PITTSBURGH--(BUSINESS WIRE)--TriState Capital Holdings, Inc. (NASDAQ: TSC) grew earnings per share to $0.24 in the second quarter of 2016, with EPS increasing 20.0% from the second quarter of 2015 and 14.3% from the first quarter of 2016, driven by record non-interest income, continued double-digit growth of loans, and strong credit quality.
Net income for the parent company of TriState Capital Bank and Chartwell Investment Partners was $6.8 million in the second quarter of 2016, increasing 18.2% from $5.7 million in the second quarter of 2015 and 15.9% from $5.8 million in the first quarter of 2016. Net income per diluted share was $0.24 in the second quarter of 2016, compared to $0.20 in the second quarter of 2015 and $0.21 in the first quarter of 2016.
“Very healthy expansion of the company’s banking and investment management businesses contributed to continued earnings growth in the quarter, offsetting the challenging economic dynamics facing financial institutions and asset managers in the first half of 2016,” Chief Executive Officer James F. Getz said. “TriState Capital’s private banking and commercial banking teams continue to deliver double-digit loan growth, while recent investments in our deposit gathering and investment management capabilities showed tangible results in the quarter. The company continues to demonstrate its ability to drive favorable top- and bottom-line growth trends over the long term, even in the low-rate environment TriState Capital has operated in since its inception.”
SECOND QUARTER 2016 HIGHLIGHTS
- Deposits increased meaningfully, 13.2% from one year prior and 4.8% during the quarter to $2.89 billion
- Total loans grew 17.3% from one year prior and 3.5% during the quarter to $3.00 billion, supporting TriState Capital’s ongoing long-term compound annual growth goal of 15%
- Commercial loans grew 8.5% from one year prior and 2.2% during the quarter, and private banking loans grew 28.8% from one year prior and 4.9% during the quarter
- Strong credit quality further improved, with period-end adverse-rated credits representing 1.89% of total loans and non-performing assets (NPAs) representing 0.59% of total assets, compared to June 30, 2015 adverse-rated credits to total loans of 2.21% and NPAs to total assets of 0.89% of assets
- Non-interest income grew to a record $11.4 million, or 38.5% of revenues, with Chartwell investment management revenue enhanced by The Killen Group (TKG) acquisition that closed on April 29
- Assets under management (AUM) grew 23.5% during the quarter to $10.6 billion, reflecting AUM acquired from TKG and legacy Chartwell net inflows that more than offset market depreciation
TriState Capital’s total revenue grew to $29.6 million in the second quarter of 2016, reflecting stable net interest income (NII) and record non-interest income. Revenues increased 12.8% from $26.2 million in the year-ago quarter and 8.5% from $27.3 million in the linked quarter.
TriState Capital’s diverse loan growth continues to bolster revenues in the low-rate environment, with NII totaling $18.2 million in the second quarter of 2016 compared to $16.7 million in the second quarter of 2015 and $18.4 million in the linked quarter. While net interest margin of 2.25% reflects pressure from the sustained low-rate environment, TriState Capital’s business model has generated EPS growth of 60% over the last three years, even as NIM has compressed by 65 basis points over the same period.
Investment management fees of $9.4 million in the second quarter of 2016 reflected Chartwell’s significant growth in new and existing accounts, as well as the contributions of the TKG business acquired on April 29, more than offsetting the impact of market volatility. Chartwell investment management fees were $7.5 million in the year-ago quarter and $7.0 million in the linked quarter. On an annualized run-rate basis, Chartwell’s revenues increased to $41.2 million at June 30, 2016, up 36.5% from $30.2 million at June 30, 2015 and 33.5% from $30.9 million at March 31, 2016.
All other non-interest income was $2.0 million in the second quarter of 2016, compared to $2.1 million in the year-ago quarter and $1.9 million in the linked quarter. Total non-interest income was $11.4 million, or 38.5% of total revenue, in the second quarter of 2016, compared to $9.6 million or 36.5% in the year-ago period and $8.9 million or 32.7% in the linked quarter.
The bank’s efficiency ratio for the second quarter of 2016 was 59.63%, compared to 60.78% in the second quarter of 2015 and 59.40% in the first quarter of 2016. Non-interest expenses in the second quarter of 2016 were $19.5 million, or 2.29% of average assets on an annualized basis, compared to $17.6 million, or 2.40%, in the second quarter of 2015. Also, $1.2 million of TriState Capital’s second quarter 2016 non-interest expense represents about two months of compensation and other ongoing costs associated with operating the business acquired from TKG. First quarter 2016 non-interest expenses were $18.0 million, or 2.19% of average assets on an annualized basis.
TriState Capital is projecting an effective tax rate of approximately 34% for the full year 2016.
BALANCE SHEET GROWTH
Loans totaled $3.00 billion at June 30, 2016, increasing 17.3% over balances at June 30, 2015 and 3.5% from March 31. Private banking loans totaled $1.44 billion at June 30, 2016, growing 28.8% from the end of the year-ago quarter and 4.9% from the end of the linked quarter. Commercial loans totaled $1.56 billion at June 30, 2016, growing 8.5% from the end of the year-ago quarter and 2.2% from the end of the linked quarter.
Deposits totaled $2.89 billion at June 30, 2016, increasing 13.2% from June 30, 2015 and 4.8% from March 31. Deposit growth outpaced robust loan growth on the success of initiatives to attract and retain deposits from new and existing clients as a source of low-cost, stable funding.
TriState Capital continues to manage a highly asset-sensitive balance sheet. At June 30, 2016, 86% of TriState Capital’s loan portfolio and 50% of its securities portfolio were floating rate. In addition, 31% of deposits were fixed-rate time deposits.
ASSET QUALITY
TriState Capital’s solid asset quality metrics in the second quarter of 2016 continued to reflect the bank’s ongoing focus on enhancing the risk profile of its loan portfolio, which includes growing its private banking franchise and particularly its portfolio of margin loans secured by marketable securities. Private banking comprised 48% of the total loan portfolio at June 30, 2016.
Non-performing assets (NPAs) were $20.9 million at June 30, 2016, or 0.59% of total assets, compared to $26.7 million, or 0.89% of assets, at June 30, 2015 and $22.9 million, or 0.67%, at March 31, 2016. The decline in NPAs was largely driven by net charge-offs of $1.4 million, primarily reflecting a single previously reserved loan. The company experienced net recoveries on loans previously charged off of $17,000 in the second quarter of 2015 and $450,000 in the first quarter of 2016.
Provision expense was $80,000 in the second quarter of 2016, reflecting TriState Capital’s strong asset quality and growth driven significantly by lower-risk marketable securities backed private banking loans. Provision expense was $185,000 in the second quarter of 2015 and $122,000 in the first quarter of 2016.
The company’s allowance for loan losses represented 0.57% of total loans at June 30, 2016, compared to 0.84% at June 30, 2015 and 0.64% at March 31, 2016. This trend is reflective of the increasing private banking loan portfolio.
INVESTMENT MANAGEMENT
The company completed its previously announced acquisition of TKG during the second quarter 2016, which added $2.0 billion to Chartwell’s assets under management (AUM) at June 30, 2016. Even without TKG’s contributions, Chartwell saw second quarter 2016 net inflows of $21 million, in contrast to outflows across the industry in the first half of the year. Excluding TKG assets, new business and new flows from existing accounts totaled $159 million in the second quarter, offsetting outflows of $138 million and market depreciation of $14 million.
Including TKG client assets, Chartwell grew AUM to $10.6 billion at the end of the second quarter of 2016, up 30.4% from $8.1 billion at June 30, 2015 and 23.5% from $8.6 billion at March 31, 2016. Chartwell’s weighted average fee rate was 0.39% at June 30, 2016, with AUM acquired from TKG helping to drive a 3-basis-point increase from 0.36% at March 31, 2016.
Chartwell’s investment management fees, including those acquired from TKG, totaled $9.4 million in the second quarter of 2016. Chartwell’s annualized run-rate revenues increased to $41.2 million at June 30, 2016, increasing 36.5% from $30.2 million at June 30, 2015 and 33.5% from $30.9 million at March 31, 2016.
Chartwell earned $1.5 million in the second quarter, comprising 22% of TriState Capital Holdings’ consolidated net income for the second quarter of 2016.
CAPITAL STRENGTH AND FLEXIBILITY
TriState Capital continued to maintain capital ratios that exceed the highest required regulatory levels. As of June 30, 2016, TriState Capital Holdings reported ratios of 12.76% for total risk-based capital, 11.25% for tier 1 risk-based capital, 11.25% for common equity tier 1 risk-based capital and 8.41% for tier 1 leverage.
In January 2016, the Board of Directors approved a share repurchase program of up to $10 million, authorizing TriState Capital Holdings to repurchase up to 1,000,000 shares of its common stock. The company repurchased a total of 109,516 shares for approximately $1.4 million during the second quarter of 2016 at an average cost of $13.10 per share. Year to date, the company repurchased a total of 257,722 shares for approximately $3.2 million at an average cost of $12.33 per share.
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 21 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/10089280 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 28. 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 10089280.
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 $3.4 billion in assets, as of June 30, 2016, 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 $10.6 billion in assets under management, as of June 30, 2016, 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). 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.
| 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, | ||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Period-end balance sheet data: | |||||||||||||||||
| Cash and cash equivalents | $ | 114,297 | $ | 110,493 | $ | 100,235 | $ | 114,297 | $ | 100,235 | |||||||
| Total investment securities | 242,217 | 244,396 | 224,064 | 242,217 | 224,064 | ||||||||||||
| Loans held-for-sale | — | — | 4,084 | — | 4,084 | ||||||||||||
| Loans held-for-investment | 2,997,309 | 2,896,603 | 2,554,343 | 2,997,309 | 2,554,343 | ||||||||||||
| Allowance for loan losses | (17,215 | ) | (18,546 | ) | (21,407 | ) | (17,215 | ) | (21,407 | ) | |||||||
| Loans held-for-investment, net | 2,980,094 | 2,878,057 | 2,532,936 | 2,980,094 | 2,532,936 | ||||||||||||
| Goodwill and other intangibles, net | 68,134 | 50,426 | 51,595 | 68,134 | 51,595 | ||||||||||||
| Other assets | 123,849 | 116,499 | 103,454 | 123,849 | 103,454 | ||||||||||||
| Total assets | $ | 3,528,591 | $ | 3,399,871 | $ | 3,016,368 | $ | 3,528,591 | $ | 3,016,368 | |||||||
| Total deposits | $ | 2,888,192 | $ | 2,756,207 | $ | 2,550,695 | $ | 2,888,192 | $ | 2,550,695 | |||||||
| Borrowings, net | 259,409 | 284,358 | 124,207 | 259,409 | 124,207 | ||||||||||||
| Other liabilities | 43,296 | 29,064 | 27,068 | 43,296 | 27,068 | ||||||||||||
| Total liabilities | 3,190,897 | 3,069,629 | 2,701,970 | 3,190,897 | 2,701,970 | ||||||||||||
| Total shareholders' equity | 337,694 | 330,242 | 314,398 | 337,694 | 314,398 | ||||||||||||
| Total liabilities and shareholders' equity | $ | 3,528,591 | $ | 3,399,871 | $ | 3,016,368 | $ | 3,528,591 | $ | 3,016,368 | |||||||
| Income statement data: | |||||||||||||||||
| Interest income | $ | 23,795 | $ | 23,360 | $ | 20,481 | $ | 47,155 | $ | 40,683 | |||||||
| Interest expense | 5,576 | 4,983 | 3,808 | 10,559 | 7,347 | ||||||||||||
| Net interest income | 18,219 | 18,377 | 16,673 | 36,596 | 33,336 | ||||||||||||
| Provision for loan losses | 80 | 122 | 185 | 202 | 1,110 | ||||||||||||
| Net interest income after provision for loan losses | 18,139 | 18,255 | 16,488 | 36,394 | 32,226 | ||||||||||||
| Non-interest income: | |||||||||||||||||
| Investment management fees | 9,462 | 7,019 | 7,514 | 16,481 | 15,169 | ||||||||||||
| Net gain on the sale and call of investment securities | 62 | 1 | — | 63 | 17 | ||||||||||||
| Other non-interest income | 1,923 | 1,895 | 2,062 | 3,818 | 3,241 | ||||||||||||
| Total non-interest income | 11,447 | 8,915 | 9,576 | 20,362 | 18,427 | ||||||||||||
| Non-interest expense: | |||||||||||||||||
| Intangible amortization expense | 438 | 390 | 390 | 828 | 779 | ||||||||||||
| Other non-interest expense | 19,019 | 17,616 | 17,192 | 36,635 | 33,905 | ||||||||||||
| Total non-interest expense | 19,457 | 18,006 | 17,582 | 37,463 | 34,684 | ||||||||||||
| Income before tax | 10,129 | 9,164 | 8,482 | 19,293 | 15,969 | ||||||||||||
| Income tax expense | 3,356 | 3,321 | 2,754 | 6,677 | 5,185 | ||||||||||||
| Net income | $ | 6,773 | $ | 5,843 | $ | 5,728 | $ | 12,616 | $ | 10,784 | |||||||
|
TRISTATE CAPITAL HOLDINGS, INC. SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED) |
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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, | ||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Per share and share data: | |||||||||||||||||
| Earnings per share: | |||||||||||||||||
| Basic | $ | 0.25 | $ | 0.21 | $ | 0.21 | $ | 0.46 | $ | 0.39 | |||||||
| Diluted | $ | 0.24 | $ | 0.21 | $ | 0.20 | $ | 0.45 | $ | 0.38 | |||||||
| Book value per common share | $ | 11.97 | $ | 11.67 | $ | 11.23 | $ | 11.97 | $ | 11.23 | |||||||
| Tangible book value per common share (1) | $ | 9.56 | $ | 9.89 | $ | 9.39 | $ | 9.56 | $ | 9.39 | |||||||
| Common shares outstanding, at end of period | 28,211,282 | 28,300,798 | 28,000,695 | 28,211,282 | 28,000,695 | ||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||
| Basic | 27,549,475 | 27,679,445 | 27,718,226 | 27,601,331 | 27,804,599 | ||||||||||||
| Diluted | 28,225,404 | 28,241,350 | 28,184,048 | 28,221,882 | 28,176,510 | ||||||||||||
| Performance ratios: | |||||||||||||||||
| Return on average assets (2) | 0.80 | % | 0.71 | % | 0.78 | % | 0.75 | % | 0.75 | % | |||||||
| Return on average equity (2) | 8.16 | % | 7.15 | % | 7.36 | % | 7.66 | % | 7.01 | % | |||||||
| Net interest margin (2) (3) | 2.25 | % | 2.34 | % | 2.39 | % | 2.29 | % | 2.42 | % | |||||||
| Bank efficiency ratio (1) | 59.63 | % | 59.40 | % | 60.78 | % | 59.51 | % | 61.09 | % | |||||||
| Efficiency ratio (1) | 64.24 | % | 64.55 | % | 65.50 | % | 64.39 | % | 65.52 | % | |||||||
| Non-interest expense to average assets (2) | 2.29 | % | 2.19 | % | 2.40 | % | 2.24 | % | 2.40 | % | |||||||
| Asset quality: | |||||||||||||||||
| Non-performing loans | $ | 19,148 | $ | 21,152 | $ | 24,978 | $ | 19,148 | $ | 24,978 | |||||||
| Non-performing assets | $ | 20,878 | $ | 22,882 | $ | 26,744 | $ | 20,878 | $ | 26,744 | |||||||
| Other real estate owned | $ | 1,730 | $ | 1,730 | $ | 1,766 | $ | 1,730 | $ | 1,766 | |||||||
| Non-performing assets to total assets | 0.59 | % | 0.67 | % | 0.89 | % | 0.59 | % | 0.89 | % | |||||||
| Allowance for loan losses to loans | 0.57 | % | 0.64 | % | 0.84 | % | 0.57 | % | 0.84 | % | |||||||
| Allowance for loan losses to non-performing loans | 89.90 | % | 87.68 | % | 85.70 | % | 89.90 | % | 85.70 | % | |||||||
| Net charge-offs (recoveries) | $ | 1,411 | $ | (450 | ) | $ | (17 | ) | $ | 961 | $ | (24 | ) | ||||
| Net charge-offs (recoveries) to average total loans (2) | 0.20 | % | (0.06 | )% | — | % | 0.07 | % | — | % | |||||||
| Revenue: | |||||||||||||||||
| Total revenue (1) | $ | 29,604 | $ | 27,291 | $ | 26,249 | $ | 56,895 | $ | 51,746 | |||||||
| Pre-tax, pre-provision net revenue (1) | $ | 10,147 | $ | 9,285 | $ | 8,667 | $ | 19,432 | $ | 17,062 | |||||||
| Capital ratios: | |||||||||||||||||
| Tier 1 leverage ratio | 8.41 | % | 8.83 | % | 9.42 | % | 8.41 | % | 9.42 | % | |||||||
| Common equity tier 1 risk-based capital ratio | 11.25 | % | 11.76 | % | 12.23 | % | 11.25 | % | 12.23 | % | |||||||
| Tier 1 risk-based capital ratio | 11.25 | % | 11.76 | % | 12.23 | % | 11.25 | % | 12.23 | % | |||||||
| Total risk-based capital ratio | 12.76 | % | 13.36 | % | 14.45 | % | 12.76 | % | 14.45 | % | |||||||
| Assets under management | $ | 10,592,000 | $ | 8,579,000 | $ | 8,124,000 | $ | 10,592,000 | $ | 8,124,000 | |||||||
| (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, 2016 | March 31, 2016 | June 30, 2015 | |||||||||||||||||||||||||
| (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 |
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| Assets | |||||||||||||||||||||||||||
| Interest-earning deposits | $ | 105,954 | $ | 135 | 0.51 | % | $ | 102,680 | $ | 133 | 0.52 | % | $ | 102,353 | $ | 87 | 0.34 | % | |||||||||
| Federal funds sold | 6,041 | 5 | 0.33 | % | 6,053 | 5 | 0.33 | % | 6,420 | 2 | 0.12 | % | |||||||||||||||
| Investment securities available-for-sale | 185,477 | 816 | 1.77 | % | 176,307 | 743 | 1.69 | % | 153,983 | 465 | 1.21 | % | |||||||||||||||
| Investment securities held-to-maturity | 45,143 | 457 | 4.07 | % | 47,278 | 466 | 3.96 | % | 40,051 | 384 | 3.85 | % | |||||||||||||||
| FHLB stock | 11,984 | 102 | 3.42 | % | 8,602 | 97 | 4.54 | % | 4,178 | 55 | 5.28 | % | |||||||||||||||
| Total loans | 2,909,217 | 22,354 | 3.09 | % | 2,834,964 | 21,988 | 3.12 | % | 2,505,646 | 19,551 | 3.13 | % | |||||||||||||||
| Total interest-earning assets | 3,263,816 | 23,869 | 2.94 | % | 3,175,884 | 23,432 | 2.97 | % | 2,812,631 | 20,544 | 2.93 | % | |||||||||||||||
| Other assets | 157,736 | 137,811 | 131,856 | ||||||||||||||||||||||||
| Total assets | $ | 3,421,552 | $ | 3,313,695 | $ | 2,944,487 | |||||||||||||||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||||||||||||
| Interest-bearing checking accounts | $ | 145,858 | $ | 154 | 0.42 | % | $ | 144,473 | $ | 153 | 0.43 | % | $ | 98,183 | $ | 99 | 0.40 | % | |||||||||
| Money market deposit accounts | 1,603,881 | 2,622 | 0.66 | % | 1,551,068 | 2,207 | 0.57 | % | 1,352,153 | 1,336 | 0.40 | % | |||||||||||||||
| Time deposits | 852,381 | 1,827 | 0.86 | % | 893,449 | 1,778 | 0.80 | % | 900,638 | 1,741 | 0.78 | % | |||||||||||||||
| Borrowings: | |||||||||||||||||||||||||||
| FHLB borrowing | 269,670 | 419 | 0.62 | % | 187,253 | 291 | 0.63 | % | 79,176 | 78 | 0.40 | % | |||||||||||||||
| Subordinated notes payable, net | 34,376 | 554 | 6.48 | % | 34,326 | 554 | 6.49 | % | 34,173 | 554 | 6.50 | % | |||||||||||||||
| Total interest-bearing liabilities | 2,906,166 | 5,576 | 0.77 | % | 2,810,569 | 4,983 | 0.71 | % | 2,464,323 | 3,808 | 0.62 | % | |||||||||||||||
| Noninterest-bearing deposits | 147,540 | 151,940 | 137,647 | ||||||||||||||||||||||||
| Other liabilities | 34,075 | 22,550 | 30,304 | ||||||||||||||||||||||||
| Shareholders' equity | 333,771 | 328,636 | 312,213 | ||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 3,421,552 | $ | 3,313,695 | $ | 2,944,487 | |||||||||||||||||||||
| Net interest income (1) | $ | 18,293 | $ | 18,449 | $ | 16,736 | |||||||||||||||||||||
| Net interest spread | 2.17 | % | 2.26 | % | 2.31 | % | |||||||||||||||||||||
| Net interest margin (1) | 2.25 | % | 2.34 | % | 2.39 | % | |||||||||||||||||||||
| (1) | Net interest income and net interest margin are calculated on a fully taxable equivalent basis. |
| TRISTATE CAPITAL HOLDINGS, INC. | ||||||||||||||||||||||
| SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||||
| Six Months Ended June 30, | ||||||||||||||||||||||
| 2016 | 2015 | |||||||||||||||||||||
| (Dollars in thousands) |
Average |
Interest |
Average |
Average |
Interest |
Average |
||||||||||||||||
| Assets | ||||||||||||||||||||||
| Interest-earning deposits | $ | 104,317 | $ | 268 | 0.52 | % | $ | 110,512 | $ | 189 | 0.34 | % | ||||||||||
| Federal funds sold | 6,047 | 10 | 0.33 | % | 6,115 | 3 | 0.10 | % | ||||||||||||||
| Investment securities available-for-sale | 180,892 | 1,559 | 1.73 | % | 157,713 | 953 | 1.22 | % | ||||||||||||||
| Investment securities held-to-maturity | 46,211 | 924 | 4.02 | % | 37,909 | 736 | 3.92 | % | ||||||||||||||
| FHLB stock | 10,293 | 199 | 3.89 | % | 4,430 | 262 | 11.93 | % | ||||||||||||||
| Total loans | 2,872,090 | 44,341 | 3.10 | % | 2,465,650 | 38,661 | 3.16 | % | ||||||||||||||
| Total interest-earning assets | 3,219,850 | 47,301 | 2.95 | % | 2,782,329 | 40,804 | 2.96 | % | ||||||||||||||
| Other assets | 147,773 | 129,762 | ||||||||||||||||||||
| Total assets | $ | 3,367,623 | $ | 2,912,091 | ||||||||||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||
| Interest-bearing checking accounts | $ | 145,166 | $ | 307 | 0.43 | % | $ | 106,815 | $ | 219 | 0.41 | % | ||||||||||
| Money market deposit accounts | 1,577,474 | 4,829 | 0.62 | % | 1,305,908 | 2,556 | 0.39 | % | ||||||||||||||
| Time deposits | 872,915 | 3,605 | 0.83 | % | 883,095 | 3,293 | 0.75 | % | ||||||||||||||
| Borrowings: | ||||||||||||||||||||||
| FHLB borrowing | 228,461 | 710 | 0.62 | % | 89,724 | 172 | 0.39 | % | ||||||||||||||
| Subordinated notes payable, net | 34,351 | 1,108 | 6.49 | % | 34,149 | 1,107 | 6.54 | % | ||||||||||||||
| Total interest-bearing liabilities | 2,858,367 | 10,559 | 0.74 | % | 2,419,691 | 7,347 | 0.61 | % | ||||||||||||||
| Noninterest-bearing deposits | 149,740 | 149,681 | ||||||||||||||||||||
| Other liabilities | 28,312 | 32,712 | ||||||||||||||||||||
| Shareholders' equity | 331,204 | 310,007 | ||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 3,367,623 | $ | 2,912,091 | ||||||||||||||||||
| Net interest income (1) | $ | 36,742 | $ | 33,457 | ||||||||||||||||||
| Net interest spread | 2.21 | % | 2.35 | % | ||||||||||||||||||
| Net interest margin (1) | 2.29 | % | 2.42 | % | ||||||||||||||||||
| (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, 2016 | March 31, 2016 | June 30, 2015 | |||||||||||||||||||
| (Dollars in thousands) |
Loan |
Percent of |
Loan |
Percent of |
Loan |
Percent of |
|||||||||||||||
| Private banking loans | $ | 1,435,545 | 47.9 | % | $ | 1,368,971 | 47.3 | % | $ | 1,114,342 | 43.6 | % | |||||||||
| Middle-market banking loans: | |||||||||||||||||||||
| Commercial and industrial | 573,733 | 19.1 | % | 612,272 | 21.1 | % | 631,122 | 24.7 | % | ||||||||||||
| Commercial real estate | 988,031 | 33.0 | % | 915,360 | 31.6 | % | 808,879 | 31.7 | % | ||||||||||||
| Total middle-market banking loans | 1,561,764 | 52.1 | % | 1,527,632 | 52.7 | % | 1,440,001 | 56.4 | % | ||||||||||||
| Loans held-for-investment | $ | 2,997,309 | 100.0 | % | $ | 2,896,603 | 100.0 | % | $ | 2,554,343 | 100.0 | % | |||||||||
| TRISTATE CAPITAL HOLDINGS, INC. | |||||||||||||||||||||||||||||||
| STATEMENT OF INCOME BY REPORTABLE SEGMENT (UNAUDITED) | |||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2016 | Three Months Ended June 30, 2015 | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | Bank |
Investment Management |
Parent and Other |
Consolidated | Bank |
Investment Management |
Parent and Other |
Consolidated | |||||||||||||||||||||||
| Income statement data: | |||||||||||||||||||||||||||||||
| Interest income | $ | 23,730 | $ | — | $ | 65 | $ | 23,795 | $ | 20,429 | $ | — | $ | 52 | $ | 20,481 | |||||||||||||||
| Interest expense | 5,025 | — | 551 | 5,576 | 3,259 | — | 549 | 3,808 | |||||||||||||||||||||||
| Net interest income (loss) | 18,705 | — | (486 | ) | 18,219 | 17,170 | — | (497 | ) | 16,673 | |||||||||||||||||||||
| Provision for loan losses | 80 | — | — | 80 | 185 | — | — | 185 | |||||||||||||||||||||||
| Net interest income (loss) after provision for loan losses | 18,625 | — | (486 | ) | 18,139 | 16,985 | — | (497 | ) | 16,488 | |||||||||||||||||||||
| Non-interest income: | |||||||||||||||||||||||||||||||
| Investment management fees | — | 9,517 | (55 | ) | 9,462 | — | 7,556 | (42 | ) | 7,514 | |||||||||||||||||||||
| Net gain on the sale and call of investment securities | 62 | — | — | 62 | — | — | — | — | |||||||||||||||||||||||
| Other non-interest income | 1,922 | 1 | — | 1,923 | 2,062 | — | — | 2,062 | |||||||||||||||||||||||
| Total non-interest income | 1,984 | 9,518 | (55 | ) | 11,447 | 2,062 | 7,556 | (42 | ) | 9,576 | |||||||||||||||||||||
| Non-interest expense: | |||||||||||||||||||||||||||||||
| Intangible amortization expense | — | 438 | — | 438 | — | 390 | — | 390 | |||||||||||||||||||||||
| Other non-interest expense | 12,299 | 6,683 | 37 | 19,019 | 11,690 | 5,497 | 5 | 17,192 | |||||||||||||||||||||||
| Total non-interest expense | 12,299 | 7,121 | 37 | 19,457 | 11,690 | 5,887 | 5 | 17,582 | |||||||||||||||||||||||
| Income (loss) before tax | 8,310 | 2,397 | (578 | ) | 10,129 | 7,357 | 1,669 | (544 | ) | 8,482 | |||||||||||||||||||||
| Income tax expense (benefit) | 2,662 | 917 | (223 | ) | 3,356 | 2,291 | 633 | (170 | ) | 2,754 | |||||||||||||||||||||
| Net income (loss) | $ | 5,648 | $ | 1,480 | $ | (355 | ) | $ | 6,773 | $ | 5,066 | $ | 1,036 | $ | (374 | ) | $ | 5,728 | |||||||||||||
| Six Months Ended June 30, 2016 | Six Months Ended June 30, 2015 | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | Bank |
Investment Management |
Parent and Other |
Consolidated | Bank |
Investment Management |
Parent and Other |
Consolidated | |||||||||||||||||||||||
| Income statement data: | |||||||||||||||||||||||||||||||
| Interest income | $ | 47,017 | $ | — | $ | 138 | $ | 47,155 | $ | 40,577 | $ | — | $ | 106 | $ | 40,683 | |||||||||||||||
| Interest expense | 9,457 | — | 1,102 | 10,559 | 6,259 | — | 1,088 | 7,347 | |||||||||||||||||||||||
| Net interest income (loss) | 37,560 | — | (964 | ) | 36,596 | 34,318 | — | (982 | ) | 33,336 | |||||||||||||||||||||
| Provision for loan losses | 202 | — | — | 202 | 1,110 | — | — | 1,110 | |||||||||||||||||||||||
| Net interest income (loss) after provision for loan losses | 37,358 | — | (964 | ) | 36,394 | 33,208 | — | (982 | ) | 32,226 | |||||||||||||||||||||
| Non-interest income: | |||||||||||||||||||||||||||||||
| Investment management fees | — | 16,590 | (109 | ) | 16,481 | — | 15,258 | (89 | ) | 15,169 | |||||||||||||||||||||
| Net gain on the sale and call of investment securities | 63 | — | — | 63 | 17 | — | — | 17 | |||||||||||||||||||||||
| Other non-interest income | 3,817 | 1 | — | 3,818 | 3,240 | 1 | — | 3,241 | |||||||||||||||||||||||
| Total non-interest income | 3,880 | 16,591 | (109 | ) | 20,362 | 3,257 | 15,259 | (89 | ) | 18,427 | |||||||||||||||||||||
| Non-interest expense: | |||||||||||||||||||||||||||||||
| Intangible amortization expense | — | 828 | — | 828 | — | 779 | — | 779 | |||||||||||||||||||||||
| Other non-interest expense | 24,623 | 11,977 | 35 | 36,635 | 22,943 | 10,995 | (33 | ) | 33,905 | ||||||||||||||||||||||
| Total non-interest expense | 24,623 | 12,805 | 35 | 37,463 | 22,943 | 11,774 | (33 | ) | 34,684 | ||||||||||||||||||||||
| Income (loss) before tax | 16,615 | 3,786 | (1,108 | ) | 19,293 | 13,522 | 3,485 | (1,038 | ) | 15,969 | |||||||||||||||||||||
| Income tax expense (benefit) | 5,653 | 1,448 | (424 | ) | 6,677 | 4,188 | 1,321 | (324 | ) | 5,185 | |||||||||||||||||||||
| Net income (loss) | $ | 10,962 | $ | 2,338 | $ | (684 | ) | $ | 12,616 | $ | 9,334 | $ | 2,164 | $ | (714 | ) | $ | 10,784 | |||||||||||||
|
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,” “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 common 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 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 business purchase combination. |
|
“Total revenue” is defined as net interest income and non-interest income, excluding gains and losses on the sale and call of investment 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 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 and call of investment securities. We believe this measure is important because it allows management and investors to better assess our performance in relation to our core operating revenue, excluding the volatility that is associated with provision for loan losses or other items that are unrelated to our core business. |
| “Efficiency ratio” is defined as non-interest expense, excluding non-recurring acquisition related expenses 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) | 2016 | 2016 | 2015 | ||||||||
| Tangible book value per common share: | |||||||||||
| Total shareholders' equity | $ | 337,694 | $ | 330,242 | $ | 314,398 | |||||
| Less: intangible assets | 68,134 | 50,426 | 51,595 | ||||||||
| Tangible common equity | $ | 269,560 | $ | 279,816 | $ | 262,803 | |||||
| Common shares outstanding | 28,211,282 | 28,300,798 | 28,000,695 | ||||||||
| Tangible book value per common share | $ | 9.56 | $ | 9.89 | $ | 9.39 | |||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
| (Dollars in thousands) | 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||
| Pre-tax, pre-provision net revenue: | ||||||||||||||||||||
| Net interest income | $ | 18,219 | $ | 18,377 | $ | 16,673 | $ | 36,596 | $ | 33,336 | ||||||||||
| Total non-interest income | 11,447 | 8,915 | 9,576 | 20,362 | 18,427 | |||||||||||||||
| Less: net gain on the sale and call of investment securities | 62 | 1 | — | 63 | 17 | |||||||||||||||
| Total revenue | 29,604 | 27,291 | 26,249 | 56,895 | 51,746 | |||||||||||||||
| Less: total non-interest expense | 19,457 | 18,006 | 17,582 | 37,463 | 34,684 | |||||||||||||||
| Pre-tax, pre-provision net revenue | $ | 10,147 | $ | 9,285 | $ | 8,667 | $ | 19,432 | $ | 17,062 | ||||||||||
| Efficiency ratio: | ||||||||||||||||||||
| Total non-interest expense | $ | 19,457 | $ | 18,006 | $ | 17,582 | $ | 37,463 | $ | 34,684 | ||||||||||
|
Less: non-recurring acquisition related expenses |
— | 1 | — | 1 | — | |||||||||||||||
| Less: intangible amortization expense | 438 | 390 | 390 | 828 | 779 | |||||||||||||||
| Total non-interest expense, as adjusted (numerator) | $ | 19,019 | $ | 17,615 | $ | 17,192 | $ | 36,634 | $ | 33,905 | ||||||||||
| Total revenue (denominator) | $ | 29,604 | $ | 27,291 | $ | 26,249 | $ | 56,895 | $ | 51,746 | ||||||||||
| Efficiency ratio | 64.24 | % | 64.55 | % | 65.50 | % | 64.39 | % | 65.52 | % | ||||||||||
| 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) | 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||
| Bank pre-tax, pre-provision net revenue: | ||||||||||||||||||||
| Net interest income | $ | 18,705 | $ | 18,855 | $ | 17,170 | $ | 37,560 | $ | 34,318 | ||||||||||
| Total non-interest income | 1,984 | 1,896 | 2,062 | 3,880 | 3,257 | |||||||||||||||
| Less: net gain on the sale and call of investment securities | 62 | 1 | — | 63 | 17 | |||||||||||||||
| Total revenue | 20,627 | 20,750 | 19,232 | 41,377 | 37,558 | |||||||||||||||
| Less: total non-interest expense | 12,299 | 12,325 | 11,690 | 24,623 | 22,943 | |||||||||||||||
| Pre-tax, pre-provision net revenue | $ | 8,328 | $ | 8,425 | $ | 7,542 | $ | 16,754 | $ | 14,615 | ||||||||||
| Bank efficiency ratio: | ||||||||||||||||||||
| Total non-interest expense (numerator) | $ | 12,299 | $ | 12,325 | $ | 11,690 | $ | 24,623 | $ | 22,943 | ||||||||||
| Total revenue (denominator) | $ | 20,627 | $ | 20,750 | $ | 19,232 | $ | 41,377 | $ | 37,558 | ||||||||||
| Efficiency ratio | 59.63 | % | 59.40 | % | 60.78 | % | 59.51 | % | 61.09 | % | ||||||||||
