TriState Capital Holdings, Inc. (NASDAQ:TSC) today reported continued growth in earnings, loan production and total revenue for the fourth quarter and year ended Dec. 31, 2013.

The holding company for TriState Capital Bank reported a 41% increase in net income available to common shareholders of $12.9 million in 2013, up from $9.1 million in 2012. Net income of $4.8 million in the fourth quarter of 2013 increased from $1.3 million in the third quarter of 2013 and $2.0 million in the fourth quarter of 2012.

Diluted earnings per share increased to $0.48 per share in 2013 from $0.47 in 2012, when TriState Capital had 7.3 million fewer average diluted common shares outstanding prior to its May 2013 initial public offering. Diluted EPS increased to $0.17 for the fourth quarter of 2013, up from $0.05 in the third quarter of 2013 and $0.09 in the fourth quarter of 2012.

"The fourth quarter, and 2013 as a whole, illustrated our ability to grow our market presence, expand our deposit base, and continue our longstanding record of consistently delivering strong, profitable and organic growth in high-quality loans," Chairman and Chief Executive Officer James F. Getz said. "We maintained our focus on meeting and exceeding customers' needs as we closed the year, even as we executed our strategy for accelerating non-interest income growth through the acquisition of a proven investment management firm to complement our banking business."

On Jan. 7, 2014, TriState Capital announced its agreement to acquire Chartwell Investment Partners, L.P. in a transaction that is expected to close late in the first quarter of 2014, subject to regulatory requirements, certain client consents and other customary closing conditions. Chartwell's investment management fee revenues for the year ended Dec. 31, 2013 are projected to be approximately $25 million. The privately held investment manager serves more than 150 institutional clients and has assets under management of approximately $7.5 billion.

FOURTH QUARTER AND FULL YEAR 2013 HIGHLIGHTS

  • Income available to common shareholders in 2013 grew 41%, or 47% when excluding $854,000 of nonrecurring acquisition expenses associated with the Chartwell transaction.
  • Loans at period end grew 21.2%, annualized, from Sept. 30, 2013 and 13.3% from Dec. 31, 2012.
  • Strong asset quality maintained, with non-performing assets at 0.95% of total assets at period end, down from 0.99% and 1.10% at Sept. 30, 2013 and Dec. 31, 2012, respectively.
  • For the full year, provision expense of 0.47% of average total loans in 2013 was in line with the bank's average trend since 2010.
  • Fourth quarter 2013 non-interest income grew 42.0% from the third quarter and 41.8% from the year ago period.
  • Fourth quarter 2013 total revenue grew 6.3% from the third quarter and 9.4% from the year ago period, while full year 2013 total revenue grew 7.0% over 2012.
  • Deposits at period end grew 17.5%, annualized, from Sept. 30, 2013 and 7.6% from Dec. 31, 2012.

FOURTH QUARTER 2013 RESULTS

Fourth quarter 2013 net interest income grew to $16.4 million, an increase of 3.9% from $15.8 million in the linked third quarter of 2013 and 7.1% from $15.3 million in the year-ago quarter. Growth in net interest income continues to be fueled by loan growth from both TriState Capital's private banking and middle-market commercial banking channels.

Fourth quarter 2013 net interest margin (NIM) expanded by 4 basis points to 2.97%, compared to 2.93% in the linked quarter. Fourth quarter 2012 NIM was 2.97%. Sequential-quarter growth in NIM was primarily the result of a 4-basis-point decline in funding costs, while earning-asset yields remained stable. Funding costs averaged 0.54% in the fourth quarter of 2013 compared to 0.58% in the third quarter, while the average yield on interest earning assets remained stable at 3.42% during the same periods.

Non-interest income for the fourth quarter of 2013 grew to $1.6 million, an increase of approximately 42% from the $1.1 million posted for each of the linked and year-ago quarters. Non-interest income growth was primarily driven by increased fees for swap transactions executed on behalf of TriState Capital's borrowers.

In the fourth quarter of 2013, TriState Capital grew total revenues to $18.0 million, an increase of 6.3% over $16.9 million in the linked third quarter of 2013 and 9.4% over $16.4 million in the year-ago quarter.

Fourth quarter 2013 non-interest expense of $11.2 million, or 1.98% of average assets on an annualized basis, included about $757,000 for non-recurring legal and professional fees associated with the Chartwell transaction. Non-interest expense was $10.0 million, or 1.81% of average assets, annualized, in the linked quarter. For the year-ago quarter, prior to TriState Capital's 2013 IPO and the costs associated with operating as publicly traded company, non-interest expense was $9.9 million, or 1.87% of average assets, annualized.

The company's efficiency ratio was 62.43% in the fourth quarter of 2013, or 58.21% excluding nonrecurring acquisition expenses. Its efficiency ratio was 59.30% in the linked quarter and 60.05% in the year ago quarter.

Fourth quarter 2013 diluted EPS of $0.17 per share reflected approximately $0.02 of after-tax nonrecurring acquisition expenses, which were more than offset by a reduction in income tax expense that increased earnings by approximately $0.03 per share, resulting in a net benefit of $0.01 per share. The fourth quarter results also benefited from a lower loan loss provision and higher swap fees.

BALANCE SHEET GROWTH

Continued loan growth in the fourth quarter of 2013 reflected steady execution of TriState Capital's strategic plan to expand lending to private banking and middle-market banking clients with strong credit quality characteristics. Loan growth for the year was 13.3%. The rate of growth from Sept. 30, 2013 to Dec. 31, 2013 was 21.2%, annualized.

Deposits grew 17.5%, annualized, during the fourth quarter to $2.0 billion at Dec. 31, 2013, while deposit funding costs declined 4 basis points from the linked quarter. Compared to the year-ago quarter, deposits grew 7.6% at period end, while deposit funding costs declined 25 basis points.

TriState Capital remains very well positioned to profit from a rising interest-rate environment, and the bank continues to manage a highly asset-sensitive balance sheet. At Dec. 31, 2013, 82% of TriState Capital's loans and 47% of its securities portfolio were floating rate. In addition, 45% of deposits were fixed-rate time deposits.

ASSET QUALITY

Disciplined underwriting and risk management continued to drive strong asset quality measures in the fourth quarter. Non-performing assets (NPAs) to total assets at Dec. 31, 2013 were 0.95%. NPAs measured 0.99% at Sept. 30, 2013 and 1.10% at Dec. 31, 2012. Net recoveries of 0.05% annualized in the fourth quarter of 2013 resulted in net charge offs to average loans of 0.41% for the full year, compared to 0.43% for full year 2012.

The allowance for loan losses to total loans was 1.02% as of Dec. 31, 2013 compared to 1.03% at Sept. 30, 2013 and 1.09% at Dec. 31, 2012. The allowance for loan losses to non-performing loans measured 93.61% at the end of the fourth quarter, compared to 84.83% and 79.50% at the end of the linked and prior year quarters, respectively.

The provision for loan losses was $473,000 for the fourth quarter of 2013, compared to $4.9 million and $3.0 million for the three months ended Sept. 30, 2013 and Dec. 31, 2012, respectively. Provision expense for 2013 represented 0.47% of average total loans, in line with the bank's average trend since 2010.

CAPITAL STRENGTH

TriState Capital Holdings' consistent earnings power, in addition to its successful 2013 IPO, continued to support capital ratios in excess of the highest regulatory benchmark levels. As of Dec. 31, 2013, TriState Capital's tier 1 leverage, tier 1 risk-based capital and total risk-based capital ratios measured 13.12%, 13.45% and 14.34%, respectively. The company's ratio of tangible equity to tangible assets measured 12.83% at Dec. 31, 2013.

CONFERENCE CALL

As previously announced, TriState Capital will hold a conference call to review its financial results and operating performance.

The live conference call on Jan. 30 will be held at 8:30 a.m. ET and may be accessed by dialing 888-317-6016 from the United States, 855-669-9657 from Canada or 412-317-6016 from other international locations. Participants should dial in at least 10 minutes prior to the call and request the "TSC Conference Call."

A replay of the call will be available from approximately 10 a.m. ET on Jan. 30 through 9 a.m. ET on Feb. 7, 2014. The replay may be accessed by dialing 877-344-7529 from the United States or 412-317-0088 from other locations and entering the conference number 10039606.

ABOUT TRISTATE CAPITAL

TriState Capital Holdings, Inc. is the registered bank holding company for TriState Capital Bank, a commercial bank serving middle-market businesses and high-net-worth individuals. Headquartered in Pittsburgh, Pa., TriState Capital has representative offices in Philadelphia, Cleveland, Princeton, N.J., and New York City, and serves private banking clients nationwide. Established in 2007, TriState Capital had assets of approximately $2.3 billion as of Dec. 31, 2013. It has also announced plans to acquire Chartwell Investment Partners, an investment management firm with about 150 institutional clients and $7.5 billion in assets under management, in a transaction that is expected to close during the first quarter of 2014. For more information, please visit www.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 prospectus filed as part of a Registration Statement on Form S-1, as well as its most-recent quarterly report filed on Form 10-Q.

NON-GAAP FINANCIAL DISCLOSURES

This news release contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (GAAP). Although TriState Capital believes non-GAAP financial measures provide a greater understanding of its business, these measures are not necessarily comparable to similar measures that may be presented by other companies. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP. Where non-GAAP disclosures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found within this news release and accompanying tables.

   

TRISTATE CAPITAL HOLDINGS, INC.

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)

 
As of and For the
Three Months Ended 		As of and For the
Years Ended
(Dollars in thousands, except per share) December 31, September 30, December 31,

December 31,

December 31,
    2013   2013   2012   2013   2012  
Period-end balance sheet data:
Cash and cash equivalents $ 146,558 $ 139,841 $ 200,080 $ 146,558 $ 200,080
Total investment securities 227,844 239,406 191,187 227,844 191,187
Total loans 1,860,775 1,766,504 1,641,628 1,860,775 1,641,628
Allowance for loan losses   (18,996 ) (18,281 ) (17,874 ) (18,996 ) (17,874 )
Total loans, net of allowance for loan losses 1,841,779 1,748,223 1,623,754 1,841,779 1,623,754
Other assets   74,328   73,427   58,108   74,328   58,108  
Total assets   $ 2,290,509   $ 2,200,897   $ 2,073,129   $ 2,290,509   $ 2,073,129  
 
Total deposits 1,961,705 $ 1,878,694 $ 1,823,379 1,961,705 $ 1,823,379
Borrowings 20,000 20,000 20,000 20,000 20,000
Other liabilities   14,859   13,137   12,026   14,859   12,026  
Total liabilities   1,996,564   1,911,831   1,855,405   1,996,564   1,855,405  
 
Preferred stock - Series C (convertible) -- -- 46,011 -- 46,011
Common shareholders' equity   293,945   289,066   171,713   293,945   171,713  
Total shareholders' equity   293,945   289,066   217,724   293,945   217,724  
 
Total liabilities and shareholders' equity   $ 2,290,509   $ 2,200,897   $ 2,073,129   $ 2,290,509   $ 2,073,129  
 
Income statement data:
Interest income $ 18,885 $ 18,384 $ 18,607 $ 72,851 $ 71,034
Interest expense   2,501   2,612   3,312   11,067   13,674  
Net interest income 16,384 15,772 15,295 61,784 57,360
Provision for loan losses   473   4,911   3,024   8,187   8,185  
Net interest income after provision for loan losses 15,911 10,861 12,271 53,597 49,175
Non-interest income:
Non-interest income (excluding net gain on sale of investment securities available-for-sale) 1,575 1,118 1,120 5,001 5,085
Net gain on sale of investment securities available-for-sale   13   --   --   797   1,114  
Total non-interest income 1,588 1,118 1,120 5,798 6,199
Non-interest expense   11,211   10,016   9,857   40,815   37,865  
Income before tax 6,288 1,963 3,534 18,580 17,509
Income tax expense   1,478   633   1,578   5,713   6,837  
Net income   $ 4,810   $ 1,330   $ 1,956   $ 12,867   $ 10,672  
Preferred stock dividends and discount amortization on Series A and B   --   --   --   --   1,525  
Net income available to common shareholders   $ 4,810   $ 1,330   $ 1,956   $ 12,867   $ 9,147  
 
   

TRISTATE CAPITAL HOLDINGS, INC.

SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)

 
As of and For the
Three Months Ended 		As of and For the
Years Ended
(Dollars in thousands, except per share) December 31, September 30, December 31, December 31, December 31,
    2013   2013   2012   2013   2012  
Per share and share data:
Earnings per share:
Basic $ 0.17 $ 0.05 $ 0.09 $ 0.49 $ 0.47
Diluted $ 0.17 $ 0.05 $ 0.09 $ 0.48 $ 0.47
Book value per common share $ 10.25 $ 10.08 $ 9.84 $ 10.25 $ 9.84
Book value per share with preferred converted to common (1) $ 10.25 $ 10.08 $ 9.75 $ 10.25 $ 9.75
Tangible book value per share with preferred converted to common (1) $ 10.25 $ 10.08 $ 9.75 $ 10.25 $ 9.75
Common shares outstanding, at end of period 28,690,279 28,690,279 17,444,730 28,690,279 17,444,730
Common shares outstanding with preferred converted to common, at end of period (1) 28,690,279 28,690,279 22,322,779 28,690,279 22,322,779
Average common shares outstanding
Basic 28,690,279 28,690,034 17,394,730 24,589,811 17,394,491
Diluted 29,063,786 29,114,795 22,528,077 26,690,773 19,351,009
 
Performance ratios:
Return on average assets (2) 0.85 % 0.24 % 0.37 % 0.59 % 0.55 %
Return on average equity (2) 6.51 % 1.81 % 3.57 % 4.84 % 5.24 %
Net interest margin (2) (3) 2.97 % 2.93 % 2.97 % 2.92 % 3.00 %
Efficiency ratio, as adjusted (1) 58.21 % 58.73 % 60.05 % 59.84 % 60.64 %
Non-interest expense to average assets (2) 1.98 % 1.81 % 1.87 % 1.88 % 1.94 %
Pre-tax, pre-provision net revenue per average employee (2) $ 206 $ 219 $ 221 $ 209 $ 222
 
Asset quality:
Non-performing loans $ 20,293 $ 21,550 $ 22,483 $ 20,293 $ 22,483
Non-performing assets $ 21,706 $ 21,840 $ 22,773 $ 21,706 $ 22,773
Other real estate owned $ 1,413 $ 290 $ 290 $ 1,413 $ 290
Non-performing assets to total assets 0.95 % 0.99 % 1.10 % 0.95 % 1.10 %
Allowance for loan losses to total loans 1.02 % 1.03 % 1.09 % 1.02 % 1.09 %
Allowance for loan losses to non-performing loans 93.61 % 84.83 % 79.50 % 93.61 % 79.50 %
Net charge-offs $ (242 ) $ 4,338 $ 4,151 $ 7,065 $ 6,661
Net charge-offs to average total loans (2) (0.05 )% 0.98 % 1.01 % 0.41 % 0.43 %
 
Revenue:
Total revenue (1) 17,959 16,890 16,415 66,785 62,445
Pre-tax, pre-provision net revenue (1) 6,748 6,874 6,558 25,970 24,580
 
Capital ratios:
Tangible equity to tangible assets (1) 12.83 % 13.13 % 10.50 % 12.83 % 10.50 %
Tier 1 leverage ratio 13.12 % 13.23 % 10.35 % 13.12 % 10.35 %
Tier 1 risk-based capital ratio 13.45 % 13.63 % 10.95 % 13.45 % 10.95 %
Total risk-based capital ratio 14.34 % 14.51 % 11.88 % 14.34 % 11.88 %
 

(1)

  

These measures are not measures recognized under GAAP and are therefore considered to be non-GAAP financial measures. See "Non-GAAP Financial Measures" for a reconciliation of these measures to their most directly comparable GAAP measures.

(2)

Ratios are annualized.

(3)

Net interest margin is calculated on a fully taxable equivalent basis.

 

TRISTATE CAPITAL HOLDINGS, INC.

AVERAGES AND YIELDS (UNAUDITED)

 
Three Months Ended
December 31, 2013   September 30, 2013   December 31, 2012
(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 $ 137,824 $ 115 0.33 % $ 135,519 $ 129 0.38 % $ 210,921 $ 183 0.35 %
Federal funds sold 8,392 1 0.05 % 6,900 1 0.06 % 7,235 3 0.16 %
Investment securities available-for-sale 206,548 804 1.54 % 218,513 814 1.48 % 194,961 917 1.87 %
Investment securities held-to-maturity 25,283 218 3.42 % 23,737 192 3.21 % -- -- -- %
Investment securities trading -- -- -- % 6,869 44 2.54 % 2,359 10 1.69 %
Total loans   1,816,860   17,806   3.89 % 1,750,101   17,263   3.91 % 1,638,598   17,552   4.26 %
Total interest-earning assets   2,194,907   18,944   3.42 % 2,141,639   18,443   3.42 % 2,054,074   18,665   3.61 %
Other assets   55,222   52,549   37,418  
Total assets   $ 2,250,129   $ 2,194,188   $ 2,091,492  
 
Liabilities and Shareholders' Equity
Interest-bearing deposits:
Interest-bearing checking accounts $ 6,010 $ 1 0.07 % $ 5,348 $ 1 0.07 % $ 3,129 $ 1 0.13 %
Money market deposit accounts 947,059 922 0.39 % 935,858 899 0.38 % 793,079 1,118 0.56 %
Time deposits (excluding CDARS®) 448,872 989 0.87 % 465,435 1,068 0.91 % 482,187 1,368 1.13 %
CDARS® time deposits 403,728 567 0.56 % 359,845 623 0.69 % 361,104 804 0.89 %
Borrowings   20,000   22   0.44 % 20,000   21   0.42 % 20,054   21   0.42 %
Total interest-bearing liabilities   1,825,669   2,501   0.54 % 1,786,486   2,612   0.58 % 1,659,553   3,312   0.79 %
Noninterest-bearing deposits 117,552 102,649 197,294
Other liabilities 13,681 14,182 16,811
Shareholders' equity   293,227   290,871   217,834  
Total liabilities and shareholders' equity   $ 2,250,129   $ 2,194,188   $ 2,091,492  
 
Net interest income $ 16,443   $ 15,831   $ 15,353  
Net interest spread 2.88 % 2.84 % 2.82 %
Net interest margin (1) 2.97 % 2.93 % 2.97 %

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

 

TRISTATE CAPITAL HOLDINGS, INC.

AVERAGES AND YIELDS (UNAUDITED)

 
Years Ended
December 31, 2013   December 31, 2012
(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 $ 154,163 $ 558 0.36 % $ 180,621 $ 582 0.32 %
Federal funds sold 8,896 8 0.09 % 8,127 10 0.12 %
Investment securities available-for-sale 208,773 3,269 1.57 % 183,976 3,213 1.75 %
Investment securities held-to-maturity 14,026 527 3.76 % -- -- -- %
Investment securities trading 3,060 71 2.32 % 2,951 52 1.76 %
Total loans   1,734,701   68,646   3.96 % 1,542,915   67,306   4.36 %
Total interest-earning assets   2,123,619   73,079   3.44 % 1,918,590   71,163   3.71 %
Other assets   50,230   33,557  
Total assets   $ 2,173,849   $ 1,952,147  
 
Liabilities and Shareholders' Equity
Interest-bearing deposits:
Interest-bearing checking accounts $ 5,617 $ 4 0.07 % $ 3,714 $ 3 0.08 %
Money market deposit accounts 931,720 3,756 0.40 % 685,030 4,062 0.59 %
Time deposits (excluding CDARS®) 469,925 4,602 0.98 % 470,219 5,995 1.27 %
CDARS® time deposits 366,663 2,619 0.71 % 377,571 3,591 0.95 %
Borrowings   20,000   86   0.43 % 5,451   23   0.42 %
Total interest-bearing liabilities   1,793,925   11,067   0.62 % 1,541,985   13,674   0.89 %
Noninterest-bearing deposits 95,462 191,352
Other liabilities 18,501 15,038
Shareholders' equity   265,961   203,772  
Total liabilities and shareholders' equity   $ 2,173,849   $ 1,952,147  
 
Net interest income $ 62,012   $ 57,489  
Net interest spread 2.82 % 2.82 %
Net interest margin (1) 2.92 % 3.00 %

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

TRISTATE CAPITAL HOLDINGS, INC.

NON-GAAP FINANCIAL MEASURES

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

"Tangible equity" is defined as shareholders' equity reduced by intangible assets, including goodwill, if any. We believe this measure is important to management and investors to better understand and assess changes from period to period in shareholders' equity exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing both equity and assets, while not increasing our tangible equity or tangible assets. We had no goodwill recorded on our balance sheet as of December 31, 2013.

"Tangible equity to tangible assets" is defined as the ratio of shareholders' equity reduced by intangible assets, divided by total assets reduced by intangible assets. We believe this measure is important to many investors who are interested in relative changes from period to period in equity and total assets, each exclusive of changes in intangible assets.

"Common shares outstanding with preferred converted to common" is defined as shares of our common stock issued and outstanding, inclusive of our issued and outstanding Series C preferred stock. We believe this measure is important to many investors who are interested in changes from period to period in our shares of common stock issued and outstanding giving effect to the conversion of shares of our Series C preferred stock which were convertible at the option of the holder and were converted to common stock immediately prior to the closing of the initial public offering, which closed on May 14, 2013. Convertible shares of preferred stock had the effect of not impacting shares of common stock issued and outstanding until they were converted, at which point they added to the number of shares of common stock issued and outstanding.

"Book value per share with preferred converted to common" is defined as book value, divided by shares of common stock issued and outstanding with preferred stock converted to common stock. We believe this measure is important to many investors who are interested in changes from period to period in book value per share inclusive of shares of preferred stock that could be converted to shares of common stock. Prior to conversion, convertible shares of preferred stock had the effect of not impacting book value per common share, but reduced our book value per share with preferred converted to common.

"Tangible book value per share with preferred converted to common" is defined as book value, excluding the impact of goodwill, if any, divided by common shares outstanding with preferred converted to common. 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 and inclusive of shares of preferred stock that could be converted to shares of common stock. Goodwill is an intangible asset that is recorded in a purchase business combination, and we had no goodwill recorded on our balance sheet as of December 31, 2013. Prior to conversion, convertible shares of preferred stock had the effect of not impacting tangible book value per common share, but reduced our tangible book value per share with preferred converted to common.

"Total revenue" is defined as net interest income and non-interest income, excluding gains and losses on sales of investment securities available-for-sale. We believe adjustments made to our operating revenue allow management and investors to better assess our operating revenue by removing the volatility that is associated with certain other items that are unrelated to our core business.

"Pre-tax, pre-provision net revenue" is defined as net income, without giving effect to loan loss provision and income taxes, and excluding net gain (loss) on sale of investment securities available-for-sale. We believe this measure is important because it allows management and investors to better assess our performance in relation to our core operating revenue, excluding the volatility that is associated with provision for loan losses or other items that are unrelated to our core business.

"Efficiency ratio" is defined as non-interest expense divided by our total revenue. We believe this measure 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)   2013   2013   2012  
Book value per share with preferred converted to common:
Common shareholders' equity $ 293,945 $ 289,066 $ 171,713
Preferred stock (convertible)   --   --   46,011  
Total common shareholders' equity and preferred stock to Series C   $ 293,945   $ 289,066   $ 217,724  
Preferred shares outstanding -- -- 48,780.488
Conversion factor   --   --   100  
Preferred shares converted to common shares outstanding -- -- 4,878,049
Common shares outstanding   28,690,279   28,690,279   17,444,730  
Common shares with preferred shares converted to common   28,690,279   28,690,279   22,322,779  
Book value per share with preferred converted to common $ 10.25 $ 10.08 $ 9.75
 
Tangible book value per share with preferred converted to common:
Book value per common share $ 10.25 $ 10.08 $ 9.84
Less: Effects of intangible assets   --   --   --  
Tangible book value   $ 10.25   $ 10.08   $ 9.84  
Common shares with preferred shares converted to common   28,690,279   28,690,279   22,322,779  
Tangible book value per share with preferred converted to common $ 10.25 $ 10.08 $ 9.75
 
Tangible equity to tangible assets:
Total shareholders' equity 293,945 289,066 217,724
Less: Intangible assets   --   --   --  
Tangible equity   $ 293,945   $ 289,066   $ 217,724  
Total assets 2,290,509 2,200,897 2,073,129
Less: Intangible assets   --   --   --  
Tangible assets   $ 2,290,509   $ 2,200,897   $ 2,073,129  
Tangible equity to tangible assets 12.83 % 13.13 % 10.50 %
  Three Months Ended   Years Ended
December 31, September 30, December 31, December 31, December 31,
(Dollars in thousands)   2013   2013   2012   2013   2012  
Pre-tax, pre-provision net revenue:
Net interest income before provision for loan losses $ 16,384 $ 15,772 $ 15,295 $ 61,784 $ 57,360
Total non-interest income 1,588 1,118 1,120 5,798 6,199
Less: Net gain on the sale of investment securities, available-for-sale   13   --   --   797   1,114  
Total revenue 17,959 16,890 16,415 66,785 62,445
Less: Total non-interest expense   11,211   10,016   9,857   40,815   37,865  
Pre-tax, pre-provision net revenue   $ 6,748   $ 6,874   $ 6,558   $ 25,970   $ 24,580  
 
Efficiency ratio:
Total non-interest expense (numerator)   $ 11,211   $ 10,016   $ 9,857   $ 40,815   $ 37,865  
Total revenue (denominator)   $ 17,959   $ 16,890   $ 16,415   $ 66,785   $ 62,445  
Efficiency ratio 62.43 % 59.30 % 60.05 % 61.11 % 60.64 %
 
Efficiency ratio, as adjusted:
Less: Nonrecurring expenses (1)   757   97   --   854   --  
Total non-interest expense, as adjusted (numerator)   10,454   9,919   9,857   39,961   37,865  
Total revenue (denominator)   17,959   16,890   16,415   66,785   62,445  
Efficiency ratio, as adjusted 58.21 % 58.73 % 60.05 % 59.84 % 60.64 %

(1) Nonrecurring expenses include costs associated with the Chartwell transaction.

TriState Capital Holdings, Inc.
MEDIA CONTACTS
Jack Horner
267-932-8760, ext. 302
412-600-2295 (mobile)
jack@hornercom.com
or
Mike Gross
267-932-8760, ext. 310
856-628-6169 (mobile)
mike@hornercom.com
or
INVESTOR RELATIONS CONTACT
Brian Fetterolf
412-304-0451
investorrelations@tscbank.com