Boston Private Announces Results for First Quarter 2007

Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) today reported its first quarter 2007 cash earnings of $0.44 per diluted share, consistent with $0.44 in the first quarter of 2006. GAAP earnings for the first quarter 2007 were $0.34 per diluted share versus $0.35 per diluted share for the first quarter of 2006. Included in the financial performance are the results from the acquisition of Anchor Holdings ("Anchor”), which Boston Private acquired on June 1, 2006. More detailed financial information regarding Anchor’s financial results is outlined later in this press release. Highlights Net Income for the first quarter was up 2.4% to $13.1 million, compared to $12.8 million a year ago. On a linked quarter basis, net income decreased $2.5 million, or 15.9%. On a same affiliate basis, net income was $12.1 million, a decline of 5.8% compared to the first quarter 2006. Total Revenues for the first quarter were up 12.4% to $92.0 million, compared to revenue of $81.9 million a year ago. On a linked quarter basis, revenues were up $1.1 million, or 1.2%. On a same affiliate basis, revenues were $83.9 million, a 2.5% increase compared to the first quarter 2006. Net Interest Income was $43.4 million in the first quarter of 2007, compared to $43.6 in the first quarter 2006 and consistent with $43.4 million recorded in the fourth quarter of 2006. Organic growth increased net interest income by $1.4 million on a linked quarter basis. Increased cost of funds, partially offset by an increased yield on earning assets, decreased net interest income by $1.4 million on a linked quarter basis. Net interest margin, including the impact of trust preferred interest expense, was 3.50%, 52 basis points lower than the 2006 level of 4.02%, and 8 basis points lower from 3.58% in the fourth quarter. Core net interest margin, excluding the trust preferred interest expense decreased to 3.76%, 55 basis points lower than the first quarter 2006 level of 4.31%, and 9 basis points lower from 3.85% in the fourth quarter 2006. Allowance for loan losses, including off-balance sheet risk, as a percentage of total loans declined 1 basis point from 1.14% to 1.13% in the quarter. Wealth Advisory Fee Income increased 13.3% over the prior quarter to $7.3 million, primarily driven by continued organic growth of new client relationships and fee increases. Wealth advisory fee income increased 2.6% on a linked quarter basis. Investment Management Fee Income for the first quarter totaled $37.7 million, an increase of 30.9% over the same quarter 2006. The increase was due predominantly to the addition of Anchor’s $8 million investment management fee income. On a same affiliate basis, investment management fee income was $29.7 million, an increase of 3.0%. Total Operating Expenses for the first quarter were up 16.5% to $69.5 million, compared to $59.7 million in the same quarter a year ago. The increase was due predominantly to the addition of Anchor’s operating expenses and continued growth. On a same affiliate basis, operating expenses were $63.7 million, an increase of 6.7%. Operating Leverage from the first quarter of 2006 to the first quarter of 2007 declined 4.0%. Net interest income, representing approximately half of the company’s revenue, was flat year over year due to 52 basis points of compression of the net interest margin, while loans increased by 18.6% and deposits increased by 7.8%. Total Balance Sheet Assets at March 31, 2007 were $5.9 billion compared to $5.2 billion, or a 12.2% increase compared to a year ago due to strong organic loan growth. On a linked quarter basis, total balance sheet assets grew by 1.9%. Total Loans increased $700 million, or 18.6%, from March 31, 2006, to $4.5 billion from $3.8 billion. On a linked quarter basis, total loans grew by 3.4%, an annualized growth rate of 13.6%. Total Deposits increased $297 million, or 7.8%, from March 31, 2006, to $4.1 billion from $3.8 billion. On a linked quarter basis, deposits grew by 0.6%, an annualized growth rate of 2.4%. Total Assets Under Management/Advisory increased 3.5% to $30.9 billion from consolidated affiliates on a linked quarter basis. Total assets under management / advisory from consolidated and unconsolidated affiliates increased from $32.7 billion to $33.9 billion, or 3.7% on a linked quarter basis, an annualized growth rate of 14.8%. On a same affiliate basis, total assets under management / advisory, including unconsolidated affiliates, increased to $26.9 billion, a year over year growth rate of 6.1%. On a linked quarter basis, market action from our consolidated banks and investment managers contributed $629 million and net new inflows contributed $156 million. Timothy L. Vaill, Chairman and Chief Executive Officer, said, "Our results in the first quarter were driven by strong loan growth in each of our private banks, while our wealth advisors and investment management firms experienced the benefits of positive market action and net inflows of funds. I am gratified that during this challenging yield curve environment we have produced consistent levels of net interest income for six quarters despite the fact that our net interest margin has declined 52 basis points, or 12.9 percent. We significantly increased our earnings capacity during this challenging timeframe despite the fact that half of our total revenues have not increased. While we see no immediate interest rate relief, we believe that we have built in long-term profitable growth.” "We continue to be pleased with our solid credit quality and our client base. Fundamentally, our financial results continue to benefit from our strategy of diversification by business, product, client type, distribution channel, and geography. In addition, we are delighted to report that the investments we have made in new private banking offices are beginning to pay dividends. Specifically, two of the six new offices are now profitable, two are approaching break even and the two newest offices, one of which will open in May, are making great progress. Year over year organic deposit growth for the period ended March 31, 2007 was approximately $300 million. Approximately 25% of that growth was contributed by five of the six new offices in which we have invested. In the aggregate these offices have produced more than $80 million of new deposits. Our success reinforces the acceptance of our business model and the vitality of the wealth management market segment,” stated Walter M. Pressey, President and Interim Chief Financial Officer. Strategic Expansion Developments On February 27, 2007, Boston Private announced the signing of a definitive agreement to acquire Charter Financial, a holding company for Charter Bank, which is a Washington-chartered commercial bank (referred together with Charter Financial as Charter Bank). The Company anticipates that the acquisition will close early in the third quarter of 2007. On April 16, 2007, Boston Private announced that First Private Bank & Trust had entered into a strategic partnership with Wilshire Associates to provide high net worth clients with sophisticated investment services. Dividend Payment Continues Concurrent with the release of the first quarter 2007 earnings, the Board of Directors of Boston Private Financial Holdings declared a cash dividend to shareholders of $0.09 per share, reflecting the quarterly earnings performance. The record date for this dividend is May 1, 2007 and the payment date is May 15, 2007. Cash Earnings Boston Private calculates its cash earnings by adjusting net income to exclude net amortization of intangibles and the impact of certain non-cash share based compensation plans, and includes related tax benefits that result from purchase accounting. In addition to GAAP earnings, the Company believes its cash earnings reports the additional value to shareholders generated by purchase accounting adjustments and the non-cash share based compensation plans. (A detailed reconciliation table is attached.) Conference Call Management will host a conference call to review the Company’s financial performance and business developments on April 26, 2007 at 9 a.m. Eastern time. Interested parties may join the call by dialing 800-867-0731 and the password required is "Boston”. The call will be simultaneously web cast and may be accessed on the Internet by linking through www.bostonprivate.com or Yahoo! Finance. A continuous telephone replay will be available beginning at 11:30 a.m. Eastern time. The replay telephone number is (800) 388-9064. Boston Private Wealth Management Group Boston Private is a financial services company which owns independently-operated affiliates located in key geographic regions of the U.S. Boston Private's affiliates offer private banking, wealth advisory and investment management services to the high net worth marketplace, selected businesses and institutions. The Company's strategy is to enter new markets primarily through selected acquisitions, and then expand its wealth management business by way of organic growth. It makes investments in mid-size firms in demographically attractive areas, forming geographic clusters that represent the firm's core competencies. Boston Private provides continuing assistance to its affiliates with strategic matters, marketing, compliance and operations. For more information about Boston Private, visit the Company's web site at www.bostonprivate.com This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP”). The Company’s management uses these non-GAAP measures in its analysis of the Company’s performance. These measures typically adjust GAAP performance measures to exclude the effects of charges and expenses related to the consummation of mergers and acquisitions, as well as excluding other significant gains or losses that are unusual in nature. Also included in these non-GAAP measures are net amortization of intangibles, tax benefits related to purchase accounting, stock options and ESPP expense. Because these items and their impact on the Company’s performance are difficult to predict, management believes that presentations of financial measures excluding the impact of these items provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s businesses. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Statements in this press release that are not historical facts are forward-looking statements as defined by United States securities laws. Forward-looking statements involve risks and uncertainties. These statements include, but are not limited to, prospects for long term financial performance, the impact on the Company’s results of improved market conditions and prevailing and future interest rates, prospects for growth in balance sheet assets and assets under management and advisory 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 Boston Private’s control and could cause actual results to differ materially from those set forth in the forward-looking statements. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements include, among others, interest rate compression which may adversely impact net interest income; competitive pressures from other financial institutions which, together with other factors, may affect the Company’s growth and financial performance; the effects of national and local economic conditions; and the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; the risk that the business of Charter will not be integrated successfully with Boston Private’s; as well as the other risks and uncertainties detailed in Boston Private's Annual Report on Form 10-K and other filings submitted to the Securities and Exchange Commission. Boston Private does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made. Boston Private Financial Holdings, Inc.Selected Financial Data(In Thousands, except share data)(Unaudited)       Acquisition Same Affiliates(6) March 31, March 31, March 31, March 31, FINANCIAL DATA: 2007    2006  2007  2007    Total Balance Sheet Assets $5,871,510  $5,231,264  $98,189  $5,773,321  Stockholders' Equity 651,282  555,690  33,135  618,147  Tangible Capital: Boston Private Bank & Trust 161,414  141,979  -  161,414  Borel Private Bank & Trust 96,270  80,211  -  96,270  First Private Bank & Trust 46,700  41,694  -  46,700  Gibraltar Private Bank & Trust 81,756  68,233  -  81,756  Investment Securities 511,985  585,679  407  511,578  Goodwill 332,462  286,595  38,501  293,961  Intangible Assets 121,782  94,681  34,956  86,826    Commercial and Construction Loans 2,608,172  2,109,229  -  2,608,172  Residential Mortgage Loans 1,581,829  1,405,984  -  1,581,829  Home Equity and Other Consumer Loans 268,956    243,565  -  268,956  Total Loans 4,458,957  3,758,778  -  $4,458,957    Loans Held for Sale 8,911  2,842  -  8,911  Allowance for Loan Losses and Off-Balance Sheet Risk 50,303  43,511  -  50,303  Non-performing Loans 9,564  4,901  -  9,564  Repossessed Assets, Net 475  -  -  475  Total Non-performing Assets 10,039  4,901  -  10,039  Deposits 4,101,432  3,804,122  -  4,101,432  Borrowings 1,012,088  762,436  -  1,012,088    Book Value Per Share $17.72  $15.80  Market Price Per Share $27.92  $33.79    ASSETS UNDER MANAGEMENT AND ADVISORY:   Westfield Capital Management $10,521,000  $9,200,000  -  $10,521,000  Boston Private Bank & Trust 2,499,000  2,352,000  -  2,499,000  Sand Hill Advisors 1,284,000  1,143,000  -  1,284,000  Boston Private Value Investors 915,000  904,000  -  915,000  RINET Company 1,285,000  1,203,000  -  1,285,000  Borel Private Bank & Trust 707,000  693,000  -  707,000  Dalton, Greiner, Hartman, Maher & Co. 2,014,000  3,489,000  -  2,014,000  KLS Professional Advisors Group 3,939,000  3,335,000  -  3,939,000  Gibraltar Private Bank & Trust 959,000  802,000  -  959,000  Anchor Capital Holdings 6,976,000  -  6,976,000  -  First Private Bank & Trust(5) 15,000  -  -  15,000  Less: Inter-company Relationship (255,000)   (222,000) -  (255,000) Consolidated Affiliate Assets Under Management and Advisory $30,859,000  $22,899,000  6,976,000  $23,883,000    Coldstream Capital Management 1,110,000  935,000  -  1,110,000  Bingham, Osborn, & Scarborough 1,930,000    1,535,000  -  1,930,000  Total Uncon-solidated Assets Under Management and Advisory $33,899,000  $25,369,000  $6,976,000  $26,923,000      FINANCIAL RATIOS:   Stockholders' Equity/Total Assets 11.09% 10.62% Non-performing Loans/Total Loans 0.21% 0.13% Allowance for Loan Losses and Off-Balance Sheet Risk/Total Loans 1.13% 1.16% Tangible Capital/ Tangible Assets 3.64% 3.60%                   Acquisition Same Affiliates(7) Three Months Ended March 31, March 31, March 31, March 31, OPERATING RESULTS: 2007    2006  2007  2007    Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) $45,019  $44,903  $19  $45,000  FTE Adjustment 1,635    1,335  -  1,635  Net Interest Income 43,384    43,568  19  43,365  Investment Management and Trust Fees: Westfield Capital Management 16,705  13,739  -  16,705  Boston Private Bank & Trust 3,685  3,417  -  3,685  Boston Private Value Investors 1,765  1,632  -  1,765  Borel Private Bank & Trust 1,127  986  -  1,127  Gibraltar Private Bank & Trust 1,839  1,495  -  1,839  Dalton, Greiner, Hartman, Maher & Co. 4,528  7,544  -  4,528  First Private Bank & Trust (5) 22  -  -  22  Anchor Capital Holdings 8,036    -  8,036  -  Total Investment Management Fees 37,707  28,813  8,036  29,671  Wealth Advisory Fees: RINET Company 2,127  1,940  -  2,127  Sand Hill Advisors 1,706  1,542  -  1,706  KLS Prof-essional Advisors Group 3,385  2,878  -  3,385  Other 48    51  -  48  Total Wealth Advisory Fees 7,266    6,411  -  7,266  Other Fees 2,450    1,829  66  2,384  Total Fees 47,423    37,053  8,102  39,321  Earnings in Equity Investments 683  772  -  683  Gain on Sale of Loans, Net 532  457  -  532  Gain on Sale of Investments, Net 3    -  3  -    Total Fees and Other Income 48,641    38,282  8,105  40,536  Total Revenue 92,025    81,850  8,124  83,901    Provision for Loan Losses 1,176    1,163  -  1,176    Salaries and Employee Benefits 46,601  39,375  4,469  42,132  Occupancy and Equipment 7,874  6,558  181  7,693  Professional Services 3,206  2,808  25  3,181  Marketing and Business Development 2,596  2,336  166  2,430  Contract Services and Processing 1,435  1,230  59  1,376  Amortization of Intangibles 3,549  2,875  859  2,690  Other 4,282    4,517  87  4,195  Total Operating Expense 69,543  59,699  5,846  63,697  Minority Interest 914    814  453  461  Income Before Income Taxes 20,392  20,174  1,825  18,567  Income Tax Expense 7,258    7,346  773  6,485  Net Income $13,134    $12,828  $1,052  $12,082    Three Months Ended March 31, March 31, RECONCILIATION OF GAAP EARNINGS 2007    2006  TO CASH EARNINGS:   Net Income (GAAP Basis) $13,134  $12,828    Cash Basis Earnings (1) Book Amortization of Purchased Intangibles, Net of Tax 1,912  1,627  Cash Benefit of Tax Deductions from Purchased Intangibles & Goodwill 1,098  1,023  Stock options and ESPP, Net of Tax 1,121    900  Total Cash Basis Adjustment $4,131    $3,550  Cash Basis Earnings $17,265    $16,378          Three Months Ended March 31, March 31, 2007    2006  PER SHARE DATA: (In thousands, except per share data)   Calculation of Net Income for EPS:   Net Income as reported and for basic EPS $13,134  $12,828  Interest on convertible trust preferred securities, net of tax 750    765  Net Income for diluted EPS $13,884  $13,593    Calculation of Average Shares Outstanding: Weighted average basic shares 36,277  34,621  Dilutive effect of: Stock Options, Stock Grants, and Other 1,674  1,425  Convertible trust preferred securities 3,184    3,182  Dilutive potential common shares 4,858  4,607  Weighted Average Diluted Shares 41,135  39,228    Earnings per Share: Basic $0.36  $0.37  Diluted $0.34  $0.35    RECONCILIATION OF GAAP EPS TO CASH EPS: (on a Diluted Basis)   Earnings Per Share (GAAP Basis) $0.34  $0.35  Cash Basis Adjustment $0.10    $0.09  Cash Basis Earnings Per Diluted Share $0.44    $0.44            Three Months Ended March 31, March 31, 2007    2006  OPERATING RATIOS & STATISTICS:   Return on Average Equity 8.17% 9.34% Return on Average Assets 0.91% 1.01% Net Interest Margin 3.50% 4.02% Core Net Interest Margin(2) 3.76% 4.31% Total Fees and Other Income/Total Revenue 52.86% 46.77% Efficiency Ratio 71.39% 69.33% Net Loans Charged-off $8  $527      RECONCILIATION OF NIM TO CORE NIM   Net Interest Margin 3.50% 4.02% Effect of Trust Preferred, Net 0.26% 0.29% Core Net Interest Margin(2) 3.76% 4.31%   CASH OPERATING RATIOS:   Return on Average Equity (3) 10.74% 11.92% Return on Average Assets (4) 1.19% 1.29% AVERAGE BALANCE SHEET:     Three Months Ended Three Months Ended   March 31, 2007     March 31, 2006 Average Income/ Yield/ Average Income/ Yield/ AVERAGE ASSETS: Balance   Expense   Rate Balance Expense Rate Earnings Assets Cash and investments $691,090  $7,313  4.83% $768,578  $7,041  4.13% Loans Commercial and Construction 2,540,403  48,527  7.74% 2,047,660  37,534  7.42% Residential Mortgage 1,588,980  22,834  5.75% 1,385,586  19,075  5.51% Home Equity and Other Consumer 265,736  5,163  7.72% 244,125  4,536  7.43% Total Earning Assets 5,086,209  83,837  7.02% 4,445,949  68,186  6.26% Allowance for Loan Losses (43,816) (38,201) Cash and due from Banks 56,127  64,673  Other Assets 703,881  599,103  TOTAL AVERAGE ASSETS $5,802,401  $5,071,524      AVERAGE LIABILITIES AND STOCKHOLDERS' EQUITY:   Interest-Bearing Liabilities: Deposits: Savings and NOW $550,726  $2,930  2.16% $449,269  $1,207  1.09% Money Market 1,874,556  15,710  3.40% 1,744,204  9,298  2.16% Certificate of Deposits 888,152  10,272  4.69% 698,943  6,017  3.49% Total Deposits 3,313,434  28,912  3.54% 2,892,416  16,522  2.32% Junior Subordinated Debentures 234,021  3,293  5.63% 234,021  3,258  5.57% FHLB Borrowings and Other 741,425  8,248  4.47% 527,970  4,838  3.60% Total Interest-Bearing Liabilities 4,288,880  40,453  3.81% 3,654,407  24,618  2.72% Non-interest Bearing Demand Deposits 729,887  729,390  Payables and Other Liabilities 140,719    138,102  Total Liabilities 5,159,486  4,521,899  Stockholders' Equity 642,915    549,625  TOTAL AVERAGE LIABILITIES & STOCKHOLDERS' EQUITY $5,802,401    $5,071,524    Net Interest Income $43,384  $43,568  Net Interest Margin     3.50%       4.02%     March 31, December 31, 2007    2006  FINANCIAL DATA:   Total Balance Sheet Assets $5,871,510  $5,763,544  Stockholders' Equity 651,282  635,197  Tangible Capital: Boston Private Bank & Trust 161,414  160,639  Borel Private Bank & Trust 96,270  91,300  First Private Bank & Trust 46,700  48,388  Gibraltar Private Bank & Trust 81,756  78,692  Investment Securities 511,985  577,903  Goodwill 332,462  335,633  Intangible Assets 121,782  125,331    Commercial and Construction Loans 2,608,172  2,496,234  Residential Mortgage Loans 1,581,829  1,546,965  Home Equity and Other Consumer Loans 268,956    268,053  Total Loans 4,458,957  4,311,252    Loans Held for Sale 8,911  5,224  Allowance for Loan Losses and Off-Balance Sheet Risk 50,303  48,973  Non-performing Loans 9,564  9,999  Repossessed Assets, Net 475  550  Total Non-performing Assets 10,039  10,549  Deposits 4,101,432  4,077,831  Borrowings 1,012,088  914,529    Book Value Per Share $17.72  $17.36  Market Price Per Share $27.92  $28.21    ASSETS UNDER MANAGEMENT AND ADVISORY:   Westfield Capital Management $10,521,000  $10,102,000  Boston Private Bank & Trust 2,499,000  2,369,000  Sand Hill Advisors 1,284,000  1,252,000  Boston Private Value Investors 915,000  961,000  RINET Company 1,285,000  1,262,000  Borel Private Bank & Trust 707,000  731,000  Dalton, Greiner, Hartman, Maher & Co. 2,014,000  2,302,000  KLS Professional Advisors Group 3,939,000  3,727,000  Gibraltar Private Bank & Trust 959,000  907,000  Anchor Capital Holdings 6,976,000  6,444,000  First Private Bank & Trust (5) 15,000  5,000  Less: Inter-company Relationship (255,000)   (238,000) Consolidated Affiliate Assets Under Management and Advisory $30,859,000  $29,824,000    Coldstream Capital Management 1,110,000  1,090,000  Bingham, Osborn, & Scarborough 1,930,000    1,777,000  Total Unconsolidated Assets Under Management and Advisory $33,899,000  $32,691,000    FINANCIAL RATIOS:   Stockholders' Equity/Total Assets 11.09% 11.02% Nonperforming Loans/Total Loans 0.21% 0.23% Allowance for Loan Losses and Off-Balance Sheet Risk/Total Loans 1.13% 1.14% Tangible Capital/Tangible Assets 3.64%   3.29%   Three Months Ended   March 31, December 31, OPERATING RESULTS: 2007  2006    Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) $45,019  $44,960  FTE Adjustment 1,635  1,575  Net Interest Income 43,384  43,385  Investment Management and Trust Fees: Westfield Capital Management 16,705  15,567  Boston Private Bank & Trust 3,685  3,578  Boston Private Value Investors 1,765  1,748  Borel Private Bank & Trust 1,127  1,130  Gibraltar Private Bank & Trust 1,839  1,764  Dalton, Greiner, Hartman, Maher & Co. 4,528  5,043  First Private Bank & Trust (5) 22  5  Anchor Capital Holdings 8,036  7,356  Total Investment Management Fees 37,707  36,191  Wealth Advisory Fees RINET Company 2,127  2,135  Sand Hill Advisors 1,706  1,556  KLS Professional Advisors Group 3,385  3,336  Other 48  55  Total Wealth Advisory Fees 7,266  7,082  Other Fees 2,450  2,312  Total Fees 47,423  45,585  Earnings in Equity Investments 683  1,515  Gain on Sale of Loans, Net 532  434  Gain / (Loss) on Sale of Investments, Net 3  -    Total Fees and Other Income 48,641  47,534  Total Revenue 92,025  90,919    Provision for Loan Losses 1,176  987    Salaries and Benefits 46,601  41,611  Occupancy and Equipment 7,874  7,900  Professional Services 3,206  3,651  Marketing and Business Development 2,596  2,169  Contract Services and Processing 1,435  1,321  Amortization of Intangibles 3,549  3,874  Other 4,282  4,512  Total Operating Expense 69,543  65,038  Minority Interest 914  1,020  Income Before Income Taxes 20,392  23,874  Income Tax Expense 7,258  8,266  Net Income $13,134  $15,608      Three Months Ended March 31, December 31, RECONCILIATION OF GAAP EARNINGS 2007  2006  TO CASH EARNINGS:     Net Income (GAAP Basis) $13,134  $15,608    Cash Basis Earnings (1) Book Amortization of Purchased Intangibles, Net of Tax 1,912  2,091  Cash Benefit of Tax Deductions from Purchased Intangibles & Goodwill 1,098  1,138  Stock options and ESPP, Net of Tax 1,121  830  Total Cash Basis Adjustment 4,131  4,059  Cash Basis Earnings $17,265  $19,667      Three Months Ended March 31, December 31, 2007  2006  PER SHARE DATA: (In thousands, except per share data)   Calculation of Net Income for EPS:   Net Income as reported and for basic EPS $13,134  $15,608  Interest on convertible trust preferred securities, net of tax 750  765  Net Income for diluted EPS $13,884  $16,373    Calculation of Average Shares Outstanding: Weighted average basic shares 36,277  36,064  Dilutive effect of: Stock Options, Stock Grants, and Other 1,674  1,560  Convertible trust preferred securities 3,184  3,183  Dilutive potential common shares 4,858  4,743  Weighted Average Diluted Shares 41,135  40,807    Earnings per Share: Basic $0.36  $0.43  Diluted $0.34  $0.40    RECONCILIATION OF GAAP EPS TO CASH EPS:   (on a Diluted Basis)   Earnings Per Share (GAAP Basis) $0.34  $0.40  Cash Basis Adjustment $0.10  $0.10  Cash Basis Earnings Per Diluted Share $0.44  $0.50    OPERATING RATIOS & STATISTICS:   Return on Average Equity 8.17% 9.96% Return on Average Assets 0.91% 1.10% Net Interest Margin 3.50% 3.58% Core Net Interest Margin (2) 3.76% 3.85% Total Fees and Other Income/Total Revenue 52.86% 52.28% Efficiency Ratio 71.39% 67.55% Net Loans Charged-off / (Recovered) $8  ($39)     (1)The Company calculates its cash earnings by adjusting net income to exclude the amortization of the purchased intangibles (net of tax), includes the tax benefit on the portion of the purchase price which is deductible over a 15 year life, and excludes certain non-cash share based compensation plans (net of tax). The tax savings are deferred under GAAP accounting but are included in cash earnings since the tax savings (lower tax payment) will be retained unless the acquired company is sold. The Company uses certain non-GAAP financial measures, such as Cash Earnings, to provide information for investors to effectively analyze financial trends of ongoing business activities.             (2)The Company defines Core Net Interest Margin as Net Interest Margin excluding the interest expense on the Junior Subordinated Debentures. The Company utilizes Trust Preferred Securities to assist in the funding of acquisitions and believes it is useful to compare Net Interest Margin excluding the impact of this acquisition funding vehicle.       (3)The Company calculates Return on Average Equity on a cash basis as Cash Basis Earnings divided by Average Equity.   (4)The Company calculates Return on Average Assets on a cash basis as Cash Basis Earnings divided by Average Assets.   (5)First Private Bank and Trust opened their Trust Department in the fourth quarter of 2006.   (6)Same Affiliate Financial Data and Assets Under Management and Advisory as of March 31, 2007 and 2006 exclude Anchor Capital Holdings.     (7)Same Affiliate Operating Results for the three months ending March 31, 2007 and 2006 exclude Anchor Capital Holdings.