BPFH reported first quarter diluted earnings per share of $0.15 compared to $0.15 in the fourth quarter of 2012.
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On a year-over-year basis, GAAP Net Income Attributable to the Company increased 39% from $9.5 million in the first quarter of 2012. Diluted earnings per share increased 36% from $0.11 in the same period.
"Our Wealth Management businesses performed well in the quarter," said Clayton G. Deutsch, CEO and President. "Core Fees and Income increased 3% on a linked quarter basis and Assets Under Management increased 7% in the same period. Our Wealth Management firms continue to exhibit positive operating leverage. The Private Banking side of our business witnessed a decline in Net Interest Income which was driven by a reduction in earning assets and Net Interest Margin compression. Having said this, our Private Bank is continuing to build profit contribution across all three of our major private banking markets."
Core Fees Increase 3% Linked Quarter:
Core Fees and Income (Investment Management and Trust Fees, Private Bank Investment Management and Trust Fees, Wealth Advisory Fees, Other Banking Fee Income and Gain on Sale of Loans) for the first quarter increased 3% to $29.9 million from $29.1 million in the fourth quarter of 2012. Core Fees and Income increased 14% from $26.3 million on a year-over-year basis.
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By GlobalDataTotal Assets Under Management/Advisory ("AUM") increased to $21.9 billion, up 7% from $20.4 billion in the fourth quarter of 2012. AUM also increased 7% from $20.4 billion in the first quarter of 2012. The Company experienced first quarter 2013 AUM net inflows of $181 million, as compared to AUM net inflows of $298 million in the fourth quarter of 2012. AUM net inflows for the first quarter of 2012 were $84 million.
Net Interest Income Declines:
Net Interest Income in the first quarter was $44.3 million, down 3% from $45.5 million in the fourth quarter of 2012 due to lower asset yields. On a year-over-year basis, Net Interest Income declined 1% from $44.8 million in the first quarter of 2012. Net Interest Margin was 3.13% in the first quarter, down six basis points from 3.19% in the fourth quarter. On a year-over-year basis, Net Interest Margin decreased 14 basis points from 3.27% in the first quarter of 2012.
Total Expenses Decrease Linked Quarter:
Total Expenses for the first quarter of 2013 were $56.6 million, a 10% decrease from $62.7 million (including restructuring costs of $1.6 million) in the fourth quarter of 2012. On a year-over-year basis, Total Expenses increased 2% from $55.6 million (including restructuring costs of $0.1 million) in the first quarter of 2012.
"Total Expenses in the quarter were impacted by seasonal compensation expenses such as increased 401(k) employee contribution matches and FICA, as well as a retirement benefit valuation update of $1.5 million," said David J. Kaye, Chief Financial Officer. "We expect to see additional savings related to our $10 million cost reduction program reflected in the second quarter 2013 run rate."
Provision:
The Company recorded no Provision for Loan Losses in the first quarter, compared to a fourth quarter credit of ($5.0) million. The lack of provision was driven by a reduction in Classified Loans and continued improvement in credit quality. In the first quarter of 2012, there was a provision of $4.0 million.
Criticized Loans decreased 5% to $223.5 million on a linked quarter basis, and decreased 27% year-over-year. Nonaccrual Loans ("Nonaccruals") increased 20% to $73.0 million, up from $60.7 million on a linked quarter basis. On a year-over-year basis, Nonaccruals were flat. As a percentage of Total Loans, Nonaccruals were 1.53% in the first quarter of 2013, up 27 basis points from 1.26% in the fourth quarter of 2012. On a year-over-year basis, Nonaccruals as a percentage of Total Loans increased 3 basis points from 1.50%.
