Business Wire | Apr 7, 2021 07:00AM EDT

Boston Private Files Investor Presentation and Board of Directors Sends Letter to Shareholders Regarding the Proposed Transaction with SVB Financial

Apr. 07, 2021

BOSTON--(BUSINESS WIRE)--Apr. 07, 2021--The Board of Directors of Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) ("Boston Private"), a leading provider of integrated wealth management, trust and banking services to individuals, families, businesses and nonprofits, today issued an investor presentation and sent a letter to Boston Private's shareholders regarding the previously announced definitive merger agreement with SVB Financial Group (NASDAQ: SIVB) ("SVB Financial"). The investor presentation is available at https://ir.bostonprivate.com/files/doc_presentations/2021/04/Investor-Presentation.pdf.

The letter and investor presentation reiterate why the SVB Financial transaction continues to provide the best path for maximizing value for Boston Private shareholders, and respond in detail to HoldCo's misleading assertions, unsubstantiated analyses and reckless and illusory proposal that threatens to destroy substantial shareholder value.

The Boston Private Board unanimously recommends that shareholders vote on the WHITE proxy card "FOR" the proposed transaction with SVB Financial and "FOR" the other matters to be considered at the April 27, 2021 special meeting.

The full text of the letter from the Board of Directors to shareholders follows.

April 7, 2021



Dear Boston Private Shareholders:



The special meeting of Boston Private shareholders to approve thevalue-maximizing transaction with SVB Financial, scheduled for April 27, 2021,is rapidly approaching.



If the merger with SVB Financial is completed, holders will be entitled toreceive, for each share of Boston Private common stock owned, $2.10 in cash and0.0228 shares of SVB Financial common stock, an implied value of $13.12 pershare of Boston Private common stock based on the closing stock price of SVBFinancial common stock on April 1, 2021, representing a 56% premium to BostonPrivate's unaffected share price as of immediately prior to announcement of thetransaction.



The Boston Private Board of Directors (the "Board") carefully considered thecompany's available alternatives and concluded that the transaction maximizesvalue for, and is in the best interests of, all Boston Private Shareholders. The Board unanimously recommends that you vote on the WHITE proxy card "FOR"the proposed transaction with SVB Financial and "FOR" the other matters to beconsidered at the April 27, 2021 special meeting to approve the transaction. You can vote by mail, over the Internet or by a toll-free telephone call. Simply follow the instructions on the attached WHITE proxy card. We urge youto vote by telephone or over the Internet to ensure your vote is received intime to be counted at the special meeting.



Your vote is very important, regardless of how many shares you own. Thefailure to vote your shares or an abstention from voting has the same effect asa vote against the transaction. The transaction cannot be completed unless themerger agreement is approved by the affirmative vote of at least 66 2/3% of theoutstanding shares of Boston Private common stock entitled to vote.



You may have received communications from an entity called HoldCo AssetManagement, LP ("HoldCo") seeking your support to defeat the transaction withSVB Financial. The Board believes that HoldCo's illusory proposal is areckless gamble based on arguments without merit that, if successful, wouldimperil the value of your investment in Boston Private.



Your Board is unanimous in its opposition to HoldCo's efforts and recommendsyou ignore their communications and not vote any of their gold proxy cards. Ifyou have voted on a gold proxy card, please vote FOR the proposed transactionwith SVB Financial using a WHITE proxy card. Only your latest dated votecounts.



THE TRANSACTION MAXIMIZES VALUE FOR BOSTON PRIVATE SHAREHOLDERS



The Board believes that the transaction with SVB Financial is a financially andstrategically compelling opportunity that maximizes value for, and is in thebest interests of, all Boston Private shareholders.

Compelling Valuation

Across multiple financial metrics, the merger with SVB Financial represents oneof the most financially attractive bank deals in years.

As a result of the Board's negotiating efforts, SVB Financial increased thevalue of the merger consideration offered from $7.60 per Boston Private sharein August 2020 to $10.94 per Boston Private share as of December 31, 2020, thelast trading day prior to the date of announcement of the merger agreement. Atthe time the transaction was announced, the merger consideration representedthe highest price to forward earnings-per-share multiple and second-highestannouncement date premium in a major bank transaction in the past three years.^1 This already-compelling premium has substantially increased since that timeas a result of the appreciation of SVB Financial's share price, and representsan implied value of $13.12 based on SVB Financial's closing price on April 1,2021, corresponding to a 56% premium to Boston Private's unaffected share priceas of immediately prior to announcement of the transaction and a 21.2x price toforward earnings-per-share multiple.^2 The Board believes that the transactionwith SVB Financial provides substantially higher and more certain value toBoston Private shareholders than the company's available alternatives.

The Right Partnership

SVB Financial is the right partner for Boston Private, which will furtherbenefit current Boston Private shareholders once the merger is completed. Ithas a differentiated platform with a long track record of stellar execution andindustry-leading growth, all of which will be enhanced by the capabilities ofthe combined company to leverage SVB Financial's balance sheet, expansiveclient network and position at the center of the innovation economy to augmentBoston Private's wealth management solutions and accelerate value creationopportunities for Boston Private shareholders. Not only does the merger withSVB Financial provide significant immediate financial benefits to BostonPrivate shareholders through a compelling premium, the Boston Private Boardbelieves that the transaction will enable shareholders to benefit from thestrategic merits of the combination by participating in the upside potential ofthe combined company, and is the clear long-term value maximizing alternativefor shareholders.

The Right Timing

The Board's decision to capitalize on a compelling strategic opportunity withSVB Financial and lock-in a fixed exchange ratio when it did has alreadygenerated hundreds of millions of dollars in incremental value for BostonPrivate shareholders above and beyond the almost 30% premium already embeddedin the implied value of the merger consideration at the time of announcement ofthe transaction. As described in detail below, delaying negotiations with SVBFinancial in order to pursue discussions with other potential counterparties,as HoldCo has proposed, would have wiped away hundreds of millions of dollarsin value for Boston Private shareholders, while providing no discerniblebenefits and significantly increasing various risks, including the potentialloss of the SVB Financial deal altogether. The timing of the transaction wascritical to capturing the upside potential in the price of SVB Financial commonstock based on SVB Financial's continued strong performance.

The Right Process

Independent Board Conducted Extensive Analysis and Carefully Considered AllAvailable Alternatives

In 11 meetings over the course of several months, the Board assessed thecompany's standalone plan and the opportunities, risks and challengesassociated with that plan, and analyzed with its financial advisor the universeof alternative potential strategic merger partners and the several inboundinquiries it received. The Board was very familiar with the strategic meritsof those potential partners as well as the merger consideration they wouldpotentially be able to offer as the result of the Board's and its' advisors'significant corporate advisory, banking and financial services experience, anddeep industry knowledge. Accordingly, the Board determined that:

* no potential merger partner would be a better strategic fit or offer more favorable terms or stronger prospects for future growth and value creation to Boston Private shareholders than SVB Financial; and

* the transaction with SVB Financial would provide more value, sooner, with significantly more certainty and significantly less execution risk, than the company's standalone plan, while at the same time offering participation in the long-term growth potential of the combined company at a level that was unlikely to be achieved under the standalone plan.

The Board's Process Maximized Value Without the Risks Inherent in an Auction

HoldCo repeatedly asserts that the company referred to in Boston Private'sdefinitive proxy statement as Company A "was offering a higher price than SVBwas offering at that time." This is simply false. Neither Company A nor anyother party - other than SVB Financial - made any offer or proposal to acquireBoston Private, either during the negotiation process with SVB Financial or atany time since announcement of the transaction. HoldCo's distortionsunderscore its inability to engage with real-world facts. Having noon-the-ground experience with bank M&A processes, HoldCo subscribes to ablack-and-white, purely theoretical philosophy by which auctions mustautomatically lead to the best outcome for shareholders. But the transactionprocess implemented by the Board was not an academic exercise undertaken in anivory tower - it was a real-world negotiation carefully designed and calibratedwith the advice of expert advisors to maximize value for Boston Privateshareholders. In the real-world, the tone of a conversation matters, timingmatters and reasoned and experienced assessments of a potential acquiror'spreparation, seriousness and ability to pay matter.



These nuances are lost on HoldCo, but they are reflected in precedent banktransactions, where a majority of target companies do not undertake auctionprocesses, and where auction processes generally do not produce better resultsthan bilateral negotiations.^3 The reasons are simple: the universe ofpotential strategic buyers for banks of Boston Private's size is limited andwell-known to those in the industry; to the extent that any such potentialbuyers are interested in a strategic combination, they typically make theirinterest known to targets proactively; and for a business whose principalassets - its people - walk out the door at the end of every business day, therisks of running a broad auction process and exposing the company to potentialleaks, market rumors and resulting employee and customer attrition are real andneed to be weighed against the hypothetical and, in many cases, illusorybenefits of running such a process.

Yet HoldCo would apparently have Boston Private open up its books and providehighly confidential and competitively sensitive diligence materials and accessto employee and customer information to any competitor that expresses even theslightest interest in discussing a possible transaction, no matter how vague,soft or flimsy their overtures or terms might be. The Board disagrees withthat philosophy.

A review of the inquiries from HoldCo's three purported potential buyersconfirms that there was no credible reason for Boston Private to affirmativelypursue further discussions with any of these parties, and that the Board chosethe value-maximizing process.

* Company A: Notwithstanding HoldCo's mischaracterizations, Company A never made any proposal to acquire Boston Private. Instead, it approached Boston Private casually based on speculation that Boston Private might already be considering a strategic business combination and indicated that, subject to numerous contingencies, it might consider a valuation at a tangible book value multiple in a general price range of $10.50. Company A never submitted any letter, indication of interest or other written expression of interest, nor did it propose any specific transaction terms, or indicate whether an actual proposal was expected to be discussed with or approved by its board of directors. The Board discussed and considered Company A's outreach and determined that it was highly speculative and contingent. The Board also concluded that there was greater upside potential in SVB Financial's stock price, and therefore in the value of the merger consideration, that would not apply to Company A even if it were to submit an actionable proposal at or around its indicated potential valuation level. After considering all the facts, the Board concluded that Company A was unlikely to (i) be a better strategic fit for Boston Private than SVB Financial, (ii) offer terms more favorable to Boston Private's shareholders than those offered by SVB Financial, or (iii) offer better prospects for future growth and value accretion for the benefit of Boston Private's shareholders.

* September 2020 Inquiry: HoldCo criticizes Boston Private for not inviting another party that inquired about a transaction in September 2020 to participate in an auction process. As previously disclosed, this party inquired about a transaction at a 20-25% premium to Boston Private's then-current stock price, which was in the range of $5.50 per share, implying a transaction value of around $6.60 - $6.87 per share. At that time, discussions with SVB Financial centered around SVB Financial making a proposal valuing Boston Private at approximately $9.25 per share, which the Boston Private Board concluded was still an inadequate price. There was simply no reason for Boston Private to waste time, money and effort, or magnify the attendant confidentiality, competitive, employee and customer retention risks, by engaging on an inquiry with such an inferior value proposition.

* Similarly-Sized California-Based Bank Holding Company: Finally, HoldCo suggests that Boston Private should have engaged in transaction negotiations with a California-based bank holding company of similar size to Boston Private. As previously disclosed, in 2019 Boston Private engaged in preliminary discussions with representatives of this potential counterparty, which centered around an acquisition by Boston Private of this counterparty - a completely different transaction than the SVB Financial merger (or, for that matter, any sale transaction advocated by HoldCo), in which Boston Private would be paying a premium, instead of receiving one. Boston Private had previously determined that such a transaction would not be financially attractive or create meaningful value for Boston Private shareholders, and that this company was not a strong financial, cultural or strategic fit for Boston Private. Accordingly, there was no reason to engage in further discussions with this potential counterparty. HoldCo's contention that inviting this party - whose apparent interest was in being acquired by Boston Private - to participate in an auction to acquire Boston Private would have somehow generated competitive pressure and resulted in SVB Financial delivering additional merger consideration defies logic, and further underscores HoldCo's lack of understanding of real-world negotiating dynamics.

Far from lending support to HoldCo's auction theory, what these variousinformal inquiries actually show is that the Board was extremely well-informedregarding the pool of potential strategic counterparties that might beinterested in pursuing a strategic combination and the level of considerationthat they might be able and willing to offer. If any of the parties thatHoldCo asserts would have offered superior financial terms, or indeed any otherpotential strategic partner, were in fact interested in and capable ofacquiring Boston Private at a premium valuation relative to the merger with SVBFinancial, they would have submitted a proposal. None did.

Contrary to HoldCo's monolithic view of M&A processes, the Board does notbelieve that there is any single blueprint for how to achieve the best resultin selling a company. It is a fact- and context-specific determination thatrequires careful consideration and evaluation of a number of factors that bearon the risks and benefits of approaching additional parties or instead pursuinga transaction with a company that has made a compelling strategic offer. TheBoard ran a robust, thorough and value-maximizing process for Boston Privateshareholders and successfully secured one of the highest premia of any bankmerger in years, and locked-in an exchange ratio at a time that has allowedBoston Private shareholders to benefit from the substantial upside in SVBFinancial's stock price.

HOLDCO'S PATH FORWARD IS RECKLESS, NOT VIABLE AND EXPOSES BOSTON PRIVATESHAREHOLDERS TO SIGNIFICANT RISKS

While the Board has provided a value-maximizing transaction with a compellingpremium and significant long-term upside prospects, HoldCo lacks any coherentstrategy or viable value proposition for Boston Private shareholders, and itsproposed "path forward" is illusory and would expose you to major risks.

It is clear that prior to the announcement of the SVB transaction, HoldCo wasplanning to launch a proxy fight against the Board and advocate for a sale ofthe company. But before HoldCo could do so, the Board capitalized on theopportunity with SVB Financial, delivering a strategic transaction at a pricethat maximizes value for Boston Private shareholders. The Board preemptedHoldCo's platform by doing what was right for Boston Private shareholders andacting at the right time, but HoldCo is determined to move forward with itscontest anyway.

The result is a "path forward" that is reckless, unrealistic and lacks anyfeasible means of delivering additional value. Notwithstanding HoldCo's claimsthat the steps to achieving enhanced value are "simple and straightforward,"they are in fact fraught with risk.

HoldCo's Proposed Sale Process Threatens To Expose Boston Private to UncappedDamages

HoldCo continues to propose that Boston Private "commence a competitive [sale]process immediately." But as the Board noted in its prior communication toshareholders, commencing such a process would be a willful breach of BostonPrivate's obligations under the merger agreement with SVB Financial, aninconvenient fact that HoldCo knows, or should know if it had in fact read thepublicly available merger agreement, but has blatantly ignored in all of itscommunications to you. HoldCo is either attempting to deliberately mislead youor is willing to expose your company to uncapped potential damages.

HoldCo's proposed path forward is a fantasy, and entirely illusory. Unless theparties mutually agree to terminate the merger agreement, until the January 3,2022 termination date is reached or another termination event occurs, neitherparty can abandon the transaction and each must use reasonable best efforts tocomplete the merger.

HoldCo's Expectations of Potential Acquirors Are Unrealistic and Unsupported

HoldCo has now implicitly acknowledged that a previously unknown mysteryacquiror is not likely to materialize. As such, HoldCo is pinning its hopes ona limited universe of potential acquirors, several of whom made informal andpreliminary inquiries of Boston Private that the Board carefully evaluated and,as discussed above, determined (correctly) were unlikely to result in termsmore favorable to Boston Private shareholders than those offered by SVBFinancial. HoldCo has not demonstrated why any of those parties, or for thatmatter any other potential acquiror, would suddenly be likely to make aproposal to acquire Boston Private, much less one that delivers more value thanthe transaction with SVB Financial. To date, no such proposal has been made. HoldCo may be comfortable taking a flyer on the unlikely possibility of such aproposal emerging; the Board is not.

Proposed Slash and Burn Approach Would Destroy Value

Perhaps understanding that re-initiating a sales process is not feasible andthat there is no mystery acquiror waiting in the wings, HoldCo has pivoted toproposing vague operational changes that amount to nothing more than a slashand burn approach designed to artificially boost short-term share priceperformance through excessive cost cutting and return of capital, to thedetriment of the long-term value of the Boston Private franchise. HoldCo'sanalysis, resting on faulty and unsubstantiated assumptions, would fail todeliver value to Boston Private shareholders on par with the SVB Financialmerger consideration even in the short term and likely result in significantcustomer and employee attrition and irredeemable damage to the Boston Privatebusiness. To make its plan appear to create value, HoldCo makes a series ofgroundless assumptions, including establishing cost-savings by reference to aset of peers with very different business models, assuming multiple expansionsolely as a result of cost-cutting, and, most egregiously, assuming that thecompany could buy back $115 million of its shares at $10 while bumping itsshare price to more than $17 - an assumption both absurd on its face and thatwould raise serious questions under the federal securities laws.

HoldCo's standalone "plan," which might as well have been sketched out on theback of a napkin, further illustrates the dangers of delegating the strategyfor ongoing operations of Boston Private and its subsidiaries to HoldCo. Thisslash and burn approach that fails to deliver value in the short term whiledestroying Boston Private's long-term prospects stands in stark contrast to thecompelling value, upside participation and certainty of execution that the SVBFinancial transaction will deliver for Boston Private shareholders.

HoldCo's Withdrawal of Its Own Nominees Demonstrates a Lack of Commitment andthe Absence of a Coherent Strategy

As the Board previously noted, HoldCo was forced to withdraw its nominationnotice with respect to two of its nominees to the Boston Private Board -HoldCo's own co-founders Michael Zaitzeff and Vikaran Ghei - due to itsparallel threatened proxy fight against another Boston-based bank holdingcompany, Berkshire Hills Bancorp, Inc., where it also nominated Mr. Zaitzeff tothe board of directors. That HoldCo consciously decided to forego thepossibility of nominating a majority slate that included HoldCo's founders tothe Boston Private Board in favor of having a single representative on theBerkshire board demonstrates HoldCo's utter lack of conviction in the strengthof its arguments or its likelihood of success. Moreover, it confirms thatHoldCo does not have a coherent strategy. It has a bag of risky, half-bakedproposals and no idea how to execute on them. Even if HoldCo's threeunaffiliated nominees were elected to the Board and adopted HoldCo's agenda,they would constitute only a minority of the Board and would have no mechanismto cause Boston Private to pursue HoldCo's ill-advised and risky gambles, andgiven HoldCo's board seat at Berkshire Hills, a competing bank operating in thesame market as Boston Private, it is far from clear that HoldCo would even beable to actively participate, directly or indirectly, in key strategicdecisions of the Boston Private Board given antitrust, bank regulatory andconfidentiality considerations.

Though HoldCo has not articulated a feasible "path forward," all of itsproposed roads lead to the same dead end: giving up a compelling transactionwith certainty of value and significant upside in favor of a collection ofreckless gambles, each with substantial and readily apparent risks, and highlytheoretical and illusory potential benefits.

HOLDCO'S MISGUIDED ATTACKS AND BASELESS ASSUMPTIONS ARE NO SUBSTITUTE FOR THEBOARD'S INFORMED VALUATION ANALYSES

In considering the SVB Financial transaction, the Board and its advisorscarefully evaluated Boston Private's standalone plan and the valuation itimplied, and determined that the SVB Financial transaction would deliver morevalue, sooner, with significantly more certainty and significantly lessexecution risk than the company's standalone plan.



In contrast, Holdco has not undertaken any serious valuation analyses orengagement with Boston Private's standalone plan, and has made no attempt todefend its naive "sum of the parts" and "contribution" analyses - methodologiesthat are inapplicable to Boston Private's business or the transaction at hand,include numerous flawed assumptions and ignore fundamental valuationprinciples. Instead of defending its analyses, HoldCo has resorted toattacking the market's valuation of SVB Financial, using sleights of hand andpretending the world did not change as a result of the pandemic.



Attacks Against SVB Financial Are Misguided

HoldCo presents several purported analyses that, while framed in differentways, boil down to a single assertion: HoldCo believes that the market isascribing too much value to SVB Financial's shares, and that it knows betterthan the market.

HoldCo's attacks against SVB Financial have no basis in reality. As industryanalysts recognize, SVB Financial has a differentiated platform withexceptional growth opportunities in key industries, along with a history ofoperational excellence and credit quality that leaves little doubt about itsability to successfully capitalize on these opportunities. SVB Financial'spremium valuation is not a short-term blip - it is based on a long-term trackrecord of successful execution: over the last ten years, SVB Financial hassignificantly outperformed its peers on almost every key metric. Accordingly,each of SVB Financial's 1-, 3-, 5- and 10-year total shareholder returns faroutpace its peers and banks generally.^4 The market again validated SVBFinancial's premium valuation just two weeks ago, as SVB Financial successfullyraised $1 billion in a common stock offering from major institutional investorsin a single day at a price of $500 per share, implying a price-to-earningsmultiple of 24.4x.^5

HoldCo's attacks on SVB Financial fly in the face of what the rest of themarket already knows, has known for years and has very recently validated -that SVB Financial's unique position at the center of the innovation economy,fundamentally different balance sheet and earnings growth opportunities andoutstanding record of performance justify its premium multiple.

HoldCo Is Living in a Pre-Pandemic World

HoldCo attempts to undermine the compelling value created by the SVB Financialtransaction by comparing the value of the merger consideration to BostonPrivate's pre-pandemic share price and referencing the parties' pre-pandemicperformance. These comparisons are irrelevant, out of touch with reality andfail to take into account the significant changes in interest rates, thecompetitive environment and the businesses and growth prospects of BostonPrivate, SVB Financial and their respective clients arising out of the pandemicand ongoing recovery. HoldCo is living in the past and focused on pre-pandemicperformance and share prices. The Board, on the other hand, is focused onmaximizing value for Boston Private shareholders in the present and over thelong-term - the Board evaluated Boston Private's future prospects in light of achanging environment and determined that the transaction with SVB Financial wasthe best way to maximize value.

Sleights of Hand Reinforce HoldCo's Mistakes

HoldCo's attempt to reframe the transaction consideration in terms of exchangeratio rather than value is not only incorrect, it repeats the same mistakesthat HoldCo made in its valuation analyses and highlights how a process managedby HoldCo would have produced inferior results. HoldCo's assertions that theBoard "ineptly negotiated for lower consideration as the process with SVBunfolded" and that SVB Financial's final offer represented a 22% decline invalue are blatantly false. The Board negotiated to increase the value of themerger consideration from approximately $7.60 per Boston Private share to$10.94 per Boston Private share at the date of announcement of the transaction,a value reflecting the second-highest premium in a major bank transaction inthe last three years. HoldCo's attempted sleight of hand again ignores thediffering valuation and growth profiles of Boston Private and SVB Financial andthe resulting possibility that their share prices would change at differingrates over time, while naively assuming that SVB Financial (or any otherpotential acquiror) would intentionally undervalue itself by negotiating atransaction without regard for positive changes to its own valuation and growthprospects.

And yet, the increase in SVB Financial's stock price, the very issue aboutwhich HoldCo complains, would have been greatly exacerbated by HoldCo'ssuggestion that Boston Private invite other parties into an auction process tosomehow "keep SVB honest" about the market value of SVB Financial's shares. AsHoldCo would have it, Boston Private would have been mired in an auctionprocess with bidders the Board deemed unlikely to be competitive and, as aresult, would have missed its window to capture the potential appreciation inthe value of SVB Financial shares for the benefit of Boston Privateshareholders. Had Boston Private sought to prolong negotiations with SVBFinancial in order to run an auction process, not only would Boston Privatehave risked losing the SVB Financial transaction altogether, particularly inlight of SVB Financial's final proposal being expressly conditioned onexclusivity, but even if a transaction had materialized based on the ultimatelyagreed pricing it would have cost Boston Private shareholders approximately$240 million in aggregate consideration value.^6 It was precisely those risks,along with the significant risks to the Boston Private franchise from aconfidentiality, competitive, and employee and customer retention perspective,that the Board carefully weighed against the potential benefits of rejecting orattempting to delay SVB Financial's final proposal and pursuing discussionswith other potential strategic parties. The Board correctly concluded thatthose risks far outweighed any conceivable benefits of delay.

THE BOARD RAN AN EXEMPLARY PROCESS DELIBERATELY SEQUENCED TO AVOID POTENTIALCONFLICTS

The Board's thoughtful sequencing of the negotiations with SVB Financialavoided conflicts to ensure a result that maximized value for Boston Privateshareholders. HoldCo's continued efforts to falsely paint the transaction withSVB Financial as a conflict-ridden, management-friendly deal have no basis infact, do not hold up to even the most cursory level of scrutiny, and are adesperate attempt to gain traction where all substantive arguments have failed.

The Board Ran a Model Process

The Board ran a thorough, independent-director-driven process that wasdeliberately sequenced to ensure that any negotiations between Mr. DeChellis orother members of management and SVB Financial related to post-closingemployment or retention arrangements occurred only after negotiations regardingthe amount of the merger consideration and the other material transaction termshad been finalized. All members of the Boston Private Board other than Mr.DeChellis are fully independent, and the Board is comprised of a sophisticatedand diverse group of directors with decades of collective financial servicesexperience. Negotiations were led by a working group comprised of Mr.DeChellis and two independent directors with deep M&A and transactionalexperience. The Board's independent Chair, Stephen Waters, was intimatelyinvolved in the key pricing negotiations with SVB Financial, all of which tookplace more than a month before SVB Financial first provided a term sheet to Mr.DeChellis outlining the proposed terms for his continued employment followingcompletion of the merger. And the entire Board was fully involved inoverseeing the transaction process from start to finish.

For the Board to have formed a special committee to negotiate the transaction,as suggested by HoldCo, would have been both unusual and value destructive. Special committees are extremely rare - they have been used by target boards injust 6% of major bank transactions over the past ten years^7 - and areappropriate where there is a true board conflict that cannot otherwiseeffectively be mitigated, such as a transaction in which a controllingshareholder stands on both sides of a deal or conflicted directors have aspecial material interest in the transaction. That was definitively not thecase with respect to Boston Private's arm's-length, third party mergernegotiations with SVB Financial. Given the sequencing of the negotiations andthe composition of the working group, the formation of a special committeewould have done nothing to mitigate any purported "conflict." Instead, itwould have deprived Boston Private of Mr. DeChellis's operational expertiseduring negotiations, which was crucial in demonstrating the value of thecompany and its wealth management franchise to SVB Financial. A transaction ofthe strategic importance of the SVB Financial merger demands the careful reviewand consideration of all directors and should, in the Board's view, remainsquarely within the ultimate province of the full Board, which is exactly whatoccurred.

Further, HoldCo's contention that the prospect of continued post-closingemployment for Mr. DeChellis represented an "irreconcilable conflict ofinterest" is based on the false premise that Mr. DeChellis was likely toreceive better post-closing employment terms from SVB Financial than from anyother potential buyer. HoldCo's misleading characterizations rely on staleinformation, make apples-to-oranges comparisons of target to actualcompensation levels, and fail to acknowledge Mr. DeChellis's waiver oftermination protections and forfeiture of Boston Private equity awards. Thefact is, Mr. DeChellis received from SVB Financial post-closing employmentarrangements on customary and reasonable terms, in a strategic transactionwhere his ongoing involvement in Boston Private's wealth management business isan important value driver.

Those arrangements are not unique to the SVB Financial transaction - everyother hypothetical acquiror cited by HoldCo would have also acquired BostonPrivate in a strategic transaction where Boston Private's wealth managementbusiness would have been an important value driver, and so would have wanted tohire Mr. DeChellis. In fact, as disclosed in Boston Private's definitive proxystatement, in September 2020, one such potential party had expressed interestin hiring away Mr. DeChellis to run its wealth management business apart froman acquisition, which Mr. DeChellis declined. Mr. DeChellis had no reason tobelieve that the package offered by SVB Financial would be any better than thatoffered by any other possible merger partner, and therefore would have had noreason to direct the transaction toward SVB Financial instead of another mergerpartner. HoldCo's contention that there was an "irreconcilable conflict ofinterest" is wrong, and the Board carefully designed a process to ensure thatno such conflict could arise.

HoldCo's Assertions Regarding Retention Arrangements Are False

In an even more brazen attempt to mislead you, HoldCo falsely asserts that theone-time merger costs expected to be incurred by SVB Financial "represent adirect transfer of wealth from BPFH shareholders to BPFH executives." Inreality, SVB Financial has offered BPFH executives customary (and for atransaction of this size, relatively modest) retention awards with aggregatevalue of up to $7.5 million, roughly 3.5% of SVB Financial's total assumedrestructuring costs and undoubtedly similar to what any other acquiror ofBoston Private would have offered to ensure continued performance of BostonPrivate's franchise. These retention arrangements were put in place only afterthe merger was announced and the pricing and other transaction terms wereagreed, and are appropriately structured for retentive purposes - executiveswill not receive their full retention amounts unless they remain employed withSVB Financial for a full four years after completion of the merger.

Most importantly, there is no basis for HoldCo's assertion that these retentioncosts, or for that matter any restructuring charges to be incurred by SVBFinancial in connection with the transaction, somehow reduced the amount of themerger consideration payable to Boston Private shareholders, which wasnegotiated more than a month before SVB Financial put any retentionarrangements in place or finalized its due diligence and preliminaryrestructuring cost analysis.

*****

In sum, the Board believes that the transaction with SVB Financial is afinancially and strategically compelling opportunity and is thevalue-maximizing alternative for all Boston Private shareholders. In contrast,HoldCo's proposed path forward is an ever-changing assortment of recklessgambles based upon an indefensible valuation and supported only by misleadingassertions and unsubstantiated attacks. The Board believes that betting thefuture of Boston Private on HoldCo's illusory proposal is a risk that is simplytoo grave to tolerate.



For these reasons, and the reasons set out in greater detail in BostonPrivate's definitive proxy statement mailed to shareholders and its othermaterials filed with the SEC, the Board unanimously recommends that you vote onthe WHITE proxy card "FOR" the proposed transaction with SVB Financial and"FOR" the other matters to be considered at the special meeting.



Your vote is very important, regardless of how many shares you own. Thefailure to vote your shares or an abstention from voting has the same effect asa vote against the transaction. The transaction cannot be completed unless themerger agreement is approved by the affirmative vote of at least 66 2/3% of theoutstanding shares of Boston Private common stock entitled to vote.



If you have any questions or need assistance voting your shares, please contactInnisfree M&A Incorporated, Boston Private's proxy solicitor, by callingtoll-free at (877) 800-5187, or for banks and brokers, collect at (212)750-5833.



On behalf of the Boston Private Board, thank you for your continued support ofBoston Private.



Sincerely,

The Boston Private Board

About Boston Private

Boston Private is a leading provider of integrated wealth management, trust and banking services to individuals, families, businesses and nonprofits. For more than 30 years, Boston Private has delivered comprehensive advice coupled with deep technical expertise to help clients simplify their lives and achieve their goals. The firm offers the capabilities of a large institution with the superior service of a boutique firm to clients across the United States. Boston Private is the corporate brand of Boston Private Financial Holdings, Inc. (NASDAQ: BPFH). For more information, visit www.bostonprivate.com.

Advisors

Wachtell, Lipton, Rosen & Katz is serving as legal counsel to Boston Private and Morgan Stanley & Co. LLC is acting as financial advisor to Boston Private.

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to SVB Financial's and/or Boston Private's expectations or predictions of future financial or business performance or conditions. Forward-looking statements are typically identified by words such as "believe," "expect," "anticipate," "intend," "target," "estimate," "continue," "positions," "prospects" or "potential," by future conditional verbs such as "will," "would," "should," "could" or "may," or by variations of such words or by similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and we assume no duty to update forward-looking statements. Actual results may differ materially from current projections. In addition to factors previously disclosed in SVB Financial's and Boston Private's reports filed with the U.S. Securities and Exchange Commission (the "SEC"), the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: ability to obtain regulatory approvals and meet other closing conditions to the merger, including approval by Boston Private's shareholders on the expected terms and schedule; delay in closing the merger; the outcome of any legal proceedings that have been or may be instituted against SVB Financial or Boston Private; the occurrence of any event, change or other circumstance that could give rise to the right of one or both parties to terminate the merger agreement providing for the merger; difficulties and delays in integrating Boston Private's business or fully realizing cost savings and other benefits; business disruption following the merger; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; the inability to retain existing Boston Private clients; the inability to retain Boston Private employees; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures; economic conditions; the impact, extent and timing of technological changes, capital management activities, and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms; and the impact of the global COVID-19 pandemic on SVB Financial's and/or Boston Private's businesses, the ability to complete the proposed merger and/or any of the other foregoing risks. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

Important Additional Information and Where to Find It

In connection with the proposed merger, SVB Financial has filed with the SEC a registration statement on Form S-4 that includes the proxy statement of Boston Private and a prospectus of SVB Financial. The registration statement on Form S-4, as amended, was declared effective by the SEC on March 17, 2021, and Boston Private commenced mailing of the definitive proxy statement/prospectus to its shareholders on or about March 19, 2021. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. INVESTORS AND SHAREHOLDERS OF BOSTON PRIVATE ARE URGED TO READ THE REGISTRATION STATEMENT AND THE DEFINITIVE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION.

A free copy of the definitive proxy statement/prospectus, as well as other filings containing information about SVB Financial and Boston Private, may be obtained at the SEC's Internet site ( http://www.sec.gov). Copies of documents filed with the SEC by SVB Financial will be made available free of charge on SVB Financial's website at http://ir.svb.com or by contacting SVB Financial's Investor Relations department at 408.654.7400; 3005 Tasman Drive, Santa Clara, CA 95054; or ir@svb.com. Copies of documents filed with the SEC by Boston Private will be made available free of charge on Boston Private's website at http://ir.bostonprivate.com or by contacting Boston Private's Investor Relations department at 617.912.4386; 10 Post Office Square, Boston, MA 02109; or abromley@bostonprivate.com.

Participants in the Solicitation

SVB Financial, Boston Private and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Boston Private in connection with the proposed merger. Information about the directors and executive officers of SVB Financial is set forth in the proxy statement for SVB Financial's 2021 Annual Meeting of Stockholders, which was filed with the SEC on March 4, 2021, and other documents filed by SVB Financial with the SEC. Information about the directors and executive officers of Boston Private is set forth in Boston Private's Form 10-K for the year ended December 31, 2020, as amended, and other documents filed by Boston Private with the SEC. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the definitive proxy statement/prospectus regarding the proposed merger. Free copies of this document may be obtained as described in the preceding paragraph.

_______________________ 1 Bank transactions in excess of $500 million since January 1, 2018. 2 Based on equity research consensus 2021 earnings per share estimates of $0.62 per share as disclosed in Boston Private's definitive proxy statement. 3 Bank transactions in excess of $500 million since January 1, 2018. 4 As of April 1, 2021. SVB Financial 1-year, 3-year, 5-year and 10-year total shareholder return ("TSR") of 245%, 101%, 369% and 742%, as compared to peers' TSR of 127%, 18%, 124% and 198% and median of the KBW Nasdaq Bank Index TSR of 114%, 21%, 105% and 181% over the same periods. Peers based on Morgan Stanley fairness opinion analysis, other than People's United Financial, Inc., where trading has been disrupted by the announced sale to M&T Bank Corporation. 5 Based on estimated 2021 earnings per share of $20.52 per Thomson Reuters median street estimates as of March 22, 2021, following SVB Financial's Form 8-K providing updated guidance. 6 Applying the agreed-upon pricing formula 30 trading days later would have yielded an exchange ratio of 0.0168x and a current implied value of the merger consideration of $10.22 per share, or approximately $840 million, as compared to the actual current implied value of the merger consideration of $13.12 per share, or approximately $1.08 billion, in each case based on SVB Financial's closing price on April 1, 2021. 7 FactSet data as of March 31, 2021 for bank transactions in excess of $500 million since January 1, 2010.

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CONTACT: Investor Relations Adam Bromley (617) 912-4386 abromley@bostonprivate.com

CONTACT: Media Lucy Muscarella (617) 912-4402 lmuscarella@bostonprivate.com