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Boston Private CEO Explains Florida Bank Sale

The chief executive of Boston Private Financial Holdings denies he is dismantling the group’s businesses and has vigorously defended his recent move to spin off five portfolio firms this year, according to Boston Business Journal.
Tim Vaill has announced the divestiture of five portfolio companies this year. The recent sale of Gibraltar Private Bank & Trust that showed Mr Vaill was not willing to sit still and weather the economic crisis. The Florida-based bank threatened to undermine BPFH’s capital base while hindering the growth prospects of the holding company’s best performers, the publication said.
“After we bought (Gibraltar) in the fall of 2005, some god living in Florida said this marketplace will decline,” Mr Vaill was quoted by the publication as saying in an interview.
Like a lot of banking groups in the US and overseas, Boston Private has been hit by the decline in the housing market. Falls in Florida have been particularly hard, saddling banks exposed to the state with a large number of non-performing loans.
Gibraltar once was seen as a key part of Boston Private Financial’s wealth management strategy in the US Southeast. But the bank’s loan portfolio soured while deposits from real estate escrow accounts all but disappeared.
About 40 per cent of Boston Private Financial’s nonperforming loans were tied to Gibraltar, the publication said. So last month he sold the bank to a group led by Gibraltar’s CEO for $93 million, or 64 per cent less than what Boston Private Financial paid for the lender four years earlier.
“The Florida marketplace will deteriorate for some time,” Mr Vaill said.