-- 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220126005784/en/
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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