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     467  0 Kommentare TriState Capital Reports Third Quarter 2019 EPS of $0.50 on Record Net Income, Pre-tax Earnings, Revenue, Loans and Deposits

    TriState Capital Holdings, Inc. (Nasdaq: TSC) reported record levels of loans, deposits, net interest income, non-interest income and net income in the third quarter of 2019, as well as further improvement in its superior credit quality metrics.

    The parent company of TriState Capital Bank and Chartwell Investment Partners reported diluted earnings per share (EPS) of $0.50 in the third quarter of 2019, compared to $0.47 in the third quarter of 2018 and $0.47 in the second quarter of 2019. Net income available to common shareholders was $14.4 million in the third quarter of 2019, increasing 5.4% from $13.6 million in the prior year period and 6.1% from $13.5 million in the second quarter of 2019.

    “Our third quarter results continue to demonstrate the company’s ability to deliver robust top- and bottom-line growth in a variety of interest rate environments, with multiple revenue streams, a highly scalable business model, diverse funding sources, and exceptional organic balance sheet growth,” Chairman and Chief Executive Officer James F. Getz said. “We surpassed key milestones including $7 billion in assets, $6 billion in loans and total deposits, and $1 billion in treasury management deposit accounts in the third quarter of 2019, and our new business pipelines for each of investment management, private banking and commercial banking are as strong as ever. We believe TriState Capital is very well positioned for the future with a strong capital position, superior asset quality metrics and effective execution of our growth strategy.”

    THIRD QUARTER 2019 HIGHLIGHTS

    • Pre-tax income grew to a record $19.4 million, up 20.3% from the prior year period and 18.2% from the linked quarter.
    • Non-interest income grew to a record $14.2 million, up 11.7% from the prior year period and 18.9% from the linked quarter.
    • Net interest income (NII) grew to a record $32.3 million, up 12.1% from the prior year period and 3.2% from the linked quarter.
    • Average deposits grew to $5.95 billion, up 30.2% from the same period last year and 11.4% from the linked quarter.
    • Average loans grew to $5.78 billion, up 25.7% from the same period last year and 5.8% from the linked quarter.
    • Private banking loans grew to a record $3.37 billion at period end, up 28.2% from one year prior and 5.6% during the quarter.
    • Commercial loans grew to a record $2.65 billion at period end, up 24.3% from one year prior and 7.0% during the quarter.
    • Non-interest expenses grew 8.1%, from the prior year period, and the bank efficiency ratio was 50.70%.
    • 85% of Chartwell’s investment strategies surpassed their benchmarks for the trailing three years and 75% surpassed their benchmarks for the trailing five years.

    NII grew to a record $32.3 million in the third quarter of 2019, increasing 12.1% from $28.8 million in the year-ago quarter and 3.2% from $31.3 million in the second quarter of 2019. Double-digit annual NII growth continued as the company grew deposits at a faster rate than loans, maintaining a loan-to-deposit ratio under 100%, and reduced balance sheet risk via the continued growth in private banking loans backed by marketable securities.

    Non-interest income grew to a record $14.2 million in the third quarter 2019, increasing 11.7% from $12.8 million in the prior year quarter and 18.9% from $12.0 million in the linked quarter.

    TriState Capital’s non-interest income, which represented 30.3% of total revenue in the third quarter of 2019 when excluding net gains on the sale of debt securities, is largely made up of Chartwell investment management fees. Investment management fees were $8.9 million in the third quarter of 2019, compared to $9.8 million in the prior year quarter and $9.3 million in the linked quarter. Borrower-facing interest rate swap activity also generated $4.2 million in fees in the third quarter of 2019, compared to $1.9 million in the prior year quarter and $1.7 million in the linked quarter.

    NII and non-interest income, excluding net gains on the sale of debt securities, combined to grow total revenue to a record $46.4 million for the third quarter of 2019, up 11.5% from $41.6 million in the year-ago period and up 7.4% from $43.2 million in the linked quarter.

    The company’s investments in talent and building operating scale continue to drive annual revenue and profit growth, client acquisition and product innovation, while achieving incremental operating leverage. TriState Capital Bank’s efficiency ratio for the third quarter of 2019 was 50.70%, compared to 52.86% in the third quarter of 2018 and 55.16% in the linked quarter.

    Third quarter 2019 non-interest expense was $27.8 million, increasing 8.1% from $25.7 million in the year-ago period and 0.7% from $27.6 million in the second quarter of 2019. TriState Capital also continued to lower non-interest expense as a percentage of average assets to 1.59% in the third quarter of 2019, down from 1.90% in the third quarter of 2018 and 1.71% in the linked quarter.

    Pre-tax, pre-provision net revenue grew to a record $18.6 million in the third quarter of 2019, increasing 17.0% from $15.9 million in the year-ago period and 19.2% from $15.6 million in the linked quarter.

    Pre-tax income grew to a record $19.4 million in the third quarter of 2019, increasing 20.3% from $16.1 million in the third quarter of 2018 and increasing 18.2% from $16.4 million in the linked quarter.

    TriState Capital’s effective tax rate was 15.8% for the third quarter of 2019. The company’s effective tax rate is impacted by certain factors including the number, timing and size of tax credit investments, as well as the proportion of consolidated earnings attributed to investment management.

    Net income available to common shareholders and EPS in the third quarter of 2019 reflected $2.0 million payable for the company’s quarterly cash dividends on Series A and Series B Non-Cumulative Perpetual Preferred Stock.

    ORGANIC LOAN GROWTH

    TriState Capital continued to show strong organic growth on both sides of its balance sheet, expanding the number and depth of its relationships with high-quality middle-market commercial customers, as well as the high-net-worth clients the bank serves through its national referral network of investment advisors and other financial intermediaries.

    Average loans totaled a record $5.78 billion in the third quarter of 2019, growing 25.7% from $4.59 billion in the prior year period and 5.8% from $5.46 billion in the linked quarter. Loans at September 30, 2019 totaled $6.02 billion, growing $1.26 billion, or 26.4%, from September 30, 2018, and $351.7 million, or 6.2%, from June 30, 2019.

    TriState Capital’s growing distribution capabilities helped drive new loan originations in its national private banking business for the third quarter of 2019, as the company fortifies its position as the nation’s leading provider of marketable securities-backed loans through independent investment advisory and other financial services firms. Private banking loans totaled $3.37 billion at September 30, 2019, increasing $740.4 million, or 28.2%, from one year prior and $179.5 million, or 5.6%, from the end of the linked quarter.

    The company continued to grow relationships with middle-market enterprises in the third quarter of 2019 to drive originations of commercial and industrial (C&I) loans and commercial real estate (CRE) loans. Commercial loans totaled $2.65 billion at September 30, 2019, increasing $517.9 million, or 24.3%, from one year prior and $172.3 million, or 7.0%, from the end of the linked quarter.

    C&I loans grew to $992.5 million at September 30, 2019, increasing $221.0 million, or 28.6%, from one year prior and $84.5 million, or 9.3%, from the end of the linked quarter. CRE loans grew to $1.66 billion at September 30, 2019, increasing $297.0 million, or 21.9%, from one year prior and $87.8 million, or 5.6%, from the end of the linked quarter. CRE loans represented 27.5% of total period-end loans.

    STRATEGIC DEPOSIT FRANCHISE EXPANSION

    TriState Capital continues to support private banking and commercial loan growth with the strategic and organic expansion of its deposit franchise. The bank’s national deposit, treasury management and liquidity management offerings are increasing the number 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 $5.95 billion in the third quarter of 2019, growing 30.2% from $4.57 billion in the same period last year and 11.4% from $5.34 billion in the linked quarter. Deposits at September 30, 2019 totaled $6.09 billion, growing $1.34 billion, or 28.2%, from September 30, 2018, and $307.6 million, or 5.3%, from June 30, 2019.

    Treasury management deposit accounts totaled $1.05 billion at September 30, 2019, growing $449.8 million, or 74.6%, in the first nine months of 2019, and $74.6 million, or 7.6%, from June 30, 2019.

    The bank’s loan-to-deposit ratio at September 30, 2019 was 98.7%, compared to 100.1% at September 30, 2018 and 97.9% at June 30, 2019.

    INTEREST RATE MANAGEMENT

    TriState Capital continues to maintain a balance sheet with significant flexibility to manage interest rate risk in changing markets.

    The yield on total loans averaged 4.23% during the third quarter of 2019, compared to 4.19% in the prior year period and 4.45% in the linked quarter. Yields reflect the proportion of the portfolio dedicated to private banking non-purpose margin loans secured by marketable securities, an overall focus on variable rate pricing, asset quality, and operating leverage, and downward changes in 30-day LIBOR during the third quarter of 2019. At September 30, 2019, 92% of the company’s loan portfolio was floating rate and primarily indexed to 30-day LIBOR.

    Total cost of funds for all deposits and interest-bearing liabilities averaged 2.27% during the third quarter of 2019, compared to 1.94% in the same period last year and 2.42% in the linked quarter. The total cost of deposits averaged 2.27% during the third quarter of 2019, compared to 1.92% in the same period last year and 2.41% in the linked quarter. At September 30, 2019, 21% of deposits were fixed-rate certificates of deposit.

    TriState Capital reported a net interest margin of 1.94% for the third quarter of 2019, compared to 2.22% in the third quarter of 2018 and 2.03% in the second quarter of 2019.

    INVESTMENT MANAGEMENT

    Strong investment performance across Chartwell’s active equity and fixed income strategies contributed to growth in assets under management (AUM) during the third quarter of 2019. Chartwell AUM was $9.62 billion at September 30, 2019, $9.87 billion at September 30, 2018 and $9.49 billion at June 30, 2019.

    Chartwell’s new business and new flows from existing accounts of $375 million and market appreciation of $153 million more than offset outflows of $398 million in the third quarter of 2019.

    Chartwell’s weighted average fee rate was 0.38% at September 30, 2019. Investment management fee revenue was $8.9 million in the third quarter of 2019, compared to $9.8 million in the third quarter of 2018 and $9.3 million in the second quarter of 2019.

    ASSET QUALITY

    TriState Capital maintained strong asset quality metrics in the third quarter of 2019, reflecting the company’s disciplined credit culture and the expansion of its private banking non-purpose margin loans secured by marketable securities. Private banking loans comprised 56.0% of the total loan portfolio at September 30, 2019, while CRE and C&I comprised 27.5% and 16.5% of total loans, respectively.

    Non-performing assets (NPAs) were $4.4 million, or 0.06% of total assets, at September 30, 2019, compared to $5.8 million, or 0.10%, at September 30, 2018, and $5.2 million, or 0.08%, at June 30, 2019.

    Non-performing loans (NPLs) were $184,000, or 0.0% of total loans, at September 30, 2019, compared to $2.3 million, or 0.05%, at September 30, 2018, and $2.2 million, or 0.04%, at June 30, 2019.

    Adverse-rated credits were $26.6 million, or 0.44% of total loans, at September 30, 2019, compared to $28.2 million, or 0.59%, at September 30, 2018, and $26.6 million, or 0.47%, at June 30, 2019.

    Net charge offs were $35,000 in the third quarter of 2019, compared to $1.5 million in the year-ago quarter. The company recorded net recoveries of $16,000 in the linked quarter. TriState Capital recorded credits to provision of $607,000 in the third quarter of 2019, $234,000 in the third quarter of 2018 and $712,000 in the second quarter of 2019.

    The company’s allowance for loan and lease losses (ALLL) continued to reflect overall credit quality, as well as lower levels of provision required by the growing proportion of low-risk-profile private banking loans in the bank’s portfolio. ALLL represented 0.22% of total loans at September 30, 2019, compared to 0.29% at September 30, 2018 and 0.25% at June 30, 2019.

    CAPITAL STRENGTH AND FLEXIBILITY

    The company’s regulatory capital levels benefited from retained earnings, as well as its Series B perpetual preferred stock offering completed in the second quarter of 2019. As of September 30, 2019, TriState Capital Holdings reported regulatory capital ratios of 12.38% for total risk-based capital, 12.12% for tier 1 risk-based capital, 9.56% for common equity tier 1 risk-based capital, and 7.91% for tier 1 leverage.

    During the nine months ended September 30, 2019, the company repurchased a total of 90,000 shares of its common stock for approximately $1.8 million at an average cost of $20.21 per share. Since the Board first authorized share buybacks in October 2014, the company has repurchased a total of 2.1 million shares for approximately $32.3 million at an average cost of $15.36 per share. TriState Capital had $10.4 million of repurchase authority available at September 30, 2019, under previously disclosed buyback programs authorized by its Board of Directors.

    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 17 will be held at 8:30 a.m. ET. Telephone participants may avoid any delays by pre-registering for the call using the link http://dpregister.com/10135298 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, 855-669-9657 from Canada, or 412-902-4194 from other international locations.

    A replay of the call will be available approximately one hour after the end of the conference through October 24. 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 10135298.

    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 $7.1 billion in assets as of September 30, 2019, and serves middle-market commercial customers through regional representative offices in Pittsburgh, Philadelphia, Cleveland, Edison, N.J., and New York City, as well as high-net-worth individuals nationwide through its national referral network of financial intermediaries. Its Chartwell Investment Partners subsidiary had $9.6 billion in assets under management as of September 30, 2019, and serves institutional clients and TriState Capital’s financial intermediary network. For more information, please visit http://investors.tristatecapitalbank.com.

    FORWARD LOOKING STATEMENTS

    This news release includes “forward-looking statements” in reliance on the safe-harbor for such statements provided by the Private Securities Litigation Reform Act of 1995. The words “achieve,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “maintain,” “opportunity,” “plan,” “potential,” “project,” “sustain,” “target,” “trend,” or similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may,” and similar expressions, among others, generally identify forward-looking statements. Examples of forward-looking statements include, without limitation, statements relating to TriState Capital’s future plans, objectives or goals and are based on current expectations, plans or forecasts. Such forward-looking statements are subject to risks, uncertainties and changed circumstances that are difficult to predict and are often beyond TriState Capital’s ability to control. Actual results or outcomes could differ materially from those currently anticipated, discussed or projected by forward-looking statements. Such risks and uncertainties include, but are not limited to:

    • those related to difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the markets in which TriState Capital operates and in which its loans are concentrated, 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 level of non-performing assets and the costs associated with resolving problem loans including litigation and other costs;
    • possible loan losses, impairment and the collectability of loans;
    • changes in market interest rates which may increase funding costs and/or reduce earning asset yields and thus reduce margin;
    • the impact of changes in interest rates on the credit quality and value of underlying securities collateral of the loan portfolio and the effect of such changes on the market value of TriState Capital’s investment securities portfolio;
    • federal and state regulation, supervision and examination, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations issued thereunder, and potential expenses associated with complying with regulations;
    • TriState Capital’s ability to comply with applicable capital and liquidity requirements (including the finalized Basel III capital standards), including our ability to generate liquidity internally or raise capital on favorable terms;
    • possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations;
    • any impairment of TriState Capital’s goodwill or other intangible assets;
    • conditions in the financial markets that may limit TriState Capital’s access to additional funding to meet its liquidity needs;
    • the success of TriState Capital’s growth plans, including the successful integration of past and future acquisitions;
    • TriState Capital’s ability to fully realize the cost savings and other benefits of its acquisitions, manage risks related to business disruption following those acquisitions, and customer disintermediation;
    • TriState Capital’s ability to develop and provide competitive products and services that appeal to its customers and target markets;
    • negative perceptions or publicity with respect to any products or services offered by TriState Capital;
    • fluctuations in the carrying value of Chartwell’s assets under management;
    • the relative and absolute investment performance of Chartwell’s investment products;
    • adverse judgments or other resolution of pending and future legal proceedings, and costs incurred in defending such proceedings;
    • system failures or breaches of TriState Capital’s network security;
    • TriState Capital’s ability to recruit and retain key employees;
    • Chartwell’s success in negotiating distribution arrangements and maintaining distribution channels for its products;
    • the failure by a key vendor to fulfill its obligations to TriState Capital;
    • the effects of problems encountered by other financial institutions that adversely affect TriState Capital or the banking industry generally;
    • the effects of weather and natural disasters such as floods, droughts, wind, tornadoes and hurricanes as well as effects from geopolitical instability and man-made disasters including terrorist attacks;
    • possible changes in the speed of loan prepayments by TriState Capital’s customers and loan origination or sales volumes;
    • regulatory limits on TriState Capital’s ability to receive dividends from its subsidiaries and pay dividends to its preferred shareholders; and
    • the effects of any reputation, credit, interest rate, market, operational, legal, liquidity, regulatory and compliance risk resulting from developments related to any of the risks discussed above.

    We caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made, and TriState Capital disclaims any duty to revise or update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of TriState Capital for any reason, except as specifically required by law. For further information about the factors that could affect TriState Capital’s future results, please see the company’s most-recent annual and quarterly reports filed on Form 10-K and Form 10-Q, and other documents the company files with the Securities and Exchange Commission from time to time.

    NON-GAAP FINANCIAL DISCLOSURES

    This news release and the accompanying tables contain 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, EBITDA, total revenue, 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 comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found within this news release and accompanying tables.

     

    TRISTATE CAPITAL HOLDINGS, INC.

    BALANCE SHEET DATA (UNAUDITED)

     

     

    As of and For the
    Three Months Ended

     

    As of and For the
    Nine Months Ended

     

    September 30,

     

    June 30,

     

    September 30,

     

    September 30,

     

    September 30,

    (Dollars in thousands)

    2019

     

    2019

     

    2018

     

    2019

     

    2018

    Cash and cash equivalents

    $

    383,948

     

    $

    458,269

     

    $

    186,535

     

     

    $

    383,948

     

    $

    186,535

     

    Total investment securities

     

    468,721

     

     

    431,426

     

     

    393,139

     

     

     

    468,721

     

     

    393,139

     

    Loans and leases held-for-investment

     

    6,016,680

     

     

    5,664,934

     

     

    4,758,356

     

     

     

    6,016,680

     

     

    4,758,356

     

    Allowance for loan and lease losses

     

    (13,374

    )

     

    (14,016

    )

     

    (13,583

    )

     

     

    (13,374

    )

     

    (13,583

    )

    Loans and leases held-for-investment, net

     

    6,003,306

     

     

    5,650,918

     

     

    4,744,773

     

     

     

    6,003,306

     

     

    4,744,773

     

    Goodwill and other intangibles, net

     

    66,357

     

     

    66,859

     

     

    68,365

     

     

     

    66,357

     

     

    68,365

     

    Other assets

     

    276,117

     

     

    238,531

     

     

    180,476

     

     

     

    276,117

     

     

    180,476

     

    Total assets

    $

    7,198,449

     

    $

    6,846,003

     

    $

    5,573,288

     

     

    $

    7,198,449

     

    $

    5,573,288

     

     

     

     

     

     

     

     

    Deposits

    $

    6,094,605

     

    $

    5,786,983

     

    $

    4,754,588

     

     

    $

    6,094,605

     

    $

    4,754,588

     

    Borrowings, net

     

    330,000

     

     

    335,000

     

     

    262,365

     

     

     

    330,000

     

     

    262,365

     

    Other liabilities

     

    169,337

     

     

    135,039

     

     

    88,715

     

     

     

    169,337

     

     

    88,715

     

    Total liabilities

     

    6,593,942

     

     

    6,257,022

     

     

    5,105,668

     

     

     

    6,593,942

     

     

    5,105,668

     

     

     

     

     

     

     

     

    Preferred stock

     

    116,064

     

     

    116,142

     

     

    38,468

     

     

     

    116,064

     

     

    38,468

     

    Common shareholders’ equity

     

    488,443

     

     

    472,839

     

     

    429,152

     

     

     

    488,443

     

     

    429,152

     

    Total shareholders’ equity

     

    604,507

     

     

    588,981

     

     

    467,620

     

     

     

    604,507

     

     

    467,620

     

     

     

     

     

     

     

     

    Total liabilities and shareholders’ equity

    $

    7,198,449

     

    $

    6,846,003

     

    $

    5,573,288

     

     

    $

    7,198,449

     

    $

    5,573,288

     

     
     

    TRISTATE CAPITAL HOLDINGS, INC.

    INCOME STATEMENT DATA (UNAUDITED)

     

     

    As of and For the
    Three Months Ended

     

    As of and For the
    Nine Months Ended

     

    September 30,

     

    June 30,

     

    September 30,

     

    September 30,

     

    September 30,

    (Dollars in thousands)

    2019

     

    2019

     

    2018

     

    2019

     

    2018

    Interest income:

     

     

     

     

     

     

    Loans and leases

    $

    61,551

     

    $

    60,579

     

    $

    48,470

     

     

    $

    179,392

     

    $

    132,111

    Investments

     

    3,993

     

     

    4,151

     

     

    2,893

     

     

     

    12,497

     

     

    6,977

    Interest-earning deposits

     

    2,188

     

     

    1,609

     

     

    1,061

     

     

     

    5,084

     

     

    2,536

    Total interest income

     

    67,732

     

     

    66,339

     

     

    52,424

     

     

     

    196,973

     

     

    141,624

     

     

     

     

     

     

     

    Interest expense:

     

     

     

     

     

     

    Deposits

     

    34,114

     

     

    32,155

     

     

    22,182

     

     

     

    95,602

     

     

    52,279

    Borrowings

     

    1,302

     

     

    2,881

     

     

    1,423

     

     

     

    7,380

     

     

    5,473

    Total interest expense

     

    35,416

     

     

    35,036

     

     

    23,605

     

     

     

    102,982

     

     

    57,752

    Net interest income

     

    32,316

     

     

    31,303

     

     

    28,819

     

     

     

    93,991

     

     

    83,872

    Provision (credit) for loan and lease losses

     

    (607

    )

     

    (712

    )

     

    (234

    )

     

     

    (1,696

    )

     

    376

    Net interest income after provision for loan and lease losses

     

    32,923

     

     

    32,015

     

     

    29,053

     

     

     

    95,687

     

     

    83,496

    Non-interest income:

     

     

     

     

     

     

    Investment management fees

     

    8,902

     

     

    9,254

     

     

    9,828

     

     

     

    27,580

     

     

    28,422

    Service charges on deposits

     

    129

     

     

    78

     

     

    146

     

     

     

    343

     

     

    420

    Net gain on the sale and call of debt securities

     

    206

     

     

    112

     

     

     

    346

     

     

    6

    Swap fees

     

    4,171

     

     

    1,692

     

     

    1,881

     

     

     

    7,666

     

     

    5,066

    Commitment and other loan fees

     

    464

     

     

    256

     

     

    373

     

     

     

    1,251

     

     

    1,036

    Other income

     

    371

     

     

    587

     

     

    523

     

     

     

    2,105

     

     

    1,392

    Total non-interest income

     

    14,243

     

     

    11,979

     

     

    12,751

     

     

     

    39,291

     

     

    36,342

    Non-interest expense:

     

     

     

     

     

     

    Compensation and employee benefits

     

    18,707

     

     

    16,985

     

     

    16,967

     

     

     

    52,467

     

     

    48,177

    Premises and occupancy costs

     

    1,704

     

     

    1,834

     

     

    1,432

     

     

     

    4,808

     

     

    3,986

    Professional fees

     

    1,305

     

     

    1,406

     

     

    889

     

     

     

    3,706

     

     

    3,538

    FDIC insurance expense

     

    994

     

     

    1,047

     

     

    1,053

     

     

     

    3,462

     

     

    3,333

    General insurance expense

     

    258

     

     

    259

     

     

    278

     

     

     

    811

     

     

    767

    State capital shares tax

     

    (720

    )

     

    380

     

     

    485

     

     

     

    40

     

     

    1,396

    Travel and entertainment expense

     

    1,339

     

     

    1,040

     

     

    986

     

     

     

    3,214

     

     

    2,638

    Intangible amortization expense

     

    502

     

     

    502

     

     

    502

     

     

     

    1,506

     

     

    1,465

    Other operating expenses

     

    3,684

     

     

    4,132

     

     

    3,094

     

     

     

    12,016

     

     

    9,554

    Total non-interest expense

     

    27,773

     

     

    27,585

     

     

    25,686

     

     

     

    82,030

     

     

    74,854

    Income before tax

     

    19,393

     

     

    16,409

     

     

    16,118

     

     

     

    52,948

     

     

    44,984

    Income tax expense

     

    3,059

     

     

    1,718

     

     

    1,807

     

     

     

    7,359

     

     

    5,680

    Net income

    $

    16,334

     

    $

    14,691

     

    $

    14,311

     

     

    $

    45,589

     

    $

    39,304

    Preferred stock dividends

     

    1,962

     

     

    1,150

     

     

    679

     

     

     

    3,791

     

     

    1,441

    Net income available to common shareholders

    $

    14,372

     

    $

    13,541

     

    $

    13,632

     

     

    $

    41,798

     

    $

    37,863

     
     

    TRISTATE CAPITAL HOLDINGS, INC.

    SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)

     

     

    As of and For the
    Three Months Ended

     

    As of and For the
    Nine Months Ended

    (Dollars in thousands, except per share data)

    September 30,

     

    June 30,

     

    September 30,

     

    September 30,

     

    September 30,

    2019

     

    2019

     

    2018

     

    2019

     

    2018

    Per share and share data:

     

     

     

     

     

     

    Earnings per common share:

     

     

     

     

     

     

    Basic

    $

    0.52

     

    $

    0.49

     

    $

    0.49

     

     

    $

    1.50

     

    $

    1.37

     

    Diluted

    $

    0.50

     

    $

    0.47

     

    $

    0.47

     

     

    $

    1.45

     

    $

    1.31

     

    Book value per common share

    $

    16.67

     

    $

    16.12

     

    $

    14.84

     

     

    $

    16.67

     

    $

    14.84

     

    Tangible book value per common share (1)

    $

    14.41

     

    $

    13.84

     

    $

    12.47

     

     

    $

    14.41

     

    $

    12.47

     

    Common shares outstanding, at end of period

     

    29,296,970

     

     

    29,339,152

     

     

    28,920,978

     

     

     

    29,296,970

     

     

    28,920,978

     

    Weighted average common shares outstanding:

     

     

     

     

     

     

    Basic

     

    27,863,767

     

     

    27,887,599

     

     

    27,588,607

     

     

     

    27,861,515

     

     

    27,603,784

     

    Diluted

     

    28,778,671

     

     

    28,790,673

     

     

    28,949,924

     

     

     

    28,759,408

     

     

    28,849,926

     

     

     

     

     

     

     

     

    Performance ratios:

     

     

     

     

     

     

    Return on average assets (2)

     

    0.94

    %

     

    0.91

    %

     

    1.06

    %

     

     

    0.94

    %

     

    1.04

    %

    Return on average common equity (2)

     

    11.82

    %

     

    11.63

    %

     

    12.78

    %

     

     

    11.97

    %

     

    12.36

    %

    Net interest margin (2) (3)

     

    1.94

    %

     

    2.03

    %

     

    2.22

    %

     

     

    2.02

    %

     

    2.31

    %

    Total revenue (1)

    $

    46,353

     

    $

    43,170

     

    $

    41,570

     

     

    $

    132,936

     

    $

    120,208

     

    Pre-tax, pre-provision net revenue (1)

    $

    18,580

     

    $

    15,585

     

    $

    15,884

     

     

    $

    50,906

     

    $

    45,354

     

    Bank efficiency ratio (1)

     

    50.70

    %

     

    55.16

    %

     

    52.86

    %

     

     

    53.94

    %

     

    52.55

    %

    Non-interest expense to average assets (2)

     

    1.59

    %

     

    1.71

    %

     

    1.90

    %

     

     

    1.69

    %

     

    1.98

    %

     

     

     

     

     

     

     

    Asset quality:

     

     

     

     

     

     

    Non-performing loans

    $

    184

     

    $

    2,189

     

    $

    2,269

     

     

    $

    184

     

    $

    2,269

     

    Non-performing assets

    $

    4,434

     

    $

    5,213

     

    $

    5,845

     

     

    $

    4,434

     

    $

    5,845

     

    Other real estate owned

    $

    4,250

     

    $

    3,024

     

    $

    3,576

     

     

    $

    4,250

     

    $

    3,576

     

    Non-performing assets to total assets

     

    0.06

    %

     

    0.08

    %

     

    0.10

    %

     

     

    0.06

    %

     

    0.10

    %

    Non-performing loans to total loans

     

    %

     

    0.04

    %

     

    0.05

    %

     

     

    %

     

    0.05

    %

    Allowance for loan and lease losses to loans

     

    0.22

    %

     

    0.25

    %

     

    0.29

    %

     

     

    0.22

    %

     

    0.29

    %

    Allowance for loan and lease losses to non-performing loans

     

    7,268.48

    %

     

    640.29

    %

     

    598.63

    %

     

     

    7,268.48

    %

     

    598.63

    %

    Net charge-offs (recoveries)

    $

    35

     

    $

    (16

    )

    $

    1,504

     

     

    $

    (1,862

    )

    $

    1,210

     

    Net charge-offs (recoveries) to average total loans (2)

     

    %

     

    %

     

    0.13

    %

     

     

    (0.05

    )%

     

    0.04

    %

     

     

     

     

     

     

     

    Capital ratios:

     

     

     

     

     

     

    Tier 1 leverage ratio

     

    7.91

    %

     

    8.21

    %

     

    7.53

    %

     

     

    7.91

    %

     

    7.53

    %

    Common equity tier 1 risk-based capital ratio

     

    9.56

    %

     

    9.83

    %

     

    10.52

    %

     

     

    9.56

    %

     

    10.52

    %

    Tier 1 risk-based capital ratio

     

    12.12

    %

     

    12.56

    %

     

    11.57

    %

     

     

    12.12

    %

     

    11.57

    %

    Total risk-based capital ratio

     

    12.38

    %

     

    12.82

    %

     

    11.89

    %

     

     

    12.38

    %

     

    11.89

    %

     

     

     

     

     

     

     

    Investment Management Segment:

     

     

     

     

     

     

    Assets under management

    $

    9,615,000

     

    $

    9,485,000

     

    $

    9,865,000

     

     

    $

    9,615,000

     

    $

    9,865,000

     

    EBITDA (1)

    $

    932

     

    $

    1,557

     

    $

    1,867

     

     

    $

    5,110

     

    $

    5,010

     

     

    (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.

     
     

    TRISTATE CAPITAL HOLDINGS, INC.

    AVERAGES AND YIELDS (UNAUDITED)

     

     

    Three Months Ended

     

    September 30, 2019

     

    June 30, 2019

     

    September 30, 2018

    (Dollars in thousands)

    Average
    Balance

    Interest

    Income (1)/
    Expense

    Average
    Yield/
    Rate (2)

     

    Average
    Balance

    Interest

    Income (1)/
    Expense

    Average
    Yield/
    Rate (2)

     

    Average
    Balance

    Interest

    Income (1)/
    Expense

    Average
    Yield/
    Rate (2)

    Assets

     

     

     

     

     

     

     

     

     

     

     

    Interest-earning deposits

    $

    388,274

    $

    2,144

    2.19

    %

     

    $

    255,697

    $

    1,542

    2.42

    %

     

    $

    207,346

    $

    1,015

    1.94

    %

    Federal funds sold

     

    8,424

     

    44

    2.07

    %

     

     

    11,218

     

    67

    2.40

    %

     

     

    9,563

     

    46

    1.91

    %

    Debt securities available-for-sale

     

    262,665

     

    2,085

    3.15

    %

     

     

    249,281

     

    2,053

    3.30

    %

     

     

    236,053

     

    1,836

    3.09

    %

    Debt securities held-to-maturity

     

    174,331

     

    1,537

    3.50

    %

     

     

    181,495

     

    1,712

    3.78

    %

     

     

    76,341

     

    699

    3.63

    %

    Equity securities

     

    4,720

     

    12

    1.01

    %

     

     

    7,701

     

    28

    1.46

    %

     

     

    11,219

     

    71

    2.51

    %

    FHLB stock

     

    10,585

     

    382

    14.32

    %

     

     

    20,235

     

    385

    7.63

    %

     

     

    11,342

     

    314

    10.98

    %

    Total loans and leases

     

    5,776,652

     

    61,552

    4.23

    %

     

     

    5,462,489

     

    60,579

    4.45

    %

     

     

    4,594,755

     

    48,470

    4.19

    %

    Total interest-earning assets

     

    6,625,651

     

    67,756

    4.06

    %

     

     

    6,188,116

     

    66,366

    4.30

    %

     

     

    5,146,619

     

    52,451

    4.04

    %

    Other assets

     

    288,216

     

     

     

     

    266,905

     

     

     

     

    223,996

     

     

    Total assets

    $

    6,913,867

     

     

     

    $

    6,455,021

     

     

     

    $

    5,370,615

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Liabilities and Shareholders’ Equity

     

     

     

     

     

     

     

     

     

     

     

    Interest-bearing deposits:

     

     

     

     

     

     

     

     

     

     

     

    Interest-bearing checking accounts

    $

    1,116,624

    $

    5,795

    2.06

    %

     

    $

    868,721

    $

    4,965

    2.29

    %

     

    $

    657,402

    $

    3,267

    1.97

    %

    Money market deposit accounts

     

    3,106,186

     

    18,870

    2.41

    %

     

     

    2,855,795

     

    18,200

    2.56

    %

     

     

    2,506,334

     

    12,428

    1.97

    %

    Certificates of deposit

     

    1,462,521

     

    9,449

    2.56

    %

     

     

    1,361,372

     

    8,990

    2.65

    %

     

     

    1,155,888

     

    6,487

    2.23

    %

    Borrowings:

     

     

     

     

     

     

     

     

     

     

     

    FHLB borrowings

     

    224,130

     

    1,302

    2.30

    %

     

     

    430,770

     

    2,334

    2.17

    %

     

     

    221,576

     

    853

    1.53

    %

    Line of credit borrowings

     

     

     

    %

     

     

    857

     

    10

    4.68

    %

     

     

    1,277

     

    16

    4.97

    %

    Subordinated notes payable, net

     

     

     

    %

     

     

    34,984

     

    537

    6.16

    %

     

     

    34,832

     

    554

    6.31

    %

    Total interest-bearing liabilities

     

    5,909,461

     

    35,416

    2.38

    %

     

     

    5,552,499

     

    35,036

    2.53

    %

     

     

    4,577,309

     

    23,605

    2.05

    %

    Noninterest-bearing deposits

     

    268,013

     

     

     

     

    256,404

     

     

     

     

    253,033

     

     

    Other liabilities

     

    137,934

     

     

     

     

    113,031

     

     

     

     

    78,802

     

     

    Shareholders’ equity

     

    598,459

     

     

     

     

    533,087

     

     

     

     

    461,471

     

     

    Total liabilities and shareholders’ equity

    $

    6,913,867

     

     

     

    $

    6,455,021

     

     

     

    $

    5,370,615

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Net interest income (1)

     

    $

    32,340

     

     

     

    $

    31,330

     

     

     

    $

    28,846

     

    Net interest spread (1)

     

     

    1.68

    %

     

     

     

    1.77

    %

     

     

     

    1.99

    %

    Net interest margin (1)

     

     

    1.94

    %

     

     

     

    2.03

    %

     

     

     

    2.22

    %

     

    (1)

     

    Interest income and net interest margin are calculated on a fully taxable equivalent basis.

    (2)

     

    Annualized.

     
     

    TRISTATE CAPITAL HOLDINGS, INC.

    AVERAGES AND YIELDS (UNAUDITED)

     

     

    Nine Months Ended September 30,

     

    2019

     

    2018

    (Dollars in thousands)

    Average
    Balance

     

    Interest

    Income (1)/
    Expense

     

    Average
    Yield/
    Rate (2)

     

    Average
    Balance

     

    Interest

    Income (1)/
    Expense

     

    Average
    Yield/
    Rate (2)

    Assets

     

     

     

     

     

     

     

    Interest-earning deposits

    $

    282,828

    $

    4,942

    2.34

    %

     

    $

    181,368

    $

    2,436

    1.80

    %

    Federal funds sold

     

    9,412

     

    142

    2.02

    %

     

     

    7,761

     

    100

    1.72

    %

    Debt securities available-for-sale

     

    249,490

     

    6,125

    3.28

    %

     

     

    187,041

     

    4,150

    2.97

    %

    Debt securities held-to-maturity

     

    189,083

     

    5,267

    3.72

    %

     

     

    69,217

     

    1,973

    3.81

    %

    Equity securities

     

    8,363

     

    112

    1.79

    %

     

     

    9,498

     

    200

    2.82

    %

    FHLB stock

     

    17,069

     

    1,072

    8.40

    %

     

     

    14,856

     

    738

    6.64

    %

    Total loans and leases

     

    5,474,522

     

    179,392

    4.38

    %

     

     

    4,381,057

     

    132,111

    4.03

    %

    Total interest-earning assets

     

    6,230,767

     

    197,052

    4.23

    %

     

     

    4,850,798

     

    141,708

    3.91

    %

    Other assets

     

    266,059

     

     

     

     

    215,388

     

     

    Total assets

    $

    6,496,826

     

     

     

    $

    5,066,186

     

     

     

     

     

     

     

     

     

     

    Liabilities and Shareholders’ Equity

     

     

     

     

     

     

     

    Interest-bearing deposits:

     

     

     

     

     

     

     

    Interest-bearing checking accounts

    $

    927,198

    $

    15,303

    2.21

    %

     

    $

    576,032

    $

    7,464

    1.73

    %

    Money market deposit accounts

     

    2,883,009

     

    53,608

    2.49

    %

     

     

    2,369,910

     

    30,263

    1.71

    %

    Certificates of deposit

     

    1,375,324

     

    26,691

    2.59

    %

     

     

    1,021,248

     

    14,552

    1.91

    %

    Borrowings:

     

     

     

     

     

     

     

    FHLB borrowings

     

    370,550

     

    6,222

    2.24

    %

     

     

    316,264

     

    3,743

    1.58

    %

    Line of credit borrowings

     

    1,650

     

    68

    5.51

    %

     

     

    2,202

     

    69

    4.19

    %

    Subordinated notes payable, net

     

    23,178

     

    1,090

    6.29

    %

     

     

    34,781

     

    1,661

    6.38

    %

    Total interest-bearing liabilities

     

    5,580,909

     

    102,982

    2.47

    %

     

     

    4,320,437

     

    57,752

    1.79

    %

    Noninterest-bearing deposits

     

    262,056

     

     

     

     

    242,325

     

     

    Other liabilities

     

    113,331

     

     

     

     

    68,064

     

     

    Shareholders’ equity

     

    540,530

     

     

     

     

    435,360

     

     

    Total liabilities and shareholders’ equity

    $

    6,496,826

     

     

     

    $

    5,066,186

     

     

     

     

     

     

     

     

     

     

    Net interest income (1)

     

    $

    94,070

     

     

     

    $

    83,956

     

    Net interest spread (1)

     

     

    1.76

    %

     

     

     

    2.12

    %

    Net interest margin (1)

     

     

    2.02

    %

     

     

     

    2.31

    %

     

    (1)

    Interest income and net interest margin are calculated on a fully taxable equivalent basis.

    (2)

    Annualized.

     

    TRISTATE CAPITAL HOLDINGS, INC.

    LOAN AND LEASE COMPOSITION (UNAUDITED)

     

     

    September 30, 2019

     

    June 30, 2019

     

    September 30, 2018

    (Dollars in thousands)

    Loan
    Balance

    Percent of
    Total Loans

     

    Loan
    Balance

    Percent of
    Total Loans

     

    Loan
    Balance

    Percent of
    Total Loans

    Private banking loans

    $

    3,368,142

     

    56.0

    %

     

    $

    3,188,668

     

    56.3

    %

     

    $

    2,627,749

     

    55.2

    %

    Middle-market banking loans:

     

     

     

     

     

     

     

     

    Commercial and industrial

    992,508

     

    16.5

    %

     

    908,054

     

    16.0

    %

     

    771,546

     

    16.2

    %

    Commercial real estate

    1,656,030

     

    27.5

    %

     

    1,568,212

     

    27.7

    %

     

    1,359,061

     

    28.6

    %

    Total middle-market banking loans

    2,648,538

     

    44.0

    %

     

    2,476,266

     

    43.7

    %

     

    2,130,607

     

    44.8

    %

    Loans and leases held-for-investment

    $

    6,016,680

     

    100.0

    %

     

    $

    5,664,934

     

    100.0

    %

     

    $

    4,758,356

     

    100.0

    %

     

    TRISTATE CAPITAL HOLDINGS, INC.

    STATEMENT OF INCOME BY REPORTABLE SEGMENT (UNAUDITED)

     

     

    Three Months Ended September 30, 2019

     

    Three Months Ended September 30, 2018

    (Dollars in thousands)

    Bank

     

    Investment
    Management

     

    Parent
    and Other

     

    Consolidated

     

    Bank

     

    Investment
    Management

     

    Parent
    and Other

     

    Consolidated

    Income statement data:

     

     

     

    Interest income

    $

    67,720

     

     

    $

     

     

    $

    12

     

     

    $

    67,732

     

     

    $

    52,354

     

     

    $

     

     

    $

    70

     

     

    $

    52,424

     

    Interest expense

    35,455

     

     

     

     

    (39

    )

     

    35,416

     

     

    23,038

     

     

     

     

    567

     

     

    23,605

     

    Net interest income (loss)

    32,265

     

     

     

     

    51

     

     

    32,316

     

     

    29,316

     

     

     

     

    (497

    )

     

    28,819

     

    Provision (credit) for loan and lease losses

    (607

    )

     

     

     

     

     

    (607

    )

     

    (234

    )

     

     

     

     

     

    (234

    )

    Net interest income (loss) after provision for loan and lease losses

    32,872

     

     

     

     

    51

     

     

    32,923

     

     

    29,550

     

     

     

     

    (497

    )

     

    29,053

     

    Non-interest income:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Investment management fees

     

     

    9,016

     

     

    (114

    )

     

    8,902

     

     

     

     

    9,914

     

     

    (86

    )

     

    9,828

     

    Net gain on the sale and call of debt securities

    206

     

     

     

     

     

     

    206

     

     

     

     

     

     

     

     

     

    Other non-interest income

    5,113

     

     

    (9

    )

     

    31

     

     

    5,135

     

     

    2,850

     

     

     

     

    73

     

     

    2,923

     

    Total non-interest income

    5,319

     

     

    9,007

     

     

    (83

    )

     

    14,243

     

     

    2,850

     

     

    9,914

     

     

    (13

    )

     

    12,751

     

    Non-interest expense:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Intangible amortization expense

     

     

    502

     

     

     

     

    502

     

     

     

     

    502

     

     

     

     

    502

     

    Other non-interest expense

    18,949

     

     

    8,186

     

     

    136

     

     

    27,271

     

     

    17,002

     

     

    8,173

     

     

    9

     

     

    25,184

     

    Total non-interest expense

    18,949

     

     

    8,688

     

     

    136

     

     

    27,773

     

     

    17,002

     

     

    8,675

     

     

    9

     

     

    25,686

     

    Income (loss) before tax

    19,242

     

     

    319

     

     

    (168

    )

     

    19,393

     

     

    15,398

     

     

    1,239

     

     

    (519

    )

     

    16,118

     

    Income tax expense (benefit)

    3,142

     

     

    3

     

     

    (86

    )

     

    3,059

     

     

    1,676

     

     

    282

     

     

    (151

    )

     

    1,807

     

    Net income (loss)

    $

    16,100

     

     

    $

    316

     

     

    $

    (82

    )

     

    $

    16,334

     

     

    $

    13,722

     

     

    $

    957

     

     

    $

    (368

    )

     

    $

    14,311

     

     
     

     

    Nine Months Ended September 30, 2019

     

    Nine Months Ended September 30, 2018

    (Dollars in thousands)

    Bank

     

    Investment
    Management

     

    Parent
    and Other

     

    Consolidated

     

    Bank

     

    Investment
    Management

     

    Parent
    and Other

     

    Consolidated

    Income statement data:

     

     

     

    Interest income

    $

    196,862

     

    $

     

    $

    111

     

    $

    196,973

     

     

    $

    141,424

     

    $

     

    $

    200

     

    $

    141,624

     

    Interest expense

    101,891

     

     

    1,091

     

    102,982

     

     

    56,027

     

     

    1,725

     

    57,752

     

    Net interest income (loss)

    94,971

     

     

    (980

    )

    93,991

     

     

    85,397

     

     

    (1,525

    )

    83,872

     

    Provision (credit) for loan and lease losses

    (1,696

    )

     

     

    (1,696

    )

     

    376

     

     

     

    376

     

    Net interest income (loss) after provision for loan and lease losses

    96,667

     

     

    (980

    )

    95,687

     

     

    85,021

     

     

    (1,525

    )

    83,496

     

    Non-interest income:

     

     

     

     

     

     

     

     

     

    Investment management fees

     

    27,912

     

    (332

    )

    27,580

     

     

     

    28,621

     

    (199

    )

    28,422

     

    Net gain on the sale and call of debt securities

    346

     

     

     

    346

     

     

    6

     

     

     

    6

     

    Other non-interest income

    10,467

     

    17

     

    881

     

    11,365

     

     

    7,875

     

    1

     

    38

     

    7,914

     

    Total non-interest income

    10,813

     

    27,929

     

    549

     

    39,291

     

     

    7,881

     

    28,622

     

    (161

    )

    36,342

     

    Non-interest expense:

     

     

     

     

     

     

     

     

     

    Intangible amortization expense

     

    1,506

     

     

    1,506

     

     

     

    1,465

     

     

    1,465

     

    Other non-interest expense

    56,872

     

    23,174

     

    478

     

    80,524

     

     

    49,011

     

    23,988

     

    390

     

    73,389

     

    Total non-interest expense

    56,872

     

    24,680

     

    478

     

    82,030

     

     

    49,011

     

    25,453

     

    390

     

    74,854

     

    Income (loss) before tax

    50,608

     

    3,249

     

    (909

    )

    52,948

     

     

    43,891

     

    3,169

     

    (2,076

    )

    44,984

     

    Income tax expense (benefit)

    6,825

     

    830

     

    (296

    )

    7,359

     

     

    5,485

     

    786

     

    (591

    )

    5,680

     

    Net income (loss)

    $

    43,783

     

    $

    2,419

     

    $

    (613

    )

    $

    45,589

     

     

    $

    38,406

     

    $

    2,383

     

    $

    (1,485

    )

    $

    39,304

     

     

    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,” “EBITDA,” “total revenue” and “efficiency ratio.” Although we believe these non-GAAP financial measures provide management and our investors with a more detailed understanding of our performance, these measures are not necessarily comparable to similar measures that may be presented by other companies. 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, 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 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 income, without giving effect to loan loss provision and income taxes, and excluding gains and losses on the sale and call of investment securities. 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 losses or 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)

    2019

     

    2019

     

    2018

    Tangible book value per common share:

     

     

     

    Common shareholders’ equity

    $

    488,443

     

    $

    472,839

     

    $

    429,152

     

    Less: goodwill and intangible assets

     

    66,357

     

     

    66,859

     

     

    68,365

     

    Tangible common equity

    $

    422,086

     

    $

    405,980

     

    $

    360,787

     

    Common shares outstanding

     

    29,296,970

     

     

    29,339,152

     

     

    28,920,978

     

    Tangible book value per common share

    $

    14.41

     

    $

    13.84

     

    $

    12.47

     

     

    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)

    2019

     

    2019

     

    2018

     

    2019

     

    2018

    Investment Management EBITDA:

     

     

     

     

     

     

    Net income

    $

    316

     

    $

    672

     

    $

    957

     

     

    $

    2,419

     

    $

    2,383

     

    Interest expense

     

     

     

     

     

     

     

     

     

    Income taxes expense (benefit)

    3

     

    264

     

    282

     

     

    830

     

    786

     

    Depreciation expense

    111

     

    119

     

    126

     

     

    355

     

    376

     

    Intangible amortization expense

    502

     

    502

     

    502

     

     

    1,506

     

    1,465

     

    EBITDA

    $

    932

     

    $

    1,557

     

    $

    1,867

     

     

    $

    5,110

     

    $

    5,010

     

     

    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)

    2019

     

    2019

     

    2018

     

    2019

     

    2018

    Total revenue:

     

     

     

     

     

     

    Net interest income

    $

    32,316

     

    $

    31,303

     

    $

    28,819

     

     

    $

    93,991

     

    $

    83,872

     

    Total non-interest income

    14,243

     

    11,979

     

    12,751

     

     

    39,291

     

    36,342

     

    Less: net gain on the sale and call of debt securities

    206

     

    112

     

     

     

    346

     

    6

     

    Total revenue

    $

    46,353

     

    $

    43,170

     

    $

    41,570

     

     

    $

    132,936

     

    $

    120,208

     

    Less: total non-interest expense

    27,773

     

    27,585

     

    25,686

     

     

    82,030

     

    74,854

     

    Pre-tax, pre-provision net revenue

    $

    18,580

     

    $

    15,585

     

    $

    15,884

     

     

    $

    50,906

     

    $

    45,354

     

     

    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)

    2019

     

    2019

     

    2018

     

    2019

     

    2018

    Bank total revenue:

     

     

     

     

     

     

    Net interest income

    $

    32,265

     

    $

    31,794

     

    $

    29,316

     

     

    $

    94,971

     

    $

    85,397

     

    Total non-interest income

    5,319

     

    2,590

     

    2,850

     

     

    10,813

     

    7,881

     

    Less: net gain on the sale and call of debt securities

    206

     

    112

     

     

     

    346

     

    6

     

    Bank total revenue

    $

    37,378

     

    $

    34,272

     

    $

    32,166

     

     

    $

    105,438

     

    $

    93,272

     

     

     

     

     

     

     

     

    Bank efficiency ratio:

     

     

     

     

     

     

    Total non-interest expense (numerator)

    $

    18,949

     

    $

    18,903

     

    $

    17,002

     

     

    $

    56,872

     

    $

    49,011

     

    Bank total revenue (denominator)

    $

    37,378

     

    $

    34,272

     

    $

    32,166

     

     

    $

    105,438

     

    $

    93,272

     

    Bank efficiency ratio

    50.70

    %

    55.16

    %

    52.86

    %

     

    53.94

    %

    52.55

    %

     



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    TriState Capital Reports Third Quarter 2019 EPS of $0.50 on Record Net Income, Pre-tax Earnings, Revenue, Loans and Deposits TriState Capital Holdings, Inc. (Nasdaq: TSC) reported record levels of loans, deposits, net interest income, non-interest income and net income in the third quarter of 2019, as well as further improvement in its superior credit quality metrics. The …