Magazine article American Banker

Boston Private Reports a Spike in Retail Deposits

Magazine article American Banker

Boston Private Reports a Spike in Retail Deposits

Article excerpt

As its name suggests, Boston Private Financial Holdings Inc. is not a traditional deposit-gathering institution, but during the first quarter that's exactly what it did -- at a rapid rate.

Deposits at Boston Private, which focuses on investment management, private banking, and wealth advisory, grew 39% from a year earlier, to $2.7 billion. They rose 12.8% from the fourth quarter, executives told investors Thursday during an earnings conference call.

But deposit-gathering machines like Commerce Bancorp Inc. of Cherry Hill, N.J., can rest easy, Boston Private said.

"We are not a retail bank," Walter M. Pressey, Boston Private's president, said in an interview. "We're more focused on the cash management service that we provide."

Boston Private does not plan to compete with traditional retail banks on deposit pricing, he said.

Mr. Pressey and analysts attributed the deposit spike in part to some customer attrition from FleetBoston Financial Corp. as a result of its purchase by Bank of America Corp. in April of last year.

But more importantly, Mr. Pressey said, the growth was fueled by tax season and a one venture capital client that needed funding. He expects slightly lower deposit growth this quarter.

Mark Fitzgibbon, an analyst at Sandler O'Neill & Partners LP, said, "They are having some good success by taking market share from their competitors."

Additionally, Boston Private's "expansion into new markets is helping a bit and enabling them to grow deposits at a faster rate," Mr. Fitzgibbon said in an interview Thursday.

Boston Private has been acquisitive; last week it said it would acquire Gibraltar Financial Corp. of Coral Gables, Fla., for $245 million. The deal, scheduled to close in the fourth quarter, would give Boston Private its first Florida operations.

However, Mr. …

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