FOR IMMEDIATE RELEASE
TRISTATE CAPITAL REPORTS SECOND QUARTER 2015 FINANCIAL RESULTS
PITTSBURGH, July 22, 2015 - TriState Capital Holdings, Inc. (NASDAQ: TSC) today reported record net income in the second quarter of 2015, driven by increases in non-interest income and net interest income, double-digit loan growth and superior credit metrics.
Net income for the parent company of TriState Capital Bank and Chartwell Investment Partners grew to $5.7 million in the second quarter of 2015, compared to $5.1 million in the first quarter and $514,000 in the second quarter of 2014. Net income per diluted share increased to $0.20 in the second quarter of 2015, compared to $0.18 in the first quarter and $0.02 in the second quarter of 2014.
“All three of TriState Capital’s business drivers, consisting of private banking, middle-market commercial banking and investment management, contributed to our record net income and pre-tax earnings in the second quarter,” said Chief Executive Officer James F. Getz. “In particular, we’re pleased to deliver higher net interest income fueled by continued double-digit loan growth, even as we further enhance asset quality and maintain a balance sheet that is very well positioned to profit from a rising interest-rate environment.”
SECOND QUARTER 2015 HIGHLIGHTS
| |
| • | Pre-tax earnings of $8.5 million and net income of $5.7 million reached record levels |
| |
| • | Net interest income increased to $16.6 million, as loans grew 3.1% during the quarter and 15.9% from the year prior |
| |
| • | Total revenue increased to $26.2 million, up 2.9% from the first quarter and 6.1% from the year-ago period |
| |
| • | Total adverse-rated credits declined 2.9% during the quarter and 30.2% from the year prior |
| |
| • | NPAs improved by 12.9% during the quarter and 9.2% from the year prior, representing 0.89% of assets at June 30 |
| |
| • | Provision expense declined to 0.03% of average loans, annualized, from 0.15% in the first quarter |
TriState Capital’s loan growth continues to generate strong net interest income (NII) that, by design, is outpacing margin compression. NII was $16.6 million in the second quarter of 2015, $16.5 million in the first quarter and $16.0 million in the second quarter of 2014.
Provision expense totaled $185,000, or 0.03% of average loans, annualized, for the second quarter of 2015. For the linked quarter, provision expense was $925,000, or 0.15% of average loans, annualized. In the year ago quarter, provision expense was $9.1 million, or 1.72% of average loans, annualized.
Second quarter 2015 non-interest income was $9.6 million, compared to $9.1 million in the linked and year-ago quarters. Non-interest income represented 36.7% of total revenue in the second quarter of 2015. Non-interest income is largely comprised of Chartwell investment management fees of $7.5 million in the current quarter, $7.7 million in the linked quarter and $7.5 million in the year-ago quarter. Second quarter 2015 other non-interest income included higher fees from commercial borrowers’ use of interest rate swaps in the period to lock in fixed rates.
In the second quarter of 2015, TriState Capital’s total revenue was $26.2 million, increasing from $25.5 million in the linked quarter and $24.7 million in the year-ago quarter.
Second quarter 2015 non-interest expenses were $17.6 million, or 2.39% of average assets on an annualized basis, compared to $17.1 million, or 2.41%, in the linked quarter and $15.5 million, or 2.34%, in the prior year quarter. The year-over-year increase in expenses was primarily due to higher incentive-compensation accruals reflecting the bank’s strong performance in the first half of 2015. The second quarter 2015 efficiency ratio for the bank was 60.78%, compared to 61.41% in the linked quarter and 56.89% in the year-ago quarter.
BALANCE SHEET GROWTH
Loans totaled $2.55 billion at June 30, 2015, increasing 3.1%, or 12.5% annualized, from March 31. Total loans grew 15.9% over balances at June 30, 2014. Private banking channel loans totaled $1.11 billion, growing 4.6% from the end of the linked quarter and 27.2% from the end of the year-ago quarter. Commercial real estate (CRE) loans totaled $808.9 million, growing 7.2% from the end of the linked quarter and 27.8% from the end of the year-ago quarter. Commercial and industrial (C&I) loan balances were $631.1 million at June 30, 2015, decreasing 4.1% from the end of the linked quarter and 9.2% from one year prior.
Deposits grew by 4.5% during the second quarter to $2.55 billion at June 30, 2015, while deposit funding costs increased 2 basis points from the linked quarter. Compared to the year-ago quarter, deposits grew 14.6% at period end, while deposit funding costs increased 2 basis points.
TriState Capital remains very well positioned to profit from a rising interest-rate environment, and the bank continues to manage a highly asset-sensitive balance sheet. At June 30, 2015, 83% of TriState Capital’s loans and 59% of its securities portfolio were floating rate. In addition, 34% of deposits were fixed-rate time deposits. The duration of the investment portfolio was 1.9 as of June 30, 2015.
ASSET QUALITY
TriState Capital experienced net recoveries on loans previously charged off totaling $17,000 in the second quarter of 2015 and $7,000 in the linked quarter. Net charge offs for the second quarter of 2014 were $5.0 million, of which $4.6 million was related to a single non-performing C&I loan. Non-performing assets (NPAs) declined by $3.9 million, or 12.9%, to $26.7 million during the second quarter of 2015. NPAs represented 0.89% of total assets at June 30, 2015, improving from 1.05% at March 31, 2015 and 1.08% at June 30, 2014.
Adverse-rated credits declined 2.9% during the second quarter and 30.2% from June 30, 2014. Adverse-rated credits represented 2.2% of total loans at the end of the second quarter of 2015, 2.4% at March 31, 2015 and 3.7% at June 30, 2014.
The company’s allowance for loan losses reflects its growing portfolio of private banking channel margin loans secured by marketable securities, which require lower provision based on their lower risk profile. The allowance for loan losses represented 0.84% of total loans at June 30, 2015, compared to 0.86% at March 31, 2015 and 1.04% at March 31, 2014.
INVESTMENT MANAGEMENT
Chartwell’s assets under management (AUM) were $8.1 billion at the end of the first and second quarters of 2015 and $7.9 billion at June 30, 2014. Second quarter AUM reflects $146 million in new business and new flows from existing accounts, offset by market depreciation of $38 million and outflows of $88 million. The weighted average fee rate was 0.37% for each of the first and second quarters of 2015.
Chartwell investment management fees were $7.5 million in the second quarter of 2015, compared to $7.7 million in the linked quarter and $7.5 million in the year-ago quarter. Continued strong performance reflects net inflows and returns relative to benchmarks across Chartwell’s investment disciplines.
Chartwell segment net income totaled $1.0 million for the second quarter of 2015, comprising 18% of TriState Capital Holdings, Inc.’s consolidated net income.
CAPITAL STRENGTH AND FLEXIBILITY
TriState Capital’s earnings in the quarter funded superior loan growth in the period, while the company maintained capital ratios that exceed the highest required regulatory benchmark levels. As of June 30, 2015, TriState Capital Holdings reported ratios of 14.45% for total risk-based capital, 12.23% for tier 1 risk-based capital, 12.23% for common equity tier 1 risk-based capital and 9.42% for tier 1 leverage.
CONFERENCE CALL
As previously announced, TriState Capital will hold a conference call tomorrow to review its financial results and operating performance.
The live conference call on July 23 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/10068347 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 Holdings 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 call through July 31. 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 locations and entering the conference number 10068347.
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 has $2.9 billion in assets, as of June 30, 2015, and serves middle-market commercial customers through regional representative offices in Pittsburgh, Philadelphia, Cleveland, Princeton, 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 has $8.1 billion in assets under management, as of June 30, 2015, and serves institutional clients and TriState Capital’s financial intermediary network. 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). 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 CONTACTS
Jack Horner
267-932-8760, ext. 302
412-600-2295 (mobile)
jack@hornercom.com
INVESTOR RELATIONS CONTACT
TriState Capital Holdings, Inc.
Brian Fetterolf
412-304-0451
investorrelations@tscbank.com
TRISTATE CAPITAL HOLDINGS, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
|
| | | | | | | | | | | | | | | | |
| | As of and For the
Three Months Ended | | As of and For the
Six Months Ended |
| (Dollars in thousands) | June 30, | March 31, | June 30, | | June 30, | June 30, |
| | 2015 | 2015 | 2014 | | 2015 | 2014 |
| Period-end balance sheet data: | | | | | | |
| Cash and cash equivalents | $ | 100,235 |
| $ | 114,554 |
| $ | 192,523 |
| | $ | 100,235 |
| $ | 192,523 |
|
| Total investment securities | 219,662 |
| 189,650 |
| 203,440 |
| | 219,662 |
| 203,440 |
|
| Loans held-for-sale | 4,084 |
| — |
| — |
| | 4,084 |
| — |
|
| Loans held-for-investment | 2,554,343 |
| 2,477,130 |
| 2,204,257 |
| | 2,554,343 |
| 2,204,257 |
|
| Allowance for loan losses | (21,407 | ) | (21,205 | ) | (22,822 | ) | | (21,407 | ) | (22,822 | ) |
| Loans held-for-investment, net | 2,532,936 |
| 2,455,925 |
| 2,181,435 |
| | 2,532,936 |
| 2,181,435 |
|
| Goodwill and other intangibles, net | 51,595 |
| 51,985 |
| 53,108 |
| | 51,595 |
| 53,108 |
|
| Other assets | 108,649 |
| 103,997 |
| 102,415 |
| | 108,649 |
| 102,415 |
|
| Total assets | $ | 3,017,161 |
| $ | 2,916,111 |
| $ | 2,732,921 |
| | $ | 3,017,161 |
| $ | 2,732,921 |
|
| | | | | | | |
| Total deposits | $ | 2,550,695 |
| $ | 2,441,956 |
| $ | 2,225,770 |
| | $ | 2,550,695 |
| $ | 2,225,770 |
|
| Borrowings | 125,000 |
| 125,000 |
| 155,000 |
| | 125,000 |
| 155,000 |
|
| Other liabilities | 27,068 |
| 40,986 |
| 51,168 |
| | 27,068 |
| 51,168 |
|
| Total liabilities | 2,702,763 |
| 2,607,942 |
| 2,431,938 |
| | 2,702,763 |
| 2,431,938 |
|
| | | | | | | |
| Total shareholders' equity | 314,398 |
| 308,169 |
| 300,983 |
| | 314,398 |
| 300,983 |
|
| | | | | | | |
| Total liabilities and shareholders' equity | $ | 3,017,161 |
| $ | 2,916,111 |
| $ | 2,732,921 |
| | $ | 3,017,161 |
| $ | 2,732,921 |
|
| | | | | | | |
| Income statement data: | | | | | | |
| Interest income | $ | 20,426 |
| $ | 19,995 |
| $ | 18,991 |
| | $ | 40,421 |
| $ | 37,299 |
|
| Interest expense | 3,808 |
| 3,539 |
| 2,953 |
| | 7,347 |
| 5,399 |
|
| Net interest income | 16,618 |
| 16,456 |
| 16,038 |
| | 33,074 |
| 31,900 |
|
| Provision for loan losses | 185 |
| 925 |
| 9,109 |
| | 1,110 |
| 9,717 |
|
| Net interest income after provision for loan losses | 16,433 |
| 15,531 |
| 6,929 |
| | 31,964 |
| 22,183 |
|
| Non-interest income: | | | | | | |
| Investment management fees | 7,514 |
| 7,655 |
| 7,509 |
| | 15,169 |
| 9,963 |
|
| Net gain on the sale of investment securities available-for-sale | — |
| 17 |
| 414 |
| | 17 |
| 1,428 |
|
| Other non-interest income | 2,117 |
| 1,386 |
| 1,198 |
| | 3,503 |
| 2,210 |
|
| Total non-interest income | 9,631 |
| 9,058 |
| 9,121 |
| | 18,689 |
| 13,601 |
|
| Non-interest expense: | | | | | | |
| Intangible amortization expense | 390 |
| 389 |
| 390 |
| | 779 |
| 520 |
|
| Other non-interest expense | 17,192 |
| 16,713 |
| 15,094 |
| | 33,905 |
| 27,756 |
|
| Total non-interest expense | 17,582 |
| 17,102 |
| 15,484 |
| | 34,684 |
| 28,276 |
|
| Income before tax | 8,482 |
| 7,487 |
| 566 |
| | 15,969 |
| 7,508 |
|
| Income tax expense | 2,754 |
| 2,431 |
| 52 |
| | 5,185 |
| 2,378 |
|
| Net income | $ | 5,728 |
| $ | 5,056 |
| $ | 514 |
| | $ | 10,784 |
| $ | 5,130 |
|
TRISTATE CAPITAL HOLDINGS, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED) |
| | | | | | | | | | | | | | | | |
| | As of and For the
Three Months Ended | | As of and For the
Six Months Ended |
| (Dollars in thousands, except per share data) | June 30, | March 31, | June 30, | | June 30, | June 30, |
| | 2015 | 2015 | 2014 | | 2015 | 2014 |
| Per share and share data: | | | | | | |
| Earnings per share: | | | | | | |
| Basic | $ | 0.21 |
| $ | 0.18 |
| $ | 0.02 |
| | $ | 0.39 |
| $ | 0.18 |
|
| Diluted | $ | 0.20 |
| $ | 0.18 |
| $ | 0.02 |
| | $ | 0.38 |
| $ | 0.18 |
|
| Book value per common share | $ | 11.23 |
| $ | 11.00 |
| $ | 10.48 |
| | $ | 11.23 |
| $ | 10.48 |
|
Tangible book value per common share (1) | $ | 9.39 |
| $ | 9.15 |
| $ | 8.63 |
| | $ | 9.39 |
| $ | 8.63 |
|
| Common shares outstanding, at end of period | 28,000,695 |
| 28,008,462 |
| 28,712,779 |
| | 28,000,695 |
| 28,712,779 |
|
| Average common shares outstanding: | | | | | | |
| Basic | 27,718,226 |
| 27,891,931 |
| 28,693,741 |
| | 27,804,599 |
| 28,692,019 |
|
| Diluted | 28,184,048 |
| 27,953,744 |
| 29,196,897 |
| | 28,176,510 |
| 29,190,482 |
|
| | | | | | | |
| Performance ratios: | | | | | | |
Return on average assets (2) | 0.78 | % | 0.71 | % | 0.08 | % | | 0.75 | % | 0.41 | % |
Return on average equity (2) | 7.36 | % | 6.66 | % | 0.68 | % | | 7.01 | % | 3.45 | % |
Net interest margin (2) (3) | 2.38 | % | 2.44 | % | 2.55 | % | | 2.41 | % | 2.69 | % |
Bank efficiency ratio (1) | 60.78 | % | 61.41 | % | 56.89 | % | | 61.09 | % | 60.63 | % |
Efficiency ratio (1) | 66.98 | % | 67.07 | % | 62.57 | % | | 67.03 | % | 64.16 | % |
Efficiency ratio, as adjusted (1) | 65.50 | % | 65.55 | % | 61.00 | % | | 65.52 | % | 62.88 | % |
Non-interest expense to average assets (2) | 2.39 | % | 2.41 | % | 2.34 | % | | 2.40 | % | 2.28 | % |
| | | | | | | |
| Asset quality: | | | | | | |
| Non-performing loans | $ | 24,978 |
| $ | 28,926 |
| $ | 28,025 |
| | $ | 24,978 |
| $ | 28,025 |
|
| Non-performing assets | $ | 26,744 |
| $ | 30,692 |
| $ | 29,438 |
| | $ | 26,744 |
| $ | 29,438 |
|
| Other real estate owned | $ | 1,766 |
| $ | 1,766 |
| $ | 1,413 |
| | $ | 1,766 |
| $ | 1,413 |
|
| Non-performing assets to total assets | 0.89 | % | 1.05 | % | 1.08 | % | | 0.89 | % | 1.08 | % |
| Allowance for loan losses to loans | 0.84 | % | 0.86 | % | 1.04 | % | | 0.84 | % | 1.04 | % |
| Allowance for loan losses to non-performing loans | 85.70 | % | 73.31 | % | 81.43 | % | | 85.70 | % | 81.43 | % |
| Net charge-offs (recoveries) | $ | (17 | ) | $ | (7 | ) | $ | 5,039 |
| | $ | (24 | ) | $ | 5,891 |
|
Net charge-offs (recoveries) to average total loans (2) | — | % | — | % | 0.95 | % | | — | % | 0.60 | % |
| | | | | | | |
| Revenue: | | | | | | |
Total revenue (1) | $ | 26,249 |
| $ | 25,497 |
| $ | 24,745 |
| | $ | 51,746 |
| $ | 44,073 |
|
Pre-tax, pre-provision net revenue (1) | $ | 8,667 |
| $ | 8,395 |
| $ | 9,261 |
| | $ | 17,062 |
| $ | 15,797 |
|
| | | | | | | |
| Capital ratios: | | | | | | |
Tangible equity to tangible assets (1) | 8.86 | % | 8.94 | % | 9.25 | % | | 8.86 | % | 9.25 | % |
| Tier 1 leverage ratio | 9.42 | % | 9.42 | % | 9.52 | % | | 9.42 | % | 9.52 | % |
| Common equity tier 1 risk-based capital ratio | 12.23 | % | 12.13 | % | N/A |
| | 12.23 | % | N/A |
|
| Tier 1 risk-based capital ratio | 12.23 | % | 12.13 | % | 9.77 | % | | 12.23 | % | 9.77 | % |
| Total risk-based capital ratio | 14.45 | % | 14.39 | % | 12.06 | % | | 14.45 | % | 12.06 | % |
| | | | | | | |
| Assets under management | $ | 8,124,000 |
| $ | 8,104,000 |
| $ | 7,888,000 |
| | $ | 8,124,000 |
| $ | 7,888,000 |
|
| |
(1) | These measures are not measures recognized under GAAP and are therefore considered to be non-GAAP financial measures. See “Non-GAAP Financial Measures” for a reconciliation of these measures to their most directly comparable GAAP measures. |
| |
(2) | Ratios are annualized. |
| |
(3) | Net interest margin is calculated on a fully taxable equivalent basis. |
TRISTATE CAPITAL HOLDINGS, INC.
AVERAGES AND YIELDS (UNAUDITED)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | June 30, 2015 | | March 31, 2015 | | June 30, 2014 |
| (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 | $ | 102,353 |
| $ | 87 |
| 0.34 | % | | $ | 118,761 |
| $ | 102 |
| 0.35 | % | | $ | 214,268 |
| $ | 173 |
| 0.32 | % |
| Federal funds sold | 6,420 |
| 2 |
| 0.12 | % | | 5,807 |
| 1 |
| 0.07 | % | | 7,911 |
| 1 |
| 0.05 | % |
| Investment securities available-for-sale | 153,983 |
| 465 |
| 1.21 | % | | 161,484 |
| 488 |
| 1.23 | % | | 158,987 |
| 463 |
| 1.17 | % |
| Investment securities held-to-maturity | 40,051 |
| 384 |
| 3.85 | % | | 35,744 |
| 352 |
| 3.99 | % | | 25,499 |
| 219 |
| 3.44 | % |
| Total loans | 2,505,646 |
| 19,551 |
| 3.13 | % | | 2,425,211 |
| 19,110 |
| 3.20 | % | | 2,129,381 |
| 18,194 |
| 3.43 | % |
| Total interest-earning assets | 2,808,453 |
| 20,489 |
| 2.93 | % | | 2,747,007 |
| 20,053 |
| 2.96 | % | | 2,536,046 |
| 19,050 |
| 3.01 | % |
| Other assets | 136,861 |
| | | | 133,204 |
| | | | 122,878 |
| | |
| Total assets | $ | 2,945,314 |
| | | | $ | 2,880,211 |
| | | | $ | 2,658,924 |
| | |
| | | | | | | | | | | | |
| Liabilities and Shareholders' Equity | | | | | | | | | | | |
| Interest-bearing deposits: | | | | | | | | | | | |
| Interest-bearing checking accounts | $ | 98,183 |
| $ | 99 |
| 0.40 | % | | $ | 115,543 |
| $ | 120 |
| 0.42 | % | | $ | 59,805 |
| $ | 27 |
| 0.18 | % |
| Money market deposit accounts | 1,352,153 |
| 1,336 |
| 0.40 | % | | 1,259,148 |
| 1,220 |
| 0.39 | % | | 1,104,147 |
| 1,075 |
| 0.39 | % |
Time deposits (excluding CDARS®) | 459,546 |
| 1,089 |
| 0.95 | % | | 442,402 |
| 987 |
| 0.90 | % | | 497,778 |
| 1,035 |
| 0.83 | % |
CDARS® time deposits | 441,092 |
| 652 |
| 0.59 | % | | 422,955 |
| 565 |
| 0.54 | % | | 421,555 |
| 555 |
| 0.53 | % |
| Borrowings: | | | | | | | | | | | |
| FHLB borrowing | 79,176 |
| 78 |
| 0.40 | % | | 100,389 |
| 93 |
| 0.38 | % | | 105,714 |
| 102 |
| 0.39 | % |
| Subordinated notes payable | 35,000 |
| 554 |
| 6.35 | % | | 35,000 |
| 554 |
| 6.42 | % | | 9,615 |
| 159 |
| 6.63 | % |
| Total interest-bearing liabilities | 2,465,150 |
| 3,808 |
| 0.62 | % | | 2,375,437 |
| 3,539 |
| 0.60 | % | | 2,198,614 |
| 2,953 |
| 0.54 | % |
| Noninterest-bearing deposits | 137,647 |
| | | | 161,850 |
| | | | 125,633 |
| | |
| Other liabilities | 30,304 |
| | | | 35,147 |
| | | | 31,960 |
| | |
| Shareholders' equity | 312,213 |
| | | | 307,777 |
| | | | 302,717 |
| | |
| Total liabilities and shareholders' equity | $ | 2,945,314 |
| | | | $ | 2,880,211 |
| | | | $ | 2,658,924 |
| | |
| | | | | | | | | | | | |
| Net interest income | | $ | 16,681 |
| | | | $ | 16,514 |
| | | | $ | 16,097 |
| |
| Net interest spread | | | 2.31 | % | | | | 2.36 | % | | | | 2.47 | % |
Net interest margin (1) | | | 2.38 | % | | | | 2.44 | % | | | | 2.55 | % |
| |
(1) | Net interest income and net interest margin are calculated on a fully taxable equivalent basis. |
TRISTATE CAPITAL HOLDINGS, INC.
AVERAGES AND YIELDS (UNAUDITED)
|
| | | | | | | | | | | | | | | | | |
| | Six Months Ended June 30, |
| | 2015 | | 2014 |
| (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 | $ | 110,512 |
| $ | 189 |
| 0.34 | % | | $ | 198,116 |
| $ | 323 |
| 0.33 | % |
| Federal funds sold | 6,115 |
| 3 |
| 0.10 | % | | 7,740 |
| 2 |
| 0.05 | % |
| Investment securities available-for-sale | 157,713 |
| 953 |
| 1.22 | % | | 173,354 |
| 1,126 |
| 1.31 | % |
| Investment securities held-to-maturity | 37,909 |
| 736 |
| 3.92 | % | | 25,377 |
| 437 |
| 3.47 | % |
| Total loans | 2,465,650 |
| 38,661 |
| 3.16 | % | | 1,994,226 |
| 35,529 |
| 3.59 | % |
| Total interest-earning assets | 2,777,899 |
| 40,542 |
| 2.94 | % | | 2,398,813 |
| 37,417 |
| 3.15 | % |
| Other assets | 135,043 |
| | | | 98,202 |
| | |
| Total assets | $ | 2,912,942 |
| | | | $ | 2,497,015 |
| | |
| | | | | | | | |
| Liabilities and Shareholders' Equity | | | | | | | |
| Interest-bearing deposits: | | | | | | | |
| Interest-bearing checking accounts | $ | 106,815 |
| 219 |
| 0.41 | % | | $ | 42,054 |
| $ | 33 |
| 0.16 | % |
| Money market deposit accounts | 1,305,908 |
| 2,556 |
| 0.39 | % | | 1,033,444 |
| 1,955 |
| 0.38 | % |
Time deposits (excluding CDARS®) | 451,021 |
| 2,076 |
| 0.93 | % | | 482,162 |
| 2,022 |
| 0.85 | % |
CDARS® time deposits | 432,074 |
| 1,217 |
| 0.57 | % | | 420,866 |
| 1,107 |
| 0.53 | % |
| Borrowings: | | | | | | | |
| FHLB borrowing | 89,724 |
| 172 |
| 0.39 | % | | 63,204 |
| 123 |
| 0.39 | % |
| Subordinated notes payable | 35,000 |
| 1,107 |
| 6.38 | % | | 4,834 |
| 159 |
| 6.63 | % |
| Total interest-bearing liabilities | 2,420,542 |
| 7,347 |
| 0.61 | % | | 2,046,564 |
| 5,399 |
| 0.53 | % |
| Noninterest-bearing deposits | 149,681 |
| | | | 125,702 |
| | |
| Other liabilities | 32,712 |
| | | | 24,484 |
| | |
| Shareholders' equity | 310,007 |
| | | | 300,265 |
| | |
| Total liabilities and shareholders' equity | $ | 2,912,942 |
| | | | $ | 2,497,015 |
| | |
| | | | | | | | |
| Net interest income | | $ | 33,195 |
| | | | $ | 32,018 |
| |
| Net interest spread | | | 2.33 | % | | | | 2.62 | % |
Net interest margin (1) | | | 2.41 | % | | | | 2.69 | % |
| |
(1) | Net interest income and net interest margin are calculated on a fully taxable equivalent basis. |
TRISTATE CAPITAL HOLDINGS, INC.
LOAN COMPOSITION (UNAUDITED)
|
| | | | | | | | | | | | | | | | | |
| | June 30, 2015 | | March 31, 2015 | | June 30, 2014 |
| (Dollars in thousands) | Loan
Balance | Percent of
Total Loans | | Loan
Balance | Percent of
Total Loans | | Loan
Balance | Percent of
Total Loans |
| Private banking channel loans | $ | 1,114,342 |
| 43.6 | % | | $ | 1,064,847 |
| 43.0 | % | | $ | 876,206 |
| 39.8 | % |
| Middle-market banking channel loans: | | | | | | | | |
| Commercial and industrial | 631,122 |
| 24.7 | % | | 657,894 |
| 26.6 | % | | 695,313 |
| 31.5 | % |
| Commercial real estate | 808,879 |
| 31.7 | % | | 754,389 |
| 30.4 | % | | 632,738 |
| 28.7 | % |
| Total middle-market banking channel loans | 1,440,001 |
| 56.4 | % | | 1,412,283 |
| 57.0 | % | | 1,328,051 |
| 60.2 | % |
| Loans held-for-investment | $ | 2,554,343 |
| 100.0 | % | | $ | 2,477,130 |
| 100.0 | % | | $ | 2,204,257 |
| 100.0 | % |
TRISTATE CAPITAL HOLDINGS, INC.
STATEMENT OF INCOME BY REPORTABLE SEGMENT (UNAUDITED)
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, 2015 | | Three Months Ended June 30, 2014 |
| (Dollars in thousands) | Bank | Investment
Management | Parent
and Other | Consolidated | | Bank | Investment
Management | Parent
and Other | Consolidated |
| Income statement data: | | | |
| Interest income | $ | 20,374 |
| $ | — |
| $ | 52 |
| $ | 20,426 |
| | $ | 18,991 |
| $ | — |
| $ | — |
| $ | 18,991 |
|
| Interest expense | 3,259 |
| — |
| 549 |
| 3,808 |
| | 2,824 |
| — |
| 129 |
| 2,953 |
|
| Net interest income (loss) | 17,115 |
| — |
| (497 | ) | 16,618 |
| | 16,167 |
| — |
| (129 | ) | 16,038 |
|
| Provision for loan losses | 185 |
| — |
| — |
| 185 |
| | 9,109 |
| — |
| — |
| 9,109 |
|
| Net interest income (loss) after provision for loan losses | 16,930 |
| — |
| (497 | ) | 16,433 |
| | 7,058 |
| — |
| (129 | ) | 6,929 |
|
| Non-interest income: | | | | | | | | | |
| Investment management fees | — |
| 7,556 |
| (42 | ) | 7,514 |
| | — |
| 7,560 |
| (51 | ) | 7,509 |
|
| Net gain on the sale of investment securities available-for-sale | — |
| — |
| — |
| — |
| | 414 |
| — |
| — |
| 414 |
|
| Other non-interest income | 2,117 |
| — |
| — |
| 2,117 |
| | 1,157 |
| 41 |
| — |
| 1,198 |
|
| Total non-interest income | 2,117 |
| 7,556 |
| (42 | ) | 9,631 |
| | 1,571 |
| 7,601 |
| (51 | ) | 9,121 |
|
| Non-interest expense: | | | | | | | | | |
| Intangible amortization expense | — |
| 390 |
| — |
| 390 |
| | — |
| 390 |
| — |
| 390 |
|
| Other non-interest expense | 11,690 |
| 5,497 |
| 5 |
| 17,192 |
| | 9,856 |
| 5,237 |
| 1 |
| 15,094 |
|
| Total non-interest expense | 11,690 |
| 5,887 |
| 5 |
| 17,582 |
| | 9,856 |
| 5,627 |
| 1 |
| 15,484 |
|
| Income (loss) before tax | 7,357 |
| 1,669 |
| (544 | ) | 8,482 |
| | (1,227 | ) | 1,974 |
| (181 | ) | 566 |
|
| Income tax expense (benefit) | 2,291 |
| 633 |
| (170 | ) | 2,754 |
| | (727 | ) | 832 |
| (53 | ) | 52 |
|
| Net income (loss) | $ | 5,066 |
| $ | 1,036 |
| $ | (374 | ) | $ | 5,728 |
| | $ | (500 | ) | $ | 1,142 |
| $ | (128 | ) | $ | 514 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended June 30, 2015 | | Six Months Ended June 30, 2014 |
| (Dollars in thousands) | Bank | Investment
Management | Parent
and Other | Consolidated | | Bank | Investment
Management | Parent
and Other | Consolidated |
| Income statement data: | | | |
| Interest income | $ | 40,315 |
| $ | — |
| $ | 106 |
| $ | 40,421 |
| | $ | 37,299 |
| $ | — |
| $ | — |
| $ | 37,299 |
|
| Interest expense | 6,259 |
| — |
| 1,088 |
| 7,347 |
| | 5,327 |
| — |
| 72 |
| 5,399 |
|
| Net interest income (loss) | 34,056 |
| — |
| (982 | ) | 33,074 |
| | 31,972 |
| — |
| (72 | ) | 31,900 |
|
| Provision for loan losses | 1,110 |
| — |
| — |
| 1,110 |
| | 9,717 |
| — |
| — |
| 9,717 |
|
| Net interest income (loss) after provision for loan losses | 32,946 |
| — |
| (982 | ) | 31,964 |
| | 22,255 |
| — |
| (72 | ) | 22,183 |
|
| Non-interest income: | | | | | | | | | |
| Investment management fees | — |
| 15,258 |
| (89 | ) | 15,169 |
| | — |
| 10,014 |
| (51 | ) | 9,963 |
|
| Net gain on the sale of investment securities available-for-sale | 17 |
| — |
| — |
| 17 |
| | 1,428 |
| — |
| — |
| 1,428 |
|
| Other non-interest income | 3,502 |
| 1 |
| — |
| 3,503 |
| | 2,169 |
| 41 |
| — |
| 2,210 |
|
| Total non-interest income | 3,519 |
| 15,259 |
| (89 | ) | 18,689 |
| | 3,597 |
| 10,055 |
| (51 | ) | 13,601 |
|
| Non-interest expense: | | | | | | | | | |
| Intangible amortization expense | — |
| 779 |
| — |
| 779 |
| | — |
| 520 |
| — |
| 520 |
|
| Other non-interest expense | 22,943 |
| 10,995 |
| (33 | ) | 33,905 |
| | 20,700 |
| 7,036 |
| 20 |
| 27,756 |
|
| Total non-interest expense | 22,943 |
| 11,774 |
| (33 | ) | 34,684 |
| | 20,700 |
| 7,556 |
| 20 |
| 28,276 |
|
| Income (loss) before tax | 13,522 |
| 3,485 |
| (1,038 | ) | 15,969 |
| | 5,152 |
| 2,499 |
| (143 | ) | 7,508 |
|
| Income tax expense (benefit) | 4,188 |
| 1,321 |
| (324 | ) | 5,185 |
| | 1,365 |
| 1,053 |
| (40 | ) | 2,378 |
|
| Net income (loss) | $ | 9,334 |
| $ | 2,164 |
| $ | (714 | ) | $ | 10,784 |
| | $ | 3,787 |
| $ | 1,446 |
| $ | (103 | ) | $ | 5,130 |
|
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 equity,” “tangible equity to tangible assets,” “tangible book value per common share,” “total revenue,” “pre-tax, pre-provision net 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 equity” is defined as shareholders' equity reduced by intangible assets, including goodwill, if any. We believe this measure is important to management and investors to better understand and assess changes from period to period in shareholders' equity exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a business purchase combination, has the effect of increasing both equity and assets, while not increasing our tangible equity or tangible assets.
“Tangible equity to tangible assets” is defined as the ratio of shareholders' equity reduced by intangible assets, divided by total assets reduced by intangible assets. We believe this measure is important to many investors who are interested in relative changes from period to period in equity and total assets, each exclusive of changes in intangible assets.
“Tangible book value per common share” is defined as book value, excluding the impact of goodwill, if any, 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 share exclusive of changes in intangible assets. Goodwill is an intangible asset that is recorded in a purchase business combination.
“Total revenue” is defined as net interest income and non-interest income, excluding gains and losses on the sale of investment securities available-for-sale. 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 other items that are unrelated to our core business.
“Pre-tax, pre-provision net revenue” is defined as net income, without giving effect to loan loss provision and income taxes, and excluding gains and losses on the sale of investment securities available-for-sale. We believe this measure is important because it allows management and investors to better assess our performance in relation to our core operating revenue, excluding the volatility that is associated with provision for loan losses or other items that are unrelated to our core business.
“Efficiency ratio” is defined as non-interest expense divided by our total revenue. “Efficiency ratio, as adjusted” is defined as non-interest expense, excluding non-recurring expenses associated with the Chartwell acquisition 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) | 2015 | 2015 | 2014 |
| Tangible equity to tangible assets: | | | |
| Total shareholders' equity | $ | 314,398 |
| $ | 308,169 |
| $ | 300,983 |
|
| Less: intangible assets | 51,595 |
| 51,985 |
| 53,108 |
|
| Tangible equity | $ | 262,803 |
| $ | 256,184 |
| $ | 247,875 |
|
| Total assets | $ | 3,017,161 |
| $ | 2,916,111 |
| $ | 2,732,921 |
|
| Less: intangible assets | 51,595 |
| 51,985 |
| 53,108 |
|
| Tangible assets | $ | 2,965,566 |
| $ | 2,864,126 |
| $ | 2,679,813 |
|
| Tangible equity to tangible assets | 8.86 | % | 8.94 | % | 9.25 | % |
| | | | |
| Tangible book value per common share: | | | |
| Tangible equity | $ | 262,803 |
| $ | 256,184 |
| $ | 247,875 |
|
| Common shares outstanding | 28,000,695 |
| 28,008,462 |
| 28,712,779 |
|
| Tangible book value per common share | $ | 9.39 |
| $ | 9.15 |
| $ | 8.63 |
|
|
| | | | | | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended |
| | June 30, | March 31, | June 30, | | June 30, | June 30, |
| (Dollars in thousands) | 2015 | 2015 | 2014 | | 2015 | 2014 |
| Pre-tax, pre-provision net revenue: | | | | | | |
| Net interest income | $ | 16,618 |
| $ | 16,456 |
| $ | 16,038 |
| | $ | 33,074 |
| $ | 31,900 |
|
| Total non-interest income | 9,631 |
| 9,058 |
| 9,121 |
| | 18,689 |
| 13,601 |
|
| Less: net gain on the sale of investment securities available-for-sale | — |
| 17 |
| 414 |
| | 17 |
| 1,428 |
|
| Total revenue | 26,249 |
| 25,497 |
| 24,745 |
| | 51,746 |
| 44,073 |
|
| Less: total non-interest expense | 17,582 |
| 17,102 |
| 15,484 |
| | 34,684 |
| 28,276 |
|
| Pre-tax, pre-provision net revenue | $ | 8,667 |
| $ | 8,395 |
| $ | 9,261 |
| | $ | 17,062 |
| $ | 15,797 |
|
| | | | | | | |
| Efficiency ratio: | | | | | | |
| Total non-interest expense (numerator) | $ | 17,582 |
| $ | 17,102 |
| $ | 15,484 |
| | $ | 34,684 |
| $ | 28,276 |
|
| Total revenue (denominator) | $ | 26,249 |
| $ | 25,497 |
| $ | 24,745 |
| | $ | 51,746 |
| $ | 44,073 |
|
| Efficiency ratio | 66.98 | % | 67.07 | % | 62.57 | % | | 67.03 | % | 64.16 | % |
| | | | | | | |
| Efficiency ratio, as adjusted: | | | | | | |
Less: nonrecurring expenses (1) | $ | — |
| $ | — |
| $ | — |
| | $ | — |
| $ | 45 |
|
| Less: intangible amortization expense | 390 |
| 389 |
| 390 |
| | 779 |
| 520 |
|
| Total non-interest expense, as adjusted (numerator) | $ | 17,192 |
| $ | 16,713 |
| $ | 15,094 |
| | $ | 33,905 |
| $ | 27,711 |
|
| Total revenue (denominator) | $ | 26,249 |
| $ | 25,497 |
| $ | 24,745 |
| | $ | 51,746 |
| $ | 44,073 |
|
| Efficiency ratio, as adjusted | 65.50 | % | 65.55 | % | 61.00 | % | | 65.52 | % | 62.88 | % |
| |
(1) | Nonrecurring expenses include costs associated with the Chartwell transaction. |
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) | 2015 | 2015 | 2014 | | 2015 | 2014 |
| Bank pre-tax, pre-provision net revenue: | | | | | | |
| Net interest income | $ | 17,115 |
| $ | 16,941 |
| $ | 16,167 |
| | $ | 34,056 |
| $ | 31,972 |
|
| Total non-interest income | 2,117 |
| 1,402 |
| 1,571 |
| | 3,519 |
| 3,597 |
|
| Less: net gain on the sale of investment securities available-for-sale | — |
| 17 |
| 414 |
| | 17 |
| 1,428 |
|
| Total revenue | 19,232 |
| 18,326 |
| 17,324 |
| | 37,558 |
| 34,141 |
|
| Less: total non-interest expense | 11,690 |
| 11,254 |
| 9,856 |
| | 22,943 |
| 20,700 |
|
| Pre-tax, pre-provision net revenue | $ | 7,542 |
| $ | 7,072 |
| $ | 7,468 |
| | $ | 14,615 |
| $ | 13,441 |
|
| | | | | | | |
| Bank efficiency ratio: | | | | | | |
| Total non-interest expense (numerator) | $ | 11,690 |
| $ | 11,254 |
| $ | 9,856 |
| | $ | 22,943 |
| $ | 20,700 |
|
| Total revenue (denominator) | $ | 19,232 |
| $ | 18,326 |
| $ | 17,324 |
| | $ | 37,558 |
| $ | 34,141 |
|
| Efficiency ratio | 60.78 | % | 61.41 | % | 56.89 | % | | 61.09 | % | 60.63 | % |
