws of Boston Private Financial Holdings, Inc., as amended on January 18, 2017
99.1			Earnings Press Release of the Company dated January 18, 2017

Exhibit 3.2

BOSTON PRIVATE FINANCIAL HOLDINGS, INC.

AMENDED AND RESTATED BYLAWS

ARTICLE I

Shareholders

1. Annual Meeting . The annual meeting of shareholders shall be held at the date, time and place within or without the United States which is fixed by the majority of the Board of Directors, the Chairman of the Board, if one is elected, or the President, which time, date and place may subsequently be changed at any time by vote of the Board of Directors. The purposes for which such annual meeting is to be held, in addition to those prescribed by law, by the Articles of Organization or by these Bylaws, shall be for electing Directors and for such other purposes as shall be specified by the Board of Directors, the Chairman of the Board, if one is elected, or the President and set forth in the notice for the meeting pursuant to Section 4 of this Article I. In the event the time for an annual meeting is not fixed in accordance with these Bylaws to be held within 13 months after the last annual meeting was held, the Board of Directors may designate a special meeting held thereafter as a special meeting in lieu of the annual meeting, and such special meeting shall have, for purposes of these Bylaws or otherwise, all the force and effect of an annual meeting. Any and all references hereafter in these Bylaws to an annual meeting or annual meetings shall be deemed to refer also to any special meeting(s) in lieu thereof.

2. Special Meetings . Except as provided in this Section 2 of Article I, special meetings of shareholders may be called only by the Board of Directors or the President. Special meetings shall be called by the Secretary or in case of the death, absence, incapacity or refusal of the Secretary, by any other officer, upon written application of one or more shareholders who hold at least (i) 75% in interest of the capital stock entitled to vote at such meeting or (ii) such lesser percentage, if any, (but not less than 40%) as shall be determined to be the maximum percentage which the Corporation is permitted by applicable law to establish for the call of such a meeting. The date, time and place of any special meeting and the record date for determining the shareholders having the right to notice of and to vote at such meeting shall be determined by the Board of Directors. Only business within the purpose or purposes described in the meeting notice may be conducted at a special meeting.

3. Notice of Shareholder Business and Nominations .


(a)	Annual Meetings of Shareholders .


(1)	Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the shareholders may be made at an annual meeting of shareholders (a) pursuant to the Corporation’s notice of

meeting, (b) by or at the direction of the Board of Directors or (c) by any shareholder of the Corporation who was a shareholder of record at the time of giving of notice provided for in this Bylaw, who is entitled to vote at the meeting, who is present at the meeting and who complies with the notice procedures set forth in this Bylaw. In addition to the other requirements set forth in this Bylaw, for any proposal of business to be considered at an annual meeting such proposal must be a proper subject for action by shareholders of the Corporation under Massachusetts law.

(2)

For nominations or other business to be properly brought before the annual meeting of shareholders, by a shareholder pursuant to clause (c) of paragraph (a)(1) of this Bylaw, in addition to other applicable requirements, the shareholder must have given timely notice thereof in writing to the Secretary of the Corporation as set forth in this Section 3 of Article I. To be timely, a shareholder’s notice under this paragraph (a)(2) shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days before or delayed by more than 60 days after such anniversary date, notice by the shareholder to be timely must be so delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. Such shareholder’s notice under this paragraph (a)(2) shall set forth (x) as to each person whom the shareholder proposes to nominate for election or reelection as a Director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of Directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a Director if elected); (y) as to any other business that the shareholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting, any material interest in such business of such shareholder and the beneficial owner, if any, on whose behalf the proposal is made, and the names and addresses of other shareholders known by the shareholder proposing such business to support such proposal, and the class and number of shares of the Corporation’s capital stock beneficially owned by such other shareholders; and (z) as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such shareholder, as they appear on the Corporation’s books, and of such beneficial owner, and (ii) the class and number

Amended and Restated By-Laws 2

of shares of the Corporation which are owned beneficially and of record by such shareholder and such beneficial owner. For purposes of this paragraph (a)(2), “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act. Notwithstanding anything in the second sentence of this paragraph (a)(2) to the contrary, in the event that the number of Directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement naming all of the nominees for Director or specifying the size of the increased Board of Directors made by the Corporation at least 85 days prior to the first anniversary of the preceding year’s annual meeting, a shareholder’s notice required by this paragraph (a)(2) shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.


(b)	General .

(1)

Only such persons who are nominated in accordance with the provisions of this Bylaw shall be eligible for election and to serve as Directors and only such business shall be conducted at an annual meeting of shareholders as shall have been brought before the meeting in accordance with the provisions of this Bylaw. The Board of Directors or a designated committee thereof shall have the power to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the provisions of this Bylaw. If neither the Board of Directors nor such designated committee makes a determination as to whether any shareholder proposal or nomination was made in accordance with the provisions of this Bylaw, the presiding officer of the annual meeting shall have the power and duty to determine whether the shareholder proposal or nomination was made in accordance with the provisions of this Bylaw. If the Board of Directors or a designated committee thereof or the presiding officer, as applicable, determines that any shareholder proposal or nomination was not made in accordance with the provisions of this Bylaw, such proposal or nomination shall be disregarded and shall not be presented for action at the annual meeting.


(2)	Notwithstanding the foregoing provisions of this Bylaw, a shareholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Bylaw. Nothing in this Bylaw shall be deemed to affect any rights of (i) shareholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to

Amended and Restated By-Laws 3

Rule 14a-8 under the Exchange Act or (ii) the holders of any series of undesignated preferred stock to elect Directors under specified circumstances.

4. Notice of Meetings . A written notice of each meeting of shareholders (other than adjournments governed by Section 5 of this Article I) stating the date, time and place and the purpose or purposes of such meeting shall be given by the Secretary or an Assistant Secretary (or other officer designated by the Board of Directors) no fewer than 7 days nor more than 60 days before the meeting to each shareholder entitled to vote thereat and to each shareholder who, by law, under the Articles of Organization or under these Bylaws, is entitled to such notice, by delivering such notice to him or her by mailing it, postage prepaid, and addressed to such shareholder at his or her address as it appears in the Corporation’s stock transfer books. Such notice shall be deemed to be delivered when hand delivered to such address or deposited in the mail so addressed, with postage prepaid. Notice may be given to a shareholder by any means permitted under applicable law. Without limiting the generality of the foregoing, notice may be given to a shareholder by electronic transmission in a manner specified by the shareholder, including, without limitation, by facsimile transmission, electronic mail or posting on an electronic network. Notwithstanding the foregoing, in case of any special meeting called upon the written demands of shareholders, such meeting shall be scheduled not less than 60 nor more than 90 days after the date on which the Secretary has received sufficient demands to require that such meeting be called and written notice thereof shall be given in accordance with this Section 4 within 30 days of receipt of such demands.

Notice of an annual or special meeting of shareholders need not be given to a shareholder if a written waiver of notice is signed before or after such meeting by such shareholder or such shareholder’s authorized attorney, if communication with such shareholder is unlawful, or if such shareholder attends such meeting unless (i) the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting or (ii) the shareholder objects to the consideration of a particular matter at the meeting as not within the purpose or purposes described in the meeting notice when the matter is presented. Neither the business to be transacted at, nor the purpose of, any annual meeting or special meeting of shareholders need be specified in any written waiver of notice.

5. Rescheduling of Meetings; Adjournments . The Board of Directors may postpone and reschedule any previously scheduled annual or special meeting of shareholders, and a record date with respect thereto, regardless of whether any notice or public disclosure with respect to any such meeting or record date has been sent or made pursuant to Section 4 of this Article I hereof or otherwise. In no event shall the public announcement of an adjournment, postponement or rescheduling of any previously scheduled annual meeting of shareholders commence a new time period for the giving of a shareholder’s notice under Section 3 of Article I of these Bylaws.

When any meeting is convened, the presiding officer may adjourn the meeting if (a) no quorum is present for the transaction of business, (b) the Board of Directors determines that adjournment is necessary or appropriate to enable the shareholders to consider fully

Amended and Restated By-Laws 4

information which the Board of Directors determines has not been made sufficiently or timely available to shareholders, or (c) the Board of Directors determines in its sole discretion that adjournment is otherwise in the best interests of the Corporation. When any annual meeting or special meeting of shareholders is adjourned to another date, time or place, notice need not be given of the adjourned meeting other than an announcement at the meeting at which the adjournment is taken of the date, time and place to which the meeting is adjourned; provided, however, that if a new record date for the adjourned meeting is fixed, notice of the adjourned meeting shall be given under this Article I to persons who are shareholders as of the new record date.

A meeting may be adjourned from time to time by a majority of the votes properly cast upon the question, whether or not a quorum is present.

6. Quorum .

(a)

Unless otherwise provided by law, or in the Articles of Organization, these Bylaws or a resolution of the Directors requiring satisfaction of a greater quorum requirement for any voting group, a majority of the votes entitled to be cast on the matter by a voting group constitutes a quorum of that voting group for action on that matter. As used in these Bylaws, a “voting group” includes all shares of one or more classes or series that, under the Articles of Organization or the Massachusetts Business Corporation Act, as in effect from time to time (or any successor statute) (the “MBCA”), are entitled to vote and to be counted together collectively on a matter at a meeting of shareholders. Shares owned by the Corporation in a fiduciary capacity shall be deemed outstanding for quorum purposes.

(b)

A share once represented for any purpose at the meeting is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless (i) the shareholder attends solely to object to lack of notice, defective notice or the conduct of the meeting on other grounds and does not vote the shares or otherwise consent that they are to be deemed present, or (ii) in the case of adjournment, a new record date is or shall be set for the adjournment meeting.

7. Voting and Proxies . Unless otherwise provided by law or by the Articles of Organization, each shareholder shall have, with respect to each matter voted upon at a meeting of shareholders, one vote for each share of stock entitled to vote owned by such shareholder of record according to the books of the Corporation. A shareholder may vote his or her shares either in person or may appoint a proxy to vote or otherwise act for him or her by signing an appointment form, either personally or by his or her attorney-in-fact. An appointment of a proxy is effective when received by the Secretary or other officer or agent authorized to tabulate votes. Unless otherwise provided in the appointment form, an appointment is valid for a period of 11 months from the date the shareholder signed the form or, if undated, from the date of its receipt by such officer or agent. Any shareholder’s proxy may be transmitted by facsimile or other electronic means in a manner complying with applicable law. Except as otherwise

Amended and Restated By-Laws 5

permitted by law or limited therein, proxies shall entitle the persons authorized thereby to vote at any adjournment of such meeting but shall not be valid after final adjournment of such meeting. A proxy with respect to stock held in the name of two or more persons shall be valid if executed by one of them if the person signing appears to be acting on behalf of all the co-owners unless at or prior to exercise of the proxy, the Corporation receives a specific written notice to the contrary from any one of them. Subject to the provisions of Section 7.24 of the MBCA (or any successor provision thereof) and to any express limitation on the proxy’s authority provided in the appointment form, the Corporation is entitled to accept the proxy’s vote or other action as that of the shareholder making the appointment. A proxy purporting to be executed by or on behalf of a shareholder shall be deemed valid unless challenged at or prior to its exercise and the burden of proving invalidity shall rest on the challenger.

To the extent permitted by applicable law, shareholders and proxyholders not physically present at a meeting of shareholders may, by means of remote communications: (i) participate in a meeting of shareholders; and (ii) be deemed present in person and vote at a meeting of shareholders.

8. Action at Meeting .

(a)

If a quorum of a voting group exists, favorable action on a matter, other than election of Directors, is taken by a voting group if the votes cast within the group favoring the action exceed the votes cast opposing the action, unless a greater number of affirmative votes is required by the MBCA, the Articles of Organization, these Bylaws or a resolution of the Board of Directors requiring receipt of a greater affirmative vote of the shareholders, including one or more separate voting groups.

(b)

Unless otherwise provided in the Articles of Organization or these Bylaws, a nominee for Director shall be elected as a Director only if such nominee receives the affirmative vote of a majority of the votes cast as to such nominee by the shares entitled to vote in the election at a meeting at which a quorum is present. Notwithstanding the foregoing, Directors shall be elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present for which (i) the Secretary of the Corporation receives notice that a shareholder has nominated an individual for election as Director in accordance with these Bylaws, and (ii) such nomination has not been withdrawn by such shareholder on or before the 10th day before the Corporation first mails its notice of meeting for such meeting to the shareholders, such that the number of nominees exceeds the number of Directors to be elected.

(c)

No ballot shall be required for any election unless requested by a shareholder present or represented at the meeting and entitled to vote in the election. Absent special circumstances, shares of the Corporation’s stock are not entitled to vote if they are owned, directly or indirectly, by the Corporation or by another entity of which the Corporation owns, directly or indirectly, a majority of the voting interests.

Amended and Restated By-Laws 6

Notwithstanding the preceding sentence however, the Corporation may vote any share of stock held by it, directly or indirectly, in a fiduciary capacity.

(d)

Any incumbent Director who fails to receive the required vote for reelection shall offer to resign from the Board of Directors. The Board of Directors will consider such Director’s offer to resign, taking into consideration any such factors that the Board of Directors deems relevant in deciding whether to accept such Director’s resignation. Any Director whose offer to resign is under consideration may not participate in any deliberation or vote of the Board of Directors (or committee thereof) regarding such offer, but may participate in the deliberation or vote of any other business transacted by the Board of Directors (or committee thereof). Within 90 days after the date of certification of the election results, the Board of Directors will determine whether to accept or reject such Director’s offer to resign. Notwithstanding the foregoing, in the event that no nominee for Director receives the vote required pursuant to this Section 8, any and all Directors may participate in the Board of Directors’ deliberation and vote regarding the Directors’ offers to resign.

9. Action without Meeting . Any action required or permitted to be taken at any annual or special meeting of shareholders (including any actions or powers reserved to the shareholders under these Bylaws) may be taken without a meeting, provided that all shareholders entitled to vote on the matter consent to the action in writing and the written consents describe the action taken, are signed by all such shareholders, bear the date of the signatures of such shareholders, and are delivered to the Corporation for inclusion with the records of the meetings of shareholders within 60 days of the earliest dated consent required to be delivered under this Section. Such consents shall be treated for all purposes as a vote at a meeting.

10. Form of Shareholder Action .

(a)

Any vote, consent, waiver, proxy appointment or other action by a shareholder or by the proxy or other agent of any shareholder shall be considered given in writing, dated and signed, if, in lieu of any other means permitted by law, it consists of an electronic transmission that is permitted under applicable law, including, without limitation, an electronic transmission that sets forth or is delivered with information from which the Corporation can determine (i) that the electronic transmission was transmitted by the shareholder, proxy or agent or by a person authorized to act for the shareholder, proxy or agent and (ii) the date on which such shareholder, proxy, agent or authorized person transmitted the electronic transmission. The date on which the electronic transmission is transmitted shall be considered to be the date on which it was signed. The electronic transmission shall be considered received by the Corporation if it has been sent to any address specified by the Corporation for the purpose or, if no address has been specified, to the principal office of the Corporation, addressed to the Secretary or other officer or agent having custody of the records of proceedings of shareholders, or is otherwise received by the Corporation in a manner permitted by applicable law.

Amended and Restated By-Laws 7

(b)

Any copy, facsimile or other reliable reproduction of a vote, consent, waiver, proxy appointment or other action by a shareholder or by the proxy or other agent of any shareholder may be substituted or used in lieu of the original writing for any purpose for which the original writing could be used, but the copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.

11. Shareholders List for Meeting .

(a)

After fixing a record date for a meeting of shareholders, the Corporation shall prepare an alphabetical list of the names of all its shareholders who are entitled to notice of the meeting. The list shall be arranged by voting group, and within each voting group by class or series of shares, and shall show the address of and number of shares held by each shareholder, but need not include an electronic mail address or other electronic contact information for any shareholder.

(b)

The shareholders list shall be available for inspection by any shareholder, beginning two business days after notice is given of the meeting for which the list was prepared and continuing through the meeting: (1) at the Corporation’s principal office or at a place identified in the meeting notice in the city where the meeting will be held; or (2) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting.


(c)	The Corporation shall make the shareholders list available at the meeting, and any shareholder or his or her agent or attorney is entitled to inspect the list at any time during the meeting or any adjournment.

12. Presiding Officer . The Chairman, if one is elected, or, in his or her absence, such other officer as shall be designated by the Board of Directors, shall preside at all annual or special meetings of shareholders and shall have the power, among other things, to adjourn such meetings at any time and from time to time in accordance with the provisions of Section 5 of this Article I. The order of business and all other matters of procedure at any meeting of the shareholders shall be determined by the presiding officer.

13. Voting Procedures and Inspectors of Elections . In advance of any meeting of shareholders, the Board of Directors may appoint one or more inspectors to act at an annual or special meeting of shareholders and make a written report thereon. Any inspector may, but need not, be an officer, employee or agent of the Corporation. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspector(s) shall (i) ascertain the number of shares outstanding and the voting power of each, (ii) determine the shares represented at a meeting and the validity of proxies and ballots, (iii) count all votes and ballots, (iv) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (v) certify their determination of the number of shares represented at the meeting, and their count of all votes

Amended and Restated By-Laws 8

and ballots. The inspector(s) may appoint or retain other persons or entities to assist the inspector(s) in the performance of their duties. The presiding officer may review all determinations made by the inspector(s), and in so doing the presiding officer shall be entitled to exercise his or her sole judgment and discretion and he or she shall not be bound by any determinations made by the inspector(s). All determinations by the inspector(s) and, if applicable, presiding officer, shall be subject to further review by the Board of Directors and any court of competent jurisdiction.

14. Control Share Acquisition . The provisions of Chapter 110D of the General Laws of The Commonwealth of Massachusetts (“Chapter 110D”), as it may be amended from time to time, shall not apply to “control share acquisitions” of the Corporation within the meaning of Chapter 110D.

ARTICLE II

Directors

1. Classes of Directors; Term of Office; Qualification . The number of Directors of the Corporation shall be fixed solely and exclusively by resolution duly adopted from time to time by the Board of Directors. The Directors shall hold office in the manner provided in the Articles of Organization. No Director need be a shareholder of the Corporation or a resident of The Commonwealth of Massachusetts.

2. Powers . The business of the Corporation shall be managed under the direction of the Board of Directors who may exercise (or grant authority to be exercised) all the powers of the Corporation except as otherwise provided by law or by the Articles of Organization. In particular, and without limiting the generality of the foregoing, the Directors may at any time issue all or from time to time any part of the unissued capital stock of the Corporation from time to time authorized under the Articles of Organization and may determine, subject to any requirements of law, the consideration for which stock is to be issued and the manner of allocating such consideration between capital and surplus.

3. Vacancies . The Board of Directors may act notwithstanding a vacancy or vacancies in its membership. Except as otherwise required by applicable law, any and all vacancies in the Board of Directors, however occurring including, without limitation, by reason of an increase in size of the Board of Directors, or the death, resignation, disqualification or removal of a Director, shall be filled solely and exclusively by the affirmative vote of a majority of the remaining Directors then in office, even though less than a quorum. A vacancy that will occur at a specific later date may be filled before the vacancy occurs but the new Director may not take office until the vacancy occurs. Any Director elected in accordance with this Section 3 of Article II shall hold office for the remainder of the full term of the class of Directors in which the vacancy occurred or the new directorship was created (whether or not such term extends beyond the date or dates of any annual meeting or meetings of shareholders succeeding the date of his election) and until his or her successor is duly elected and qualified.

Amended and Restated By-Laws 9

4. Resignation . Any Director may resign by delivering his or her written resignation to the Corporation at its principal executive office, to the Board of Directors, or the Chairman of the Board (if any). Such resignation shall be effective upon receipt unless it is specified to be effective at some later time or upon the happening of some other event.

5. Removal . A Director may be removed only as provided by applicable law or the Articles of Organization.

6. Meetings . Regular meetings of the Board of Directors may be held without notice at such time, date and place as the Board of Directors may from time to time determine. A regular meeting of the Board of Directors may be held without notice at the same place as the annual meeting of shareholders, or the special meeting held in lieu thereof, following such meeting of shareholders.

Special meetings of the Board of Directors may be called, orally or in writing, by the Board of Directors, by the Chairman of the Board, if one is elected, or by the President designating the time, date and place thereof.

7. Notice of Meetings . Notice of the time, date and place of all special meetings of the Board of Directors shall be given to each Director by the Secretary or Assistant Secretary, or in case of the death, absence, incapacity or refusal of such persons, by the officer or one of the Directors calling the meeting. Notice shall be given to each Director in person or by telephone, voice mail, telegraph, teletype or other electronic means or by facsimile sent to his business or home address, at least 24 hours in advance of the meeting, or by written notice mailed to his or her business or home address at least 48 hours in advance of the meeting. Written notice, other than notice by electronic, telephone or similar means, is effective upon deposit in the United States mail, postage prepaid, and addressed to the Director’s address shown in the Corporation’s records. Notice need not be given to any Director who waives notice. A Director may waive any notice before or after the date and time of the meeting. The waiver shall be in writing, signed by the Director entitled to the notice, or in the form of an electronic transmission by the Director to the Corporation, and filed with the minutes or corporate records. A Director’s attendance at or participation in a meeting waives any required notice to him or her of the meeting unless the Director at the beginning of the meeting, or promptly upon his or her arrival, objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting.

8. Quorum . At any meeting of the Board of Directors, a majority of the Directors then in office shall constitute a quorum, but a smaller number may constitute a quorum pursuant to Section 8.53 or Section 8.55 of the MBCA in making a determination that indemnification or advancement of expenses is permissible in a specific proceeding. Any number of Directors (whether one or more and whether or not constituting a quorum) constituting a majority of Directors present at any meeting or at any adjourned meeting may make any adjournment thereof, and the meeting may be held as adjourned without further notice.

Amended and Restated By-Laws 10

9. Action at Meeting . At any meeting of the Board of Directors at which a quorum is present, a majority of the Directors present may take any action on behalf of the Board of Directors, unless a larger number is required by law, by the Articles of Organization or by these Bylaws.

10. Presence Through Communications Equipment . Unless otherwise provided by law or the Articles of Organization, members of the Board of Directors may participate in a meeting of the Board of Directors by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time and participation by such means shall constitute presence in person at a meeting. A Director participating in a meeting by this means is considered to be present in person at the meeting.

11. Action by Consent . Unless the Articles of Organization otherwise provide, any action required or permitted to be taken by the Directors at any meeting of the Board of Directors may be taken without a meeting if the action is taken by the unanimous consent of the members of the Board of Directors. The action must be evidenced by one or more consents describing the action taken, in writing, signed by each Director, or delivered to the Corporation by electronic transmission to the address specified by the Corporation for the purpose or, if no address has been specified, to the principal office of the Corporation, addressed to the Secretary or other officer or agent having custody of the records of proceedings of Directors, and included in the minutes or filed with the corporate records reflecting the action taken. Action taken under this Section is effective when the last Director signs or delivers the consent, unless the consent specifies a different effective date. A consent signed or delivered under this Section has the effect of a meeting vote and may be described as such in any document.

12. Committees . Unless otherwise provided by the Articles of Organization or these Bylaws, the Board of Directors, by vote of a majority of all the Directors then in office, may create one or more committees, may appoint members of the Board of Directors thereto, and may delegate to such committees some or all of its powers except those which by law, by the Articles of Organization, or by these Bylaws may not be delegated. Except as the Board of Directors may otherwise determine, any such committee may make rules for the conduct of its business, but unless otherwise provided by the Board of Directors or in such rules, its business shall be conducted so far as possible in the same manner as is provided by these Bylaws for the Board of Directors. All members of such committees shall hold such offices at the pleasure of the Board of Directors. The Board of Directors may abolish any such committee at any time. Any committee to which the Board of Directors delegates any of its powers or duties shall keep records of its meetings and shall report its action to the Board of Directors. The Board of Directors shall have power to rescind any action of any committee, but no such rescission shall have retroactive effect.

13. Compensation . The Board of Directors may fix the compensation of Directors.

Amended and Restated By-Laws 11

ARTICLE III

Officers

1. Enumeration . The officers of the Corporation shall consist of a President, a Treasurer, a Secretary, and such other officers, including a Chairman of the Board or one or more Vice Presidents, Assistant Treasurers or Assistant Secretaries, as the Board of Directors may determine.

2. Appointment . The Chairman of the Board, President, Treasurer and Secretary shall be appointed annually by the Board of Directors at its first meeting following the annual meeting of shareholders. Other officers may be appointed by the Board of Directors at such meeting or at any other meeting. Any such officer that is appointed by the Board of Directors shall be a “Board appointed officer.” A Board appointed officer may appoint one or more officers or assistant officers if authorized by the Board of Directors. Each officer has the authority and shall perform the duties set forth in these Bylaws, the duties prescribed by the Board of Directors or by direction of an officer authorized by the Board of Directors to prescribe the duties of other officers.

3. Qualification . No officer need be a Director of the Corporation except for the Chairman of the Board, if one is elected. Any two or more offices may be held by any person. The Secretary shall be a resident of Massachusetts unless the Corporation has a resident agent appointed for the purpose of service of process. Any officer may be required by the Board of Directors to give bond for the faithful performance of his or her duties in such amount and with such sureties as the Board of Directors may determine.

4. Tenure . Except as otherwise provided by law, by the Articles of Organization or by these Bylaws, the President, Treasurer, Secretary, and the Chairman of the Board if one is elected, shall hold office until the first meeting of the Board of Directors following the next annual meeting of shareholders and until their respective successors are appointed and qualified; and all other officers shall hold office until the first meeting of the Board of Directors following the next annual meeting of shareholders and until their successors are appointed and qualified, or for such shorter term as the Board of Directors may fix at the time such officers are appointed.

5. Resignation . Any officer may resign by delivering his or her written resignation to the Corporation at its principal office, and such resignation shall be effective upon receipt unless it is specified to be effective at some later time. If a resignation is made effective at a later date and the Corporation accepts the future effective date, the Board of Directors may fill the pending vacancy before the effective date if the Board of Directors provides that the successor shall not take office until the effective date. An officer’s resignation shall not affect the Corporation’s contract rights, if any, with the officer.

Amended and Restated By-Laws 12

6. Removal . The Board of Directors may remove any officer at any time with or without cause.

7. Vacancies . Any vacancy in any office may be filled for the unexpired portion of the term by the Board of Directors. The Board of Directors shall appoint a successor if the office of President, Treasurer or Secretary becomes vacant and may appoint a successor if any other office becomes vacant.

8. Chairman of the Board and President . Unless otherwise provided by the Board of Directors, the President shall be the chief executive officer of the Corporation and shall, subject to the direction of the Board of Directors, have general supervision and control of its business. Unless otherwise provided by the Board of Directors, the President shall preside, when present, at all meetings of shareholders and (unless a Chairman of the Board has been appointed and is present) of the Board of Directors. If a Chairman of the Board of Directors is appointed, he or she shall preside at all meetings of the Shareholders and the Board of Directors at which he or she is present.

9. Treasurer . Except as the Board of Directors shall otherwise determine, the Treasurer shall be the Chief Financial and Accounting Officer of the Corporation and shall be in charge of its funds and valuable papers, books of account and accounting records, and shall have such other duties and powers as may be designated from time to time by the Board of Directors or by any officer authorized by the Board of Directors to prescribe such duties and powers.

10. Secretary . The Secretary shall have responsibility for preparing minutes of the meetings of shareholders and the Board of Directors, and for authenticating records of the Corporation. In case a Secretary is not appointed or is absent, an Assistant Secretary shall keep a record of the meetings of the shareholders and the Board of Directors and may authenticate records of the Corporation. In the absence of the Secretary from any meeting of shareholders, an Assistant Secretary if one be appointed, otherwise a Temporary Secretary designated by the person presiding at the meeting, shall perform the duties of the Secretary. Unless a transfer agent has been appointed or the Board of Directors otherwise prescribes, the Secretary shall keep or cause to be kept the stock and transfer records of the Corporation, which shall contain the names and record addresses of all shareholders and the amount of stock held by each.

11. Other Powers and Duties . Subject to law, to the Articles of Organization, and to the other provisions of these Bylaws, each officer of the Corporation shall have in addition to the duties and powers specifically set forth in these Bylaws, such duties and powers as are customarily incident to his office, and such duties and powers as may be designated from time to time by the Board of Directors or by direction of an officer authorized by the Board of Directors to prescribe the duties of such other officer.

12. Employment Contracts . The Corporation may enter into employment contracts authorized by the Board of Directors extending beyond the terms of office of the Directors. An employment contract shall be valid despite any inconsistent provision of these Bylaws relating

Amended and Restated By-Laws 13

to terms of officers and removal of officers with or without cause but shall not affect the authority of the Board of Directors to remove or fail to reappoint officers. Any such removal or failure to reappoint an officer shall be without prejudice to the officer’s contract rights, if any, with the Corporation.

ARTICLE IV

Capital Stock

1. Issuance and Consideration . The Board of Directors may issue the number of shares of each class or series of stock authorized by the Articles of Organization. The Board of Directors may authorize shares to be issued for any valid consideration. Before the Corporation issues shares, the Board of Directors shall determine that the consideration received or to be received for shares to be issued is adequate. That determination by the Board of Directors is conclusive insofar as the adequacy of consideration for the issuance of shares relates to whether the shares are validly issued, fully paid, and nonassessable. The Board of Directors shall determine the terms upon which the rights, options, or warrants for the purchase of shares or other securities of the Corporation are issued by the Corporation and the terms, including the consideration, for which the shares or other securities are to be issued.

2. Share Certificates . If shares are represented by certificates, at a minimum each share certificate shall state on its face: (a) the name of the Corporation and that it is organized under the laws of The Commonwealth of Massachusetts; (b) the name of the person to whom issued; and (c) the number and class of shares and the designation of the series, if any, the certificate represents. If different classes of shares or different series within a class are authorized, then the variations in rights, preferences and limitations applicable to each class and series, and the authority of the Board of Directors to determine variations for any future class or series, must be summarized on the front or back of each certificate. Alternatively, each certificate may state conspicuously on its front or back that the Corporation will furnish the shareholder this information on request in writing and without charge. Each share certificate shall be signed, either manually or in facsimile, by the President or a Vice President and by the Treasurer or an Assistant Treasurer, or any two officers designated by the Board of Directors, and shall bear the corporate seal or its facsimile. If the person who signed, either manually or in facsimile, a share certificate no longer holds office when the certificate is issued, the certificate shall be nevertheless valid.

3. Uncertificated Shares . The Board of Directors may authorize the issuance of some or all of the shares of any or all of the Corporation’s classes or series without certificates. The authorization shall not affect shares already represented by certificates until they are surrendered to the Corporation. Within a reasonable time after the issue or transfer of shares without certificates, the Corporation shall send the shareholder a written statement of the information required by the MBCA to be on certificates.

Amended and Restated By-Laws 14

4. Record and Beneficial Owners . Except as may be otherwise required by law, by the Articles of Organization or by these Bylaws, the Corporation shall be entitled to treat the record holder of stock as shown in the records of the Corporation (or, if the Board of Directors has established a procedure by which the beneficial owner of shares that are registered in the name of a nominee will be recognized by the Corporation as a shareholder, the beneficial owner of shares to the extent provided in such procedure) as the owner of such stock for all purposes, including the payment of dividends and the right to receive notice and to vote with respect thereto, regardless of any transfer, pledge or other disposition of such stock until the shares have been transferred on the books of the Corporation in accordance with the requirements of these Bylaws.

Each shareholder shall have the duty to notify the corporation of such shareholder’s post office address.

5. Lost or Destroyed Certificates . The Board of Directors of the Corporation may, subject to Massachusetts General Laws, Chapter 106, Section 8-405 (or any successor provision), determine the conditions upon which a new share certificate may be issued in place of any certificate alleged to have been lost, destroyed, or wrongfully taken. The Board of Directors may, in its discretion, require the owner of such share certificate, or his or her legal representative, to give a bond, sufficient in its opinion, with or without surety, to indemnify the Corporation against any loss or claim which may arise by reason of the issue of the new certificate.

6. Transfers . Subject to any restrictions on transfer, if any, stated or noted on the stock certificates, shares of stock may be transferred on the books of the Corporation by the surrender to the Corporation or its transfer agent of the certificate therefore properly endorsed or accompanied by a written assignment and power of attorney properly executed, with transfer stamps (if necessary) affixed, and with such proof of the authenticity of signature as the Corporation or its transfer agent may reasonably require.

7. Record Date . The Board of Directors may fix in advance a time, which, in the case of any meeting of shareholders, shall be not more than 70 days before the date of such meeting, as the record date for determining the shareholders having the right to notice of and to vote at such meeting and any adjournment thereof or the right to receive a dividend or distribution, and in such case only shareholders of record on such record date shall have such right, notwithstanding any transfer of stock on the books of the Corporation after the record date. If a record date for a specific action is not fixed by the Board of Directors, and is not supplied by the section of the MBCA dealing with that action, the record date shall be the close of business either on the day before the first notice is sent to shareholders, or, if no notice is sent, on the day before the meeting. If the Board of Directors does not fix the record date for determining shareholders entitled to a distribution, other than one involving a purchase, redemption or other acquisition of the Corporation’s shares, the record date shall be the date the Board of Directors authorizes the distribution. A determination of shareholders entitled to notice of or to vote at a meeting of shareholders is effective for any adjournment of the meeting unless the

Amended and Restated By-Laws 15

Board of Directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting.

ARTICLE V

Indemnification

1. Indemnification; Articles of Organization . Directors and officers shall be entitled to indemnification in accordance with the Articles of Organization.

2. Insurance . The Corporation may purchase and maintain insurance on behalf of an individual who is a Director or officer of the Corporation, or who, while a Director or officer of the Corporation, serves at the Corporation’s request as a director, officer, partner, trustee, employee, or agent of another domestic or foreign corporation, partnership, joint venture, trust, employee benefit plan, or other entity, against liability asserted against or incurred by him or her in that capacity or arising from his or her status as a Director or officer, whether or not the Corporation would have power to indemnify or advance expenses to him or her against the same liability under this Article V or the Articles of Organization.

3. Application of this Article . If the laws of The Commonwealth of Massachusetts are hereafter amended from time to time, or are succeeded by new provisions of applicable law to increase the scope of permitted indemnification, indemnification required hereunder shall be provided to the fullest extent permitted or required by any such amendment or successor provision and indemnification permitted hereunder shall be permitted to the fullest extent authorized by any such amendment or successor provision.

ARTICLE VI

Miscellaneous Provisions

1. Fiscal Year . Except as otherwise determined by the Board of Directors, the fiscal year of the Corporation shall be the twelve months ending December 31st in each year.

2. Seal . The Board of Directors shall have power to adopt and alter the seal of the Corporation.

3. Execution of Instruments . All deeds, leases, transfers, contracts, bonds, notes and other obligations to be entered into by the Corporation in the ordinary course of its business without Director action, may be executed on behalf of the Corporation by the President or the Treasurer except as the Board of Directors may generally or in particular cases otherwise determine.

4. Voting of Securities . Unless otherwise provided by the Board of Directors, the President or Treasurer may waive notice of and act on behalf of this Corporation, or appoint another person or persons to act as proxy or attorney in fact for this Corporation with or without discretionary power and/or power of substitution, at any meeting of shareholders or

Amended and Restated By-Laws 16

shareholders of any other corporation or organization, any of whose securities are held by this Corporation.

5. Resident Agent . The Board of Directors may appoint a resident agent upon whom legal process may be served in any action or proceeding against the Corporation. Said resident agent shall be either an individual, a corporation organized under the laws of Massachusetts, or a corporation organized under the laws of any other state of the United States, which has qualified to do business in Massachusetts, that has a business address in Massachusetts.

6. Corporate Records . The original, or attested copies, of the Articles of Organization, Bylaws and records of all meetings of the incorporators and shareholders, and the stock and transfer records, which shall contain the names of all shareholders and the record address and the amount of stock held by each, shall be kept in Massachusetts at the principal office of the Corporation, or at an office of its transfer agent, Secretary or resident agent.

7. Articles of Organization . All references in these Bylaws to the Articles of Organization shall be deemed to refer to the Amended and Restated Articles of Organization of the Corporation, as amended and in effect from time to time.

8. Amendment . The power to make, amend or repeal these Bylaws shall be in the shareholders; provided, however, that, in accordance with the Articles of Organization, the Directors may make, amend or repeal these Bylaws (other than this Section 8 of Article VI) in whole or in part, except with respect to any provisions thereof which by law, the Articles of Organization or these Bylaws requires action by the shareholders. Notwithstanding the foregoing, the Board of Directors shall not take any action unless permitted by law. Not later than the time of giving notice of the meeting of shareholders next following the making, amending or repealing by the Directors of any Bylaw, notice thereof stating the substance of such change shall be given to all shareholders entitled to vote on amending the Bylaws. Any amendment or repeal of these Bylaws by the Directors and any Bylaw adopted by the Directors may be amended or repealed by the shareholders.

ADOPTED, as revised, January 18, 2017

Amended and Restated By-Laws 17

Boston Private Financial Holdings, Inc. Reports Fourth Quarter and Full Year 2016 Results; Raises Dividend to $0.11 Per Share

Fourth Quarter and Full Year Highlights:


•	Net Interest Income Growth: Net Interest Income for the fourth quarter increased 7% year-over-year and 3% linked quarter to $51.5 million. Net Interest Income for the full year of 2016 was $200.4 million, an 8% increase compared to 2015.


•	Deposit and Loan Growth: Average Total Deposits increased 2% year-over-year to $6.0 billion, and Average Total Loans increased 6% year-over-year to $6.0 billion.


•	Assets Under Management: Total Assets Under Management/Advisory (“AUM”) of $27.6 billion were flat year-over-year and linked quarter.


•	Dividend Increase: The Board of Directors approved a quarterly cash dividend of $0.11 per share of common stock, an increase from $0.10 per share in the prior quarter.


•	Notable Items: During the fourth quarter, the Company recorded a net after-tax charge of $4.3 million or $0.05 of diluted earnings per share related to goodwill impairment charges and gain on sale of offices.

Boston, MA - January 18, 2017 - Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported fourth quarter 2016 GAAP Net Income Attributable to the Company of $17.6 million, compared to $19.6 million for the third quarter of 2016 and $15.0 million for the fourth quarter of 2015. Fourth quarter 2016 diluted earnings per share were $0.19, compared to $0.22 in the third quarter of 2016, and $0.17 in the fourth quarter of 2015. Excluding Notable Items and the related tax impact, adjusted Net Income Attributable to the Company for the fourth quarter of 2016 was $21.9 million, and adjusted diluted earnings per share were $0.24.

For the full year of 2016, BPFH reported GAAP Net Income Attributable to the Company of $71.6 million or $0.81 of diluted earnings per share, compared to $64.9 million or $0.74 of diluted earnings per share for the full year of 2015.

“2016 was a year of progress for the Company,” said Clayton G. Deutsch, CEO. "The overall Company delivered 10% annual profit growth despite the impact of a goodwill impairment charge, and returned record levels of capital to shareholders through dividends and share repurchases."

“Our Private Bank contributed pristine asset quality and reliable earnings growth throughout a challenging yield environment, while Wealth Management & Trust demonstrated ongoing progress towards stability. Our Investment Managers and Wealth Advisors continue to contribute high returns to Company-wide financial performance. As we enter 2017, we are focused on perfecting our client service offering, improving profitability in all of our businesses, and positioning for long term growth.”

Notable Items Impacting Fourth Quarter Results

During the fourth quarter, the Company recorded two Notable Items that resulted in a net after-tax charge of $4.3 million. The Notable Items include a pre-tax, non-cash charge of $9.5 million for goodwill impairment related to the Wealth Management & Trust segment, and a pre-tax net gain on sale of $2.9 million related to the divestiture of two Southern California offices. The office divestiture, which closed during the fourth quarter, included $104 million of deposits. The tax effect was calculated by applying the federal statutory rate of of 35%.

Core Fees and Income/Assets Under Management

Core Fees and Income for the fourth quarter were $38.5 million, a 2% increase linked quarter and a 4% increase year-over-year. For the full year 2016, Core Fees and Income decreased 3% to $151.7 million due to lower AUM in the Wealth Management & Trust segment, partially offset by higher Other Banking Fee Income.

AUM was $27.6 billion at the end of the fourth quarter, flat from the previous quarter and year-over-year. The Company experienced net flows of negative $176 million during the fourth quarter, compared to negative $336 million and negative $543 million in the third quarter of 2016 and fourth quarter of 2015, respectively. During the fourth quarter, net flows by segment were negative $82 million for Wealth Management & Trust, negative $23 million for Investment Management, and negative $71 million for Wealth Advisory.

Net Interest Income

Net Interest Income for the fourth quarter was $51.5 million, an increase of 3% from $49.9 million for the third quarter of 2016 and an increase of 7% from $48.1 million for the fourth quarter of 2015. The current quarter includes $0.4 million of interest recovered on previous nonaccrual loans compared to $0.3 million for both the third quarter of 2016 and fourth quarter of 2015. Excluding interest recovered on previous nonaccrual loans, Net Interest Income on an FTE basis increased 4% linked quarter and 6% year-over-year.

Net Interest Margin was 2.88% for the fourth quarter of 2016, unchanged from both the third quarter of 2016 and the fourth quarter of 2015. Excluding interest recovered on previous nonaccrual loans, Net Interest Margin was 2.86%, also unchanged from the third quarter of 2016 and the fourth quarter of 2015.

Total Operating Expenses

Total Operating Expenses for the fourth quarter of 2016 were $71.8 million, up 16% from $61.7 million for the third quarter of 2016, primarily due to the goodwill impairment. Excluding the goodwill impairment, Total Operating Expenses for the fourth quarter were $62.3 million, a 1% increase from the previous quarter.

On a year-over-year basis, Total Operating Expenses increased 7% from $67.4 million. Excluding the fourth quarter 2016 goodwill impairment and a fourth quarter 2015 restructuring charge of $2.0 million, Total Operating Expenses declined 5% year-over-year.

Provision and Asset Quality

The Company recorded a provision credit of $1.1 million for the fourth quarter of 2016, compared to a provision credit of $0.1 million for the third quarter of 2016 and $1.7 million for the fourth quarter of 2015. The provision credit in the fourth quarter of 2016 was due to net recoveries and a decrease in Criticized and Classified loans, partially offset by an increase in loan volume.

Criticized Loans decreased 25% linked quarter and 23% year-over-year to $118.5 million. Nonaccrual Loans (“Nonaccruals”) increased 5% to $17.3 million on a linked quarter basis. On a year-over-year basis, Nonaccruals decreased 35% from $26.6 million. As a percentage of Total Loans, Nonaccruals were 28 basis points at December 31, 2016, flat compared to September 30, 2016, and down 18 basis points from December 31, 2015.

Additional credit metrics are listed below:



(In millions)	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
Total Criticized Loans	$	118.5		$	158.8		$	150.7		$	166.9		$	154.1
Total Loans 30-89 Days Past Due and Accruing ⁽¹³⁾	$	15.1		$	4.6		$	7.6		$	8.3		$	13.1
Total Net Loans (Charged-off)/ Recovered	$	1.5		$	2.1		$	1.9		$	1.1		$	0.9
Allowance for Loan Losses/ Total Loans	1.28		%	1.32		%	1.32		%	1.35		%	1.37		%

Capital Ratios

Capital ratios are listed below:



	December 31, 2016		September 30, 2016		June 30, 2016		March 31, 2016		December 31, 2015
BPFH Ratios:
Total Risk-Based Capital *	13.9	%	14.0	%	14.0	%	14.0	%	13.9	%
Tier I Risk-Based Capital *	12.7	%	12.7	%	12.7	%	12.7	%	12.6	%
Tier I Leverage Capital *	9.4	%	9.5	%	9.6	%	9.5	%	9.5	%
TCE/TA ⁽⁴⁾	7.1	%	7.4	%	7.4	%	7.3	%	7.0	%
Tier I Common Equity/ Risk Weighted Assets *	10.0	%	10.0	%	10.0	%	9.9	%	9.8	%

* December 31, 2016 information is presented based on estimated data.

Dividend Payments

Concurrent with the release of fourth quarter 2016 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 February 3, 2017, and the payment date is February 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 February 15, 2017, and the payment date is March 15, 2017.

Non-GAAP Financial Measures

The Company uses certain non-GAAP financial measures, such as tangible book value per share; the TCE/TA ratio; return on average common equity; return on average tangible common equity; pre-tax, pre-provision earnings; 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; to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. A detailed reconciliation table of the Company's GAAP to the non-GAAP measures is attached.

Conference Call

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

Dial In #: (888) 317-6003

Elite Entry Number: 6886722

Replay Information:

Available from January 19, 2017 at 12 noon until January 26, 2017

Dial In #: (877) 344-7529

Conference Number: 10098672

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 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 $27 billion of client assets.

The Company positions its affiliates to 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 and wealth advisory 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; 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.

###

CONTACT:

Adam Bromley

Vice President Corporate Finance and Director of Investor Relations

Boston Private Financial Holdings, Inc.

(617) 912-4386

abromley@bostonprivate.com

Boston Private Financial Holdings, Inc.

Selected Financial Data (Unaudited)



	December 31, 2016			September 30, 2016		June 30, 2016		March 31, 2016		December 31, 2015
	(In thousands, except share and per share data)
Assets:
Cash and cash equivalents	$	106,557		$	67,631	$	126,167	$	113,946	$	238,694
Investment securities available-for-sale	1,264,132			1,249,578		1,191,523		1,151,529		1,084,510
Investment securities held-to-maturity	93,079			98,881		105,297		111,337		116,352
Stock in Federal Home Loan Banks	44,077			36,084		44,374		34,202		35,181
Loans held for sale	3,464			5,316		4,677		5,383		8,072
Total loans	6,114,354			5,869,498		5,751,497		5,658,181		5,719,212
Less: Allowance for loan losses	78,077			77,669		75,753		76,427		78,500
Net loans	6,036,277			5,791,829		5,675,744		5,581,754		5,640,712
Other real estate owned (“OREO”)	1,690			1,800		2,042		98		776
Premises and equipment, net	31,827			32,089		31,752		31,575		31,036
Goodwill	142,554			152,082		152,082		152,082		152,082
Intangible assets, net	26,725			28,267		29,836		31,422		33,007
Fees receivable	13,400			11,185		11,129		11,041		11,258
Accrued interest receivable	20,479			18,062		18,061		17,590		17,950
Deferred income taxes, net	55,460			39,319		36,942		43,164		51,699
Other assets	130,753			149,427		149,975		128,540		121,179
Total assets	$	7,970,474		$	7,681,550	$	7,579,601	$	7,413,663	$	7,542,508
Liabilities:
Deposits	$	6,085,146		$	5,812,243	$	5,536,092	$	5,786,860	$	6,040,437
Deposits held for sale	—			105,788		110,558		—		—
Securities sold under agreements to repurchase	59,624			77,466		43,304		63,182		58,215
Federal funds purchased	80,000			125,000		180,000		40,000		—
Federal Home Loan Bank borrowings	734,205			522,681		678,012		523,953		461,324
Junior subordinated debentures	106,363			106,363		106,363		106,363		106,363
Other liabilities	119,683			134,322		135,289		114,222		111,468
Total liabilities	7,185,021			6,883,863		6,789,618		6,634,580		6,777,807
Redeemable Noncontrolling Interests (“RNCI”)	16,972			16,199		15,843		16,938		18,088
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	83,732			83,195		83,380		83,024		83,411
Additional paid-in capital	597,454			597,209		597,989		599,825		600,670
Retained earnings	47,929			39,415		28,985		21,740		12,886
Accumulated other comprehensive income/ (loss)	(12,548		)	10,134		12,654		6,687		(1,500		)
Total Company’s shareholders’ equity	764,320			777,706		770,761		759,029		743,220
Noncontrolling interests	4,161			3,782		3,379		3,116		3,393
Total shareholders’ equity	768,481			781,488		774,140		762,145		746,613
Total liabilities, redeemable noncontrolling interests and shareholders’ equity	$	7,970,474		$	7,681,550	$	7,579,601	$	7,413,663	$	7,542,508

Boston Private Financial Holdings, Inc.

Selected Financial Data (Unaudited)



	Three Months Ended
	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
Interest and dividend income:	(In thousands, except share and per share data)
Loans	$	51,499		$	50,074		$	49,731		$	50,046		$	49,463
Taxable investment securities	1,592			1,537			1,507			1,594			1,239
Non-taxable investment securities	1,520			1,444			1,400			1,390			1,348
Mortgage-backed securities	3,290			3,079			2,982			3,065			2,863
Federal funds sold and other	508			469			405			507			449
Total interest and dividend income	58,409			56,603			56,025			56,602			55,362
Interest expense:
Deposits	4,152			4,163			4,075			4,182			4,281
Federal Home Loan Bank borrowings	1,987			1,929			2,139			1,953			1,960
Junior subordinated debentures	674			591			584			578			973
Repurchase agreements and other short-term borrowings	77			49			58			10			8
Total interest expense	6,890			6,732			6,856			6,723			7,222
Net interest income	51,519			49,871			49,169			49,879			48,140
Provision/ (credit) for loan losses	(1,128		)	(138		)	(2,535		)	(3,133		)	(1,655		)
Net interest income after provision/ (credit) for loan losses	52,647			50,009			51,704			53,012			49,795
Fees and other income:
Investment management fees	12,408			10,717			10,627			10,658			10,889
Wealth advisory fees	12,568			12,750			12,551			12,712			12,569
Wealth management and trust fees	11,031			10,826			11,208			10,916			11,782
Other banking fee income	2,387			3,447			2,982			3,233			1,719
Gain on sale of loans, net	105			156			197			209			178
Total core fees and income	38,499			37,896			37,565			37,728			37,137
Gain/ (loss) on sale of investments, net	2			273			245			1			215
Gain/ (loss) on OREO, net	(110		)	137			—			280			—
Gain on sale of offices	2,862			—			—			—			—
Other	2,705			1,706			(1,015		)	13			366
Total other income	5,459			2,116			(770		)	294			581
Operating expense:
Salaries and employee benefits	39,669			40,924			40,614			42,560			39,520
Occupancy and equipment	10,039			9,521			9,928			9,587			9,989
Professional services	2,756			2,290			3,015			3,515			3,778
Marketing and business development	2,022			1,623			1,811			2,170			4,001
Contract services and data processing	1,743			1,865			1,737			1,679			1,505
Amortization of intangibles	1,542			1,568			1,586			1,586			1,799
Impairment of goodwill	9,528			—			—			—			—
FDIC insurance	727			722			1,015			1,020			1,089
Restructuring	—			—			905			1,112			2,000
Other	3,817			3,157			4,120			3,480			3,726
Total operating expense	71,843			61,670			64,731			66,709			67,407
Income before income taxes	24,762			28,351			23,768			24,325			20,106
Income tax expense	7,247			8,652			7,626			7,438			5,638
Net income from continuing operations	17,515			19,699			16,142			16,887			14,468
Net income from discontinued operations (1)	1,184			1,047			1,245			2,065			1,455
Net income before attribution to noncontrolling interests	18,699			20,746			17,387			18,952			15,923
Less: Net income attributable to noncontrolling interests	1,147			1,110			989			911			921
Net income attributable to the Company	$	17,552		$	19,636		$	16,398		$	18,041		$	15,002

Boston Private Financial Holdings, Inc.

Selected Financial Data (Unaudited)



	Year Ended
	December 31, 2016			December 31, 2015
Interest and dividend income:	(In thousands, except share and per share data)
Loans	$	201,349		$	192,184
Taxable investment securities	6,230			4,403
Non-taxable investment securities	5,754			4,758
Mortgage-backed securities	12,416			10,933
Federal funds sold and other	1,890			1,390
Total interest and dividend income	227,639			213,668
Interest expense:
Deposits	16,571			16,002
Federal Home Loan Bank borrowings	8,008			7,959
Junior subordinated debentures	2,427			3,875
Repurchase agreements and other short-term borrowings	195			62
Total interest expense	27,201			27,898
Net interest income	200,438			185,770
Provision/ (credit) for loan losses	(6,935		)	(1,555		)
Net interest income after provision/ (credit) for loan losses	207,373			187,325
Fees and other income:
Investment management fees	44,410			45,694
Wealth advisory fees	50,581			50,437
Wealth management and trust fees	43,980			51,309
Other banking fee income	12,050			8,440
Gain on sale of loans, net	667			1,207
Total core fees and income	151,688			157,087
Gain/ (loss) on sale of investments, net	521			236
Gain/ (loss) on OREO, net	306			124
Gain on sale of offices	2,862			—
Other	3,410			3,722
Total other income	7,099			4,082
Operating expense:
Salaries and employee benefits	163,767			159,401
Occupancy and equipment	39,075			37,183
Professional services	11,576			12,861
Marketing and business development	7,626			9,063
Contract services and data processing	7,024			6,037
Amortization of intangibles	6,282			6,711
Impairment of goodwill	9,528			—
FDIC insurance	3,484			3,979
Restructuring	2,017			3,724
Other	14,574			16,222
Total operating expense	264,953			255,181
Income before income taxes	101,207			93,313
Income tax expense	30,963			30,392
Net income from continuing operations	70,244			62,921
Net income from discontinued operations (1)	5,541			6,411
Net income before attribution to noncontrolling interests	75,785			69,332
Less: Net income attributable to noncontrolling interests	4,157			4,407
Net income attributable to the Company	$	71,628		$	64,925

Boston Private Financial Holdings, Inc.

Selected Financial Data (Unaudited)



	Three Months Ended
PER SHARE DATA:	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
	(In thousands, except share and per share data)
Calculation of Income for EPS:
Net income attributable to the Company	$	17,552		$	19,636		$	16,398		$	18,041		$	15,002
Adjustments to Net Income Attributable to the Company to arrive at Net Income Attributable to Common Shareholders, treasury stock method (2)	(1,798		)	(1,006		)	(970		)	(289		)	(1,182		)
Net Income Attributable to the Common Shareholders, treasury stock method	$	15,755		$	18,630		$	15,428		$	17,752		$	13,820

End of Period Common Shares Outstanding	83,731,769			83,194,714			83,380,426			83,023,755			83,410,961

Weighted Average Shares Outstanding:
Weighted average basic shares outstanding	81,217,391			81,301,499			81,236,809			81,301,499			81,134,931
Weighted average diluted shares outstanding (3)	83,438,137			83,562,283			83,519,939			83,279,866			83,579,050

Diluted Total Earnings per Share	$	0.19		$	0.22		$	0.18		$	0.21		$	0.17



	Year Ended
PER SHARE DATA:	December 31, 2016			December 31, 2015
	(In thousands, except share and per share data)
Calculation of Income for EPS:
Net income attributable to the Company	$	71,628		$	64,925
Adjustments to Net Income Attributable to the Company to arrive at Net Income Attributable to Common Shareholders, treasury stock method (2)	(4,063		)	(3,011		)
Net Income Attributable to the Common Shareholders, treasury stock method	$	67,565		$	61,914

Weighted Average Shares Outstanding:
Weighted average basic shares outstanding	81,264,273			80,885,253
Weighted average diluted shares outstanding (3)	83,209,126			83,225,153

Diluted Total Earnings per Share	$	0.81		$	0.74

Boston Private Financial Holdings, Inc.

Selected Financial Data (Unaudited)



(In thousands, except per share data)	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
FINANCIAL DATA:	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
Book Value Per Common Share	$	8.61		$	8.82		$	8.71		$	8.60		$	8.38
Tangible Book Value Per Share (4)	$	6.59		$	6.65		$	6.53		$	6.39		$	6.16
Market Price Per Share	$	16.55		$	12.83		$	11.78		$	11.45		$	11.34

ASSETS UNDER MANAGEMENT AND ADVISORY:
Wealth Management and Trust	$	7,008,000		$	7,334,000		$	7,313,000		$	7,137,000		$	7,976,000
Investment Managers	10,571,000			10,176,000			10,006,000			9,838,000			9,952,000
Wealth Advisory	9,989,000			10,028,000			9,974,000			9,857,000			9,688,000
Less: Inter-company Relationship	(11,000		)	(11,000		)	(17,000		)	(21,000		)	(21,000		)
Total Assets Under Management and Advisory	$	27,557,000		$	27,527,000		$	27,276,000		$	26,811,000		$	27,595,000

FINANCIAL RATIOS:
Total Equity/ Total Assets	9.64		%	10.17		%	10.21		%	10.28		%	9.90		%
Tangible Common Equity/ Tangible Assets (4)	7.07		%	7.38		%	7.36		%	7.34		%	6.98		%
Tier I Common Equity/ Risk Weighted Assets (4)	10.00		%	10.02		%	9.95		%	9.92		%	9.80		%
Allowance for Loan Losses/ Total Loans	1.28		%	1.32		%	1.32		%	1.35		%	1.37		%
Allowance for Loan Losses/ Nonaccrual Loans	451		%	471		%	395		%	314		%	295		%
Return on Average Assets - Three Months Ended (Annualized)	0.89		%	1.03		%	0.88		%	0.99		%	0.81		%
Return on Average Common Equity - Three Months Ended (Annualized) (5)	9.07		%	10.20		%	8.68		%	9.84		%	8.06		%
Return on Average Tangible Common Equity - Three Months Ended (Annualized) (5)	12.75		%	14.30		%	12.43		%	14.11		%	11.92		%
Efficiency Ratio - Three Months Ended (6)	61.87		%	65.04		%	70.41		%	70.87		%	71.59		%

DEPOSIT DETAIL:
Demand deposits (noninterest-bearing)	$	1,753,648		$	1,770,631		$	1,636,273		$	1,609,669		$	1,689,604
NOW	578,657			556,096			547,777			565,394			588,337
Savings	74,162			74,866			70,553			76,019			72,336
Money market	3,102,048			2,879,952			2,771,080			2,959,328			3,105,172
Certificates of deposit	576,631			530,698			510,409			576,450			584,988
Total Deposits	$	6,085,146		$	5,812,243		$	5,536,092		$	5,786,860		$	6,040,437

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:	12/31/16		09/30/16		12/31/15		12/31/16		09/30/16		12/31/15		12/31/16		09/30/16		12/31/15
AVERAGE ASSETS
Interest-Earning Assets:
Cash and Investments:
Taxable investment securities	$	375,913	$	372,852	$	368,573	$	1,592	$	1,537	$	1,239	1.69	%	1.65	%	1.35	%
Non-taxable investment securities (9)	285,330		271,864		258,755		2,338		2,221		2,074		3.28	%	3.27	%	3.21	%
Mortgage-backed securities	679,644		629,748		526,987		3,290		3,079		2,863		1.94	%	1.96	%	2.17	%
Federal funds sold and other	130,740		152,892		220,618		508		469		449		1.53	%	1.20	%	0.80	%
Total Cash and Investments	1,471,627		1,427,356		1,374,933		7,728		7,306		6,625		2.10	%	2.05	%	1.92	%
Loans (10):
Commercial and Industrial (9)	1,110,268		1,065,787		1,053,290		10,892		10,626		10,865		3.84	%	3.90	%	4.04	%
Commercial Real Estate (9)	2,109,601		1,976,327		1,897,943		21,153		19,860		19,981		3.92	%	3.93	%	4.12	%
Construction and Land	96,242		117,183		182,648		1,018		1,263		1,634		4.14	%	4.22	%	3.50	%
Residential	2,350,644		2,300,392		2,224,614		17,999		17,812		17,272		3.06	%	3.10	%	3.11	%
Home Equity	117,985		122,505		117,892		1,050		1,105		1,015		3.54	%	3.59	%	3.41	%
Other Consumer	188,908		182,315		166,184		1,323		1,154		967		2.79	%	2.52	%	2.31	%
Total Loans	5,973,648		5,764,509		5,642,571		53,435		51,820		51,734		3.53	%	3.55	%	3.62	%
Total Earning Assets	7,445,275		7,191,865		7,017,504		61,163		59,126		58,359		3.25	%	3.25	%	3.28	%
LESS: Allowance for Loan Losses	79,440		76,424		79,389
Cash and due From Banks (Non-Interest Bearing)	39,133		39,301		39,453
Other Assets	427,545		445,517		411,642
TOTAL AVERAGE ASSETS	$	7,832,513	$	7,600,259	$	7,389,210
AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY
Interest-Bearing Liabilities:
Interest-Bearing Deposits (10):
NOW	$	567,538	$	551,085	$	512,973	$	126	$	120	$	82	0.09	%	0.09	%	0.06	%
Savings	76,033		76,999		73,380		18		25		23		0.09	%	0.13	%	0.12	%
Money Market	2,969,292		2,922,687		3,063,533		2,807		2,877		2,995		0.38	%	0.39	%	0.39	%
Certificates of Deposit	563,045		560,546		593,286		1,201		1,141		1,181		0.85	%	0.81	%	0.79	%
Total Interest-Bearing Deposits (14)	4,175,908		4,111,317		4,243,172		4,152		4,163		4,281		0.40	%	0.40	%	0.40	%
Junior Subordinated Debentures	106,363		106,363		106,363		674		591		973		2.48	%	2.17	%	3.58	%
FHLB Borrowings and Other	742,247		624,528		491,115		2,064		1,978		1,968		1.09	%	1.24	%	1.57	%
Total Interest-Bearing Liabilities	5,024,518		4,842,208		4,840,650		6,890		6,732		7,222		0.54	%	0.55	%	0.59	%
Noninterest Bearing Demand Deposits (10) (14)	1,870,130		1,824,548		1,673,122
Payables and Other Liabilities	140,006		135,901		110,951
Total Average Liabilities	7,034,654		6,802,657		6,624,723
Redeemable Noncontrolling Interests	20,393		19,504		21,337
Average Shareholders' Equity	777,466		778,098		743,150
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY	$	7,832,513	$	7,600,259	$	7,389,210
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE)							$	54,273	$	52,394	$	51,137
LESS: FTE Adjustment (9)							2,754		2,523		2,997
Net Interest Income (GAAP Basis)							$	51,519	$	49,871	$	48,140
Interest Rate Spread													2.71	%	2.70	%	2.69	%
Bank only Net Interest Margin													2.91	%	2.92	%	2.94	%
Net Interest Margin													2.88	%	2.88	%	2.88	%

Boston Private Financial Holdings, Inc.

Selected Financial Data (Unaudited)



	Average Balance				Interest Income/Expense				Average Yield/Rate
(In thousands)	Year Ended				Year Ended				Year Ended
AVERAGE BALANCE SHEET:	12/31/16		12/31/15		12/31/16		12/31/15		12/31/16		12/31/15
AVERAGE ASSETS
Interest-Earning Assets:
Cash and Investments:
Taxable investment securities	$	373,937	$	343,130	$	6,230	$	4,403	1.67	%	1.28	%
Non-taxable investment securities (9)	270,320		245,402		8,850		7,320		3.27	%	2.98	%
Mortgage-backed securities	615,873		527,057		12,416		10,933		2.02	%	2.07	%
Federal funds sold and other	152,616		167,847		1,890		1,390		1.24	%	0.83	%
Total Cash and Investments	1,412,746		1,283,436		29,386		24,046		2.08	%	1.87	%
Loans (10):
Commercial and Industrial (9)	1,081,658		1,000,139		43,250		42,879		4.00	%	4.29	%
Commercial Real Estate (9)	1,964,544		1,820,142		80,369		76,770		4.09	%	4.22	%
Construction and Land	134,651		156,669		5,385		5,404		4.00	%	3.45	%
Residential	2,284,478		2,183,830		70,553		67,648		3.09	%	3.10	%
Home Equity	120,878		117,520		4,310		4,084		3.57	%	3.48	%
Other Consumer	176,683		167,297		4,516		3,872		2.56	%	2.31	%
Total Loans	5,762,892		5,445,597		208,383		200,657		3.62	%	3.68	%
Total Earning Assets	7,175,638		6,729,033		237,769		224,703		3.31	%	3.34	%
LESS: Allowance for Loan Losses	78,368		78,164
Cash and due From Banks (Non-Interest Bearing)	39,669		39,513
Other Assets	430,972		410,375
TOTAL AVERAGE ASSETS	$	7,567,911	$	7,100,757
AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY
Interest-Bearing Liabilities:
Interest-Bearing Deposits (10):
NOW	$	553,981	$	516,720	$	437	$	318	0.08	%	0.06	%
Savings	75,977		72,275		89		81		0.12	%	0.11	%
Money Market	2,960,702		2,894,615		11,422		10,871		0.39	%	0.38	%
Certificates of Deposit	565,274		597,153		4,623		4,732		0.82	%	0.79	%
Total Interest-Bearing Deposits (14)	4,155,934		4,080,763		16,571		16,002		0.40	%	0.39	%
Junior Subordinated Debentures	106,363		106,363		2,427		3,875		2.28	%	3.64	%
FHLB Borrowings and Other	652,998		516,237		8,203		8,021		1.26	%	1.55	%
Total Interest-Bearing Liabilities	4,915,295		4,703,363		27,201		27,898		0.55	%	0.59	%
Noninterest Bearing Demand Deposits (10) (14)	1,736,637		1,542,254
Payables and Other Liabilities	126,039		103,669
Total Average Liabilities	6,777,971		6,349,286
Redeemable Noncontrolling Interests	20,323		21,982
Average Shareholders' Equity	769,617		729,489
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY	$	7,567,911	$	7,100,757
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE)					$	210,568	$	196,805
LESS: FTE Adjustment (9)					10,130		11,035
Net Interest Income (GAAP Basis)					$	200,438	$	185,770
Interest Rate Spread									2.76	%	2.75	%
Bank only Net Interest Margin									2.95	%	2.99	%
Net Interest Margin									2.93	%	2.92	%

Boston Private Financial Holdings, Inc.

Selected Financial Data (Unaudited)



(In thousands)	December 31, 2016		September 30, 2016		June 30, 2016		March 31, 2016		December 31, 2015
LOAN DATA (11):	December 31, 2016		September 30, 2016		June 30, 2016		March 31, 2016		December 31, 2015
Other Commercial and Industrial Loans:
New England	$	493,451	$	461,201	$	428,515	$	457,520	$	500,389
San Francisco Bay Area	50,578		59,936		64,762		66,629		70,702
Southern California	67,341		67,583		66,379		68,640		61,928
Total Other Commercial and Industrial Loans	$	611,370	$	588,720	$	559,656	$	592,789	$	633,019
Commercial Tax Exempt Loans:
New England	$	317,691	$	263,418	$	260,739	$	268,270	$	267,595
San Francisco Bay Area	69,064		69,366		51,462		51,756		52,052
Southern California	11,849		11,918		11,986		12,053		12,120
Total Commercial Tax Exempt Loans	$	398,604	$	344,702	$	324,187	$	332,079	$	331,767
Total Commercial and Industrial Loans	$	1,009,974	933,422		883,843		924,868		964,786
Commercial Real Estate Loans:
New England	$	1,012,284	$	987,758	$	923,035	$	940,149	$	925,402
San Francisco Bay Area	637,042		611,224		633,735		611,461		622,123
Southern California	652,918		621,336		579,616		519,012		513,378
Total Commercial Real Estate Loans	$	2,302,244	$	2,220,318	$	2,136,386	$	2,070,622	$	2,060,903
Construction and Land Loans:
New England	$	47,434	$	56,268	$	90,408	$	106,258	$	106,048
San Francisco Bay Area	29,629		26,400		36,808		35,281		52,876
Southern California	27,776		16,028		15,333		25,135		24,510
Total Construction and Land Loans	$	104,839	$	98,696	$	142,549	$	166,674	$	183,434
Residential Loans:
New England	$	1,456,592	$	1,409,385	$	1,385,102	$	1,361,547	$	1,368,192
San Francisco Bay Area	473,102		476,986		470,694		463,645		462,327
Southern California	450,167		429,719		424,320		391,683		399,021
Total Residential Loans	$	2,379,861	$	2,316,090	$	2,280,116	$	2,216,875	$	2,229,540
Home Equity Loans:
New England	$	87,280	$	90,592	$	91,728	$	84,693	$	83,712
San Francisco Bay Area	25,129		23,826		26,714		26,134		28,966
Southern California	6,408		6,851		7,044		7,980		7,150
Total Home Equity Loans	$	118,817	$	121,269	$	125,486	$	118,807	$	119,828
Other Consumer Loans:
New England	$	186,680	$	167,140	$	166,998	$	145,450	$	152,984
San Francisco Bay Area	7,517		6,764		8,299		8,347		4,530
Southern California	4,422		5,799		7,820		6,538		3,207
Total Other Consumer Loans	$	198,619	$	179,703	$	183,117	$	160,335	$	160,721
Total Loans:
New England	$	3,601,412	$	3,435,762	$	3,346,525	$	3,363,887	$	3,404,322
San Francisco Bay Area	1,292,061		1,274,502		1,292,474		1,263,253		1,293,576
Southern California	1,220,881		1,159,234		1,112,498		1,031,041		1,021,314
Total Loans	$	6,114,354	$	5,869,498	$	5,751,497	$	5,658,181	$	5,719,212

Boston Private Financial Holdings, Inc.

Selected Financial Data (Unaudited)



(In thousands)	December 31, 2016			September 30, 2016		June 30, 2016		March 31, 2016			December 31, 2015
CREDIT QUALITY (11):	December 31, 2016			September 30, 2016		June 30, 2016		March 31, 2016			December 31, 2015
Special Mention Loans:
New England	$	14,750		$	25,248	$	27,903	$	38,927		$	40,121
San Francisco Bay Area	21,901			22,786		24,381		23,288			15,764
Southern California	884			6,278		15,044		24,710			13,326
Total Special Mention Loans	$	37,535		$	54,312	$	67,328	$	86,925		$	69,211
Accruing Substandard Loans (12):
New England	$	10,972		$	19,748	$	17,447	$	19,157		$	22,026
San Francisco Bay Area	15,890			19,157		19,750		20,235			19,990
Southern California	36,809			49,148		27,027		16,299			16,398
Total Accruing Substandard Loans	$	63,671		$	88,053	$	64,224	$	55,691		$	58,414
Nonaccruing Loans:
New England	$	10,081		$	11,020	$	13,028	$	17,988		$	19,572
San Francisco Bay Area	2,989			3,543		4,196		4,369			4,977
Southern California	4,245			1,928		1,964		1,999			2,022
Total Nonaccruing Loans	$	17,315		$	16,491	$	19,188	$	24,356		$	26,571
Other Real Estate Owned:
New England	$	1,690		$	1,800	$	2,042	$	98		$	191
San Francisco Bay Area	—			—		—		—			585
Southern California	—			—		—		—			—
Total Other Real Estate Owned	$	1,690		$	1,800	$	2,042	$	98		$	776
Loans 30-89 Days Past Due and Accruing (13):
New England	$	10,311		$	2,735	$	5,213	$	4,723		$	7,118
San Francisco Bay Area	591			1,018		70		986			2,806
Southern California	4,235			836		2,343		2,598			3,170
Total Loans 30-89 Days Past Due and Accruing	$	15,137		$	4,589	$	7,626	$	8,307		$	13,094
Loans (Charged-off)/ Recovered, Net for the Three Months Ended:
New England	$	1,120		$	1,704	$	1,276	$	(2,146	)	$	120
San Francisco Bay Area	384			318		537		3,454			703
Southern California	33			32		48		(248		)	86
Total Net Loans (Charged-off)/ Recovered	$	1,537		$	2,054	$	1,861	$	1,060		$	909
Loans (Charged-off)/ Recovered, Net for the Twelve Months Ended:
New England	$	1,954									$	(502	)
San Francisco Bay Area	4,693										4,217
Southern California	(135		)								502
Total Net Loans (Charged-off)/ Recovered	$	6,512									$	4,217

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, 2015 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 per share data)	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
Total Balance Sheet Assets	$	7,970,474		$	7,681,550		$	7,579,601		$	7,413,663		$	7,542,508
LESS: Goodwill and Intangible Assets, net	(169,279		)	(180,349		)	(181,918		)	(183,504		)	(185,089		)
Tangible Assets (non-GAAP)	$	7,801,195		$	7,501,201		$	7,397,683		$	7,230,159		$	7,357,419
Total Shareholders' Equity	$	768,481		$	781,488		$	774,140		$	762,145		$	746,613
LESS: Series D Preferred Stock (non-convertible)	(47,753		)	(47,753		)	(47,753		)	(47,753		)	(47,753		)
LESS: Goodwill and Intangible Assets, net	(169,279		)	(180,349		)	(181,918		)	(183,504		)	(185,089		)
Total adjusting items	(217,032		)	(228,102		)	(229,671		)	(231,257		)	(232,842		)
Tangible Common Equity (non-GAAP)	$	551,449		$	553,386		$	544,469		$	530,888		$	513,771
Total Equity/Total Assets	9.64		%	10.17		%	10.21		%	10.28		%	9.90		%
Tangible Common Equity/Tangible Assets (non-GAAP)	7.07		%	7.38		%	7.36		%	7.34		%	6.98		%

Total Risk Weighted Assets *	$	5,714,598		$	5,534,711		$	5,464,529		$	5,412,514		$	5,449,239
Tier I Common Equity *	$	571,665		$	554,368		$	543,801		$	536,925		$	534,241
Tier I Common Equity/ Risk Weighted Assets	10.00		%	10.02		%	9.95		%	9.92		%	9.80		%

End of Period Shares Outstanding	83,731,769			83,194,714			83,380,426			83,023,755			83,410,961

Book Value Per Common Share	$	8.61		$	8.82		$	8.71		$	8.60		$	8.38
Tangible Book Value Per Share (non-GAAP)	$	6.59		$	6.65		$	6.53		$	6.39		$	6.16

* Risk Weighted Assets and Tier I Common Equity for December 31, 2016 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)	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
Total average shareholders' equity	$	777,466		$	778,098		$	765,063		$	755,400		$	743,150
LESS: Average Series D preferred stock (non-convertible)	(47,753		)	(47,753		)	(47,753		)	(47,753		)	(47,753		)
Average common equity (non-GAAP)	729,713			730,345			717,310			707,647			695,397
LESS: Average goodwill and intangible assets, net	(179,535		)	(181,191		)	(182,787		)	(184,415		)	(185,983		)
Average Tangible Common Equity (non-GAAP)	$	550,178		$	549,154		$	534,523		$	523,232		$	509,414

Net income attributable to the Company	$	17,552		$	19,636		$	16,398		$	18,041		$	15,002
LESS: Dividends on Series D preferred stock	(869		)	(868		)	(869		)	(869		)	(869		)
Common net income (non-GAAP)	16,683			18,768			15,529			17,172			14,133
ADD: Amortization of intangibles, net of tax (35%)	1,002			1,019			1,031			1,031			1,169
Tangible common net income (non-GAAP)	$	17,685		$	19,787		$	16,560		$	18,203		$	15,302

Return on Average Equity - (Annualized)	8.96		%	10.01		%	8.60		%	9.69		%	8.01		%
Return on Average Common Equity - (Annualized) (non-GAAP)	9.07		%	10.20		%	8.68		%	9.84		%	8.06		%
Return on Average Tangible Common Equity - (Annualized) (non-GAAP)	12.75		%	14.30		%	12.43		%	14.11		%	11.92		%



	Year Ended
(In thousands)	December 31, 2016			December 31, 2015
Total average shareholders' equity	$	769,617		$	729,489
LESS: Average Series D preferred stock (non-convertible)	(47,753		)	(47,753		)
Average common equity (non-GAAP)	721,864			681,736
LESS: Average goodwill and intangible assets, net	(181,976		)	(188,533		)
Average Tangible Common Equity (non-GAAP)	$	539,888		$	493,203

Net income attributable to the Company	$	71,628		$	64,925
LESS: Dividends on Series D preferred stock	(3,475		)	(3,475		)
Common net income (non-GAAP)	68,153			61,450
ADD: Amortization of intangibles, net of tax (35%)	4,083			4,362
Tangible common net income (non-GAAP)	$	72,236		$	65,812

Return on Average Equity - (Annualized)	9.31		%	8.90		%
Return on Average Common Equity - (Annualized) (non-GAAP)	9.44		%	9.01		%
Return on Average Tangible Common Equity - (Annualized) (non-GAAP)	13.38		%	13.34		%

Boston Private Financial Holdings, Inc.

Selected Financial Data

(Unaudited)

(6)

The Company uses certain non-GAAP financial measures, such as: pre-tax, pre-provision earnings, 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 earnings; 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)	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
Income before income taxes (GAAP)	$	24,762		$	28,351		$	23,768		$	24,325		$	20,106
ADD BACK: Provision/ (credit) for loan losses	(1,128		)	(138		)	(2,535		)	(3,133		)	(1,655		)
Pre-tax, pre-provision earnings (non-GAAP)	$	23,634		$	28,213		$	21,233		$	21,192		$	18,451

Total operating expense (GAAP)	$	71,843		$	61,670		$	64,731		$	66,709		$	67,407
Less: Amortization of intangibles	1,542			1,568			1,586			1,586			1,799
Less: Goodwill impairment	9,528			—			—			—			—
Less: Restructuring	—			—			905			1,112			2,000
Total operating expense (excluding amortization of intangibles, goodwill impairment, and restructuring) (non-GAAP)	$	60,773		$	60,102		$	62,240		$	64,011		$	63,608

Net interest income	$	51,519		$	49,871		$	49,169		$	49,879		$	48,140
Total core fees and income	38,499			37,896			37,565			37,728			37,137
Total other income	5,459			2,116			(770		)	294			581
FTE income	2,754			2,523			2,437			2,416			2,997
Total revenue (FTE basis)	$	98,231		$	92,406		$	88,401		$	90,317		$	88,855
Efficiency Ratio (GAAP)	75.25		%	68.61		%	75.30		%	75.89		%	78.51		%
Efficiency Ratio, FTE Basis excluding amortization of intangibles, goodwill impairment, and restructuring (non-GAAP)	61.87		%	65.04		%	70.41		%	70.87		%	71.59		%



	Year Ended
(In thousands)	December 31, 2016			December 31, 2015
Income before income taxes (GAAP)	$	101,207		$	93,313
ADD BACK: Provision/ (credit) for loan losses	(6,935		)	(1,555		)
Pre-tax, pre-provision earnings (non-GAAP)	$	94,272		$	91,758

Total operating expense (GAAP)	$	264,953		$	255,181
Less: Amortization of intangibles	6,282			6,711
Less: Goodwill impairment	9,528			—
Less: Restructuring	2,017			3,724
Total operating expense (excluding amortization of intangibles, goodwill impairment, and restructuring) (non-GAAP)	$	247,126		$	244,746

Net interest income	$	200,438		$	185,770
Total core fees and income	151,688			157,087
Total other income	7,099			4,082
FTE income	10,130			11,035
Total revenue (FTE basis)	$	369,355		$	357,974
Efficiency Ratio (GAAP)	73.76		%	73.55		%
Efficiency Ratio, FTE Basis excluding amortization of intangibles, goodwill impairment, and restructuring (non-GAAP)	66.91		%	68.37		%


(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)	December 31, 2016			September 30, 2016		June 30, 2016		March 31, 2016		December 31, 2015
Net income attributable to the Company (GAAP)	$	17,552		$	19,636	$	16,398	$	18,041	$	15,002
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)	$	21,885		$	19,636	$	16,398	$	18,041	$	15,002

Net Income Attributable to the Common Shareholders, treasury stock method (GAAP)	$	15,755		$	18,630	$	15,428	$	17,752	$	13,820
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)	$	20,088		$	18,630	$	15,428	$	17,752	$	13,820

Weighted average diluted shares outstanding (3)	83,438,137			83,562,283		83,519,939		83,279,866		83,579,050

Diluted Total Earnings per Share (GAAP)	$	0.19		$	0.22	$	0.18	$	0.21	$	0.17
Diluted Total Earnings per Share, excluding notable items (non-GAAP)	$	0.24		$	0.22	$	0.18	$	0.21	$	0.17

(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 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)	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
Net interest income (GAAP basis)	$	51,519		$	49,871		$	49,169		$	49,879		$	48,140
ADD: FTE income	2,754			2,523			2,437			2,416			2,997
Net interest income, FTE basis	54,273			52,394			51,606			52,295			51,137
LESS: Interest recovered on previously nonaccrual loans	365			343			565			1,089			255
Net interest income, FTE basis, excluding interest recovered on previously nonaccrual loans (non-GAAP)	53,908			52,051			51,041			51,206			50,882

Net Interest Margin (FTE basis)	2.88		%	2.88		%	2.91		%	2.96		%	2.88		%
Net Interest Margin, FTE basis, excluding interest recovered on previously nonaccrual loans (non-GAAP)	2.86		%	2.86		%	2.88		%	2.90		%	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)

In addition to loans 30-89 days past due and accruing, at June 30, 2016, the Company had one loan totaling $0.1 million that was more than 90 days past due but still on accrual status. This loan originated in the San Francisco Bay Area region. At December 31, 2016, September 30, 2016, March 31, 2016, and December 31, 2015, 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.