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Section 1: 8-K (8-K)

Document


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 19, 2017

_________
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 19, 2017, TriState Capital Holdings, Inc. issued a press release which disclosed results of operations for the three and six months ended June 30, 2017. A copy of the press release is included as Exhibit 99.1 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 5.02.    Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(c)
On July 19, 2017, TriState Capital Holdings, Inc. (the “Company”) also issued a press release which announced that Brian Fetterolf, the President of the Company’s banking subsidiary, TriState Capital Bank, has been elected the Chief Executive Officer of the Bank and to the boards of directors of the Bank and of the Company. A copy of the press release is included as Exhibit 99.2 to this report, which is incorporated into this report by reference.

Mr. Fetterolf has no family relationships with any current director or executive officer of the Company, and there are no transactions or proposed transactions to which the Company is a party, or intended to be a party, in which Mr. Fetterolf has, or will have, a material interest subject to disclosure under Item 404(a) of Regulation S-K. Mr. Fetterolf was not elected the Bank’s Chief Executive Officer or to the boards of directors of the Bank and the Company pursuant to any arrangement or understanding with any other person.

(e)
Mr. Fetterolf’s annual compensation has been set at $400,000. He will also be eligible for bonuses at the discretion of the Company’s Compensation Committee under a bonus compensation plan based upon established goals.


Item 9.01.    Financial Statements and Exhibits.
Exhibit No.
Description
99.1
Press release dated July 19, 2017, filed herewith, for item 2.02.
99.2
Press release dated July 19, 2017, filed herewith, for item 5.02.


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 19, 2017


3



EXHIBIT INDEX


Exhibit No.
Description
99.1
Press release dated July 19, 2017, filed herewith, for item 2.02.
99.2
Press release dated July 19, 2017, filed herewith, for item 5.02.


4
(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
EXHIBIT 99.1


FOR IMMEDIATE RELEASE                            








TRISTATE CAPITAL REPORTS SECOND QUARTER 2017 FINANCIAL RESULTS


PITTSBURGH, July 19, 2017 - TriState Capital Holdings, Inc. (NASDAQ: TSC) reported record growth in net interest income and loans for the second quarter of 2017, as well as double-digit expansion of earnings, revenue and deposits, compared to the same period last year.

The parent company of TriState Capital Bank and Chartwell Investment Partners grew earnings to $0.29 per diluted share in the second quarter ended June 30, 2017, an increase of 20.8% from $0.24 in the second quarter of 2016 and 11.5% from $0.26 in the first quarter of 2017. Net income totaled $8.4 million in the second quarter of 2017, growing 24.3% from $6.8 million in the year-ago period and 12.4% from $7.5 million in the linked quarter.

“TriState Capital’s ability to generate year-over-year earnings growth in excess of 10% for 10 consecutive quarters is the product of our disciplined focus on niche financial services businesses, an unrivaled national distribution network, and a relationship-driven sales culture that attracts and retains highly motivated and talented professionals,” Chairman and Chief Executive Officer James F. Getz said. “In the second quarter, we continued to fund what we believe is the premier private banking franchise in the United States, complementing the expansion of our national investment management and regional middle-market commercial banking businesses while maintaining superior asset quality and consistently delivering strong bottom-line growth.”

SECOND QUARTER 2017 HIGHLIGHTS
Net interest income of $22.0 million grew a record $3.8 million, or 20.9%, from the year-ago quarter and $1.1 million, or 5.3%, from the linked quarter
Loans of $3.77 billion at period end grew a record $774.0 million, or 25.8%, from one year prior and 6.6% during the quarter, with significant increases in commercial and industrial, commercial real estate and private bank lending
Deposits of $3.53 billion at period end grew by 22.2% from one year prior and 6.4% during the quarter, to continue funding the rapid growth of TriState Capital’s national private banking franchise
Significant operating leverage illustrated by TriState Capital Bank’s 55.03% efficiency ratio
Investment management fees and total non-interest income represented 27.3% and 34.2% of total revenue, respectively
Superior credit quality metrics saw further improvement with non-performing assets (NPAs) declining to 0.27% of assets and adverse-rated credits declining to 0.90% of loans at period end

Total revenue was $33.5 million in the second quarter of 2017, increasing 13.2% from $29.6 million in the year-ago quarter and 3.6% from $32.3 million in the linked quarter. Net interest income totaled $22.0 million in the second quarter of 2017, growing a record $3.8 million, or 20.9%, from $18.2 million in the year-ago quarter and $1.1 million, or 5.3%, from $20.9 million in the linked quarter.

Non-interest income totaled $11.7 million in the second quarter 2017, compared to $11.4 million in the year-ago period and the linked quarter. TriState Capital’s non-interest income is largely comprised of Chartwell investment management fees, which were $9.1 million in the second quarter of 2017. Investment management fees were $9.5 million in the second quarter of 2016, when Chartwell completed its acquisition of The Killen Group (TKG) and its Berwyn Funds, and $9.3 million in the linked quarter.


1

EXHIBIT 99.1

Other non-interest income was $2.3 million in the second quarter of 2017, compared to $1.9 million in the year-ago quarter and $2.1 million in the linked quarter, with quarter-to-quarter variability primarily reflecting commercial borrower interest rate swap activity.

Non-interest expenses were $21.8 million, or 2.10% of average assets on an annualized basis, in the second quarter of 2017 compared to $21.2 million, or 2.15%, in the first quarter of 2017. Non-interest expenses in the second quarter of 2016 were $19.5 million, or 2.29% of average assets on an annualized basis, reflecting the closing of the company’s TKG investment management acquisition on April 29 of last year. The bank’s efficiency ratio for the second quarter of 2017 continued its positive trend and was 55.03%, compared to 59.63% in the year-ago period and 57.99% in the linked quarter.

(Dollars in thousands, except per share data)
Q2 2017

Q1 2017

Q2 2016

 
FY 2016

Total non-interest expense (GAAP)
$
21,784

$
21,158

$
19,457

 
$
78,794

Non-recurring items:
 
 
 
 
 
Change in fair value of previously accrued acquisition earn out



 
3,687

Acquisition-related expense



 
(352
)
Severance expense



 
(300
)
Non-interest expense excluding non-recurring items (non-GAAP)
$
21,784

$
21,158

$
19,457

 
$
81,829

Net impact of non-recurring items on EPS
$

$

$

 
$
0.07


TriState Capital’s effective tax rate was 26.4% due primarily to securing additional tax credits in the second quarter. The company’s effective rate is currently expected to be approximately 30.0% for full year 2017.

BALANCE SHEET GROWTH
Loans totaled $3.77 billion at June 30, 2017, increasing a record $774.0 million, or 25.8%, over balances at June 30, 2016 and $234.2 million, or 6.6%, from March 31. Private banking loans totaled $1.97 billion at June 30, 2017, growing 37.1% from the end of the year-ago quarter and 7.1% from the end of the linked quarter. Commercial loans totaled $1.80 billion at June 30, 2017, up 15.5% from the end of the year-ago quarter and 6.1% from the end of the linked quarter, with renewed commercial and industrial lending growth of $54.0 million during the second quarter of 2017 and continued expansion of commercial real estate lending.

Deposits totaled $3.53 billion at June 30, 2017, increasing $641.7 million, or 22.2%, from June 30, 2016 and $212.0 million, or 6.4%, from March 31. This illustrates the ongoing success of TriState Capital’s efforts to grow stable and cost-effective relationship deposits and treasury management related liquidity from new and existing accounts through enhanced services and technology.

TriState Capital continues to manage a highly asset-sensitive balance sheet. At June 30, 2017, 90% of TriState Capital’s loan portfolio and 38% of its securities portfolio were floating rate. In addition, 28% of deposits were fixed-rate certificates of deposit. Net interest margin was essentially flat at 2.23% in the second quarter 2017, compared to 2.24% in the linked quarter, due to the continuing shift in loan mix and the sourcing of strategic deposit relationships, which still resulted in record net interest income. Margin expansion is expected to resume in the upcoming quarter.

ASSET QUALITY
The bank’s superior asset quality metrics in the second quarter of 2017 continued to reflect TriState Capital’s disciplined credit culture and the growth of its private banking non-purpose margin loans secured by marketable securities. Private banking comprised 52% of the total loan portfolio at June 30, 2017.

Non-performing assets declined to $11.7 million at June 30, 2017, or 0.27% of total assets, compared to $20.9 million, or 0.59% of assets, at June 30, 2016 and $18.2 million, or 0.45%, at March 31, 2017.

Adverse-rated credits declined to $33.8 million at June 30, 2017, or 0.90% of total loans, compared to $56.6 million, or 1.89% of loans, at June 30, 2016 and $40.0 million, or 1.13%, at March 31, 2017.

2

EXHIBIT 99.1


The bank took net charge-offs of $733,000, or 0.08% of average total loans, in the second quarter of 2017, $1.4 million, or 0.20% of average total loans, in the year-ago period and $2.8 million, or 0.33% of average total loans, in the linked quarter.

Provision expense was $516,000 for the second quarter of 2017, $80,000 in the second quarter of 2016 and $243,000 in the first quarter of 2017.

The company’s allowance for loan losses (ALL) at the end of the second quarter of 2017 reflects declining NPAs and lower levels of provision required for private banking loans. ALL represented 0.42% of total loans at June 30, 2017, compared to 0.57% at June 30, 2016 and 0.46% at March 31, 2017.

INVESTMENT MANAGEMENT
Chartwell assets under management totaled $8.0 billion at June 30, 2017, compared to $8.2 billion at March 31, 2017, with new business and new flows from existing accounts of $457 million, outflows of $733 million, and market appreciation of $87 million in the second quarter of 2017. Particularly strong inflow contributors in the second quarter included Chartwell’s small- and mid-cap value equity strategies, its short duration BB-Rated high yield fixed income strategy, and its Berwyn Income Fund hybrid strategy. Chartwell’s weighted average fee rate was 0.46% at June 30, 2017.

Investment management fees totaled $9.1 million in the second quarter of 2017, compared to $9.5 million in the second quarter of 2016 and $9.3 million in the first quarter of 2017. On an annualized run-rate basis, Chartwell’s revenues were $36.4 million at June 30, 2017, compared to $41.2 million at June 30, 2016 and $37.9 million at March 31, 2017.

CAPITAL STRENGTH AND FLEXIBILITY
TriState Capital’s earnings in the quarter continued to support superior loan growth in the period, while the company maintained capital ratios that exceed the highest required regulatory benchmark levels. As of June 30, 2017, TriState Capital Holdings reported ratios of 12.14% for total risk-based capital, 11.21% for tier 1 risk-based capital, 11.21% for common equity tier 1 risk-based capital and 7.45% for tier 1 leverage.

In January 2017, TriState Capital’s Board of Directors approved additional share repurchases of up to $5 million. In combination with authorizations granted in 2016, $4.6 million remains available. Over the six months ended June 30, 2017, the company repurchased a total of 174,603 shares for approximately $4.1 million at an average cost of $23.60 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 20 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/10109423 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 27. 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 10109423.

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 $4.2 billion in assets, as of June 30, 2017, 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.

3

EXHIBIT 99.1

Its Chartwell Investment Partners subsidiary had $8.0 billion in assets under management, as of June 30, 2017, 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.

###

MEDIA CONTACT
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


4

EXHIBIT 99.1

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,
 
2017
2017
2016
 
2017
2016
Period-end balance sheet data:
 
 
 
 
 
 
Cash and cash equivalents
$
119,715

$
112,501

$
114,297

 
$
119,715

$
114,297

Total investment securities
221,409

234,866

242,217

 
221,409

242,217

Loans held-for-investment
3,771,312

3,537,090

2,997,309

 
3,771,312

2,997,309

Allowance for loan losses
(15,968
)
(16,185
)
(17,215
)
 
(15,968
)
(17,215
)
Loans held-for-investment, net
3,755,344

3,520,905

2,980,094

 
3,755,344

2,980,094

Goodwill and other intangibles, net
66,283

66,746

68,134

 
66,283

68,134

Other assets
145,084

140,019

123,849

 
145,084

123,849

Total assets
$
4,307,835

$
4,075,037

$
3,528,591

 
$
4,307,835

$
3,528,591

 
 
 
 
 
 
 
Deposits
$
3,529,868

$
3,317,880

$
2,888,192

 
$
3,529,868

$
2,888,192

Borrowings, net
363,612

349,561

259,409

 
363,612

259,409

Other liabilities
46,716

47,937

43,296

 
46,716

43,296

Total liabilities
3,940,196

3,715,378

3,190,897

 
3,940,196

3,190,897

 
 
 
 
 
 
 
Total shareholders' equity
367,639

359,659

337,694

 
367,639

337,694

 
 
 
 
 
 
 
Total liabilities and shareholders' equity
$
4,307,835

$
4,075,037

$
3,528,591

 
$
4,307,835

$
3,528,591

 
 
 
 
 
 
 
Income statement data:
 
 
 
 
 
 
Interest income
$
32,115

$
28,737

$
23,795

 
$
60,852

$
47,155

Interest expense
10,082

7,821

5,576

 
17,903

10,559

Net interest income
22,033

20,916

18,219

 
42,949

36,596

Provision for loan losses
516

243

80

 
759

202

Net interest income after provision for loan losses
21,517

20,673

18,139

 
42,190

36,394

Non-interest income:
 
 
 
 
 
 
Investment management fees
9,130

9,340

9,462

 
18,470

16,481

Net gain (loss) on the sale and call of investment securities
241

(2
)
62

 
239

63

Other non-interest income
2,341

2,071

1,923

 
4,412

3,818

Total non-interest income
11,712

11,409

11,447

 
23,121

20,362

Non-interest expense:
 
 
 
 
 
 
Intangible amortization expense
462

463

438

 
925

828

Other non-interest expense
21,322

20,695

19,019

 
42,017

36,635

Total non-interest expense
21,784

21,158

19,457

 
42,942

37,463

Income before tax
11,445

10,924

10,129

 
22,369

19,293

Income tax expense
3,024

3,432

3,356

 
6,456

6,677

Net income
$
8,421

$
7,492

$
6,773

 
$
15,913

$
12,616



5

EXHIBIT 99.1

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,
 
2017
2017
2016
 
2017
2016
Per share and share data:
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
Basic
$
0.31

$
0.27

$
0.25

 
$
0.58

$
0.46

Diluted
$
0.29

$
0.26

$
0.24

 
$
0.55

$
0.45

Book value per common share
$
12.83

$
12.52

$
11.97

 
$
12.83

$
11.97

Tangible book value per common share (1)
$
10.51

$
10.19

$
9.56

 
$
10.51

$
9.56

Common shares outstanding, at end of period
28,665,726

28,731,963

28,211,282

 
28,665,726

28,211,282

Weighted average common shares outstanding:
 
 
 
 
 
 
Basic
27,601,702

27,627,285

27,549,475

 
27,614,423

27,601,331

Diluted
28,785,625

28,717,506

28,225,404

 
28,752,917

28,221,882

 
 
 
 
 
 
 
Performance ratios:
 
 
 
 
 
 
Return on average assets (2)
0.81
%
0.76
%
0.80
%
 
0.79
%
0.75
%
Return on average equity (2)
9.27
%
8.52
%
8.16
%
 
8.90
%
7.66
%
Net interest margin (2) (3)
2.23
%
2.24
%
2.25
%
 
2.23
%
2.29
%
Bank efficiency ratio (1)
55.03
%
57.99
%
59.63
%
 
56.47
%
59.51
%
Efficiency ratio (1)
63.64
%
64.02
%
64.24
%
 
63.83
%
64.39
%
Non-interest expense to average assets (2)
2.10
%
2.15
%
2.29
%
 
2.12
%
2.24
%
 
 
 
 
 
 
 
Asset quality:
 
 
 
 
 
 
Non-performing loans
$
7,830

$
14,053

$
19,148

 
$
7,830

$
19,148

Non-performing assets
$
11,701

$
18,231

$
20,878

 
$
11,701

$
20,878

Other real estate owned
$
3,871

$
4,178

$
1,730

 
$
3,871

$
1,730

Non-performing assets to total assets
0.27
%
0.45
%
0.59
%
 
0.27
%
0.59
%
Non-performing loans to total loans
0.21
%
0.40
%
0.64
%
 
0.21
%
0.64
%
Allowance for loan losses to loans
0.42
%
0.46
%
0.57
%
 
0.42
%
0.57
%
Allowance for loan losses to non-performing loans
203.93
%
115.17
%
89.90
%
 
203.93
%
89.90
%
Net charge-offs
$
733

$
2,820

$
1,411

 
$
3,553

$
961

Net charge-offs to average total loans (2)
0.08
%
0.33
%
0.20
%
 
0.20
%
0.07
%
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
Total revenue (1)
$
33,504

$
32,327

$
29,604

 
$
65,831

$
56,895

Pre-tax, pre-provision net revenue (1)
$
11,720

$
11,169

$
10,147

 
$
22,889

$
19,432

 
 
 
 
 
 
 
Capital ratios:
 
 
 
 
 
 
Tier 1 leverage ratio
7.45
%
7.56
%
8.41
%
 
7.45
%
8.41
%
Common equity tier 1 risk-based capital ratio
11.21
%
11.42
%
11.25
%
 
11.21
%
11.25
%
Tier 1 risk-based capital ratio
11.21
%
11.42
%
11.25
%
 
11.21
%
11.25
%
Total risk-based capital ratio
12.14
%
12.39
%
12.76
%
 
12.14
%
12.76
%
 
 
 
 
 
 
 
Investment Management Segment:
 
 
 
 
 
 
Assets under management
$
8,003,000

$
8,192,000

$
10,592,000

 
$
8,003,000

$
10,592,000

Adjusted EBITDA (1)
$
1,692

$
2,475

$
2,860

 
$
4,167

$
4,661


(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 99.1

TRISTATE CAPITAL HOLDINGS, INC.
AVERAGES AND YIELDS (UNAUDITED)
 
Three Months Ended
 
June 30, 2017
 
March 31, 2017
 
June 30, 2016
(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
$
118,916

$
323

1.09
%
 
$
114,709

$
238

0.84
%
 
$
105,954

$
135

0.51
%
Federal funds sold
6,225

15

0.97
%
 
6,427

11

0.69
%
 
6,041

5

0.33
%
Investment securities available-for-sale
152,471

808

2.13
%
 
168,083

854

2.06
%
 
185,477

816

1.77
%
Investment securities held-to-maturity
61,359

639

4.18
%
 
54,591

574

4.26
%
 
45,143

457

4.07
%
FHLB stock
16,449

148

3.61
%
 
12,376

102

3.34
%
 
11,984

102

3.42
%
Total loans
3,619,251

30,242

3.35
%
 
3,448,837

27,019

3.18
%
 
2,909,217

22,354

3.09
%
Total interest-earning assets
3,974,671

32,175

3.25
%
 
3,805,023

28,798

3.07
%
 
3,263,816

23,869

2.94
%
Other assets
188,588

 
 
 
185,357

 
 
 
157,736

 
 
Total assets
$
4,163,259

 
 
 
$
3,990,380

 
 
 
$
3,421,552

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Shareholders' Equity
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing checking accounts
$
304,973

$
759

1.00
%
 
$
217,704

$
362

0.67
%
 
$
145,858

$
154

0.42
%
Money market deposit accounts
1,914,429

5,150

1.08
%
 
1,916,428

4,098

0.87
%
 
1,603,881

2,622

0.66
%
Certificates of deposit
924,110

2,587

1.12
%
 
934,913

2,253

0.98
%
 
852,381

1,827

0.86
%
Borrowings:
 
 
 
 
 
 
 
 
 
 
 
FHLB borrowing
379,890

1,016

1.07
%
 
270,222

554

0.83
%
 
269,670

419

0.62
%
Line of credit borrowing
1,527

16

4.20
%
 


%
 


%
Subordinated notes payable, net
34,579

554

6.43
%
 
34,528

554

6.51
%
 
34,376

554

6.48
%
Total interest-bearing liabilities
3,559,508

10,082

1.14
%
 
3,373,795

7,821

0.94
%
 
2,906,166

5,576

0.77
%
Noninterest-bearing deposits
194,957

 
 
 
218,007

 
 
 
147,540

 
 
Other liabilities
44,404

 
 
 
41,960

 
 
 
34,075

 
 
Shareholders' equity
364,390

 
 
 
356,618

 
 
 
333,771

 
 
Total liabilities and shareholders' equity
$
4,163,259

 
 
 
$
3,990,380

 
 
 
$
3,421,552

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income (1)
 
$
22,093

 
 
 
$
20,977

 
 
 
$
18,293

 
Net interest spread
 
 
2.11
%
 
 
 
2.13
%
 
 
 
2.17
%
Net interest margin (1)
 
 
2.23
%
 
 
 
2.24
%
 
 
 
2.25
%

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


7

EXHIBIT 99.1

TRISTATE CAPITAL HOLDINGS, INC.
AVERAGES AND YIELDS (UNAUDITED)

 
Six Months Ended June 30,
 
2017
 
2016
(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
$
116,824

$
561

0.97
%
 
$
104,317

$
268

0.52
%
Federal funds sold
6,325

25

0.80
%
 
6,047

10

0.33
%
Investment securities available-for-sale
160,234

1,662

2.09
%
 
180,892

1,559

1.73
%
Investment securities held-to-maturity
57,994

1,214

4.22
%
 
46,211

924

4.02
%
FHLB stock
14,424

250

3.50
%
 
10,293

199

3.89
%
Total loans
3,534,514

57,261

3.27
%
 
2,872,090

44,341

3.10
%
Total interest-earning assets
3,890,315

60,973

3.16
%
 
3,219,850

47,301

2.95
%
Other assets
186,982

 
 
 
147,773

 
 
Total assets
$
4,077,297

 
 
 
$
3,367,623

 
 
 
 
 
 
 
 
 
 
Liabilities and Shareholders' Equity
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
Interest-bearing checking accounts
$
261,579

$
1,121

0.86
%
 
$
145,166

$
307

0.43
%
Money market deposit accounts
1,915,426

9,248

0.97
%
 
1,577,474

4,829

0.62
%
Certificates of deposit
929,482

4,840

1.05
%
 
872,915

3,605

0.83
%
Borrowings:
 
 
 
 
 
 
 
FHLB borrowing
325,359

1,570

0.97
%
 
228,461

710

0.62
%
Line of credit borrowing
768

16

4.20
%
 


%
Subordinated notes payable, net
34,553

1,108

6.47
%
 
34,351

1,108

6.49
%
Total interest-bearing liabilities
3,467,167

17,903

1.04
%
 
2,858,367

10,559

0.74
%
Noninterest-bearing deposits
206,416

 
 
 
149,740

 
 
Other liabilities
43,188

 
 
 
28,312

 
 
Shareholders' equity
360,526

 
 
 
331,204

 
 
Total liabilities and shareholders' equity
$
4,077,297

 
 
 
$
3,367,623

 
 
 
 
 
 
 
 
 
 
Net interest income (1)
 
$
43,070

 
 
 
$
36,742

 
Net interest spread
 
 
2.12
%
 
 
 
2.21
%
Net interest margin (1)
 
 
2.23
%
 
 
 
2.29
%

(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, 2017
 
March 31, 2017
 
June 30, 2016
(Dollars in thousands)
Loan
Balance
Percent of
Total Loans
 
Loan
Balance
Percent of
Total Loans
 
Loan
Balance
Percent of
Total Loans
Private banking loans
$
1,968,139

52.2
%
 
$
1,837,207

51.9
%
 
$
1,435,545

47.9
%
Middle-market banking loans:
 
 
 
 
 
 
 
 
Commercial and industrial
639,808

17.0
%
 
585,846

16.6
%
 
573,733

19.1
%
Commercial real estate
1,163,365

30.8
%
 
1,114,037

31.5
%
 
988,031

33.0
%
Total middle-market banking loans
1,803,173

47.8
%
 
1,699,883

48.1
%
 
1,561,764

52.1
%
Loans held-for-investment
$
3,771,312

100.0
%
 
$
3,537,090

100.0
%
 
$
2,997,309

100.0
%


8

EXHIBIT 99.1

TRISTATE CAPITAL HOLDINGS, INC.
STATEMENT OF INCOME BY REPORTABLE SEGMENT (UNAUDITED)
 
Three Months Ended June 30, 2017
 
Three Months Ended June 30, 2016
(Dollars in thousands)
Bank
Investment
Management
Parent
and Other
Consolidated
 
Bank
Investment
Management
Parent
and Other
Consolidated
Income statement data:
 
 
 
Interest income
$
32,047

$

$
68

$
32,115

 
$
23,730

$

$
65

$
23,795

Interest expense
9,515


567

10,082

 
5,025


551

5,576

Net interest income (loss)
22,532


(499
)
22,033

 
18,705


(486
)
18,219

Provision for loan losses
516



516

 
80



80

Net interest income (loss) after provision for loan losses
22,016


(499
)
21,517

 
18,625


(486
)
18,139

Non-interest income:
 
 
 
 
 
 
 
 
 
Investment management fees

9,182

(52
)
9,130

 

9,517

(55
)
9,462

Net gain on the sale and call of investment securities
241



241

 
62



62

Other non-interest income
2,341



2,341

 
1,922

1


1,923

Total non-interest income
2,582

9,182

(52
)
11,712

 
1,984

9,518

(55
)
11,447

Non-interest expense:
 
 
 
 
 
 
 
 
 
Intangible amortization expense

462


462

 

438


438

Other non-interest expense
13,688

7,612

22

21,322

 
12,299

6,683

37

19,019

Total non-interest expense
13,688

8,074

22

21,784

 
12,299

7,121

37

19,457

Income (loss) before tax
10,910

1,108

(573
)
11,445

 
8,310

2,397

(578
)
10,129

Income tax expense (benefit)
2,819

425

(220
)
3,024

 
2,662

917

(223
)
3,356

Net income (loss)
$
8,091

$
683

$
(353
)
$
8,421

 
$
5,648

$
1,480

$
(355
)
$
6,773


 
Six Months Ended June 30, 2017
 
Six Months Ended June 30, 2016
(Dollars in thousands)
Bank
Investment
Management
Parent
and Other
Consolidated
 
Bank
Investment
Management
Parent
and Other
Consolidated
Income statement data:
(unaudited)
 
(unaudited)
Interest income
$
60,708

$

$
144

$
60,852

 
$
47,017

$

$
138

$
47,155

Interest expense
16,785


1,118

17,903

 
9,457


1,102

10,559

Net interest income (loss)
43,923


(974
)
42,949

 
37,560


(964
)
36,596

Provision for loan losses
759



759

 
202



202

Net interest income (loss) after provision for loan losses
43,164


(974
)
42,190

 
37,358


(964
)
36,394

Non-interest income:
 
 
 
 
 
 
 
 
 
Investment management fees

18,578

(108
)
18,470

 

16,590

(109
)
16,481

Net gain on the sale and call of investment securities
239



239

 
63



63

Other non-interest income
4,411

1


4,412

 
3,817

1


3,818

Total non-interest income
4,650

18,579

(108
)
23,121

 
3,880

16,591

(109
)
20,362

Non-interest expense:
 
 
 
 
 
 
 
 
 
Intangible amortization expense

925


925

 

828


828

Other non-interest expense
27,293

14,651

73

42,017

 
24,623

11,977

35

36,635

Total non-interest expense
27,293

15,576

73

42,942

 
24,623

12,805

35

37,463

Income (loss) before tax
20,521

3,003

(1,155
)
22,369

 
16,615

3,786

(1,108
)
19,293

Income tax expense (benefit)
5,747

1,152

(443
)
6,456

 
5,653

1,448

(424
)
6,677

Net income (loss)
$
14,774

$
1,851

$
(712
)
$
15,913

 
$
10,962

$
2,338

$
(684
)
$
12,616



9

EXHIBIT 99.1

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,” “adjusted EBITDA,” “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. 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 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 share exclusive of changes in intangible assets.

“Adjusted EBITDA” is defined as net income before interest expense, income taxes, depreciation and amortization as well as excluding acquisition related items. We use this measure 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 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 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.


10

EXHIBIT 99.1

TRISTATE CAPITAL HOLDINGS, INC.
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
 
June 30,
March 31,
June 30,
(Dollars in thousands, except per share data)
2017
2017
2016
Tangible book value per common share:
 
 
 
Total shareholders' equity
$
367,639

$
359,659

$
337,694

Less: intangible assets
66,283

66,746

68,134

Tangible common equity
$
301,356

$
292,913

$
269,560

Common shares outstanding
28,665,726

28,731,963

28,211,282

Tangible book value per common share
$
10.51

$
10.19

$
9.56



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)
2017
2017
2016
 
2017
2016
Investment Management EBITDA:
 
 
 
 
 
 
Net income
$
683

$
1,168

$
1,480

 
$
1,851

$
2,338

Interest expense



 


Income taxes expense
425

727

917

 
1,152

1,448

Depreciation expense
122

117

25

 
239

46

Intangible amortization expense
462

463

438

 
925

828

EBITDA
1,692

2,475

2,860

 
4,167

4,660

Acquisition related items



 

1

Adjusted EBITDA
$
1,692

$
2,475

$
2,860

 
$
4,167

$
4,661




11

EXHIBIT 99.1

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)
2017
2017
2016
 
2017
2016
Pre-tax, pre-provision net revenue:
 
 
 
 
 
 
Net interest income
$
22,033

$
20,916

$
18,219

 
$
42,949

$
36,596

Total non-interest income
11,712

11,409

11,447

 
23,121

20,362

Less: net gain (loss) on the sale and call of investment securities
241

(2
)
62

 
239

63

Total revenue
33,504

32,327

29,604

 
65,831

56,895

Less: total non-interest expense
21,784

21,158

19,457

 
42,942

37,463

Pre-tax, pre-provision net revenue
$
11,720

$
11,169

$
10,147

 
$
22,889

$
19,432

 
 
 
 
 
 
 
Efficiency ratio:
 
 
 
 
 
 
Total non-interest expense
$
21,784

$
21,158

$
19,457

 
$
42,942

$
37,463

Less: acquisition related items



 

1

Less: intangible amortization expense
462

463

438

 
925

828

Total non-interest expense, as adjusted (numerator)
$
21,322

$
20,695

$
19,019

 
$
42,017

$
36,634

Total revenue (denominator)
$
33,504

$
32,327

$
29,604

 
$
65,831

$
56,895

Efficiency ratio
63.64
%
64.02
%
64.24
%
 
63.83
%
64.39
%


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)
2017
2017
2016
 
2017
2016
Bank pre-tax, pre-provision net revenue:
 
 
 
 
 
 
Net interest income
$
22,532

$
21,391

$
18,705

 
$
43,923

$
37,560

Total non-interest income
2,582

2,068

1,984

 
4,650

3,880

Less: net gain (loss) on the sale and call of investment securities
241

(2
)
62

 
239

63

Total revenue
24,873

23,461

20,627

 
48,334

41,377

Less: total non-interest expense
13,688

13,605

12,299

 
27,293

24,623

Pre-tax, pre-provision net revenue
$
11,185

$
9,856

$
8,328

 
$
21,041

$
16,754

 
 
 
 
 
 
 
Bank efficiency ratio:
 
 
 
 
 
 
Total non-interest expense (numerator)
$
13,688

$
13,605

$
12,299

 
$
27,293

$
24,623

Total revenue (denominator)
$
24,873

$
23,461

$
20,627

 
$
48,334

$
41,377

Bank efficiency ratio
55.03
%
57.99
%
59.63
%
 
56.47
%
59.51
%



12
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Section 3: EX-99.2 (EXHIBIT 99.2)

Exhibit
EXHIBIT 99.2



FOR IMMEDIATE RELEASE
                                

TRISTATE CAPITAL’S BRIAN FETTEROLF NAMED CEO OF BANK SUBSIDIARY

PITTSBURGH, July 19, 2017 - TriState Capital Bank President Brian S. Fetterolf has been elected to chief executive officer of the financial institution, and to the board of directors of the bank and its parent company, TriState Capital Holdings, Inc. (NASDAQ: TSC).

His election received unanimous approval from the board. Fetterolf will continue to report to James F. Getz, who remains chairman of TriState Capital Bank, as well as chairman, president and chief executive officer of its parent company, responsible for strategy and performance across the entire TriState Capital Holdings enterprise, including business development, growth initiatives and acquisitions.

“Brian exemplifies the exceptional breadth and depth of strong talent we’ve assembled across our entire organization,” Getz said. “Over the last two years, in his role as President, he’s led a TriState Capital Bank team that has continued the major expansion of our business, generating asset growth of nearly 43% and superior loan growth of more than 47%, meaningfully expanding the number of middle-market commercial customers, financial intermediaries and high-net worth clients we serve.”

As TriState Capital Bank President and CEO, Fetterolf will be responsible for strategy, execution and performance of all aspects of the bank subsidiary’s operations.

Fetterolf has more than 20 years of financial services experience and has been with TriState Capital since 2009. He was named president of TriState Capital Bank in 2015, adding responsibility for overseeing sales and origination activities of the bank. In 2017 Fetterolf was also named president of Chartwell TSC Securities Corp., the holding company's broker-dealer subsidiary that facilitates the wholesale marketing of Chartwell Funds and The Berwyn Funds. Previously, he served as TriState Capital’s chief risk officer for four years, responsible for developing and executing the firm’s enterprise risk management efforts. Fetterolf joined the company as its initial corporate counsel, managing the legal activities of TriState Capital and its loan portfolio, including loan structuring and closing, loan distribution, and special asset management.

Before coming to TriState Capital, Fetterolf was a senior vice president in the Special Situations Advisory Group of Macquarie Capital Advisors, and the head of structuring for Macquarie’s U.S. Commercial Real Estate Finance Group based in Chicago. He also worked with LaSalle Bank/ABN Amro in Chicago and New York as director of structured financial products in the Commercial Real Estate Debt Capital Markets Group. Prior to his employment within financial services, he practiced as a corporate finance attorney with Klett Rooney Lieber & Schorling, now Buchanan Ingersoll & Rooney, in Pittsburgh. Additionally, he has held ownership and director positions in manufacturing and financial services companies.

1


EXHIBIT 99.2



Fetterolf is an active member of the Pittsburgh community, serving as the chairman of the Pittsburgh Benefit Dinner for the Navy SEAL Foundation, and on the Western Pennsylvania Committee for the Bucknell University Annual Fund. He earned a Bachelor of Arts degree in economics from Bucknell University, a Juris Doctor degree from Boston College Law School and a Master of Business Administration degree from the University of Pittsburgh, Joseph M. Katz School of Business.

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 $4.2 billion in assets, as of June 30, 2017, 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 $8.0 billion in assets under management, as of June 30, 2017, and serves as the advisor to The Berwyn Funds and Chartwell Mutual Funds. For more information, please visit http://investors.tristatecapitalbank.com.

###

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



2

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