The parent company of Boston Private opened 2018 with a strong first quarter, but continues to closely watch deposit betas and the performance of its wealth division as key indicators for how the company will perform throughout the rest of the year.

Boston Private Financial Holdings reported net income of $22.7 million for the first quarter, or diluted earnings per share of $0.27, compared to $15.7 million for the first quarter of 2017. Net interest income for the quarter was $57.4 million, up $3.8 million for the same time period last year. The margin stayed flat year-over-year at 2.95 percent, but is down nine basis points from the linked quarter.

The company also completed the sale of its stake in Anchor Capital Advisors, one of its wealth management subsidiaries that managed over $9 billion in assets.

“I am pleased that the quarter gives us a good start to the year,” Boston Private CEO Clayton Deutsch said on a recent earnings call. “What I was most looking for was positive evolution of the bank’s balance sheet. Boston Private wealth is performing in line with the expectations we had from start and finally, critically important, creating operating leverage after our expense step ups last year in staffing and technology.”

Total assets at the $8.3 billion asset company grew over $100 million year-over-year. Total loans at the company reached $6.6 billion, up more than $370 million year-over-year, led by increases in residential and commercial real estate – residential grew more than $275 million year-over-year. Commercial and industrial loans lost more than $50 million in volume year-over-year.

“The competitive environment on C&I is really tough,” said Boston Private CFO Steven Gaven, adding that he had seen some pricing spreads in the market the bank did not feel comfortable with.

The bank had a good quarter for its wealth management and wealth advisory divisions producing positive net flows. Boston Private’s investment management had negative flows, but that excluded assets from Anchor, which was still part of Boston Private in the first quarter. Excluding Anchor, Boston Private’s consolidated assets under management had $198 million in positive net flows.

Total deposits grew almost $90 million year-over-year, reaching $6.39 billion, but declined from the linked quarter after the bank saw movement in deposit betas. The cost of funds reached 60 basis points, up eight basis points from the linked quarter and 18 basis points year-over-year.

“We are in the part of the cycle where increases in rates are starting to translate into higher deposit costs,” Gaven said, adding that he still felt good about the company’s projected 8 percent to 10 percent annualized loan growth, despite the fact that it will depend on deposit growth.

The company recorded a provision credit for the quarter of $1.8 million.