Boston Private Financial Holdings Inc. was to announce today that it has hired an executive from Bank of America Corp. as its chief financial officer.
David J. Kaye, 43, will succeed Walter Pressey, Boston Private's president, who has been interim CFO since Robert J. Whelan left in March to become the CFO of the Boston mutual fund company Eaton Vance Corp.
Timothy Vaill, Boston Private's chief executive, said in an interview Thursday that Mr. Kaye will help Boston Private's search for acquisitions in new regions.
Mr. Kaye, who will join Boston Private July 30, was a senior vice president and CFO for Columbia Management, Bank of America's asset management arm. Previously he was the CFO of the Charlotte company's private bank.
Before joining B of A, Mr. Kaye was a vice president and the controller for Goldman Sachs Asset Management in New York. A former Naval officer, he is a graduate of the U.S. Naval Academy.
Mr. Vaill said Mr. Kaye was selected from a pool of 12 candidates from banks, asset managers, mortgage companies, and brokerage firms. He said Mr. Kaye was chosen because his experience will help Boston Private expand further into a national wealth management organization. He said it wants to grow organically but also to remain an active acquirer in a consolidating market.
For 13 years Boston Private has been establishing regional hubs by acquiring a wealth manager and a bank and then opening offices in the region. In addition to Seattle, it has used this strategy in San Francisco, Los Angeles, New York, Boston, and Coral Gables, Fla.
Boston Private's latest acquisition, completed July 1, was of Charter Financial Corp., a Bellevue, Wash., private banking company, for $70.8 million.
Charter Bank serves professionals and family-owned businesses in the Puget Sound region. Last year it had about $294 million of assets, $227 million of deposits, and $3 million of net income.
Over the last five years Charter Bank has had annual growth of about 18% in assets, 16% in deposits, and 38% in net income.
Buying Charter Bank strengthened Boston Private in the Seattle and Puget Sound region. It entered the Pacific Northwest in December 2002 by acquiring Coldstream Capital Management of Bellevue, a wealth manager for family offices. Since then Coldstream's assets under management have tripled, to $1 billion.
As it completes the integration of Coldstream, Boston Private will scout other deal opportunities.
"We haven't announced anything else, but conversations are under way," Mr. Vaill said. "I wouldn't be surprised" if another acquisition "happened this year."
Boston Private wants to expand into other regions, including northern Virginia, Atlanta, Dallas, Chicago, and Denver. He said in Boston Private likes to make an acquisition every 18 months.
Mr. Kaye "may bring us a unique perspective on the East Coast," Mr. Vaill said. "He may have a perspective on different areas of the country and different companies for us to partner with."
Analysts said there will continue to be opportunities for companies like Boston Private that want to buy small and midsize banks and wealth managers. Burton Greenwald, an analyst in Philadelphia, said these companies go this route "because starting from scratch is almost impossible these days."
Mr. Greenwald said other trust banks, including Northern Trust Corp. and Wilmington Trust Corp., have used similar strategies.
"The truth is, there is no company that can parachute into virgin territory and build a high-net-worth business from nothing," he said. "A high-net-worth business is built on long-standing relationships."
