As of and for the three and nine months ended September 30, 2009

Certain statements contained in this Quarterly Report on Form 10-Q that are not historical facts may constitute forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. These statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of the words "may," "will," "should," "could," "would," "plan," "potential," "estimate," "project," "believe," "intend," "anticipate," "expect," "target" and similar expressions. These statements include, among others, statements regarding our strategy, evaluations of future interest rate trends and liquidity, prospects for growth in assets and prospects for overall results over the long term. You should not place undue reliance on our forward-looking statements. You should exercise caution in interpreting and relying on forward-looking statements because they are subject to significant risks, uncertainties and other factors which are, in some cases, beyond the Company's control.

Forward-looking statements are based on the current assumptions and beliefs of management and are only expectations of future results. The Company's actual results could differ materially from those projected in the forward-looking statements as a result of, among others, factors referenced herein under the section captioned "Risk Factors"; continued adverse conditions in the capital and debt markets and the impact of such conditions on the Company's private banking, investment management and wealth advisory activities; changes in interest rates; competitive pressures from other financial institutions; continued deterioration in general economic conditions on a national basis or in the local markets in which the Company operates, including changes which adversely affect borrowers' ability to service and repay our loans; changes in the value of the securities in our investment portfolio; changes in loan default and charge-off rates; adequacy of loan loss reserves; reductions in deposit levels necessitating increased borrowing to fund loans and investments; the adoption of adverse government regulation; the risk that goodwill and intangibles recorded in the Company's financial statements will become further impaired; and risks related to the identification and implementation of acquisitions; as well as the other risks and uncertainties detailed in the Company's Annual Report on Form 10-K and other filings submitted to the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

Executive Summary

The Company offers a full range of wealth management services to high net worth individuals, families, businesses and select institutions through its three reporting segments: Private Banking, Investment Management, and Wealth Advisory. This Executive Summary provides an overview of the most significant aspects of our reporting segments and the Company's operations in the third quarter of 2009. Details of the matters addressed in this summary are provided elsewhere in this document and, in particular, in the sections immediately following.

The following table illustrates the Company's operations for the three months ended September 30, 2009 compared to the same period in 2008:

                                                 Three months ended
                                                   September 30,
                                              2009                2008            $ Change         % Change
                                                (In thousands, except per share data)
Total revenues                            $     66,240         $    66,087        $     153               0 %
Total operating expenses                        55,936             142,042          (86,106 )           -61 %
Net income/ (loss) from continuing
operations                                         390            (151,803 )        152,193              nm
Net income attributable to
noncontrolling interests                         1,136               1,255             (119 )            -9 %
Net loss from discontinued operations          (30,614 )          (120,303 )         89,689              75 %
Net loss attributable to the Company           (31,360 )          (273,361 )        242,001              89 %

(Loss)/ earnings per share:
From continuing operations                $      (0.15 )       $     (3.52 )      $    3.37              96 %
From discontinued operations                     (0.45 )             (2.34 )           1.89              81 %
Attributable to the Company                      (0.60 )             (5.86 )           5.26              90 %

nm not meaningful

The major differences leading to the $86.1 million decrease in operating expenses and the $152.2 million increase in net income from continuing operations from the third quarter of 2008 to the third quarter of 2009 include the non-cash impairment charge of $71.2 million, net of tax, recorded in the third quarter 2008, and the transfer of the non-strategic Southern California loan portfolio to the loans held for sale category resulting in charge-offs of $96.4 million, net of tax, in the third quarter of 2008.

The third quarter 2009 earnings per share were adversely impacted by accounting adjustments which reduced income available to common shareholders by $9.9 million, or $0.14 per share.

The key items that affected the Company's third quarter 2009 results include:

1. Net interest margin ("NIM") compression due to several factors including a higher percentage of the Company's assets invested in lower yielding short-term liquid investments, lower rates earned on residential mortgages as adjustable rate mortgages have reset with lower rates, and an increase in non-performing assets.

2. A decrease in Assets Under Management ("AUM"), primarily due to market decline over the past year, which resulted in a reduction in the Company's investment management fees of $3.6 million compared to the quarter ended September 30, 2008.

3. The Company completed its sale of Gibraltar and RINET during the third quarter of 2009 and announced an agreement in which management at Westfield will complete the purchase of the firm in 2009, rather than in 2014. As a result of these transactions, the results of operations related to Gibraltar, RINET and Westfield are included in the results from discontinued operations in the accompanying Consolidated Statements of Operations. In addition, the assets and liabilities of these affiliates have been reflected as assets and liabilities of discontinued operations in the accompanying Consolidated Balance Sheet for periods prior to the divestitures.

All three segments reported positive earnings in the third quarter of 2009. Segment results exclude the effect of discontinued operations, interest expense on certain portions of long-term debt and the results of unconsolidated affiliates and are reduced by net income attributable to non-controlling interests.

The Company's Private Banking segment reported net income of $3.7 million in the third quarter of 2009, compared to a net loss of $125.0 million for the same period in 2008. The major differences in the positive earnings compared to the third quarter 2008 net loss include a $50.1 million, net of tax, impairment charge taken in the third quarter of 2008 and the increased provisions in the third quarter 2008 as a result of the transfer of the non-strategic Southern California loan portfolio. The Company's Private Banking segment reported revenue increases of $1.7 million, or 3%, in the third quarter of 2009 compared to the same period in 2008. Increased revenues were primarily due to higher net interest income, gains recognized from the sale of investments and from the gain on sale of loans and OREO, slightly offset by decreased investment management and trust fees. Net interest income increased $1.1 million, or 3%, in the third quarter of 2009 compared to the same period in 2008 primarily due to decreased cost of borrowings. The increase in interest income has been partially offset by several factors including a higher percentage of the Company's assets in lower yielding short-term liquid investments, and lower rates earned on residential mortgages as adjustable rate mortgages have reset with lower rates, as well as an increase in non-performing assets. Investment management and trust fees at the Banks decreased $0.3 million, or 6%, compared to the third quarter of 2008 as a result of declines in AUM of $0.09 billion, or 3%, from September 30, 2008. 85% of the decrease was attributable to market decline, and the remaining 15% was attributable to outflows. AUM at September 30, 2009 for the Banks was $3.4 billion. Total operating expenses at the Banks for the third quarter of 2009 decreased $45.8 million, or 56%, compared to the same period in 2008. The decrease is primarily due to the non-cash impairment charge recorded in the third quarter of 2008, partially offset by the increase in FDIC insurance expense in the second and third quarters of 2009.

The Company's Investment Management segment reported net income of $0.6 million in the third quarter of 2009, compared to a net loss of $18.2 million for the same period in 2008. The Company's Investment Management segment continues to be negatively affected by the decline in the equity markets. Revenue decreased $3.3 million, or 28%, in the third quarter of 2009 compared to the same period in 2008 as a result of declines in AUM of $1.0 billion, or 13%, from September 30, 2008. Market decline for the twelve months ended September 30, 2009 was $0.5 billion, with outflows of $0.5 billion. AUM at September 30, 2009 at the Investment Management affiliates was $7.0 billion. Total operating expenses at the Investment Management firms for the third quarter of 2009 decreased $34.9 million, or 83%, compared to the same period in 2008. The decrease in expenses is primarily due to a non-cash impairment charge of $33.0 million recorded in the third quarter of 2008. Other drivers of the expense decrease include decreased amortization expense and reduced fixed and variable compensation expenses as a result of decreased salaries and reduced bonus accruals.

The Company's Wealth Advisory segment reported net income of $2.1 million in the third quarter of 2009, compared to net income of $0.2 million in the same period of 2008. The major difference in positive earnings compared to the third quarter 2008 net loss is a $1.5 million non-cash impairment charge taken in the third quarter of 2008. Revenues remained relatively flat in the third quarter 2009 compared to the same period in 2008 at $8.9 million. AUM at September 30, 2009 at the Wealth Advisory firms was $6.9 billion, compared to $7.0 billion at September 30, 2008. Total operating expenses at the Wealth Advisory firms for the third quarter of 2009 decreased $2.0 million, or 26%, compared to the same period in 2008. The decrease is primarily due to the non-cash impairment charge taken in the third quarter of 2008 and decreases in fixed and variable compensation expenses as a result of decrease in staff and reduced bonus accruals.

Critical Accounting Policies

Critical accounting policies are reflective of significant judgments and uncertainties, and could potentially result in materially different results under different assumptions and conditions. The Company believes that its most critical accounting policies upon which its financial condition depends, and which involve the most complex or subjective decisions or assessments are the allowance for loan losses, the valuation of goodwill and intangible assets and analysis for impairment, stock-based compensation, and tax estimates. These policies are discussed in Part II. Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations - III. D. Critical Accounting Policies" in the Company's 2008 Annual Report on Form 10-K. There have been no changes to these policies through the filing of this report on Form 10-Q.

Financial Condition

Total Assets. Total assets decreased $1.4 billion, or 19%, to $5.9 billion at September 30, 2009 from $7.3 billion at December 31, 2008. The decrease in the Company's assets is primarily related to the affiliate divestitures partially offset by organic growth in loans and deposits. In the first quarter of 2009 the Company announced the sale of its affiliates BPVI, and Sand Hill, which closed on April 1, 2009 and June 30, 2009, respectively. During the third quarter of 2009 the Company completed the sale of its affiliates RINET and Gibraltar on September 16 and 17, 2009, respectively. As a result of these transactions, prior period and current financial information related to the firms (BPVI, Sand Hill, RINET and Gibraltar) are included in discontinued operations through the date of sale. See Part I. Item 1. "Notes to Unaudited Consolidated Financial Statements - Note 12: Discontinued Operations" for further details. In addition, in October 2009 the Company announced an agreement in which management at Westfield will complete the purchase of the firm in 2009, rather than in 2014 as previously negotiated. As a result, prior period and current financial information related to Westfield are also included in discontinued operations.

Cash and Cash Equivalent. Cash and cash equivalents (consisting of cash and due from banks and federal funds sold) increased $197.5 million, or 70%, to $478.7 million, or 8% of total assets, at September 30, 2009, from $281.3 million, or 5% of total assets, excluding assets of discontinued operations, at December 31, 2008. The increase is primarily related to the cash received from the sale of Gibraltar and additional liquidity at the Banks as a result of deposit growth outpacing loan growth in 2009. The Banks have generally kept their liquid assets at the Federal Reserve this year as they earn interest on the balances kept there and the funds are well secured. The Banks expect that in the long term the liquidity will be used for future loan growth.

Investments. Total investments (consisting of investment securities available-for-sale, and held-to-maturity) decreased $159.2 million, or 20%, to $644.3 million, or 11% of total assets, at September 30, 2009, from $803.5 million, or 14% of total assets, excluding assets of discontinued operations, at December 31, 2008. Two of the Banks have sold a portion of their investment portfolio in the first nine months of 2009 and realized net gains on the transactions. The Banks' investment portfolios primarily consist of investment grade securities that have increased in fair value as interest rates have fallen. The proceeds from the sale of the securities have been reinvested in either higher yielding loans, kept in cash and cash equivalents, or used to repay borrowed funds such as FHLB borrowings. The Banks acquire securities for various purposes such as: providing a source of income through interest income or through the subsequent sale of the securities, maintaining liquidity, and managing interest rate and liquidity risk. The sale of investments resulted in the Banks recognizing gains due to changes in interest rates which were previously recorded as unrealized gains within other comprehensive income. See

Stock in Federal Home Loan Bank. At September 30, 2009 and December 31, 2008, the Company had $47.5 million in FHLB stock. The Company carries the FHLB stock at the original cost basis (par value). Each of our Banks is a member of their local FHLB located in either: Boston, Seattle, or San Francisco. At each period end, the Company evaluates its investment in the respective FHLB's stock for other-than-temporary impairment. Based on the Company's evaluation of the underlying investment, including the long-term nature of the asset, the liquidity position of the respective FHLBs, the actions being taken by the respective FHLBs to address their regulatory situations, and the fact that the Company's Banks currently

have no intention to sell or redeem any of its investment in the respective FHLBs, and the determination that it is not more likely than not that the Company would be required to sell or redeem any of its investments in the respective FHLBs. Therefore, the Company has not recognized an other-than-temporary impairment loss with respect to stock in the FHLBs.

Loans held for sale. Loans held for sale decreased $18.5 million, or 50%, to $18.3 million at September 30, 2009 from $36.8 million at December 31, 2008. Included in the total loans held for sale at September 30, 2009 is $13.8 million of the Company's non-strategic Southern California portfolio loans. During the first nine months of the year the Company has been able to decrease its non-strategic portfolio from 18 loans, with a carrying value of $27.2 million, at December 31, 2008 to nine loans, with a carrying value of $13.8 million, at September 30, 2009. $4.5 million of the $13.4 million decrease in the non-strategic loans is a result of the loans being transferred to OREO. For these types of loans, the Company believes it will be easier to sell the asset as an OREO property versus as a loan, as there are fewer legal restrictions associated with an OREO property. The Company continues to actively market the sale of the remaining loans. Other factors affecting the decrease include the timing and volume of residential loans originated for sale in the secondary market. When mortgage rates are low, the Banks see an increase in the percentage of customer requests for fixed rate mortgage loans as compared to adjustable rate mortgages. The Banks sell the majority of their fixed rate loans in the secondary market to mitigate interest rate risk.

Loans. Total portfolio loans increased $201.3 million, or 5%, to $4.3 billion, or 74% of total assets, at September 30, 2009, from $4.1 billion, or 72% of total assets, excluding assets of discontinued operations, at December 31, 2008. A portion of the increase in loans was due to two of the Banks purchasing residential loans. In general, the Company has had lower loan growth in 2009 than in recent years as economic conditions have reduced the demand for commercial loans and our Banks have generally reduced or stopped originating construction loans. See Part I. Item 1. "Notes to Unaudited Consolidated Financial Statements - Note 6: Loans Receivable" for a summary of the Company's loan portfolio by geography.

Risk Elements. The Company's non-performing assets include non-accrual loans (including the Southern California non-strategic loans held for sale), OREO and repossessed assets. OREO consists of real estate acquired through foreclosure proceedings and real estate acquired through acceptance of deeds in lieu of foreclosure. In addition, the Company may, under certain circumstances, restructure loans as a concession to a borrower. Such restructured loans are generally included in impaired loans. Non-performing assets increased $39.5 million, or 51%, to $116.3 million, or 1.99% of total assets from continuing operations at September 30, 2009, from $76.8 million, or 1.35% of total assets from continuing operations at December 31, 2008. See Part I. Item 1. "Notes to Unaudited Consolidated Financial Statements - Note 6: Loans Receivable" for a summary of the Company's Private Banking credit quality by geography.

The increases in non-performing assets and classified loans are the result of continued weakness in the U.S. housing, labor and commercial real estate markets and increased bankruptcy filings. This weakening has caused a related deterioration in real estate and land loans as prices for these assets continue to decline.

Total non-accrual loans at September 30, 2009 were $99.8 million, an increase of $35.8 million, or 56%, from $64.0 million at December 31, 2008. Included with non-accrual loans are $13.8 million of the Southern California non-strategic loans held for sale. For a detailed breakout of non-accrual loans by geographic region based on the location of the lender, refer to Part 1. Item I. "Notes to Unaudited Consolidated Financial Statements - Note 6: Loans Receivable".

Of the total non-accrual loans, $43.6 million, or 44% of the total, is in construction and land loans; $31.9 million, or 32%, is in commercial real estate loans; $17.8 million, or 18%, is in commercial and industrial loans; $6.1 million, or 6%, is in residential mortgage loans; and $0.4 million is in other loan categories.

A rollforward of non-accrual loans is presented in the table below:

                                       At and for the three months             At and for the nine months
                                           ended September 30,                    ended September 30,
                                         2009                2008                2009               2008
                                                                 (In thousands)
Ending gross loans                  $    4,330,373        $ 4,039,145       $    4,330,373       $ 4,039,145


Non-accrual loans, beginning of
period                                      83,466             80,090               63,990            34,116
Transfers in to non-accrual
status                                      45,673            172,307              117,787           257,736
Transfers out to OREO                      (11,282 )               -               (24,312 )          (3,581 )
Transfers out to accrual status             (3,369 )             (800 )            (11,877 )          (8,689 )
Charge offs                                 (6,980 )         (164,310 )            (17,560 )        (188,501 )
Paid off/ paid down                         (7,670 )           (3,186 )            (28,190 )          (6,980 )

Non-accrual loans, end of period    $       99,838        $    84,101       $       99,838       $    84,101

OREO and repossessed assets consists of 16 OREO properties with a carrying value of $16.4 million at September 30, 2009, an increase of $3.6 million, or 28%, as compared to six properties with a carrying value of $12.8 million at December 31, 2008. The increase was due to five additional properties in Southern California, three additional properties in both Northern California and the Pacific Northwest, offset by the disposition of one property in New England, as well as partial dispositions and write-downs of various properties in New England and the Pacific Northwest. The fair value of OREO is defined as the cash price that might reasonably be anticipated in a current sale (within 12 months), less estimated selling costs. See Part I. Item 1. "Notes to Unaudited Consolidated Financial Statements - Note 6: Loans Receivable" for a summary of the Company's Private Banking credit quality by geography.

Additional write downs of $0.9 million were taken for the nine months ended September 30, 2009 on loans in Southern California which were previously transferred to the loans held for sale category. These write downs were the result of further declines in the collateral values of five loans. The loss associated with the write downs is included with the gain on sale of loans and other real estate owned, net on the consolidated statement of operations. The Company recorded net gains of $2.5 million on sales of or payments on these loans during the year.

At September 30, 2009, loans with an aggregate balance of $11.4 million, or 0.26% of total loans, were 30-89 days past due, a decrease of $7.3 million, or 39%, as compared to $18.7 million, or 0.45% of total loans, at December 31, 2008. The Company believes most of these loans are adequately secured at the present time and the payment performance of these borrowers varies from month to month. Further deterioration in the local economy or in the real estate market where the collateral is located could lead to these delinquent loans transferring to non-accrual status with a corresponding downgrade of the loans' credit ratings. Downgrades in credit ratings generally result in additional charges to the provision for loan losses.

The Banks' general policy is to discontinue the accrual of interest on a loan when the collectability of principal or interest is not expected. In certain instances, loans that have become 90 days past due may remain on accrual status if the value of the collateral securing the loan is sufficient to cover principal and interest and the loan is in process of collection. There were no loans 90 days past due, but still accruing, as of September 30, 2009, or December 31, 2008. The Banks' general policy to put a loan back on accrual status requires the loan to be brought current and for the customer to show a three to six month history of being able to make timely payments.

Net charge-offs of $22.2 million were recorded through the first nine months of 2009. The Company believes that construction and land loans represent the greatest risk of loss due to the nature of the loans. In times of economic downturns, the value of land and real estate under construction can have a significant rapid decline in value which could lead to financial difficulties for the borrower as well. For a detailed breakout of net loans charged off by loan type and by geographic region based on the location of the lender, refer to

Non-performing assets and delinquent loans are affected by factors such as the economic conditions in the Banks' geographic regions, interest rates, and seasonality. These factors are generally not within the Company's control. A decline in the fair values of the collateral for the non-performing assets could result in additional future expense depending on the timing and severity of the decline. The Banks continue to evaluate the underlying collateral of each non-accrual loan and pursue the collection of interest and principal. Generally when a loan becomes past due or is adversely classified, an updated appraisal of the collateral is obtained. If the loan has not been updated to a performing status within a reasonable amount of time, the Banks may continue to obtain newer appraisals especially during periods of declining values.

Loans that evidence weakness or potential weakness related to repayment history, the borrower's financial condition, or other factors are reviewed by the Banks' management to determine if the loan should be adversely classified. Delinquent loans may or may not be adversely classified depending upon management's judgment with respect to each individual loan. Classified loans are classified as either substandard or doubtful under the rating system adopted by the Banks based on the criteria established by federal bank regulatory authorities.

At September 30, 2009, the Company had classified loans of $147.7 million, an increase of $57.2 million, or 63%, compared to $90.5 million at December 31, 2008. The largest absolute change was in the Northern California region which increased $38.1 million, from $10.9 million at December 31, 2008 to $49.0 . . .