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Section 1: 8-K (8-K EANINGS RELEASE Q2 2018)

Document


    
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 25, 2018

BLUE HILLS BANCORP, INC.
(Exact name of registrant as specified in its charter)

Maryland
 
001-36551
 
46-5429062
(State or Other Jurisdiction of Incorporation)
 
(Commission File No.)
 
(I.R.S. Employer
Identification No.)

500 River Ridge Drive, Norwood, Massachusetts
 
02062
(Address of Principal Executive Offices)
 
(Zip Code)


Registrant’s telephone number, including area code: (617) 361-6900

Not Applicable
(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 


Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934. [X]

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [X]








Item 2.02     Results of Operations and Financial Condition

On July 25, 2018, Blue Hills Bancorp, Inc. (the “Company”), the holding company for Blue Hills Bank, issued a press release announcing its financial results for the quarter ended June 30, 2018. The Company’s press release is included as Exhibit 99.1 to this report. The information included in Exhibit 99.1 to this report is considered to be “furnished” under the Securities Exchange Act of 1934.

Item 7.01     Regulation FD Disclosure


The Company also announced that its Board of Directors voted to increase the regular quarterly cash dividend to $0.20 per share from $0.15 per share. The dividend will be payable on August 22, 2018 to stockholders of record as of August 8, 2018.

Item 9.01     Financial Statements and Exhibits
Exhibit
 
Description
 
 
 
 
 
 
 
 
 
 
 








SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 
 
BLUE HILLS BANCORP, INC.
DATE: July 25, 2018
By:
/s/ William M. Parent
 
 
William M. Parent
 
 
President and Chief Executive Officer




(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1 EARNINGS RELEASE Q2 2018)

Exhibit
EXHIBIT 99.1
Blue Hills Bancorp, Inc. Reports Second Quarter Earnings
Quarterly Dividend Increased 33% to $0.20 per share

NORWOOD, Mass., July 25, 2018--(GLOBE NEWSWIRE)- Blue Hills Bancorp, Inc. (the “Company” or "Blue Hills Bancorp") (NASDAQ: BHBK), the parent of Blue Hills Bank (the "Bank"), today announced net income of $6.5 million, or $0.26 per diluted share, for the second quarter of 2018 compared to net income of $6.6 million, or $0.27 per diluted share, for the first quarter of 2018 and net income of $3.9 million, or $0.16 per diluted share, for the second quarter of 2017. Net income on a non-GAAP basis was $6.1 million, or $0.25 per diluted share, for the second quarter of 2018 compared to net income on a non-GAAP basis of $5.9 million, or $0.24 per diluted share, for the first quarter of 2018 and net income on a non-GAAP basis of $3.3 million, or $0.14 per diluted share, for the second quarter of 2017 (see page 14 for a reconciliation of GAAP to non-GAAP measures).

For the six months ended June 30, 2018, net income was $13.0 million, or $0.52 per diluted share, compared to net income of $11.4 million, or $0.47 per diluted share for the six months ended June 30, 2017. Net income on a non-GAAP basis was $12.1 million, or $0.48 per diluted share, for the first six months of 2018 compared to net income on a non-GAAP basis of $5.9 million, or $0.25 per diluted share for the first six months of 2017 (see page 15 for a reconciliation of GAAP to non-GAAP measures).

The Company also announced that its Board of Directors voted to increase the regular quarterly cash dividend to $0.20 per share from $0.15 per share. The dividend will be payable on August 22, 2018 to stockholders of record as of August 8, 2018.

Commenting on the Company's results, William Parent, President and Chief Executive Officer of Blue Hills Bancorp, said, "The second quarter results continue to demonstrate the significant and ongoing progress we have made as the Bank reaches its four year anniversary as a public company. Our asset sensitive interest rate risk position has allowed us to absorb increases in deposit costs and still grow net interest margin over 20 basis points from the second quarter of 2017. In addition, since the second quarter of last year our core return on assets has increased over 70% to above 90 basis points while our focus on expense management has contributed to further improvement in our efficiency ratio, which has fallen to 62% excluding nonrecurring gains. Our business units continue to perform well in a highly competitive marketplace. Mortgage banking generated originations higher than a year ago and mortgage banking revenue exceeded $1 million in the second quarter. Commercial business loans grew 8% from the end of the first quarter and 18% from a year ago as we strive to create more balance with our strong commercial real estate lending business, while on the consumer banking side we have positioned our core funding capabilities to meet our quality growth operating strategy."

Parent continued, "Our capital deployment efforts continued with today's announcement of another increase to our quarterly dividend. In the current environment, banks must be flexible and able to adjust to rapidly changing industry and economic conditions. We are all proud of the franchise we have built and as we move forward in this environment, we feel that our franchise will continue to create incremental value for our shareholders."

BALANCE SHEET
Compared to March 31, 2018, total assets grew $72 million, or 3%, to $2.7 billion at June 30, 2018. The increase was mainly driven by a $57 million, or 3%, increase in loans to $2.3 billion at June 30, 2018. By category, the growth was due to a $52 million, or 5%, increase in residential mortgage loans, a $20 million, or 8%, increase in commercial business loans, and a $15 million, or 21%, increase in construction loans. These increases were partially offset by a $24 million, or 3% decrease in commercial real estate loans reflecting paydowns and very competitive market conditions.

Compared to June 30, 2017, total assets increased $227 million, or 9%. Loans drove the growth in total assets from June 30, 2017, increasing $196 million, or 9%. By category, the increase from June 30, 2017 was due to residential mortgage loans, which were up $95 million, or 11%; commercial real estate loans, which were up $68 million, or 9%; and commercial business loans, which were up $41 million, or 18%. Residential mortgage originations were $167 million in the second quarter of 2018 compared to $139 million in the second quarter of 2017 while commercial loans (real estate and non-real estate combined)

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added to the balance sheet were $97 million in the second quarter of 2018 compared to $137 million in the second quarter of 2017. The decline is due to a lower level of commercial real estate originations, partially offset by an increase in commercial business loan originations. The commercial real estate decline reflects a noticeable pick-up in competition with respect to loan terms and pricing during the first half of 2018.

Compared to March 31, 2018, deposits grew $34 million, or 2%, to $2.1 billion at June 30, 2018. The growth from the end of the first quarter was driven by a $38 million increase in total brokered deposits and a $21 million increase in certificates of deposit. These increases were partially offset by small declines in the other deposit account categories. In addition to the growth in deposits, short-term borrowings were up $45 million, or 69%, from March 31, 2018 while long-term debt fell $15 million, or 14%.

Compared to June 30, 2017, deposits grew $147 million, or 7%, and included growth in all customer segments (consumer, small business, commercial and municipal). By category, the growth came from certificates of deposit, which were up $163 million, total brokered deposits, which were up $47 million, and NOW and demand deposits, which were up $16 million. These increases were partially offset by a $46 million decline in money market deposits and a $33 million decline in regular savings deposits. Short-term borrowings increased $110 million from a year ago while long-term debt declined $40 million.

Stockholders’ equity was $400 million at June 30, 2018 compared to $395 million at March 31, 2018 and $397 million at June 30, 2017. The increases in both periods mainly reflect net income and share based compensation, partially offset by the payment of dividends.

NET INTEREST AND DIVIDEND INCOME
Reported net interest and dividend income was $19.0 million in the second quarter of 2018, up $624,000, or 3%, from the first quarter of 2018 and up $2.6 million, or 16%, from the second quarter of 2017. Reported net interest margin was 2.98% in the second quarter of 2018, up from 2.91% in the first quarter of 2018 and from 2.75% in the second quarter of 2017.

Net interest and dividend income on a fully taxable equivalent basis (FTE), a Non-GAAP measure, was also $19.0 million in the second quarter of 2018, up $626,000, or 3%, from $18.4 million in the first quarter of 2018, and up $2.5 million, from $16.5 million or 15%, from the second quarter of 2017. Net interest margin on a fully taxable equivalent basis (FTE), a Non-GAAP measure, was 2.99% in the second quarter of 2018 compared to 2.92% in the first quarter of 2018 and 2.76% in the second quarter of 2017. Purchase accounting accretion added $171,000, $200,000 and $181,000 to net interest and dividend income in the second quarter of 2018, first quarter of 2018, and second quarter of 2017, respectively. Purchase accounting accretion also added 3 basis points to net interest margin in all three quarters.

Net interest and dividend income (FTE) and net interest margin (FTE) benefited in both quarterly comparisons from higher floating rate loan yields related to the interest rate increases announced by the Federal Reserve Bank. There have been seven rate increases announced by the Fed since December 2015 totaling 175 basis points. The Company has maintained and continues to maintain an asset sensitive interest rate risk position, which has resulted in earning asset yields increasing at a faster pace than interest bearing liability costs. In addition, the improvement in net interest and dividend income (FTE) from the second quarter of 2017 was helped by loan growth. Average loans increased $163 million, or 8%, from the second quarter of 2017 due to higher levels of commercial real estate loans and residential mortgages.

NONINTEREST INCOME
Noninterest income was $3.6 million in the second quarter of 2018, down 266,000, or 7%, from the first quarter of 2018. The decline was due to the absence of a first quarter securities gain of $653,000, the absence of a first quarter gain of $271,000 from the sale of premises and equipment and a decline of $169,000 in miscellaneous income mainly reflecting lower income on Small Business Investment Company ("SBIC") investments. Partially offsetting these declines in the second quarter was a $452,000 unrealized gain on equity securities compared to an unrealized loss of $69,000 recorded in the first quarter and a $293,000, or 40%, increase in mortgage banking income. The Company also had increases of $67,000, or 19%, in deposit account fees and $63,000, or 16%, in interchange and ATM fees reflecting higher transaction volumes and pricing changes.

Compared to the second quarter of 2017, noninterest income declined $878,000, or 19%. This was mainly due to a $1.2 million decline in loan level derivative income, which is related to a lower volume of new commercial loan customer back-to-back interest rate swap contracts. The amount of revenue in the loan level derivative income category can be volatile since it is a

2



function of the amount of commercial loans that customers opt to convert from floating to fixed rate via interest rate swaps in any given quarter. Also contributing to the decline was the absence of a $928,000 gain recognized in the second quarter of last year on the sale of the Company's remaining available-for-sale debt securities portfolio. Partially offsetting the declines were an $866,000 increase in miscellaneous income due primarily to SBIC investments, a $452,000 unrealized gain on equity securities recognized in the second quarter of 2018, and increases of $81,000 in deposit account fees and $66,000 in interchange and ATM fees.

NONINTEREST EXPENSE
Noninterest expense was $13.7 million in the second quarter of 2018, down $180,000, or 1%, from the first quarter of 2018. Several categories of expenses had declines from last quarter and these declines were partially offset by an increase in advertising expense, which was at a low level in the first quarter. Compared to the second quarter of 2017, noninterest expense increased $325,000, or 2%. The increase was mainly driven by higher salaries and benefits expense which was up $600,000, or 8%. The growth in salaries and benefits expense was due, in part, to an increase in full time equivalent employees to 245 at June 30, 2018 from 230 at June 30, 2017 as well as merit increases.

INCOME TAXES
The effective income tax rate was 26.8% in the second quarter of 2018 and 25.6% in the first quarter of 2018. This is down from 39.9% in the second quarter of 2017. The lower effective tax rates in 2018 are mainly due to the Tax Act, which was enacted on December 22, 2017 and provided for a reduction in the federal corporate income tax rate from 35% to 21% effective January 1, 2018.

ASSET QUALITY
The provision for loan losses reflects management’s assessment of risks inherent in the loan portfolio. The provision for loan losses was $101,000 in the second quarter of 2018 compared to a credit of $460,000 in the first quarter of 2018 and a provision of $1.1 million in the second quarter of 2017. The decline in the provision from 2017 reflects lower loan growth in 2018 coupled with the impact of the Company's continued migration from the use of historical loss rates based on national FDIC data to loss rates based on the Company's own experience.

The allowance for loan losses as a percentage of total loans was 0.89% at June 30, 2018 compared to 0.92% at March 31, 2018 and 0.97% at June 30, 2017. The Company had net loan charge-offs of $161,000 in the second quarter of 2018 compared to $232,000 in the first quarter of 2018 and $76,000 in the second quarter of 2017.

Nonperforming assets were $13.9 million at June 30, 2018 compared to $13.3 million at March 31, 2018 and $12.8 million at June 30, 2017. Nonperforming assets as a percentage of total assets were 0.51% at June 30, 2018 compared to 0.50% at March 31, 2018 and 0.51% at June 30, 2017.

ABOUT BLUE HILLS BANCORP
Blue Hills Bancorp, Inc., with corporate headquarters in Norwood, MA, had assets of $2.7 billion at June 30, 2018 and operates 11 retail branch offices in Boston, Dedham, Hyde Park, Milton, Nantucket, Norwood, West Roxbury, and Westwood, Massachusetts. Blue Hills Bank is a full service, community bank with its main office in Hyde Park, Massachusetts. The Bank's three branches in Nantucket, Massachusetts operate under the name, Nantucket Bank, a division of Blue Hills Bank. The Bank provides consumer, commercial and municipal deposit and loan products in Eastern Massachusetts through its branch network, loan production offices and eCommerce channels. The Bank offers commercial business and commercial real estate loans in addition to cash management services and commercial deposit accounts. The Bank also serves consumers through a full suite of consumer banking products including checking accounts, mortgage loans, equity lines of credit and traditional savings and certificate of deposit accounts. The Bank has invested substantially in online technology including online account opening and funding, online mortgage applications, online banking, mobile banking, bill pay and mobile deposits. Blue Hills Bank has been serving area residents for over 145 years. For more information about Blue Hills Bank, visit www.bluehillsbank.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release, as well as other written communications made from time to time by the Company and its subsidiaries and oral communications made from time to time by authorized officers of the Company, may contain statements relating to the future results of the Company (including certain projections and business trends) that are considered "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 (the PSLRA). Such forward-looking statements

3



may be identified by the use of such words as "believe," "expect," "anticipate," "should," "planned," "estimated," "intend" and "potential." For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the PSLRA.

The Company cautions you that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement. Such factors include, but are not limited to: our ability to implement successfully our business strategy, which includes significant asset and liability growth; changes that could adversely affect the business in which the Company and the Bank are engaged; prevailing economic and geopolitical conditions; changes in interest rates, loan demand, real estate values and competition; changes in accounting principles, policies, and guidelines; changes in any applicable law, rule, regulation or practice with respect to tax or legal issues; and other economic, competitive, governmental, regulatory and technological factors affecting the Company's operations, pricing, products and services. For additional information on some of the risks and important factors that could affect the Company’s future results and financial condition, see “Risk Factors” in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission. The forward-looking statements are made as of the date of this release, and, except as may be required by applicable law or regulation, the Company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

Media and Investor Contact:
William Parent, 617-360-6520

4


Blue Hills Bancorp, Inc.
Consolidated Balance Sheets

(Unaudited; dollars in thousands)
 
 
 
% Change
 
June 30, 2018
March 31, 2018
June 30, 2017
June 30, 2018
vs.
March 31, 2018
June 30, 2018
vs.
June 30, 2017
Assets
 
 
 
 
 
Cash and due from banks
$
17,566

$
18,194

$
17,292

(3.5
)%
1.6
 %
Short term investments
34,383

26,878

33,819

27.9
 %
1.7
 %
Total cash and cash equivalents
51,949

45,072

51,111

15.3
 %
1.6
 %
Equity securities, at fair value
5,331

9,651


(44.8
)%
 %
Securities available-for-sale, at fair value


10,437

 %
(100.0
)%
Securities held-to-maturity, at amortized cost
303,137

304,036

283,672

(0.3
)%
6.9
 %
Federal Home Loan Bank stock, at cost
14,375

10,730

11,943

34.0
 %
20.4
 %
Loans held for sale
10,005

5,865

6,789

70.6
 %
47.4
 %
Loans:










1-4 family residential
989,598

938,030

895,015

5.5
 %
10.6
 %
Home equity
72,813

75,737

84,615

(3.9
)%
(13.9
)%
Commercial real estate
824,541

849,040

756,093

(2.9
)%
9.1
 %
Construction
88,132

73,113

78,062

20.5
 %
12.9
 %
Total real estate loans
1,975,084

1,935,920

1,813,785

2.0
 %
8.9
 %
Commercial business
268,435

248,521

227,262

8.0
 %
18.1
 %
Consumer
18,352

20,034

25,047

(8.4
)%
(26.7
)%
Total loans
2,261,871

2,204,475

2,066,094

2.6
 %
9.5
 %
Allowance for loan losses
(20,125
)
(20,185
)
(19,917
)
(0.3
)%
1.0
 %
Loans, net
2,241,746

2,184,290

2,046,177

2.6
 %
9.6
 %
Premises and equipment, net
20,192

20,685

22,004

(2.4
)%
(8.2
)%
Other real estate owned
3,649

3,649

202

 %
NM

Accrued interest receivable
6,531

6,120

5,362

6.7
 %
21.8
 %
Goodwill and core deposit intangible
9,438

9,566

10,091

(1.3
)%
(6.5
)%
Net deferred tax asset
6,480

5,197

8,184

24.7
 %
(20.8
)%
Bank-owned life insurance
33,610

33,354

32,533

0.8
 %
3.3
 %
Other assets
34,719

30,936

25,404

12.2
 %
36.7
 %
Total assets
$
2,741,162

$
2,669,151

$
2,513,909

2.7
 %
9.0
 %
Liabilities and Stockholders' Equity
 
 
 




Deposits:
 
 
 
 
 
NOW and demand
$
375,934

$
382,406

$
359,877

(1.7
)%
4.5
 %
Regular savings
213,205

216,894

246,484

(1.7
)%
(13.5
)%
Money market
628,718

643,336

674,593

(2.3
)%
(6.8
)%
Certificates of deposit
525,587

504,996

362,261

4.1
 %
45.1
 %
Brokered money market
85,951

90,369

44,728

(4.9
)%
92.2
 %
Brokered certificates of deposit
282,672

239,837

277,320

17.9
 %
1.9
 %
Total deposits
2,112,067

2,077,838

1,965,263

1.6
 %
7.5
 %
Short-term borrowings
110,000

65,000


69.2
 %
NM

Long-term debt
90,000

105,000

130,000

(14.3
)%
(30.8
)%
Other liabilities
28,850

25,869

21,328

11.5
 %
35.3
 %
Total liabilities
2,340,917

2,273,707

2,116,591

3.0
 %
10.6
 %
Common stock
268

268

268

 %
 %
Additional paid-in capital
258,225

256,470

252,495

0.7
 %
2.3
 %
Unearned compensation- ESOP
(19,357
)
(19,547
)
(20,117
)
(1.0
)%
(3.8
)%
Retained earnings
162,948

160,124

166,033

1.8
 %
(1.9
)%
Accumulated other comprehensive loss
(1,839
)
(1,871
)
(1,361
)
(1.7
)%
35.1
 %
Total stockholders' equity
400,245

395,444

397,318

1.2
 %
0.7
 %
Total liabilities and stockholders' equity
$
2,741,162

$
2,669,151

$
2,513,909

2.7
 %
9.0
 %

5


Blue Hills Bancorp, Inc.
Consolidated Balance Sheet Trend

(Unaudited; dollars in thousands)
June 30, 2018
March 31, 2018
December 31, 2017
September 30, 2017
June 30, 2017
Assets
 
 
 
 
 
Cash and due from banks
$
17,566

$
18,194

$
16,149

$
16,171

$
17,292

Short term investments
34,383

26,878

30,018

22,192

33,819

Total cash and cash equivalents
51,949

45,072

46,167

38,363

51,111

Equity securities, at fair value
5,331

9,651




Securities available for sale, at fair value


9,720

9,943

10,437

Securities held-to-maturity, at amortized cost
303,137

304,036

303,716

302,833

283,672

Federal Home Loan Bank stock, at cost
14,375

10,730

12,105

9,410

11,943

Loans held for sale
10,005

5,865

8,992

12,268

6,789

Loans:










1-4 family residential
989,598

938,030

926,117

905,585

895,015

Home equity
72,813

75,737

81,358

77,819

84,615

Commercial real estate
824,541

849,040

833,978

751,209

756,093

Construction
88,132

73,113

90,712

88,979

78,062

Total real estate loans
1,975,084

1,935,920

1,932,165

1,823,592

1,813,785

Commercial business
268,435

248,521

253,001

240,801

227,262

Consumer
18,352

20,034

21,858

23,142

25,047

Total loans
2,261,871

2,204,475

2,207,024

2,087,535

2,066,094

Allowance for loan losses
(20,125
)
(20,185
)
(20,877
)
(20,248
)
(19,917
)
Loans, net
2,241,746

2,184,290

2,186,147

2,067,287

2,046,177

Premises and equipment, net
20,192

20,685

21,573

21,850

22,004

Other real estate owned
3,649

3,649


202

202

Accrued interest receivable
6,531

6,120

6,438

5,802

5,362

Goodwill and core deposit intangible
9,438

9,566

9,717

9,892

10,091

Net deferred tax asset
6,480

5,197

6,000

9,295

8,184

Bank-owned life insurance
33,610

33,354

33,078

32,800

32,533

Other assets
34,719

30,936

24,867

25,471

25,404

Total assets
$
2,741,162

$
2,669,151

$
2,668,520

$
2,545,416

$
2,513,909

Liabilities and Stockholders' Equity
 
 
 
 
 
Deposits:
 
 
 
 
 
NOW and demand
$
375,934

$
382,406

$
381,316

$
376,864

$
359,877

Regular savings
213,205

216,894

221,004

244,662

246,484

Money market
628,718

643,336

646,603

666,388

674,593

Certificates of deposit
525,587

504,996

448,382

420,765

362,261

Brokered money market
85,951

90,369

92,798

41,768

44,728

Brokered certificates of deposit
282,672

239,837

249,766

235,106

277,320

Total deposits
2,112,067

2,077,838

2,039,869

1,985,553

1,965,263

Short-term borrowings
110,000

65,000

100,000

20,000


Long-term debt
90,000

105,000

105,000

110,000

130,000

Other liabilities
28,850

25,869

25,845

30,829

21,328

Total liabilities
2,340,917

2,273,707

2,270,714

2,146,382

2,116,591

Common stock
268

268

268

268

268

Additional paid-in capital
258,225

256,470

254,750

254,025

252,495

Unearned compensation- ESOP
(19,357
)
(19,547
)
(19,737
)
(19,927
)
(20,117
)
Retained earnings
162,948

160,124

163,978

166,282

166,033

Accumulated other comprehensive loss
(1,839
)
(1,871
)
(1,453
)
(1,614
)
(1,361
)
Total stockholders' equity
400,245

395,444

397,806

399,034

397,318

Total liabilities and stockholders' equity
$
2,741,162

$
2,669,151

$
2,668,520

$
2,545,416

$
2,513,909


6


Blue Hills Bancorp, Inc.
Consolidated Statements of Net Income - Quarters



(Unaudited; dollars in thousands, except share data)
Quarters Ended
% Change
 
June 30, 2018
March 31, 2018
June 30, 2017
June 30, 2018
vs.
March 31, 2018
June 30, 2018
vs.
June 30, 2017
Interest and fees on loans
$
23,081

$
21,809

$
18,715

5.8
 %
23.3
 %
Interest on securities
1,809

1,857

1,572

(2.6
)%
15.1
 %
Dividends
195

204

193

(4.4
)%
1.0
 %
Other
62

78

94

(20.5
)%
(34.0
)%
Total interest and dividend income
25,147

23,948

20,574

5.0
 %
22.2
 %
Interest on deposits
5,252

4,775

3,523

10.0
 %
49.1
 %
Interest on borrowings
912

814

643

12.0
 %
41.8
 %
Total interest expense
6,164

5,589

4,166

10.3
 %
48.0
 %
Net interest and dividend income
18,983

18,359

16,408

3.4
 %
15.7
 %
Provision (credit) for loan losses
101

(460
)
1,118

(122.0
)%
(91.0
)%
Net interest and dividend income, after provision for loan losses
18,882

18,819

15,290

0.3
 %
23.5
 %
Deposit account fees
422

355

341

18.9
 %
23.8
 %
Interchange and ATM fees
454

391

388

16.1
 %
17.0
 %
Mortgage banking
1,033

740

1,219

39.6
 %
(15.3
)%
Loan level derivative fee income
143

240

1,367

(40.4
)%
(89.5
)%
Unrealized gains (losses) on equity securities
452

(69
)

(755.1
)%
NM

Realized securities gains (losses), net


928

NM

(100.0
)%
Gain on exchange of investment in Northeast Retirement Services

653


(100.0
)%
NM

Bank-owned life insurance income
256

276

261

(7.2
)%
(1.9
)%
Gain on sale of premises and equipment

271


(100.0
)%
NM

Miscellaneous
872

1,041

6

(16.2
)%
14,433.3
 %
Total noninterest income
3,632

3,898

4,510

(6.8
)%
(19.5
)%
Salaries and employee benefits
8,264

8,382

7,664

(1.4
)%
7.8
 %
Occupancy and equipment
2,050

2,083

2,030

(1.6
)%
1.0
 %
Data processing
1,054

1,044

1,022

1.0
 %
3.1
 %
Professional fees
450

453

526

(0.7
)%
(14.4
)%
Advertising
499

304

489

64.1
 %
2.0
 %
FDIC deposit insurance
230

233

223

(1.3
)%
3.1
 %
Directors' fees
362

409

428

(11.5
)%
(15.4
)%
Amortization of core deposit intangible
127

151

222

(15.9
)%
(42.8
)%
Other general and administrative
655

812

762

(19.3
)%
(14.0
)%
Total noninterest expense
13,691

13,871

13,366

(1.3
)%
2.4
 %
Income before income taxes
8,823

8,846

6,434

(0.3
)%
37.1
 %
Provision for income taxes
2,366

2,263

2,566

4.6
 %
(7.8
)%
Net income
$
6,457

$
6,583

$
3,868

(1.9
)%
66.9
 %
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
Basic
$
0.27

$
0.27

$
0.16

 
 
Diluted
$
0.26

$
0.27

$
0.16

 
 
Weighted average shares outstanding:
 
 
 
 
 
Basic
24,230,098

24,172,237

23,952,443

 
 
Diluted
24,991,958

24,827,850

24,346,553

 
 
Regular dividends declared per share
$
0.15

$
0.15

$
0.05

 
 
Special dividends declared per share
$

$
0.30

$
0.20

 
 

7


Blue Hills Bancorp, Inc.
Consolidated Statements of Net Income-Year to Date

(Unaudited; dollars in thousands, except share data)
Year to Date
 
June 30, 2018
June 30, 2017
% Change
Interest and fees on loans
$
44,890

$
36,097

24.4
 %
Interest on securities
3,666

3,782

(3.1
)%
Dividends
399

350

14.0
 %
Other
140

126

11.1
 %
Total interest and dividend income
49,095

40,355

21.7
 %
Interest on deposits
10,027

6,777

48.0
 %
Interest on borrowings
1,726

1,289

33.9
 %
Total interest expense
11,753

8,066

45.7
 %
Net interest and dividend income
37,342

32,289

15.6
 %
Provision (credit) for loan losses
(359
)
1,175

(130.6
)%
Net interest and dividend income, after provision for loan losses
37,701

31,114

21.2
 %
Deposit account fees
777

661

17.5
 %
Interchange and ATM fees
845

736

14.8
 %
Mortgage banking
1,773

1,959

(9.5
)%
Loan level derivative fee income
383

1,531

(75.0
)%
Unrealized gains on equity securities
383


NM

Realized securities gains (losses), net

(94
)
(100.0
)%
Gain on exchange of investment in Northeast Retirement Services
653

5,947

(89.0
)%
Bank-owned life insurance income
532

518

2.7
 %
Gain on sale of premises and equipment
271


NM

Miscellaneous
1,913

68

2,713.2
 %
Total noninterest income
7,530

11,326

(33.5
)%
Salaries and employee benefits
16,646

15,227

9.3
 %
Occupancy and equipment
4,133

4,145

(0.3
)%
Data processing
2,098

2,066

1.5
 %
Professional fees
903

1,395

(35.3
)%
Advertising
803

856

(6.2
)%
FDIC deposit insurance
463

435

6.4
 %
Directors' fees
771

802

(3.9
)%
Amortization of core deposit intangible
278

469

(40.7
)%
Other general and administrative
1,467

1,371

7.0
 %
Total noninterest expense
27,562

26,766

3.0
 %
Income before income taxes
17,669

15,674

12.7
 %
Provision for income taxes
4,629

4,319

7.2
 %
Net income
$
13,040

$
11,355

14.8
 %
 
 
 
 
Earnings per common share:
 
 
 
Basic
$
0.54

$
0.47

 
Diluted
$
0.52

$
0.47

 
Weighted average shares outstanding:
 
 
 
Basic
24,201,328

23,932,044

 
Diluted
24,910,065

24,311,222

 
 
 
 
 
Regular dividends declared per share
$
0.30

$
0.10

 
Special dividends declared per share
$
0.30

$
0.20

 


8



Blue Hills Bancorp Inc.
Consolidated Statements of Net Income - Trend
 
Quarters Ended
(Unaudited; dollars in thousands, except share data)
June 30,
March 31,
December 31,
September 30,
June 30,
 
2018
2018
2017
2017
2017
Interest and fees on loans
$
23,081

$
21,809

$
20,883

$
19,721

$
18,715

Interest on securities
1,809

1,857

1,763

1,565

1,572

Dividends
195

204

189

194

193

Other
62

78

40

65

94

Total interest and dividend income
25,147

23,948

22,875

21,545

20,574

Interest on deposits
5,252

4,775

4,349

4,089

3,523

Interest on borrowings
912

814

732

502

643

Total interest expense
6,164

5,589

5,081

4,591

4,166

Net interest and dividend income
18,983

18,359

17,794

16,954

16,408

Provision (credit) for loan losses
101

(460
)
681

242

1,118

Net interest and dividend income, after provision for loan losses
18,882

18,819

17,113

16,712

15,290

Deposit account fees
422

355

372

385

341

Interchange and ATM fees
454

391

418

455

388

Mortgage banking
1,033

740

552

1,146

1,219

Loss on sale of purchased home equity portfolio



(118
)

Loan level derivative fee income
143

240

1,105

156

1,367

Unrealized gains (losses) on equity securities
452

(69
)



Realized securities gains (losses), net




928

Gain on exchange of investment in Northeast Retirement Services

653




Bank-owned life insurance income
256

276

277

268

261

Gain on sale of property plant and equipment

271




Miscellaneous
872

1,041

206

534

6

Total noninterest income
3,632

3,898

2,930

2,826

4,510

Salaries and employee benefits
8,264

8,382

7,755

7,979

7,664

Pension settlement charges


317



Occupancy and equipment
2,050

2,083

2,224

2,024

2,030

Data processing
1,054

1,044

1,067

1,016

1,022

Professional fees
450

453

540

340

526

Advertising
499

304

503

563

489

FDIC deposit insurance
230

233

220

226

223

Directors' fees
362

409

382

382

428

Amortization of core deposit intangible
127

151

175

199

222

Other general and administrative
655

812

1,002

626

762

Total noninterest expense
13,691

13,871

14,185

13,355

13,366

Income before income taxes
8,823

8,846

5,858

6,183

6,434

Provision for income taxes
2,366

2,263

4,565

2,342

2,566

Net income
$
6,457

$
6,583

$
1,293

$
3,841

$
3,868

 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
Basic
$
0.27

$
0.27

$
0.05

$
0.16

$
0.16

Diluted
$
0.26

$
0.27

$
0.05

$
0.16

$
0.16

Weighted average shares outstanding:
 
 
 
 
 
Basic
24,230,098

24,172,237

24,104,329

23,973,116

23,952,443

Diluted
24,991,958

24,827,850

24,795,366

24,510,092

24,346,553

Regular dividends declared per share
$
0.15

$
0.15

$
0.15

$
0.15

$
0.05

Special dividends declared per share
$

$
0.30

$

$

$
0.20


9



Blue Hills Bancorp Inc.
Average Balances/Yields
(Unaudited; dollars in thousands)
Quarters Ended
 
June 30, 2018
 
March 31, 2018
 
June 30, 2017
 
Average balance
Interest
Yield/Cost
 
Average balance
Interest
Yield/Cost
 
Average balance
Interest
Yield/Cost
Interest-earning assets
 
 
 
 
 
 
 
 
 
 
 
Total loans (1)
$
2,209,618

$
23,115

4.20
%
 
$
2,207,895

$
21,841

4.01
%
 
$
2,046,288

$
18,770

3.68
%
Securities (1)
311,183

1,832

2.36

 
313,212

1,902

2.46

 
309,909

1,621

2.10

Other interest earning assets and FHLB stock
28,181

234

3.33

 
33,533

237

2.87

 
36,768

243

2.65

Total interest-earning assets
2,548,982

25,181

3.96
%
 
2,554,640

23,980

3.81
%
 
2,392,965

20,634

3.46
%
Non-interest-earning assets
103,295

 
 
 
96,629

 
 
 
102,750

 
 
Total assets
$
2,652,277

 
 
 
$
2,651,269

 
 
 
$
2,495,715

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
NOW
$
160,194

$
16

0.04
%
 
$
157,582

$
16

0.04
%
 
$
150,711

$
17

0.05
%
Regular savings
214,116

156

0.29

 
219,834

165

0.30

 
255,255

208

0.33

Money market
721,329

2,066

1.15

 
742,035

1,972

1.08

 
688,600

1,669

0.97

Certificates of deposit
725,904

3,014

1.67

 
694,526

2,622

1.53

 
573,997

1,629

1.14

Total interest-bearing deposits
1,821,543

5,252

1.16

 
1,813,977

4,775

1.07

 
1,668,563

3,523

0.85

Borrowings
197,429

912

1.85

 
202,944

814

1.63

 
204,786

643

1.26

Total interest-bearing liabilities
2,018,972

6,164

1.22
%
 
2,016,921

5,589

1.12
%
 
1,873,349

4,166

0.89
%
Non-interest-bearing deposits
207,888

 
 
 
208,561

 
 
 
189,180

 
 
Other non-interest-bearing liabilities
25,349

 
 
 
26,063

 
 
 
33,664

 
 
Total liabilities
2,252,209

 
 
 
2,251,545

 
 
 
2,096,193

 
 
Stockholders' equity
400,068

 
 
 
399,724

 
 
 
399,522

 
 
Total liabilities and stockholders' equity
$
2,652,277

 
 
 
$
2,651,269

 
 
 
$
2,495,715

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest and dividend income (FTE)
 
19,017

 
 
 
18,391

 
 
 
16,468

 
Less: FTE adjustment
 
(34
)
 
 
 
(32
)
 
 
 
(60
)
 
Net interest and dividend income (GAAP)
 
$
18,983

 
 
 
$
18,359

 
 
 
$
16,408

 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest rate spread (FTE)
 
 
2.74
%
 
 
 
2.69
%
 
 
 
2.57
%
Net interest margin (FTE)
 
 
2.99
%
 
 
 
2.92
%
 
 
 
2.76
%
Total deposit cost
 
 
1.04
%
 
 
 
0.96
%
 
 
 
0.76
%

(1) Interest income on tax-exempt securities and loans was adjusted to a fully taxable-equivalent (FTE) basis using a federal statutory tax rate of 21% for the three months ended June 30 and March 31, 2018. A statutory rate of 35% was used in the second quarter of 2017.


10



Blue Hills Bancorp Inc.
Average Balances/Yields
(Unaudited; dollars in thousands)
Year to Date
 
June 30, 2018
 
June 30, 2017
 
Average balance
Interest
Yield/Cost
 
Average balance
Interest
Yield/Cost
Interest-earning assets
 
 
 
 
 
 
 
Total loans (1)
$
2,208,761

$
44,956

4.10
%
 
$
2,002,710

$
36,206

3.65
%
Securities (1)
312,192

3,734

2.41

 
352,212

3,861

2.21

Other interest earning assets and FHLB stock
30,842

471

3.08

 
34,318

414

2.43

Total interest-earning assets
2,551,795

49,161

3.88
%
 
2,389,240

40,481

3.42
%
Non-interest-earning assets
99,981

 
 
 
99,698

 
 
Total assets
$
2,651,776

 
 
 
$
2,488,938

 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities
 
 
 
 
 
 
 
NOW
$
158,896

$
32

0.04
%
 
$
148,068

$
33

0.04
%
Regular savings
216,959

321

0.30

 
258,896

426

0.33

Money market
731,625

4,038

1.11

 
670,980

3,188

0.96

Certificates of deposit
710,301

5,636

1.60

 
570,837

3,130

1.11

Total interest-bearing deposits
1,817,781

10,027

1.11

 
1,648,781

6,777

0.83

Borrowings
200,171

1,726

1.74

 
230,500

1,289

1.13

Total interest-bearing liabilities
2,017,952

11,753

1.17
%
 
1,879,281

8,066

0.87
%
Non-interest-bearing deposits
208,223

 
 
 
186,366

 
 
Other non-interest-bearing liabilities
25,704

 
 
 
27,385

 
 
Total liabilities
2,251,879

 
 
 
2,093,032

 
 
Stockholders' equity
399,897

 
 
 
395,906

 
 
Total liabilities and stockholders' equity
$
2,651,776

 
 
 
$
2,488,938

 
 
 
 
 
 
 
 
 
 
Net interest and dividend income (FTE)
 
37,408

 
 
 
32,415

 
Less: FTE adjustment
 
(66
)
 
 
 
(126
)
 
Net interest and dividend income (GAAP)
 
$
37,342

 
 
 
$
32,289

 
 
 
 
 
 
 
 
 
Net interest rate spread (FTE)
 
 
2.71
%
 
 
 
2.55
%
Net interest margin (FTE)
 
 
2.96
%
 
 
 
2.74
%
Total deposit cost
 
 
1.00
%
 
 
 
0.74
%

(1) Interest income on tax-exempt securities and loans was adjusted to a fully taxable-equivalent (FTE) basis using a federal statutory tax rate of 21% in 2018. A statutory rate of 35% was used in 2017.



11



Blue Hills Bancorp, Inc.
Average Balances - Trend
(Unaudited; dollars in thousands)
Quarters Ended
 
June 30,
March 31,
December 31,
September 30,
June 30,
 
2018
2018
2017
2017
2017
Interest-earning assets
 
 
 
 
 
Total loans
$
2,209,618

$
2,207,895

$
2,178,388

$
2,096,034

$
2,046,288

Securities
311,183

313,212

312,313

301,484

309,909

Other interest earning assets and FHLB stock
28,181

33,533

28,842

32,051

36,768

Total interest-earning assets
2,548,982

2,554,640

2,519,543

2,429,569

2,392,965

Non-interest-earning assets
103,295

96,629

96,781

101,188

102,750

Total assets
$
2,652,277

$
2,651,269

$
2,616,324

$
2,530,757

$
2,495,715

 
 
 
 
 
 
Interest-bearing liabilities
 
 
 
 
 
NOW
$
160,194

$
157,582

$
160,371

$
153,224

$
150,711

Regular savings
214,116

219,834

235,864

243,680

255,255

Money market
721,329

742,035

718,489

708,748

688,600

Certificates of deposit
725,904

694,526

653,573

653,339

573,997

Total interest-bearing deposits
1,821,543

1,813,977

1,768,297

1,758,991

1,668,563

Borrowings
197,429

202,944

202,255

133,788

204,786

Total interest-bearing liabilities
2,018,972

2,016,921

1,970,552

1,892,779

1,873,349

Non-interest-bearing deposits
207,888

208,561

220,167

213,459

189,180

Other non-interest-bearing liabilities
25,349

26,063

23,602

23,603

33,664

Total liabilities
2,252,209

2,251,545

2,214,321

2,129,841

2,096,193

Stockholders' equity
400,068

399,724

402,003

400,916

399,522

Total liabilities and stockholders' equity
$
2,652,277

$
2,651,269

$
2,616,324

$
2,530,757

$
2,495,715



12



Blue Hills Bancorp, Inc.
Yield Trend
(Unaudited)
Quarters Ended
 
June 30,
March 31,
December 31,
September 30,
June 30,
 
2018
2018
2017
2017
2017
Interest-earning assets
 
 
 
 
 
Total loans (1)
4.20%
4.01%
3.81%
3.74%
3.68%
Securities (1)
2.36%
2.46%
2.33%
2.12%
2.10%
Other interest earning assets and FHLB stock
3.33%
2.87%
2.15%
2.66%
2.65%
Total interest-earning assets
3.96%
3.81%
3.61%
3.53%
3.46%
 
 
 
 
 
 
Interest-bearing liabilities
 
 
 
 
 
NOW
0.04%
0.04%
0.04%
0.04%
0.05%
Regular savings
0.29%
0.30%
0.31%
0.31%
0.33%
Money market
1.15%
1.08%
1.01%
0.99%
0.97%
Certificates of deposit
1.67%
1.53%
1.41%
1.28%
1.14%
Total interest-bearing deposits
1.16%
1.07%
0.98%
0.92%
0.85%
Borrowings
1.85%
1.63%
1.44%
1.49%
1.26%
Total interest-bearing liabilities
1.22%
1.12%
1.02%
0.96%
0.89%
 
 
 
 
 
 
Net interest rate spread (FTE) (1)
2.74%
2.69%
2.59%
2.57%
2.57%
Net interest margin (FTE) (1)
2.99%
2.92%
2.81%
2.78%
2.76%
Total deposit cost
1.04%
0.96%
0.87%
0.82%
0.76%
(1) Interest income on tax-exempt securities and loans was adjusted to a fully taxable-equivalent (FTE) basis using a federal statutory tax rate of 21% for the three months ended June 30, 2018 and March 31, 2018. A statutory rate of 35% was used in 2017.
 


13



Blue Hills Bancorp Inc.
Reconciliation of GAAP to Non-GAAP Net Income
(Unaudited; dollars in thousands, except share data)
Quarter Ended
 
June 30, 2018
 
Income Before Income Taxes
 
Provision for Income Taxes
 
Net Income
 
Earnings per Common Share (diluted)
GAAP basis
$
8,823

 
$
2,366

 
$
6,457

 
$
0.26

Less unrealized gain on equity securities
(452
)
 
(121
)
 
(331
)
 
(0.01
)
Non-GAAP basis
$
8,371

 
$
2,245

 
$
6,126

 
$
0.25

 
Quarter Ended
 
March 31, 2018
 
Income Before Income Taxes
 
Provision for Income Taxes
 
Net Income
 
Earnings per Common Share (diluted)
GAAP basis
$
8,846

 
$
2,263

 
$
6,583

 
$
0.27

Add unrealized loss on equity securities
69

 
18

 
51

 

Less gain on exchange of investment in Northeast Retirement Service
(653
)
 
(169
)
 
(484
)
 
(0.02
)
Less gain on sale of premises and equipment
(271
)
 
(70
)
 
(201
)
 
(0.01
)
Non-GAAP basis
$
7,991

 
$
2,042

 
$
5,949

 
$
0.24

 
Quarter Ended
 
December 31, 2017
 
Income Before Income Taxes
 
Provision for Income Taxes
 
Net Income
 
Earnings per Common Share (diluted)
GAAP basis
$
5,858

 
$
4,565

 
$
1,293

 
$
0.05

Add pension settlement charges
317

 
129

 
188

 
0.01

Add impact of tax reform on deferred tax asset valuation

 
(2,500
)
 
2,500

 
0.10

Non-GAAP basis
$
6,175

 
$
2,194

 
$
3,981

 
$
0.16

 
Quarter Ended
 
September 30, 2017
 
Income Before Income Taxes
 
Provision for Income Taxes
 
Net Income
 
Earnings per Common Share (diluted)
GAAP basis
$
6,183

 
$
2,342

 
$
3,841

 
$
0.16

Add loss on sale of purchased home equity portfolio
118

 
45

 
73

 

Non-GAAP basis
$
6,301

 
$
2,387

 
$
3,914

 
$
0.16

 
Quarter Ended
 
June 30, 2017
 
Income Before Income Taxes
 
Provision for Income Taxes
 
Net Income
 
Earnings per Common Share (diluted)
GAAP basis
$
6,434

 
$
2,566

 
$
3,868

 
$
0.16

Less realized gain on sale of remaining available-for-sale debt securities portfolio
(928
)
 
(333
)
 
(595
)
 
(0.02
)
Non-GAAP basis
$
5,506

 
$
2,233

 
$
3,273

 
$
0.14


The Company's management believes that the presentation of net income on a non-GAAP basis, excluding nonrecurring items, provides useful information for evaluating the Company's operating results and any related trends that may be affecting the Company's business. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP.


14



Blue Hills Bancorp Inc.
Reconciliation of GAAP to Non-GAAP Net Income
(Unaudited; dollars in thousands, except share data)
Year to Date
 
June 30, 2018
 
Income Before Income Taxes
 
Provision for Income Taxes
 
Net Income
 
Earnings per Common Share (diluted)
GAAP basis
$
17,669

 
$
4,629

 
$
13,040

 
$
0.52

Less unrealized gain on equity securities
(383
)
 
(103
)
 
(280
)
 
(0.01
)
Less gain on exchange of investment in Northeast Retirement Service
(653
)
 
(169
)
 
(484
)
 
(0.02
)
Less gain on sale of property, plant and equipment
(271
)
 
(70
)
 
(201
)
 
(0.01
)
Non-GAAP basis
$
16,362

 
$
4,287

 
$
12,075

 
$
0.48

 
Year to Date
 
June 30, 2017
 
Income Before Income Taxes
 
Provision for Income Taxes
 
Net Income
 
Earnings per Common Share (diluted)
GAAP basis
$
15,674

 
$
4,319

 
$
11,355

 
$
0.47

Less gain on exchange of investment in Northeast Retirement Services
(5,947
)
 
(2,133
)
 
(3,814
)
 
(0.16
)
Less gain on sale of remaining available-for-sale debt securities portfolio
(928
)
 
(333
)
 
(595
)
 
(0.02
)
Add realized loss on sale of mutual funds
1,054

 
378

 
676

 
0.03

Add reversal of state tax valuation allowance

 
1,697

 
(1,697
)
 
(0.07
)
Non-GAAP basis
$
9,853

 
$
3,928

 
$
5,925

 
$
0.25


The Company's management believes that the presentation of net income on a non-GAAP basis, excluding nonrecurring items, provides useful information for evaluating the Company's operating results and any related trends that may be affecting the Company's business. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP.




15



Blue Hills Bancorp, Inc.
Selected Financial Highlights
(Unaudited)
Quarters Ended
 
June 30,
March 31,
December 31,
September 30,
June 30,
 
2018
2018
2017
2017
2017
Performance Ratios (annualized)
 
 
 
 
 
 
 
 
 
 
 
Diluted EPS:
 
 
 
 
 
GAAP
$
0.26

$
0.27

$
0.05

$
0.16

$
0.16

Non-GAAP
$
0.25

$
0.24

$
0.16

$
0.16

$
0.14

 
 
 
 
 
 
Return on average assets (ROAA):
 
 
 
 
 
GAAP
0.98
%
1.01
%
0.20
%
0.60
%
0.62
%
Non-GAAP
0.93
%
0.91
%
0.60
%
0.61
%
0.53
%
 
 
 
 
 
 
Return on average equity (ROAE):
 
 
 
 
 
GAAP
6.47
%
6.68
%
1.28
%
3.80
%
3.88
%
Non-GAAP
6.14
%
6.04
%
3.93
%
3.87
%
3.29
%
 
 
 
 
 
 
Return on average tangible common equity (ROATCE) (1) (3):
 
 
 
 
 
GAAP
6.63
%
6.84
%
1.31
%
3.90
%
3.99
%
Non-GAAP
6.29
%
6.19
%
4.03
%
3.97
%
3.37
%
 
 
 
 
 
 
Efficiency ratio (2) (3):
 
 
 
 
 
GAAP
61
%
62
%
68
%
68
%
64
%
Non-GAAP
62
%
65
%
67
%
67
%
67
%

(1) Average tangible common equity equals average total equity less goodwill and intangibles.

(2) Efficiency ratio equals noninterest expense divided by net interest and dividend income and noninterest income.

(3) ROATCE and the efficiency ratio are non-GAAP measures and may not be comparable to similar non-GAAP measures used by other companies. Management believes that these non-GAAP measures are meaningful because it is standard practice for companies in the banking industry to disclose these measures. Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons.

See pages 14 for reconciliation of Non-GAAP financial measures.























16



Blue Hills Bancorp, Inc.
Selected Financial Highlights
(Unaudited, dollars in thousands, except share data)
Year to Date
 
June 30, 2018
June 30, 2017
Performance Ratios (annualized)
 
 
 
 
 
Diluted EPS
 
 
GAAP
$
0.52

$
0.47

Non-GAAP
0.48

0.25

 
 
 
Return on average assets (ROAA)
 
 
GAAP
0.99
%
0.92
%
Non-GAAP
0.92
%
0.48
%
 
 
 
Return on average equity (ROAE)
 
 
GAAP
6.58
%
5.78
%
Non-GAAP
6.09
%
3.02
%
 
 
 
Return on average tangible common equity (ROATCE) (1) (3)
 
 
GAAP
6.74
%
5.94