Business Wire | Oct 20, 2021 05:43PM EDT

TriState Capital Reports Third Quarter 2021 EPS of $0.44 on Record Net Income and Revenue, Organic Loan and Balance Sheet Growth, and Net Interest Margin Expansion

Oct. 20, 2021

PITTSBURGH--(BUSINESS WIRE)--Oct. 20, 2021--TriState Capital Holdings, Inc. (Nasdaq: TSC) reported third quarter 2021 financial results, including record net income, organic loan and balance sheet growth and its fourth consecutive quarter of net interest margin (NIM) expansion.

The parent company of TriState Capital Bank and Chartwell Investment Partners reported net income available to common shareholders of $16.9 million in the third quarter of 2021, up 129.7% from $7.4 million in the third quarter of 2020 and up 7.7% from $15.7 million in the second quarter of 2021.

The company earned $0.44 per diluted share in the third quarter of 2021, compared to $0.26 in the third quarter of 2020 and $0.41 in the second quarter of 2021. Third quarter 2021 results include a higher number of diluted average shares outstanding and a $1.1 million increase in preferred dividends, compared to the year-ago quarter, both resulting from the company's December 30, 2020 private placement of $105 million of common stock, convertible preferred stock and warrants.

"TriState Capital's performance in the quarter and year to date showcased the tremendous earnings power of our investment management, private banking and commercial banking businesses, along with our ability to sustain profitable and responsible organic revenue growth," Chairman and Chief Executive Officer James F. Getz said. "Our long record of consistent investment in talent and technology continue to fuel our success in strengthening relationships with our sophisticated clients, attracting new ones, and rapidly scaling each of our businesses. Our agile and low-cost funding capability also enabled TriState Capital to cross the $12 billion-asset milestone during the quarter, as each of our private banking, middle-market commercial and securities portfolios grew to new record levels and we maintain a balance sheet that is well positioned for rising interest rates. We are pleased with our new business pipelines and dialogue with clients, which we believe will enable TriState Capital to sustain our momentum in the near term and accelerate growth over the long term."

TriState Capital also announced today that it entered into a definitive agreement with Raymond James Financial, Inc., under which Raymond James will acquire TriState Capital. The companies provided additional information on the transaction in a news release that will be made available at https://investors.tristatecapitalbank.com.

THIRD QUARTER 2021 HIGHLIGHTS

* Chartwell year-to-date net inflows from retail and institutional clients totaled $499.0 million, including $149.0 million in fixed income strategies in the third quarter alone. * Total loans grew by 28.9% from September 30, 2020 and 6.3% during the quarter. * Commercial loans grew by 14.7% from September 30, 2020 and 2.7% during the quarter, led by fund finance solutions and other commercial and industrial (C&I) lending. * Private banking loans grew by 39.1% from September 30, 2020 and 8.6% during the quarter, as the company continued to leverage talent and proprietary technology to fortify its position as the nation's leading independent provider of loans collateralized by marketable securities and other liquid assets. * Treasury management deposit accounts grew by 82.0% from September 30, 2020 and 8.2% during the quarter. * Net interest income (NII) increased by 39.4% from the year-ago quarter and 8.8% from the linked quarter on continued loan growth and NIM expansion to 1.65%. * The company maintained superior credit quality metrics, with period-end non-performing assets (NPAs) and non-performing loans (NPLs) declining by 21.4% and 22.8% respectively during the quarter, while adverse rated credits represented just 0.44% of total loans at period end. * Return on average common equity expanded to 10.67%, up 511 basis points from the year-ago period and 30 basis points from the linked quarter, as the company continues to productively deploy capital raised in December 2020.

REVENUE GROWTH

NII grew to a record $46.7 million in the third quarter of 2021, increasing 39.4% from $33.5 million in the year-ago quarter and 8.8% from $42.9 million in the second quarter of 2021. NIM expanded for the fourth consecutive quarter to 1.65% for the three months ended September 30, 2021, up from 1.46% in the third quarter of 2020 and 1.63% in the second quarter of 2021.

Non-interest income was $14.2 million in the third quarter of 2021, compared to $16.9 million in the year-ago quarter and $14.8 million in the linked quarter. Chartwell investment management fees of $9.4 million in the third quarter of 2021 are up 16.6% from $8.1 million in the same period the prior year and remained relatively consistent with the $9.5 million reported in the linked quarter. Fees from commercial and private banking clients' use of TriState Capital's interest rate swaps offering totaled $3.1 million in the third quarter of 2021, $4.0 million in the prior year quarter and $3.9 million in the linked quarter.

NII and non-interest income, excluding net gains and losses on the sale of debt securities, combined to generate record total revenue of $60.9 million for the third quarter of 2021, an increase of 30.6% from $46.6 million in the year-ago period and 5.6% from $57.7 million in the linked quarter. Total revenue, which is not a financial metric under generally accepted accounting principles (GAAP), is a measure that TriState Capital has consistently utilized to provide a greater understanding of the diversity and balance of its income-generating capabilities. Non-interest income represented 23.3% of total revenue in the third quarter of 2021 when excluding net gains on the sale of securities, compared to 28.2% in the year-ago period and 25.6% in the linked quarter.

EXPENSES REFLECT CONTINUED INVESTMENTS

TriState Capital continues to invest in talent, technology, products and risk and compliance management to support the continued responsible growth of its businesses and balance sheet, to provide a premier client experience, and to scale its efficient branchless operating model.

Third quarter 2021 non-interest expense of $38.0 million increased 20.9% from $31.4 million in the year-ago period and 10.4% from $34.4 million in the linked quarter. TriState Capital currently expects operating expense growth in the mid teens for full-year 2021.

TriState Capital Bank's efficiency ratio for the third quarter of 2021 was 54.79%, compared to 58.73% in the third quarter of 2020 and 51.51% in the linked quarter. Efficiency ratio is a non-GAAP financial metric utilized to provide a greater understanding of a bank's level of non-interest expense as a percentage of total revenue.

TriState Capital continued to maintain a low annualized non-interest expense to average assets ratio of 1.30% in the third quarter of 2021, compared to 1.31% in the third quarter of 2020 and 1.27% in the linked quarter.

Pre-tax, pre-provision net revenue of $22.9 million in the third quarter of 2021 increased 50.4% from $15.2 million in the year-ago period and decreased 1.6% from $23.2 million in the linked quarter. Pre-tax, pre-provision net revenue is a non-GAAP financial metric representing net income, without giving effect to loan loss provision and income taxes, and excluding gains and losses on the sale and call of investment securities.

Income before tax was $22.9 million in the third quarter of 2021, compared to $11.5 million in the third quarter of 2020 and $23.2 million in the linked quarter.

TriState Capital's effective tax rate was 12.6% for the third quarter, reflecting a $3 million historic tax credit. Expenses associated with this tax credit are included in other expenses. The company's effective tax rate is impacted by certain factors including the number, timing and size of tax credit investments, as well as the proportion of consolidated earnings attributed to investment management. The company's 2021 effective tax rate, based on factors including anticipated tax credit investment opportunities, is currently expected to be in the mid teens.

Net income available to common shareholders and earnings per share in the third quarter of 2021 are net of $3.1 million in dividends payable to holders of the company's Series A, Series B and Series C Non-Cumulative Perpetual Preferred Stock.

INVESTMENT MANAGEMENT

A combination of investment performance, strong client relationships and a robust new business effort contributed to positive net inflows of $499.0 million for the nine months ending September 30, 2021. In addition, Chartwell's new business pipeline currently has in excess of $69 million in commitments from institutional investors.

Chartwell's new business and new flows from existing accounts of $375.0 million was offset by market depreciation of $23.0 million and outflows of $409.0 million in the third quarter of 2021. Chartwell's assets under management (AUM) totaled $11.45 billion on September 30, 2021, compared to $9.65 billion on September 30, 2020 and $11.51 billion on June 30, 2021.

Reflecting historically low interest rates and the performance of Chartwell's investment professionals, its fixed income strategies attracted net positive inflows of $149.0 million in the third quarter of 2021. Chartwell fixed income assets grew by 2.6% during the third quarter to $6.75 billion on September 30, 2021, or 58.9% of total AUM.

Annual run-rate revenue was $39.0 million as of September 30, 2021, compared to $33.6 million on September 30, 2020 and $39.9 million on June 30, 2021. Chartwell's weighted average fee rate was 0.34% at September 30, 2021. Investment management fee revenue was $9.4 million in the third quarter of 2021, compared to $8.1 million in the third quarter of 2020 and $9.5 million in the second quarter of 2021.

Initiatives to enhance Chartwell profitability continue to be reflected in the segment's improving level of expenses relative to revenue. Investment management fees grew by 18.8%, outpacing a 12.6% increase in Chartwell segment non-interest expense, in the first nine months of 2021 compared to the same period the prior year. Year to date, compared to the first nine months of 2020, Chartwell generated a 138.7% increase in segment net income and a 53.4% increase in segment EBITDA, which is a non-GAAP financial metric representing net income before interest expense, income tax expense, depreciation expense and intangible amortization expense.

ORGANIC LENDING FRANCHISE GROWTH

TriState Capital's client engagement and distribution capabilities continued to drive the organic growth of both sides of its balance sheet by expanding the number and depth of its premier relationships with high-quality middle-market commercial customers, as well as expanding the number of high-net-worth clients the bank serves through its growing national referral network of financial intermediaries.

Average loans totaled a record $9.43 billion in the third quarter of 2021, growing 27.6% from $7.39 billion in the prior year period and 7.0% from $8.81 billion in the linked quarter. Period-end loans totaled a record $9.87 billion on September 30, 2021, growing $2.21 billion, or 28.9%, from September 30, 2020, and $586.1 million, or 6.3%, from June 30, 2021.

TriState Capital continued to fortify its position as the nation's leading independent provider of marketable securities-backed loans for clients of independent investment advisory firms, trust companies, broker-dealers, regional securities firms, family offices, insurance companies and other financial intermediaries that do not offer banking services themselves. Private banking loans totaled a record $6.20 billion at September 30, 2021, increasing $1.75 billion, or 39.1%, from one year prior and $490.4 million, or 8.6%, from the end of the linked quarter.

The company continued to grow relationships with top-quality middle-market sponsors and businesses, driving originations of C&I and commercial real estate (CRE) loans while managing credit quality within the portfolio. Commercial loans totaled $3.67 billion at September 30, 2021, increasing $469.3 million, or 14.7%, from one year prior and $95.6 million, or 2.7%, from the end of the linked quarter.

C&I loans grew to $1.34 billion at September 30, 2021, increasing $202.5 million, or 17.8%, from one year prior and $99.9 million, or 8.1%, from June 30, 2021, led by capital call lines of credit and other fund finance offerings, more than offsetting amortization and paydowns. The bank did not participate in the Paycheck Protection Program (PPP).

CRE loans totaled $2.32 billion at September 30, 2021, increasing $266.8 million, or 13.0%, from September 30, 2020 and down $4.3 million, or 0.2%, from June 30, 2021 as new production activity was offset by amortization and paydowns in the third quarter.

STRATEGIC DEPOSIT AND LIQUIDITY MANAGEMENT FRANCHISE EXPANSION

TriState Capital continues to deliver growth on its agile liquidity management franchise, which creates meaningful service-based client relationships and provides highly responsive funding. The bank is winning new business and enhancing the breadth and depth of existing client relationships with its nationally distributed service and liquidity management offerings for financial services businesses, payroll and other specialized payment servicers, real estate firms, high-net-worth individuals, family offices, middle market companies, municipalities and non-profits.

Average deposits totaled a record $10.25 billion in the third quarter of 2021, growing 25.0% from $8.21 billion in the third quarter of last year and 7.3% from $9.56 billion in the linked quarter. Period-end deposits totaled a record $10.76 billion at September 30, 2021, growing $2.57 billion, or 31.4%, from September 30, 2020, and $564.7 million, or 5.5%, from June 30, 2021.

Treasury management deposit accounts totaled $2.45 billion at September 30, 2021, increasing $1.10 billion, or 82.0%, from September 30, 2020 and $186.8 million, or 8.2%, from June 30, 2021.

The bank's loan-to-deposit ratio at September 30, 2021 was 91.75%, compared to 93.53% at September 30, 2020 and 91.09% at June 30, 2021, reflecting the bank's ability to manage liquidity levels in line with deployment opportunities.

INTEREST RATE MANAGEMENT

TriState Capital continues to maintain a balance sheet with significant flexibility to manage interest rate dynamics, while offering attractive deposit and loan pricing to clients. Ultimately, the bank favors an asset-sensitive approach over the long term.

Investment securities totaled a record $1.43 billion at September 30, 2021, up 74.3% from September 30, 2020 and 6.9% from June 30, 2021 as the bank continued to build on-balance sheet liquidity.

Approximately 60% of TriState Capital's non-fixed rate deposits use the Effective Fed Funds Rate or another benchmark as reference points, and the remaining non-fixed rate deposits are priced at rates set with bank discretion. Total cost of funds for all deposits and interest-bearing liabilities averaged 0.49% during the third quarter of 2021, compared to 0.77% in the same period last year and 0.51% in the linked quarter. The total cost of deposits averaged 0.41% during the third quarter of 2021, compared to 0.67% in the same period last year and 0.42% in the linked quarter.

At September 30, 2021, 95% of the bank's loans were floating rate and indexed to 30-day LIBOR or the Prime Rate. TriState Capital continued to constructively use interest rate floors on existing and new variable rate loans throughout the third quarter of 2021.

The yield on total loans averaged 2.32% during the third quarter of 2021, compared to 2.49% in the prior year period and 2.35% in the linked quarter. Loan yields resulted primarily from trends in 30-day LIBOR, which declined on average less than 1 basis point during the third quarter of 2021. Loan yields were also affected by higher rates of growth in balances of private bank loans relative to commercial bank loans. Loan yield movement was offset by a continued reduction in deposit costs.

NIM expanded for the fourth consecutive quarter to 1.65% for the third quarter of 2021, up 19 basis points from the same period the year prior and 2 basis points from the linked quarter.

ASSET QUALITY

TriState Capital maintained strong asset quality metrics in the third quarter of 2021, reflecting its disciplined credit culture and lower risk profile resulting from the majority of its loans consisting of private banking non-purpose margin loans collateralized by marketable securities. Private banking grew to represent 62.9% of the total loan portfolio at September 30, 2021, while CRE and C&I comprised 23.5% and 13.6% of total loans, respectively.

COVID-19 deferral levels continued to decline in line with expectations to two loans representing $18.8 million or 0.2% of total loans on September 30, 2021, from four loans representing $41.0 million or 0.4% of total loans on June 30, 2021.

The allowance for credit losses on loans and leases (ACL) was $32.4 million at September 30, 2021, compared to $30.7 million at September 30, 2020 and $32.6 million at June 30, 2021. ACL on commercial loans represented 0.82% of commercial loans at period end, excluding private banking loans primarily collateralized by liquid, marketable securities that do not require a reserve, compared to 0.89% at September 30, 2020 and 0.85% at June 30, 2021. As a percentage of total loans, ACL was 0.33% at September 30, 2021, 0.40% at September 30, 2020 and 0.35% at June 30, 2021.

TriState Capital's net charge offs (NCOs) were $238,000 in the third quarter of 2021, or 0.01% of total average loans of $9.43 billion. NCOs were $0 in the year-ago quarter and $2.3 million in the linked quarter.

During the third quarter of 2021, NPAs and NPLs declined by 21.4% and 22.8%, respectively, from June 30, 2021 to September 30, 2021.

NPAs were $10.8 million, or 0.09% of total assets, at September 30, 2021, compared to $9.5 million, or 0.10%, at September 30, 2020 and $13.7 million, or 0.12%, at June 30, 2021. NPLs were $8.6 million, or 0.09% of total loans, at September 30, 2021, compared to $6.8 million, or 0.09%, at September 30, 2020 and $11.2 million, or 0.12%, at June 30, 2021.

Total adverse-rated credits, including NPLs, were $43.5 million, or 0.44% of total loans, at September 30, 2021, compared to $38.8 million, or 0.51%, at September 30, 2020 and $34.1 million, or 0.37%, at June 30, 2021. TriState Capital maintains a very low ratio of criticized assets to total loans that was more than 10 times lower than the 4.41% most-recent quarter median for publicly traded commercial banks with assets of $10 billion to $20 billion, according to data from S&P Capital IQ.

TriState Capital's provision for credit losses was de minimis in the third quarter of 2021, $7.4 million in the third quarter of 2020 and $96,000 in the linked quarter.

CAPITAL STRENGTH AND EFFICIENCY

The company's strong balance sheet included $1.90 billion in cash, equivalents and securities at September 30, 2021. Cash, equivalents, securities and private banking loans -- which are primarily collateralized by marketable securities that are monitored daily, liquid and subject to favorable treatment under regulatory capital requirements -- represented 66.65% of total assets at the end of the third quarter of 2021.

As of September 30, 2021, estimated regulatory capital ratios for TriState Capital Holdings were 13.71% for total risk-based capital, 11.79% for tier 1 risk-based capital, 9.01% for common equity tier 1 risk-based capital, and 6.61% for tier 1 leverage. For TriState Capital Bank, the estimated capital ratios were 13.38% for total risk-based capital, 12.94% for tier 1 risk-based capital, 12.94% for common equity tier 1 risk-based capital, and 7.24% for tier 1 leverage.

TriState Capital had $9.8 million of common stock repurchase authority available at September 30, 2021 under previously disclosed buyback programs authorized by its Board of Directors. Since the Board first authorized share buybacks in 2014, the company has repurchased a total of 2.1 million shares for approximately $33.0 million at an average cost of $15.39 per share. The company has not repurchased shares on the open market since the second quarter of 2020.

CONFERENCE CALL

As previously announced, TriState Capital will hold an investor conference call tomorrow. The live conference call on October 21 will be held at 8:30 a.m. ET. Telephone participants may avoid any delays by pre-registering for the call using the link https://dpregister.com/sreg/10160497/edacb54f34 to receive a special dial-in number and PIN. Telephone participants who are unable to pre-register should dial in at least 10 minutes prior to the call and request the "TriState Capital investor call." The call may be accessed by dialing 888-339-0757 from the United States or Canada, and 412-902-4194 from other international locations.

The live conference call will also be available through an audio webcast accessible at https://events.q4inc.com/attendee/650246783 or https://investors.tristatecapitalbank.com. These links may also be used to access an archived replay of the conference call.

A telephone replay of the call will be available approximately one hour after the end of the conference through October 28. The replay may be accessed by dialing 877-344-7529 from the United States, 855-669-9658 from Canada, or 412-317-0088 from other international locations, and entering the conference number 10160497.

ABOUT TRISTATE CAPITAL

TriState Capital Holdings, Inc. (Nasdaq: TSC) is a bank holding company headquartered in Pittsburgh, Pa., providing commercial banking, private banking and investment management services to middle-market companies, institutional clients and high-net-worth individuals. Its TriState Capital Bank subsidiary had $12.07 billion in assets as of September 30, 2021, and serves middle-market commercial customers through regional representative offices in Pittsburgh, Philadelphia, Cleveland, Edison, N.J., and New York City, as well as high-net-worth individuals nationwide through its national referral network of financial intermediaries. Its Chartwell Investment Partners subsidiary had $11.45 billion in assets under management as of September 30, 2021, and serves institutional clients and TriState Capital's financial intermediary network. For more information, please visit http://investors.tristatecapitalbank.com.

FORWARD-LOOKING STATEMENTS

This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect TriState Capital's current views with respect to, among other things, future events and the company's financial performance, as well as the company's goals and objectives for future operations, financial and business trends, business prospects and management's outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality or other measures of future financial or business performance, strategies or expectations. These statements are often, but not always, made through the use of words or phrases such as "achieve," "anticipate," "believe," "continue," "could," "estimate," "expect," "goal," "intend," "maintain," "may," "opportunity," "outlook," "plan," "potential," "predict," "projection," "seek," "should," "sustain," "target," "trend," "will," "will likely result," and "would," or the negative versions of those words or other comparable statements of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about TriState Capital's industry and beliefs or assumptions made by management, many of which, by their nature, are inherently uncertain. Although TriState Capital believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Accordingly, TriState Capital cautions 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, including, but not limited to, the following:

* risks associated with the COVID-19 pandemic and their expected impact and duration, including effects on TriState Capital's operations, its clients, economic conditions and the demand for its products and services; * TriState Capital's ability to prudently manage its growth and execute its strategy, including the successful integration of past and future acquisitions, its ability to fully realize the cost savings and other benefits of its acquisitions, manage risks related to business disruption following those acquisitions, and manage customer disintermediation; * deterioration of TriState Capital's asset quality; * TriState Capital's level of non-performing assets and the costs associated with resolving problem loans, including litigation and other costs; * possible additional loan and lease losses and impairment, changes in the value of collateral securing TriState Capital's loans and leases and the collectability of loans and leases, particularly as a result of the COVID-19 pandemic and the programs implemented by the Coronavirus Aid, Relief, and Economic Security Act, including its automatic loan forbearance provisions; * possible changes in the speed of loan prepayments by customers and loan origination or sales volumes; * business and economic conditions generally and in the financial services industry, nationally and within TriState Capital's local market areas, including the effects of an increase in unemployment levels, slowdowns in economic growth and changes in demand for products or services or the value of assets under management; * TriState Capital's ability to maintain important deposit customer relationships, its reputation and otherwise avoid liquidity risks; * changes in management personnel; * TriState Capital's ability to recruit and retain key employees; * volatility and direction of interest rates; * risks related to the phasing out of LIBOR and changes in the manner of calculating reference rates, as well as the impact of the phase out of LIBOR and introduction of alternative reference rates on the value of loans and other financial instruments that are linked to LIBOR; * changes in accounting policies, accounting standards, or authoritative accounting guidance, including the CECL model; * any impairment of TriState Capital's goodwill or other intangible assets; * TriState Capital's ability to develop and provide competitive products and services that appeal to its customers and target markets; * TriState Capital's ability to provide investment management performance competitive with its peers and benchmarks; * fluctuations in the carrying value of the assets under management held by Chartwell, as well as the relative and absolute investment performance of such subsidiary's investment products; * operational risks associated with TriState Capital's business, including technology and cyber-security related risks; * increased competition in the financial services industry, particularly from regional and national institutions; * negative perceptions or publicity with respect to any products or services offered by TriState Capital; * adverse judgments or other resolution of pending and future legal proceedings, and costs incurred in defending such proceedings; * changes in the laws, rules, regulations, interpretations or policies relating to financial institutions, accounting, tax, trade, monetary and fiscal matters, including economic stimulus programs, and potential expenses associated with complying with such laws and regulations; * TriState Capital's ability to comply with applicable capital and liquidity requirements, including its ability to generate liquidity internally or raise capital on favorable terms; * regulatory limits on TriState Capital's ability to receive dividends from its subsidiaries and pay dividends to shareholders; * changes and direction of government policy towards and intervention in the U.S. financial system; * natural disasters and adverse weather, acts of terrorism, regional or national civil unrest, cyber-attacks, an outbreak of hostilities, a public health outbreak (such as COVID-19) or other international or domestic calamities, and other matters beyond TriState Capital's control; * the effects of any reputation, credit, interest rate, market, operational, legal, liquidity, regulatory or compliance risk resulting from developments related to any of the risks discussed above; and * other factors that are discussed in TriState Capital's filings with the Securities and Exchange Commission.

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this press release. If one or more events related to these or other risks or uncertainties materialize, or if TriState Capital's underlying assumptions prove to be incorrect, actual results may differ materially from what the company anticipates. Accordingly, readers should not place undue reliance on any such forward-looking statements. New factors emerge from time to time, and it is not possible for TriState Capital to predict which will arise. Any forward-looking statement speaks only as of the date on which it is made, and TriState Capital does not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. In addition, TriState Capital cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

NON-GAAP FINANCIAL DISCLOSURES

This news release and the accompanying tables contain certain financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (GAAP). Specifically, TriState Capital reviews and reports tangible common equity, tangible book value per common share, EBITDA, total revenue, pre-tax, pre-provision net revenue and efficiency ratio. Although TriState Capital believes these 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 most directly comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found within this news release and in the reconciliation tables accompanying this news release.

TRISTATE CAPITAL HOLDINGS, INC. BALANCE SHEET DATA (UNAUDITED)

As of

September 30, June 30, September 30,

(Dollars in thousands) 2021 2021 2020

Cash and cash equivalents $ 469,932 $ 529,453 $ 608,302

Total investment securities 1,429,613 1,337,658 820,223

Loans and leases held-for-investment 9,869,011 9,282,922 7,654,446

Allowance for credit losses on loans (32,363) (32,577) (30,706) and leases

Loans and leases held-for-investment, 9,836,648 9,250,345 7,623,740 net

Goodwill and other intangibles, net 62,478 62,955 64,389

Other assets 360,197 360,761 377,136

Total assets $ 12,158,868 $ 11,541,172 $ 9,493,790



Deposits $ 10,756,141 $ 10,191,433 $ 8,183,713

Borrowings, net 355,654 345,600 395,439

Other liabilities 233,035 209,571 271,438

Total liabilities 11,344,830 10,746,604 8,850,590



Preferred stock 180,443 179,343 116,079

Common shareholders' equity 633,595 615,225 527,121

Total shareholders' equity 814,038 794,568 643,200



Total liabilities and shareholders' $ 12,158,868 $ 11,541,172 $ 9,493,790 equity

TRISTATE CAPITAL HOLDINGS, INC. INCOME STATEMENT DATA (UNAUDITED)

Three Months Ended Nine Months Ended

September June 30, September September September 30, 30, 30, 30,

(Dollars in 2021 2021 2020 2021 2020thousands)

Interest income:

Loans and leases $ 55,071 $ 51,702 $ 46,256 $ 155,959 $ 152,551

Investments 4,477 3,737 3,687 10,860 11,528

Interest-earning 157 116 279 433 2,006 deposits

Total interest 59,705 55,555 50,222 167,252 166,085 income



Interest expense:

Deposits 10,480 10,106 13,898 31,340 57,095

Borrowings 2,558 2,537 2,850 7,677 7,110

Total interest 13,038 12,643 16,748 39,017 64,205 expense

Net interest income 46,667 42,912 33,474 128,235 101,880

Provision for credit - 96 7,430 320 16,428 losses

Net interest incomeafter provision for 46,667 42,816 26,044 127,915 85,452 credit losses

Non-interest income:

Investment 9,436 9,451 8,095 27,887 23,471 management fees

Service charges on 377 325 235 1,018 763 deposits

Net gain on the saleand call of debt 33 98 3,744 130 3,815 securities

Swap fees 3,059 3,913 3,953 9,683 12,179

Commitment and other 740 564 381 1,630 1,262 loan fees

Bank owned life 613 480 441 1,522 1,298 insurance income

Other income (loss) (28) 13 40 855 414

Total non-interest 14,230 14,844 16,889 42,725 43,202 income

Non-interest expense:

Compensation and 21,701 20,937 18,524 62,559 52,539 employee benefits

Premises and 1,520 1,173 1,488 4,099 4,389 equipment expense

Professional fees 2,310 2,124 1,596 5,758 4,175

FDIC insurance 1,375 1,125 3,030 3,625 7,760 expense

General insurance 363 341 294 1,002 834 expense

State capital shares 790 777 366 2,217 1,115 tax expense

Travel andentertainment 755 639 592 1,835 1,735 expense

Technology and data 4,274 3,687 2,576 11,061 7,294 services

Intangible 477 478 478 1,433 1,466 amortization expense

Marketing and 984 898 394 2,566 1,694 advertising

Other operating 3,459 2,246 2,089 7,556 5,667 expenses

Total non-interest 38,008 34,425 31,427 103,711 88,668 expense

Income before tax 22,889 23,235 11,506 66,929 39,986

Income tax expense 2,873 4,455 2,177 11,933 7,362

Net income $ 20,016 $ 18,780 $ 9,329 $ 54,996 $ 32,624

Preferred stock 3,097 3,077 1,962 9,233 5,886 dividends

Net income availableto common $ 16,919 $ 15,703 $ 7,367 $ 45,763 $ 26,738 shareholders

TRISTATE CAPITAL HOLDINGS, INC. SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)

As of and For the As of and For the Three Months Ended Nine Months Ended

September 30, June 30, September 30, September 30, September 30,

(Dollars inthousands, 2021 2021 2020 2021 2020except pershare data)

Per share and share data:

Earnings per common share:

Basic $ 0.46 $ 0.42 $ 0.26 $ 1.24 $ 0.95

Diluted $ 0.44 $ 0.41 $ 0.26 $ 1.20 $ 0.93

Book value per $ 19.11 $ 18.54 $ 17.67 $ 19.11 $ 17.67 common share

Tangible bookvalue per $ 17.23 $ 16.65 $ 15.51 $ 17.23 $ 15.51 common share ^(1)

Common sharesoutstanding, 33,154,343 33,176,934 29,828,143 33,154,343 29,828,143 at end ofperiod

Weightedaverage common sharesoutstanding:

Basic 31,357,356 31,280,481 28,286,250 31,287,924 28,230,180

Diluted 32,146,222 32,147,758 28,674,443 32,316,867 28,679,283



Performance ratios:

Return onaverage assets 0.68 % 0.69 % 0.39 % 0.67 % 0.49 %^(2)

Return onaverage common 10.67 % 10.37 % 5.56 % 10.06 % 6.90 %equity ^(2)

Net interestmargin ^(2) 1.65 % 1.63 % 1.46 % 1.63 % 1.60 %(3)

Total revenue $ 60,864 $ 57,658 $ 46,619 $ 170,830 $ 141,267 ^(1)

Pre-tax,pre-provision $ 22,856 $ 23,233 $ 15,192 $ 67,119 $ 52,599 net revenue ^(1)

Bankefficiency 54.79 % 51.51 % 58.73 % 52.41 % 53.66 %ratio ^(1)

Non-interestexpense to 1.30 % 1.27 % 1.31 % 1.27 % 1.33 %average assets^(2)



Asset quality:

Non-performing $ 8,625 $ 11,175 $ 6,754 $ 8,625 $ 6,754 loans

Non-performing $ 10,803 $ 13,743 $ 9,478 $ 10,803 $ 9,478 assets

Other real $ 2,178 $ 2,568 $ 2,724 $ 2,178 $ 2,724 estate owned

Non-performingassets to 0.09 % 0.12 % 0.10 % 0.09 % 0.10 %total assets

Non-performingloans to total 0.09 % 0.12 % 0.09 % 0.09 % 0.09 %loans

ACL to loans 0.33 % 0.35 % 0.40 % 0.33 % 0.40 %and leases

ACL tonon-performing 375.22 % 291.52 % 454.63 % 375.22 % 454.63 %loans

Netcharge-offs $ 238 $ 2,253 $ - $ 2,690 $ (170) (recoveries)

Netcharge-offs to 0.01 % 0.10 % - % 0.04 % - %average totalloans ^(2)



Capital ratios: ^(4)

Tier 1 6.61 % 6.86 % 6.23 % 6.61 % 6.23 %leverage ratio

Common equitytier 1 9.01 % 9.06 % 8.48 % 9.01 % 8.48 %risk-basedcapital ratio

Tier 1risk-based 11.79 % 11.94 % 10.56 % 11.79 % 10.56 %capital ratio

Totalrisk-based 13.71 % 13.94 % 12.85 % 13.71 % 12.85 %capital ratio

Bank tier 1 7.24 % 7.34 % 7.00 % 7.24 % 7.00 %leverage ratio

Bank commonequity tier 1 12.94 % 12.80 % 11.89 % 12.94 % 11.89 %risk-basedcapital ratio

Bank tier 1risk based 12.94 % 12.80 % 11.89 % 12.94 % 11.89 %capital ratio

Bank totalrisk-based 13.38 % 13.26 % 12.46 % 13.38 % 12.46 %capital ratio



InvestmentManagement Segment:

Assets under $ 11,454,000 $ 11,511,000 $ 9,653,000 $ 11,454,000 $ 9,653,000 management

EBITDA ^(1) $ 1,847 $ 2,063 $ 1,551 $ 5,826 $ 3,799

(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.

(4)

Capital ratios are estimated until regulatory reports are filed.

TRISTATE CAPITAL HOLDINGS, INC. AVERAGES AND YIELDS (UNAUDITED)

These measures are not measures recognized under GAAP and are therefore^ considered to be non-GAAP financial measures. See "Non-GAAP Financial(1) Measures" for a reconciliation of these measures to their most directly comparable GAAP measures.

^ Ratios are annualized.(2)

^ Net interest margin is calculated on a fully taxable equivalent basis.(3)

^ Capital ratios are estimated until regulatory reports are filed.(4)

TRISTATE CAPITAL HOLDINGS, INC. AVERAGES AND YIELDS (UNAUDITED)

Three Months Ended

September 30, 2021 June 30, 2021 September 30, 2020

Interest Average Interest Average Interest Average(Dollars in Average Income ^ Yield/ Average Income ^ Yield/ Average Income ^ Yield/thousands) Balance (1)/ Rate ^ Balance (1)/ Rate ^ Balance (1)/ Rate ^ Expense (2) Expense (2) Expense (2)

Assets

Interest-earning $ 429,806 $ 155 0.14 % $ 407,627 $ 114 0.11 % $ 866,502 $ 278 0.13 %deposits

Federal funds sold 12,629 2 0.06 % 11,502 2 0.07 % 9,071 2 0.09 %

Debt securities 415,855 1,664 1.59 % 266,264 886 1.33 % 561,378 1,804 1.28 %available-for-sale

Debt securities 943,733 2,686 1.13 % 1,040,658 2,705 1.04 % 262,128 1,701 2.58 %held-to-maturity

Equity securities 163 - - % - - - % - - - %

FHLB stock 11,932 137 4.56 % 11,776 154 5.25 % 13,284 196 5.87 %

Total loans and 9,427,370 55,071 2.32 % 8,808,775 51,702 2.35 % 7,386,265 46,256 2.49 %leases

Totalinterest-earning 11,241,488 59,715 2.11 % 10,546,602 55,563 2.11 % 9,098,628 50,237 2.20 %assets

Other assets 382,763 347,923 420,887

Total assets $ 11,624,251 $ 10,894,525 $ 9,519,515



Liabilities andShareholders' Equity

Interest-bearing deposits:

Interest-bearing $ 3,946,028 $ 3,682 0.37 % $ 3,852,078 $ 3,214 0.33 % $ 2,866,303 $ 3,280 0.46 %checking accounts

Money market 4,879,971 5,794 0.47 % 4,316,946 5,636 0.52 % 3,811,100 6,944 0.72 %deposit accounts

Certificates of 899,855 1,004 0.44 % 929,906 1,256 0.54 % 1,121,824 3,674 1.30 %deposit

Borrowings:

FHLB borrowings 250,815 1,102 1.74 % 250,000 1,082 1.74 % 300,000 1,392 1.85 %

Line of credit 761 - - % - - - % - - - %borrowings

Subordinated notes 95,619 1,456 6.04 % 95,565 1,455 6.11 % 95,601 1,458 6.07 %payable, net

Totalinterest-bearing 10,073,049 13,038 0.51 % 9,444,495 12,643 0.54 % 8,194,828 16,748 0.81 %liabilities

Noninterest-bearing 528,897 460,601 407,079 deposits

Other liabilities 213,552 203,033 274,480

Shareholders' 808,753 786,396 643,128 equity

Total liabilitiesand shareholders' $ 11,624,251 $ 10,894,525 $ 9,519,515 equity



Net interest income $ 46,677 $ 42,920 $ 33,489 ^(1)

Net interest spread 1.60 % 1.57 % 1.39 %^(1)

Net interest margin 1.65 % 1.63 % 1.46 %^ (1)

(1)

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

(2)

Annualized.

TRISTATE CAPITAL HOLDINGS, INC. AVERAGES AND YIELDS (UNAUDITED)

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

^ Annualized.(2)

TRISTATE CAPITAL HOLDINGS, INC. AVERAGES AND YIELDS (UNAUDITED)

Nine Months Ended September 30,

2021 2020

Interest Average Interest Average(Dollars in Average Income ^(1) Yield/ Average Income ^(1) Yield/thousands) Balance / Rate ^ Balance / Rate ^ Expense (2) Expense (2)

Assets

Interest-earning $ 463,827 $ 427 0.12 % $ 809,978 $ 1,983 0.33 %deposits

Federal funds sold 11,570 6 0.07 % 8,022 23 0.38 %

Debt securities 343,897 3,120 1.21 % 391,377 5,874 2.00 %available-for-sale

Debt securities 875,157 7,291 1.11 % 252,296 4,805 2.54 %held-to-maturity

Debt securities 104 1 1.29 % 76 1 1.76 %trading

Equity securities 55 - - % - - - %

FHLB stock 11,754 473 5.38 % 15,569 899 7.71 %

Total loans and 8,841,619 155,959 2.36 % 7,052,457 152,551 2.89 %leases

Totalinterest-earning 10,547,983 167,277 2.12 % 8,529,775 166,136 2.60 %assets

Other assets 368,728 380,908

Total assets $ 10,916,711 $ 8,910,683



Liabilities andShareholders' Equity

Interest-bearing deposits:

Interest-bearing $ 3,624,587 $ 9,689 0.36 % $ 2,224,827 $ 11,213 0.67 %checking accounts

Money market 4,516,081 17,395 0.51 % 3,740,968 28,975 1.03 %deposit accounts

Certificates of 947,127 4,256 0.60 % 1,297,637 16,907 1.74 %deposit

Borrowings:

FHLB borrowings 251,557 3,256 1.73 % 340,493 4,711 1.85 %

Line of credit 1,769 55 4.16 % 8,047 261 4.33 %borrowings

Subordinated notes 95,565 4,366 6.11 % 46,851 2,138 6.10 %payable, net

Totalinterest-bearing 9,436,686 39,017 0.55 % 7,658,823 64,205 1.12 %liabilities

Noninterest-bearing 471,727 391,689 deposits

Other liabilities 221,290 226,838

Shareholders' 787,008 633,333 equity

Total liabilitiesand shareholders' $ 10,916,711 $ 8,910,683 equity



Net interest income $ 128,260 $ 101,931 ^(1)

Net interest spread 1.57 % 1.48 %^(1)

Net interest margin 1.63 % 1.60 %^ (1)

(1)

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

(2)

Annualized.

TRISTATE CAPITAL HOLDINGS, INC. LOAN AND LEASE COMPOSITION (UNAUDITED)

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

^ Annualized.(2)

TRISTATE CAPITAL HOLDINGS, INC. LOAN AND LEASE COMPOSITION (UNAUDITED)

September 30, 2021 June 30, 2021 September 30, 2020

Loan Percent Loan Percent Loan Percent(Dollars in of of ofthousands) Balance Total Balance Total Balance Total Loans Loans Loans

Private banking $ 6,204,009 62.9 % $ 5,713,562 61.5 % $ 4,458,767 58.3 %loans

Middle-market banking loans:

Commercial and 1,340,817 13.6 % 1,240,917 13.4 % 1,138,288 14.9 %industrial

Commercial real 2,324,185 23.5 % 2,328,443 25.1 % 2,057,391 26.8 %estate

Total middle-market 3,665,002 37.1 % 3,569,360 38.5 % 3,195,679 41.7 %banking loans

Loans and leases $ 9,869,011 100.0 % $ 9,282,922 100.0 % $ 7,654,446 100.0 %held-for-investment

TRISTATE CAPITAL HOLDINGS, INC. STATEMENT OF INCOME BY REPORTABLE SEGMENT (UNAUDITED)

Three Months Ended September 30, 2021 Three Months Ended September 30, 2020

(Dollars in Bank Investment Parent Consolidated Bank Investment Parent Consolidatedthousands) Management and Other Management and Other

Incomestatement data:

Interest $ 59,705 $ - $ - $ 59,705 $ 50,222 $ - $ - $ 50,222 income

Interest 11,591 - 1,447 13,038 15,297 - 1,451 16,748 expense

Net interestincome 48,114 - (1,447) 46,667 34,925 - (1,451) 33,474 (loss)

Provisionfor credit - - - - 7,430 - - 7,430 losses

Net interestincome(loss) after 48,114 - (1,447) 46,667 27,495 - (1,451) 26,044 provisionfor creditlosses

Non-interest income:

Investmentmanagement - 9,780 (344) 9,436 - 8,293 (198) 8,095 fees

Net gain onthe sale and 33 - - 33 3,744 - - 3,744 call of debtsecurities

Othernon-interest 4,768 (7) - 4,761 5,027 23 - 5,050 income(loss)

Totalnon-interest 4,801 9,773 (344) 14,230 8,771 8,316 (198) 16,889 income(loss)

Non-interest expense:

Intangibleamortization - 477 - 477 - 478 - 478 expense

Othernon-interest 28,975 8,031 525 37,531 23,462 6,868 619 30,949 expense

Totalnon-interest 28,975 8,508 525 38,008 23,462 7,346 619 31,427 expense

Income(loss) 23,940 1,265 (2,316) 22,889 12,804 970 (2,268) 11,506 before tax

Income taxexpense 2,719 (412) 566 2,873 2,357 251 (431) 2,177 (benefit)

Net income $ 21,221 $ 1,677 $ (2,882) $ 20,016 $ 10,447 $ 719 $ (1,837) $ 9,329 (loss)

Nine Months Ended September 30, 2021

Nine Months Ended September 30, 2020

(Dollars in thousands)

Bank

Investment Management

Parent and Other

Consolidated

Bank

Investment Management

Parent and Other

Consolidated

Income statement data:

Interest income

$

167,252

$

-

$

-

$

167,252

$

166,085

$

-

$

-

$

166,085

Interest expense

34,629

-

4,388

39,017

61,844

-

2,361

64,205

Net interest income (loss)

132,623

-

(4,388)

128,235

104,241

-

(2,361)

101,880

Provision for credit losses

320

-

-

320

16,428

-

-

16,428

Net interest income (loss) after provision for credit losses

132,303

-

(4,388)

127,915

87,813

-

(2,361)

85,452

Non-interest income:

Investment management fees

-

28,789

(902)

27,887

-

23,955

(484)

23,471

Net gain on the sale and call of debt securities

130

-

-

130

3,815

-

-

3,815

Other non-interest income

14,683

25

-

14,708

15,893

23

-

15,916

Total non-interest income (loss)

14,813

28,814

(902)

42,725

19,708

23,978

(484)

43,202

Non-interest expense:

Intangible amortization expense

-

1,433

-

1,433

-

1,466

-

1,466

Other non-interest expense

77,201

23,300

1,777

102,278

64,462

20,498

2,242

87,202

Total non-interest expense

77,201

24,733

1,777

103,711

64,462

21,964

2,242

88,668

Income (loss) before tax

69,915

4,081

(7,067)

66,929

43,059

2,014

(5,087)

39,986

Income tax expense (benefit)

12,013

183

(263)

11,933

7,878

381

(897)

7,362

Net income (loss)

$

57,902

$

3,898

$

(6,804)

$

54,996

$

35,181

$

1,633

$

(4,190)

$

32,624

TRISTATE CAPITAL HOLDINGS, INC. EARNINGS PER COMMON SHARE (UNAUDITED)

Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020

(Dollars in Bank Investment Parent Consolidated Bank Investment Parent Consolidatedthousands) Management and Other Management and Other

Incomestatement data:

Interest $ 167,252 $ - $ - $ 167,252 $ 166,085 $ - $ - $ 166,085 income

Interest 34,629 - 4,388 39,017 61,844 - 2,361 64,205 expense

Net interestincome 132,623 - (4,388) 128,235 104,241 - (2,361) 101,880 (loss)

Provisionfor credit 320 - - 320 16,428 - - 16,428 losses

Net interestincome(loss) after 132,303 - (4,388) 127,915 87,813 - (2,361) 85,452 provisionfor creditlosses

Non-interest income:

Investmentmanagement - 28,789 (902) 27,887 - 23,955 (484) 23,471 fees

Net gain onthe sale and 130 - - 130 3,815 - - 3,815 call of debtsecurities

Othernon-interest 14,683 25 - 14,708 15,893 23 - 15,916 income

Totalnon-interest 14,813 28,814 (902) 42,725 19,708 23,978 (484) 43,202 income(loss)

Non-interest expense:

Intangibleamortization - 1,433 - 1,433 - 1,466 - 1,466 expense

Othernon-interest 77,201 23,300 1,777 102,278 64,462 20,498 2,242 87,202 expense

Totalnon-interest 77,201 24,733 1,777 103,711 64,462 21,964 2,242 88,668 expense

Income(loss) 69,915 4,081 (7,067) 66,929 43,059 2,014 (5,087) 39,986 before tax

Income taxexpense 12,013 183 (263) 11,933 7,878 381 (897) 7,362 (benefit)

Net income $ 57,902 $ 3,898 $ (6,804) $ 54,996 $ 35,181 $ 1,633 $ (4,190) $ 32,624 (loss)

TRISTATE CAPITAL HOLDINGS, INC. EARNINGS PER COMMON SHARE (UNAUDITED)

Three Months Ended Nine Months Ended

September June 30, September September September 30, 30, 30, 30,

(Dollars inthousands, 2021 2021 2020 2021 2020except pershare data)



Basicearnings per common share:

Net income $ 20,016 $ 18,780 $ 9,329 $ 54,996 $ 32,624

Less:Preferreddividends on 1,963 1,962 1,962 5,887 5,886 Series A andSeries B

Less:Preferred 1,134 1,115 - 3,346 - dividends onSeries C

Net incomeavailable to $ 16,919 $ 15,703 $ 7,367 $ 45,763 $ 26,738 commonshareholders



Allocation ofnet income available:

Common $ 14,274 $ 13,272 $ 7,367 $ 38,679 $ 26,738 shareholders

Series Cconvertible 2,225 2,040 - 5,944 - preferredshareholders

Warrant 420 391 - 1,140 - shareholders

Total $ 16,919 $ 15,703 $ 7,367 $ 45,763 $ 26,738



Basicweightedaverage common sharesoutstanding:

Basic common 31,357,356 31,280,481 28,286,250 31,287,924 28,230,180 shares

Series Cconvertiblepreferred 4,887,272 4,807,272 - 4,807,858 - stock, as-ifconverted

Warrants,as-if 922,438 922,438 - 922,438 - exercised



Basicearnings per $ 0.46 $ 0.42 $ 0.26 $ 1.24 $ 0.95 common share



Dilutedearnings per common share:

Incomeavailable tocommon $ 14,274 $ 13,272 $ 7,367 $ 38,679 $ 26,738 shareholdersafterallocation



Dilutedweightedaverage common sharesoutstanding:

Basic common 31,357,356 31,280,481 28,286,250 31,287,924 28,230,180 shares

Restrictedstock - 664,729 719,504 303,138 884,714 313,726 dilutive

Stock options 124,137 147,773 85,055 144,229 135,377 - dilutive

Diluted 32,146,222 32,147,758 28,674,443 32,316,867 28,679,283 common shares



Dilutedearnings per $ 0.44 $ 0.41 $ 0.26 $ 1.20 $ 0.93 common share



September June 30, September September September 30, 30, 30, 30,

2021 2021 2020 2021 2020

Anti-dilutive shares:

Restricted 10,750 10,750 785,762 11,500 566,498 stock

Stock options - - 5,500 - -

Series Cconvertiblepreferred 4,887,272 4,807,272 - 4,887,272 - stock, as-ifconverted

Warrants,as-if 922,438 922,438 - 922,438 - exercised

Totalanti-dilutive 5,820,460 5,740,460 791,262 5,821,210 566,498 shares

Earnings per common share ("EPS") is computed using the two-class method, which requires that the Series C convertible preferred stock and warrants to be treated as participating classes of securities in the computation of EPS. In addition, net income is reduced by dividends declared on all series of preferred stock to derive net income available to common shareholders. The two-class method is an earnings allocation that determines EPS for each class of common stock and participating security. Net income available to common shareholders is reduced by the percentage of average common shares allocable to Series C convertible preferred holders and warrant holders on an as-if converted basis to arrive at net income allocable to common shareholders. Basic EPS is computed by dividing net income allocable to common shareholders by the weighted average number of its common shares outstanding for the period, excluding non-vested restricted stock. Diluted EPS reflects the potential dilution upon the exercise of stock options and warrants, and the vesting of restricted stock awards granted utilizing the treasury stock method. The Series C convertible preferred stock is excluded from diluted weighted average common shares outstanding because the payment of the dividend is considered in the net income allocable to common shareholders for the calculation of basic EPS.

TRISTATE CAPITAL HOLDINGS, INC. NON-GAAP FINANCIAL MEASURES

The information set forth above contains certain financial information determined by methods other than in accordance with GAAP. These non-GAAP financial measures are "tangible common equity," "tangible book value per common share," "EBITDA," "total revenue," "pre-tax, pre-provision net revenue" and "efficiency ratio." These non-GAAP financial measures are supplemental measures that we believe provide management and our investors with a more detailed understanding of our performance, although 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 in accordance with GAAP. The non-GAAP financial measures presented herein are calculated as follows:

"Tangible common equity" is defined as common shareholders' equity reduced by intangible assets, including goodwill. We believe this measure is important to management and investors so that they can better understand and assess changes from period to period in common shareholders' equity exclusive of changes in intangible assets associated with prior acquisitions. Intangible assets are created when we buy businesses that add relationships and revenue to our company. Intangible assets have the effect of increasing both equity and assets, while not increasing our tangible equity or tangible assets.

"Tangible book value per common share" is defined as common shareholders' equity reduced by intangible assets, including goodwill, divided by common shares outstanding. We believe this measure is important to many investors who are interested in changes from period to period in book value per common share exclusive of changes in intangible assets associated with prior acquisitions.

"EBITDA" is defined as net income before interest expense, income tax expense, depreciation expense and intangible amortization expense. We use EBITDA particularly to assess the strength of our investment management business. We believe this measure is important because it allows management and investors to better assess our investment management performance in relation to our core operating earnings by excluding certain non-cash items and the volatility that is associated with certain discrete items that are unrelated to our core business.

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

"Pre-tax, pre-provision net revenue" is defined as net interest income and non-interest income, excluding gains and losses on the sale and call of debt securities and total non-interest expense. 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 and lease losses and changes in our tax rates and other items that are unrelated to our core business.

"Efficiency ratio" is defined as total 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, particularly at the Bank.

TRISTATE CAPITAL HOLDINGS, INC. NON-GAAP FINANCIAL MEASURES (UNAUDITED)

September June 30, September 30, 30,

(Dollars in thousands, except per share 2021 2021 2020data)

Tangible common equity and tangible book value per common share:

Common shareholders' equity $ 633,595 $ 615,225 $ 527,121

Less: goodwill and intangible assets 62,478 62,955 64,389

Tangible common equity (numerator) $ 571,117 $ 552,270 $ 462,732

Common shares outstanding (denominator) 33,154,343 33,176,934 29,828,143

Tangible book value per common share $ 17.23 $ 16.65 $ 15.51

INVESTMENT MANAGEMENT SEGMENT NON-GAAP FINANCIAL MEASURES (UNAUDITED)

Three Months Ended Nine Months Ended

September June 30, September September September 30, 30, 30, 30,

(Dollars in thousands) 2021 2021 2020 2021 2020

Investment Management EBITDA:

Net income $ 1,677 $ 1,196 $ 719 $ 3,898 $ 1,633

Interest expense - - - - -

Income tax expense (412) 286 251 183 381

Depreciation expense 105 103 103 312 319

Intangible amortization 477 478 478 1,433 1,466 expense

EBITDA $ 1,847 $ 2,063 $ 1,551 $ 5,826 $ 3,799

TRISTATE CAPITAL HOLDINGS, INC. NON-GAAP FINANCIAL MEASURES (UNAUDITED)

Three Months Ended Nine Months Ended

September June 30, September September September 30, 30, 30, 30,

(Dollars in 2021 2021 2020 2021 2020thousands)

Total revenue andpre-tax, pre-provision netrevenue:

Net interest income $ 46,667 $ 42,912 $ 33,474 $ 128,235 $ 101,880

Total non-interest 14,230 14,844 16,889 42,725 43,202 income

Less: net gain onthe sale and call of 33 98 3,744 130 3,815 debt securities

Total revenue $ 60,864 $ 57,658 $ 46,619 $ 170,830 $ 141,267

Less: total 38,008 34,425 31,427 103,711 88,668 non-interest expense

Pre-tax,pre-provision net $ 22,856 $ 23,233 $ 15,192 $ 67,119 $ 52,599 revenue

BANK SEGMENT NON-GAAP FINANCIAL MEASURES (UNAUDITED)

Three Months Ended Nine Months Ended

September June 30, September September September 30, 30, 30, 30,

(Dollars in 2021 2021 2020 2021 2020thousands)

Bank total revenue:

Net interest income $ 48,114 $ 44,356 $ 34,925 $ 132,623 $ 104,241

Total non-interest 4,801 5,381 8,771 14,813 19,708 income

Less: net gain onthe sale and call of 33 98 3,744 130 3,815 debt securities

Bank total revenue $ 52,882 $ 49,639 $ 39,952 $ 147,306 $ 120,134



Bank efficiency ratio:

Total non-interest $ 28,975 $ 25,570 $ 23,462 $ 77,201 $ 64,462 expense (numerator)

Bank total revenue $ 52,882 $ 49,639 $ 39,952 $ 147,306 $ 120,134 (denominator)

Bank efficiency 54.79 % 51.51 % 58.73 % 52.41 % 53.66 %ratio

View source version on businesswire.com: https://www.businesswire.com/news/home/20211020006113/en/

CONTACT: MEDIA CONTACT Jack Horner 267-932-8760, ext. 302 412-600-2295 (mobile) jack@hornercom.com

CONTACT: INVESTOR RELATIONS CONTACT Lambert Jeff Schoenborn and Kate Croft 888-609-8351 TSC@lambert.com