INVESTOR PRESENTATION TRISTATE CAPITAL HOLDINGS, INC. ( N asdaq : TSC) Subordinated Notes Offering
IMPORTANT INFORMATION Disclosure Regarding Offerings TriState Capital Holdings, Inc. (the “Company”) has engaged Stephens Inc. and Raymond James & Associates, Inc. (the “Underwriters”) to assist the Company in exploring a potential sale of subordinated notes (the “Securities”). The Securities will be issued and sold pursuant to effective shelf registration statements on Form S - 3 (File Nos. 333 - 235713 and 333 - 222074) previously filed with the Securities and Exchange Commission (the “SEC”). This presentation shall not constitute an offer to sell or the solicitation of an offer to buy the Securities , nor shall there be any sale of the Securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful. This offering may only be made by means of a prospectus supplement and related base prospectus under each registration statement. Neither the SEC nor any othe r regulatory body has approved or disapproved of the Securities or passed upon the accuracy or adequacy of this presentation. The Securities are not deposits and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency . I nterested parties should conduct their own investigation in accordance with the procedures established by the Company and the Underwriter and consult with their financial, legal and tax advisors before determining whether to invest in the Securities. Neither the Underwriter, the Company or any of their representatives have made or make any representation or warranty as to the accuracy or completeness of this presentation. Except as otherwise indicated, this presentation speaks as of the date hereof . The Company has filed a preliminary prospectus (which is subject to completion) with the SEC for the offering of the Securities. Before you invest in the Securities, you should read the preliminary prospectus supplement, the final prospectus supplement (when available ), including in each case the base prospectuses and the other documents that the Company has filed with the SEC that are incorporated by reference into the preliminary prospectus supplement, the final prospectus supplement and the accompanying base prospectuses for more complete information about the Company and the offering of the Securities. You may obtain these documents for free by visiting the SEC website at www.sec.gov. Alternatively, you may request copies of the prospectus and preliminary prospectus supplement by calling toll - free 1 - 800 - 643 - 9691. 2 INVESTOR PRESENTATION
IMPORTANT INFORMATION (CONT’D) Forward - Looking Statements This presentation contains certain forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. F orward - looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, and beliefs or assumptions made by management, many of which, by their nature, are inherently uncertain. Although we believe that the expectations reflected in these forward - looking statements are reasonable as of the date made, actual results may prove to be materially different. Accordingly, we caution you that any such forward - looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that change over time and are difficult to predict, and you should not place any undue reliance on any such forward - looking statements. For a discussion of the factors , risks and uncertainties that could cause our actual results to differ materially from estimates and projections contained in forward - looking statements, please read the “Risk Factors” in the prospectus supplement and in our filings with the SEC that are incorporated by reference therein. In addition, if one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we antici pat e. 3 INVESTOR PRESENTATION Non - GAAP Financial Measures In addition to financial measures presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”), this presentation contains certain non - GAAP financial measures. The specific non - GAAP financial measures used are tangible assets, tangible common equity, tangible common equity to tangible assets, tangible book value per common share, total revenu e, bank efficiency ratio and EBITDA. The presentation of this non - GAAP financial information is not intended to be considered in isolati on or as a substitute for any measure prepared in accordance with GAAP. Investors should note that, because there are no standardized definitions for these calculations, our non - GAAP financial measures may not be comparable to similarly - titled measures presented by other companies. Also, there may be limits in the usefulness of these measures to investors. As a result, we encourage reader s t o consider our consolidated financial statements in their entirety and not to rely on any single financial measure. Reconciliations of these non - GAAP financial measures to the most directly comparable GAAP financial measures are included in the Appendix to this presentation. All information as of and for the quarter ended March 31, 2020, and all other quarterly and trailing twelve month (TTM) infor mat ion, is unaudited.
TERMS OF PROPOSED OFFERING INVESTOR PRESENTATION 4 Issuer TriState Capital Holdings, Inc. (Nasdaq: TSC) Security Offered Holding Company Subordinated Debt Offering Type SEC Registered Kroll Rating BBB Structure Fixed - to - Floating Rate (Fixed for 5 Years) Maturity 10 Years Call Feature Callable after 5 Years Covenants Consistent with Regulatory Requirements for Tier 2 Capital Use of Proceeds Repay certain outstanding indebtedness and the remainder for other general corporate purposes Book Running Managers Stephens Inc. Raymond James & Associates, Inc.
LEADERSHIP TEAM INVESTOR PRESENTATION 5 Tim J. Riddle, CFA Executive Officer and CEO of Chartwell ▪ Founding member of Chartwell Investment Partners, LLC (1997) ▪ 37 years of industry experience ▪ Previously served as Senior Vice President at Delaware Investment Advisers from 1986 – 1997 where he directed the institutional client service effort Jim F. Getz Chairman, President & CEO ▪ Founded TriState Capital Holdings, Inc. in 2007 ▪ Prior to founding TriState Capital, Mr. Getz was the founder of Federated Bank and Trust (est. 1985), and later served as pre sid ent of Federated Securities C orp. ▪ Mr. Getz’s tenure at Federated was preceded by two senior positions at two other Pennsylvania banks: Girard Bank from 1973 - 1982 and First Pennsylvania Bank from 1982 - 1985 David J. Demas CFO ▪ CFO of TriState Capital Holdings, Inc. since January 2018 ▪ Served as EVP of Finance from August 2017 - January 2018 ▪ Previously served as senior Partner of Deloitte & Touche, LLP where he spent 25 years of his career Brian S. Fetterolf President and CEO of TriState Capital Bank ▪ Joined TriState Capital in 2009 ▪ CEO of TriState Capital Bank since July 2017 and President since July 2015 ▪ Prior to TriState, he served as a Senior VP in the Special Situations Advisory Group of Macquarie Capital Advisors
Sophistication of a super regional financial firm with the high touch of a boutique firm INVESTOR PRESENTATION Private Banking Investment Management Commercial Banking Organic growth Low capital requirements Self - funding liquidity management NATIONAL NATIONAL PA, NY, NJ & OH Organic & acquisitive growth Low capital requirements Organic growth Traditional capital requirements Relationship - driven liquidity and treasury management funding 6 THREE DIFFERENTIATED BUSINESSES
KEY CREDIT INVESTOR HIGHLIGHTS 7 Diversified Revenue Streams x 27.5% of revenue from noninterest income x Chartwell, a separate subsidiary of TSC with $ 8.3B in AUM, generated EBITDA (1) of $1.2M, or $4.9M annualized, in 1Q 2020 Differentiated Lending Platform x 56% of total loans consist of private banking loans backed by marketable securities with a median LTV of less than 36% as of 3/31/20 x Never experienced a credit loss in the private banking portfolio backed by marketable securities Pristine Credit Quality x 0.0% NPLs / total loans as of 3/31/20 x (0.01%) net charge offs (recoveries) / average total loans in 1Q 2020 Efficient and Scalable Operating Model x Branchless banking model requires significantly less infrastructure (51.86% bank efficiency ratio (1) ) and offers the ability to grow without the costs and investments in traditional brick - and - mortar branches x ~$687k quarterly revenue / FTE annualized (More than 2x peer median (2) ) Proven Leadership Team x Leadership team consists of experienced and tenured veterans x Insider ownership in excess of 8% (3) , with management increasing ownership by more than 167,000 shares in 1Q 2020 Note: Above figures as of or for the quarter ended March 31, 2020, unless otherwise noted. ( 1 ) EBITDA and bank efficiency ratio are non - GAAP measures; please see reconciliations in the Appendix on pg. 36 - 38 . (2) Peer data for the three months ended March 31, 2020 for bank holding companies with $5B - $ 10B in 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 . (3) Per S&P Global Market Intelligence as of April 22, 2020. INVESTOR PRESENTATION
FIRST QUARTER 2020 HIGHLIGHTS 8 INVESTOR PRESENTATION (1) Based on fully tax - equivalent total revenue, excluding net gains on sale of debt securities. ( 2 ) Reflects annualized noninterest expense for the three months ended March 31, 2020. (3) B ank efficiency ratio is a non - GAAP measure; please see reconciliations in the Appendix on pg. 36 - 38. (4) Net income available to common shareholders divided by average common equity. 1 Q 2020 was highlighted by strong financial results, favorable balance sheet trends and continued exceptional asset quality Record Revenue, Net Interest Income, and Efficiency Favorable Balance Sheet and Asset Quality Trends Strong Chartwell / Fee Income • Record top - line revenue (1) of $48.2 million, up 11.0% year - over - year • Record net interest income of $34.9 million • Record low noninterest expense / average assets of 1.47 % (2) , supporting a bank efficiency ratio of 51.86 % ( 3 ) • Liability and asset pricing management supported a stable NIM of 1.84% (flat from 4Q 2019) • Net income attributed to common and diluted EPS of $10.9 million and $0.38, respectively • ROACE of 8.59 % (4) • Record level of liquidity included $1.0 billion in cash and equivalents, as well as $606.7 million in securities, as of 3/31/20 • Continued execution of growth in high quality, private banking loans • Private banking loans grew $220.2 million, or ~24% linked - quarter annualized • 0.00% NPLs / total loans as of 3/31/20 and 0.01% net recoveries during the quarter • Adverse - rated credits represent only 0.50% of total loans as of 3/31/20, down from 0.53% at 12/31/19, and 0.55% at 3/31/19 • Despite unfavorable market conditions, Chartwell generated $57.0 million of positive net inflows during the quarter • Chartwell new business pipeline remains robust with > $200 million in new commitments from institutional investors (through mid - April) • Continued high levels of fee income, with 27.5% noninterest income / total revenue in 1Q 2020
Private Banking Other Loans HFI “At - Risk” Industries LIMITED EXPOSURE TO “AT - RISK” INDUSTRIES In February, we began client outreach efforts to understand the impact of the COVID - 19 situation, and organized a credit strategy committee comprised of leaders from credit, legal, finance, operations and compliance Through April 15, we have developed deferral arrangements on fewer than 100 loans, totaling ~$378 million and representing less than 6% of total loans outstanding As of 3/31/20, our portfolio consists of 7.1% loans to industries we believe are most at - risk to COVID - 19 disruptions, while 55% of our portfolio carries a 0% risk - weighting 9 INVESTOR PRESENTATION Loan Portfolio as of March 31, 2020 7.1% 36.6% 56.3% Balance Percentage of ($M) Total Loans Retail 317$ 4.6% Transportation 48 0.7% Hotels 44 0.6% Senior Housing / Healthcare-Related RE 43 0.6% Energy 25 0.4% Restaurants 18 0.3% Total "At-Risk" Loans 495$ 7.1% "At-Risk" Industries (as of March 31, 2020)
STRONG FOUNDATION FOR FUTURE (Dollars in Thousands) 3/31/2020 3/31/2013 % Change since IPO Assets $ 8,990,061 $ 2,074,287 333 % Total revenue (TTM) $ 184,191 $ 63,548 190 % Net interest income (TTM) $ 131,607 $ 58,487 125 % Non - interest income (TTM) $ 52,584 $ 5,061 939 % Income before tax (TTM) $ 67,61 3 $ 17,629 284 % EPS ( 2 ) (TTM) $ 1.79 $ 0.48 273 % Growth since 2013 IPO illustrates the strength and effectiveness of strategy Among Fortune’s 100 Fastest - Growing Companies ( 1 ) The September 2019 issue of Fortune reported that it ranks the 100 Fastest - Growing Companies listed on major U.S. stock exchange s by "revenue growth rate, EPS growth rate, and total return for the period ended June 29, 2019 on a three - year annualized. (To compute the revenue and EPS growth rates, Fortune uses a trailing - four - quart ers log linear least square regression fit.)." ( 2 ) Fully diluted earnings per share . Ranked by Fortune ( 1 ) in 2019 for 3 rd consecutive year based on: • 33% growth in EPS • 29% growth in revenue • 16% total return on a three - year annualized basis 10 INVESTOR PRESENTATION
OPERATING LEVERAGE Driven by revenue growth, exceptional client focus, scalable model and prudent management, which enables sophisticated client experience, agility and efficiency 5 1.86 % YTD bank efficiency ratio ( 1) compared to 56.30% in prior year period Unique branchless model 2 82 FTEs Highly experienced and high - performing team (1) Bank efficiency ratio is a non - GAAP measure; please see reconciliations in the Appendix on pg. 36 - 38. ( 2 ) Peer data for the three months ended March 31, 2020 for bank holding companies with $5B - $10B in 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. 11 INVESTOR PRESENTATION Annualized (2)
PRIVATE BANKING Part of TSC's integrated advisor solutions strategy which includes treasury management, premium cash management and niche investment products Demand loans over - collateralized by marketable securities are monitored utilizing the bank’s proprietary technology • No loss history Favorable regulatory capital treatment given reduced risk weighting enhances capital efficiency Marketable securities collateral consist of liquid and primarily well - diversified portfolios 12 INVESTOR PRESENTATION % of Total Loans 47.3% 51.0% 54.1% 55.9% 56.2% 56.3%
PRIVATE BANKING THE OPPORTUNITY TSC's fastest growing category of lending aimed at assisting financial advisors of all types provide enhanced value to their clients Leading and trusted partner offering unique and essential products, services and technology to help advisors create holistic experiences and enhanced value proposition for their clients Deep relationships with 219 broker - dealers, regional securities firms, RIAs, family offices and trust companies that do not offer banking services themselves These platforms enhance TSC's network of 6 0,000 + independent financial advisors, trust officers and family office executives seeking to add value for their clients High net worth individuals, trusts and businesses Loans to HNW individuals used for any purpose (except to purchase securities) Median LTV of these outstanding loans <36 % 13 INVESTOR PRESENTATION
14 GROWING REFERRAL NETWORK TriState Capital private banking loans and other holistic solutions prove attractive to the fast - growing numbers of financial advisors moving from wire houses to independent platforms INVESTOR PRESENTATION Channels feeding into TSC's referral network continue to grow * Based on data from InvestmentNews article published January 31, 2020, available at: https://www.investmentnews.com/financial - advisers - bolt - from - wall - street - 2019 - 187535. Excludes insurance broker - dealers.
MIDDLE - MARKET COMMERCIAL LENDING Four - state Mid - Atlantic footprint organic commercial loan growth YOY * 2 9 % 15 INVESTOR PRESENTATION * As of March 31, 2020 .
MIDDLE - MARKET COMMERCIAL BANKING In - market relationships diversified across industries, property type and geographies Highly experienced in - market regional presidents and relationship managers, with 21+ years average experience, source and serve local clients through our Mid - Atlantic representative offices 16 INVESTOR PRESENTATION * Numbers as of March 31, 2020. C&I LOANS $1.19B * CRE LOANS $ 1.85B * COMMERCIAL LOANS BY REGION $ 3.04B *
17 NPLs / T otal L oans * 0.0% SUPERIOR CREDIT QUALITY Drives consistently low annual credit costs INVESTOR PRESENTATION * As of March 31, 2020.
World class financial institutions and national deposit team Enhanced capabilities to serve family offices and ultra high net worth clients in 2018 of deposits are fixed - rate CDs * 19 % ORGANIC DEPOSIT GROWTH * As of March 31, 2020. ( 1 ) 1 - Month London Interbank Offered Rate (LIBOR), based on U.S. Dollar, Percent. Daily, Not Seasonally Adjusted . 18 INVESTOR PRESENTATION Annualized ( 1 )
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 Treasury management deposits are up approximately 40 % since 3/31/19 13 dedicated professionals across regional footprint More than 400 clients and growing, including deposit - only clients with essential need for treasury management services 19 INVESTOR PRESENTATION
TREASURY MANAGEMENT DEPOSITS Sophisticated and high touch service combined with transparent fee structures driving growth with existing clients and rapid expansion of new clients 20 INVESTOR PRESENTATION BALANCES OF $ 1.11B * < 1% * As of March 31, 2020.
CHARTWELL Investment management fees provide significant income diversification Generating approximately 19% of total revenue and 67% of noninterest income (1) Leveraging TSC's distribution network and expertise to grow Chartwell Investment Partners' AUM Enhancing institutional inflows while maintaining strong retail momentum • Retail up to 22% in MRQ (2) from 8% when Chartwell was acquired in 2014 21 INVESTOR PRESENTATION (1) TTM data. Revenue , which is not calculated in accordance with GAAP, is a financial measure that TriState Capital has consistently utilized to provide a greater understanding of its significant fee - generating businesses . Please see the reconciliations in the appendix on pg. 36 - 38. (2) As of March 31, 2020 . $8.32B AUM (2)
CHARTWELL Offers strategies not easily replicated by passive products Growth driven by superior investment performance strategies outperforming respective benchmarks for 1, 3 and 5 years 6 22 INVESTOR PRESENTATION AUM BY INVESTMENT TEAM (1) Small Cap Value Mid Cap Value Smid Cap Value Dividend Value Covered Call Short Duration BB - Rated High Yield Fixed Income Large Cap Growth Small Cap Growth Berwyn Income Fund Short Duration High Grade Corporate Intermediate High Grade Fixed Income Core High Grade Fixed Income Core Plus Fixed Income High Yield Fixed Income (1) As of March 31, 2020 .
APPENDIX 23 INVESTOR PRESENTATION
PRO FORMA CAPITALIZATION TABLE INVESTOR PRESENTATION 24 As of 3/31/20 Actual Pro Forma (1) Consolidated Level Capital: Common Equity $498,301 $498,301 Tangible Common Equity (2) 432,949 432,949 Common Equity Tier 1 451,408 451,408 Tier 1 Capital 567,487 567,487 Total Risk-Based Capital 585,503 684,003 Risk Weighted Assets 5,125,267 5,125,267 Total Assets for Leverage Ratio 7,895,277 7,963,777 Tangible Assets (2) 8,924,709 8,993,209 Consolidated Capital Ratios: Tier 1 Leverage 7.2% 7.1% Common Equity Tier 1 8.8% 8.8% Tier 1 Capital 11.1% 11.1% Total Risk-Based Capital 11.4% 13.3% Tangible Common Equity / Tangible Assets (2) 4.9% 4.8% Bank-Level Regulatory Capital Ratios: Well Capitalized (3) Tier 1 Leverage 7.4% 8.2% 5.0% Common Equity Tier 1 11.3% 12.7% 6.5% Tier 1 Capital 11.3% 12.7% 8.0% Total Risk-Based Capital 11.7% 13.0% 10.0% (Dollars in Thousands) ( 1 ) Assumes $100.0 million in gross subordinated note offering and variable underwriting costs of 1.50%. Assumes downstream of $68.5 million to TriState Capital Bank after underwriting discounts and the repayment of existing $ 30.0 million line of credit. Assumes a 0.0% risk - weighing on remaining net proceeds, for regulatory capital purposes. (2) Tangible Common Equity, Tangible Assets and T angible C ommon E quity / Tangible A ssets are non - GAAP measures; please see reconciliations in the Appendix on pg . 36 - 38. (3) To be well capitalized under Prompt C orrective A ction provisions.
HISTORICAL INTEREST COVERAGE & DOUBLE LEVERAGE INVESTOR PRESENTATION 25 Annual Quarterly Pro Forma (1) 2017 2018 2019 4Q 2019 1Q 2020 1Q 2020 Investment in Subsidiaries 418,596$ 506,002$ 606,904$ 606,904$ 641,819$ 710,319$ Consolidated Equity 389,071 479,354 621,281 621,281 614,380 614,380 Double Leverage Ratio 107.6% 105.6% 97.7% 97.7% 104.5% 115.6% Interest Coverage Total Deposit - Interest Expense 37,485$ 78,493$ 125,592$ 29,991$ 27,244$ 27,244$ Existing Debt - Interest Expense 2,215 2,215 1,091 - - - Other Borrowings - Interest Expense 3,242 5,674 8,707 2,417 2,036 2,036 Subordinated Debt Interest Attributable to $100M Offering - - - - - 1,313 Savings from Repayment of Existing $30M Line of Credit - - - - - (299) Total Debt Interest Expense 5,457$ 7,889$ 9,798$ 2,417$ 2,036$ 3,049$ Total Interest Expense 42,942$ 86,382$ 135,390$ 32,408$ 29,280$ 30,293$ Pre-Tax Income 47,470 60,369 68,658 15,710 16,101 15,088 Pre Tax Income Interest Coverage (Excluding Deposit Interest Expense) 9.7x 8.7x 8.0x 7.5x 8.9x 5.9x Interest Coverage (Including Deposit Interest Expense) 2.1x 1.7x 1.5x 1.5x 1.5x 1.5x Source: S&P Global Market Intelligence. (1) Pro forma 1Q 2020 interest expense reflects $100.0 million subordinated debt offering at 5.250% cost of debt, for illustrativ e purposes. Interest expense assumes debt was issued on January 1, 2020 for illustrative purposes. Assumes 100% of net offering proceeds are down - streamed to TriState Capital Bank, after full repayment of existing $30.0 million holding company line of credit. (2) Decrease in interest attributable to repayment of $30.0 million line of credit, which bears interest at 1 - Month LIBOR plus 3.00 % (equal to 3.993% as of March 31, 2020). (Dollars in Thousands) (2)
26 KROLL RATINGS AS OF MAY 2 2, 2019 INVESTOR PRESENTATION Source: Kroll Bond Rating Agency, dated May 22, 2019 . Entity Type Rating Outlook Action TriState Capital Holdings, Inc. Senior Unsecured Debt BBB+ Stable Reaffirmed Subordinated Debt BBB Stable Reaffirmed Preferred Stock BBB- Stable Reaffirmed Short-Term Debt K2 Stable Reaffirmed TriState Capital Bank Deposit A- Stable Reaffirmed Senior Unsecured Debt A- Stable Reaffirmed Short-Term Deposit K2 Stable Reaffirmed Short-Term Debt K2 Stable Reaffirmed
27 As of and For the Three Months Ended As of and For the Years Ended March 31, December 31, September 30, June 30, March 31, December 31, December 31, (Dollars in thousands) 2020 2019 2019 2019 2019 2019 2018 Performance ratios: Return on average assets (1 ) 0.65 % 0.78 % 0.94 % 0.91 % 0.97 % 0.89 % 1.04 % Return on average common equity (2) 8.59 % 10.07 % 11.82 % 11.63 % 12.50 % 11.47 % 12.57 % Net interest margin (3) 1.84 % 1.84 % 1.94 % 2.03 % 2.10 % 1.97 % 2.26 % Total revenue (4) $ 48,181 $ 46,487 $ 46,353 $ 43,170 $ 43,413 $ 179,423 $ 161,391 Pre - tax, pre - provision net revenue (4) $ 19,037 $ 16,368 $ 18,580 $ 15,585 $ 16,741 $ 67,274 $ 60,234 Bank efficiency ratio (4) 51.86 % 56.03 % 50.70 % 55.16 % 56.30 % 54.49 % 53.09 % Non - interest expense to average assets 1.47 % 1.60 % 1.59 % 1.71 % 1.77 % 1.66 % 1.93 % Asset quality: Non - performing loans $ 184 $ 184 $ 184 $ 2,189 $ 7,329 $ 184 $ 2,237 Non - performing assets $ 4,434 $ 4,434 $ 4,434 $ 5,213 $ 10,453 $ 4,434 $ 5,661 Other real estate owned $ 4,250 $ 4,250 $ 4,250 $ 3,024 $ 3,124 $ 4,250 $ 3,424 Non - performing assets to total assets 0.05 % 0.06 % 0.06 % 0.08 % 0.16 % 0.06 % 0.09 % Non - performing loans to total loan — % — % — % 0.04 % 0.14 % — % 0.04 % Allowance for loan and lease losses to loans 0.25 % 0.21 % 0.22 % 0.25 % 0.28 % 0.21 % 0.26 % Allowance for loan and lease losses to non - performing loans 9,404.35 % 7,667.39 % 7,268.48 % 640.29 % 200.74 % 7,667.39 % 590.43 % Net charge - offs (recoveries) $ (203 ) $ (6 ) $ 35 $ (16 ) $ (1,881 ) $ (1,868 ) $ 1,004 Net charge - offs (recoveries) to average total loans (0.01 )% — % — % — % (0.15 )% (0.03 )% 0.02 % Investment management segment: Assets under management $ 8,323,000 $ 9,701,000 $ 9,615,000 $ 9,485,000 $ 9,732,000 $ 9,701,000 $ 9,189,000 EBITDA (4) $ 1,217 $ 714 $ 932 $ 1,557 $ 2,621 $ 5,824 $ 6,900 KEY PERFORMANCE RATIOS (1) Net income divided by total average assets. (2) Net income available to common shareholders divided by average common equity. (3 ) Net interest margin is calculated on a fully taxable equivalent basis. ( 4) Total revenue, pre - tax, pre - provision net revenue, bank efficiency ratio and EBITDA are non - GAAP measures; please see reconcilia tions in the Appendix on pg. 36 - 38. INVESTOR PRESENTATION
28 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, except per share data) 2020 2019 2019 2019 2019 2019 2018 Income statement data: Interest income $ 64,202 $ 65,474 $ 67,732 $ 66,339 $ 62,902 $ 262,447 $ 199,786 Interest expense 29,280 32,408 35,416 35,036 32,530 135,390 86,382 Net interest income 34,922 33,066 32,316 31,303 30,372 127,057 113,404 Provision (credit) for loan and lease losses 2,993 728 (607 ) (712 ) (377 ) (968 ) (205 ) Net interest income after provision for loan and lease losses 31,929 32,338 32,923 32,015 30,749 128,025 113,609 Non - interest income: Investment management fees 7,638 8,862 8,902 9,254 9,424 36,442 37,647 Net gain (loss) on the sale and call of debt securities 57 70 206 112 28 416 (70 ) Other non - interest income 5,621 4,559 5,135 2,613 3,617 15,924 10,340 Total non - interest income 13,316 13,491 14,243 11,979 13,069 52,782 47,917 Non - interest expense: Intangible amortization expense 502 503 502 502 502 2,009 1,968 Change in fair value of acquisition earn out — — — — — — (218 ) Other non - interest expense 28,642 29,616 27,271 27,083 26,170 110,140 99,407 Total non - interest expense 29,144 30,119 27,773 27,585 26,672 112,149 101,157 Income before tax 16,101 15,710 19,393 16,409 17,146 68,658 60,369 Income tax expense 3,206 1,106 3,059 1,718 2,582 8,465 5,945 Net income $ 12,895 $ 14,604 $ 16,334 $ 14,691 $ 14,564 $ 60,193 $ 54,424 Preferred stock dividends 1,962 1,962 1,962 1,150 679 5,753 2,120 Net income available to common shareholders $ 10,933 $ 12,642 $ 14,372 $ 13,541 $ 13,885 $ 54,440 $ 52,304 Earnings per common share: Basic $ 0.39 $ 0.45 $ 0.52 $ 0.49 $ 0.50 $ 1.95 $ 1.90 Diluted $ 0.38 $ 0.44 $ 0.50 $ 0.47 $ 0.48 $ 1.89 $ 1.81 INCOME STATEMENT INVESTOR PRESENTATION
29 As of March 31, December 31, September 30, June 30, March 31, (Dollars in thousands) 2020 2019 2019 2019 2019 Period - end balance sheet data: Cash and cash equivalents $ 1,010,128 $ 403,855 $ 383,948 $ 458,269 $ 243,911 Total investment securities 606,736 469,150 468,721 431,426 487,087 Loans and leases held - for - investment 6,958,149 6,577,559 6,016,680 5,664,934 5,336,725 Allowance for loan and lease losses (17,304 ) (14,108 ) (13,374 ) (14,016 ) (14,712 ) Loans and leases held - for - investment, net 6,940,845 6,563,451 6,003,306 5,650,918 5,322,013 Goodwill and other intangibles, net 65,352 65,854 66,357 66,859 67,361 Other assets 367,000 263,500 276,117 238,531 223,638 Total assets $ 8,990,061 $ 7,765,810 $ 7,198,449 $ 6,846,003 $ 6,344,010 Deposits $ 7,782,759 $ 6,634,613 $ 6,094,605 $ 5,786,983 $ 5,337,704 Borrowings, net 330,000 355,000 330,000 335,000 398,216 Other liabilities 262,922 154,916 169,337 135,039 111,533 Total liabilities 8,375,681 7,144,529 6,593,942 6,257,022 5,847,453 Preferred stock 116,079 116,079 116,064 116,142 38,468 Common shareholders' equity 498,301 505,202 488,443 472,839 458,089 Total shareholders' equity 614,380 621,281 604,507 588,981 496,557 Total liabilities and shareholders' equity $ 8,990,061 $ 7,765,810 $ 7,198,449 $ 6,846,003 $ 6,344,010 PERIOD - END BALANCE SHEET INVESTOR PRESENTATION
30 As of March 31, December 31, September 30, June 30, March 31, 2020 2019 2019 2019 2019 TSCH capital ratios: Tier 1 leverage ratio 7.19 % 7.54 % 7.91 % 8.21 % 7.13 % Common equity tier 1 risk - based capital ratio 8.81 % 9.32 % 9.58 % 9.83 % 9.98 % Tier 1 risk - based capital ratio 11.07 % 11.75 % 12.15 % 12.56 % 10.92 % Total risk - based capital ratio 11.42 % 12.05 % 12.40 % 12.82 % 11.26 % TSCB capital ratios: Tier 1 leverage ratio 7.36 % 7.22 % 7.20 % 7.43 % 7.29 % Common equity tier 1 risk - based capital ratio 11.34 % 11.26 % 11.07 % 11.38 % 11.18 % Tier 1 risk - based capital ratio 11.34 % 11.26 % 11.07 % 11.38 % 11.18 % Total risk - based capital ratio 11.69 % 11.57 % 11.38 % 11.73 % 11.57 % CAPITAL RATIOS INVESTOR PRESENTATION
31 (Dollars in thousands) As of March 31, December 31, September 30, June 30, March 31, Loan and Lease Composition 2020 2019 2019 2019 2019 Private banking $ 3,915,555 $ 3,695,402 $ 3,368,142 $ 3,188,668 $ 2,981,973 C&I 1,191,104 1,085,709 992,508 908,054 862,405 CRE 1,851,490 1,796,448 1,656,030 1,568,212 1,492,347 Loans and leases held - for - investment $ 6,958,149 $ 6,577,559 $ 6,016,680 $ 5,664,934 $ 5,336,725 Private banking 56.3 % 56.2 % 56.0 % 56.3 % 55.9 % C&I 17.1 % 16.5 % 16.5 % 16.0 % 16.1 % CRE 26.6 % 27.3 % 27.5 % 27.7 % 28.0 % Loans and leases held - for - investment 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % LOAN COMPOSITION INVESTOR PRESENTATION
32 DEPOSIT COMPOSITION INVESTOR PRESENTATION (Dollars in thousands) As of March 31, December 31, September 30, June 30, March 31, Deposit Composition 2020 2019 2019 2019 2019 Noninterest - bearing checking accounts $ 362,075 $ 356,102 $ 312,285 $ 270,435 $ 292,188 Interest - bearing checking accounts 2,195,824 1,398,264 1,333,189 971,081 895,948 Money market deposit accounts 3,783,842 3,426,745 3,149,346 3,021,610 2,760,147 Certificates of deposit 1,441,018 1,453,502 1,299,785 1,523,857 1,389,421 Total deposits $ 7,782,759 $ 6,634,613 $ 6,094,605 $ 5,786,983 $ 5,337,704 Noninterest - bearing checking accounts 4.7 % 5.4 % 5.1 % 4.7 % 5.5 % Interest - bearing checking accounts 28.2 % 21.1 % 21.9 % 16.8 % 16.8 % Money market deposit accounts 48.6 % 51.6 % 51.7 % 52.2 % 51.7 % Certificates of deposit 18.5 % 21.9 % 21.3 % 26.3 % 26.0 % Total deposits 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
33 AVERAGE BALANCE SHEET (1) C alculated on a fully taxable equivalent basis. INVESTOR PRESENTATION Three Months Ended March 31, 2020 December 31, 2019 March 31, 2019 (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 $ 464,302 $ 1,363 1.18 % $ 404,169 $ 1,687 1.66 % $ 202,474 $ 1,256 2.52 % Federal funds sold 7,099 20 1.13 % 6,994 25 1.42 % 8,595 31 1.46 % Debt securities available - for - sale 281,870 2,044 2.92 % 251,767 1,994 3.14 % 236,235 1,986 3.41 % Debt securities held - to - maturity 201,754 1,488 2.97 % 206,383 1,653 3.18 % 211,833 2,018 3.86 % Debt securities trading 230 1 1.75 % — — — % — — — % Equity securities — — — % 1,898 4 0.84 % 12,755 72 2.29 % FHLB stock 20,179 398 7.93 % 20,930 198 3.75 % 20,498 305 6.03 % Total loans and leases 6,672,692 58,918 3.55 % 6,248,106 59,936 3.81 % 5,177,844 57,262 4.49 % Total interest - earning assets 7,648,126 64,232 3.38 % 7,140,247 65,497 3.64 % 5,870,234 62,930 4.35 % Other assets 312,447 326,013 242,553 Total assets $ 7,960,573 $ 7,466,260 $ 6,112,787 Liabilities and Shareholders' Equity Interest - bearing deposits: Interest - bearing checking accounts $ 1,473,614 5,214 1.42 % $ 1,446,394 $ 6,178 1.69 % $ 792,690 $ 4,542 2.32 % Money market deposit accounts 3,548,965 14,655 1.66 % 3,123,162 15,727 2.00 % 2,682,390 16,540 2.50 % Certificates of deposit 1,383,036 7,375 2.14 % 1,358,319 8,086 2.36 % 1,300,296 8,251 2.57 % Borrowings: FHLB borrowings 421,923 2,035 1.94 % 465,489 2,417 2.06 % 459,333 2,585 2.28 % Line of credit borrowings 1,484 1 0.27 % — — — % 4,139 58 5.68 % Subordinated notes payable, net — — — % — — — % 34,933 554 6.43 % Total interest - bearing liabilities 6,829,022 29,280 1.72 % 6,393,364 32,408 2.01 % 5,273,781 32,530 2.50 % Noninterest - bearing deposits 350,086 285,027 261,682 Other liabilities 153,207 173,977 88,485 Shareholders' equity 628,258 613,892 488,839 Total liabilities and shareholders' equity $ 7,960,573 $ 7,466,260 $ 6,112,787 Net interest income (1) $ 34,952 $ 33,089 $ 30,400 Net interest spread (1) 1.66 % 1.63 % 1.85 % Net interest margin (1) 1.84 % 1.84 % 2.10 %
34 AVERAGE BALANCE SHEET (1) C alculated on a fully taxable equivalent basis. INVESTOR PRESENTATION Years Ended December 31, 2019 2018 (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 $ 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 %
35 SEGMENTS INVESTOR PRESENTATION Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 (Dollars in thousands) Bank Investment Management Parent and Other Consolidated Bank Investment Management Parent and Other Consolidated Income statement data: Interest income $ 64,202 $ — $ — $ 64,202 $ 62,830 $ — $ 72 $ 62,902 Interest expense 29,296 — (16 ) 29,280 31,919 — 611 32,530 Net interest income (loss) 34,906 — 16 34,922 30,911 — (539 ) 30,372 Provision (credit) for loan and lease losses 2,993 — — 2,993 (377 ) — — (377 ) Net interest income (loss) after provision for loan and lease losses 31,913 — 16 31,929 31,288 — (539 ) 30,749 Non - interest income: Investment management fees — 7,765 (127 ) 7,638 — 9,533 (109 ) 9,424 Net gain on the sale and call of debt securities 57 — — 57 28 — — 28 Other non - interest income (loss) 5,652 (31 ) — 5,621 2,877 21 719 3,617 Total non - interest income (loss) 5,709 7,734 (127 ) 13,316 2,905 9,554 610 13,069 Non - interest expense: Intangible amortization expense — 502 — 502 — 502 — 502 Other non - interest expense 21,034 6,626 982 28,642 19,021 7,058 91 26,170 Total non - interest expense 21,034 7,128 982 29,144 19,021 7,560 91 26,672 Income (loss) before tax 16,588 606 (1,093 ) 16,101 15,172 1,994 (20 ) 17,146 Income tax expense (benefit) 3,348 28 (170 ) 3,206 2,024 563 (5 ) 2,582 Net income (loss) $ 13,240 $ 578 $ (923 ) $ 12,895 $ 13,148 $ 1,431 $ (15 ) $ 14,564
36 RECONCILIATION OF NON - GAAP FINANCIAL MEASURES TO GAAP INCOME STATEMENT ITEMS For a comprehensive discussion on the use of non - GAAP data, please refer to the Company’s most recent quarterly financial result s news release furnished with the Securities and Exchange Commission and available at www.tscbank.com INVESTOR PRESENTATION 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) 2020 2019 2019 2019 2019 2019 2018 Bank total revenue: Net interest income $ 34,906 $ 33,025 $ 32,265 $ 31,794 $ 30,911 $ 127,996 $ 115,455 Total non - interest income 5,709 4,655 5,319 2,590 2,905 15,467 11,042 Less: net gain (loss) on the sale and call of debt securities 57 70 206 112 28 416 (70 ) Bank total revenue $ 40,558 $ 37,610 $ 37,378 $ 34,272 $ 33,788 $ 143,047 $ 126,567 Bank efficiency ratio: Total non - interest expense (numerator) $ 21,034 $ 21,073 $ 18,949 $ 18,903 $ 19,021 $ 77,945 $ 67,190 Total revenue (denominator) $ 40,558 $ 37,610 $ 37,378 $ 34,272 $ 33,788 $ 143,047 $ 126,567 Bank efficiency ratio 51.86 % 56.03 % 50.70 % 55.16 % 56.30 % 54.49 % 53.09 % 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) 2020 2019 2019 2019 2019 2019 2018 Total revenue: Net interest income $ 34,922 $ 33,066 $ 32,316 $ 31,303 $ 30,372 $ 127,057 $ 113,404 Total non - interest income 13,316 13,491 14,243 11,979 13,069 52,782 47,917 Less: net gain (loss) on the sale and call of debt securities 57 70 206 112 28 416 (70 ) Total revenue $ 48,181 $ 46,487 $ 46,353 $ 43,170 $ 43,413 $ 179,423 $ 161,391 Less: total non - interest expense 29,144 30,119 27,773 27,585 26,672 112,149 101,157 Pre - tax, pre - provision net revenue $ 19,037 $ 16,368 $ 18,580 $ 15,585 $ 16,741 $ 67,274 $ 60,234
37 RECONCILIATION OF NON - GAAP FINANCIAL MEASURES TO GAAP INCOME STATEMENT ITEMS For a comprehensive discussion on the use of non - GAAP data, please refer to the Company’s most recent quarterly financial result s news release filed with the Securities and Exchange Commission and available at www.tscbank.com INVESTOR PRESENTATION 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) 2020 2019 2019 2019 2019 2019 2018 Investment Management EBITDA: Net income $ 578 $ 13 $ 316 $ 672 $ 1,431 $ 2,433 $ 3,851 Interest expense — — — — — — — Income taxes expense (benefit) 28 88 3 264 563 918 579 Depreciation expense 109 110 111 119 125 464 502 Intangible amortization expense 502 503 502 502 502 2,009 1,968 EBITDA $ 1,217 $ 714 $ 932 $ 1,557 $ 2,621 $ 5,824 $ 6,900
38 RECONCILIATION OF NON - GAAP FINANCIAL MEASURES TO GAAP BALANCE SHEET ITEMS For a comprehensive discussion on the use of non - GAAP data, please refer to the Company’s most recent quarterly financial result s news release filed with the Securities and Exchange Commission and available at www.tscbank.com As of (Dollars in thousands, except per share data) March 31, December 31, September 30, June 30, March 31, 2020 2019 2019 2019 2019 Tangible book value per common share: Common shareholders' equity $ 498,301 $ 505,202 $ 488,443 $ 472,839 $ 458,089 Less: goodwill and intangible assets 65,352 65,854 66,357 66,859 67,361 Tangible common equity $ 432,949 $ 439,348 $ 422,086 $ 405,980 $ 390,728 Common shares outstanding 29,762,578 29,355,986 29,296,970 29,339,152 29,351,833 Tangible book value per common share $ 14.55 $ 14.97 $ 14.41 $ 13.84 $ 13.31 Tangible common equity and tangible assets: Common shareholders' equity $ 498,301 $ 505,202 $ 488,443 $ 472,839 $ 458,089 Less: g oodwill and intangible assets 65,352 65,854 66,357 66,859 67,361 Tangible common equity (numerator) $ 432,949 $ 439,348 $ 422,086 $ 405,980 $ 390,728 Total assets $ 8,990,061 $ 7,765,810 $ 7,198,449 $ 6,846,003 $ 6,344,010 Less: goodwill and intangible assets 65,352 65,854 66,357 66,859 67,361 Tangible assets (denominator) $ 8,924,709 $ 7,699,956 $ 7,132,092 $ 6,779,144 $ 6,276,649 Tangible common equity to tangible assets 4.9% 5.7% 5.9% 6.0% 6.2% INVESTOR PRESENTATION