TriState Capital Reports First Quarter 2022 EPS of $0.48 on New Record Levels of Net Interest Income, Revenue and Loans, With Continued Net Interest Margin Expansion
TriState Capital Holdings (TSC) announced its first quarter 2022 results, reflecting strong financial performance with a record net interest income of $53.6 million, a 38.7% increase year-over-year. With consistent organic growth in loans, total loans reached $11.25 billion, up 31.6% from the previous year. The company also noted successful asset management with Chartwell, generating high inflows despite market depreciation. NIM improved to 1.70%, marking the sixth consecutive quarter of expansion. The anticipated acquisition by Raymond James remains on track, expecting closure by Q2 2022.
- Record net interest income of $53.6M, up 38.7% YoY.
- Total loans grew to $11.25B, up 31.6% YoY.
- NIM expanded for the sixth consecutive quarter to 1.70%.
- Chartwell secured $416M in inflows, demonstrating strong asset management.
- Non-performing loans decreased to 0.00% of total loans.
- Net income available to common shareholders decreased from $19.9M in Q4 2021 to $18.5M in Q1 2022.
- Total adverse-rated credits increased to $32.1M, or 0.29% of total loans.
-- Organic growth of commercial loans, private banking loans primarily backed by marketable securities, and liquidity management franchise continues, while Chartwell delivered strong fixed income and equity performance over benchmarks and celebrates the 25th anniversary of its founding --
The parent company of
“Deliberate double-digit organic growth and TriState Capital’s synergistic businesses contributed to meaningful expansion in our client base and financial performance in the first quarter of 2022, and we are really excited about the opportunity that our agile businesses and our asset-sensitive balance sheet provide us to succeed in a highly dynamic environment,” President and Chief Executive Officer
FIRST QUARTER 2022 HIGHLIGHTS
-
TriState Capital continued to progress toward the closing of its previously announced agreement to be acquired by Raymond James Financial, Inc. (“Raymond James”), which is currently expected to close by the end of the second quarter of 2022, subject to customary conditions including receipt of regulatory approvals. -
Pre-tax income increased by
29.5% from the year-ago quarter and13.4% from the linked quarter. -
Net interest income (NII) increased by
38.7% from the year-ago quarter and4.8% from the linked quarter on continued growth in the bank’s asset-sensitive balance sheet, with NIM expansion to1.70% . -
Total loans grew by
31.6% fromMarch 31, 2021 and4.5% during the quarter. -
Commercial loans grew by
14.0% fromMarch 31, 2021 and2.6% during the quarter, led by fund finance solutions and other commercial and industrial (C&I) lending. -
Private banking loans grew by
43.8% fromMarch 31, 2021 and5.5% during the quarter, as the company continued to leverage talent and proprietary technology to fortify its position as the nation’s leading independent provider of loans collateralized by marketable securities and other liquid assets working with non-bank affiliated financial intermediaries. -
Treasury management deposit accounts grew by64.2% fromMarch 31, 2021 and4.3% during the quarter. -
The company maintained superior credit quality metrics, with period-end non-performing assets (NPAs) and non-performing loans (NPLs) declining to
0.01% of assets and0.00% of loans, respectively, while adverse rated credits represented just0.29% of total loans at period-end. -
Record fees of
$4.7 million $9.1 million $15.1 million -
Chartwell year-to-date inflows from retail and institutional clients totaled
$416.0 million
REVENUE GROWTH
NII grew to a record
Non-interest income was
NII and non-interest income, excluding net gains and losses on the sale of debt securities, combined to generate record total revenue of
EXPENSES REFLECT CONTINUED INVESTMENTS IN BUSINESSES AND CLIENT EXPERIENCE
TriState Capital Bank’s efficiency ratio for the first quarter of 2022 was
Pre-tax, pre-provision net revenue of
Pre-tax income was
TriState Capital’s effective tax rate was
Net income available to common shareholders, earnings per share and weighted average diluted shares in the first quarter of 2022 are net of
INVESTMENT MANAGEMENT
A combination of fixed income and equity strategy performance relative to benchmarks and a robust new business effort contributed to inflows of
Chartwell’s new business and new flows from existing accounts of
Annual run-rate revenue was
ORGANIC LENDING FRANCHISE GROWTH
TriState Capital’s client engagement and distribution capabilities continued to drive organic loan growth by expanding the number and depth of its premier relationships with high-quality middle-market commercial customers, as well as expanding the number of high-net-worth clients the bank serves through its growing national referral network of financial intermediaries.
Average loans totaled a record
The company continued to grow relationships with top-quality middle-market sponsors and businesses, driving originations of commercial and industrial (“C&I”) and commercial real estate (“CRE”) loans while managing credit quality within the portfolio. Commercial loans totaled
C&I loans grew to
CRE loans totaled
STRATEGIC DEPOSIT AND LIQUIDITY MANAGEMENT FRANCHISE EXPANSION
Average deposits totaled a record
The bank’s loan-to-deposit ratio at
INTEREST RATE MANAGEMENT
Approximately
At
The yield on total loans averaged
Investment securities totaled a record
NIM expanded for the sixth consecutive quarter to
ASSET QUALITY
The allowance for credit losses on loans and leases (ACL) was
TriState Capital’s net charge offs (NCOs) were
NPAs were
Total adverse-rated credits, including NPLs, were
TriState Capital’s provision for credit losses was
CAPITAL STRENGTH AND EFFICIENCY
The company’s strong balance sheet included
As of
ABOUT
In light of the pending acquisition by Raymond James, the company will not hold a quarterly investor conference call and webcast. For more information related to the acquisition, please refer to the company’s and Raymond James’ filings with the
PARTICIPANTS IN THE SOLICITATION
Raymond James,
FORWARD-LOOKING STATEMENTS
This news release contains “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. These forward-looking statements reflect TriState Capital’s current views with respect to, among other things, future events and the company’s financial performance, as well as the company’s goals and objectives for future operations, financial and business trends, business prospects and management’s outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality or other measures of future financial or business performance, strategies or expectations. These statements are often, but not always, made through the use of words or phrases such as “achieve,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “maintain,” “may,” “opportunity,” “outlook,” “plan,” “potential,” “predict,” “projection,” “seek,” “should,” “sustain,” “target,” “trend,” “will,” “will likely result,” and “would,” or the negative versions of those words or other comparable statements of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about TriState Capital’s industry and beliefs or assumptions made by management, many of which, by their nature, are inherently uncertain. Although
- risks associated with the COVID-19 pandemic and their expected impact and duration, including effects on TriState Capital’s operations, its clients, economic conditions and the demand for its products and services;
- risks associated with the acquisition of our company by Raymond James, including risks related to the failure of our company to satisfy conditions of the closing of the acquisition, which could result in the acquisition not closing, which could have a material adverse impact on the value of our stock;
- TriState Capital’s ability to prudently manage its growth and execute its strategy;
- deterioration of TriState Capital’s asset quality;
- TriState Capital’s level of non-performing assets and the costs associated with resolving problem loans, including litigation and other costs;
- possible additional loan and lease losses and impairment, changes in the value of collateral securing TriState Capital’s loans and leases and the collectability of loans and leases, particularly as a result of the COVID-19 pandemic and the programs implemented by the Coronavirus Aid, Relief, and Economic Security Act, including its automatic loan forbearance provisions;
- possible changes in the speed of loan prepayments by customers and loan origination or sales volumes;
- business and economic conditions generally and in the financial services industry, nationally and within TriState Capital’s local market areas, including the effects of an increase in unemployment levels, slowdowns in economic growth and changes in demand for products or services or the value of assets under management;
- TriState Capital’s ability to maintain important deposit customer relationships, its reputation and otherwise avoid liquidity risks;
- changes in management personnel;
- TriState Capital’s ability to recruit and retain key employees;
- volatility and direction of interest rates;
- risks related to the phasing out of LIBOR and changes in the manner of calculating reference rates, as well as the impact of the phase out of LIBOR and introduction of alternative reference rates such as SOFR on the value of loans and other financial instruments that are linked to LIBOR;
- changes in accounting policies, accounting standards, or authoritative accounting guidance, including the CECL model;
- any impairment of TriState Capital’s goodwill or other intangible assets;
- TriState Capital’s ability to develop and provide competitive products and services that appeal to its customers and target markets;
- TriState Capital’s ability to provide investment management performance competitive with its peers and benchmarks;
- fluctuations in the carrying value of the assets under management held by Chartwell, as well as the relative and absolute investment performance of such subsidiary’s investment products;
- operational risks associated with TriState Capital’s business, including technology and cyber-security related risks;
- increased competition in the financial services industry, particularly from regional and national institutions;
-
negative perceptions or publicity with respect to any products or services offered by
TriState Capital ; - adverse judgments or other resolution of pending and future legal proceedings, and costs incurred in defending such proceedings;
- changes in the laws, rules, regulations, interpretations or policies relating to financial institutions, accounting, tax, trade, monetary and fiscal matters, including economic stimulus programs, and potential expenses associated with complying with such laws and regulations;
- TriState Capital’s ability to comply with applicable capital and liquidity requirements, including its ability to generate liquidity internally or raise capital on favorable terms;
- regulatory limits on TriState Capital’s ability to receive dividends from its subsidiaries and pay dividends to shareholders;
-
changes and direction of government policy towards and intervention in the
U.S. financial system; - natural disasters and adverse weather, acts of terrorism, regional or national civil unrest, cyber-attacks, an outbreak of hostilities, a public health outbreak (such as COVID-19) or other international or domestic calamities, and other matters beyond TriState Capital’s control;
- the effects of any reputation, credit, interest rate, market, operational, legal, liquidity, regulatory or compliance risk resulting from developments related to any of the risks discussed above; and
-
other factors that are discussed in TriState Capital’s filings with the
Securities and Exchange Commission .
The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this press release. If one or more events related to these or other risks or uncertainties materialize, or if TriState Capital’s underlying assumptions prove to be incorrect, actual results may differ materially from what the company anticipates. Accordingly, readers should not place undue reliance on any such forward-looking statements. New factors emerge from time to time, and it is not possible for
NON-GAAP FINANCIAL DISCLOSURES
This news release and the accompanying tables contain certain financial information determined by methods other than in accordance with
BALANCE SHEET DATA (UNAUDITED) |
||||||||||||
|
As of |
|||||||||||
|
|
|
|
|||||||||
(Dollars in thousands) |
|
2022 |
|
|
2021 |
|
|
2021 |
|
|||
Cash and cash equivalents |
$ |
481,874 |
|
$ |
452,016 |
|
$ |
446,484 |
|
|||
Total investment securities |
|
1,538,437 |
|
|
1,405,678 |
|
|
1,231,074 |
|
|||
Loans and leases held-for-investment |
|
11,246,919 |
|
|
10,763,324 |
|
|
8,543,182 |
|
|||
Allowance for credit losses on loans and leases |
|
(25,024 |
) |
|
(28,563 |
) |
|
(34,644 |
) |
|||
Loans and leases held-for-investment, net |
|
11,221,895 |
|
|
10,734,761 |
|
|
8,508,538 |
|
|||
|
|
61,523 |
|
|
62,000 |
|
|
63,433 |
|
|||
Other assets |
|
373,938 |
|
|
350,397 |
|
|
315,621 |
|
|||
Total assets |
$ |
13,677,667 |
|
$ |
13,004,852 |
|
$ |
10,565,150 |
|
|||
|
|
|
|
|||||||||
Deposits |
$ |
12,165,476 |
|
$ |
11,504,389 |
|
$ |
9,250,019 |
|
|||
Borrowings, net |
|
470,262 |
|
|
470,163 |
|
|
345,547 |
|
|||
Other liabilities |
|
203,791 |
|
|
193,578 |
|
|
195,298 |
|
|||
Total liabilities |
|
12,839,529 |
|
|
12,168,130 |
|
|
9,790,864 |
|
|||
|
|
|
|
|||||||||
Preferred stock |
|
182,644 |
|
|
181,544 |
|
|
178,243 |
|
|||
Common shareholders’ equity |
|
655,494 |
|
|
655,178 |
|
|
596,043 |
|
|||
Total shareholders’ equity |
|
838,138 |
|
|
836,722 |
|
|
774,286 |
|
|||
|
|
|
|
|||||||||
Total liabilities and shareholders’ equity |
$ |
13,677,667 |
|
$ |
13,004,852 |
|
$ |
10,565,150 |
|
|||
INCOME STATEMENT DATA (UNAUDITED) |
|||||||||||
|
Three Months Ended |
||||||||||
|
|
|
|
||||||||
(Dollars in thousands) |
|
2022 |
|
2021 |
|
2021 |
|
||||
Interest income: |
|
|
|
||||||||
Loans and leases |
$ |
61,228 |
|
$ |
59,227 |
$ |
49,186 |
|
|||
Investments |
|
6,157 |
|
|
4,669 |
|
2,646 |
|
|||
Interest-earning deposits |
|
192 |
|
|
149 |
|
160 |
|
|||
Total interest income |
|
67,577 |
|
|
64,045 |
|
51,992 |
|
|||
|
|
|
|
||||||||
Interest expense: |
|
|
|
||||||||
Deposits |
|
10,746 |
|
|
10,164 |
|
10,754 |
|
|||
Borrowings |
|
3,230 |
|
|
2,757 |
|
2,582 |
|
|||
Total interest expense |
|
13,976 |
|
|
12,921 |
|
13,336 |
|
|||
Net interest income |
|
53,601 |
|
|
51,124 |
|
38,656 |
|
|||
Provision for credit losses |
|
563 |
|
|
488 |
|
224 |
|
|||
Net interest income after provision for credit losses |
|
53,038 |
|
|
50,636 |
|
38,432 |
|
|||
Non-interest income: |
|
|
|
||||||||
Investment management fees |
|
9,085 |
|
|
9,567 |
|
9,000 |
|
|||
Service charges on deposits |
|
415 |
|
|
389 |
|
316 |
|
|||
Net gain on the sale and call of debt securities |
|
— |
|
|
112 |
|
(1 |
) |
|||
Swap fees |
|
4,660 |
|
|
4,408 |
|
2,711 |
|
|||
Commitment and other loan fees |
|
601 |
|
|
818 |
|
326 |
|
|||
Bank owned life insurance income |
|
606 |
|
|
620 |
|
429 |
|
|||
Other income (loss) |
|
(270 |
) |
|
7 |
|
870 |
|
|||
Total non-interest income |
|
15,097 |
|
|
15,921 |
|
13,651 |
|
|||
Non-interest expense: |
|
|
|
||||||||
Compensation and employee benefits |
|
24,994 |
|
|
22,040 |
|
19,921 |
|
|||
Premises and equipment expense |
|
1,989 |
|
|
1,738 |
|
1,406 |
|
|||
Professional fees |
|
2,280 |
|
|
5,062 |
|
1,324 |
|
|||
|
|
1,584 |
|
|
1,455 |
|
1,125 |
|
|||
General insurance expense |
|
371 |
|
|
368 |
|
298 |
|
|||
State capital shares tax expense |
|
798 |
|
|
694 |
|
650 |
|
|||
Travel and entertainment expense |
|
696 |
|
|
799 |
|
441 |
|
|||
Technology and data services |
|
4,123 |
|
|
3,758 |
|
3,100 |
|
|||
Intangible amortization expense |
|
478 |
|
|
478 |
|
478 |
|
|||
Marketing and advertising |
|
896 |
|
|
1,058 |
|
684 |
|
|||
Other operating expenses |
|
2,976 |
|
|
5,333 |
|
1,851 |
|
|||
Total non-interest expense |
|
41,185 |
|
|
42,783 |
|
31,278 |
|
|||
Income before tax |
|
26,950 |
|
|
23,774 |
|
20,805 |
|
|||
Income tax expense |
|
5,309 |
|
|
710 |
|
4,605 |
|
|||
Net income |
$ |
21,641 |
|
$ |
23,064 |
$ |
16,200 |
|
|||
Preferred stock dividends |
|
3,133 |
|
|
3,115 |
|
3,059 |
|
|||
Net income available to common shareholders |
$ |
18,508 |
|
$ |
19,949 |
$ |
13,141 |
|
|||
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED) |
|||||||||||
|
As of and For the Three Months Ended |
||||||||||
|
|
|
|
||||||||
(Dollars in thousands, except per share data) |
|
2022 |
|
|
2021 |
|
|
2021 |
|
||
Per share and share data: |
|
|
|
||||||||
Earnings per common share: |
|
|
|
||||||||
Basic |
$ |
0.49 |
|
$ |
0.54 |
|
$ |
0.36 |
|
||
Diluted |
$ |
0.48 |
|
$ |
0.52 |
|
$ |
0.35 |
|
||
Book value per common share |
$ |
19.49 |
|
$ |
19.70 |
|
$ |
17.97 |
|
||
Tangible book value per common share (1) |
$ |
17.66 |
|
$ |
17.83 |
|
$ |
16.06 |
|
||
Common shares outstanding, at end of period |
|
33,636,462 |
|
|
33,263,498 |
|
|
33,160,605 |
|
||
Weighted average common shares outstanding: |
|
|
|
||||||||
Basic |
|
31,699,023 |
|
|
31,396,278 |
|
|
31,224,474 |
|
||
Diluted |
|
32,774,847 |
|
|
32,580,999 |
|
|
32,187,034 |
|
||
|
|
|
|
||||||||
Performance ratios: |
|
|
|
||||||||
Return on average assets (2) |
|
0.67 |
% |
|
0.73 |
% |
|
0.64 |
% |
||
Return on average common equity (2) |
|
11.40 |
% |
|
12.25 |
% |
|
9.06 |
% |
||
Net interest margin (2) (3) |
|
1.70 |
% |
|
1.68 |
% |
|
1.59 |
% |
||
Total revenue (1) |
$ |
68,698 |
|
$ |
66,933 |
|
$ |
52,308 |
|
||
Pre-tax, pre-provision net revenue (1) |
$ |
27,513 |
|
$ |
24,150 |
|
$ |
21,030 |
|
||
Bank efficiency ratio (1) |
|
50.42 |
% |
|
51.10 |
% |
|
50.59 |
% |
||
Non-interest expense to average assets (2) |
|
1.27 |
% |
|
1.36 |
% |
|
1.24 |
% |
||
|
|
|
|
||||||||
Asset quality: |
|
|
|
||||||||
Non-performing loans |
$ |
— |
|
$ |
4,313 |
|
$ |
22,727 |
|
||
Non-performing assets |
$ |
2,005 |
|
$ |
6,318 |
|
$ |
25,451 |
|
||
Other real estate owned |
$ |
2,005 |
|
$ |
2,005 |
|
$ |
2,724 |
|
||
Non-performing assets to total assets |
|
0.01 |
% |
|
0.05 |
% |
|
0.24 |
% |
||
Non-performing loans to total loans |
|
— |
% |
|
0.04 |
% |
|
0.27 |
% |
||
Allowance for credit losses on loans and leases to loans |
|
0.22 |
% |
|
0.27 |
% |
|
0.41 |
% |
||
Allowance for credit losses on loans and leases to non-performing loans |
|
N/A |
|
|
662.25 |
% |
|
152.44 |
% |
||
Net charge-offs (recoveries) |
$ |
4,193 |
|
$ |
4,197 |
|
$ |
199 |
|
||
Net charge-offs to average total loans (2) |
|
0.16 |
% |
|
0.16 |
% |
|
0.01 |
% |
||
|
|
|
|
||||||||
Capital ratios: (4) |
|
|
|
||||||||
Tier 1 leverage ratio |
|
6.16 |
% |
|
6.36 |
% |
|
7.13 |
% |
||
Common equity tier 1 risk-based capital ratio |
|
8.91 |
% |
|
8.96 |
% |
|
9.10 |
% |
||
Tier 1 risk-based capital ratio |
|
11.52 |
% |
|
11.64 |
% |
|
12.08 |
% |
||
Total risk-based capital ratio |
|
13.23 |
% |
|
13.43 |
% |
|
14.18 |
% |
||
Bank tier 1 leverage ratio |
|
7.52 |
% |
|
7.76 |
% |
|
7.65 |
% |
||
Bank common equity tier 1 risk-based capital ratio |
|
14.08 |
% |
|
14.22 |
% |
|
12.98 |
% |
||
Bank tier 1 risk based capital ratio |
|
14.08 |
% |
|
14.22 |
% |
|
12.98 |
% |
||
Bank total risk-based capital ratio |
|
14.42 |
% |
|
14.60 |
% |
|
13.49 |
% |
||
|
|
|
|
||||||||
Investment Management Segment: |
|
|
|
||||||||
Assets under management |
$ |
11,230,000 |
|
$ |
11,844,000 |
|
$ |
11,203,000 |
|
||
EBITDA (1) |
$ |
1,316 |
|
$ |
1,391 |
|
$ |
1,916 |
|
||
(1) |
These measures are not measures recognized under GAAP and are therefore considered to be non-GAAP financial measures. See “Non-GAAP Financial Measures” for a reconciliation of these measures to their most directly comparable GAAP measures. |
(2) |
Ratios are annualized. |
(3) |
Net interest margin is calculated on a fully taxable equivalent basis. |
(4) |
Capital ratios are estimated until regulatory reports are filed. |
AVERAGES AND YIELDS (UNAUDITED) |
|||||||||||||||||
|
Three Months Ended |
||||||||||||||||
|
|
|
|
|
|
||||||||||||
(Dollars in thousands) |
Average Balance |
Interest Income (1)/
|
Average
|
|
Average Balance |
Interest Income (1)/
|
Average
|
|
Average Balance |
Interest Income (1)/
|
Average
|
||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-earning deposits |
$ |
410,702 |
$ |
189 |
0.19 % |
|
$ |
423,351 |
$ |
147 |
0.14 % |
|
$ |
555,427 |
$ |
158 |
0.12 % |
Federal funds sold |
|
11,677 |
|
3 |
0.10 % |
|
|
9,896 |
|
2 |
0.08 % |
|
|
10,557 |
|
2 |
0.08 % |
Debt securities available-for-sale |
|
704,444 |
|
3,144 |
1.81 % |
|
|
575,965 |
|
2,520 |
1.74 % |
|
|
348,835 |
|
570 |
0.66 % |
Debt securities held-to-maturity |
|
798,893 |
|
2,865 |
1.45 % |
|
|
839,798 |
|
2,011 |
0.95 % |
|
|
637,719 |
|
1,900 |
1.21 % |
Debt securities trading |
|
— |
|
— |
— % |
|
|
1,895 |
|
3 |
0.63 % |
|
|
315 |
|
1 |
1.29 % |
Equity securities |
|
4,939 |
|
16 |
1.31 % |
|
|
4,985 |
|
— |
— % |
|
|
— |
|
— |
— % |
FHLB stock |
|
11,811 |
|
138 |
4.74 % |
|
|
11,802 |
|
140 |
4.71 % |
|
|
11,551 |
|
182 |
6.39 % |
Total loans and leases |
|
10,830,464 |
|
61,228 |
2.29 % |
|
|
10,213,833 |
|
59,227 |
2.30 % |
|
|
8,276,059 |
|
49,186 |
2.41 % |
Total interest-earning assets |
|
12,772,930 |
|
67,583 |
2.15 % |
|
|
12,081,525 |
|
64,050 |
2.10 % |
|
|
9,840,463 |
|
51,999 |
2.14 % |
Other assets |
|
378,246 |
|
|
|
|
381,218 |
|
|
|
|
375,418 |
|
|
|||
Total assets |
$ |
13,151,176 |
|
|
|
$ |
12,462,743 |
|
|
|
$ |
10,215,881 |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-bearing checking accounts |
$ |
4,269,019 |
$ |
3,707 |
0.35 % |
|
$ |
4,195,332 |
$ |
3,416 |
0.32 % |
|
$ |
3,065,983 |
$ |
2,793 |
0.37 % |
Money market deposit accounts |
|
6,032,665 |
|
6,352 |
0.43 % |
|
|
5,385,794 |
|
5,905 |
0.43 % |
|
|
4,345,454 |
|
5,964 |
0.56 % |
Certificates of deposit |
|
698,367 |
|
687 |
0.40 % |
|
|
842,758 |
|
843 |
0.40 % |
|
|
1,012,861 |
|
1,997 |
0.80 % |
Borrowings: |
|
|
|
|
|
|
|
|
|
|
|
||||||
FHLB borrowings |
|
250,111 |
|
1,026 |
1.66 % |
|
|
250,000 |
|
1,092 |
1.73 % |
|
|
253,889 |
|
1,072 |
1.71 % |
Line of credit borrowings |
|
— |
|
— |
— % |
|
|
8,370 |
|
93 |
4.41 % |
|
|
4,589 |
|
55 |
4.86 % |
Senior & subordinated notes payable, net |
|
220,220 |
|
2,204 |
4.06 % |
|
|
118,765 |
|
1,572 |
5.25 % |
|
|
95,511 |
|
1,455 |
6.18 % |
Total interest-bearing liabilities |
|
11,470,382 |
|
13,976 |
0.49 % |
|
|
10,801,019 |
|
12,921 |
0.47 % |
|
|
8,778,287 |
|
13,336 |
0.62 % |
Noninterest-bearing deposits |
|
652,805 |
|
|
|
|
617,241 |
|
|
|
|
424,535 |
|
|
|||
Other liabilities |
|
187,171 |
|
|
|
|
217,375 |
|
|
|
|
247,659 |
|
|
|||
Shareholders’ equity |
|
840,818 |
|
|
|
|
827,108 |
|
|
|
|
765,400 |
|
|
|||
Total liabilities and shareholders’ equity |
$ |
13,151,176 |
|
|
|
$ |
12,462,743 |
|
|
|
$ |
10,215,881 |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net interest income (1) |
|
$ |
53,607 |
|
|
|
$ |
51,129 |
|
|
|
$ |
38,663 |
|
|||
Net interest spread (1) |
|
|
1.66 % |
|
|
|
1.63 % |
|
|
|
1.52 % |
||||||
Net interest margin (1) |
|
|
1.70 % |
|
|
|
1.68 % |
|
|
|
1.59 % |
||||||
| (1) | Interest income and net interest margin are calculated on a fully taxable equivalent basis. |
| (2) | Annualized. |
LOAN AND LEASE COMPOSITION (UNAUDITED) |
|||||||||||
|
|
|
|
|
|
||||||
(Dollars in thousands) |
Loan Balance |
Percent of Total Loans |
|
Loan Balance |
Percent of Total Loans |
|
Loan Balance |
Percent of Total Loans |
|||
Private banking loans |
$ |
7,268,162 |
64.6 % |
|
$ |
6,886,498 |
64.0 % |
|
$ |
5,053,621 |
59.2 % |
Middle-market banking loans: |
|
|
|
|
|
|
|
|
|||
Commercial and industrial |
|
1,564,309 |
13.9 % |
|
|
1,513,423 |
14.1 % |
|
|
1,249,208 |
14.6 % |
Commercial real estate |
|
2,414,448 |
21.5 % |
|
|
2,363,403 |
21.9 % |
|
|
2,240,353 |
26.2 % |
Total middle-market banking loans |
|
3,978,757 |
35.4 % |
|
|
3,876,826 |
36.0 % |
|
|
3,489,561 |
40.8 % |
Loans and leases held-for-investment |
$ |
11,246,919 |
100.0 % |
|
$ |
10,763,324 |
100.0 % |
|
$ |
8,543,182 |
100.0 % |
STATEMENT OF INCOME BY REPORTABLE SEGMENT (UNAUDITED) |
||||||||||||||||||||||
|
Three Months Ended |
|
Three Months Ended |
|||||||||||||||||||
(Dollars in thousands) |
Bank |
Investment Management |
Parent and Other |
Consolidated |
|
Bank |
Investment Management |
Parent and Other |
Consolidated |
|||||||||||||
Income statement data: |
|
|
|
|||||||||||||||||||
Interest income |
$ |
67,561 |
$ |
— |
|
$ |
16 |
|
$ |
67,577 |
|
$ |
51,992 |
|
$ |
— |
$ |
— |
|
$ |
51,992 |
|
Interest expense |
|
11,776 |
|
— |
|
|
2,200 |
|
|
13,976 |
|
|
11,839 |
|
|
— |
|
1,497 |
|
|
13,336 |
|
Net interest income (loss) |
|
55,785 |
|
— |
|
|
(2,184 |
) |
|
53,601 |
|
|
40,153 |
|
|
— |
|
(1,497 |
) |
|
38,656 |
|
Provision for credit losses |
|
563 |
|
— |
|
|
— |
|
|
563 |
|
|
224 |
|
|
— |
|
— |
|
|
224 |
|
Net interest income (loss) after provision for credit losses |
|
55,222 |
|
— |
|
|
(2,184 |
) |
|
53,038 |
|
|
39,929 |
|
|
— |
|
(1,497 |
) |
|
38,432 |
|
Non-interest income: |
|
|
|
|
|
|
|
|
|
|||||||||||||
Investment management fees |
|
— |
|
9,444 |
|
|
(359 |
) |
|
9,085 |
|
|
— |
|
|
9,234 |
|
(234 |
) |
|
9,000 |
|
Net gain on the sale and call of debt securities |
|
— |
|
— |
|
|
— |
|
|
— |
|
|
(1 |
) |
|
— |
|
— |
|
|
(1 |
) |
Other non-interest income (loss) |
|
6,167 |
|
(31 |
) |
|
(124 |
) |
|
6,012 |
|
|
4,631 |
|
|
21 |
|
— |
|
|
4,652 |
|
Total non-interest income (loss) |
|
6,167 |
|
9,413 |
|
|
(483 |
) |
|
15,097 |
|
|
4,630 |
|
|
9,255 |
|
(234 |
) |
|
13,651 |
|
Non-interest expense: |
|
|
|
|
|
|
|
|
|
|||||||||||||
Intangible amortization expense |
|
— |
|
478 |
|
|
— |
|
|
478 |
|
|
— |
|
|
478 |
|
— |
|
|
478 |
|
Other non-interest expense |
|
31,238 |
|
8,208 |
|
|
1,261 |
|
|
40,707 |
|
|
22,655 |
|
|
7,442 |
|
703 |
|
|
30,800 |
|
Total non-interest expense |
|
31,238 |
|
8,686 |
|
|
1,261 |
|
|
41,185 |
|
|
22,655 |
|
|
7,920 |
|
703 |
|
|
31,278 |
|
Income (loss) before tax |
|
30,151 |
|
727 |
|
|
(3,928 |
) |
|
26,950 |
|
|
21,904 |
|
|
1,335 |
|
(2,434 |
) |
|
20,805 |
|
Income tax expense (benefit) |
|
5,833 |
|
199 |
|
|
(723 |
) |
|
5,309 |
|
|
4,729 |
|
|
310 |
|
(434 |
) |
|
4,605 |
|
Net income (loss) |
$ |
24,318 |
$ |
528 |
|
$ |
(3,205 |
) |
$ |
21,641 |
|
$ |
17,175 |
|
$ |
1,025 |
$ |
(2,000 |
) |
$ |
16,200 |
|
EARNINGS PER COMMON SHARE (UNAUDITED) |
|||||||||
|
Three Months Ended |
||||||||
|
|
|
|
||||||
(Dollars in thousands, except per share data) |
2022 |
2021 |
2021 |
||||||
|
|
|
|
||||||
Basic earnings per common share: |
|
|
|
||||||
Net income |
$ |
21,641 |
$ |
23,064 |
$ |
16,200 |
|||
Less: Preferred dividends on Series A and Series B |
|
1,962 |
|
1,962 |
|
1,962 |
|||
Less: Preferred dividends on Series C |
|
1,171 |
|
1,153 |
|
1,097 |
|||
Net income available to common shareholders |
$ |
18,508 |
$ |
19,949 |
$ |
13,141 |
|||
|
|
|
|
||||||
Allocation of net income available: |
|
|
|
||||||
Common shareholders |
$ |
15,575 |
$ |
16,798 |
$ |
11,127 |
|||
Series C convertible preferred shareholders |
|
2,480 |
|
2,658 |
|
1,685 |
|||
Warrant shareholders |
|
453 |
|
493 |
|
329 |
|||
Total |
$ |
18,508 |
$ |
19,949 |
$ |
13,141 |
|||
|
|
|
|
||||||
Basic weighted average common shares outstanding: |
|
|
|
||||||
Basic common shares |
|
31,699,023 |
|
31,396,278 |
|
31,224,474 |
|||
Series C convertible preferred stock, as-if converted |
|
5,047,272 |
|
4,967,272 |
|
4,727,272 |
|||
Warrants, as-if exercised |
|
922,438 |
|
922,438 |
|
922,438 |
|||
|
|
|
|
||||||
Basic earnings per common share |
$ |
0.49 |
$ |
0.54 |
$ |
0.36 |
|||
|
|
|
|
||||||
Diluted earnings per common share: |
|
|
|
||||||
Income available to common shareholders after allocation |
$ |
15,575 |
$ |
16,798 |
$ |
11,127 |
|||
|
|
|
|
||||||
Diluted weighted average common shares outstanding: |
|
|
|
||||||
Basic common shares |
|
31,699,023 |
|
31,396,278 |
|
31,224,474 |
|||
Restricted stock - dilutive |
|
956,414 |
|
1,028,637 |
|
801,798 |
|||
Stock options - dilutive |
|
119,410 |
|
156,084 |
|
160,762 |
|||
Diluted common shares |
|
32,774,847 |
|
32,580,999 |
|
32,187,034 |
|||
|
|
|
|
||||||
Diluted earnings per common share |
$ |
0.48 |
$ |
0.52 |
$ |
0.35 |
|||
|
|
|
|
||||||
|
|
|
|
||||||
|
2022 |
2021 |
2021 |
||||||
Anti-dilutive shares: |
|
|
|
||||||
Restricted stock |
|
48,147 |
|
37,500 |
|
71,810 |
|||
Stock options |
|
— |
|
— |
|
— |
|||
Series C convertible preferred stock, as-if converted |
|
5,047,272 |
|
4,967,272 |
|
4,727,272 |
|||
Warrants, as-if exercised |
|
922,438 |
|
922,438 |
|
922,438 |
|||
Total anti-dilutive shares |
|
6,017,857 |
|
5,927,210 |
|
5,721,520 |
|||
Earnings per common share (“EPS”) is computed using the two-class method, which requires that the Series C convertible preferred stock and warrants to be treated as participating classes of securities in the computation of EPS. In addition, net income is reduced by dividends declared on all series of preferred stock to derive net income available to common shareholders. The two-class method is an earnings allocation that determines EPS for each class of common stock and participating security. Net income available to common shareholders is reduced by the percentage of average common shares allocable to Preferred Series C holders and warrant holders on an as-if converted basis to arrive at net income allocable to common shareholders. Basic EPS is computed by dividing net income allocable to common shareholders by the weighted average number of common shares outstanding for the period, excluding non-vested restricted stock. Diluted EPS reflects the potential dilution upon the exercise of stock options and warrants, and the vesting of restricted stock awards granted utilizing the treasury stock method. The Series C convertible preferred stock is excluded from diluted weighted average common shares outstanding because the payment of the dividend is considered in the net income allocable to common shareholders for the calculation of basic EPS.
NON-GAAP FINANCIAL MEASURES
The information set forth above contains certain financial information determined by methods other than in accordance with GAAP. These non-GAAP financial measures are “tangible common equity,” “tangible book value per common share,” “EBITDA,” “total revenue,” “pre-tax, pre-provision net revenue” and “efficiency ratio.” These non-GAAP financial measures are supplemental measures that we believe provide management and our investors with a more detailed understanding of our performance, although these measures are not necessarily comparable to similar measures that may be presented by other companies. These disclosures should not be viewed as a substitute for financial measures in accordance with GAAP. The non-GAAP financial measures presented herein are calculated as follows:
“Tangible common equity” is defined as common shareholders’ equity reduced by intangible assets, including goodwill. We believe this measure is important to management and investors so that they can better understand and assess changes from period to period in common shareholders’ equity exclusive of changes in intangible assets associated with prior acquisitions. Intangible assets are created when we buy businesses that add relationships and revenue to our company. Intangible assets have the effect of increasing both equity and assets, while not increasing our tangible equity or tangible assets.
“Tangible book value per common share” is defined as common shareholders’ equity reduced by intangible assets, including goodwill, divided by common shares outstanding. We believe this measure is important to many investors who are interested in changes from period to period in book value per common share exclusive of changes in intangible assets associated with prior acquisitions.
“EBITDA” is defined as net income before interest expense, income tax expense (benefit), depreciation expense and intangible amortization expense. We use EBITDA particularly to assess the strength of our investment management business. We believe this measure is important because it allows management and investors to better assess our investment management performance in relation to our core operating earnings by excluding certain non-cash items and the volatility that is associated with certain discrete items that are unrelated to our core business.
“Total revenue” is defined as net interest income and total non-interest income, excluding gains and losses on the sale and call of debt securities. We believe adjustments made to our operating revenue allow management and investors to better assess our core operating revenue by removing the volatility that is associated with certain items that are unrelated to our core business.
“Pre-tax, pre-provision net revenue” is defined as net interest income and non-interest income, excluding gains and losses on the sale and call of debt securities and total non-interest expense. We believe this measure is important because it allows management and investors to better assess our performance in relation to our core operating revenue, excluding the volatility that is associated with provision for credit losses and changes in our tax rates and other items that are unrelated to our core business.
“Efficiency ratio” is defined as total non-interest expense divided by our total revenue. We believe this measure allows management and investors to better assess our operating expenses in relation to our core operating revenue, particularly at the Bank.
NON-GAAP FINANCIAL MEASURES (UNAUDITED) |
|||||||||
|
|
|
|
||||||
(Dollars in thousands, except per share data) |
2022 |
2021 |
2021 |
||||||
Tangible common equity and tangible book value per common share: |
|
|
|
||||||
Common shareholders’ equity |
$ |
655,494 |
$ |
655,178 |
$ |
596,043 |
|||
Less: goodwill and intangible assets |
|
61,523 |
|
62,000 |
|
63,433 |
|||
Tangible common equity (numerator) |
$ |
593,971 |
$ |
593,178 |
$ |
532,610 |
|||
Common shares outstanding (denominator) |
|
33,636,462 |
|
33,263,498 |
|
33,160,605 |
|||
Tangible book value per common share |
$ |
17.66 |
$ |
17.83 |
$ |
16.06 |
|||
INVESTMENT MANAGEMENT SEGMENT NON-GAAP FINANCIAL MEASURES (UNAUDITED) |
||||||||||
|
Three Months Ended |
|||||||||
|
|
|
|
|||||||
(Dollars in thousands) |
2022 |
|
2021 |
|
2021 |
|||||
Investment Management EBITDA: |
|
|
|
|||||||
Net income |
$ |
528 |
$ |
(112 |
) |
$ |
1,025 |
|||
Interest expense |
|
— |
|
— |
|
|
— |
|||
Income tax expense |
|
199 |
|
916 |
|
|
310 |
|||
Depreciation expense |
|
111 |
|
109 |
|
|
103 |
|||
Intangible amortization expense |
|
478 |
|
478 |
|
|
478 |
|||
EBITDA |
$ |
1,316 |
$ |
1,391 |
|
$ |
1,916 |
|||
NON-GAAP FINANCIAL MEASURES (UNAUDITED) |
||||||||||
|
Three Months Ended |
|||||||||
|
|
|
|
|||||||
(Dollars in thousands) |
2022 |
2021 |
|
2021 |
|
|||||
Total revenue and pre-tax, pre-provision net revenue: |
|
|
|
|||||||
Net interest income |
$ |
53,601 |
$ |
51,124 |
$ |
38,656 |
|
|||
Total non-interest income |
|
15,097 |
|
15,921 |
|
13,651 |
|
|||
Less: net gain on the sale and call of debt securities |
|
— |
|
112 |
|
(1 |
) |
|||
Total revenue |
$ |
68,698 |
$ |
66,933 |
$ |
52,308 |
|
|||
Less: total non-interest expense |
|
41,185 |
|
42,783 |
|
31,278 |
|
|||
Pre-tax, pre-provision net revenue |
$ |
27,513 |
$ |
24,150 |
$ |
21,030 |
|
|||
BANK SEGMENT NON-GAAP FINANCIAL MEASURES (UNAUDITED) |
|||||||||||
|
Three Months Ended |
||||||||||
|
|
|
|
||||||||
(Dollars in thousands) |
|
2022 |
|
|
2021 |
|
|
2021 |
|
||
Bank total revenue: |
|
|
|
||||||||
Net interest income |
$ |
55,785 |
|
$ |
52,785 |
|
$ |
40,153 |
|
||
Total non-interest income |
|
6,167 |
|
|
6,370 |
|
|
4,630 |
|
||
Less: net gain on the sale and call of debt securities |
|
— |
|
|
112 |
|
|
(1 |
) |
||
Bank total revenue |
$ |
61,952 |
|
$ |
59,043 |
|
$ |
44,784 |
|
||
|
|
|
|
||||||||
Bank efficiency ratio: |
|
|
|
||||||||
Total non-interest expense (numerator) |
$ |
31,238 |
|
$ |
30,170 |
|
$ |
22,655 |
|
||
Bank total revenue (denominator) |
$ |
61,952 |
|
$ |
59,043 |
|
$ |
44,784 |
|
||
Bank efficiency ratio |
|
50.42 |
% |
|
51.10 |
% |
|
50.59 |
% |
||
NON-GAAP FINANCIAL MEASURES (UNAUDITED) |
||||
|
Three Months Ended |
|||
|
|
|
||
(Dollars in thousands) |
2022 |
2021 |
||
Income Before Taxes (GAAP) |
$ |
26,950 |
$ |
23,774 |
Non-recurring non-interest expense* |
|
432 |
|
2,665 |
Income Before Taxes, excluding non-recurring items (non-GAAP) |
|
27,382 |
|
26,439 |
Estimated effect of non-recurring item on Income Tax Expense** |
|
90 |
|
560 |
|
|
342 |
|
2,105 |
Net impact of non-recurring expense and taxes on diluted EPS |
|
0.01 |
|
0.06 |
|
|
|
||
*Non-recurring expenses incurred in connection with the pending transaction announced in October (agreement to be acquired by Raymond James) |
||||
**Tax impact estimated using |
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20220427005776/en/
MEDIA CONTACT
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jack@hornercom.com
INVESTOR RELATIONS CONTACT
Lambert
888-609-8351
TSC@lambert.com
Source:
FAQ
What are TriState Capital Holdings' first quarter 2022 financial highlights?
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How did Chartwell perform in the first quarter of 2022?
