UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________

FORM 8-K
_________

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 18, 2018

_________
TRISTATE CAPITAL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
_________
Pennsylvania
 
001-35913
 
20-4929029
(State or other jurisdiction of incorporation or organization)
 
(Commission File Number)
 
(I.R.S. Employer Identification No.)
One Oxford Centre
301 Grant Street, Suite 2700
Pittsburgh, Pennsylvania 15219
(Address of principal executive offices)
(Zip Code)
( 412) 304-0304
(Registrant’s telephone number, including area code)
_________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Exchange Act of 1934 (§ 240.12b-2 of this chapter).
    
Emerging growth company
ý

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      ý

1


Item 2.02. Results of Operations and Financial Condition.
On July 18, 2018 , TriState Capital Holdings, Inc. issued a press release which disclosed results of operations for the three and six months ended June 30, 2018 . A copy of the press release is included as Exhibit 99 to this report.
The information in this report, including the exhibit attached hereto, is furnished solely pursuant to Item 2.02 of this Form 8-K and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.
Exhibit No.      Description
99     Press release dated April 18, 2018, filed herewith, for item 2.02.


2


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


TRISTATE CAPITAL HOLDINGS, INC.
 
 
By
/s/ James F. Getz
 
James F. Getz
 
Chairman, President and Chief Executive Officer


Date: July 18, 2018


3
EXHIBIT 99


FOR IMMEDIATE RELEASE                            





TRISTATE CAPITAL REPORTS RECORD REVENUE, PRE-TAX INCOME AND EARNINGS FOR THE
SECOND QUARTER OF 2018

-- Results included double-digit growth in pre-tax income, earnings, loans, deposits and AUM --

PITTSBURGH, July 18, 2018 - TriState Capital Holdings, Inc. (NASDAQ: TSC) reported record pre-tax income and earnings resulting from increasing revenues and operating leverage in the three months ended June 30, 2018 , as loans, deposits and assets under management (AUM) grew at double-digit rates in the second quarter.

The parent company of TriState Capital Bank and Chartwell Investment Partners grew second quarter 2018 diluted earnings per share (EPS) to $0.48 , including a net benefit of $0.08 primarily from a tax credit investment. EPS grew by 65.5% from $0.29 in the second quarter of 2017 and by 33.3% from $0.36 in the first quarter of 2018 . Pre-tax income grew to a record $15.6 million , increasing 36.0% from the prior year period and 16.9% from the linked quarter.

“The company’s second quarter results, including record pre-tax income, are the product of effective and timely execution of our growth strategy across our commercial banking, private banking, and investment management businesses,” Chairman and Chief Executive Officer James F. Getz said. “Importantly, all three of these business lines produced healthy organic growth, as TriState Capital Bank continued to expand loan and deposit balances at rates in excess of 20% and Chartwell delivered significant growth in assets under management. We fully expect our momentum to continue through the end of 2018 and beyond, as we believe TriState Capital has the strategy, distribution, products, talent and capital necessary to maintain a high level of performance for our clients and investors over the long term. We are doing well by helping our clients do well.”

Net income available to common stockholders was $13.8 million in the second quarter of 2018 , increasing by 64.2% from $8.4 million in the prior year period and 33.0% from $10.4 million in the first quarter of 2018 .

SECOND QUARTER 2018 HIGHLIGHTS
•
Total assets surpassed the $5 billion milestone, growing to $5.23 billion at period end, up 21.5% from one year prior and 6.7% during the quarter
•
Average loans grew to a record $4.38 billion , up 21.0% from the same period last year and 5.1% from the linked quarter
•
Average deposits grew to a record $4.10 billion , up 22.7% from the same period last year and 3.7% from the linked quarter
•
Chartwell AUM at period end of $9.55 billion grew by 19.4% compared to one year prior, or 6.0% organically, excluding AUM acquired in April 2018

REVENUE GROWTH
TriState Capital’s record total revenue of $41.3 million in the second quarter 2018 grew 23.2% from $33.5 million in the same period last year and 10.6% from $37.3 million in the first quarter of 2018 .

Net interest income (NII) for the second quarter 2018 grew $6.8 million , or 30.7% , year-over-year to a record $28.8 million . Compared to the linked quarter, NII increased by $2.5 million , or 9.6% , from $26.3 million . Net interest margin grew to 2.38% in the second quarter of 2018 , increasing by 15 basis points from the prior year quarter and 3 basis points from the linked quarter, resulting from loan yield expansion and lower-cost deposits gathered through TriState Capital’s liquidity and treasury management products and services.

Non-interest income totaled $12.5 million in the second quarter 2018 , compared to $11.7 million in the second quarter of 2017 and $11.1 million in the linked quarter. TriState Capital’s non-interest income is largely made up of Chartwell investment

1
EXHIBIT 99

management fees, which grew to $9.7 million in the second quarter of 2018 , increasing 6.1% from $9.1 million in the second quarter of 2017 and 8.7% from $8.9 million in the first quarter of 2018 . Other non-interest income was $2.8 million in the second quarter of 2018 , compared to $2.3 million in the year-ago quarter and $2.2 million in the linked quarter, primarily reflecting borrower-facing interest rate swap activity.

OPERATING LEVERAGE
TriState Capital Bank’s efficiency ratio for the first half of 2018 improved to 52.38% , down 409 basis points from 56.47% in the comparable year-ago period, as investments made in talent and building scale continue to increasingly drive revenue growth while building incremental operating leverage.

Second quarter 2018 non-interest expense of $25.3 million included non-recurring expenses of approximately $0.01 per share incurred in connection with the previously disclosed May 2018 secondary public offering of TriState Capital common stock. Non-interest expense totaled $21.8 million in the year-ago period and $23.9 million in the first quarter of 2018 .

The company regularly evaluates opportunities to prudently manage income tax expense, including through high-quality tax credit investments that meet TriState Capital Bank’s underwriting criteria. Accordingly, TriState Capital’s effective tax rate was 6.2% in the second quarter of 2018 , reflecting a tax credit investment that will reduce the company’s full-year 2018 tax liability. The company’s effective rate is currently expected to be approximately 14% for full-year 2018 .

Net income available to common stockholders and EPS in the second quarter of 2018 reflect $762,000 payable for the company’s first quarterly cash dividend on its Series A Non-Cumulative Perpetual Preferred Stock, declared in April.

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

Average loans totaled a record $4.38 billion in the second quarter of 2018 , growing 21.0% from $3.62 billion in the same period last year and 5.1% from $4.17 billion in the linked quarter.

Loans at June 30, 2018 totaled $4.55 billion , growing by $781.6 million , or 20.7% , from balances at June 30, 2017 and $250.2 million , or 5.8% , from March 31 , 2018 . Private banking loans totaled $2.49 billion at June 30, 2018 , increasing by $520.0 million , or 26.4% , from one year prior and $146.1 million , or 6.2% , from the end of the linked quarter. Commercial loans totaled $2.06 billion at June 30, 2018 , increasing by $261.6 million , or 14.5% , from the end of the year-ago quarter and $104.0 million , or 5.3% , from the end of the linked quarter.

Deposits at June 30, 2018 totaled $4.44 billion , growing by $911.3 million , or 25.8% , from June 30, 2017 and $342.2 million , or 8.3% , from March 31, 2018 .

ASSET SENSITIVITY
TriState Capital continues to manage an asset-sensitive balance sheet. At June 30, 2018 , 92% of the company’s loan portfolio was floating rate and 24% of deposits were fixed-rate certificates of deposit. This positioning provides significant flexibility to manage interest rate risk in changing markets.

The bank’s yield on total loans averaged 4.09% during the second quarter of 2018 , compared to 3.35% in the same period last year and 3.80% in the linked quarter.

TriState Capital’s total cost of funds for all deposits and interest-bearing liabilities averaged 1.67% during the second quarter of 2018 , compared to 1.08% in the same period last year and 1.43% in the linked quarter. The bank’s cost of total deposits averaged 1.63% during the second quarter of 2018 , compared to 1.02% in the same period last year and 1.38% in the linked quarter.


2
EXHIBIT 99

INVESTMENT MANAGEMENT
For the quarter ended June 30, 2018 , Chartwell grew total AUM to $9.55 billion , increasing 19.4% from $8.00 billion at June 30, 2017 and 14.5% from $8.34 billion at March 31, 2018 .

Excluding $1.07 billion in client AUM acquired from Columbia Partners, L.L.C. on April 6, 2018, Chartwell’s new business and new flows from existing accounts of $372 million and market appreciation of $228 million more than offset outflows of $457 million in the second quarter of 2018 .

Chartwell’s weighted average fee rate was 0.41% at June 30, 2018 . Investment management fee revenue grew to $9.7 million in the second quarter of 2018 , increasing 6.1% from $9.1 million in the second quarter of 2017 and 8.7% from $8.9 million in the first quarter of 2018 . Approximately $516,000 of Chartwell’s second quarter revenue is attributed to client AUM acquired in April 2018.

ASSET QUALITY
TriState Capital maintained strong asset quality metrics in the second quarter of 2018 , reflecting the company’s disciplined credit culture and the expansion of its private banking non-purpose margin loans secured by marketable securities. Private banking loans comprised 54.6% of the total loan portfolio at June 30, 2018 , while commercial real estate loans and commercial and industrial loans comprised 29.1% and 16.3% of total loans, respectively.

Non-performing assets (NPAs) declined to $6.0 million , or 0.11% of total assets, at June 30, 2018 , compared to $11.7 million , or 0.27% , at June 30, 2017 and $6.1 million , or 0.12% , at March 31, 2018 .

Non-performing loans (NPLs) declined to $2.4 million , or 0.05% of total loans, at June 30, 2018 , compared to $7.8 million , or 0.21% , at June 30, 2017 and $2.5 million , or 0.06% , March 31, 2018 .

Adverse-rated credits were $30.0 million , or 0.66% of total loans, at June 30, 2018 , compared to $33.8 million , or 0.90% , at June 30, 2017 and $29.0 million , or 0.67% , at March 31, 2018 .

The company recorded net recoveries of $88,000 in the second quarter of 2018 , compared to net charge-offs of $733,000 , or 0.08% of average total loans, in the year-ago quarter and net recoveries of $206,000 in the linked quarter.

TriState Capital’s provision for loan loss expense was $415,000 in the second quarter of 2018 , compared to $516,000 in the second quarter of 2017 and $195,000 for the first quarter of 2018 .

The company’s allowance for loan losses (ALL) represented 0.34% of total loans at June 30, 2018 , compared to 0.42% at June 30, 2017 and 0.34% at March 31, 2018 , reflecting its declining NPLs as well as the lower levels of provision required by the low risk profile of the bank’s growing proportion of private banking loans in its portfolio.

CAPITAL STRENGTH AND FLEXIBILITY
As of June 30, 2018 , TriState Capital Holdings reported regulatory capital ratios of 12.66% for total risk-based capital, 12.06% for tier 1 risk-based capital, 10.94% for common equity tier 1 risk-based capital, and 7.68% for tier 1 leverage.

In January 2018 , TriState Capital’s Board of Directors approved share repurchases of up to $5 million , which may be made at the discretion of management from time to time and of which $2.5 million remains available. During the six months ended June 30, 2018 , the company repurchased a total of 97,031 shares for approximately $2.5 million at an average cost of $25.37 per share.

CONFERENCE CALL
As previously announced, TriState Capital will hold a conference call tomorrow to review its financial results and operating performance.


3
EXHIBIT 99

The live conference call on July 19 will be held at 8:30 a.m. ET. Telephone participants may avoid any delays by pre-registering for the call using the link http://dpregister.com/ 10121950 to receive a special dial-in number and PIN. Telephone participants who are unable to pre-register should dial in at least 10 minutes prior to the call and request the “TriState Capital earnings call.” The call may be accessed by dialing 888-339-0757 from the United States, 855-669-9657 from Canada, or 412-902-4194 from other international locations.

A replay of the call will be available approximately one hour after the end of the conference through July 26 . The replay may be accessed by dialing 877-344-7529 from the United States, 855-669-9658 from Canada, or 412-317-0088 from other international locations, and entering the conference number 10121950 .

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 $5.1 billion in assets, as of June 30, 2018 , and serves middle-market commercial customers through regional representative offices in Pittsburgh, Philadelphia, Cleveland, Edison, N.J., and New York City, as well as high-net-worth individuals nationwide through its national referral network of financial intermediaries. Its Chartwell Investment Partners subsidiary had $9.6 billion in assets under management, as of June 30, 2018 , and serves as the advisor to The Berwyn Funds and Chartwell Mutual Funds. For more information, please visit http://investors.tristatecapitalbank.com .

FORWARD LOOKING STATEMENTS
This press release includes “forward-looking” statements related to TriState Capital that can generally be identified as describing TriState Capital’s future plans, objectives or goals. Such forward-looking statements are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those currently anticipated. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. For further information about the factors that could affect TriState Capital’s future results, please see the company’s most-recent annual and quarterly reports filed on Form 10-K and Form 10-Q.

NON-GAAP FINANCIAL DISCLOSURES
This news release contains 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 and efficiency ratio. Although TriState Capital believes non-GAAP financial measures provide a greater understanding of its business, these measures are not necessarily comparable to similar measures that may be presented by other companies. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP. Where non-GAAP disclosures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found within this news release and accompanying tables.

###

MEDIA CONTACT
Jack Horner
267-932-8760, ext. 302
412-600-2295 (mobile)
jack@hornercom.com

INVESTOR RELATIONS CONTACT
Casteel Schoenborn
Jeff Schoenborn and Kate Croft
888-609-8351
TSC@csirfirm.com


4
EXHIBIT 99

TRISTATE CAPITAL HOLDINGS, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
 
As of and For the 
 Three Months Ended
 
As of and For the 
 Six Months Ended
 
June 30,
March 31,
June 30,
 
June 30,
June 30,
(Dollars in thousands)
2018
2018
2017
 
2018
2017
Period-end balance sheet data:
 
 
 
 
 
 
Cash and cash equivalents
$
164,367

$
145,033

$
119,715

 
$
164,367

$
119,715

Total investment securities
288,674

245,350

221,409

 
288,674

221,409

Loans held-for-investment
4,552,928

4,302,766

3,771,312

 
4,552,928

3,771,312

Allowance for loan losses
(15,321
)
(14,818
)
(15,968
)
 
(15,321
)
(15,968
)
Loans held-for-investment, net
4,537,607

4,287,948

3,755,344

 
4,537,607

3,755,344

Goodwill and other intangibles, net
68,867

64,897

66,283

 
68,867

66,283

Other assets
174,421

163,525

145,084

 
174,421

145,084

Total assets
$
5,233,936

$
4,906,753

$
4,307,835

 
$
5,233,936

$
4,307,835

 
 
 
 
 
 
 
Deposits
$
4,441,202

$
4,098,955

$
3,529,868

 
$
4,441,202

$
3,529,868

Borrowings, net
264,814

304,764

363,612

 
264,814

363,612

Other liabilities
74,026

62,805

46,716

 
74,026

46,716

Total liabilities
4,780,042

4,466,524

3,940,196

 
4,780,042

3,940,196

 
 
 
 
 
 
 
Preferred stock
38,432

38,440

—

 
38,432

—

Common shareholders' equity
415,462

401,789

367,639

 
415,462

367,639

Total shareholders' equity
453,894

440,229

367,639

 
453,894

367,639

 
 
 
 
 
 
 
Total liabilities and shareholders' equity
$
5,233,936

$
4,906,753

$
4,307,835

 
$
5,233,936

$
4,307,835

 
 
 
 
 
 
 
Income statement data:
 
 
 
 
 
 
Interest income
$
47,784

$
41,416

$
32,115

 
$
89,200

$
60,852

Interest expense
18,993

15,154

10,082

 
34,147

17,903

Net interest income
28,791

26,262

22,033

 
55,053

42,949

Provision for loan losses
415

195

516

 
610

759

Net interest income after provision for loan losses
28,376

26,067

21,517

 
54,443

42,190

Non-interest income:
 
 
 
 
 
 
Investment management fees
9,686

8,908

9,130

 
18,594

18,470

Net gain (loss) on the sale and call of investment securities
1

5

241

 
6

239

Other non-interest income
2,815

2,176

2,341

 
4,991

4,412

Total non-interest income
12,502

11,089

11,712

 
23,591

23,121

Non-interest expense:
 
 
 
 
 
 
Intangible amortization expense
502

461

462

 
963

925

Other non-interest expense
24,816

23,389

21,322

 
48,205

42,017

Total non-interest expense
25,318

23,850

21,784

 
49,168

42,942

Income before tax
15,560

13,306

11,445

 
28,866

22,369

Income tax expense
968

2,905

3,024

 
3,873

6,456

Net income
$
14,592

$
10,401

$
8,421

 
$
24,993

$
15,913

Preferred stock dividends on Series A
762

—

—

 
762

—

Net income available to common shareholders
$
13,830

$
10,401

$
8,421

 
$
24,231

$
15,913



5
EXHIBIT 99

TRISTATE CAPITAL HOLDINGS, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
 
As of and For the 
 Three Months Ended
 
As of and For the 
 Six Months Ended
 
June 30,
March 31,
June 30,
 
June 30,
June 30,
(Dollars in thousands, except per share data)
2018
2018
2017
 
2018
2017
Per share and share data:
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
Basic
$
0.50

$
0.38

$
0.31

 
$
0.88

$
0.58

Diluted
$
0.48

$
0.36

$
0.29

 
$
0.84

$
0.55

Book value per common share
$
14.35

$
13.87

$
12.83

 
$
14.35

$
12.83

Tangible book value per common share (1)
$
11.97

$
11.63

$
10.51

 
$
11.97

$
10.51

Common shares outstanding, at end of period
28,947,883

28,976,214

28,665,726

 
28,947,883

28,665,726

Weighted average common shares outstanding:
 
 
 
 
 
 
Basic
27,628,120

27,594,691

27,601,702

 
27,611,498

27,614,423

Diluted
28,848,969

28,711,106

28,785,625

 
28,786,188

28,752,917

 
 
 
 
 
 
 
Performance ratios:
 
 
 
 
 
 
Return on average assets (2)
1.09
 %
0.89
 %
0.81
%
 
0.99
 %
0.79
%
Return on average common equity (2)
13.57
 %
10.65
 %
9.27
%
 
12.14
 %
8.90
%
Net interest margin (2) (3)
2.38
 %
2.35
 %
2.23
%
 
2.36
 %
2.23
%
Total revenue (1)
$
41,292

$
37,346

$
33,504

 
$
78,638

$
65,831

Bank efficiency ratio (1)
50.49
 %
54.48
 %
55.03
%
 
52.38
 %
56.47
%
Non-interest expense to average assets (2)
2.00
 %
2.03
 %
2.10
%
 
2.02
 %
2.12
%
 
 
 
 
 
 
 
Asset quality:
 
 
 
 
 
 
Non-performing loans
$
2,437

$
2,477

$
7,830

 
$
2,437

$
7,830

Non-performing assets
$
6,013

$
6,053

$
11,701

 
$
6,013

$
11,701

Other real estate owned
$
3,576

$
3,576

$
3,871

 
$
3,576

$
3,871

Non-performing assets to total assets
0.11
 %
0.12
 %
0.27
%
 
0.11
 %
0.27
%
Non-performing loans to total loans
0.05
 %
0.06
 %
0.21
%
 
0.05
 %
0.21
%
Allowance for loan losses to loans
0.34
 %
0.34
 %
0.42
%
 
0.34
 %
0.42
%
Allowance for loan losses to non-performing loans
628.68
 %
598.22
 %
203.93
%
 
628.68
 %
203.93
%
Net charge-offs (recoveries)
$
(88
)
$
(206
)
$
733

 
$
(294
)
$
3,553

Net charge-offs (recoveries) to average total loans (2)
(0.01
)%
(0.02
)%
0.08
%
 
(0.01
)%
0.20
%
 
 
 
 
 
 
 
Capital ratios:
 
 
 
 
 
 
Tier 1 leverage ratio
7.68
 %
7.96
 %
7.45
%
 
7.68
 %
7.45
%
Common equity tier 1 risk-based capital ratio
10.94
 %
11.09
 %
11.21
%
 
10.94
 %
11.21
%
Tier 1 risk-based capital ratio
12.06
 %
12.25
 %
11.21
%
 
12.06
 %
11.21
%
Total risk-based capital ratio
12.66
 %
12.84
 %
12.14
%
 
12.66
 %
12.14
%
 
 
 
 
 
 
 
Investment Management Segment:
 
 
 
 
 
 
Assets under management
$
9,554,000

$
8,344,000

$
8,003,000

 
$
9,554,000

$
8,003,000

EBITDA (1)
$
1,627

$
1,515

$
1,692

 
$
3,143

$
4,167


(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.

6
EXHIBIT 99

TRISTATE CAPITAL HOLDINGS, INC.
AVERAGES AND YIELDS (UNAUDITED)
 
Three Months Ended
 
June 30, 2018
 
March 31, 2018
 
June 30, 2017
(Dollars in thousands)
Average
Balance
Interest Income (1) /
Expense
Average
Yield/
Rate
 
Average
Balance
Interest Income (1) /
Expense
Average
Yield/
Rate
 
Average
Balance
Interest Income (1) /
Expense
Average
Yield/
Rate
Assets
 
 
 
 
 
 
 
 
 
 
 
Interest-earning deposits
$
186,009

$
842

1.82
%
 
$
150,121

$
579

1.56
%
 
$
118,916

$
323

1.09
%
Federal funds sold
6,650

28

1.69
%
 
7,042

26

1.50
%
 
6,225

15

0.97
%
Debt securities available-for-sale
181,718

1,356

2.99
%
 
142,323

958

2.73
%
 
143,967

740

2.06
%
Debt securities held-to-maturity
72,166

678

3.77
%
 
58,953

595

4.09
%
 
61,359

639

4.18
%
Equity securities
8,620

64

2.98
%
 
8,627

66

3.10
%
 
8,504

68

3.21
%
FHLB stock
19,061

230

4.84
%
 
14,195

194

5.54
%
 
16,449

148

3.61
%
Total loans
4,378,514

44,614

4.09
%
 
4,165,180

39,027

3.80
%
 
3,619,251

30,242

3.35
%
Total interest-earning assets
4,852,738

47,812

3.95
%
 
4,546,441

41,445

3.70
%
 
3,974,671

32,175

3.25
%
Other assets
213,320

 
 
 
208,679

 
 
 
188,588

 
 
Total assets
$
5,066,058

 
 
 
$
4,755,120

 
 
 
$
4,163,259

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Shareholders' Equity
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing checking accounts
$
604,324

$
2,576

1.71
%
 
$
464,247

$
1,621

1.42
%
 
$
304,973

$
759

1.00
%
Money market deposit accounts
2,319,320

9,722

1.68
%
 
2,281,606

8,113

1.44
%
 
1,914,429

5,150

1.08
%
Certificates of deposit
928,210

4,398

1.90
%
 
977,689

3,667

1.52
%
 
924,110

2,587

1.12
%
Borrowings:
 
 
 
 
 
 
 
 
 
 
 
FHLB borrowings
418,187

1,743

1.67
%
 
310,000

1,147

1.50
%
 
379,890

1,016

1.07
%
Line of credit borrowings
—

—

—
%
 
5,373

52

3.92
%
 
1,527

16

4.20
%
Subordinated notes payable, net
34,781

554

6.39
%
 
34,731

554

6.47
%
 
34,579

554

6.43
%
Total interest-bearing liabilities
4,304,822

18,993

1.77
%
 
4,073,646

15,154

1.51
%
 
3,559,508

10,082

1.14
%
Noninterest-bearing deposits
245,412

 
 
 
228,257

 
 
 
194,957

 
 
Other liabilities
68,491

 
 
 
56,655

 
 
 
44,404

 
 
Shareholders' equity
447,333

 
 
 
396,562

 
 
 
364,390

 
 
Total liabilities and shareholders' equity
$
5,066,058

 
 
 
$
4,755,120

 
 
 
$
4,163,259

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income (1)
 
$
28,819

 
 
 
$
26,291

 
 
 
$
22,093

 
Net interest spread
 
 
2.18
%
 
 
 
2.19
%
 
 
 
2.11
%
Net interest margin  (1)
 
 
2.38
%
 
 
 
2.35
%
 
 
 
2.23
%

(1)  
Interest income and net interest margin are calculated on a fully taxable equivalent basis.


7
EXHIBIT 99

TRISTATE CAPITAL HOLDINGS, INC.
AVERAGES AND YIELDS (UNAUDITED)
 
Six Months Ended June 30,
 
2018
 
2017
(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
$
168,164

$
1,421

1.70
%
 
$
116,824

$
561

0.97
%
Federal funds sold
6,845

54

1.59
%
 
6,325

25

0.80
%
Debt securities available-for-sale
162,129

2,314

2.88
%
 
151,778

1,518

2.02
%
Debt securities held-to-maturity
65,596

1,273

3.91
%
 
57,994

1,214

4.22
%
Equity securities
8,624

130

3.04
%
 
8,456

144

3.43
%
FHLB stock
16,641

424

5.14
%
 
14,424

250

3.50
%
Total loans
4,272,437

83,641

3.95
%
 
3,534,514

57,261

3.27
%
Total interest-earning assets
4,700,436

89,257

3.83
%
 
3,890,315

60,973

3.16
%
Other assets
211,012

 
 
 
186,982

 
 
Total assets
$
4,911,448

 
 
 
$
4,077,297

 
 
 
 
 
 
 
 
 
 
Liabilities and Shareholders' Equity
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
Interest-bearing checking accounts
$
534,673

$
4,198

1.58
%
 
$
261,579

$
1,121

0.86
%
Money market deposit accounts
2,300,567

17,834

1.56
%
 
1,915,426

9,248

0.97
%
Certificates of deposit
952,813

8,065

1.71
%
 
929,482

4,840

1.05
%
Borrowings:
 
 
 
 
 
 
 
FHLB borrowings
364,392

2,890

1.60
%
 
325,359

1,570

0.97
%
Line of credit borrowings
2,672

52

3.92
%
 
768

16

4.20
%
Subordinated notes payable, net
34,756

1,108

6.43
%
 
34,553

1,108

6.47
%
Total interest-bearing liabilities
4,189,873

34,147

1.64
%
 
3,467,167

17,903

1.04
%
Noninterest-bearing deposits
236,882

 
 
 
206,416

 
 
Other liabilities
62,605

 
 
 
43,188

 
 
Shareholders' equity
422,088

 
 
 
360,526

 
 
Total liabilities and shareholders' equity
$
4,911,448

 
 
 
$
4,077,297

 
 
 
 
 
 
 
 
 
 
Net interest income (1)
 
$
55,110

 
 
 
$
43,070

 
Net interest spread
 
 
2.19
%
 
 
 
2.12
%
Net interest margin  (1)
 
 
2.36
%
 
 
 
2.23
%

(1)  
Interest income and net interest margin are calculated on a fully taxable equivalent basis.


TRISTATE CAPITAL HOLDINGS, INC.
LOAN COMPOSITION (UNAUDITED)
 
June 30, 2018
 
March 31, 2018
 
June 30, 2017
(Dollars in thousands)
Loan
Balance
Percent of
Total Loans
 
Loan
Balance
Percent of
Total Loans
 
Loan
Balance
Percent of
Total Loans
Private banking loans
$
2,488,162

54.6
%
 
$
2,342,024

54.4
%
 
$
1,968,139

52.2
%
Middle-market banking loans:
 
 
 
 
 
 
 
 
Commercial and industrial
741,901

16.3
%
 
683,417

15.9
%
 
639,808

17.0
%
Commercial real estate
1,322,865

29.1
%
 
1,277,325

29.7
%
 
1,163,365

30.8
%
Total middle-market banking loans
2,064,766

45.4
%
 
1,960,742

45.6
%
 
1,803,173

47.8
%
Loans held-for-investment
$
4,552,928

100.0
%
 
$
4,302,766

100.0
%
 
$
3,771,312

100.0
%


8
EXHIBIT 99

TRISTATE CAPITAL HOLDINGS, INC.
STATEMENT OF INCOME BY REPORTABLE SEGMENT (UNAUDITED)
 
Three Months Ended June 30, 2018
 
Three Months Ended June 30, 2017
(Dollars in thousands)
Bank
Investment
Management
Parent
and Other
Consolidated
 
Bank
Investment
Management
Parent
and Other
Consolidated
Income statement data:
 
 
 
Interest income
$
47,720

$
—

$
64

$
47,784

 
$
32,047

$
—

$
68

$
32,115

Interest expense
18,440

—

553

18,993

 
9,515

—

567

10,082

Net interest income (loss)
29,280

—

(489
)
28,791

 
22,532

—

(499
)
22,033

Provision for loan losses
415

—

—

415

 
516

—

—

516

Net interest income (loss) after provision for loan losses
28,865

—

(489
)
28,376

 
22,016

—

(499
)
21,517

Non-interest income:
 
 
 
 
 
 
 
 
 
Investment management fees
—

9,743

(57
)
9,686

 
—

9,182

(52
)
9,130

Net gain on the sale and call of debt securities
1

—

—

1

 
241

—

—

241

Other non-interest income
2,849

1

(35
)
2,815

 
2,341

—

—

2,341

Total non-interest income
2,850

9,744

(92
)
12,502

 
2,582

9,182

(52
)
11,712

Non-interest expense:
 
 
 
 
 
 
 
 
 
Intangible amortization expense
—

502

—

502

 
—

462

—

462

Other non-interest expense
16,223

8,242

351

24,816

 
13,688

7,612

22

21,322

Total non-interest expense
16,223

8,744

351

25,318

 
13,688

8,074

22

21,784

Income (loss) before tax
15,492

1,000

(932
)
15,560

 
10,910

1,108

(573
)
11,445

Income tax expense (benefit)
955

277

(264
)
968

 
2,819

425

(220
)
3,024

Net income (loss)
$
14,537

$
723

$
(668
)
$
14,592

 
$
8,091

$
683

$
(353
)
$
8,421


TRISTATE CAPITAL HOLDINGS, INC.
STATEMENT OF INCOME BY REPORTABLE SEGMENT (UNAUDITED)
 
Six Months Ended June 30, 2018
 
Six Months Ended June 30, 2017
(Dollars in thousands)
Bank
Investment
Management
Parent
and Other
Consolidated
 
Bank
Investment
Management
Parent
and Other
Consolidated
Income statement data:
(unaudited)
 
(unaudited)
Interest income
$
89,071

$
—

$
129

$
89,200

 
$
60,708

$
—

$
144

$
60,852

Interest expense
32,990

—

1,157

34,147

 
16,785

—

1,118

17,903

Net interest income (loss)
56,081

—

(1,028
)
55,053

 
43,923

—

(974
)
42,949

Provision for loan losses
610

—

—

610

 
759

—

—

759

Net interest income (loss) after provision for loan losses
55,471

—

(1,028
)
54,443

 
43,164

—

(974
)
42,190

Non-interest income:
 
 
 
 
 
 
 
 
 
Investment management fees
—

18,707

(113
)
18,594

 
—

18,578

(108
)
18,470

Net gain on the sale and call of debt securities
6

—

—

6

 
239

—

—

239

Other non-interest income
5,026

1

(36
)
4,991

 
4,411

1

—

4,412

Total non-interest income
5,032

18,708

(149
)
23,591

 
4,650

18,579

(108
)
23,121

Non-interest expense:
 
 
 
 
 
 
 
 
 
Intangible amortization expense
—

963

—

963

 
—

925

—

925

Other non-interest expense
32,010

15,815

380

48,205

 
27,293

14,651

73

42,017

Total non-interest expense
32,010

16,778

380

49,168

 
27,293

15,576

73

42,942

Income (loss) before tax
28,493

1,930

(1,557
)
28,866

 
20,521

3,003

(1,155
)
22,369

Income tax expense (benefit)
3,809

504

(440
)
3,873

 
5,747

1,152

(443
)
6,456

Net income (loss)
$
24,684

$
1,426

$
(1,117
)
$
24,993

 
$
14,774

$
1,851

$
(712
)
$
15,913



9
EXHIBIT 99

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,” “adjusted EBITDA,” “total revenue,” and “efficiency ratio.” Although we believe these non-GAAP financial measures provide a greater understanding of our business, these measures are not necessarily comparable to similar measures that may be presented by other companies.

“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 to better understand and assess changes from period to period in common shareholders’ equity exclusive of changes in intangible assets. Intangible assets are created when we buy businesses which 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.

“EBITDA” and “Adjusted EBITDA” are defined as net income before interest expense, income taxes, depreciation and amortization expenses, adjusted for acquisition related items. We use adjusted 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, excluding certain non-cash items and the volatility that is associated with certain one-time items and other discrete items that are unrelated to our core business.

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

“Efficiency ratio” is defined as non-interest expense, excluding acquisition related items and intangible amortization expense, where applicable, divided by our total revenue. We believe this measure , particularly at the Bank, allows management and investors to better assess our operating expenses in relation to our core operating revenue by removing the volatility that is associated with certain one-time items and other discrete items that are unrelated to our core business.




TRISTATE CAPITAL HOLDINGS, INC.
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
 
June 30,
March 31,
June 30,
(Dollars in thousands, except per share data)
2018
2018
2017
Tangible book value per common share:
 
 
 
Common shareholders' equity
$
415,462

$
401,789

$
367,639

Less: intangible assets
68,867

64,897

66,283

Tangible common equity
$
346,595

$
336,892

$
301,356

Common shares outstanding
28,947,883

28,976,214

28,665,726

Tangible book value per common share
$
11.97

$
11.63

$
10.51




10
EXHIBIT 99

INVESTMENT MANAGEMENT SEGMENT
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
 
Three Months Ended
 
Six Months Ended
 
June 30,
March 31,
June 30,
 
June 30,
June 30,
(Dollars in thousands)
2018
2018
2017
 
2018
2017
Investment Management EBITDA:
 
 
 
 
 
 
Net income
$
723

$
702

$
683

 
$
1,426

$
1,851

Interest expense
—

—

—

 
—

—

Income taxes expense
277

227

425

 
504

1,152

Depreciation expense
125

125

122

 
250

239

Intangible amortization expense
502

461

462

 
963

925

EBITDA
$
1,627

$
1,515

$
1,692

 
3,143

4,167



TRISTATE CAPITAL HOLDINGS, INC.
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
 
Three Months Ended
 
Six Months Ended
 
June 30,
March 31,
June 30,
 
June 30,
June 30,
(Dollars in thousands)
2018
2018
2017
 
2018
2017
Total revenue:
 
 
 
 
 
 
Net interest income
$
28,791

$
26,262

$
22,033

 
$
55,053

$
42,949

Total non-interest income
12,502

11,089

11,712

 
23,591

23,121

Less: net gain on the sale and call of investment securities
1

5

241

 
6

239

Total revenue
$
41,292

$
37,346

$
33,504

 
78,638

65,831



BANK SEGMENT
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
 
Three Months Ended
 
Six Months Ended
 
June 30,
March 31,
June 30,
 
June 30,
June 30,
(Dollars in thousands)
2018
2018
2017
 
2018
2017
Bank total revenue:
 
 
 
 
 
 
Net interest income
$
29,280

$
26,801

$
22,532

 
$
56,081

$
43,923

Total non-interest income
2,850

2,181

2,582

 
5,032

4,650

Less: net gain on the sale and call of investment securities
1

5

241

 
6

239

Bank total revenue
$
32,129

$
28,977

$
24,873

 
61,107

48,334

 
 
 
 
 
 
 
Bank efficiency ratio:
 
 
 
 
 
 
Total non-interest expense (numerator)
$
16,223

$
15,786

$
13,688

 
$
32,010

$
27,293

Total revenue (denominator)
$
32,129

$
28,977

$
24,873

 
$
61,107

$
48,334

Bank efficiency ratio
50.49
%
54.48
%
55.03
%
 
52.38
%
56.47
%

11