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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): January 24, 2018

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

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

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




Item 2.02. Results of Operations and Financial Condition.

On January 24, 2018, TriState Capital Holdings, Inc. issued a press release which disclosed results of operations for the three months and year ended December 31, 2017. A copy of the press release is included as Exhibit 99 to this report.

The information in this report, including the exhibit attached hereto, is furnished solely pursuant to Item 2.02 of this Form 8-K and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.

Item 8.01. Other Events.

On January 24, 2018, TriState Capital Holdings, Inc. entered into a definitive agreement to acquire the clients and client contracts and certain other assets of the fixed income business and equity business of Columbia Partners, L.L.C., Investment Management.  Institutional accounts with up to $1 billion in client assets under management (AUM) are expected to move from Columbia to Chartwell upon closing of the transaction.  Columbia Partners and the board of directors of TriState Capital have approved the transaction. Closing is anticipated during the first half of 2018, subject to regulatory requirements, certain Columbia Partners client consents, and other customary closing conditions and adjustments.

Item 9.01. Financial Statements and Exhibits.

Exhibit No.
Description
99
Press release dated January 24, 2018, filed herewith, for item 2.02.


2



SIGNATURES

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


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

Date: January 24, 2018


3



EXHIBIT INDEX


Exhibit No.
Description
99
Press release dated January 24, 2018, filed herewith, for item 2.02.


4
(Back To Top)

Section 2: EX-99 (EXHIBIT 99)

Exhibit
EXHIBIT 99



FOR IMMEDIATE RELEASE



TRISTATE CAPITAL REPORTS FOURTH QUARTER AND FULL YEAR 2017 FINANCIAL RESULTS

Fourth quarter 2017 EPS grew 55.6%, or 47.8% on a core operating basis, compared to the fourth quarter of 2016

Full year 2017 EPS grew 30.7%, or 31.9% on a core operating basis, compared to 2016

PITTSBURGH, January 24, 2018 - TriState Capital Holdings, Inc. (NASDAQ: TSC) reported strong double-digit growth in fourth quarter and full year 2017 earnings, with expansion of its commercial banking, private banking and investment management businesses generating record levels of revenue, loans and deposits.

The parent company of TriState Capital Bank and Chartwell Investment Partners reported net income of $38.0 million, or $1.32 per diluted share, for 2017 and $28.6 million, or $1.01, for 2016. The company reported net income of $12.0 million, or $0.42 per share, for the fourth quarter of 2017, $7.6 million, or $0.27, for the year-ago quarter and $10.0 million, or $0.35, for the linked third quarter of 2017. Fourth quarter and full year 2017 reported earnings per share (EPS) included a one-time benefit of $0.08 from recent federal tax legislation, while fourth quarter and full year 2016 EPS included net benefits of $0.04 and $0.07, respectively, from non-recurring items.

The company grew core operating EPS to $1.24 in 2017, which is an increase of 31.9% from $0.94 in 2016. Fourth quarter 2017 core operating EPS was $0.34, increasing 47.8% from $0.23 in the year ago quarter.

“TriState Capital’s financial results continue to demonstrate the earnings power of our diversified financial services company,” Chief Executive Officer James F. Getz said. “This marks the fourth consecutive year, and the twelfth consecutive quarter, that TriState Capital achieved double-digit EPS growth, driven by our rapidly expanding customer base, exceptional credit quality and record levels of revenue, deposits and loans, which surpassed the $4 billion milestone for the first time. TriState Capital is by every measure a growth company, and we look forward to continuing the expansion of our middle-market commercial banking business, our national private banking franchise and our premier investment management business in 2018.”

FOURTH QUARTER 2017 HIGHLIGHTS
Net interest income grew to a record $24.8 million, increasing 27.1% from the year-ago period and 5.1% from the linked quarter
Pre-tax income grew to a record $12.9 million, increasing 15.4% from the year-ago period and 5.5% from the linked quarter
Loans grew to a record $4.18 billion at period end, increasing 23.0% from one year prior and 6.5% during the quarter
Chartwell assets under management grew to $8.3 billion at period end, increasing 3.2% from one year prior and 1.4% during the quarter
Superior credit quality metrics included non-performing assets declining to 0.14% of assets, non-performing loans declining to 0.08% of loans and adverse-rated credits declining to 0.71% of loans at period end

TriState Capital’s record total revenue of $36.9 million in the fourth quarter of 2017 reflects growth of 11.2% from $33.2 million in the fourth quarter of 2016 and 4.5% from $35.3 million in the linked third quarter of 2017.

Net interest income (NII) of $24.8 million in the fourth quarter of 2017 reflected continued double-digit rates of loan growth, with NII increasing 27.1% from $19.5 million in the year-ago period and 5.1% from $23.6 million in the linked quarter.


1

EXHIBIT 99

Fourth quarter 2017 non-interest income totaled $12.1 million, compared to $13.6 million in the year-ago period and $11.7 million in the linked quarter. Non-interest income represented 32.8% of total revenue in the quarter ended December 31, 2017.

Chartwell investment management fee income was $9.4 million, or 25.5% of total revenue, in the fourth quarter of 2017, compared to $10.2 million in the same period last year and $9.2 million in the third quarter of 2017. Other non-interest income was $2.7 million in the fourth quarter of 2017, compared to $3.4 million in the year-ago period and $2.5 million in the linked quarter, primarily reflecting borrower-facing interest rate swap activity.

Total non-interest expenses were $25.7 million, or an annualized 2.24% of average assets, in the fourth quarter of 2017, including increased compensation costs tied to the company’s performance incentive program. Fourth quarter 2016 non-interest expense of $20.8 million was reduced by non-recurring adjustments in the fair value of previously accrued contingent consideration associated with that year’s acquisition of The Killen Group. Excluding non-recurring adjustments, fourth quarter 2016 non-interest expense, annualized, represented 2.38% of average assets. Third quarter 2017 non-interest expense totaled $22.8 million, or an annualized 2.09% of average assets.

The fourth quarter 2017 efficiency ratio for TriState Capital Bank was 61.42%, compared to 63.33% in the year-ago quarter and 54.81% in the linked quarter. TriState Capital’s full-year bank efficiency ratio improved to 57.39% in 2017, declining 378 basis points from 61.17% in 2016, as moderating expense growth resulted from the benefits of the company’s scale and prior investments in its distribution capabilities, operations and infrastructure.

Income tax expense for the fourth quarter and 12 months of 2017 reflected a $2.4 million, or $0.08 per share, one-time benefit from recent federal tax legislation. The adjustment was related to the acceleration of an incentive compensation deduction for tax purposes and favorable depreciation treatment associated with renewable energy credits, lowering the company’s 2017 effective tax rate to 20.0%. TriState Capital expects its 2018 effective tax rate to be approximately 21%.

(Dollars in thousands, except per share data)
Q4 2017

Q3 2017

Q4 2016

 
FY 2017

FY 2016

Income before tax (GAAP)
$
12,885

$
12,216

$
11,167

 
$
47,470

$
41,689

Non-recurring, non-interest expense items:
 
 
 
 
 
 
Change in fair value of previously accrued acquisition earn out


(2,478
)
 

(3,687
)
Acquisition-related expense


351

 

352

Severance expense


300

 

300

Income before tax, excluding non-recurring items (non-GAAP)
$
12,885

$
12,216

$
9,340

 
$
47,470

$
38,654

Adjustment for deferred taxes resulting in tax expense reduction
$
2,351

$

$

 
$
2,351

$

Net impact of non-recurring items and tax adjustment on EPS
$
0.08

$

$
0.04

 
$
0.08

$
0.07


BALANCE SHEET GROWTH
Total loans at year-end surpassed $4 billion for the first time in TriState Capital’s history, driven by strong production across all categories of lending. The company reported total loans of $4.18 billion at December 31, 2017, an increase of 23.0% from December 31, 2016 and 6.5% from September 30, 2017. Private banking loans of $2.27 billion at December 31, 2017 grew 30.5% year-over-year and 10.2% from the linked quarter. Commercial loans of $1.92 billion at December 31, 2017 reflected growth of 15.2% compared to one year prior and 2.3% compared to September 30, 2017.

Deposits totaled $3.99 billion at December 31, 2017, an increase of 21.3% from the prior year-end and 5.8% from September 30, 2017. Fourth quarter 2017 average noninterest-bearing deposits grew 2.0% from the year ago period and 9.6% from the linked quarter. These growing sources of funding reflect the success of TriState Capital’s national deposit sales team and enhanced treasury management offerings.

TriState Capital continues to manage an asset-sensitive balance sheet. At December 31, 2017, 91% of the company’s loan portfolio was floating rate and 25% of deposits were fixed-rate certificates of deposit.


2

EXHIBIT 99

ASSET QUALITY
TriState Capital’s strong asset quality metrics continued to improve in the fourth quarter of 2017, reflective of the company’s disciplined credit culture and continuing growth of its private banking non-purpose margin loans backed by marketable securities. Private banking loans comprised 54.1% of total loans at December 31, 2017.

Non-performing assets (NPAs) totaled $6.8 million at December 31, 2017, declining 69.2% from $22.0 million at December 31, 2016 and 35.7% from $10.5 million at September 30, 2017. NPAs made up 0.14% of total assets at year-end, declining by 42 basis points during 2017 and 9 basis points during the fourth quarter.

Non-performing loans (NPLs) totaled $3.2 million at December 31, 2017, declining 82.1% from $17.8 million at December 31, 2016 and 54.1% from $6.9 million at September 30, 2017. NPLs made up 0.08% of total loans at year-end, declining by 44 basis points during 2017 and 10 basis points during the fourth quarter.

Adverse-rated credits declined 29.9% from December 31, 2016, and 20.0% during the fourth quarter. Adverse-rated credits represented 0.71% of total loans at the end of the fourth quarter of 2017, 1.25% at December 31, 2016 and 0.95% at September 30, 2017.

The company recorded net recoveries of $103,000 in the fourth quarter of 2017, compared to net charge-offs of $2.6 million, or 0.32% of average total loans, in the year-ago quarter and $272,000, or 0.03% in the linked quarter.

TriState Capital recorded a credit to provision of $1.7 million for the fourth quarter of 2017, reflecting net recoveries and declining non-performing loans and adverse rated credits. Provision expense was $1.2 million in the fourth quarter of 2016 and $283,000 in the third quarter of 2017.

The company’s allowance for loan losses (ALL) continued to reflect declining NPLs and lower levels of provision required by the low risk profile of the growing proportion of private banking loans in the bank’s portfolio. ALL represented 0.34% of total loans at December 31, 2017, 0.41% at September 30, 2017 and 0.55% at December 31, 2016.

INVESTMENT MANAGEMENT
For the fourth quarter of 2017, Chartwell Investment Partners’ fee revenue totaled $9.4 million compared to $10.2 million in the year ago period and $9.2 million in the linked quarter.

Chartwell grew total assets under management to $8.3 billion at December 31, 2017, increasing 3.2% from $8.2 billion one year prior and 1.4% during the fourth quarter from $8.1 billion. The investment manager reported new business and new flows from existing accounts of $317 million and market appreciation of $197 million, which more than offset outflows of $400 million in the fourth quarter of 2017. Chartwell’s weighted average fee rate was 0.45% at December 31, 2017.

CAPITAL STRENGTH AND FLEXIBILITY
TriState Capital’s earnings in the quarter continued to support superior growth in the period, while the company maintained capital ratios exceeding the highest required regulatory benchmark levels. As of December 31, 2017, TriState Capital Holdings reported ratios of 11.72% for total risk-based capital, 11.14% for tier 1 risk-based capital, 11.14% for common equity tier 1 risk-based capital and 7.25% for tier 1 leverage.

During 2017, the company repurchased 376,641 shares of TriState Capital Holdings’ common stock for approximately $8.7 million at an average cost of $23.03 per share, fully utilizing repurchase authorizations granted by its Board of Directors. Since the Board first authorized share buybacks in October 2014, the company repurchased a total of 1,751,370 shares of its common stock for approximately $23.7 million at an average cost of $13.53 per share.

At its regular January 2018 meeting, the Board approved additional share repurchases of up to $5 million, which may be made at the discretion of management from time to time in the open market or through negotiated transactions.


3

EXHIBIT 99

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 January 25 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/10115413 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 February 1. 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 10115413.

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 $4.7 billion in assets, as of December 31, 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 $8.3 billion in assets under management, as of December 31, 2017, 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 CONTACT
Jack Horner
267-932-8760, ext. 302
412-600-2295 (mobile)
jack@hornercom.com

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

4

EXHIBIT 99

TRISTATE CAPITAL HOLDINGS, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
 
As of and For the 
 Three Months Ended
 
As of and For the 
 Years Ended
 
December 31,
September 30,
December 31,
 
December 31,
December 31,
(Dollars in thousands)
2017
2017
2016
 
2017
2016
Period-end balance sheet data:
 
 
 
 
 
 
Cash and cash equivalents
$
156,153

$
136,579

$
103,994

 
$
156,153

$
103,994

Total investment securities
220,552

220,916

238,473

 
220,552

238,473

Loans held-for-investment
4,184,244

3,930,670

3,401,054

 
4,184,244

3,401,054

Allowance for loan losses
(14,417
)
(15,979
)
(18,762
)
 
(14,417
)
(18,762
)
Loans held-for-investment, net
4,169,827

3,914,691

3,382,292

 
4,169,827

3,382,292

Goodwill and other intangibles, net
65,358

65,821

67,209

 
65,358

67,209

Other assets
166,007

158,006

138,489

 
166,007

138,489

Total assets
$
4,777,897

$
4,496,013

$
3,930,457

 
$
4,777,897

$
3,930,457

 
 
 
 
 
 
 
Deposits
$
3,987,611

$
3,769,870

$
3,286,779

 
$
3,987,611

$
3,286,779

Borrowings, net
335,913

279,162

239,510

 
335,913

239,510

Other liabilities
65,302

69,648

52,361

 
65,302

52,361

Total liabilities
4,388,826

4,118,680

3,578,650

 
4,388,826

3,578,650

Total shareholders' equity
389,071

377,333

351,807

 
389,071

351,807

Total liabilities and shareholders' equity
$
4,777,897

$
4,496,013

$
3,930,457

 
$
4,777,897

$
3,930,457

 
 
 
 
 
 
 
Income statement data:
 
 
 
 
 
 
Interest income
$
37,868

$
35,575

$
26,232

 
$
134,295

$
98,312

Interest expense
13,069

11,970

6,719

 
42,942

23,499

Net interest income
24,799

23,605

19,513

 
91,353

74,813

Provision (credit) for loan losses
(1,665
)
283

1,178

 
(623
)
838

Net interest income after provision for loan losses
26,464

23,322

18,335

 
91,976

73,975

Non-interest income:



 
 
 
Investment management fees
9,416

9,214

10,221

 
37,100

37,035

Net gain on the sale and call of investment securities
56

15


 
310

77

Other non-interest income
2,667

2,477

3,428

 
9,556

9,396

Total non-interest income
12,139

11,706

13,649

 
46,966

46,508

Non-interest expense:
 
 
 
 
 
 
Intangible amortization expense
463

463

462

 
1,851

1,753

Change in the fair value of acquisition earn out


(2,478
)
 

(3,687
)
Other non-interest expense
25,255

22,349

22,833

 
89,621

80,728

Total non-interest expense
25,718

22,812

20,817

 
91,472

78,794

Income before tax
12,885

12,216

11,167

 
47,470

41,689

Income tax expense
842

2,184

3,596

 
9,482

13,048

Net income
$
12,043

$
10,032

$
7,571

 
$
37,988

$
28,641




5

EXHIBIT 99

TRISTATE CAPITAL HOLDINGS, INC.
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)
 
As of and For the 
 Three Months Ended
 
As of and For the 
 Years Ended
 
December 31,
September 30,
December 31,
 
December 31,
December 31,
(Dollars in thousands, except per share data)
2017
2017
2016
 
2017
2016
Per share and share data:
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
Basic
$
0.44

$
0.36

$
0.27

 
$
1.38

$
1.04

Diluted
$
0.42

$
0.35

$
0.27

 
$
1.32

$
1.01

Book value per common share
$
13.61

$
13.17

$
12.38

 
$
13.61

$
12.38

Tangible book value per common share (1)
$
11.32

$
10.88

$
10.02

 
$
11.32

$
10.02

Common shares outstanding, at end of period
28,588,101

28,642,573

28,415,654

 
28,588,101

28,415,654

Weighted average common shares outstanding:
 
 
 
 
 
 
Basic
27,458,044

27,515,923

27,614,296

 
27,550,833

27,593,725

Diluted
28,679,619

28,659,990

28,349,644

 
28,711,322

28,359,152

 
 
 
 
 
 
 
Performance ratios:
 
 
 
 
 
 
Return on average assets (2)
1.05
 %
0.92
%
0.79
%
 
0.89
%
0.81
%
Return on average equity (2)
12.51
 %
10.69
%
8.67
%
 
10.30
%
8.48
%
Net interest margin (2) (3)
2.26
 %
2.27
%
2.16
%
 
2.25
%
2.23
%
Total revenue (1)
$
36,882

$
35,296

$
33,162

 
$
138,009

$
121,244

Bank efficiency ratio (1)
61.42
 %
54.81
%
63.33
%
 
57.39
%
61.17
%
Efficiency ratio (1)
68.48
 %
63.32
%
67.79
%
 
64.94
%
66.29
%
Non-interest expense to average assets (2)
2.24
 %
2.09
%
2.19
%
 
2.15
%
2.23
%
 
 
 
 
 
 
 
Asset quality:
 
 
 
 
 
 
Non-performing loans
$
3,183

$
6,936

$
17,790

 
$
3,183

$
17,790

Non-performing assets
$
6,759

$
10,517

$
21,968

 
$
6,759

$
21,968

Other real estate owned
$
3,576

$
3,581

$
4,178

 
$
3,576

$
4,178

Non-performing assets to total assets
0.14
 %
0.23
%
0.56
%
 
0.14
%
0.56
%
Non-performing loans to total loans
0.08
 %
0.18
%
0.52
%
 
0.08
%
0.52
%
Allowance for loan losses to loans
0.34
 %
0.41
%
0.55
%
 
0.34
%
0.55
%
Allowance for loan losses to non-performing loans
452.94
 %
230.38
%
105.46
%
 
452.94
%
105.46
%
Net charge-offs (recoveries)
$
(103
)
$
272

$
2,627

 
$
3,722

$
50

Net charge-offs (recoveries) to average total loans (2)
(0.01
)%
0.03
%
0.32
%
 
0.10
%
%
 
 
 
 
 
 
 
Capital ratios:
 
 
 
 
 
 
Tier 1 leverage ratio
7.25
 %
7.40
%
7.90
%
 
7.25
%
7.90
%
Common equity tier 1 risk-based capital ratio
11.14
 %
11.14
%
11.49
%
 
11.14
%
11.49
%
Tier 1 risk-based capital ratio
11.14
 %
11.14
%
11.49
%
 
11.14
%
11.49
%
Total risk-based capital ratio
11.72
 %
11.80
%
12.66
%
 
11.72
%
12.66
%
 
 
 
 
 
 
 
Investment Management Segment:
 
 
 
 
 
 
Assets under management
$
8,309,000

$
8,195,000

$
8,055,000

 
$
8,309,000

$
8,055,000

Adjusted EBITDA (1)
$
1,605

$
1,648

$
2,797

 
$
7,421

$
9,873


(1) 
These measures are not measures recognized under GAAP and are therefore considered to be non-GAAP financial measures. See “Non-GAAP Financial Measures” for a reconciliation of these measures to their most directly comparable GAAP measures.
(2) 
Ratios are annualized.
(3) 
Net interest margin is calculated on a fully taxable equivalent basis.

6

EXHIBIT 99

TRISTATE CAPITAL HOLDINGS, INC.
AVERAGES AND YIELDS (UNAUDITED)
 
Three Months Ended
 
December 31, 2017
 
September 30, 2017
 
December 31, 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
$
142,458

$
485

1.35
%
 
$
131,115

$
420

1.27
%
 
$
118,807

$
177

0.59
%
Federal funds sold
8,179

23

1.12
%
 
6,845

20

1.16
%
 
5,922

6

0.40
%
Investment securities available-for-sale
152,113

966

2.52
%
 
140,741

760

2.14
%
 
177,712

847

1.90
%
Investment securities held-to-maturity
58,311

618

4.20
%
 
60,220

631

4.16
%
 
52,464

550

4.17
%
Investment securities trading
746

4

2.13
%
 


%
 


%
FHLB stock
11,753

153

5.16
%
 
12,582

200

6.31
%
 
8,518

150

7.01
%
Total loans
3,984,768

35,679

3.55
%
 
3,787,231

33,604

3.52
%
 
3,249,874

24,563

3.01
%
Total interest-earning assets
4,358,328

37,928

3.45
%
 
4,138,734

35,635

3.42
%
 
3,613,297

26,293

2.89
%
Other assets
205,547

 
 
 
194,405

 
 
 
176,395

 
 
Total assets
$
4,563,875

 
 
 
$
4,333,139

 
 
 
$
3,789,692

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Shareholders' Equity
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing checking accounts
$
448,226

$
1,411

1.25
%
 
$
371,526

$
1,173

1.25
%
 
$
204,555

$
272

0.53
%
Money market deposit accounts
2,142,251

6,839

1.27
%
 
2,021,755

6,263

1.23
%
 
1,860,468

3,529

0.75
%
Certificates of deposit
1,006,529

3,422

1.35
%
 
1,003,280

3,168

1.25
%
 
888,721

2,078

0.93
%
Borrowings:
 
 
 
 
 
 
 
 
 
 
 
FHLB borrowings
260,218

792

1.21
%
 
271,304

790

1.16
%
 
185,000

286

0.62
%
Line of credit borrowings
4,703

51

4.30
%
 
2,571

22

3.39
%
 


%
Subordinated notes payable, net
34,680

554

6.34
%
 
34,629

554

6.35
%
 
34,477

554

6.39
%
Total interest-bearing liabilities
3,896,607

13,069

1.33
%
 
3,705,065

11,970

1.28
%
 
3,173,221

6,719

0.84
%
Noninterest-bearing deposits
225,094

 
 
 
205,368

 
 
 
220,637

 
 
Other liabilities
60,212

 
 
 
50,332

 
 
 
48,372

 
 
Shareholders' equity
381,962

 
 
 
372,374

 
 
 
347,462

 
 
Total liabilities and shareholders' equity
$
4,563,875

 
 
 
$
4,333,139

 
 
 
$
3,789,692

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income (1)
 
$
24,859

 
 
 
$
23,665

 
 
 
$
19,574

 
Net interest spread
 
 
2.12
%
 
 
 
2.14
%
 
 
 
2.05
%
Net interest margin (1)
 
 
2.26
%
 
 
 
2.27
%
 
 
 
2.16
%

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

7

EXHIBIT 99

TRISTATE CAPITAL HOLDINGS, INC.
AVERAGES AND YIELDS (UNAUDITED)
 
Years Ended
 
December 31, 2017
 
December 31, 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
$
126,888

$
1,466

1.16
%
 
$
110,455

$
595

0.54
%
Federal funds sold
6,923

68

0.98
%
 
6,116

22

0.36
%
Investment securities available-for-sale
153,274

3,388

2.21
%
 
180,460

3,234

1.79
%
Investment securities held-to-maturity
58,635

2,463

4.20
%
 
48,357

1,958

4.05
%
Investment securities trading
188

4

2.13
%
 


%
FHLB stock
13,286

603

4.54
%
 
10,363

494

4.77
%
Total loans
3,711,701

126,544

3.41
%
 
3,014,645

92,273

3.06
%
Total interest-earning assets
4,070,895

134,536

3.30
%
 
3,370,396

98,576

2.92
%
Other assets
193,532

 
 
 
161,054

 
 
Total assets
$
4,264,427

 
 
 
$
3,531,450

 
 
 
 
 
 
 
 
 
 
Liabilities and Shareholders' Equity
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
Interest-bearing checking accounts
$
336,337

$
3,706

1.10
%
 
$
171,431

$
813

0.47
%
Money market deposit accounts
1,999,399

22,350

1.12
%
 
1,676,455

11,376

0.68
%
Certificates of deposit
967,503

11,429

1.18
%
 
874,615

7,618

0.87
%
Borrowings:
 
 
 
 
 
 
 
FHLB borrowings
295,315

3,152

1.07
%
 
228,934

1,477

0.65
%
Line of credit borrowings
2,214

90

4.07
%
 


%
Subordinated notes payable, net
34,605

2,215

6.40
%
 
34,402

2,215

6.44
%
Total interest-bearing liabilities
3,635,373

42,942

1.18
%
 
2,985,837

23,499

0.79
%
Noninterest-bearing deposits
210,860

 
 
 
170,573

 
 
Other liabilities
49,279

 
 
 
37,441

 
 
Shareholders' equity
368,915

 
 
 
337,599

 
 
Total liabilities and shareholders' equity
$
4,264,427

 
 
 
$
3,531,450

 
 
 
 
 
 
 
 
 
 
Net interest income (1)
 
$
91,594

 
 
 
$
75,077

 
Net interest spread
 
 
2.12
%
 
 
 
2.13
%
Net interest margin (1)
 
 
2.25
%
 
 
 
2.23
%

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


TRISTATE CAPITAL HOLDINGS, INC.
LOAN COMPOSITION (UNAUDITED)
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
(Dollars in thousands)
Loan
Balance
Percent of
Loans
 
Loan
Balance
Percent of
Loans
 
Loan
Balance
Percent of
Loans
Private banking loans
$
2,265,737

54.1
%
 
$
2,055,808

52.3
%
 
$
1,735,928

51.0
%
Middle-market banking loans:
 
 
 
 
 
 
 
 
Commercial and industrial
667,684

16.0
%
 
648,720

16.5
%
 
587,423

17.3
%
Commercial real estate
1,250,823

29.9
%
 
1,226,142

31.2
%
 
1,077,703

31.7
%
Total middle-market banking loans
1,918,507

45.9
%
 
1,874,862

47.7
%
 
1,665,126

49.0
%
Loans held-for-investment
$
4,184,244

100.0
%
 
$
3,930,670

100.0
%
 
$
3,401,054

100.0
%


8

EXHIBIT 99

TRISTATE CAPITAL HOLDINGS, INC.
STATEMENTS OF INCOME BY REPORTABLE SEGMENT (UNAUDITED)
 
Three Months Ended December 31, 2017
 
Year Ended December 31, 2017
(Dollars in thousands)
Bank
Investment
Management
Parent
and Other
Consolidated
 
Bank
Investment
Management
Parent
and Other
Consolidated
Income statement data:
 
 
 
 
 
 
 
 
 
Interest income
$
37,809

$

$
59

$
37,868

 
$
134,029

$

$
266

$
134,295

Interest expense
12,466


603

13,069

 
40,649


2,293

42,942

Net interest income (loss)
25,343


(544
)
24,799

 
93,380


(2,027
)
91,353

Provision (credit) for loan losses
(1,665
)


(1,665
)
 
(623
)


(623
)
Net interest income (loss) after provision for loan losses
27,008


(544
)
26,464

 
94,003


(2,027
)
91,976

Non-interest income:
 
 
 
 
 
 
 
 
 
Investment management fees

9,466

(50
)
9,416

 

37,309

(209
)
37,100

Net gain on the sale and call of investment securities
56



56

 
310



310

Other non-interest income
2,666

1


2,667

 
9,554

2


9,556

Total non-interest income
2,722

9,467

(50
)
12,139

 
9,864

37,311

(209
)
46,966

Non-interest expense:
 
 
 
 
 
 
 
 
 
Intangible amortization expense

463


463

 

1,851


1,851

Other non-interest expense
17,204

7,990

61

25,255

 
59,073

30,387

161

89,621

Total non-interest expense
17,204

8,453

61

25,718

 
59,073

32,238

161

91,472

Income (loss) before tax
12,526

1,014

(655
)
12,885

 
44,794

5,073

(2,397
)
47,470

Income tax expense (benefit)
1,477

(1,065
)
430

842

 
9,211

522

(251
)
9,482

Net income (loss)
$
11,049

$
2,079

$
(1,085
)
$
12,043

 
$
35,583

$
4,551

$
(2,146
)
$
37,988


 
Three Months Ended December 31, 2016
 
Year Ended December 31, 2016
(Dollars in thousands)
Bank
Investment
Management
Parent
and Other
Consolidated
 
Bank
Investment
Management
Parent
and Other
Consolidated
Income statement data:
 
 
 
 
 
 
 
 
 
Interest income
$
26,156

$

$
76

$
26,232

 
$
98,027

$

$
285

$
98,312

Interest expense
6,170


549

6,719

 
21,300


2,199

23,499

Net interest income (loss)
19,986


(473
)
19,513

 
76,727


(1,914
)
74,813

Provision for loan losses
1,178



1,178

 
838



838

Net interest income (loss) after provision for loan losses
18,808


(473
)
18,335

 
75,889


(1,914
)
73,975

Non-interest income:
 
 
 
 
 
 
 
 
 
Investment management fees

10,277

(56
)
10,221

 

37,258

(223
)
37,035

Net gain on the sale and call of investment securities




 
77



77

Other non-interest income
3,427

1


3,428

 
9,393

3


9,396

Total non-interest income
3,427

10,278

(56
)
13,649

 
9,470

37,261

(223
)
46,508

Non-interest expense:
 
 
 
 
 
 
 
 
 
Intangible amortization expense

462


462

 

1,753


1,753

Change in fair value of acquisition earn out

(2,478
)

(2,478
)
 

(3,687
)

(3,687
)
Other non-interest expense
14,827

7,919

87

22,833

 
52,676

27,905

147

80,728

Total non-interest expense
14,827

5,903

87

20,817

 
52,676

25,971

147

78,794

Income (loss) before tax
7,408

4,375

(616
)
11,167

 
32,683

11,290

(2,284
)
41,689

Income tax expense (benefit)
2,092

1,524

(20
)
3,596

 
9,568

4,357

(877
)
13,048

Net income (loss)
$
5,316

$
2,851

$
(596
)
$
7,571

 
$
23,115

$
6,933

$
(1,407
)
$
28,641


9

EXHIBIT 99

TRISTATE CAPITAL HOLDINGS, INC.
NON-GAAP FINANCIAL MEASURES

The information set forth above contains certain financial information determined by methods other than in accordance with GAAP. These non-GAAP financial measures are “tangible common equity,” “tangible book value per common share,” “EBITDA,” “adjusted EBITDA,” “total revenue,” and “efficiency ratio.” Although we believe these non-GAAP financial measures provide a greater understanding of our business, these measures are not necessarily comparable to similar measures that may be presented by other companies.

“Tangible common equity” is defined as 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.

“EBITDA” and “adjusted EBITDA” are defined as net income before interest expense, income taxes, depreciation and intangible amortization expenses, adjusted for acquisition related items. We use adjusted EBITDA particularly to assess the strength of our investment management business. We believe this measure is important because it allows management and investors to better assess our investment management performance in relation to our core operating earnings, excluding certain non-cash items and the volatility that is associated with certain one-time items and other discrete items that are unrelated to our core business.

“Total revenue” is defined as net interest income and non-interest income, excluding gains and losses on the sale and call of 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 items that are unrelated to our core business.

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


TRISTATE CAPITAL HOLDINGS, INC.
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
 
December 31,
September 30,
December 31,
(Dollars in thousands, except per share data)
2017
2017
2016
Tangible book value per common share:
 
 
 
Total shareholders' equity
$
389,071

$
377,333

$
351,807

Less: intangible assets
65,358

65,821

67,209

Tangible common equity
$
323,713

$
311,512

$
284,598

Common shares outstanding
28,588,101

28,642,573

28,415,654

Tangible book value per common share
$
11.32

$
10.88

$
10.02



10

EXHIBIT 99

INVESTMENT MANAGEMENT SEGMENT
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
 
Three Months Ended
 
Years Ended
 
December 31,
September 30,
December 31,
 
December 31,
December 31,
(Dollars in thousands)
2017
2017
2016
 
2017
2016
Investment Management EBITDA:
 
 
 
 
 
 
Net income
$
2,079

$
620

$
2,851

 
$
4,551

$
6,933

Interest expense



 


Income taxes expense
(1,065
)
435

1,524

 
522

4,357

Depreciation expense
128

130

87

 
497

165

Intangible amortization expense
463

463

462

 
1,851

1,753

EBITDA
1,605

1,648

4,924

 
7,421

13,208

Change in fair value of acquisition earn out


(2,478
)
 

(3,687
)
Acquisition related items


351

 

352

Adjusted EBITDA
$
1,605

$
1,648

$
2,797

 
$
7,421

$
9,873


TRISTATE CAPITAL HOLDINGS, INC.
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
 
Three Months Ended
 
Years Ended
 
December 31,
September 30,
December 31,
 
December 31,
December 31,
(Dollars in thousands)
2017
2017
2016
 
2017
2016
Total revenue:
 
 
 
 
 
 
Net interest income
$
24,799

$
23,605

$
19,513

 
$
91,353

$
74,813

Total non-interest income
12,139

11,706

13,649

 
46,966

46,508

Less: net gain on the sale and call of investment securities
56

15


 
310

77

Total revenue
$
36,882

$
35,296

$
33,162

 
$
138,009

$
121,244

 
 
 
 
 
 
 
Efficiency ratio:
 
 
 
 
 
 
Total non-interest expense
$
25,718

$
22,812

$
20,817

 
$
91,472

$
78,794

Plus: change in fair value of acquisition earn out


2,478

 

3,687

Less: acquisition related items


351

 

352

Less: intangible amortization expense
463

463

462

 
1,851

1,753

Total non-interest expense, as adjusted (numerator)
$
25,255

$
22,349

$
22,482

 
$
89,621

$
80,376

Total revenue (denominator)
$
36,882

$
35,296

$
33,162

 
$
138,009

$
121,244

Efficiency ratio
68.48
%
63.32
%
67.79
%
 
64.94
%
66.29
%

BANK SEGMENT
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
 
Three Months Ended
 
Years Ended
 
December 31,
September 30,
December 31,
 
December 31,
December 31,
(Dollars in thousands)
2017
2017
2016
 
2017
2016
Bank total revenue:
 
 
 
 
 
 
Net interest income
$
25,343

$
24,114

$
19,986

 
$
93,380

$
76,727

Total non-interest income
2,722

2,492

3,427

 
9,864

9,470

Less: net gain on the sale and call of investment securities
56

15


 
310

77

Total revenue
$
28,009

$
26,591

$
23,413

 
$
102,934

$
86,120

 
 
 
 
 
 
 
Bank efficiency ratio:
 
 
 
 
 
 
Total non-interest expense (numerator)
$
17,204

$
14,575

$
14,827

 
$
59,073

$
52,676

Total revenue (denominator)
$
28,009

$
26,591

$
23,413

 
$
102,934

$
86,120

Bank efficiency ratio
61.42
%
54.81
%
63.33
%
 
57.39
%
61.17
%


11
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