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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): April 30, 2019

_________
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
¨

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. ¨




Item 7.01. Regulation FD Disclosure.

The attached investor presentation contains information that members of management of TriState Capital Holdings, Inc. (“TriState Capital”) will use during visits with, or presentations to, investors, analysts and other interested parties to assist in their understanding of TriState Capital. This investor presentation is available in the Investor Materials section of TriState Capital’s Investor Relations website at http://investors.tristatecapitalbank.com. A copy of the investor presentation is attached as Exhibit 99.1 to this report and is incorporated herein by reference.

The information in this Current Report on Form 8-K, including the exhibit attached hereto, is furnished solely pursuant to Item 7.01 of this Form 8-K and shall not be deemed “filed” for the purposes of Section 18 of the Securities and 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 shall be expressly set forth by specific reference in such a filing.



Item 9.01. Financial Statements and Exhibits.

Exhibit No.
Description
99.1
Investor Presentation


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: April 30, 2019


3
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Section 2: EX-99.1 (EXHIBIT 99.1)

irpresentationq12019fina
Investor presentation TRISTATE CAPITAL HOLDINGS, INC. (NASDAQ: TSC) First quarter ended March 31, 2019


 
Important Information About this presentation Financial information and data: Unless noted otherwise herein, income statement data is for the trailing twelve-months ended March 31, 2019, compared to the same TTM period the year prior; and balance sheet data is as of March 31, 2019, compared to one year prior. Forward looking statements: This presentation may contain “forward-looking” statements. Such forward-looking statements are subject to risks that could cause actual results or outcomes to differ materially from those currently anticipated. TriState Capital has no duty to, and does not intend to, update or revise forward-looking statements after the date on which they are made. 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 measures: To the extent non-GAAP financial measures are presented herein, comparable GAAP measures and reconciliations can be found in TriState Capital’s most recent quarterly financial results news release. 2 Investor presentation


 
Three Businesses Drive Differentiated Growth Sophistication of a super regional financial firm with the high touch of a boutique firm Private Banking Investment Management Commercial Banking NATIONAL NATIONAL PA, NY, NJ & OH Organic growth Organic & acquisitive growth Organic growth Low capital requirements Low capital requirements Traditional capital requirements Self-funding liquidity management Relationship-driven liquidity and treasury management funding 3 Investor presentation


 
Three Businesses Drive Differentiated Growth For the trailing twelve-months and period ending March 31, 2019 Growth in net income available 36% to common stockholders Asset quality Operating leverage Asset sensitive & LIBOR neutral balance sheet 17% Total revenue growth 27% 23% 20% Private banking Investment management fee Commercial loan growth contribution to total revenue loan growth 4 Investor presentation


 
Unique Model Sophisticated, high-touch, client-focused approach to financial services positions us to do well while empowering our clients to do well 30% of revenue from non-interest income 22% organic NII growth YOY driven through lower credit risk and variable rate loans 24% organic loan growth YOY 30% organic deposit growth YOY 93% of loans and 17% of debt securities variable rate 56.30% YTD Bank efficiency ratio ~$680k quarterly revenue/FTE, annualized ~18% insider ownership 0 branches 5 Investor presentation


 
Strong Foundation for Future Growth since 2013 IPO illustrates the strength and effectiveness of strategy % Change 3/31/2019 3/31/2013 since IPO (Dollars in Thousands) Among Fortune’s 100 Assets $ 6,344,010 $ 2,074,287 206% Fastest-Growing Companies Total revenue (TTM) $ 167,458 $ 63,548 164% Net interest income $ 117,514 $ 58,487 101% Ranked by Fortune1 in 2018 for (TTM) Non-interest income 2nd consecutive year based on: $ 49,944 $ 5,061 887% (TTM) • 30% growth in EPS Income before tax $ 64,209 $ 17,629 264% • 19% growth in revenue (TTM) • 26% total return Share price2 $ 20.43 $ 11.50 78% on a three-year annualized basis Book value per $ 15.61 $ 9.86 58% common share3 1 The September 2018 issue of Fortune reported that it ranks the 100 Fastest-Growing Companies listed on major U.S. stock exchanges by "revenue growth rate, EPS growth rate, and total return for the period ended June 29, 2018 on a three-year annualized. (To compute the revenue and EPS growth rates, Fortune uses a trailing-four-quarters log linear least square regression fit.)." 2 Share data as of 3/29/2019 (close) & 5/9/2013 (IPO price). 3 Book value per share with preferred converted to common as of 3/31/2013. 6 Investor presentation


 
DOUBLE -DIGIT EPS GROWTH $2.20 $2.00 $1.93 $1.81 $1.80 CAGR Record of Growth $1.60 35% $1.40 $1.32 Double-digit YOY EPS growth for $1.20 $1.01 20 of 24 quarters $1.00 $0.80 $0.80 $0.60 $0.55 $0.40 2014 2015 2016 2017 2018 TTM 1Q19 7 Investor presentation


 
2019 Financial Performance Goals Aimed at sustaining record of double-digit earnings growth over long term Grow pre-tax Organically grow Grow treasury Surpass $7B in income at a double- loans at a management bank assets digit pace of double-digit pace deposit accounts by 15%–25% of 15%–25% $500 million Deliver double-digit Surpass $15B Drive operating leverage Maintain strong credit organic growth of in AUM at Chartwell through revenue quality metrics Chartwell revenues Through a combination of growth and disciplined Continuing to distinguish us by While continuing to evaluate organic and inorganic growth driving peer leading risk expense management adjusted returns investment management M&A Maintaining bank efficiency ratio in the low 50s while limiting annual operating expense growth to a single-digit rate 8 Investor presentation


 
Private Banking TriState Capital’s fastest-growing channel for lending PRIVATE BANKING LOANS Private banking loans are over- collateralized by marketable securities, $3.5 cash value life insurance policies or cash, $2.982 all monitored utilizing the bank’s $3.0 $2.870 proprietary technology $2.5 CAGR • No loss history to date on 31% $2.266 these loans $2.0 s n $1.736 o i l l i Favorable regulatory capital treatment B $1.5 given reduced risk weighting enhances $1.345 capital efficiency $0.989 $1.0 Marketable securities collateral consist of $0.5 liquid and primarily well-diversified portfolios $0.0 2014 2015 2016 2017 2018 1Q19 9 Investor presentation


 
Private Banking TriState Capital’s network of financial intermediary referral relationships is steadily expanding National distribution of private banking loans and other services through financial intermediaries including broker-dealers, regional securities firms, registered investment advisors, wealth managers, family offices and trust companies • 195 financial intermediaries provide access to 50,000+ individual financial advisors • Encompasses those that do not offer banking services themselves Private banking loans prove attractive to the fast-growing numbers of financial advisors moving from wire houses to independent platforms <35% High net worth Loans to HNW Median LTV individuals, trusts and individuals used for of these businesses any purpose (except to outstanding loans purchase securities) 10 Investor presentation


 
ORGANIC, IN-MARKET COMMERCIAL LOAN GROWTH $3.0 $2.5 CAGR $2.355 Middle-Market 13% $2.263 Commercial $2.0 $1.919 $1.665 s Banking n $1.496 o i l $1.5 $1.410 l i Four-state Mid-Atlantic footprint B $1.0 commercial loan $0.5 20% growth YOY $0.0 2014 2015 2016 2017 2018 1Q19 C&I CRE: owner-occupied CRE: non-owner occupied 11 Investor presentation


 
Middle-Market Commercial Banking In-market relationships diversified across industries, property type and geographies Highly experienced in-market regional presidents and relationship managers, with 25+ years average experience, source and serve local clients through our Mid-Atlantic representative offices 87% non-owner occupied 20% 24% 58% 16% 38% COMMERCIAL C&I LOANS LOANS BY CRE LOANS $862M 27% $1.49B 13% 11% REGION $2.35B 17% 5% 20% 21% 22% 8% Service Real estate Western PA Eastern PA Income-producing Owner-occupied Manufacturing Transportation Ohio New Jersey Multifamily/apartment Construction/land All others NYC 12 Investor presentation


 
ALLOWANCE / NPLs 590.4% 600% 500% 452.9% 400% 300% 200.7% 200% 107.9% 105.5% Superior 100% 67.1% 0% Credit Quality 2014 2015 2016 2017 2018 1Q19 Drives consistently low annual credit costs NPLs / TOTAL LOANS 1.5% $6 1.26% 28 bps allowance to $5 1.0% $4 loans ratio s n o i $3 l l 0.59% i 0.52% B 0.5% $2 0.14% $1 0.08% 0.04% 0.0% $0 2014 2015 2016 2017 2018 1Q19 Total Loans 13 Investor presentation


 
Organic Deposit Growth DIVERSE AND HIGH-QUALITY DEPOSIT FRANCHISE World class financial institutions and national deposit team $6 3.0% 2.49% Treasury management $5 2.5% capabilities and team enhanced 2.36% in 2016 $4 2.0% s n o i Enhanced capabilities to serve l $3 1.5% l i family offices and ultra high net B worth clients in 2018 $2 1.0% 0.49% $1 0.5% of deposits are 0.17% 26% fixed-rate CDs $0 0.0% 2014 2015 2016 2017 2018 1Q19 Annualized 1-Month LIBOR1 Average Cost of Deposits Certificates of Deposit Money Market Deposits Noninterest and Interest Checking 1 1-Month London Interbank Offered Rate (LIBOR), based on U.S. Dollar, Percent. Daily, Not Seasonally Adjusted 14 Investor presentation


 
Treasury Management a Strategic Priority Investments in best-in-class technology and talent beginning in 2016 are paying off for our clients and our business • Doubled treasury management deposits over last 18 months • 12 dedicated professionals across regional footprint • Sophisticated and high touch service combined with transparent fee structures driving growth with existing clients and rapid expansion of new clients • ~500 clients and growing, including deposit-only clients with essential need for treasury management services 15 Investor presentation


 
Chartwell Investment management fees provide significant income diversification Leveraging TSC's distribution network CHARTWELL REVENUE AND EBITDA and expertise to grow Chartwell Investment Partners' AUM $50 $38.2 Enhancing institutional inflows while $40 $37.0 $37.1 $37.6 maintaining strong retail momentum $29.6 $30 s • Retail up to 30% in MRQ from n o i l l i 8% when Chartwell was acquired M $20 in 2014 $13.2 $8.5 $10 $7.4 $6.9 $8.0 12% Institutional $0 18% Subadvisory 2015 2016* 2017 2018* TTM 1Q19* $9.73B AUM Mutual Funds Revenue EBITDA 63% 7% Managed Accounts * EBITDA reflects change in the fair value of acquisition earnout in the period 16 Investor presentation


 
Chartwell Offers strategies not easily replicated by passive products AUM of $9.73B up 22% since TSC acquired Chartwell in 2014 strategies outperforming respective 8 benchmarks for 3 and 5 years Growth driven by superior investment performance Mid Cap Value Smid Cap Value Dividend Value Covered Call 13% 22% Value Equity Short Duration BB-Rated High Yield Fixed Income Intermediate High Grade Fixed Income Growth Equity AUM BY Core High Grade Fixed Income INVESTMENT 4% Balanced Core Plus Fixed Income TEAM 15% Fixed Income 46% Small Cap Value Large Cap Large Cap Growth Small Cap Growth Berwyn Income Fund High Yield Fixed Income 17 Investor presentation


 
Operating Leverage Driven by revenue growth, exceptional client focus, scalable model and prudent management SUPERIOR REVENUE / EMPLOYEE $700,000 Unique branchless model $650,000 $600,000 259 FTEs Highly experienced and high-performing team $550,000 $500,000 2014 2015 2016 2017 2018 1Q19 Annualized* 56.30% YTD bank efficiency ratio compared to 54.48% in prior year period *Revenue per employee was ~$680,000 in 1Q19, more than twice that of our peer group1 1 Peer data for bank holding companies with $5B-$10B in MRQ assets. Analysis of net interest income plus non-interest income, annualized, divided by period-end FTE employees based on data from S&P Global Market Intelligence. 18 Investor presentation


 
Capital and Investment Profile History of deploying capital in accretive acquisitions while organically growing balance sheet Deployed $66M raised in 2013 IPO Investment Profile2 (last common equity raise) in three accretive investment management Closing Price $ 23.22 acquisitions1 while organically growing 52-Week High $ 30.10 bank’s balance sheet by more than $4B 52-Week Low $ 18.20 Raised net capital of $38M in March Common Shares Outstanding 29.4M 2018 offering of non-cumulative perpetual Float 24.2M preferred stock, providing additional Tier 1 capital for the holding company Average Daily Volume (3 mos.) ~135,000 Insider Ownership ~18% Repurchased 2.0M shares since 4Q14 for $30.9M (~$15.21 per share) 1 Chartwell acquisition closed 3/5/2014, TKG acquisition closed 4/29/2016, and Columbia acquisition closed 4/6/2018. 2 Market data as of April 25, 2019 . 19 Investor presentation


 
appendix 20 Investor presentation


 
Key Performance Ratios As of and For the  As of and For the   Three Months Ended  Years Ended (Dollars in thousands) March 31, December 31, September 30, June 30, March 31, December 31, December 31, 2019 2018 2018 2018 2018 2018 2017 Performance ratios: Return on average assets 0.92 % 0.99 % 1.01% 1.09 % 0.89 % 1.00% 0.89% Return on average common equity 12.50 % 13.16 % 12.78% 13.57 % 10.65 % 12.57% 10.30% Net interest margin 2.10 % 2.12 % 2.22% 2.38 % 2.35 % 2.26% 2.25% Total revenue $ 43,413 $ 41,183 $ 41,570 $ 41,292 $ 37,346 $ 161,391 $ 138,009 Bank efficiency ratio 56.30 % 54.60 % 52.86% 50.49 % 54.48 % 53.09% 57.39% Non-interest expense to average assets 1.77 % 1.81 % 1.90% 2.00 % 2.03 % 1.93% 2.15% Asset quality: Non-performing loans $ 7,329 $ 2,237 $ 2,269 $ 2,437 $ 2,477 $ 2,237 $ 3,183 Non-performing assets $ 10,453 $ 5,661 $ 5,845 $ 6,013 $ 6,053 $ 5,661 $ 6,759 Other real estate owned $ 3,124 $ 3,424 $ 3,576 $ 3,576 $ 3,576 $ 3,424 $ 3,576 Non-performing assets to total assets 0.16 % 0.09 % 0.10% 0.11 % 0.12 % 0.09% 0.14% Non-performing loans to total loan 0.14 % 0.04 % 0.05% 0.05 % 0.06 % 0.04% 0.08% Allowance for loan and lease losses to loans 0.28 % 0.26 % 0.29% 0.34 % 0.34 % 0.26% 0.34% Allowance for loan and lease losses to non- performing loans 200.74 % 590.43 % 598.63% 628.68 % 598.22 % 590.43% 452.94% Net charge-offs (recoveries) $ (1,881) $ (206) $ 1,504 $ (88) $ (206) $ 1,004 $ 3,722 Net charge-offs (recoveries) to average total loans (0.15)% (0.02)% 0.13% (0.01)% (0.02)% 0.02% 0.10% Investment management segment: Assets under management $ 9,732,000 $ 9,189,000 $ 9,865,000 $ 9,554,000 $ 8,344,000 $ 9,189,000 $ 8,309,000 EBITDA $ 2,621 $ 1,890 $ 1,867 $ 1,627 $ 1,515 $ 6,900 $ 7,421 21 Investor presentation


 
Income Statement For the Three Months Ended For the Years Ended (Dollars in thousands, except per share data) March 31, December 31, September 30, June 30, March 31, December 31, December 31, 2019 2018 2018 2018 2018 2018 2017 Income statement data: Interest income $ 62,902 $ 58,162 $ 52,424 $ 47,784 $ 41,416 $ 199,786 $ 134,295 Interest expense 32,530 28,630 23,605 18,993 15,154 86,382 42,942 Net interest income 30,372 29,532 28,819 28,791 26,262 113,404 91,353 Provision (credit) for loan and lease losses (377) (581) (234) 415 195 (205) (623) Net interest income after provision for loan and lease losses 30,749 30,113 29,053 28,376 26,067 113,609 91,976 Non-interest income: Investment management fees 9,424 9,225 9,828 9,686 8,908 37,647 37,100 Net gain (loss) on the sale and call of debt securities 28 (76) — 1 5 (70) 310 Other non-interest income 3,617 2,426 2,923 2,815 2,176 10,340 9,556 Total non-interest income 13,069 11,575 12,751 12,502 11,089 47,917 46,966 Non-interest expense: Intangible amortization expense 502 503 502 502 461 1,968 1,851 Change in fair value of acquisition earn out — (218) — — — (218) — Other non-interest expense 26,170 26,018 25,184 24,816 23,389 99,407 89,621 Total non-interest expense 26,672 26,303 25,686 25,318 23,850 101,157 91,472 Income before tax 17,146 15,385 16,118 15,560 13,306 60,369 47,470 Income tax expense 2,582 265 1,807 968 2,905 5,945 9,482 Net income $ 14,564 $ 15,120 $ 14,311 $ 14,592 $ 10,401 $ 54,424 $ 37,988 Preferred stock dividends on Series A 679 679 679 762 — 2,120 — Net income available to common shareholders $ 13,885 $ 14,441 $ 13,632 $ 13,830 $ 10,401 $ 52,304 $ 37,988 Earnings per common share: Basic $ 0.50 $ 0.52 $ 0.49 $ 0.50 $ 0.38 $ 1.90 $ 1.38 Diluted $ 0.48 $ 0.50 $ 0.47 $ 0.48 $ 0.36 $ 1.81 $ 1.32 22 Investor presentation


 
Period-End Balance Sheet As of (Dollars in thousands) March 31, December 31, September 30, June 30, March 31, 2019 2018 2018 2018 2018 Period-end balance sheet data: Cash and cash equivalents $ 243,911 $ 189,985 $ 186,535 $ 164,367 $ 145,033 Total investment securities 487,087 466,759 393,139 288,674 245,350 Loans and leases held-for-investment 5,336,725 5,132,873 4,758,356 4,552,928 4,302,766 Allowance for loan and lease losses (14,712) (13,208) (13,583) (15,321) (14,818) Loans and leases held-for-investment, net 5,322,013 5,119,665 4,744,773 4,537,607 4,287,948 Goodwill and other intangibles, net 67,361 67,863 68,365 68,867 64,897 Other assets 223,638 191,383 180,476 174,421 163,525 Total assets $ 6,344,010 $ 6,035,655 $ 5,573,288 $ 5,233,936 $ 4,906,753 Deposits $ 5,337,704 $ 5,050,461 $ 4,754,588 $ 4,441,202 $ 4,098,955 Borrowings, net 398,216 404,166 262,365 264,814 304,764 Other liabilities 111,533 101,674 88,715 74,026 62,805 Total liabilities 5,847,453 5,556,301 5,105,668 4,780,042 4,466,524 Preferred stock 38,468 38,468 38,468 38,432 38,440 Common shareholders' equity 458,089 440,886 429,152 415,462 401,789 Total shareholders' equity 496,557 479,354 467,620 453,894 440,229 Total liabilities and shareholders' equity $ 6,344,010 $ 6,035,655 $ 5,573,288 $ 5,233,936 $ 4,906,753 23 Investor presentation


 
Capital Ratios As of March 31, December 31, September 30, June 30, March 31, 2019 2018 2018 2018 2018 TSCH capital ratios: Tier 1 leverage ratio 7.13 % 7.28 % 7.53 % 7.68 % 7.96 % Common equity tier 1 risk-based capital ratio 9.98 % 9.64 % 10.52 % 10.94 % 11.09 % Tier 1 risk-based capital ratio 10.92 % 10.58 % 11.57 % 12.06 % 12.25 % Total risk-based capital ratio 11.26 % 10.86 % 11.89 % 12.66 % 12.84 % TSCB capital ratios: Tier 1 leverage ratio 7.29 % 7.49 % 7.71 % 7.87 % 8.03 % Common equity tier 1 risk-based capital ratio 11.18 % 10.90 % 11.92 % 12.38 % 12.41 % Tier 1 risk-based capital ratio 11.18 % 10.90 % 11.92 % 12.38 % 12.41 % Total risk-based capital ratio 11.57 % 11.25 % 12.30 % 12.82 % 12.83 % 24 Investor presentation


 
Loan and Lease Composition (Dollars in thousands) As of March 31, December 31, September 30, June 30, March 31, Loan and Lease Composition 2019 2018 2018 2018 2018 Private banking $ 2,981,973 $ 2,869,543 $ 2,627,749 $ 2,488,162 $ 2,342,024 C&I 862,405 785,320 771,546 741,901 683,417 CRE 1,492,347 1,478,010 1,359,061 1,322,865 1,277,325 Loans and lease held-for-investment $ 5,336,725 $ 5,132,873 $ 4,758,356 $ 4,552,928 $ 4,302,766 Private banking 55.9% 55.9% 55.2% 54.6% 54.4% C&I 16.1% 15.3% 16.2% 16.3% 15.9% CRE 28.0% 28.8% 28.6% 29.1% 29.7% Loans and lease held-for-investment 100.0% 100.0% 100.0% 100.0% 100.0% 25 Investor presentation


 
Deposit Composition (Dollars in thousands) As of March 31, December 31, September 30, June 30, March 31, Deposit Composition 2019 2018 2018 2018 2018 Noninterest-bearing checking accounts $ 292,188 $ 258,268 $ 236,422 $ 247,705 $ 260,952 Interest-bearing checking accounts 895,948 778,131 713,833 612,501 554,743 Money market deposit accounts 2,760,147 2,781,870 2,565,561 2,494,927 2,346,793 Certificates of deposit 1,389,421 1,232,192 1,238,772 1,086,069 936,467 Total deposits $ 5,337,704 $ 5,050,461 $ 4,754,588 $ 4,441,202 $ 4,098,955 Noninterest-bearing checking accounts 5.5% 5.1% 5.0% 5.5% 6.4% Interest-bearing checking accounts 16.8% 15.4% 15.0% 13.8% 13.5% Money market deposit accounts 51.7% 55.1% 53.9% 56.2% 57.3% Certificates of deposit 26.0% 24.4% 26.1% 24.5% 22.8% Total deposits 100.0% 100.0% 100.0% 100.0% 100.0% 26 Investor presentation


 
Average Balance Sheet Three Months Ended March 31, 2019 December 31, 2018 March 31, 2018 Interest Average Interest Average Interest Average Average Income (1)/ Yield/ Average Income (1)/ Yield/ Average Income (1)/ Yield/ (Dollars in thousands) Balance Expense Rate Balance Expense Rate Balance Expense Rate Assets Interest-earning deposits $ 202,474 $ 1,256 2.52% $ 211,333 $ 1,162 2.18% $ 150,121 $ 579 1.56% Federal funds sold 8,595 31 1.46% 9,959 57 2.27% 7,042 26 1.50% Debt securities available-for-sale 236,235 1,986 3.41% 260,877 2,045 3.11% 142,323 958 2.73% Debt securities held-to-maturity 211,833 2,018 3.86% 155,220 1,426 3.64% 58,953 595 4.09% Equity securities 12,755 72 2.29% 13,543 77 2.26% 8,627 66 3.10% FHLB stock 20,498 305 6.03% 15,970 186 4.62% 14,195 194 5.54% Total loans and leases 5,177,844 57,262 4.49% 4,853,414 53,237 4.35% 4,165,180 39,027 3.80% Total interest-earning assets 5,870,234 62,930 4.35% 5,520,316 58,190 4.18% 4,546,441 41,445 3.70% Other assets 242,553 239,506 208,679 Total assets $ 6,112,787 $ 5,759,822 $ 4,755,120 Liabilities and Shareholders' Equity Interest-bearing deposits: Interest-bearing checking accounts $ 792,690 4,542 2.32% $ 722,386 $ 3,976 2.18% $ 464,247 $ 1,621 1.42% Money market deposit accounts 2,682,390 16,540 2.50% 2,605,148 14,844 2.26% 2,281,606 8,113 1.44% Certificates of deposit 1,300,296 8,251 2.57% 1,220,839 7,394 2.40% 977,689 3,667 1.52% Borrowings: FHLB borrowings 459,333 2,585 2.28% 352,337 1,811 2.04% 310,000 1,147 1.50% Line of credit borrowings 4,139 58 5.68% 3,652 51 5.54% 5,373 52 3.92% Subordinated notes payable, net 34,933 554 6.43% 34,883 554 6.30% 34,731 554 6.47% Total interest-bearing liabilities 5,273,781 32,530 2.50% 4,939,245 28,630 2.30% 4,073,646 15,154 1.51% Noninterest-bearing deposits 261,682 249,330 228,257 Other liabilities 88,485 97,458 56,655 Shareholders' equity 488,839 473,789 396,562 Total liabilities and shareholders' equity $ 6,112,787 $ 5,759,822 $ 4,755,120 Net interest income (1) $ 30,400 $ 29,560 $ 26,291 Net interest spread 1.85% 1.88% 2.19% Net interest margin (1) 2.10% 2.12% 2.35% (1) Interest income and net interest margin are calculated on a fully taxable equivalent basis. 27 Investor presentation


 
Average Balance Sheet Years Ended December 31, 2018 2017 Interest Average Interest Average Average Income (1)/ Yield/ Average Income (1)/ Yield/ (Dollars in thousands) Balance Expense Rate Balance Expense Rate Assets Interest-earning deposits $ 188,921 $ 3,598 1.90% $ 126,888 $ 1,466 1.16% Federal funds sold 8,315 156 1.88% 6,923 68 0.98% Debt securities available-for-sale 205,652 6,195 3.01% 144,735 3,122 2.16% Debt securities held-to-maturity 90,895 3,399 3.74% 58,635 2,463 4.20% Debt securities trading — — —% 188 4 2.13% Equity securities 10,517 277 2.63% 8,539 266 3.12% FHLB stock 15,136 924 6.10% 13,286 603 4.54% Total loans and leases 4,500,117 185,349 4.12% 3,711,701 126,544 3.41% Total interest-earning assets 5,019,553 199,898 3.98% 4,070,895 134,536 3.30% Other assets 221,467 193,532 Total assets $ 5,241,020 $ 4,264,427 Liabilities and Shareholders' Equity Interest-bearing deposits: Interest-bearing checking accounts $ 612,921 $ 11,440 1.87% $ 336,337 $ 3,706 1.10% Money market deposit accounts 2,429,203 45,106 1.86% 1,999,399 22,350 1.12% Certificates of deposit 1,071,556 21,947 2.05% 967,503 11,429 1.18% Borrowings: FHLB borrowings 325,356 5,555 1.71% 295,315 3,152 1.07% Line of credit borrowings 2,568 119 4.63% 2,214 90 4.07% Subordinated notes payable, net 34,807 2,215 6.36% 34,605 2,215 6.40% Total interest-bearing liabilities 4,476,411 86,382 1.93% 3,635,373 42,942 1.18% Noninterest-bearing deposits 244,090 210,860 Other liabilities 75,473 49,279 Shareholders' equity 445,046 368,915 Total liabilities and shareholders' equity $ 5,241,020 $ 4,264,427 Net interest income (1) $ 113,516 $ 91,594 Net interest spread 2.05% 2.12% Net interest margin (1) 2.26% 2.25% (1) Interest income and net interest margin are calculated on a fully taxable equivalent basis. 28 Investor presentation


 
Segments Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Investment Parent Investment Parent (Dollars in thousands) Bank Management and Other Consolidated Bank Management and Other Consolidated Income statement data: Interest income $ 62,830 $ — $ 72 $ 62,902 $ 41,350 $ — $ 66 $ 41,416 Interest expense 31,919 — 611 32,530 14,549 — 605 15,154 Net interest income (loss) 30,911 — (539) 30,372 26,801 — (539) 26,262 Provision (credit) for loan and lease losses (377) — — (377) 195 — — 195 Net interest income (loss) after provision for loan and lease losses 31,288 — (539) 30,749 26,606 — (539) 26,067 Non-interest income: Investment management fees — 9,533 (109) 9,424 — 8,963 (55) 8,908 Net gain on the sale and call of debt securities 28 — — 28 5 — — 5 Other non-interest income 2,877 21 719 3,617 2,176 — — 2,176 Total non-interest income 2,905 9,554 610 13,069 2,181 8,963 (55) 11,089 Non-interest expense: Intangible amortization expense — 502 — 502 — 461 — 461 Other non-interest expense 19,021 7,058 91 26,170 15,786 7,573 30 23,389 Total non-interest expense 19,021 7,560 91 26,672 15,786 8,034 30 23,850 Income (loss) before tax 15,172 1,994 (20) 17,146 13,001 929 (624) 13,306 Income tax expense (benefit) 2,024 563 (5) 2,582 2,854 227 (176) 2,905 Net income (loss) $ 13,148 $ 1,431 $ (15) $ 14,564 $ 10,147 $ 702 $ (448) $ 10,401 29 Investor presentation


 
Reconciliation of Non-GAAP Financial measures to GAAP Income Statement Items For the Three Months Ended For the Years Ended March 31, December 31, September 30, June 30, March 31, December 31, December 31, (Dollars in thousands) 2019 2018 2018 2018 2018 2018 2017 Total revenue: Net interest income $ 30,372 $ 29,532 $ 28,819 $ 28,791 $ 26,262 $ 113,404 $ 91,353 Total non-interest income 13,069 11,575 12,751 12,502 11,089 47,917 46,966 Less: net gain (loss) on the sale and call of debt securities 28 (76) — 1 5 (70) 310 Total revenue $ 43,413 $ 41,183 $ 41,570 $ 41,292 $ 37,346 $ 161,391 $ 138,009 For the Three Months Ended For the Years Ended March 31, December 31, September 30, June 30, March 31, December 31, December 31, (Dollars in thousands) 2019 2018 2018 2018 2018 2018 2017 Bank total revenue: Net interest income $ 30,911 $ 30,058 $ 29,316 $ 29,280 $ 26,801 $ 115,455 $ 93,380 Total non-interest income 2,905 3,161 2,850 2,850 2,181 11,042 9,864 Less: net gain (loss) on the sale and call of debt securities 28 (76) — 1 5 (70) 310 Bank total revenue $ 33,788 $ 33,295 $ 32,166 $ 32,129 $ 28,977 $ 126,567 $ 102,934 Bank efficiency ratio: Total non-interest expense (numerator) $ 19,021 $ 18,179 $ 17,002 $ 16,223 $ 15,786 $ 67,190 $ 59,073 Total revenue (denominator) $ 33,788 $ 33,295 $ 32,166 $ 32,129 $ 28,977 $ 126,567 $ 102,934 Bank efficiency ratio 56.30% 54.60% 52.86% 50.49% 54.48% 53.09% 57.39% For a comprehensive discussion on the use of non-GAAP data, please refer to the Company’s most recent quarterly financial results news release filed with the Securities and Exchange Commission and available at www.tscbank.com 30 Investor presentation


 
Reconciliation of Non-GAAP Financial measures to GAAP Income Statement Items For the Three Months Ended For the Years Ended March 31, December 31, September 30, June 30, March 31, December 31, December 31, (Dollars in thousands) 2019 2018 2018 2018 2018 2018 2017 Investment Management EBITDA: Net income $ 1,431 $ 1,468 $ 957 $ 723 $ 702 $ 3,851 $ 4,551 Interest expense — — — — — — — Income taxes expense (benefit) 563 (207) 282 277 227 579 522 Depreciation expense 125 126 126 125 125 502 497 Intangible amortization expense 502 503 502 502 461 1,968 1,851 EBITDA $ 2,621 $ 1,890 $ 1,867 $ 1,627 $ 1,515 $ 6,900 $ 7,421 For a comprehensive discussion on the use of non-GAAP data, please refer to the Company’s most recent quarterly financial results news release filed with the Securities and Exchange Commission and available at www.tscbank.com 31 Investor presentation


 
Reconciliation of Non-GAAP Financial measures to GAAP Balance Sheet Items As of March 31, December 31, September 30, June 30, March 31, (Dollars in thousands, except per share data) 2019 2018 2018 2018 2018 Tangible book value per common share: Common shareholders' equity $ 458,089 $ 440,886 $ 429,152 $ 415,462 $ 401,789 Less: goodwill and intangible assets 67,361 67,863 68,365 68,867 64,897 Tangible common equity $ 390,728 $ 373,023 $ 360,787 $ 346,595 $ 336,892 Common shares outstanding 29,351,833 28,878,674 28,920,978 28,947,883 28,976,214 Tangible book value per common share $ 13.31 $ 12.92 $ 12.47 $ 11.97 $ 11.63 For a comprehensive discussion on the use of non-GAAP data, please refer to the Company’s most recent quarterly financial results news release filed with the Securities and Exchange Commission and available at www.tscbank.com 32 Investor presentation


 
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