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Tristate Capital Reports EPS of $1.71 for Full Year 2021 and $0.52 for the Fourth Quarter on Double-Digit Annual Organic Growth in AUM, Total Assets, Revenue and Net Income to New Record Levels

-- The company continued to expand the client base utilizing its asset management, private banking, commercial banking, and treasury and liquidity management capabilities, while all of its businesses enter 2022 with strong new business pipelines --

TriState Capital Holdings, Inc. (Nasdaq: TSC) (“TriState Capital” or the “company”) reported fourth quarter and full year 2021 financial results including double-digit organic growth in assets under management (AUM), loans, deposits, revenue and earnings.

The parent company of TriState Capital Bank and Chartwell Investment Partners reported net income available to common shareholders of $65.7 million, or $1.71 per diluted share, for 2021 and $19.9 million, or $0.52, per diluted share in the fourth quarter, including the $0.06 impact of expenses associated with its previously announced agreement to be acquired by Raymond James Financial, Inc. (“Raymond James”). Net income available to common stockholders was $37.4 million or $1.30 per diluted share in 2020, $10.6 million or $0.37 per diluted share in the fourth quarter of 2020, and $16.9 million or $0.44 per diluted share in the third quarter of 2021.

“TriState Capital’s unwavering support of our talented people as they meet the needs of our clients in extraordinary times, while creating long-term value for our common stockholders, resulted in a spectacular year for this company and each of our asset management, private banking and commercial banking businesses,” Chairman James F. Getz said. “Our solid performance in 2021 exemplified TriState Capital’s ability to consistently execute against our long-term strategy for achieving responsible growth in a range of economic and rate environments. Since 2011, TriState Capital has delivered average annual growth of 23% in loans, 17% in revenue and 20% in earnings per share, all while diversifying our sources of fee income, launching a best-in-class treasury and liquidity management offering, building exceptional national financial services distribution capabilities, enhancing operating leverage, and implementing the infrastructure to accommodate the continued organic expansion of our businesses.”

Mr. Getz added that the company also continues to expect to close its transaction with Raymond James in 2022, subject to customary conditions including TriState Capital shareholder and regulatory approvals. He noted, “TriState Capital is aligned with a strong partner that appreciates the value of the franchises and personnel we have in place today, as well as our ability to put its capital, low-cost deposits and other resources to work to support the continued success of TriState Capital Bank and Chartwell Investment Partners.”

FULL YEAR AND FOURTH QUARTER 2021 HIGHLIGHTS

  • Raised $125 million in capital to fund responsible growth in 2022, a senior unsecured fixed-to-floating rate note that matures December 15, 2024. The note was issued to Raymond James and bears interest at a fixed annual rate of 2.25% until December 15, 2022.
  • Chartwell fourth quarter revenue increased by 1.4% from the linked quarter and 11.7% from the prior year period, as positive net inflows, especially new and existing fixed income strategies, contributed to assets under management growth to a record $11.84 billion.
  • Non-interest income grew to $15.9 million in the fourth quarter, increasing 13.7% from the prior year period and 11.9% from the linked quarter.
  • Net interest income (“NII”) hit a record $51.1 million in the fourth quarter, growing 41.8% from the prior period and 9.6% from the linked quarter, as net interest margin (“NIM”) expanded to 1.68% in the last three months of the year.
  • Commercial loans grew 13.0% from December 31, 2020 and 5.8% during the quarter to $3.88 billion at period end.
  • Private banking loans grew 43.2% from December 31, 2020 and 11.0% during the quarter to $6.89 billion at period end, as loans primarily collateralized by marketable securities represented 64.0% of total loans at the end of 2021.
  • Treasury management deposit accounts grew 96.1% from December 31, 2020 and 16.6% during the quarter to $2.86 billion at period end.

“The results we achieved in 2021, and our expectations for 2022 and beyond, are a direct result of our high-performance team, our ability across all three of our premier platforms to deliver holistic yet bespoke solutions for our focused client channels, our commitment to investing for our future success, and our drive to deliver exceptional risk adjusted returns over time,” President and Chief Executive Officer Brian S. Fetterolf said. “TriState Capital’s ability to generate significant growth in net interest income and net interest margin in 2021, while favoring a long-term asset-sensitive approach, highlights the strength of our unique business model, relationships and ability to execute, as well as how a rising rate environment can serve as another catalyst for continued earnings growth going forward.”

REVENUE GROWTH

NII grew to a record $51.1 million in the fourth quarter of 2021, increasing 41.8% from $36.1 million in the prior year period and 9.6% from $46.7 million in the linked quarter. NIM expanded for the fifth consecutive quarter to 1.68% for the last three months of 2021, compared to 1.53% in the prior year period and 1.65% in the linked quarter.

Non-interest income grew to $15.9 million in the fourth quarter of 2021, increasing 13.7% from $14.0 million in the prior year period and 11.9% from $14.2 million in the linked quarter. Chartwell investment management fees grew to $9.6 million in the fourth quarter of 2021, compared to $8.6 million in the prior year period and $9.4 million in the linked quarter. Fees from the bank’s back-to-back, loan-level interest rate swap offering for clients totaled $4.4 million during the fourth quarter of 2021, compared to $4.1 million in the prior year period and $3.1 million in the linked quarter. In addition, treasury management fees have continued to grow over time, while TriState Capital maintains its priority of growing deposit balances in services accounts through effective and predictable fee structures.

NII and non-interest income, excluding net gains and losses on the sale and call of debt securities, combined to generate record total revenue of $66.9 million for the fourth quarter of 2021, which grew 34.0% from $49.9 million in the prior year period and 10.0% from $60.9 million in the linked quarter. Full year 2021 total revenue was a record $237.8 million, up 24.4% from $191.2 million in 2020. Total revenue, which is not a financial metric under generally accepted accounting principles (“GAAP”), is a measure that TriState Capital has consistently utilized to provide a greater understanding of its diverse fee-generating businesses. TriState Capital’s non-interest income represented 23.6% of total revenue for the fourth quarter of 2021.

EXPENSES REFLECT CONTINUED INVESTMENTS

TriState Capital continues to invest in talent, technology, product, and risk and compliance management to support the continued responsible growth of its businesses, providing a premier client experience as it continues to scale its efficient branchless operating model. Fourth quarter 2021 non-interest expense was $42.8 million, including $2.7 million in expenses incurred in connection with the pending transaction with Raymond James, compared to $34.4 million in the prior year period and $38.0 million in the linked quarter. New hires and bonus accruals reflecting the company’s record annual revenue and other key financial metrics were primary factors in compensation and benefits expense increasing to $22.0 million in the fourth quarter of 2021, from $18.7 million in the prior year period and $21.7 million in the linked quarter. Non-interest expense also included investment tax credit expense of $2.8 million and $1.7 million in the fourth quarters of 2021 and 2020, respectively.

TriState Capital Bank’s efficiency ratio decreased to 51.10% in the fourth quarter of 2021, from 60.95% in the prior year period and 54.79% in the linked quarter. The efficiency ratio, a widely used industry non-GAAP financial metric, is utilized to provide a greater understanding of a bank’s level of non-interest expense as a percentage of total revenue. Annualized non-interest expense represented 1.36% of average assets in the fourth quarter of 2021, compared to 1.40% in the same period the prior year and 1.30% in the linked quarter.

Pre-tax, pre-provision net revenue grew to $24.2 million in the fourth quarter of 2021, increasing 55.8% from $15.5 million in the prior year period and 5.7% from $22.9 million in the linked quarter. Pre-tax, pre-provision net revenue is a non-GAAP financial metric representing net interest income and non-interest income, and excluding gains and losses on the sale and call of debt securities and total non-interest expense.

Pre-tax income was $23.8 million in the fourth quarter of 2021, increasing 87.8% from $12.7 million in the same period a year prior and 3.9% from $22.9 million in the linked quarter.

TriState Capital’s 2021 effective tax rate was 3.0% for the fourth quarter and 13.9% for the full year. The company’s effective tax rate is impacted by certain factors including the number, timing and size of tax credit investments.

Net income available to common shareholders, earnings per share and weighted average diluted shares in the fourth quarter of 2021 are net of $3.1 million in dividends payable to holders of the company’s Series A, Series B and Series C Non-Cumulative Perpetual Preferred Stock.

INVESTMENT MANAGEMENT

A combination of investment performance, strong client relationships and a robust new business effort contributed to positive net inflows of $21.0 million and $521.0 million for the three and 12 months ending December 31, 2021, respectively, reflecting growth in existing strategies and new product developed in 2021. In addition, Chartwell’s new business pipeline currently has in excess of $353 million in commitments from institutional investors.

Chartwell’s new business and new flows from existing accounts of $319 million and market appreciation of $369 million more than offset outflows of $298 million in the fourth quarter of 2021. Chartwell assets under management grew to a record $11.84 billion at December 31, 2021, compared to $10.26 billion one year prior and $11.45 billion at September 30, 2021.

Chartwell’s annual run rate revenue grew to $40.0 million at December 31, 2021, increasing 2.6% from $39.0 million at September 30, 2021 and 12.4% from $35.6 million at December 31, 2020. Chartwell’s weighted average fee rate was 0.34% at December 31, 2021.

ORGANIC LENDING FRANCHISE GROWTH

TriState Capital’s client engagement and distribution capabilities continued to drive organic loan growth by expanding the number and depth of its premier relationships with high-quality middle-market commercial customers, as well as expanding the number of high-net-worth clients the bank serves through its growing national referral network of financial intermediaries.

Average loans totaled a record $10.21 billion in the fourth quarter of 2021, growing 30.0% from $7.86 billion in the prior year period and 8.3% from $9.43 billion in the linked quarter. Loans at December 31, 2021 totaled $10.76 billion, growing $2.53 billion, or 30.7%, from one year prior and $894.3 million, or 9.1%, from September 30, 2021.

TriState Capital continued to fortify its position as the nation’s leading independent provider of marketable securities-based loans for clients of independent investment advisory firms, trust companies, broker-dealers, regional securities firms, family offices, and other financial intermediaries that do not offer banking services themselves. Private banking loans totaled a record $6.89 billion at December 31, 2021, increasing $2.08 billion, or 43.2%, from one year prior and $682.5 million, or 11.0%, from the end of the linked quarter.

The company continued to grow relationships with top-quality middle-market sponsors and businesses, driving originations of commercial and industrial (“C&I”) and commercial real estate (“CRE”) loans while managing credit quality within the portfolio. Commercial loans totaled $3.88 billion at December 31, 2021, increasing $447.2 million, or 13.0%, from one year prior and $211.8 million, or 5.8%, from the end of the linked quarter.

C&I loans grew to $1.51 billion at December 31, 2021, increasing by $239.3 million, or 18.8%, from one year prior and $172.6 million, or 12.9%, from the end of the linked quarter, led by utilization of capital call lines of credit and other fund finance offerings.

CRE loans grew to $2.36 billion at December 31, 2021, increasing $207.9 million, or 9.6%, from one year prior and $39.2 million, or 1.7%, from the end of the linked quarter.

STRATEGIC DEPOSIT AND LIQUIDITY MANAGEMENT FRANCHISE EXPANSION

TriState Capital continues to deliver growth in its agile liquidity management franchise, which creates meaningful service-based client relationships and provides highly responsive funding. The bank is winning new business and enhancing the breadth and depth of existing client relationships with its nationally distributed service and liquidity management offerings for financial services businesses, payroll and other specialized payment servicers, real estate firms, high-net-worth individuals, family offices, middle market companies, municipalities and non-profits.

Average deposits totaled $11.04 billion in the fourth quarter of 2021, growing 30.8% from $8.44 billion in the prior year period and 7.7% from $10.25 billion in the linked quarter. Deposits at December 31, 2021 totaled $11.50 billion, growing by an annual record $3.02 billion, or 35.5%, from one year prior and $748.2 million, or 7.0%, from September 30, 2021.

Treasury management deposit accounts grew to $2.86 billion at December 31, 2021, increasing $1.4 billion, or 96.1%, from one year prior and $406.3 million, or 16.6%, from September 30, 2021.

TriState Capital’s loan-to-deposit ratio was 93.56% at December 31, 2021, compared to 97.04% at December 31, 2020 and 91.75% at September 30, 2021, as TriState Capital managed deposit balances in line with loan activity in the quarter in a continued favorable liquidity environment.

INTEREST RATE MANAGEMENT

TriState Capital continues to maintain a balance sheet with significant flexibility to manage interest rate dynamics, while offering attractive deposit and loan pricing to clients.

Approximately 60% of TriState Capital’s non-fixed rate deposits use the Effective Federal Funds Rate or another benchmark as reference points, and the remaining non-fixed rate deposits are priced at rates set with bank discretion. Total cost of funds for all deposits and interest-bearing liabilities averaged 0.45% during the fourth quarter of 2021, compared to 0.67% in the same period last year and 0.49% in the linked quarter. The total cost of deposits averaged 0.37% during the fourth quarter of 2021, compared to 0.57% in the same period last year and 0.41% in the linked quarter.

At December 31, 2021, 95% of the company’s loans were floating rate and indexed to 30-day LIBOR, the Prime Rate, or another benchmark rate such as SOFR. TriState Capital continued to constructively use interest rate floors on existing and new variable rate loans throughout the fourth quarter of 2021.

The yield on total loans averaged 2.30% during the fourth quarter of 2021, compared to 2.44% in the prior year period and 2.32% in the linked quarter. Loan yields resulted primarily from trends in 30-day LIBOR in 2021, as well as higher rates of growth in private bank loans relative to commercial loans. Loan yield movement was more than offset by a continued reduction in deposit costs.

Investment securities totaled $1.41 billion at December 31, 2021, increasing 66.8% from one year prior and decreasing 1.7% from the end of the linked quarter.

NIM expanded for the fifth consecutive quarter to 1.68% for the fourth quarter of 2021, up 15 basis points from the same period last year and up 3 basis points from the linked quarter.

ASSET QUALITY

TriState Capital maintained strong asset quality metrics in the fourth quarter of 2021, reflecting its disciplined credit culture and lower risk profile resulting from the majority of its loans consisting of private banking non-purpose margin loans collateralized by marketable securities. Private banking grew to represent 64.0% of total loans at December 31, 2021, while CRE and C&I loans comprised 21.9% and 14.1% of total loans, respectively.

The allowance for credit losses on loans and leases (“ACL”) totaled $28.6 million at the end of 2021, compared to $34.6 million at December 31, 2020 and $32.4 million at September 30, 2021. ACL on commercial loans represented 0.69% of commercial loans at period end, excluding private banking loans primarily collateralized by liquid, marketable securities, that do not require a reserve, compared to 0.95% at December 31, 2020 and 0.82% at September 30, 2021. As a percentage of total loans, ACL was 0.27% at December 31, 2021, 0.42% at December 31, 2020 and 0.33% at September 30, 2021.

The company recorded net charge-offs of $4.2 million in the fourth quarter of 2021, net recoveries of $109,000 in the year-ago quarter, and net charge-offs of $238,000 in the linked quarter.

Non-performing assets (“NPAs”) were $6.3 million, or 0.05% of total assets, at December 31, 2021, compared to $12.4 million, or 0.13%, at December 31, 2020 and $10.8 million, or 0.09%, at September 30, 2021. Non-performing loans (“NPLs”) were $4.3 million, or 0.04% of total loans, at December 31, 2021, compared to $9.7 million, or 0.12%, at December 31, 2020 and $8.6 million, or 0.09%, at September 30, 2021.

Total adverse-rated credits, including NPLs, were $36.9 million, or 0.34% of total loans, at December 31, 2021, compared to $51.3 million, or 0.62%, at December 31, 2020 and $43.5 million, or 0.44%, at September 30, 2021.

TriState Capital’s provision for credit loss was $488,000 for the fourth quarter of 2021, $3.0 million for the fourth quarter of 2020 and de minimis for the linked quarter.

CAPITAL STRENGTH AND EFFICIENCY

The company’s strong balance sheet included $1.86 billion in cash, equivalents and securities at December 31, 2021. Cash, equivalents, securities and private banking loans -- which are primarily collateralized by marketable securities that are monitored daily, liquid and subject to favorable treatment under regulatory capital requirements -- represented 67.24% of total assets at the end of the fourth quarter of 2021.

As of December 31, 2021, estimated regulatory capital ratios for TriState Capital Holdings were 13.43% for total risk-based capital, 11.64% for tier 1 risk-based capital, 8.96% for common equity tier 1 risk-based capital, and 6.36% for tier 1 leverage. For TriState Capital Bank, the estimated capital ratios were 14.60% for total risk-based capital, 14.22% for tier 1 risk-based capital, 14.22% for common equity tier 1 risk-based capital, and 7.76% for tier 1 leverage.

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 $12.9 billion in assets as of December 31, 2021, 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 $11.8 billion in assets under management as of December 31, 2021, and serves institutional clients and TriState Capital’s financial intermediary network. For more information, please visit http://investors.tristatecapitalbank.com.

In light of the pending acquisition by Raymond James, the company will not hold a quarterly investor conference call and webcast. For more information related to the acquisition, please refer to the company’s and Raymond James’ filings with the Securities and Exchange Commission.

IMPORTANT INFORMATION ABOUT THE TRANSACTION AND WHERE TO FIND IT

Raymond James has filed a Registration Statement on Form S-4 (File No. 333-261647) with the SEC to register the shares of Raymond James’s common stock and preferred stock that will be issued to TriState Capital’s shareholders in connection with the transaction. The registration statement will include a proxy statement of TriState Capital that also constitutes a prospectus of Raymond James. When the registration statement becomes effective, the definitive proxy statement/prospectus will be sent to the shareholders of TriState Capital in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS WHEN THEY BECOME AVAILABLE (AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTION OR INCORPORATED BY REFERENCE INTO THE PROXY STATEMENT/PROSPECTUS) BECAUSE SUCH DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION REGARDING THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders may obtain free copies of these documents and other documents filed with the SEC by Raymond James or TriState Capital through the website maintained by the SEC at www.sec.gov or by contacting the investor relations department of Raymond James or TriState Capital at:

Raymond James

880 Carillon Parkway

Saint Petersburg, FL 33716

Attention: Investor Relations

 

 

TriState Capital Holdings, Inc.

301 Grant Street, Suite 2700

Pittsburgh, PA 15219

Attention: Investor Relations

Before making any voting or investment decision, investors and security holders of Raymond James and TriState Capital are urged to read carefully the entire registration statement and definitive proxy statement/prospectus when they become available, including any amendments thereto, because they will contain important information about the proposed transaction. Free copies of these documents may be obtained as described above.

PARTICIPANTS IN THE SOLICITATION

Raymond James, TriState Capital, and certain of their respective directors and executive officers may be deemed participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and executive officers of Raymond James can be found in Raymond James’s definitive proxy statement in connection with its 2021 annual meeting of shareholders, as filed with the SEC on January 8, 2021, and other documents subsequently filed by Raymond James with the SEC. Information about the directors and executive officers of TriState Capital can be found in TriState Capital’s definitive proxy statement in connection with its 2021 annual meeting of shareholders, as filed with the SEC on April 7, 2021, and other documents subsequently filed by TriState Capital with the SEC. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the definitive proxy statement/prospectus and other relevant materials to be filed with the SEC regarding the transaction when they become available.

FORWARD-LOOKING STATEMENTS

This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect TriState Capital’s current views with respect to, among other things, future events and the company’s financial performance, as well as the company’s goals and objectives for future operations, financial and business trends, business prospects and management’s outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality or other measures of future financial or business performance, strategies or expectations. These statements are often, but not always, made through the use of words or phrases such as “achieve,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “maintain,” “may,” “opportunity,” “outlook,” “plan,” “potential,” “predict,” “projection,” “seek,” “should,” “sustain,” “target,” “trend,” “will,” “will likely result,” and “would,” or the negative versions of those words or other comparable statements of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about TriState Capital’s industry and beliefs or assumptions made by management, many of which, by their nature, are inherently uncertain. Although 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 their expected impact and duration, including effects on TriState Capital’s operations, its clients, economic conditions and the demand for its products and services;
  • risks associated with the acquisition of our company by Raymond James, including risks related to the failure of our company to satisfy conditions of the closing of the acquisition, which could result in the acquisition not closing, which could have a material adverse impact on the value of our stock;
  • TriState Capital’s ability to prudently manage its growth and execute its strategy;
  • deterioration of TriState Capital’s asset quality;
  • TriState Capital’s level of non-performing assets and the costs associated with resolving problem loans, including litigation and other costs;
  • possible additional loan and lease losses and impairment, changes in the value of collateral securing TriState Capital’s loans and leases and the collectability of loans and leases, particularly as a result of the COVID-19 pandemic and the programs implemented by the Coronavirus Aid, Relief, and Economic Security Act, including its automatic loan forbearance provisions;
  • possible changes in the speed of loan prepayments by customers and loan origination or sales volumes;
  • business and economic conditions generally and in the financial services industry, nationally and within TriState Capital’s local market areas, including the effects of an increase in unemployment levels, slowdowns in economic growth and changes in demand for products or services or the value of assets under management;
  • TriState Capital’s ability to maintain important deposit customer relationships, its reputation and otherwise avoid liquidity risks;
  • changes in management personnel;
  • TriState Capital’s ability to recruit and retain key employees;
  • volatility and direction of interest rates;
  • risks related to the phasing out of LIBOR and changes in the manner of calculating reference rates, as well as the impact of the phase out of LIBOR and introduction of alternative reference rates such as SOFR on the value of loans and other financial instruments that are linked to LIBOR;
  • changes in accounting policies, accounting standards, or authoritative accounting guidance, including the CECL model;
  • any impairment of TriState Capital’s goodwill or other intangible assets;
  • TriState Capital’s ability to develop and provide competitive products and services that appeal to its customers and target markets;
  • TriState Capital’s ability to provide investment management performance competitive with its peers and benchmarks;
  • fluctuations in the carrying value of the assets under management held by Chartwell, as well as the relative and absolute investment performance of such subsidiary’s investment products;
  • operational risks associated with TriState Capital’s business, including technology and cyber-security related risks;
  • increased competition in the financial services industry, particularly from regional and national institutions;
  • negative perceptions or publicity with respect to any products or services offered by TriState Capital;
  • adverse judgments or other resolution of pending and future legal proceedings, and costs incurred in defending such proceedings;
  • changes in the laws, rules, regulations, interpretations or policies relating to financial institutions, accounting, tax, trade, monetary and fiscal matters, including economic stimulus programs, and potential expenses associated with complying with such laws and regulations;
  • TriState Capital’s ability to comply with applicable capital and liquidity requirements, including its ability to generate liquidity internally or raise capital on favorable terms;
  • regulatory limits on TriState Capital’s ability to receive dividends from its subsidiaries and pay dividends to shareholders;
  • changes and direction of government policy towards and intervention in the U.S. financial system;
  • natural disasters and adverse weather, acts of terrorism, regional or national civil unrest, cyber-attacks, an outbreak of hostilities, a public health outbreak (such as COVID-19) or other international or domestic calamities, and other matters beyond TriState Capital’s control;
  • the effects of any reputation, credit, interest rate, market, operational, legal, liquidity, regulatory or compliance risk resulting from developments related to any of the risks discussed above; and
  • other factors that are discussed in TriState Capital’s filings with the Securities and Exchange Commission.

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this press release. If one or more events related to these or other risks or uncertainties materialize, or if TriState Capital’s underlying assumptions prove to be incorrect, actual results may differ materially from what the company anticipates. Accordingly, readers should not place undue reliance on any such forward-looking statements. New factors emerge from time to time, and it is not possible for 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, 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 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

 

December 31,

September 30,

December 31,

(Dollars in thousands)

 

2021

 

 

2021

 

 

2020

 

Cash and cash equivalents

$

452,016

 

$

469,932

 

$

435,442

 

Total investment securities

 

1,405,678

 

 

1,429,613

 

 

842,545

 

Loans and leases held-for-investment

 

10,763,324

 

 

9,869,011

 

 

8,237,418

 

Allowance for credit losses on loans and leases

 

(28,563

)

 

(32,363

)

 

(34,630

)

Loans and leases held-for-investment, net

 

10,734,761

 

 

9,836,648

 

 

8,202,788

 

Goodwill and other intangibles, net

 

62,000

 

 

62,478

 

 

63,911

 

Other assets

 

350,397

 

 

360,197

 

 

352,130

 

Total assets

$

13,004,852

 

$

12,158,868

 

$

9,896,816

 

 

 

 

 

Deposits

$

11,504,389

 

$

10,756,141

 

$

8,489,089

 

Borrowings, net

 

470,163

 

 

355,654

 

 

400,493

 

Other liabilities

 

193,578

 

 

233,035

 

 

250,089

 

Total liabilities

 

12,168,130

 

 

11,344,830

 

 

9,139,671

 

Preferred stock

 

181,544

 

 

180,443

 

 

177,143

 

Common shareholders' equity

 

655,178

 

 

633,595

 

 

580,002

 

Total shareholders' equity

 

836,722

 

 

814,038

 

 

757,145

 

Total liabilities and shareholders' equity

$

13,004,852

 

$

12,158,868

 

$

9,896,816

 

 

TRISTATE CAPITAL HOLDINGS, INC.

INCOME STATEMENT DATA (UNAUDITED)

 

 

Three Months Ended

 

Years Ended

 

December 31,

September 30,

December 31,

 

December 31,

December 31,

(Dollars in thousands)

2021

 

2021

 

2020

 

2021

2020

Interest income:

 

 

 

 

 

 

Loans and leases

$

59,227

$

55,071

 

$

48,288

 

$

215,186

$

200,839

Investments

 

4,669

 

4,477

 

 

2,504

 

 

15,529

 

14,032

Interest-earning deposits

 

149

 

157

 

 

218

 

 

582

 

2,224

Total interest income

 

64,045

 

59,705

 

 

51,010

 

 

231,297

 

217,095

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

Deposits

 

10,164

 

10,480

 

 

12,107

 

 

41,504

 

69,202

Borrowings

 

2,757

 

2,558

 

 

2,839

 

 

10,434

 

9,949

Total interest expense

 

12,921

 

13,038

 

 

14,946

 

 

51,938

 

79,151

Net interest income

 

51,124

 

46,667

 

 

36,064

 

 

179,359

 

137,944

Provision for credit losses

 

488

 

 

 

2,972

 

 

808

 

19,400

Net interest income after provision for credit losses

 

50,636

 

46,667

 

 

33,092

 

 

178,551

 

118,544

Non-interest income:

 

 

 

 

 

 

Investment management fees

 

9,567

 

9,436

 

 

8,564

 

 

37,454

 

32,035

Service charges on deposits

 

389

 

377

 

 

309

 

 

1,407

 

1,072

Net gain on the sale and call of debt securities

 

112

 

33

 

 

133

 

 

242

 

3,948

Swap fees

 

4,408

 

3,059

 

 

4,095

 

 

14,091

 

16,274

Bank owned life insurance income

 

620

 

613

 

 

444

 

 

2,142

 

1,742

Commitment and other loan fees

 

818

 

740

 

 

453

 

 

2,448

 

1,715

Other income (loss)

 

7

 

(28

)

 

5

 

 

862

 

419

Total non-interest income

 

15,921

 

14,230

 

 

14,003

 

 

58,646

 

57,205

Non-interest expense:

 

 

 

 

 

 

Compensation and employee benefits

 

22,040

 

21,701

 

 

18,658

 

 

84,599

 

71,197

Premises and equipment expense

 

1,738

 

1,520

 

 

1,486

 

 

5,837

 

5,875

Professional fees

 

5,062

 

2,310

 

 

2,026

 

 

10,820

 

6,201

FDIC insurance expense

 

1,455

 

1,375

 

 

1,920

 

 

5,080

 

9,680

General insurance expense

 

368

 

363

 

 

308

 

 

1,370

 

1,142

State capital shares tax

 

694

 

790

 

 

605

 

 

2,911

 

1,720

Travel and entertainment expense

 

799

 

755

 

 

688

 

 

2,634

 

2,423

Technology and data services

 

3,758

 

4,274

 

 

3,509

 

 

14,819

 

10,803

Intangible amortization expense

 

478

 

477

 

 

478

 

 

1,911

 

1,944

Marketing and advertising

 

1,058

 

984

 

 

708

 

 

3,624

 

2,402

Other operating expenses

 

5,333

 

3,459

 

 

4,049

 

 

12,889

 

9,716

Total non-interest expense

 

42,783

 

38,008

 

 

34,435

 

 

146,494

 

123,103

Income before tax

 

23,774

 

22,889

 

 

12,660

 

 

90,703

 

52,646

Income tax expense

 

710

 

2,873

 

 

50

 

 

12,643

 

7,412

Net income

$

23,064

$

20,016

 

$

12,610

 

$

78,060

$

45,234

Preferred stock dividends

 

3,115

 

3,097

 

 

1,987

 

 

12,348

 

7,873

Net income available to common shareholders

$

19,949

$

16,919

 

$

10,623

 

$

65,712

$

37,361

 

TRISTATE CAPITAL HOLDINGS, INC.

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)

 

 

Three Months Ended

 

Years Ended

 

December 31,

September 30,

December 31,

 

December 31,

December 31,

(Dollars in thousands, except per share data)

 

2021

 

 

2021

 

 

2020

 

 

 

2021

 

 

2020

 

Per share and share data:

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

Basic

$

0.54

 

$

0.46

 

$

0.37

 

 

$

1.77

 

$

1.32

 

Diluted

$

0.52

 

$

0.44

 

$

0.37

 

 

$

1.71

 

$

1.30

 

Book value per common share

$

19.70

 

$

19.11

 

$

17.78

 

 

$

19.70

 

$

17.78

 

Tangible book value per common share (1)

$

17.83

 

$

17.23

 

$

15.82

 

 

$

17.83

 

$

15.82

 

Common shares outstanding, at end of period

 

33,263,498

 

 

33,154,343

 

 

32,620,150

 

 

 

33,263,498

 

 

32,620,150

 

Weighted average common shares outstanding:

 

 

 

 

 

 

Basic

 

31,396,278

 

 

31,357,356

 

 

28,378,695

 

 

 

31,315,235

 

 

28,267,512

 

Diluted

 

32,580,999

 

 

32,146,222

 

 

28,867,958

 

 

 

32,459,948

 

 

28,738,468

 

 

 

 

 

 

 

 

Performance ratios:

 

 

 

 

 

 

Return on average assets (2)

 

0.73

%

 

0.68

%

 

0.51

%

 

 

0.69

%

 

0.50

%

Return on average common equity (2)

 

12.25

%

 

10.67

%

 

7.87

%

 

 

10.64

%

 

7.15

%

Net interest margin (2) (3)

 

1.68

%

 

1.65

%

 

1.53

%

 

 

1.64

%

 

1.58

%

Total revenue (1)

$

66,933

 

$

60,864

 

$

49,934

 

 

$

237,763

 

$

191,201

 

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

$

24,150

 

$

22,856

 

$

15,498

 

 

$

91,269

 

$

68,098

 

Bank efficiency ratio (1)

 

51.10

%

 

54.79

%

 

60.95

%

 

 

52.03

%

 

55.57

%

Non-interest expense to average assets (2)

 

1.36

%

 

1.30

%

 

1.40

%

 

 

1.30

%

 

1.35

%

 

 

 

 

 

 

 

Asset quality:

 

 

 

 

 

 

Non-performing loans

$

4,313

 

$

8,625

 

$

9,680

 

 

$

4,313

 

$

9,680

 

Non-performing assets

$

6,318

 

$

10,803

 

$

12,404

 

 

$

6,318

 

$

12,404

 

Other real estate owned

$

2,005

 

$

2,178

 

$

2,724

 

 

$

2,005

 

$

2,724

 

Non-performing assets to total assets

 

0.05

%

 

0.09

%

 

0.13

%

 

 

0.05

%

 

0.13

%

Non-performing loans to total loans

 

0.04

%

 

0.09

%

 

0.12

%

 

 

0.04

%

 

0.12

%

Allowance for credit losses on loans and leases to loans

 

0.27

%

 

0.33

%

 

0.42

%

 

 

0.27

%

 

0.42

%

Allowance for credit losses on loans and leases to non-performing loans

 

662.25

%

 

375.22

%

 

357.75

%

 

 

662.25

%

 

357.75

%

Net charge-offs (recoveries)

$

4,197

 

$

238

 

$

(109

)

 

$

6,887

 

$

(279

)

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

 

0.16

%

 

0.01

%

 

(0.01

) %

 

 

0.07

%

 

%

 

 

 

 

 

 

 

Capital ratios: (4)

 

 

 

 

 

 

Tier 1 leverage ratio

 

6.36

%

 

6.61

%

 

7.29

%

 

 

6.36

%

 

7.29

%

Common equity tier 1 risk-based capital ratio

 

8.96

%

 

9.01

%

 

8.99

%

 

 

8.96

%

 

8.99

%

Tier 1 risk-based capital ratio

 

11.64

%

 

11.79

%

 

11.99

%

 

 

11.64

%

 

11.99

%

Total risk-based capital ratio

 

13.43

%

 

13.71

%

 

14.12

%

 

 

13.43

%

 

14.12

%

Bank tier 1 leverage ratio

 

7.76

%

 

7.24

%

 

7.83

%

 

 

7.76

%

 

7.83

%

Bank common equity tier 1 risk-based capital ratio

 

14.22

%

 

12.94

%

 

12.89

%

 

 

14.22

%

 

12.89

%

Bank tier 1 risk-based capital ratio

 

14.22

%

 

12.94

%

 

12.89

%

 

 

14.22

%

 

12.89

%

Bank total risk-based capital ratio

 

14.60

%

 

13.38

%

 

13.41

%

 

 

14.60

%

 

13.41

%

 

 

 

 

 

 

 

Investment Management Segment:

 

 

 

 

 

 

Assets under management

$

11,844,000

 

$

11,454,000

 

$

10,263,000

 

 

$

11,844,000

 

$

10,263,000

 

EBITDA (1)

$

1,391

 

$

1,847

 

$

1,675

 

 

$

7,218

 

$

5,473

 

(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

 

December 31, 2021

 

September 30, 2021

 

December 31, 2020

(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

$

423,351

$

147

0.14

%

 

$

429,806

$

155

0.14

%

 

$

671,922

$

216

0.13

%

Federal funds sold

 

9,896

 

2

0.08

%

 

 

12,629

 

2

0.06

%

 

 

8,236

 

2

0.10

%

Debt securities available-for-sale

 

575,965

 

2,520

1.74

%

 

 

415,855

 

1,664

1.59

%

 

 

578,021

 

676

0.47

%

Debt securities held-to-maturity, net

 

839,798

 

2,011

0.95

%

 

 

943,733

 

2,686

1.13

%

 

 

227,465

 

1,633

2.86

%

Debt securities trading

 

1,895

 

3

0.63

%

 

 

 

%

 

 

2,126

 

4

0.75

%

Equity securities

 

4,985

 

%

 

 

163

 

%

 

 

 

%

FHLB stock

 

11,802

 

140

4.71

%

 

 

11,932

 

137

4.56

%

 

 

13,284

 

199

5.96

%

Total loans and leases

 

10,213,833

 

59,227

2.30

%

 

 

9,427,370

 

55,071

2.32

%

 

 

7,858,368

 

48,288

2.44

%

Total interest-earning assets

 

12,081,525

 

64,050

2.10

%

 

 

11,241,488

 

59,715

2.11

%

 

 

9,359,422

 

51,018

2.17

%

Other assets

 

381,218

 

 

 

 

382,763

 

 

 

 

405,461

 

 

Total assets

$

12,462,743

 

 

 

$

11,624,251

 

 

 

$

9,764,883

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing checking accounts

$

4,195,332

$

3,416

0.32

%

 

$

3,946,028

$

3,682

0.37

%

 

$

2,949,908

$

3,280

0.44

%

Money market deposit accounts

 

5,385,794

 

5,905

0.43

%

 

 

4,879,971

 

5,794

0.47

%

 

 

4,027,298

 

6,120

0.60

%

Certificates of deposit

 

842,758

 

843

0.40

%

 

 

899,855

 

1,004

0.44

%

 

 

1,003,219

 

2,707

1.07

%

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

FHLB borrowings

 

250,000

 

1,092

1.73

%

 

 

250,815

 

1,102

1.74

%

 

 

300,000

 

1,384

1.84

%

Line of credit borrowings

 

8,370

 

93

4.41

%

 

 

761

 

%

 

 

870

 

%

Senior & subordinated notes payable, net

 

118,765

 

1,572

5.25

%

 

 

95,619

 

1,456

6.04

%

 

 

95,493

 

1,455

6.06

%

Total interest-bearing liabilities

 

10,801,019

 

12,921

0.47

%

 

 

10,073,049

 

13,038

0.51

%

 

 

8,376,788

 

14,946

0.71

%

Noninterest-bearing deposits

 

617,241

 

 

 

 

528,897

 

 

 

 

457,824

 

 

Other liabilities

 

217,375

 

 

 

 

213,552

 

 

 

 

275,766

 

 

Shareholders' equity

 

827,108

 

 

 

 

808,753

 

 

 

 

654,505

 

 

Total liabilities and shareholders' equity

$

12,462,743

 

 

 

$

11,624,251

 

 

 

$

9,764,883

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income (1)

 

$

51,129

 

 

 

$

46,677

 

 

 

$

36,072

 

Net interest spread

 

 

1.63

%

 

 

 

1.60

%

 

 

 

1.46

%

Net interest margin (1)

 

 

1.68

%

 

 

 

1.65

%

 

 

 

1.53

%

(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)

 

 

Years Ended

 

December 31, 2021

 

December 31, 2020

(Dollars in thousands)

Average

Balance

Interest Income (1)/

Expense

Average

Yield/

Rate

 

Average

Balance

Interest Income (1)/

Expense

Average

Yield/

Rate

Assets

 

 

 

 

 

 

 

Interest-earning deposits

$

453,625

$

573

0.13

%

 

$

775,276

$

2,199

0.28

%

Federal funds sold

 

11,148

 

9

0.08

%

 

 

8,076

 

25

0.31

%

Debt securities available-for-sale

 

402,391

 

5,640

1.40

%

 

 

438,293

 

6,550

1.49

%

Debt securities held-to-maturity, net

 

866,245

 

9,301

1.07

%

 

 

246,054

 

6,439

2.62

%

Debt securities trading

 

555

 

5

0.90

%

 

 

592

 

5

0.84

%

Equity securities

 

1,298

 

%

 

 

 

%

FHLB stock

 

11,766

 

613

5.21

%

 

 

14,994

 

1,098

7.32

%

Total loans and leases

 

9,187,492

 

215,186

2.34

%

 

 

7,255,035

 

200,839

2.77

%

Total interest-earning assets

 

10,934,520

 

231,327

2.12

%

 

 

8,738,320

 

217,155

2.49

%

Other assets

 

371,876

 

 

 

 

387,080

 

 

Total assets

$

11,306,396

 

 

 

$

9,125,400

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

Interest-bearing checking accounts

$

3,768,446

$

13,106

0.35

%

 

$

2,407,087

$

14,493

0.60

%

Money market deposit accounts

 

4,735,297

 

23,299

0.49

%

 

 

3,812,942

 

35,095

0.92

%

Certificates of deposit

 

920,820

 

5,099

0.55

%

 

 

1,223,631

 

19,614

1.60

%

Borrowings:

 

 

 

 

 

 

 

FHLB borrowings

 

251,164

 

4,348

1.73

%

 

 

330,314

 

6,095

1.85

%

Line of credit borrowings

 

3,433

 

148

4.31

%

 

 

6,243

 

261

4.18

%

Senior & subordinated notes payable, net

 

101,413

 

5,938

5.86

%

 

 

59,078

 

3,593

6.08

%

Total interest-bearing liabilities

 

9,780,573

 

51,938

0.53

%

 

 

7,839,295

 

79,151

1.01

%

Noninterest-bearing deposits

 

508,404

 

 

 

 

408,313

 

 

Other liabilities

 

220,303

 

 

 

 

239,137

 

 

Shareholders' equity

 

797,116

 

 

 

 

638,655

 

 

Total liabilities and shareholders' equity

$

11,306,396

 

 

 

$

9,125,400

 

 

 

 

 

 

 

 

 

 

Net interest income (1)

 

$

179,389

 

 

 

$

138,004

 

Net interest spread

 

 

1.59

%

 

 

 

1.48

%

Net interest margin (1)

 

 

1.64

%

 

 

 

1.58

%

(1)

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

 

TRISTATE CAPITAL HOLDINGS, INC.

LOAN AND LEASE COMPOSITION (UNAUDITED)

 

 

December 31, 2021

 

September 30, 2021

 

December 31, 2020

(Dollars in thousands)

Loan

Balance

Percent of

Loans

 

Loan

Balance

Percent of

Loans

 

Loan

Balance

Percent of

Loans

Middle-market banking loans:

 

 

 

 

 

 

 

 

Commercial and industrial

$

1,513,423

14.1

%

 

$

1,340,817

13.6

%

 

$

1,274,152

15.5

%

Commercial real estate

 

2,363,403

21.9

%

 

 

2,324,185

23.5

%

 

 

2,155,466

26.1

%

Total middle-market banking loans

 

3,876,826

36.0

%

 

 

3,665,002

37.1

%

 

 

3,429,618

41.6

%

Private banking loans

 

6,886,498

64.0

%

 

 

6,204,009

62.9

%

 

 

4,807,800

58.4

%

Loans and leases held-for-investment

$

10,763,324

100.0

%

 

$

9,869,011

100.0

%

 

$

8,237,418

100.0

%

TRISTATE CAPITAL HOLDINGS, INC.

STATEMENTS OF INCOME BY REPORTABLE SEGMENT (UNAUDITED)

 

 

Three Months Ended December 31, 2021

 

Year Ended December 31, 2021

(Dollars in thousands)

Bank

Investment

Management

Parent

and Other

Consolidated

 

Bank

Investment

Management

Parent

and Other

Consolidated

Income statement data:

 

 

 

 

 

 

 

 

 

Interest income

$

64,045

$

 

$

 

$

64,045

 

$

231,297

$

$

 

$

231,297

Interest expense

 

11,260

 

 

 

1,661

 

 

12,921

 

 

45,889

 

 

6,049

 

 

51,938

Net interest income (loss)

 

52,785

 

 

 

(1,661

)

 

51,124

 

 

185,408

 

 

(6,049

)

 

179,359

Provision for credit losses

 

488

 

 

 

 

 

488

 

 

808

 

 

 

 

808

Net interest income (loss) after provision for credit losses

 

52,297

 

 

 

(1,661

)

 

50,636

 

 

184,600

 

 

(6,049

)

 

178,551

Non-interest income:

 

 

 

 

 

 

 

 

 

Investment management fees

 

 

9,913

 

 

(346

)

 

9,567

 

 

 

38,702

 

(1,248

)

 

37,454

Net gain on the sale and call of debt securities

 

112

 

 

 

 

 

112

 

 

242

 

 

 

 

242

Other non-interest income

 

6,258

 

9

 

 

(25

)

 

6,242

 

 

20,941

 

34

 

(25

)

 

20,950

Total non-interest income (loss)

 

6,370

 

9,922

 

 

(371

)

 

15,921

 

 

21,183

 

38,736

 

(1,273

)

 

58,646

Non-interest expense:

 

 

 

 

 

 

 

 

 

Intangible amortization expense

 

 

478

 

 

 

 

478

 

 

 

1,911

 

 

 

1,911

Other non-interest expense

 

30,170

 

8,640

 

 

3,495

 

 

42,305

 

 

107,373

 

31,939

 

5,271

 

 

144,583

Total non-interest expense

 

30,170

 

9,118

 

 

3,495

 

 

42,783

 

 

107,373

 

33,850

 

5,271

 

 

146,494

Income (loss) before tax

 

28,497

 

804

 

 

(5,527

)

 

23,774

 

 

98,410

 

4,886

 

(12,593

)

 

90,703

Income tax expense (benefit)

 

2,158

 

916

 

 

(2,364

)

 

710

 

 

14,171

 

1,100

 

(2,628

)

 

12,643

Net income (loss)

$

26,339

$

(112

)

$

(3,163

)

$

23,064

 

$

84,239

$

3,786

$

(9,965

)

$

78,060

 

Three Months Ended December 31, 2020

 

Year Ended December 31, 2020

(Dollars in thousands)

Bank

Investment

Management

Parent

and Other

Consolidated

 

Bank

Investment

Management

Parent

and Other

Consolidated

Income statement data:

 

 

 

 

 

 

 

 

 

Interest income

$

51,010

$

 

$

 

$

51,010

 

$

217,095

$

$

 

$

217,095

Interest expense

 

13,495

 

 

 

1,451

 

 

14,946

 

 

75,339

 

 

3,812

 

 

79,151

Net interest income (loss)

 

37,515

 

 

 

(1,451

)

 

36,064

 

 

141,756

 

 

(3,812

)

 

137,944

Provision for credit losses

 

2,972

 

 

 

 

 

2,972

 

 

19,400

 

 

 

 

19,400

Net interest income (loss) after provision for credit losses

 

34,543

 

 

 

(1,451

)

 

33,092

 

 

122,356

 

 

(3,812

)

 

118,544

Non-interest income:

 

 

 

 

 

 

 

 

 

Investment management fees

 

 

8,772

 

 

(208

)

 

8,564

 

 

 

32,727

 

(692

)

 

32,035

Net gain on the sale and call of debt securities

 

133

 

 

 

 

 

133

 

 

3,948

 

 

 

 

3,948

Other non-interest income (loss)

 

5,270

 

36

 

 

 

 

5,306

 

 

21,164

 

58

 

 

 

21,222

Total non-interest income (loss)

 

5,403

 

8,808

 

 

(208

)

 

14,003

 

 

25,112

 

32,785

 

(692

)

 

57,205

Non-interest expense:

 

 

 

 

 

 

 

 

 

Intangible amortization expense

 

 

478

 

 

 

 

478

 

 

 

1,944

 

 

 

1,944

Other non-interest expense

 

26,078

 

7,237

 

 

642

 

 

33,957

 

 

90,541

 

27,735

 

2,883

 

 

121,159

Total non-interest expense

 

26,078

 

7,715

 

 

642

 

 

34,435

 

 

90,541

 

29,679

 

2,883

 

 

123,103

Income (loss) before tax

 

13,868

 

1,093

 

 

(2,301

)

 

12,660

 

 

56,927

 

3,106

 

(7,387

)

 

52,646

Income tax expense (benefit)

 

452

 

(74

)

 

(328

)

 

50

 

 

8,330

 

308

 

(1,226

)

 

7,412

Net income (loss)

$

13,416

$

1,167

 

$

(1,973

)

$

12,610

 

$

48,597

$

2,798

$

(6,161

)

$

45,234

 

TRISTATE CAPITAL HOLDINGS, INC.

EARNINGS PER COMMON SHARE (UNAUDITED)

 

 

Three Months Ended

 

Years Ended

 

December 31,

September 30,

December 31,

 

December 31,

December 31,

(Dollars in thousands, except per share data)

2021

2021

2020

 

2021

2020

 

 

 

 

 

 

 

Basic earnings per common share:

 

 

 

 

 

 

Net income

$

23,064

$

20,016

$

12,610

 

$

78,060

$

45,234

Less: Preferred dividends on Series A and Series B

 

1,962

 

1,963

 

1,963

 

 

7,849

 

7,849

Less: Preferred dividends on Series C

 

1,153

 

1,134

 

24

 

 

4,499

 

24

Net income available to common shareholders

$

19,949

$

16,919

$

10,623

 

$

65,712

$

37,361

 

 

 

 

 

 

 

Allocation of net income available:

 

 

 

 

 

 

Common shareholders

$

16,798

$

14,274

$

10,578

 

$

55,487

$

37,320

Series C convertible preferred shareholders

 

2,658

 

2,225

 

38

 

 

8,590

 

34

Warrant shareholders

 

493

 

420

 

7

 

 

1,635

 

7

Total

$

19,949

$

16,919

$

10,623

 

$

65,712

$

37,361

 

 

 

 

 

 

 

Basic weighted average common shares outstanding:

 

 

 

 

 

 

Basic common shares

 

31,396,278

 

31,357,356

 

28,378,695

 

 

31,315,235

 

28,267,512

Series C convertible preferred stock, as-if converted

 

4,967,272

 

4,887,272

 

102,767

 

 

4,848,039

 

25,832

Warrants, as-if exercised

 

922,438

 

922,438

 

20,053

 

 

922,438

 

5,041

 

 

 

 

 

 

 

Basic earnings per common share

$

0.54

$

0.46

$

0.37

 

$

1.77

$

1.32

 

 

 

 

 

 

 

Diluted earnings per common share:

 

 

 

 

 

 

Income available to common shareholders after allocation

$

16,798

$

14,274

$

10,578

 

$

55,487

$

37,320

 

 

 

 

 

 

 

Diluted weighted average common shares outstanding:

 

 

 

 

 

 

Basic common shares

 

31,396,278

 

31,357,356

 

28,378,695

 

 

31,315,235

 

28,267,512

Restricted stock - dilutive

 

1,028,637

 

664,729

 

390,320

 

 

994,997

 

345,026

Stock options - dilutive

 

156,084

 

124,137

 

98,943

 

 

149,716

 

125,930

Diluted common shares

 

32,580,999

 

32,146,222

 

28,867,958

 

 

32,459,948

 

28,738,468

 

 

 

 

 

 

 

Diluted earnings per common share

$

0.52

$

0.44

$

0.37

 

$

1.71

$

1.30

 

 

 

 

 

 

 

 

December 31,

September 30,

December 31,

 

December 31,

December 31,

 

 

2021

 

2021

 

2020

 

 

2021

 

2020

Anti-dilutive shares:

 

 

 

 

 

 

Restricted stock

 

37,500

 

10,750

 

647,717

 

 

37,500

 

581,717

Stock options

 

 

 

 

 

 

Series C convertible preferred stock, as-if converted

 

4,967,272

 

4,887,272

 

4,727,272

 

 

4,967,272

 

4,727,272

Warrants, as-if exercised

 

922,438

 

922,438

 

922,438

 

 

922,438

 

922,438

Total anti-dilutive shares

 

5,927,210

 

5,820,460

 

6,297,427

 

 

5,927,210

 

6,231,427

 

 

 

 

 

 

 

Earnings per common share (“EPS”) is computed using the two-class method, which requires that the Series C convertible preferred stock and warrants to be treated as participating classes of securities in the computation of EPS. In addition, net income is reduced by dividends declared on all series of preferred stock to derive net income available to common shareholders. The two-class method is an earnings allocation that determines EPS for each class of common stock and participating security. Net income available to common shareholders is reduced by the percentage of average common shares allocable to Preferred Series C holders and warrant holders on an as-if converted basis to arrive at net income allocable to common shareholders. Basic EPS is computed by dividing net income allocable to common shareholders by the weighted average number of common shares outstanding for the period, excluding non-vested restricted stock. Diluted EPS reflects the potential dilution upon the exercise of stock options and warrants, and the vesting of restricted stock awards granted utilizing the treasury stock method. The Series C convertible preferred stock is excluded from diluted weighted average common shares outstanding because the payment of the dividend is considered in the net income allocable to common shareholders for the calculation of basic EPS.

 

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,” “pre-tax, pre-provision net revenue” and “efficiency ratio.” These non-GAAP financial measures are supplemental measures that we believe provide management and our investors with a more detailed understanding of our performance, although these measures are not necessarily comparable to similar measures that may be presented by other companies. These disclosures should not be viewed as a substitute for financial measures in accordance with GAAP. The non-GAAP financial measures presented herein are calculated as follows:

“Tangible common equity” is defined as common shareholders’ equity reduced by intangible assets, including goodwill. We believe this measure is important to management and investors so that they can better understand and assess changes from period to period in common shareholders’ equity exclusive of changes in intangible assets associated with prior acquisitions. Intangible assets are created when we buy businesses that add relationships and revenue to our company. Intangible assets have the effect of increasing both equity and assets, while not increasing our tangible equity or tangible assets.

“Tangible book value per common share” is defined as common shareholders’ equity reduced by intangible assets, including goodwill, divided by common shares outstanding. We believe this measure is important to many investors who are interested in changes from period to period in book value per common share exclusive of changes in intangible assets associated with prior acquisitions.

“EBITDA” is defined as net income before interest expense, income tax expense (benefit), depreciation expense and intangible amortization expense. We use EBITDA particularly to assess the strength of our investment management business. We believe this measure is important because it allows management and investors to better assess our investment management performance in relation to our core operating earnings by excluding certain non-cash items and the volatility that is associated with certain discrete items that are unrelated to our core business.

“Total revenue” is defined as net interest income and total non-interest income, excluding gains and losses on the sale and call of debt securities. We believe adjustments made to our operating revenue allow management and investors to better assess our core operating revenue by removing the volatility that is associated with certain items that are unrelated to our core business.

“Pre-tax, pre-provision net revenue” is defined as net interest income and non-interest income, excluding gains and losses on the sale and call of debt securities and total non-interest expense. We believe this measure is important because it allows management and investors to better assess our performance in relation to our core operating revenue, excluding the volatility that is associated with provision for credit losses and changes in our tax rates and other items that are unrelated to our core business.

“Efficiency ratio” is defined as total non-interest expense divided by our total revenue. We believe this measure allows management and investors to better assess our operating expenses in relation to our core operating revenue, particularly at the Bank.

TRISTATE CAPITAL HOLDINGS, INC.

NON-GAAP FINANCIAL MEASURES (UNAUDITED)

 
 

 

December 31,

September 30,

December 31,

(Dollars in thousands, except per share data)

2021

2021

2020

Tangible common equity and tangible book value per common share:

 

 

 

Common shareholders' equity

$

655,178

$

633,595

$

580,002

Less: goodwill and intangible assets

 

62,000

 

62,478

 

63,911

Tangible common equity

$

593,178

$

571,117

$

516,091

Common shares outstanding

 

33,263,498

 

33,154,343

 

32,620,150

Tangible book value per common share

$

17.83

$

17.23

$

15.82

INVESTMENT MANAGEMENT SEGMENT

NON-GAAP FINANCIAL MEASURES (UNAUDITED)

 

 

Three Months Ended

 

Years Ended

 

December 31,

September 30,

December 31,

 

December 31,

December 31,

(Dollars in thousands)

 

2021

 

 

2021

 

 

2020

 

 

2021

2020

Investment Management EBITDA:

 

 

 

 

 

 

Net income

$

(112

)

$

1,677

 

$

1,167

 

 

$

3,786

$

2,798

Interest expense

 

 

 

 

 

 

 

 

 

Income taxes expense (benefit)

 

916

 

 

(412

)

 

(74

)

 

 

1,100

 

308

Depreciation expense

 

109

 

 

105

 

 

104

 

 

 

421

 

423

Intangible amortization expense

 

478

 

 

477

 

 

478

 

 

 

1,911

 

1,944

EBITDA

$

1,391

 

$

1,847

 

$

1,675

 

 

$

7,218

$

5,473

TRISTATE CAPITAL HOLDINGS, INC.

NON-GAAP FINANCIAL MEASURES (UNAUDITED)

 

 

Three Months Ended

 

Years Ended

 

December 31,

September 30,

December 31,

 

December 31,

December 31,

(Dollars in thousands)

2021

2021

2020

 

2021

2020

Total revenue and pre-tax, pre-provision net revenue:

 

 

 

 

 

 

Net interest income

$

51,124

$

46,667

$

36,064

 

$

179,359

$

137,944

Total non-interest income

 

15,921

 

14,230

 

14,003

 

 

58,646

 

57,205

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

 

112

 

33

 

133

 

 

242

 

3,948

Total revenue

 

66,933

 

60,864

 

49,934

 

 

237,763

 

191,201

Less: total non-interest expense

 

42,783

 

38,008

 

34,436

 

 

146,494

 

123,103

Pre-tax, pre-provision net revenue

$

24,150

$

22,856

$

15,498

 

$

91,269

$

68,098

BANK SEGMENT

NON-GAAP FINANCIAL MEASURES (UNAUDITED)

 

 

Three Months Ended

 

Years Ended

 

December 31,

September 30,

December 31,

 

December 31,

December 31,

(Dollars in thousands)

 

2021

 

 

2021

 

 

2020

 

 

 

2021

 

 

2020

 

Bank total revenue:

 

 

 

 

 

 

Net interest income

$

52,785

 

$

48,114

 

$

37,515

 

 

$

185,408

 

$

141,756

 

Total non-interest income

 

6,370

 

 

4,801

 

 

5,403

 

 

 

21,183

 

 

25,112

 

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

 

112

 

 

33

 

 

133

 

 

 

242

 

 

3,948

 

Bank total revenue

$

59,043

 

$

52,882

 

$

42,785

 

 

$

206,349

 

$

162,920

 

 

 

 

 

 

 

 

Bank efficiency ratio:

 

 

 

 

 

 

Total non-interest expense (numerator)

$

30,170

 

$

28,975

 

$

26,078

 

 

$

107,373

 

$

90,541

 

Bank total revenue (denominator)

$

59,043

 

$

52,882

 

$

42,785

 

 

$

206,349

 

$

162,920

 

Bank efficiency ratio

 

51.10

%

 

54.79

%

 

60.95

%

 

 

52.03

%

 

55.57

%

 

TRISTATE CAPITAL HOLDINGS, INC.

NON-GAAP FINANCIAL MEASURES (UNAUDITED)

 

Fourth Quarter 2021 (Dollars in thousands, except per share amounts)

Income Before

Taxes (GAAP)

Non-recurring

non-interest

expense*

Income Before

Taxes, excluding

non-recurring items

(non-GAAP)

Estimated effect

of non-recurring

item on Income

Tax Expense**

Net Impact of

Non-recurring

expense and

effect on Income

Tax Expense**

Net impact of

non-recurring

expense and

taxes on diluted

EPS

$

23,774

$

2,665

$

26,439

$

560

$

2,105

$

0.06

 

 

 

 

 

 

*Non-recurring expenses incurred in connection with the pending transaction announced in October (agreement to be acquired by Raymond James)

**Tax impact estimated using 21% federal tax rate.

 

Contacts

MEDIA CONTACT

Jack Horner

267-932-8760, ext. 302

412-600-2295 (mobile)

jack@hornercom.com



INVESTOR RELATIONS CONTACT

Lambert

Jeff Schoenborn and Kate Croft

888-609-8351

TSC@lambert.com

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