TriState Capital’s Third Quarter Results Include Robust Growth Across All Three of Its Business Lines With Strong Credit Metrics and Deferral Trends
TriState Capital Holdings (TSC) reported its third-quarter 2020 financial results, highlighting net income of $7.4 million ($0.26 per diluted share), a decrease from $14.4 million ($0.50) in Q3 2019. Key achievements included a 4.3% increase in assets under management to $9.65 billion, and a 32.4% year-over-year rise in private banking loans, totaling $4.46 billion. COVID-19 loan deferral levels significantly decreased, reflecting strong asset quality. Total revenue reached $46.6 million, with non-interest income growing to $16.9 million. The company anticipates net income growth for Q4 and ongoing expansion through 2021.
- Net income of $7.4 million for Q3 2020, improving operational resilience.
- 4.3% growth in assets under management, reaching $9.65 billion.
- 32.4% increase in private banking loans year-over-year, totaling $4.46 billion.
- Significant decrease in COVID-19 loan deferral levels from $431.4 million to $185.9 million.
- Total revenue of $46.6 million, with non-interest income increasing to $16.9 million.
- Net income decreased from $14.4 million in Q3 2019 to $7.4 million.
- Net interest margin declined to 1.46% from 1.94% in Q3 2019.
- Non-interest expense increased by 13.2% year-over-year to $31.4 million.
PITTSBURGH--(BUSINESS WIRE)--TriState Capital Holdings, Inc. (Nasdaq: TSC) reported third quarter 2020 financial results including positive net flows of client assets into its investment management unit and double-digit growth in loans and deposits from its core private banking and commercial banking businesses, as well as strong credit quality metrics and COVID-19 deferral levels declining better than previously forecast.
The parent company of TriState Capital Bank and Chartwell Investment Partners reported third quarter of 2020 net income available to common shareholders of
“We are very proud of what our team and businesses have been able to accomplish for our clients and our shareholders in a year of extraordinary disruption,” Chairman and Chief Executive Officer James F. Getz said. “For both the quarter and the year, each of our investment management, private banking and commercial banking businesses have contributed to profitable revenue growth as we serve greater numbers of clients and financial intermediaries, while maintaining superior credit quality metrics, investing in technology and talent, and optimizing the company’s agile balance sheet as we manage liquidity and capital. With continued confidence in our ability to manage long-term credit quality, we currently expect to be able to generate meaningful net income growth in the fourth quarter and next year, as we deploy capital and continue to expand each of our businesses through 2021 and beyond.”
THIRD QUARTER 2020 HIGHLIGHTS
-
Chartwell client assets under management grew
4.3% during the quarter to$9.65 billion , drawing positive net inflows of$289.0 million year to date, including$156.0 million during the third quarter. -
Private banking loans primarily collateralized by marketable securities represented
58.3% of total loans at period end, growing32.4% from September 30, 2019 and9.7% during the quarter. -
Commercial loans increased by
20.7% from September 30, 2019 and2.8% during the quarter. -
Cost of funds for deposits and interest-bearing liabilities averaged
0.77% , compared to2.27% in the same period last year and0.87% in the linked quarter. -
Allowance for loan and lease losses (ALLL) increased by
31.9% during the quarter to$30.7 million , representing79.1% of adverse-rated credits and0.96% of commercial loans. -
COVID-19 deferral levels declined more than earlier forecasts for this point in time, from
$431.4 million or5.9% of total loans on July 18 to$185.9 million or2.4% on October 20. -
Even with provision expense supporting a
$7.4 million ALLL build, credit costs across the portfolio remain relatively low given the company’s private banking loan portfolio, limited commercial exposure to the industries most directly impacted by the pandemic, and focus on commercial borrower sponsorship, as well as its proven approach to managing high quality commercial credits. -
Tangible common equity (TCE) and regulatory capital ratios are expected to benefit upon closing of the company’s recently announced agreement to issue common stock at
$14.44 per share, convertible preferred stock and warrants to funds managed by Stone Point Capital LLC, in order to raise$105 million to support continued execution of TriState Capital’s high-growth strategy.
Net interest income (NII) was
Total non-interest income grew to
Fees from the bank’s back-to-back, loan-level interest rate swap offering for clients totaled
NII and non-interest income, excluding net gains on the sale of debt securities, combined to generate total revenue of
TriState Capital recorded a
To drive revenue growth and product innovation, TriState Capital continues to invest in talent, client experience, operating scale, and risk and compliance management in preparation for growing its bank to over
Third quarter 2020 non-interest expense totaled
TriState Capital continued to maintain a low non-interest expense to average assets ratio of
TriState Capital Bank’s efficiency ratio for the third quarter of 2020 was
Pre-tax income was
Pre-tax, pre-provision net revenue (PTPPNR) was
TriState Capital’s effective tax rate was
Net income available to common shareholders and earnings per share in the third quarter of 2020 is net of
ORGANIC LENDING FRANCHISE GROWTH
TriState Capital’s client-engagement and distribution capabilities continued to grow both sides of its balance sheet organically, expanding the number and depth of its premier relationships with high-quality middle-market commercial customers, as well as the family offices and high-net-worth clients the bank serves through its national referral network of investment advisors and other financial intermediaries.
Average loans totaled a record
TriState Capital continued to fortify its position as the nation’s leading independent provider of marketable securities-backed loans for clients of independent investment advisory and other financial services firms. Private banking loans totaled a record
The company continued to grow relationships with top-quality middle-market sponsors and businesses in the third quarter of 2020, 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 grew to
TriState Capital’s third quarter commercial lending activity is attributed to its regional middle-market and financial services franchise, including the continued expansion of its equipment finance and investment fund finance offerings. The bank does not offer small business lending products and did not participate in the Paycheck Protection Program.
DEPOSIT FRANCHISE EXPANSION
TriState Capital continues to support private banking and commercial loan growth with its highly responsive funding capability and the organic, strategic expansion of its deposit franchise. The bank’s national treasury management and liquidity management offerings are increasing the breadth and depth of depositor relationships with financial services businesses, high-net-worth individuals, family offices, middle market companies, professional service firms, specialized payment and transaction processors, municipalities and non-profits.
Average deposits totaled a record
Treasury management deposit accounts totaled
The bank’s loan-to-deposit ratio at September 30, 2020 was
INTEREST RATE MANAGEMENT
TriState Capital continues to maintain a balance sheet with significant flexibility to actively manage interest rate dynamics and profitability, while offering attractive deposit and loan pricing to clients, even as the Federal Reserve’s target Federal Funds Rate has declined dramatically since the third quarter of 2019.
Investment securities totaled a record
Most of TriState Capital’s non-fixed rate deposits are linked to the Effective Fed Funds Rate or another benchmark, and the remaining deposits are priced at rates set with bank discretion. Total cost of funds for all deposits and interest-bearing liabilities averaged
At September 30, 2020,
The yield on total loans averaged
INVESTMENT MANAGEMENT
Strong investment performance across Chartwell’s active equity and fixed income strategies contributed to net inflows of
Chartwell’s new business and new flows from existing accounts of
Annual run rate revenue grew
Initiatives to enhance Chartwell profitability continue to be reflected in moderating segment non-interest expenses, which were
ASSET QUALITY
TriState Capital maintained strong asset quality metrics in the third quarter of 2020, reflecting the company’s disciplined credit culture and the majority of its private banking non-purpose margin loans collateralized by marketable securities. Private banking loans comprised
COVID-19 deferral levels have declined more than previously forecast, from 113 loans representing
TriState Capital recorded provision expense of
ALLL increased to
TriState Capital’s third quarter 2020 results, including provision expense and ALLL, reflect continued application of the incurred loss method for estimating credit losses. The company continues to anticipate implementation of the current expected credit losses (CECL) accounting standard on December 31, 2020. ALLL on December 31, 2020 is currently estimated to range from
Non-performing assets (NPAs) were
Total adverse-rated credits, including NPLs, were
TriState Capital’s net charge offs were
STRONG BALANCE SHEET, HEIGHTENED LIQUIDITY AND CAPITAL EFFICIENCY
The company’s strong balance sheet included
As of September 30, 2020, estimated regulatory capital ratios for TriState Capital Holdings were
The expected infusion of
CONFERENCE CALL
As previously announced, TriState Capital will hold a conference call tomorrow to review its financial results and operating performance.
The live conference call on October 22 will be held at 8:30 a.m. ET. Telephone participants may avoid any delays by pre-registering for the call using the link https://dpregister.com/sreg/10147699/d833675036 to receive a special dial-in number and PIN. Telephone participants who are unable to pre-register should dial in at least 10 minutes prior to the call and request the “TriState Capital investor call.” The call may be accessed by dialing 888-339-0757 from the United States or Canada, and 412-902-4194 from other international locations.
The live conference call will also be available through an audio webcast accessible at https://services.choruscall.com/links/tsc201022.html or https://investors.tristatecapitalbank.com. These links may also be used to access an archived replay of the conference call.
A telephone replay of the call will be available approximately one hour after the end of the conference through October 29. The replay may be accessed by dialing 877-344-7529 from the United States, 855-669-9658 from Canada, or 412-317-0088 from other international locations, and entering the conference number 10147699.
ABOUT TRISTATE CAPITAL
TriState Capital Holdings, Inc. (Nasdaq: TSC) is a bank holding company headquartered in Pittsburgh, Pa., providing commercial banking, private banking and investment management services to middle-market companies, institutional clients and high-net-worth individuals. Its TriState Capital Bank subsidiary had
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, the expected sale of securities to Stone Point Capital LLC and management’s outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality or other 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,” “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 TriState Capital believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Accordingly, TriState Capital cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that change over time and are difficult to predict, including, but not limited to, the following:
- risks associated with the COVID-19 pandemic and its expected impact and duration, including effects on TriState Capital’s operations, its clients, economic conditions and the demand for its products and services;
- TriState Capital’s ability to prudently manage its growth and execute its strategy, including the successful integration of past and future acquisitions, its ability to fully realize the cost savings and other benefits of its acquisitions, manage risks related to business disruption following those acquisitions, and manage customer disintermediation;
- 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 on the value of loans and other financial instruments we hold that are linked to LIBOR;
- changes in accounting policies, accounting standards, or authoritative accounting guidance, including the CECL model, which may increase the level of TriState Capital’s allowance for credit losses upon adoption;
- 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 Investment Partners, LLC, the company’s registered investment advisor subsidiary, 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 TriState Capital to predict which will arise. Any forward-looking statement speaks only as of the date on which it is made, and TriState Capital does not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. In addition, TriState Capital cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
NON-GAAP FINANCIAL DISCLOSURES
This news release and the accompanying tables contain certain financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (GAAP). Specifically, TriState Capital reviews and reports tangible common equity, tangible book value per common share, tangible assets, tangible assets excluding private banking loans, tangible common equity ratio, tangible common equity ratio excluding private banking loans, total revenue, EBITDA, pre-tax, pre-provision net revenue and efficiency ratio. Although TriState Capital believes these non-GAAP financial measures provide a greater understanding of its business, 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 determined in accordance with GAAP. Where non-GAAP disclosures are used, the most directly comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found within this news release and in the reconciliation tables accompanying this news release.
TRISTATE CAPITAL HOLDINGS, INC. BALANCE SHEET DATA (UNAUDITED) |
|||||||||||||||||||||
|
As of and For the
|
|
As of and For the
|
||||||||||||||||||
|
September 30, |
June 30, |
September 30, |
|
September 30, |
September 30, |
|||||||||||||||
(Dollars in thousands) |
2020 |
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
||||||||||
Cash and cash equivalents |
$ |
608,302 |
|
|
$ |
724,942 |
|
|
$ |
383,948 |
|
|
|
$ |
608,302 |
|
|
$ |
383,948 |
|
|
Total investment securities |
820,223 |
|
|
812,140 |
|
|
468,721 |
|
|
|
820,223 |
|
|
468,721 |
|
|
|||||
Loans and leases held-for-investment |
7,654,446 |
|
|
7,170,770 |
|
|
6,016,680 |
|
|
|
7,654,446 |
|
|
6,016,680 |
|
|
|||||
Allowance for loan and lease losses |
(30,706 |
) |
|
(23,276 |
) |
|
(13,374 |
) |
|
|
(30,706 |
) |
|
(13,374 |
) |
|
|||||
Loans and leases held-for-investment, net |
7,623,740 |
|
|
7,147,494 |
|
|
6,003,306 |
|
|
|
7,623,740 |
|
|
6,003,306 |
|
|
|||||
Goodwill and other intangibles, net |
64,389 |
|
|
64,867 |
|
|
66,357 |
|
|
|
64,389 |
|
|
66,357 |
|
|
|||||
Other assets |
377,136 |
|
|
380,398 |
|
|
276,117 |
|
|
|
377,136 |
|
|
276,117 |
|
|
|||||
Total assets |
$ |
9,493,790 |
|
|
$ |
9,129,841 |
|
|
$ |
7,198,449 |
|
|
|
$ |
9,493,790 |
|
|
$ |
7,198,449 |
|
|
|
|
|
|
|
|
|
|||||||||||||||
Deposits |
$ |
8,183,713 |
|
|
$ |
7,831,471 |
|
|
$ |
6,094,605 |
|
|
|
$ |
8,183,713 |
|
|
$ |
6,094,605 |
|
|
Borrowings, net |
395,439 |
|
|
395,552 |
|
|
330,000 |
|
|
|
395,439 |
|
|
330,000 |
|
|
|||||
Other liabilities |
271,438 |
|
|
269,987 |
|
|
169,337 |
|
|
|
271,438 |
|
|
169,337 |
|
|
|||||
Total liabilities |
8,850,590 |
|
|
8,497,010 |
|
|
6,593,942 |
|
|
|
8,850,590 |
|
|
6,593,942 |
|
|
|||||
|
|
|
|
|
|
|
|||||||||||||||
Preferred stock |
116,079 |
|
|
116,079 |
|
|
116,064 |
|
|
|
116,079 |
|
|
116,064 |
|
|
|||||
Common shareholders’ equity |
527,121 |
|
|
516,752 |
|
|
488,443 |
|
|
|
527,121 |
|
|
488,443 |
|
|
|||||
Total shareholders’ equity |
643,200 |
|
|
632,831 |
|
|
604,507 |
|
|
|
643,200 |
|
|
604,507 |
|
|
|||||
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities and shareholders’ equity |
$ |
9,493,790 |
|
|
$ |
9,129,841 |
|
|
$ |
7,198,449 |
|
|
|
$ |
9,493,790 |
|
|
$ |
7,198,449 |
|
|
TRISTATE CAPITAL HOLDINGS, INC. INCOME STATEMENT DATA (UNAUDITED) |
||||||||||||||||||
|
As of and For the
|
|
As of and For the
|
|||||||||||||||
|
September 30, |
June 30, |
September 30, |
|
September 30, |
September 30, |
||||||||||||
(Dollars in thousands) |
2020 |
2020 |
2019 |
|
|
2020 |
2019 |
|
||||||||||
Interest income: |
|
|
|
|
|
|
||||||||||||
Loans and leases |
$ |
46,256 |
|
$ |
47,377 |
|
$ |
61,551 |
|
|
|
$ |
152,551 |
|
$ |
179,392 |
|
|
Investments |
3,687 |
|
3,940 |
|
3,993 |
|
|
|
11,528 |
|
12,497 |
|
|
|||||
Interest-earning deposits |
279 |
|
344 |
|
2,188 |
|
|
|
2,006 |
|
5,084 |
|
|
|||||
Total interest income |
50,222 |
|
51,661 |
|
67,732 |
|
|
|
166,085 |
|
196,973 |
|
|
|||||
|
|
|
|
|
|
|
||||||||||||
Interest expense: |
|
|
|
|
|
|
||||||||||||
Deposits |
13,898 |
|
15,953 |
|
34,114 |
|
|
|
57,095 |
|
95,602 |
|
|
|||||
Borrowings |
2,850 |
|
2,224 |
|
1,302 |
|
|
|
7,110 |
|
7,380 |
|
|
|||||
Total interest expense |
16,748 |
|
18,177 |
|
35,416 |
|
|
|
64,205 |
|
102,982 |
|
|
|||||
Net interest income |
33,474 |
|
33,484 |
|
32,316 |
|
|
|
101,880 |
|
93,991 |
|
|
|||||
Provision (credit) for loan and lease losses |
7,430 |
|
6,005 |
|
(607 |
) |
|
|
16,428 |
|
(1,696 |
) |
|
|||||
Net interest income after provision for loan and lease losses |
26,044 |
|
27,479 |
|
32,923 |
|
|
|
85,452 |
|
95,687 |
|
|
|||||
Non-interest income: |
|
|
|
|
|
|
||||||||||||
Investment management fees |
8,095 |
|
7,738 |
|
8,902 |
|
|
|
23,471 |
|
27,580 |
|
|
|||||
Service charges on deposits |
235 |
|
315 |
|
129 |
|
|
|
763 |
|
343 |
|
|
|||||
Net gain on the sale and call of debt securities |
3,744 |
|
14 |
|
206 |
|
|
|
3,815 |
|
346 |
|
|
|||||
Swap fees |
3,953 |
|
3,853 |
|
4,171 |
|
|
|
12,179 |
|
7,666 |
|
|
|||||
Commitment and other loan fees |
381 |
|
462 |
|
464 |
|
|
|
1,262 |
|
1,251 |
|
|
|||||
Other income |
481 |
|
615 |
|
371 |
|
|
|
1,712 |
|
2,105 |
|
|
|||||
Total non-interest income |
16,889 |
|
12,997 |
|
14,243 |
|
|
|
43,202 |
|
39,291 |
|
|
|||||
Non-interest expense: |
|
|
|
|
|
|
||||||||||||
Compensation and employee benefits |
18,524 |
|
16,569 |
|
18,707 |
|
|
|
52,539 |
|
52,467 |
|
|
|||||
Premises and equipment expense |
1,488 |
|
1,515 |
|
1,420 |
|
|
|
4,389 |
|
3,866 |
|
|
|||||
Professional fees |
1,596 |
|
1,109 |
|
1,305 |
|
|
|
4,175 |
|
3,706 |
|
|
|||||
FDIC insurance expense |
3,030 |
|
2,560 |
|
994 |
|
|
|
7,760 |
|
3,462 |
|
|
|||||
General insurance expense |
294 |
|
278 |
|
258 |
|
|
|
834 |
|
811 |
|
|
|||||
State capital shares tax |
366 |
|
366 |
|
(720 |
) |
|
|
1,115 |
|
40 |
|
|
|||||
Travel and entertainment expense |
592 |
|
279 |
|
1,339 |
|
|
|
1,735 |
|
3,214 |
|
|
|||||
Technology and data services |
2,576 |
|
2,414 |
|
2,082 |
|
|
|
7,294 |
|
6,246 |
|
|
|||||
Intangible amortization expense |
478 |
|
486 |
|
502 |
|
|
|
1,466 |
|
1,506 |
|
|
|||||
Marketing and advertising |
394 |
|
686 |
|
518 |
|
|
|
1,694 |
|
1,661 |
|
|
|||||
Other operating expenses |
2,089 |
|
1,834 |
|
1,368 |
|
|
|
5,667 |
|
5,051 |
|
|
|||||
Total non-interest expense |
31,427 |
|
28,096 |
|
27,773 |
|
|
|
88,668 |
|
82,030 |
|
|
|||||
Income before tax |
11,506 |
|
12,380 |
|
19,393 |
|
|
|
39,986 |
|
52,948 |
|
|
|||||
Income tax expense |
2,177 |
|
1,979 |
|
3,059 |
|
|
|
7,362 |
|
7,359 |
|
|
|||||
Net income |
$ |
9,329 |
|
$ |
10,401 |
|
$ |
16,334 |
|
|
|
$ |
32,624 |
|
$ |
45,589 |
|
|
Preferred stock dividends |
1,962 |
|
1,962 |
|
1,962 |
|
|
|
5,886 |
|
3,791 |
|
|
|||||
Net income available to common shareholders |
$ |
7,367 |
|
$ |
8,439 |
|
$ |
14,372 |
|
|
|
$ |
26,738 |
|
$ |
41,798 |
|
|
TRISTATE CAPITAL HOLDINGS, INC. SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED) |
||||||||||||||||||
|
As of and For the
|
|
As of and For the
|
|||||||||||||||
|
September 30, |
June 30, |
September 30, |
|
September 30, |
September 30, |
||||||||||||
(Dollars in thousands, except per share data) |
2020 |
2020 |
2019 |
|
2020 |
|
2019 |
|
||||||||||
Per share and share data: |
|
|
|
|
|
|
||||||||||||
Earnings per common share: |
|
|
|
|
|
|
||||||||||||
Basic |
$ |
0.26 |
|
$ |
0.30 |
|
$ |
0.52 |
|
|
$ |
0.95 |
|
|
$ |
1.50 |
|
|
Diluted |
$ |
0.26 |
|
$ |
0.30 |
|
$ |
0.50 |
|
|
$ |
0.93 |
|
|
$ |
1.45 |
|
|
Book value per common share |
$ |
17.67 |
|
$ |
17.31 |
|
$ |
16.67 |
|
|
$ |
17.67 |
|
|
$ |
16.67 |
|
|
Tangible book value per common share (1) |
$ |
15.51 |
|
$ |
15.14 |
|
$ |
14.41 |
|
|
$ |
15.51 |
|
|
$ |
14.41 |
|
|
Common shares outstanding, at end of period |
29,828,143 |
|
29,851,550 |
|
29,296,970 |
|
|
29,828,143 |
|
|
29,296,970 |
|
|
|||||
Weighted average common shares outstanding: |
|
|
|
|
|
|
||||||||||||
Basic |
28,286,250 |
|
28,223,085 |
|
27,863,767 |
|
|
28,230,180 |
|
|
27,861,515 |
|
|
|||||
Diluted |
28,674,443 |
|
28,527,961 |
|
28,778,671 |
|
|
28,679,283 |
|
|
28,759,408 |
|
|
|||||
|
|
|
|
|
|
|
||||||||||||
Performance ratios: |
|
|
|
|
|
|
||||||||||||
Return on average assets (2) |
0.39 |
% |
0.45 |
% |
0.94 |
% |
|
0.49 |
|
% |
0.94 |
|
% |
|||||
Return on average common equity (2) |
5.56 |
% |
6.62 |
% |
11.82 |
% |
|
6.90 |
|
% |
11.97 |
|
% |
|||||
Net interest margin (2) (3) |
1.46 |
% |
1.52 |
% |
1.94 |
% |
|
1.60 |
|
% |
2.02 |
|
% |
|||||
Total revenue (1) |
$ |
46,619 |
|
$ |
46,467 |
|
$ |
46,353 |
|
|
$ |
141,267 |
|
|
$ |
132,936 |
|
|
Pre-tax, pre-provision net revenue (1) |
$ |
15,192 |
|
$ |
18,371 |
|
$ |
18,580 |
|
|
$ |
52,599 |
|
|
$ |
50,906 |
|
|
Bank efficiency ratio (1) |
58.73 |
% |
50.39 |
% |
50.70 |
% |
|
53.66 |
|
% |
53.94 |
|
% |
|||||
Non-interest expense to average assets (2) |
1.31 |
% |
1.22 |
% |
1.59 |
% |
|
1.33 |
|
% |
1.69 |
|
% |
|||||
|
|
|
|
|
|
|
||||||||||||
Asset quality: |
|
|
|
|
|
|
||||||||||||
Non-performing loans |
$ |
6,754 |
|
$ |
6,780 |
|
$ |
184 |
|
|
$ |
6,754 |
|
|
$ |
184 |
|
|
Non-performing assets |
$ |
9,478 |
|
$ |
9,504 |
|
$ |
4,434 |
|
|
$ |
9,478 |
|
|
$ |
4,434 |
|
|
Other real estate owned |
$ |
2,724 |
|
$ |
2,724 |
|
$ |
4,250 |
|
|
$ |
2,724 |
|
|
$ |
4,250 |
|
|
Non-performing assets to total assets |
0.10 |
% |
0.10 |
% |
0.06 |
% |
|
0.10 |
|
% |
0.06 |
|
% |
|||||
Non-performing loans to total loans |
0.09 |
% |
0.09 |
% |
— |
% |
|
0.09 |
|
% |
— |
|
% |
|||||
Allowance for loan and lease losses to loans |
0.40 |
% |
0.32 |
% |
0.22 |
% |
|
0.40 |
|
% |
0.22 |
|
% |
|||||
Allowance for loan and lease losses to non-performing loans |
454.63 |
% |
343.30 |
% |
7,268.48 |
% |
|
454.63 |
|
% |
7,268.48 |
|
% |
|||||
Net charge-offs (recoveries) |
$ |
— |
|
$ |
33 |
|
$ |
35 |
|
|
$ |
(170 |
) |
|
$ |
(1,862 |
) |
|
Net charge-offs (recoveries) to average total loans (2) |
— |
% |
— |
% |
— |
% |
|
— |
|
% |
(0.05 |
) |
% |
|||||
|
|
|
|
|
|
|
||||||||||||
Capital ratios: (4) |
|
|
|
|
|
|
||||||||||||
Tier 1 leverage ratio |
6.23 |
% |
6.30 |
% |
7.91 |
% |
|
6.23 |
|
% |
7.91 |
|
% |
|||||
Common equity tier 1 risk-based capital ratio |
8.49 |
% |
8.54 |
% |
9.58 |
% |
|
8.49 |
|
% |
9.58 |
|
% |
|||||
Tier 1 risk-based capital ratio |
10.57 |
% |
10.68 |
% |
12.15 |
% |
|
10.57 |
|
% |
12.15 |
|
% |
|||||
Total risk-based capital ratio |
12.85 |
% |
12.89 |
% |
12.40 |
% |
|
12.85 |
|
% |
12.40 |
|
% |
|||||
Bank tier 1 leverage ratio |
7.00 |
% |
7.11 |
% |
7.20 |
% |
|
7.00 |
|
% |
7.20 |
|
% |
|||||
Bank common equity tier 1 risk-based capital ratio |
11.89 |
% |
12.07 |
% |
11.07 |
% |
|
11.89 |
|
% |
11.07 |
|
% |
|||||
Bank tier 1 risk based capital ratio |
11.89 |
% |
12.07 |
% |
11.07 |
% |
|
11.89 |
|
% |
11.07 |
|
% |
|||||
Bank total risk-based capital ratio |
12.46 |
% |
12.52 |
% |
11.38 |
% |
|
12.46 |
|
% |
11.38 |
|
% |
|||||
|
|
|
|
|
|
|
||||||||||||
Investment Management Segment: |
|
|
|
|
|
|
||||||||||||
Assets under management |
$ |
9,653,000 |
|
$ |
9,254,000 |
|
$ |
9,615,000 |
|
|
$ |
9,653,000 |
|
|
$ |
9,615,000 |
|
|
EBITDA (1) |
$ |
1,551 |
|
$ |
1,031 |
|
$ |
932 |
|
|
$ |
3,799 |
|
|
$ |
5,110 |
|
|
(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. |
TRISTATE CAPITAL HOLDINGS, INC. AVERAGES AND YIELDS (UNAUDITED) |
||||||||||||||||||||||||||
|
Three Months Ended |
|||||||||||||||||||||||||
|
September 30, 2020 |
|
June 30, 2020 |
|
September 30, 2019 |
|||||||||||||||||||||
(Dollars in thousands) |
Average
|
Interest
|
Average
|
|
Average
|
Interest
|
Average
|
|
Average
|
Interest
|
Average
|
|||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-earning deposits |
$ |
866,502 |
|
$ |
278 |
|
0.13 |
% |
|
$ |
1,098,510 |
|
$ |
342 |
|
0.13 |
% |
|
$ |
388,274 |
|
$ |
2,144 |
|
2.19 |
% |
Federal funds sold |
9,071 |
|
2 |
|
0.09 |
% |
|
7,883 |
|
1 |
|
0.05 |
% |
|
8,424 |
|
44 |
|
2.07 |
% |
||||||
Debt securities available-for-sale |
561,378 |
|
1,804 |
|
1.28 |
% |
|
329,015 |
|
2,026 |
|
2.48 |
% |
|
262,665 |
|
2,085 |
|
3.15 |
% |
||||||
Debt securities held-to-maturity |
262,128 |
|
1,701 |
|
2.58 |
% |
|
292,898 |
|
1,616 |
|
2.22 |
% |
|
174,331 |
|
1,537 |
|
3.50 |
% |
||||||
Equity securities |
— |
|
— |
|
— |
% |
|
— |
|
— |
|
— |
% |
|
4,720 |
|
12 |
|
1.01 |
% |
||||||
FHLB stock |
13,284 |
|
196 |
|
5.87 |
% |
|
13,269 |
|
305 |
|
9.24 |
% |
|
10,585 |
|
382 |
|
14.32 |
% |
||||||
Total loans and leases |
7,386,265 |
|
46,256 |
|
2.49 |
% |
|
7,094,744 |
|
47,377 |
|
2.69 |
% |
|
5,776,652 |
|
61,552 |
|
4.23 |
% |
||||||
Total interest-earning assets |
9,098,628 |
|
50,237 |
|
2.20 |
% |
|
8,836,319 |
|
51,667 |
|
2.35 |
% |
|
6,625,651 |
|
67,756 |
|
4.06 |
% |
||||||
Other assets |
420,887 |
|
|
|
|
408,950 |
|
|
|
|
288,216 |
|
|
|
||||||||||||
Total assets |
$ |
9,519,515 |
|
|
|
|
$ |
9,245,269 |
|
|
|
|
$ |
6,913,867 |
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing checking accounts |
$ |
2,866,303 |
|
$ |
3,280 |
|
0.46 |
% |
|
$ |
2,327,513 |
|
$ |
2,719 |
|
0.47 |
% |
|
$ |
1,116,624 |
|
$ |
5,795 |
|
2.06 |
% |
Money market deposit accounts |
3,811,100 |
|
6,944 |
|
0.72 |
% |
|
3,862,068 |
|
7,377 |
|
0.77 |
% |
|
3,106,186 |
|
18,870 |
|
2.41 |
% |
||||||
Certificates of deposit |
1,121,824 |
|
3,674 |
|
1.30 |
% |
|
1,389,984 |
|
5,857 |
|
1.69 |
% |
|
1,462,521 |
|
9,449 |
|
2.56 |
% |
||||||
Borrowings: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
FHLB borrowings |
300,000 |
|
1,392 |
|
1.85 |
% |
|
300,000 |
|
1,284 |
|
1.72 |
% |
|
224,130 |
|
1,302 |
|
2.30 |
% |
||||||
Line of credit borrowings |
— |
|
— |
|
— |
% |
|
22,747 |
|
260 |
|
4.60 |
% |
|
— |
|
— |
|
— |
% |
||||||
Subordinated notes payable, net |
95,601 |
|
1,458 |
|
6.07 |
% |
|
44,417 |
|
680 |
|
6.16 |
% |
|
— |
|
— |
|
— |
% |
||||||
Total interest-bearing liabilities |
8,194,828 |
|
16,748 |
|
0.81 |
% |
|
7,946,729 |
|
18,177 |
|
0.92 |
% |
|
5,909,461 |
|
35,416 |
|
2.38 |
% |
||||||
Noninterest-bearing deposits |
407,079 |
|
|
|
|
417,732 |
|
|
|
|
268,013 |
|
|
|
||||||||||||
Other liabilities |
274,480 |
|
|
|
|
252,303 |
|
|
|
|
137,934 |
|
|
|
||||||||||||
Shareholders’ equity |
643,128 |
|
|
|
|
628,505 |
|
|
|
|
598,459 |
|
|
|
||||||||||||
Total liabilities and shareholders’ equity |
$ |
9,519,515 |
|
|
|
|
$ |
9,245,269 |
|
|
|
|
$ |
6,913,867 |
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net interest income (1) |
|
$ |
33,489 |
|
|
|
|
$ |
33,490 |
|
|
|
|
$ |
32,340 |
|
|
|||||||||
Net interest spread (1) |
|
|
1.39 |
% |
|
|
|
1.43 |
% |
|
|
|
1.68 |
% |
||||||||||||
Net interest margin (1) |
|
|
1.46 |
% |
|
|
|
1.52 |
% |
|
|
|
1.94 |
% |
||||||||||||
(1) |
Calculated on a fully taxable equivalent basis. |
|
(2) |
Annualized. |
TRISTATE CAPITAL HOLDINGS, INC. LOAN AND LEASE COMPOSITION (UNAUDITED) |
|||||||||||||||||
|
Nine Months Ended September 30, |
||||||||||||||||
|
2020 |
|
2019 |
||||||||||||||
(Dollars in thousands) |
Average
|
Interest
|
Average
Yield/
|
|
Average
|
Interest
|
Average
|
||||||||||
Assets |
|
|
|
|
|
|
|
||||||||||
Interest-earning deposits |
$ |
809,978 |
|
$ |
1,983 |
|
0.33 |
% |
|
$ |
282,828 |
|
$ |
4,942 |
|
2.34 |
% |
Federal funds sold |
8,022 |
|
23 |
|
0.38 |
% |
|
9,412 |
|
142 |
|
2.02 |
% |
||||
Debt securities available-for-sale |
391,377 |
|
5,874 |
|
2.00 |
% |
|
249,490 |
|
6,125 |
|
3.28 |
% |
||||
Debt securities held-to-maturity |
252,296 |
|
4,805 |
|
2.54 |
% |
|
189,083 |
|
5,267 |
|
3.72 |
% |
||||
Debt securities trading |
76 |
|
1 |
|
1.76 |
% |
|
— |
|
— |
|
— |
% |
||||
Equity securities |
— |
|
— |
|
— |
% |
|
8,363 |
|
112 |
|
1.79 |
% |
||||
FHLB stock |
15,569 |
|
899 |
|
7.71 |
% |
|
17,069 |
|
1,072 |
|
8.40 |
% |
||||
Total loans and leases |
7,052,457 |
|
152,551 |
|
2.89 |
% |
|
5,474,522 |
|
179,392 |
|
4.38 |
% |
||||
Total interest-earning assets |
8,529,775 |
|
166,136 |
|
2.60 |
% |
|
6,230,767 |
|
197,052 |
|
4.23 |
% |
||||
Other assets |
380,908 |
|
|
|
|
266,059 |
|
|
|
||||||||
Total assets |
$ |
8,910,683 |
|
|
|
|
$ |
6,496,826 |
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits: |
|
|
|
|
|
|
|
||||||||||
Interest-bearing checking accounts |
$ |
2,224,827 |
|
$ |
11,213 |
|
0.67 |
% |
|
$ |
927,198 |
|
$ |
15,303 |
|
2.21 |
% |
Money market deposit accounts |
3,740,968 |
|
28,975 |
|
1.03 |
% |
|
2,883,009 |
|
53,608 |
|
2.49 |
% |
||||
Certificates of deposit |
1,297,637 |
|
16,907 |
|
1.74 |
% |
|
1,375,324 |
|
26,691 |
|
2.59 |
% |
||||
Borrowings: |
|
|
|
|
|
|
|
||||||||||
FHLB borrowings |
340,493 |
|
4,711 |
|
1.85 |
% |
|
370,550 |
|
6,222 |
|
2.24 |
% |
||||
Line of credit borrowings |
8,047 |
|
261 |
|
4.33 |
% |
|
1,650 |
|
68 |
|
5.51 |
% |
||||
Subordinated notes payable, net |
46,851 |
|
2,138 |
|
6.10 |
% |
|
23,178 |
|
1,090 |
|
6.29 |
% |
||||
Total interest-bearing liabilities |
7,658,823 |
|
64,205 |
|
1.12 |
% |
|
5,580,909 |
|
102,982 |
|
2.47 |
% |
||||
Noninterest-bearing deposits |
391,689 |
|
|
|
|
262,056 |
|
|
|
||||||||
Other liabilities |
226,838 |
|
|
|
|
113,331 |
|
|
|
||||||||
Shareholders’ equity |
633,333 |
|
|
|
|
540,530 |
|
|
|
||||||||
Total liabilities and shareholders’ equity |
$ |
8,910,683 |
|
|
|
|
$ |
6,496,826 |
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||
Net interest income (1) |
|
$ |
101,931 |
|
|
|
|
$ |
94,070 |
|
|
||||||
Net interest spread (1) |
|
|
1.48 |
% |
|
|
|
1.76 |
% |
||||||||
Net interest margin (1) |
|
|
1.60 |
% |
|
|
|
2.02 |
% |
||||||||
| (1) | Calculated on a fully taxable equivalent basis. |
|
| (2) | Annualized. |
| TRISTATE CAPITAL HOLDINGS, INC.
LOAN AND LEASE COMPOSITION (UNAUDITED) |
|||||||||||||||||
|
September 30, 2020 |
|
June 30, 2020 |
|
September 30, 2019 |
||||||||||||
(Dollars in thousands) |
Loan
|
Percent of
|
|
Loan
|
Percent of
|
|
Loan
|
Percent of
|
|||||||||
Private banking loans |
$ |
4,458,767 |
|
58.3 |
% |
|
$ |
4,063,116 |
|
56.6 |
% |
|
$ |
3,368,142 |
|
56.0 |
% |
Middle-market banking loans: |
|
|
|
|
|
|
|
|
|||||||||
Commercial and industrial |
1,138,288 |
|
14.9 |
% |
|
1,152,880 |
|
16.1 |
% |
|
992,508 |
|
16.5 |
% |
|||
Commercial real estate |
2,057,391 |
|
26.8 |
% |
|
1,954,774 |
|
27.3 |
% |
|
1,656,030 |
|
27.5 |
% |
|||
Total middle-market banking loans |
3,195,679 |
|
41.7 |
% |
|
3,107,654 |
|
43.4 |
% |
|
2,648,538 |
|
44.0 |
% |
|||
Loans and leases held-for-investment |
$ |
7,654,446 |
|
100.0 |
% |
|
$ |
7,170,770 |
|
100.0 |
% |
|
$ |
6,016,680 |
|
100.0 |
% |
TRISTATE CAPITAL HOLDINGS, INC. STATEMENT OF INCOME BY REPORTABLE SEGMENT (UNAUDITED) |
||||||||||||||||||||||||||||||
|
Three Months Ended September 30, 2020 |
|
Three Months Ended September 30, 2019 |
|||||||||||||||||||||||||||
(Dollars in thousands) |
Bank |
Investment
|
Parent
|
Consolidated |
|
Bank |
Investment
|
Parent
|
Consolidated |
|||||||||||||||||||||
Income statement data: |
|
|
|
|||||||||||||||||||||||||||
Interest income |
$ |
50,222 |
|
$ |
— |
|
$ |
— |
|
|
$ |
50,222 |
|
|
$ |
67,720 |
|
|
$ |
— |
|
|
$ |
12 |
|
|
$ |
67,732 |
|
|
Interest expense |
15,297 |
|
— |
|
1,451 |
|
|
16,748 |
|
|
35,455 |
|
|
— |
|
|
(39 |
) |
|
35,416 |
|
|
||||||||
Net interest income (loss) |
34,925 |
|
— |
|
(1,451 |
) |
|
33,474 |
|
|
32,265 |
|
|
— |
|
|
51 |
|
|
32,316 |
|
|
||||||||
Provision (credit) for loan and lease losses |
7,430 |
|
— |
|
— |
|
|
7,430 |
|
|
(607 |
) |
|
— |
|
|
— |
|
|
(607 |
) |
|
||||||||
Net interest income (loss) after provision for loan and lease losses |
27,495 |
|
— |
|
(1,451 |
) |
|
26,044 |
|
|
32,872 |
|
|
— |
|
|
51 |
|
|
32,923 |
|
|
||||||||
Non-interest income: |
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Investment management fees |
— |
|
8,293 |
|
(198 |
) |
|
8,095 |
|
|
— |
|
|
9,016 |
|
|
(114 |
) |
|
8,902 |
|
|
||||||||
Net gain on the sale and call of debt securities |
3,744 |
|
— |
|
— |
|
|
3,744 |
|
|
206 |
|
|
— |
|
|
— |
|
|
206 |
|
|
||||||||
Other non-interest income |
5,027 |
|
23 |
|
— |
|
|
5,050 |
|
|
5,113 |
|
|
(9 |
) |
|
31 |
|
|
5,135 |
|
|
||||||||
Total non-interest income (loss) |
8,771 |
|
8,316 |
|
(198 |
) |
|
16,889 |
|
|
5,319 |
|
|
9,007 |
|
|
(83 |
) |
|
14,243 |
|
|
||||||||
Non-interest expense: |
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Intangible amortization expense |
— |
|
478 |
|
— |
|
|
478 |
|
|
— |
|
|
502 |
|
|
— |
|
|
502 |
|
|
||||||||
Other non-interest expense |
23,462 |
|
6,868 |
|
619 |
|
|
30,949 |
|
|
18,949 |
|
|
8,186 |
|
|
136 |
|
|
27,271 |
|
|
||||||||
Total non-interest expense |
23,462 |
|
7,346 |
|
619 |
|
|
31,427 |
|
|
18,949 |
|
|
8,688 |
|
|
136 |
|
|
27,773 |
|
|
||||||||
Income (loss) before tax |
12,804 |
|
970 |
|
(2,268 |
) |
|
11,506 |
|
|
19,242 |
|
|
319 |
|
|
(168 |
) |
|
19,393 |
|
|
||||||||
Income tax expense (benefit) |
2,357 |
|
251 |
|
(431 |
) |
|
2,177 |
|
|
3,142 |
|
|
3 |
|
|
(86 |
) |
|
3,059 |
|
|
||||||||
Net income (loss) |
$ |
10,447 |
|
$ |
719 |
|
$ |
(1,837 |
) |
|
$ |
9,329 |
|
|
$ |
16,100 |
|
|
$ |
316 |
|
|
$ |
(82 |
) |
|
$ |
16,334 |
|
|
|
Nine Months Ended September 30, 2020 |
|
Nine Months Ended September 30, 2019 |
||||||||||||||||||||||||||
(Dollars in thousands) |
Bank |
Investment
|
Parent
|
Consolidated |
|
Bank |
Investment
|
Parent
|
Consolidated |
||||||||||||||||||||
Income statement data: |
|
|
|
||||||||||||||||||||||||||
Interest income |
$ |
166,085 |
|
$ |
— |
|
$ |
— |
|
|
$ |
166,085 |
|
|
$ |
196,862 |
|
|
$ |
— |
|
$ |
111 |
|
|
$ |
196,973 |
|
|
Interest expense |
61,844 |
|
— |
|
2,361 |
|
|
64,205 |
|
|
101,891 |
|
|
— |
|
1,091 |
|
|
102,982 |
|
|
||||||||
Net interest income (loss) |
104,241 |
|
— |
|
(2,361 |
) |
|
101,880 |
|
|
94,971 |
|
|
— |
|
(980 |
) |
|
93,991 |
|
|
||||||||
Provision (credit) for loan and lease losses |
16,428 |
|
— |
|
— |
|
|
16,428 |
|
|
(1,696 |
) |
|
— |
|
— |
|
|
(1,696 |
) |
|
||||||||
Net interest income (loss) after provision for loan and lease losses |
87,813 |
|
— |
|
(2,361 |
) |
|
85,452 |
|
|
96,667 |
|
|
— |
|
(980 |
) |
|
95,687 |
|
|
||||||||
Non-interest income: |
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Investment management fees |
— |
|
23,955 |
|
(484 |
) |
|
23,471 |
|
|
— |
|
|
27,912 |
|
(332 |
) |
|
27,580 |
|
|
||||||||
Net gain on the sale and call of debt securities |
3,815 |
|
— |
|
— |
|
|
3,815 |
|
|
346 |
|
|
— |
|
— |
|
|
346 |
|
|
||||||||
Other non-interest income |
15,893 |
|
23 |
|
— |
|
|
15,916 |
|
|
10,467 |
|
|
17 |
|
881 |
|
|
11,365 |
|
|
||||||||
Total non-interest income (loss) |
19,708 |
|
23,978 |
|
(484 |
) |
|
43,202 |
|
|
10,813 |
|
|
27,929 |
|
549 |
|
|
39,291 |
|
|
||||||||
Non-interest expense: |
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
— |
|
1,466 |
|
— |
|
|
1,466 |
|
|
— |
|
|
1,506 |
|
— |
|
|
1,506 |
|
|
||||||||
|
64,462 |
|
20,498 |
|
2,242 |
|
|
87,202 |
|
|
56,872 |
|
|
23,174 |
|
478 |
|
|
80,524 |
|
|
||||||||
Total non-interest expense |
64,462 |
|
21,964 |
|
2,242 |
|
|
88,668 |
|
|
56,872 |
|
|
24,680 |
|
478 |
|
|
82,030 |
|
|
||||||||
Income (loss) before tax |
43,059 |
|
2,014 |
|
(5,087 |
) |
|
39,986 |
|
|
50,608 |
|
|
3,249 |
|
(909 |
) |
|
52,948 |
|
|
||||||||
Income tax expense (benefit) |
7,878 |
|
381 |
|
(897 |
) |
|
7,362 |
|
|
6,825 |
|
|
830 |
|
(296 |
) |
|
7,359 |
|
|
||||||||
Net income (loss) |
$ |
35,181 |
|
$ |
1,633 |
|
$ |
(4,190 |
) |
|
$ |
32,624 |
|
|
$ |
43,783 |
|
|
$ |
2,419 |
|
$ |
(613 |
) |
|
$ |
45,589 |
|
|
TRISTATE CAPITAL HOLDINGS, INC.
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,” “tangible assets,” “tangible assets excluding private banking loans,” tangible common equity ratio,” “tangible common equity ratio excluding private banking loans,” “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.
“Tangible assets” is defined as total assets reduced by intangible assets, including goodwill. We believe this measure is important to many investors who are interested in changes from period to period in total assets exclusive of changes in intangible assets.
“Tangible assets excluding private banking loans” is defined as total assets reduced by intangible assets, including goodwill, and private banking loans. We believe this measure is important to many investors who are interested in changes from period to period in total assets exclusive of changes in intangible assets and private banking loans.
“Tangible common equity ratio” is defined as (i) common shareholders’ equity reduced by intangible assets, including goodwill, divided by (ii) total assets reduced by intangible assets, including goodwill. We believe this measure is important to many investors who are interested in changes from period to period in the ratio of common shareholders’ equity to total assets exclusive of changes in intangible assets.
“Tangible common equity ratio excluding private banking loans” is defined as (i) common shareholders’ equity reduced by intangible assets, including goodwill, divided by (ii) total assets reduced by intangible assets, including goodwill, and private banking loans. We believe this measure is important to many investors who are interested in changes from period to period in the ratio of common shareholders’ equity to total assets exclusive of changes in intangible assets and private banking loans.
“EBITDA” is defined as net income before interest expense, income tax expense, 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 loan and lease 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.
TRISTATE CAPITAL HOLDINGS, INC. NON-GAAP FINANCIAL MEASURES (UNAUDITED) |
|||||||||
|
|
|
|
||||||
|
September 30, |
June 30, |
September 30, |
||||||
(Dollars in thousands, except per share data) |
2020 |
2020 |
2019 |
||||||
Tangible common equity and tangible book value per common share: |
|
|
|
||||||
Common shareholders’ equity |
$ |
527,121 |
|
$ |
516,752 |
|
$ |
488,443 |
|
Less: goodwill and intangible assets |
64,389 |
|
64,867 |
|
66,357 |
|
|||
Tangible common equity (numerator) |
$ |
462,732 |
|
$ |
451,885 |
|
$ |
422,086 |
|
Common shares outstanding (denominator) |
29,828,143 |
|
29,851,550 |
|
29,296,970 |
|
|||
Tangible book value per common share |
$ |
15.51 |
|
$ |
15.14 |
|
$ |
14.41 |
|
(Dollars in thousands) |
September 30,
|
June 30,
|
December 31,
|
||||||
Tangible common equity ratio excluding private banking channel loans: |
|
|
|
||||||
Common shareholders' equity |
$ |
527,121 |
|
$ |
516,752 |
|
$ |
505,202 |
|
Less: goodwill and intangible assets |
64,389 |
|
64,867 |
|
65,854 |
|
|||
Tangible common equity (numerator) |
$ |
462,732 |
|
$ |
451,885 |
|
$ |
439,348 |
|
Total assets |
9,493,790 |
|
9,129,841 |
|
7,765,810 |
|
|||
Less: goodwill and intangible assets |
64,389 |
|
64,867 |
|
65,854 |
|
|||
Tangible assets |
$ |
9,429,401 |
|
$ |
9,064,974 |
|
$ |
7,699,956 |
|
Tangible common equity ratio |
4.91 |
% |
4.98 |
% |
5.71 |
% |
|||
Less: private banking loans |
4,458,767 |
|
4,063,116 |
|
3,695,402 |
|
|||
Tangible assets excluding private banking loans (denominator) |
$ |
4,970,634 |
|
$ |
5,001,858 |
|
$ |
4,004,554 |
|
Tangible common equity ratio excluding private banking loans |
9.31 |
% |
9.03 |
% |
10.97 |
% |
|||
|
|
|
|
||||||
TRISTATE CAPITAL HOLDINGS, INC. PRO FORMA BASIS - NON-GAAP FINANCIAL MEASURES (UNAUDITED) |
|||||||||
|
September 30, 2020 |
||||||||
(Dollars in thousands) |
Actual |
Adjustments |
Pro Forma Basis |
||||||
Tangible common equity ratio excluding private banking channel loans: |
|
|
|
||||||
Common shareholders' equity |
$ |
527,121 |
|
$ |
37,800 |
|
$ |
564,921 |
|
Less: goodwill and intangible assets |
64,389 |
|
|
64,389 |
|
||||
Tangible common equity (numerator) |
$ |
462,732 |
|
$ |
37,800 |
|
$ |
500,532 |
|
Total assets |
9,493,790 |
|
99,300 |
|
9,593,090 |
|
|||
Less: goodwill and intangible assets |
64,389 |
|
|
64,389 |
|
||||
Tangible assets |
$ |
9,429,401 |
|
$ |
99,300 |
|
$ |
9,528,701 |
|
Tangible common equity ratio |
4.91 |
% |
|
5.25 |
% |
||||
Less: private banking loans |
$ |
4,458,767 |
|
|
$ |
4,458,767 |
|
||
Tangible assets excluding private banking loans (denominator) |
$ |
4,970,634 |
|
$ |
99,300 |
|
$ |
5,069,934 |
|
Tangible common equity ratio excluding private banking loans |
9.31 |
% |
|
9.87 |
% |
||||
INVESTMENT MANAGEMENT SEGMENT NON-GAAP FINANCIAL MEASURES (UNAUDITED) |
|||||||||||||||
|
Three Months Ended |
Nine Months Ended |
|||||||||||||
|
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
||||||||||
(Dollars in thousands) |
2020 |
2020 |
2019 |
2020 |
2019 |
||||||||||
Investment Management EBITDA: |
|
|
|
|
|
||||||||||
Net income |
$ |
719 |
|
$ |
336 |
|
$ |
316 |
|
$ |
1,633 |
|
$ |
2,419 |
|
Interest expense |
— |
|
— |
|
— |
|
— |
|
— |
|
|||||
Income tax expense |
251 |
|
102 |
|
3 |
|
381 |
|
830 |
|
|||||
Depreciation expense |
103 |
|
107 |
|
111 |
|
319 |
|
355 |
|
|||||
Intangible amortization expense |
478 |
|
486 |
|
502 |
|
1,466 |
|
1,506 |
|
|||||
EBITDA |
$ |
1,551 |
|
$ |
1,031 |
|
$ |
932 |
|
$ |
3,799 |
|
$ |
5,110 |
|
TRISTATE CAPITAL HOLDINGS, INC. NON-GAAP FINANCIAL MEASURES (UNAUDITED) |
||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||
|
September 30, |
June 30, |
September 30, |
|
September 30, |
September 30, |
||||||||||
(Dollars in thousands) |
2020 |
2020 |
2019 |
|
2020 |
2019 |
||||||||||
Total revenue and pre-tax, pre-provision net revenue: |
|
|
|
|
|
|
||||||||||
Net interest income |
$ |
33,474 |
|
$ |
33,484 |
|
$ |
32,316 |
|
|
$ |
101,880 |
|
$ |
93,991 |
|
Total non-interest income |
16,889 |
|
12,997 |
|
14,243 |
|
|
43,202 |
|
39,291 |
|
|||||
Less: net gain on the sale and call of debt securities |
3,744 |
|
14 |
|
206 |
|
|
3,815 |
|
346 |
|
|||||
Total revenue |
$ |
46,619 |
|
$ |
46,467 |
|
$ |
46,353 |
|
|
$ |
141,267 |
|
$ |
132,936 |
|
Less: total non-interest expense |
31,427 |
|
28,096 |
|
27,773 |
|
|
88,668 |
|
82,030 |
|
|||||
Pre-tax, pre-provision net revenue |
$ |
15,192 |
|
$ |
18,371 |
|
$ |
18,580 |
|
|
$ |
52,599 |
|
$ |
50,906 |
|
BANK SEGMENT NON-GAAP FINANCIAL MEASURES (UNAUDITED) |
||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||
|
September 30, |
June 30, |
September 30, |
|
September 30, |
September 30, |
||||||||||
(Dollars in thousands) |
2020 |
2020 |
2019 |
|
2020 |
2019 |
||||||||||
Bank total revenue: |
|
|
|
|
|
|
||||||||||
Net interest income |
$ |
34,925 |
|
$ |
34,410 |
|
$ |
32,265 |
|
|
$ |
104,241 |
|
$ |
94,971 |
|
Total non-interest income |
8,771 |
|
5,229 |
|
5,319 |
|
|
19,708 |
|
10,813 |
|
|||||
Less: net gain on the sale and call of debt securities |
3,744 |
|
14 |
|
206 |
|
|
3,815 |
|
346 |
|
|||||
Bank total revenue |
$ |
39,952 |
|
$ |
39,625 |
|
$ |
37,378 |
|
|
$ |
120,134 |
|
$ |
105,438 |
|
|
|
|
|
|
|
|
||||||||||
Bank efficiency ratio: |
|
|
|
|
|
|
||||||||||
Total non-interest expense (numerator) |
$ |
23,462 |
|
$ |
19,967 |
|
$ |
18,949 |
|
|
$ |
64,462 |
|
$ |
56,872 |
|
Bank total revenue (denominator) |
$ |
39,952 |
|
$ |
39,625 |
|
$ |
37,378 |
|
|
$ |
120,134 |
|
$ |
105,438 |
|
Bank efficiency ratio |
58.73 |
% |
50.39 |
% |
50.70 |
% |
|
53.66 |
% |
53.94 |
% |
|||||
