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| 8-K - 8-K - TriState Capital Holdings, Inc. | tsc-20201112.htm |
1 Investor Presentation TriState Capital Holdings, Inc. (NASDAQ: TSC) Third Quarter Ended September 30,TRISTATE CAPITAL | INVESTOR 2020 PRESENTATION
2 Important Information About this presentation Financial information and data: Unless noted otherwise herein, income statement data is for the trailing twelve-months ended September 30, 2020, compared to the same TTM period the year prior; and balance sheet data is as of September 30, 2020 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. TRISTATE CAPITAL | INVESTOR PRESENTATION
3 Why TSC Branchless, scalable and capital efficient model Premier private banking, commercial banking and niche investment management products and services to sophisticated corporate, institutional and high-net-worth clients Truly exceptional asset quality Unique and high quality lending relationships result in peer and industry leading asset quality metrics that keep credit costs low Annual Key Metrics ($000s) TTM at 9/30/20 Growth 1 $187,754 8% Among Fortune's 100 Revenue Deposits $8,183,713 34% fastest-growing Loans $7,654,446 27% companies in 2019 for the AUM $9,653,000 — third consecutive year Bank efficiency ratio 54.22% NPLs/ total loans 9 bps NCOs/ average loans —% 1 Non-GAAP financial metric reconciled on slide 36. TRISTATE CAPITAL | INVESTOR PRESENTATION
Three Differentiated 4 Businesses Drive Growth Premier businesses which have low correlation yet are symbiotic, highly scalable with efficient use of capital and provide revenue diversity BUSINESS COMMERCIAL BANKING PRIVATE BANKING INVESTMENT MANAGEMENT MARKETPLACE Regional (primarily PA, OH, NJ, NY) National National SALES Regional loan offices National and inside sales National and inside sales DISTRIBUTION Businesses with annual revenues of RIAs Institutional $10M-$300M Regional broker/dealers RIAs Non-bank trust companies Wirehouses Family offices SOLUTIONS C&I and CRE lending Loans backed by marketable Fixed income and equity Equipment finance securities or prime-issuer management Treasury & liquidity management cash value life insurance Financial services & fund finance Treasury & liquidity management CAPITAL Standard risk-based and leverage Primarily non-risk weighted Primarily for acquisition purposes REQUIREMENTS SIZE $3B in loans $4B in loans $10B in AUM KEY FEATURES Exceptional credit quality Exceptional credit quality 9 strategies beating their Dominant provider of securities- respective 3- & 5-year based lending benchmarks TRISTATE CAPITAL | INVESTOR PRESENTATION
Middle Market 5 Commercial Lending Delivering 21% organic commercial loan growth YOY by sourcing and serving local clients through Mid-Atlantic representative offices Commercial Loans $4B $3.20 $3B $2.88 $2.26 $2B $1.92 $1.67 Bi llions $1.50 2020 growth reflects true, organic demand, $1B and no PPP lending $0B 2015 2016 2017 2018 2019 3Q20 CRE: owner-occupied CRE: non-owner occupied C&I TRISTATE CAPITAL | INVESTOR PRESENTATION
Middle Market 6 Commercial Lending In-market relationships and diversified across industries, property type and geographies 1% 18% 19% 17% 27% 26% C&I CRE Commercial 5% Loans Loans 48% Loans $2.06B 17% $3.20B 10% $1.14B 21% 16% 24% 16% 24% 11% Finance & Insurance Non-owner-occupied Western PA Service Owner-occupied Eastern PA Real Estate Multifamily/apartment Ohio Manufacturing Land Development New Jersey Transportation Construction New York All others TRISTATE CAPITAL | INVESTOR PRESENTATION
7 Credit Risk Profile Product of differentiated model and investments in talent + tech Private banking loans collateralized by marketable securities • Fastest-growing loan product • Collateral monitored and priced daily through premier Capital Risk Profile relationships by TSC experts and tech • Primarily marketable equity and fixed-income securities collateral 58% • Minimal risk weighting - favorable regulatory capital treatment Private Banking • Minimal reserve levels required under incurred loss method or CECL • History of zero private banking losses since inception Total Loans Responsible loan portfolio growth $7.65B • Highly experienced lending and credit management talent • Expert teams dedicated to managing commercial and private 42% banking loan credit risk, with career portfolio managers Commercial • Disciplined loan approval process • Commercial focus on the highest-quality borrowers with proven track records • Net charge-offs since 2008 total just $57M TRISTATE CAPITAL | INVESTOR PRESENTATION
8 Fastest Growing Portfolio TSC's fastest growing category Private of lending aimed at assisting financial advisors of all types Banking provide enhanced value to their clients Securities-based Lending Loans over-collateralized by marketable securities or cash value life insurance (CVLI) policies from select, top-rated issuers No loss history Median LTV <35% Marketable securities collateral consist of liquid and primarily well-diversified portfolios TRISTATE CAPITAL | INVESTOR PRESENTATION
9 Private Banking Loans Dominant independent provider of securities-based lending Private Banking Loans TSC Network Advisors $5B Unrivaled network of independent financial $4.46 advisors, trust officers and family office $4B executives seeking to add value for their $3.70 clients $3B $2.87 TSC Network Firms Strong executive- and board-level $2.27 relationships with broker-dealers, regional $2B $1.74 securities firms, RIAs, family offices and trust $1.34 companies that do not offer banking services themselves $1B $0B 2015 2016 2017 2018 2019 3Q20 TRISTATE CAPITAL | INVESTOR PRESENTATION
Independent Provider of 10 Advisor Solutions Serving those who serve high net worth individuals and families Through our referral network of 235 firms, Securities- Based TSC provides holistic solutions for 60,000+ Private Bank advisors and, in turn, their HNW clients, by: Lending Future Services Complementing advisors capabilities with unique and essential products and services which can be integrated into their environments Chartwell’s Treasury Niche FINANCIAL Customizing technology, including digital Management Investment ADVISORS Services lending platform, and in-person delivery Products & their clients to meet their needs and clients' expectations Optimizing risk management and monitoring through smart and scalable Future Products proprietary collateral monitoring system Premium Respecting Cash their relationships by Management supporting, and not competing with, them TRISTATE CAPITAL | INVESTOR PRESENTATION
Chartwell Investment 11 Partners 50+ person boutique asset manager located outside of Philadelphia offering equity and fixed income strategies Augmenting institutional inflows while building strong Advisory Services momentum: Advisory Services up to 20% in MRQ from 8% when Chartwell was acquired in 2014 Investment Strategies Distribution Channels 10% 14% 20% 10% 2% $9.65B 6% $9.65B AUM 7% AUM 57% 74% Value Equity Growth Equity Institutional Conservative Allocation Fixed Income Subadvisory Large Cap Equity Mutual Funds Advisory Services/ Managed Accounts TRISTATE CAPITAL | INVESTOR PRESENTATION
12 Investment Performance Chartwell's strategies provide strategies outperforming strong risk-adjusted returns their respective benchmarks 9 3 through active management for 3 and 5 years Investment management fees provide significant income diversification, generating 1 EQUITY FIXED INCOME over 18% of total revenue and over 60% of ORIENTED ORIENTED non-interest income2 STRATEGIES STRATEGIES Strong investment performance contributed Small Cap Value Intermediate High to positive net inflows of $156M in 3Q20 and Grade Smid Value new-business pipeline commitments of Core High Grade >$200M from institutional investors Mid Cap Value Core Plus Small Cap Growth Continue to leverage distribution synergies High Yield Large Cap Growth to expand Advisor Services capabilities Short Duration BB- Dividend Value Rated High Yield Covered Call Short Duration High Grade Corporate 1 TTM data. Non-GAAP financial metric reconciled on slide 36. Chartwell Income Fund 2 Non-interest income excludes net gains on the sale of debt securities. 3 Strategies outperforming their respective benchmarks for the 3 and 5 years TRISTATE CAPITAL | INVESTOR PRESENTATION ended September 30, 2020 shown in white font.
13 Non-Interest Income Engine Non-interest Income Chartwell contributes significant investment $60M 100% management fee income $52.4 $52.8 $46.4 $46.7 $48.0 Back-to-back, loan-level interest rate swap $45M 75% offerings for clients provide non-interest fees $35.5 No regulatory capital required to generate $30M 50% fees making meaningful top-line contribution $15M 25% 1 $0M 0% 28% of TTM revenue 2015 2016 2017 2018 2019 TTM from non-interest Investment management income Swaps Other Non-Interest Income/Revenue 1 Non-GAAP financial metric reconciled on slide 36. TRISTATE CAPITAL | INVESTOR PRESENTATION
14 Revenue Growth Total Revenue $200M $188 Organic loan growth drives net interest $179 $53 income $161 $52 $48 Uncorrelated, but complementary, revenue $150M $138 streams enable robust organic growth $121 $47 $135 $127 complemented by strategic investment $103 $46 $100M $113 management acquisitions $35 $91 $75 $68 $50M 8% annual revenue1 $0M growth over TTM 2015 2016 2017 2018 2019 TTM Net Interest Income Non-Interest Income, ex. Securities Gains/Losses 1 Non-GAAP financial metric reconciled on slide 36. TRISTATE CAPITAL | INVESTOR PRESENTATION
15 Operating Leverage Driven by revenue growth, scalable non-branch model and prudent expense management enable continued investment in growth Efficient branchless banking platform Superior Revenue/ Employee $700K $622K 1.39% non-interest $600K expense / average assets $500K TTM, compared to 2.54% for 1 the median peer $400K $300K 53.66% bank efficiency ratio $200K YTD, compared to 53.94% in prior year period $100K 2015 2016 2017 2018 2019 3Q20 1 Highly scalable investment TSC $5B-$10B Bank Median manager Chartwell’s current business capable of doubling AUM 1 Peer data for bank holding companies with $5B-$10B in assets for MRQ. 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. TRISTATE CAPITAL | INVESTOR PRESENTATION
16 Treasury Management a Strategic Priority 28%v 13v 400v Treasury 13 dedicated & More than 400 management experienced clients & deposits up ~28% professionals growing Investments in best-in- Growth in treasury 13 treasury Including deposit- class talent and management management only clients with technology beginning in deposits to $1.35B professionals essential need for contributed to providing high- treasury 2016 are paying off for our ~14% total deposit touch service management clients and our business growth, year-over- across regional services year footprint TRISTATE CAPITAL | INVESTOR PRESENTATION TRISTATE CAPITAL | INVESTOR PRESENTATION
Treasury Management 17 Deposits Sophisticated capability, expertise within industry verticals, high-touch service, combined with transparent fee structures driving growth in product, balance and revenue Treasury Management 2% 2% Deposit Accounts 2% $1.5B 4% $1.35 21% $1.11 $1.12 12% $1.05 $1.07 $1.0B Deposit Balances 9% $1.35B $0.5B 25% 11% 12% $0.0B 12/31/19 09/30/19 03/31/20 06/30/20 09/30/20 Lending Client - Operating Accounts Payment Processors 2 Real Estate (Investments & Services) Financial Entities (Funds, Custody, Trust) 1 Financial Intermediaries Family Offices & Foundations C&I Non-Lending Non-Profit Organizations Financial Entities (Banks) Other 1 Includes broker dealers and advisory TRISTATE CAPITAL | INVESTOR PRESENTATION 2 Includes Third party and class action
18 Superior Credit Quality Designed to maintain low annual credit costs relative to peers Commercial Allowance/ Commercial Allowance/ Total Loans Loans (Excludes Private Bank Loans) 1.6% 1.6% 1.10% 1.2% 1.2% 1.04% 0.89% 0.8% 0.63% 0.8% 0.67% 0.55% 0.50% 0.42% 0.34% 0.40% 0.4% 0.26% 0.21% 0.4% 0.0% 0.0% 2015 2016 2017 2018 2019 3Q20 2015 2016 2017 2018 2019 3Q20 NPLs / Total Loans NCOs / Average Loans 0.8% $7.7 $8B 0.8% $6.6 0.59% 0.6% 0.52% $6B 0.6% 0.50% $5.1 0.48% 0.48% 0.47% 0.47% 0.48% $4.2 0.4% 0.4% $3.4 $4B US Bank Aggregate $2.8 0.2% 0.10% 0.2% $2B 0.08% 0.09% —% 0.02% —% 0.04% (0.03)% —% 0.0% 0.09% 0.0% $0B 2015 2016 2017 2018 2019 3Q20 2015 2016 2017 2018 2019 3Q20 Total Loans NPLs / Total Loans TRISTATE CAPITAL | INVESTOR PRESENTATION
Commercial Loan 19 Deferrals Commercial balances with deferral agreements at September 30, 2020 totaled $242M, or ~3% of total loans, compared to $389M, or <6%, at June 30, 2020 Loans with Deferral Deferrals Deferrals Balances Deferrals as % of as % of Agreements/ Total Loans Category at at Total Total 9/30/20 9/30/20 Deferrals Loans C&I 0.2% Manufacturing $ 110.7 $ 4.8 2.0 % 6 bps CRE 2.9% C&I Information $ 48.3 $ 10.4 4.3 % 14 bps Mining $ 22.4 $ 1.8 0.7 % 2 bps Multifamily $ 622.8 $ 39.4 16.2 % 5 bps Total Office $ 443.8 $ 65.4 26.9 % 9 bps Loans (1) Retail $ 315.1 $ 54.9 22.5 % 7 bps $7.65B Industrial $ 279.5 $ 8.2 3.4 % 1 bps Educational/ Other CRE $ 101.4 $ 2.0 0.8 % — bps Centers Developed Land $ 49.3 $ 4.4 1.8 % 1 bps Hotel $ 57.2 $ 42.7 17.5 % 6 bps Self Storage $ 42.7 $ 7.9 3.3 % 1 bps 1 Includes approximately $9.4M of CRE loans to restaurant operations, approximately $5.1M of TRISTATE CAPITAL | INVESTOR PRESENTATION which has been deferred, as of September 30, 2020.
20 Reserve Expectations Low TSC allowance/loans ratio Allowance/ Total Loans reflects attractive risk profile 3% Reflects TSC's focus on high-quality and seasoned commercial borrowers, proactive 2% approach to managing credit risk, and majority of portfolio in private banking loans collateralized by marketable securities 1% 37-79 bps below the year-end average for U.S. commercial banks with $5B-$10B of assets, 2009-19 0% Expected to remain well below the average 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 3Q20 for $5B-$10B-asset U.S. commercial banks, TSC Allowance / Loans under both the incurred loss method utilized TSC Commercial Allowance/ Commercial Loans today and future implementation of CECL $5B-$10B Commercial Bank Average ALL/ Loans With CECL adoption, year-end allowance is estimated to range $30M-$35M, representing 85-105 bps of commercial loans TRISTATE CAPITAL | INVESTOR PRESENTATION
21 Flexible Balance Sheet Enables active management of interest rate risk in changing markets Agile liability pricing Disciplined loan repricing Majority of funding through variable Effective use of interest rate rate deposits repriced monthly floors Floating Rate ~ 22% 93% Total ~ 85% Total Deposits ~ 44% Loans ~ 5% $8.18B $7.65B ~ 8% ~ 15% ~ 7% ~ 14% Linked to EFF* or other benchmark Indexed to 30-Day LIBOR Rates set at bank discretion Indexed to Prime or Other Fixed-rate CDs (~5-7 month duration) Fixed-rate Other fixed-rate term Non-interest bearing * Effective Federal Funds Rate TRISTATE CAPITAL | INVESTOR PRESENTATION
Strong Balance Sheet 22 Leads to Capital Efficiency 61% of balance sheet is comprised of cash & equivalents, investments and private banking loans collateralized by liquid marketable securities or cash value life insurance policies Balance Sheet Capital Profile $10B $9.49 15% $7.77 $7.5B $6.04 10% $4.78 $5B $3.93 $3.30 12.57% 11.47% 5% $2.5B 10.30% 8.48% 7.13% 5.56% $0B 0% 2015 2016 2017 2018 2019 3Q20 2015 2016 2017 2018 2019 3Q20 Period Ending Period Ending Private Banking Channel Loans (net) Tangible equity to tangible assets Total Commercial Banking Loans (net) 1 TCE ratio ex. private banking Cash and cash equivalents Tier 1 leverage ratio Total investment securities Common equity tier 1 risk-based capital ratio Goodwill and other intangibles, net Tier 1 risk-based capital ratio Other assets Total risk-based capital ratio Return on average common equity 1 TCE ratio ex. private banking, a non-GAAP financial metric used to provide a greater understanding of TriState Capital's capital adequacy while excluding PB channel loans because of their minimal capital requirements, is calculated as tangible common equity divided by tangible assets excluding private banking loans. TRISTATE CAPITAL | INVESTOR PRESENTATION
23 Capital Strength Supports High-Growth Strategy Raised >$300M in past two years Announced agreement with Stone Point Capital LLC in October to sell common stock, preferred stock and warrants for $105M in growth capital Raised >$97M in new capital in 2Q20 through registered offering of subordinated notes Non-cumulative perpetual preferred stock offerings in 2018-19 raised $116M, providing Deployed $66M raised in additional Tier 1 capital for holding company ‘13 IPO in three accretive Capital Ratios Holding Co. Bank investment management 1 Tier 1 leverage 6.23% 7.00% acquisitions while CET 1 risk-based 8.48% 11.89% organically growing Tier 1 risk-based 10.56% 11.89% balance sheet by >$7B Total risk-based 12.85% 12.46% 1 Chartwell acquisition closed 3/5/2014,TKG acquisition closed 4/29/2016, and TRISTATE CAPITAL | INVESTOR PRESENTATION Columbia acquisition closed 4/6/2018. 2
24 Investment Profile Investment Profile1 Closing Price $ 13.61 52-Week High $ 26.43 52-Week Low $ 7.59 Common Shares Outstanding 29.8 M Price/ LTM EPS 9.93 x Price/ Book 0.77 x Price/ Tangible Book 0.88 x Float $ 27.3 M Average Daily Volume (3 mos.) ~ 114,000 TSC is well positioned Insider Ownership ~8 % to produce robust earnings as we expand each of our businesses into 2021 and beyond TRISTATE CAPITAL | INVESTOR PRESENTATION 1 Market data as of October 22, 2020.
25 Appendix TRISTATE CAPITAL | INVESTOR PRESENTATION
26 Key Performance Ratios As of and For the As of and For the Three Months Ended Years Ended (Dollars in thousands) September 30, June 30, March 31, December 31, September 30, December 31, December 31, 2020 2020 2020 2019 2019 2019 2018 Performance ratios: Return on average assets (1) 0.39 % 0.45 % 0.65 % 0.78 % 0.94 % 0.89 % 1.04 % Return on average common equity (2) 5.56 % 6.62 % 8.59 % 10.07 % 11.82 % 11.47 % 12.57 % Net interest margin 1.46 % 1.52 % 1.84 % 1.84 % 1.94 % 1.97 % 2.26 % Total revenue $ 46,619 $ 46,467 $ 48,181 $ 46,487 $ 46,353 $ 179,423 $ 161,391 Pre-tax, pre-provision net revenue $ 15,192 $ 18,371 $ 19,037 $ 16,368 $ 18,580 $ 67,274 $ 60,234 Bank efficiency ratio 58.73 % 50.39 % 51.86 % 56.03 % 50.70 % 54.49 % 53.09 % Non-interest expense to average assets 1.31 % 1.22 % 1.47 % 1.60 % 1.59 % 1.66 % 1.93 % Asset quality: Non-performing loans $ 6,754 $ 6,780 $ 184 $ 184 $ 184 $ 184 $ 2,237 Non-performing assets $ 9,478 $ 9,504 $ 4,434 $ 4,434 $ 4,434 $ 4,434 $ 5,661 Other real estate owned $ 2,724 $ 2,724 $ 4,250 $ 4,250 $ 4,250 $ 4,250 $ 3,424 Non-performing assets to total assets 0.10 % 0.10 % 0.05 % 0.06 % 0.06 % 0.06 % 0.09 % Non-performing loans to total loan 0.09 % 0.09 % — % — % — % — % 0.04 % Allowance for loan and lease losses to loans 0.40 % 0.32 % 0.25 % 0.21 % 0.22 % 0.21 % 0.26 % Allowance for loan and lease losses to non- performing loans 454.63 % 343.30 % 9,404.35 % 7,667.39 % 7,268.48 % 7,667.39 % 590.43 % Net charge-offs (recoveries) $ — $ 33 $ (203) $ (6) $ 35 $ (1,868) $ 1,004 Net charge-offs (recoveries) to average total loans — % — % (0.01) % — % — % (0.03) % 0.02 % Investment management segment: Assets under management $ 9,653,000 $ 9,254,000 $ 8,323,000 $ 9,701,000 $ 9,615,000 $ 9,701,000 $ 9,189,000 EBITDA $ 1,551 $ 1,031 $ 1,217 $ 714 $ 932 $ 5,824 $ 6,900 (1) Net income divided by total average assets. (2) Net income available to common shareholders divided by average common equity. TRISTATE CAPITAL | INVESTOR PRESENTATION
27 Income Statement For the Three Months Ended For the Years Ended (Dollars in thousands, except per share data) September 30, June 30, March 31, December 31, September 30, December 31, December 31, 2020 2020 2020 2019 2019 2019 2018 Income statement data: Interest income $ 50,222 $ 51,661 $ 64,202 $ 65,474 $ 67,732 $ 262,447 $ 199,786 Interest expense 16,748 18,177 29,280 32,408 35,416 135,390 86,382 Net interest income 33,474 33,484 34,922 33,066 32,316 127,057 113,404 Provision (credit) for loan and lease losses 7,430 6,005 2,993 728 (607) (968) (205) Net interest income after provision for loan and lease losses 26,044 27,479 31,929 32,338 32,923 128,025 113,609 Non-interest income: Investment management fees 8,095 7,738 7,638 8,862 8,902 36,442 37,647 Net gain (loss) on the sale and call of debt securities 3,744 14 57 70 206 416 (70) Other non-interest income 5,050 5,245 5,621 4,559 5,135 15,924 10,340 Total non-interest income 16,889 12,997 13,316 13,491 14,243 52,782 47,917 Non-interest expense: Intangible amortization expense 478 486 502 503 502 2,009 1,968 Change in fair value of acquisition earn out — — — — — — (218) Other non-interest expense 30,949 27,610 28,642 29,616 27,271 110,140 99,407 Total non-interest expense 31,427 28,096 29,144 30,119 27,773 112,149 101,157 Income before tax 11,506 12,380 16,101 15,710 19,393 68,658 60,369 Income tax expense 2,177 1,979 3,206 1,106 3,059 8,465 5,945 Net income $ 9,329 $ 10,401 $ 12,895 $ 14,604 $ 16,334 $ 60,193 $ 54,424 Preferred stock dividends 1,962 1,962 1,962 1,962 1,962 5,753 2,120 Net income available to common shareholders $ 7,367 $ 8,439 $ 10,933 $ 12,642 $ 14,372 $ 54,440 $ 52,304 Earnings per common share: Basic $ 0.26 $ 0.30 $ 0.39 $ 0.45 $ 0.52 $ 1.95 $ 1.90 Diluted $ 0.26 $ 0.30 $ 0.38 $ 0.44 $ 0.50 $ 1.89 $ 1.81 TRISTATE CAPITAL | INVESTOR PRESENTATION
28 Period-End Balance Sheet As of (Dollars in thousands) September 30, June 30, March 31, December 31, September 30, 2020 2020 2020 2019 2019 Period-end balance sheet data: Cash and cash equivalents $ 608,302 $ 724,942 $ 1,010,128 $ 403,855 $ 383,948 Total investment securities 820,223 812,140 606,736 469,150 468,721 Loans and leases held-for-investment 7,654,446 7,170,770 6,958,149 6,577,559 6,016,680 Allowance for loan and lease losses (30,706) (23,276) (17,304) (14,108) (13,374) Loans and leases held-for-investment, net 7,623,740 7,147,494 6,940,845 6,563,451 6,003,306 Goodwill and other intangibles, net 64,389 64,867 65,352 65,854 66,357 Other assets 377,136 380,398 367,000 263,500 276,117 Total assets $ 9,493,790 $ 9,129,841 $ 8,990,061 $ 7,765,810 $ 7,198,449 Deposits $ 8,183,713 $ 7,831,471 $ 7,782,759 $ 6,634,613 $ 6,094,605 Borrowings, net 395,439 395,552 330,000 355,000 330,000 Other liabilities 271,438 269,987 262,922 154,916 169,337 Total liabilities 8,850,590 8,497,010 8,375,681 7,144,529 6,593,942 Preferred stock 116,079 116,079 116,079 116,079 116,064 Common shareholders' equity 527,121 516,752 498,301 505,202 488,443 Total shareholders' equity 643,200 632,831 614,380 621,281 604,507 Total liabilities and shareholders' equity $ 9,493,790 $ 9,129,841 $ 8,990,061 $ 7,765,810 $ 7,198,449 TRISTATE CAPITAL | INVESTOR PRESENTATION
29 Capital Ratios As of September 30, June 30, March 31, December 31, September 30, 2020 2020 2020 2019 2019 TSCH capital ratios: Tier 1 leverage ratio 6.23 % 6.30 % 7.19 % 7.54 % 7.91 % Common equity tier 1 risk-based capital ratio 8.48 % 8.54 % 8.81 % 9.32 % 9.58 % Tier 1 risk-based capital ratio 10.56 % 10.68 % 11.07 % 11.75 % 12.15 % Total risk-based capital ratio 12.85 % 12.89 % 11.42 % 12.05 % 12.40 % TSCB capital ratios: Tier 1 leverage ratio 7.00 % 7.11 % 7.36 % 7.22 % 7.20 % Common equity tier 1 risk-based capital ratio 11.89 % 12.07 % 11.34 % 11.26 % 11.07 % Tier 1 risk-based capital ratio 11.89 % 12.07 % 11.34 % 11.26 % 11.07 % Total risk-based capital ratio 12.46 % 12.52 % 11.69 % 11.57 % 11.38 % TRISTATE CAPITAL | INVESTOR PRESENTATION
30 Loan Composition (Dollars in thousands) As of September 30, June 30, March 31, December 31, September 30, Loan and Lease Composition 2020 2020 2020 2019 2019 Private banking $ 4,458,767 $ 4,063,116 $ 3,915,555 $ 3,695,402 $ 3,368,142 C&I 1,138,288 1,152,880 1,191,104 1,085,709 992,508 CRE 2,057,391 1,954,774 1,851,490 1,796,448 1,656,030 Loans and leases held-for-investment $ 7,654,446 $ 7,170,770 $ 6,958,149 $ 6,577,559 $ 6,016,680 Private banking 58.3 % 56.6 % 56.3 % 56.2 % 56.0 % C&I 14.9 % 16.1 % 17.1 % 16.5 % 16.5 % CRE 26.8 % 27.3 % 26.6 % 27.3 % 27.5 % Loans and leases held-for-investment 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % TRISTATE CAPITAL | INVESTOR PRESENTATION
31 Deposit Composition (Dollars in thousands) As of September 30, June 30, March 31, December 31, September 30, Deposit Composition 2020 2020 2020 2019 2019 Noninterest-bearing checking accounts $ 439,878 $ 422,341 $ 362,075 $ 356,102 $ 312,285 Interest-bearing checking accounts 3,024,007 2,664,864 2,195,824 1,398,264 1,333,189 Money market deposit accounts 3,662,860 3,547,518 3,783,842 3,426,745 3,149,346 Certificates of deposit 1,056,968 1,196,748 1,441,018 1,453,502 1,299,785 Total deposits $ 8,183,713 $ 7,831,471 $ 7,782,759 $ 6,634,613 $ 6,094,605 Noninterest-bearing checking accounts 5.3 % 5.4 % 4.7 % 5.4 % 5.1 % Interest-bearing checking accounts 37.0 % 34.0 % 28.2 % 21.1 % 21.9 % Money market deposit accounts 44.8 % 45.3 % 48.6 % 51.6 % 51.7 % Certificates of deposit 12.9 % 15.3 % 18.5 % 21.9 % 21.3 % Total deposits 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % TRISTATE CAPITAL | INVESTOR PRESENTATION
32 Average Balance Sheet Three Months Ended September 30, 2020 June 30, 2020 September 30, 2019 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 $ 866,502 $ 278 0.13 % $ 1,098,510 $ 342 0.13 % $ 388,274 $ 2,144 2.19 % Federal funds sold 9,071 2 0.09 % 7,883 1 0.05 % 8,424 44 2.07 % Debt securities available-for-sale 561,378 1,804 1.28 % 329,015 2,026 2.48 % 262,665 2,085 3.15 % Debt securities held-to-maturity 262,128 1,701 2.58 % 292,898 1,616 2.22 % 174,331 1,537 3.50 % Equity securities — — — % — — — % 4,720 12 1.01 % FHLB stock 13,284 196 5.87 % 13,269 305 9.24 % 10,585 382 14.32 % Total loans and leases 7,386,265 46,256 2.49 % 7,094,744 47,377 2.69 % 5,776,652 61,552 4.23 % Total interest-earning assets 9,098,628 50,237 2.20 % 8,836,319 51,667 2.35 % 6,625,651 67,756 4.06 % Other assets 420,887 408,950 288,216 Total assets $ 9,519,515 $ 9,245,269 $ 6,913,867 Liabilities and Shareholders' Equity Interest-bearing deposits: Interest-bearing checking accounts $ 2,866,303 3,280 0.46 % $ 2,327,513 $ 2,719 0.47 % $ 1,116,624 $ 5,795 2.06 % Money market deposit accounts 3,811,100 6,944 0.72 % 3,862,068 7,377 0.77 % 3,106,186 18,870 2.41 % Certificates of deposit 1,121,824 3,674 1.30 % 1,389,984 5,857 1.69 % 1,462,521 9,449 2.56 % Borrowings: FHLB borrowings 300,000 1,392 1.85 % 300,000 1,284 1.72 % 224,130 1,302 2.30 % Line of credit borrowings — — — % 22,747 260 4.60 % — — — % Subordinated notes payable, net 95,601 1,458 6.07 % 44,417 680 6.16 % — — — % Total interest-bearing liabilities 8,194,828 16,748 0.81 % 7,946,729 18,177 0.92 % 5,909,461 35,416 2.38 % Noninterest-bearing deposits 407,079 417,732 268,013 Other liabilities 274,480 252,303 137,934 Shareholders' equity 643,128 628,505 598,459 Total liabilities and shareholders' equity $ 9,519,515 $ 9,245,269 $ 6,913,867 Net interest income (1) $ 33,489 $ 33,490 $ 32,340 Net interest spread (1) 1.39 % 1.43 % 1.68 % Net interest margin (1) 1.46 % 1.52 % 1.94 % (1) Calculated on a fully taxable equivalent basis. TRISTATE CAPITAL | INVESTOR PRESENTATION
33 Average Balance Sheet Years Ended December 31, 2019 2018 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 $ 313,413 $ 6,628 2.11 % $ 188,921 $ 3,598 1.90 % Federal funds sold 8,803 167 1.90 % 8,315 156 1.88 % Debt securities available-for-sale 250,064 8,119 3.25 % 205,652 6,195 3.01 % Debt securities held-to-maturity 193,443 6,921 3.58 % 90,895 3,399 3.74 % Equity securities 6,733 115 1.71 % 10,517 277 2.63 % FHLB stock 18,043 1,270 7.04 % 15,136 924 6.10 % Total loans and leases 5,669,507 239,328 4.22 % 4,500,117 185,349 4.12 % Total interest-earning assets 6,460,006 262,548 4.06 % 5,019,553 199,898 3.98 % Other assets 281,171 221,467 Total assets $ 6,741,177 $ 5,241,020 Liabilities and Shareholders' Equity Interest-bearing deposits: Interest-bearing checking accounts $ 1,058,064 $ 21,480 2.03 % $ 612,921 $ 11,440 1.87 % Money market deposit accounts 2,943,541 69,336 2.36 % 2,429,203 45,106 1.86 % Certificates of deposit 1,371,038 34,776 2.54 % 1,071,556 21,947 2.05 % Borrowings: FHLB borrowings 394,480 8,639 2.19 % 325,356 5,555 1.71 % Line of credit borrowings 1,234 68 5.51 % 2,568 119 4.63 % Subordinated notes payable, net 17,335 1,091 6.29 % 34,807 2,215 6.36 % Total interest-bearing liabilities 5,785,692 135,390 2.34 % 4,476,411 86,382 1.93 % Noninterest-bearing deposits 267,846 244,090 Other liabilities 128,618 75,473 Shareholders' equity 559,021 445,046 Total liabilities and shareholders' equity $ 6,741,177 $ 5,241,020 Net interest income (1) $ 127,158 $ 113,516 Net interest spread (1) 1.72 % 2.05 % Net interest margin (1) 1.97 % 2.26 % (1) Calculated on a fully taxable equivalent basis. TRISTATE CAPITAL | INVESTOR PRESENTATION
34 Segments Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 Investment Parent Investment Parent (Dollars in thousands) Bank Management and Other Consolidated Bank Management and Other Consolidated Income statement data: Interest income $ 50,222 $ — $ — $ 50,222 $ 67,720 $ — $ 12 $ 67,732 Interest expense 15,297 — 1,451 16,748 35,455 — (39) 35,416 Net interest income (loss) 34,925 — (1,451) 33,474 32,265 — 51 32,316 Provision (credit) for loan and lease losses 7,430 — — 7,430 (607) — — (607) Net interest income (loss) after provision for loan and lease losses 27,495 — (1,451) 26,044 32,872 — 51 32,923 Non-interest income: Investment management fees — 8,293 (198) 8,095 — 9,016 (114) 8,902 Net gain on the sale and call of debt securities 3,744 — — 3,744 206 — — 206 Other non-interest income 5,027 23 — 5,050 5,113 (9) 31 5,135 Total non-interest income (loss) 8,771 8,316 (198) 16,889 5,319 9,007 (83) 14,243 Non-interest expense: Intangible amortization expense — 478 — 478 — 502 — 502 Other non-interest expense 23,462 6,868 619 30,949 18,949 8,186 136 27,271 Total non-interest expense 23,462 7,346 619 31,427 18,949 8,688 136 27,773 Income (loss) before tax 12,804 970 (2,268) 11,506 19,242 319 (168) 19,393 Income tax expense (benefit) 2,357 251 (431) 2,177 3,142 3 (86) 3,059 Net income (loss) $ 10,447 $ 719 $ (1,837) $ 9,329 $ 16,100 $ 316 $ (82) $ 16,334 TRISTATE CAPITAL | INVESTOR PRESENTATION
35 Segments Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 Investment Parent Investment Parent (Dollars in thousands) Bank Management and Other Consolidated Bank Management and Other Consolidated Income statement data: Interest income $ 166,085 $ — $ — $ 166,085 $ 196,862 $ — $ 111 $ 196,973 Interest expense 61,844 — 2,361 64,205 101,891 — 1,091 102,982 Net interest income (loss) 104,241 — (2,361) 101,880 94,971 — (980) 93,991 Provision (credit) for loan and lease losses 16,428 — — 16,428 (1,696) — — (1,696) Net interest income (loss) after provision for loan and lease losses 87,813 — (2,361) 85,452 96,667 — (980) 95,687 Non-interest income: Investment management fees — 23,955 (484) 23,471 — 27,912 (332) 27,580 Net gain on the sale and call of debt securities 3,815 — — 3,815 346 — — 346 Other non-interest income 15,893 23 — 15,916 10,467 17 881 11,365 Total non-interest income (loss) 19,708 23,978 (484) 43,202 10,813 27,929 549 39,291 Non-interest expense: Intangible amortization expense — 1,466 — 1,466 — 1,506 — 1,506 Other non-interest expense 64,462 20,498 2,242 87,202 56,872 23,174 478 80,524 Total non-interest expense 64,462 21,964 2,242 88,668 56,872 24,680 478 82,030 Income (loss) before tax 43,059 2,014 (5,087) 39,986 50,608 3,249 (909) 52,948 Income tax expense (benefit) 7,878 381 (897) 7,362 6,825 830 (296) 7,359 Net income (loss) $ 35,181 $ 1,633 $ (4,190) $ 32,624 $ 43,783 $ 2,419 $ (613) $ 45,589 TRISTATE CAPITAL | INVESTOR PRESENTATION
36 Reconciliation of Non-GAAP Financial Measures to GAAP Income Statement Items For the Three Months Ended For the Years Ended September 30, June 30, March 31, December 31, September 30, December 31, December 31, (Dollars in thousands) 2020 2020 2020 2019 2019 2019 2018 Total revenue: Net interest income $ 33,474 $ 33,484 $ 34,922 $ 33,066 $ 32,316 $ 127,057 $ 113,404 Total non-interest income 16,889 12,997 13,316 13,491 14,243 52,782 47,917 Less: net gain (loss) on the sale and call of debt securities 3,744 14 57 70 206 416 (70) Total revenue $ 46,619 $ 46,467 $ 48,181 $ 46,487 $ 46,353 $ 179,423 $ 161,391 Less: total non-interest expense 31,427 28,096 29,144 30,119 27,773 112,149 101,157 Pre-tax, pre-provision net revenue $ 15,192 $ 18,371 $ 19,037 $ 16,368 $ 18,580 $ 67,274 $ 60,234 Bank total revenue: Net interest income $ 34,925 $ 34,410 $ 34,906 $ 33,025 $ 32,265 $ 127,996 $ 115,455 Total non-interest income 8,771 5,229 5,709 4,655 5,319 15,467 11,042 Less: net gain (loss) on the sale and call of debt securities 3,744 14 57 70 206 416 (70) Bank total revenue $ 39,952 $ 39,625 $ 40,558 $ 37,610 $ 37,378 $ 143,047 $ 126,567 Bank efficiency ratio: Total non-interest expense (numerator) $ 23,462 $ 19,967 $ 21,034 $ 21,073 $ 18,949 $ 77,945 $ 67,190 Total revenue (denominator) $ 39,952 $ 39,625 $ 40,558 $ 37,610 $ 37,378 $ 143,047 $ 126,567 Bank efficiency ratio 58.73 % 50.39 % 51.86 % 56.03 % 50.70 % 54.49 % 53.09 % Revenue, a non-GAAP financial metric that TriState Capital has consistently utilized to provide a greater understanding of its significant fee-generating businesses, is the sum of net interest income and non-interest income, excluding net gains on the sale of debt securities. For a comprehensive discussion on the use of non-GAAP data, please refer to the Company’s most recent quarterly TRISTATE CAPITAL | INVESTOR PRESENTATION financial results news release filed with the Securities and Exchange Commission and available at www.tscbank.com
37 Reconciliation of Non-GAAP Financial Measures to GAAP Income Statement Items For the Three Months Ended For the Years Ended September 30, June 30, March 31, December 31, September 30, December 31, December 31, (Dollars in thousands) 2020 2020 2020 2019 2019 2019 2018 Investment Management EBITDA: Net income $ 719 $ 336 $ 578 $ 13 $ 316 $ 2,433 $ 3,851 Interest expense — — — — — — — Income taxes expense (benefit) 251 102 28 88 3 918 579 Depreciation expense 103 107 109 110 111 464 502 Intangible amortization expense 478 486 502 503 502 2,009 1,968 EBITDA $ 1,551 $ 1,031 $ 1,217 $ 714 $ 932 $ 5,824 $ 6,900 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 TRISTATE CAPITAL | INVESTOR PRESENTATION
38 Reconciliation of Non-GAAP Financial Measures to GAAP Balance Sheet Items As of September 30, June 30, March 31, December 31, September 30, (Dollars in thousands, except per share data) 2020 2020 2020 2019 2019 Tangible book value per common share: Common shareholders' equity $ 527,121 $ 516,752 $ 498,301 $ 505,202 $ 488,443 Less: goodwill and intangible assets 64,389 64,867 65,352 65,854 66,357 Tangible common equity (numerator) $ 462,732 $ 451,885 $ 432,949 $ 439,348 $ 422,086 Common shares outstanding 29,828,143 29,851,550 29,762,578 29,355,986 29,296,970 Tangible book value per common share $ 15.51 $ 15.14 $ 14.55 $ 14.97 $ 14.41 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 TRISTATE CAPITAL | INVESTOR PRESENTATION
39 Reconciliation of Non-GAAP Financial Measures to GAAP Balance Sheet Items As of September 30, December 31, December 31, December 31, December 31, December 31, (Dollars in thousands, except per share data) 2020 2019 2018 2017 2016 2015 Tangible common equity ratio excluding private banking channel loans: Common shareholders' equity $ 527,121 $ 505,202 $ 440,886 $ 389,071 $ 351,807 $ 325,977 Less: goodwill and intangible assets 64,389 65,854 67,863 65,358 67,209 50,816 Tangible common equity (numerator) $ 462,732 $ 439,348 $ 373,023 $ 323,713 $ 284,598 $ 275,161 Total assets 9,493,790 7,765,810 6,035,655 4,777,897 3,930,457 3,302,171 Less: goodwill and intangible assets 64,389 65,854 67,863 65,358 67,209 50,816 Tangible assets $ 9,429,401 $ 7,699,956 $ 5,967,792 $ 4,712,539 $ 3,863,248 $ 3,251,355 Tangible common equity ratio 4.91 % 5.71 % 6.25 % 6.87 % 7.37 % 8.46 % Tangible assets 9,429,401 7,699,956 5,967,792 4,712,539 3,863,248 3,251,355 Less: private banking loans 4,458,767 3,695,402 2,869,543 2,265,737 1,735,928 1,344,864 Tangible assets excluding private banking loans (denominator) $ 4,970,634 $ 4,004,554 $ 3,098,249 $ 2,446,802 $ 2,127,320 $ 1,906,491 Tangible common equity ratio excluding private banking loans 9.31 % 10.97 % 12.04 % 13.23 % 13.38 % 14.43 % 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 TRISTATE CAPITAL | INVESTOR PRESENTATION