Photo by James Sanna | Banker & Tradesman Staff

Boston Private has joined the list of banks seeing the effects of the coronavirus crisis and CECL adoption, as its first quarter earnings dropped 96 percent compared to the same period last year.

First quarter net income was $800,000, with diluted earnings per share of $0.01, compared to $19.4 million, or diluted earnings per share of $0.25, in the first quarter of 2019. Fourth quarter net income was $21.2 million, or $0.26 per diluted share.

Boston Private’s provision for loan loss was $17 million, with another $1.8 million for unfunded loan commitments. Like many banks in the first quarter, Boston Private adopted the new current expected credit loss methodology. Using the previous accounting standard, Boston Private had a provision credit of $3.7 million in the fourth quarter and $1.4 million in the first quarter last year.

“This quarter’s results reflect the implementation of CECL and a reserve build related to the uncertain outlook of the pandemic’s impact on our economy,” Anthony DeChellis, CEO of Boston Private, said in a statement. “Before the reserve build, our company demonstrated net interest income growth and expense discipline, while generating positive net flows in our Wealth Management & Trust business.”

Boston Private’s total loan portfolio was $7 billion in the first quarter, including $2.6 billion in commercial real estate.

The Boston-based bank operates in New England, Northern California and Southern California. For the industries most affected by the coronavirus pandemic, Boston Private had $632 million in retail loans and $144 million in hospitality, with 43 percent of the retail portfolio and 52 percent of hospitality located in New England. Boston Private’s commercial and industrial portfolio includes 27 restaurant loans for $16 million.

“While the pandemic’s ultimate impact on our loan portfolio remains highly uncertain, we have limited exposure to several industries that may be most immediately at risk,” Chief Financial Officer Steven Gaven said during the bank’s earnings conference call. He added that Boston Private did not have material exposure to energy, airlines, cruise lines, movie theaters or casinos.

Gaven said during the call that the bank had proactively offered options to eligible CRE clients to adjust loan or repayment terms, with 51 percent of the portfolio accepting adjustments.

About 12.5 percent of Boston Private’s $670 million commercial and industrial portfolio took six months of principal deferrals.

In Boston Private’s $2.8 billion residential mortgage portfolio, which Gaven said included primarily jumbo loans in the bank’s three markets, 5.7 percent took 3-month payment deferrals during the coronavirus crisis.

Boston Private also offers wealth management services. Total assets under management, most of which is attributed to the bank’s wealth management and trust division, were $14.513 billion, a 10 percent decline from the first quarter of 2019, which had $16.122 billion in total assets under management. Fourth quarter assets under management were $16.768 billion. Gaven said during the earnings call that the decline primarily reflected lower equity values.