Boston Private Financial Holdings posted second quarter income totaling $16.4 million, compared with $18 million in the prior quarter and $17.6 million in the year-ago quarter.
“We are pleased with the company’s overall performance amid a turbulent macro environment,” CEO Clayton G. Deutsch said in a statement. “Our private bank continues to deliver steady performance, while our fee-based businesses demonstrated resiliency confronting market pressure. We are excited about the geographic balance of new business as we maintain our focus on improving our client offering and increasing client introductions to position the company favorably for the long term.”
While net interest income declined slightly from the first quarter to $49.2 million, that figure represented a 9 percent year-over-year increase from $45.1 million in the second quarter of 2015.
Total assets under management declined 8 percent year-over-year to $27.3 billion and increased 2 percent from the prior quarter. The company attributed that to negative net flows partly offset by positive market action. The company saw negative net flows of $199 million during the second quarter, compared to negative $761 million and negative $193 million in the first quarter of 2016 and second quarter of 2015, respectively. Net flows attributable to Boston Private Wealth for the second quarter were negative $39 million compared to negative $422 million in the first quarter of 2016 and negative $243 million in the second quarter of 2015.
Core fees and income totaled $37.6 million, flat from the prior quarter and down 7 percent year-over-year due largely to lower levels of assets under management and offset by higher other banking fee income.
Total operating expenses in the second quarter declined 3 percent to $64.7 million from $66.7 million in the prior quarter. On a year-over-year basis, total operating expenses increased 4 percent from $62.4 million, primarily due to higher occupancy and restructuring expense. Restructuring expense in the second quarter totaled about $900,000, while the prior quarter and the year-ago quarter included restructuring expense of $1.1 million and about $200,000, respectively.
Boston Private Financial Holdings recorded a provision credit of $2.5 million for the second quarter, compared to a provision credit of $3.1 million in the prior quarter and no provision in the year-ago quarter. The provision credit was driven by net recoveries of $1.9 million and a decline in criticized loans.
Criticized loans decreased 10 percent quarter-to-quarter and year-over-year to $150.7 million. Nonaccrual loans decreased 21 percent quarter-over-quarter and 36 percent year-over-year to $19.2 million. As a percentage of total loans, nonaccruals were 33 basis points at June 30, down 10 basis points from March 31, and down 21 basis points from June 30 of last year.
