Calif., Florida loans weigh on Boston Private

Boston Private Financial Holdings Inc.’s stock plunged to its cheapest price in four years today after the investment manager said it needs to squirrel away more money to prepare for unpaid loans.

The Boston company plans to funnel $11 million to $12 million to one of its affiliates, First Private Bank & Trust.

Boston Private is a parent company operating through 15 ‘‘affiliates,’’ investment managers or private banks the company owns a stake in. First Private Bank is the company’s Los Angeles affiliate.

First Private expects to sock away $16 million to $19 million more than it previously planned to cover bad loans. The affiliate, which has a $545 million loan portfolio, said credit quality in a portfolio of real estate development loans in Southern California’s Inland Empire has decayed.

The reserve will siphon $10 million to $12 million from company income in 2007. Boston Private reported profit of $15 million last year.

RBC Capital Markets analyst Gerard Cassidy said Boston Private has until now sidestepped the travails plaguing most lenders with loans in Southern California and Florida. The real surprise, he said, would be if the company had escaped unscathed.

Boston Private has about $700 million in construction loans in Florida and Southern California.

Boston Private’s stock sank $4.74, or nearly 24 percent, to $15.32 in afternoon trading.
(AP)