TriState Capital Reports First Quarter 2021 Results Including EPS of $0.35, Net Income Growth, and Record Levels of Pre-tax Income, Net Interest Income, Assets Under Management, Loans and Deposits

TriState Capital Holdings, Inc. (Nasdaq: TSC) reported first quarter 2021 financial results including net income growth, record pre-tax income and net interest income, net interest margin expansion, and all-time-high levels of assets under management (AUM), loans and deposits.

The parent company of TriState Capital Bank and Chartwell Investment Partners grew net income available to common shareholders to $13.1 million in the first quarter of 2021, up 20.2% from $10.9 million in the first quarter of 2020 and up 23.7% from $10.6 million in the fourth quarter of 2020.

The company earned $0.35 per diluted share in the first quarter of 2021, compared to $0.38 in the first quarter of 2020 and $0.37 in the fourth quarter of 2020. First quarter 2021 results reflect a significantly higher number of diluted average shares outstanding and a $1.1 million increase in preferred dividends, compared to the linked 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 ability to surpass $10 billion in assets and $11 billion in AUM reflects our success in building the TriState Capital brand and driving meaningful demand for our core investment management, private banking and commercial banking offerings, with each of these businesses contributing to our exceptional growth in net income, as well as record pre-tax income and total revenue in the first quarter,” Chairman and Chief Executive Officer James F. Getz said. “Chartwell experienced a breakout quarter, generating impressive investment performance, investment management fee growth, and strong net inflows of client assets. TriState Capital Bank also expanded net interest margin and grew net interest income through continued growth in private banking loans and in-market commercial lending in the quarter. We continue to anticipate strong and responsible top- and bottom-line growth in 2021, based on our robust new-business pipelines, agile funding mechanism, financial services distribution capability and strong risk management as we enter a more favorable economic and credit environment.”

FIRST QUARTER 2021 HIGHLIGHTS

• Chartwell grew investment management fees by 17.8% from the year-ago quarter and 5.1% from the linked quarter, generated $507.0 million in net client inflows, and grew AUM by 34.6% from March 31, 2020 and 9.2% during the quarter to a record $11.20 billion.
• Net interest income (NII) grew to a record $38.7 million, up 10.7% from the year-ago quarter and 7.2% from the linked quarter on record average earning assets, lower funding costs and the second consecutive quarter of net interest margin (NIM) expansion.
• Private banking loans primarily collateralized by marketable securities and other liquid assets represented 59.2% of total loans at period end, growing 29.1% from March 31, 2020 and 5.1% during the quarter.
• Commercial loans increased by 14.7% from March 31, 2020 and 1.7% during the quarter, based on expansion with core clients and select new prospects in core products, with no lending under the Paycheck Protection Program.
• The company maintained superior credit quality metrics, including period-end non-performing assets (NPAs) representing 0.24% of total assets, non-performing loans (NPLs) representing 0.27% of total loans, adverse-rated credits representing 0.60% of total loans, and COVID-19 deferral levels declining to 0.7% of total loans.
• Operating expenses increased 7.3% from the year-ago quarter and declined 9.2% from the linked quarter, as the company continued to invest in talent and technology to support scalable growth, product innovation, and the client experience for high-net-worth individuals, middle-market companies, financial services firms and advisors.

REVENUE GROWTH

NII grew to a record $38.7 million in the first quarter of 2021, increasing 10.7% from $34.9 million in the year-ago quarter and 7.2% from $36.1 million in the fourth quarter of 2020. TriState Capital’s NIM expanded for the second consecutive quarter to 1.59% for the first quarter of 2021. By comparison, the company reported NIM of 1.84% for the first quarter of 2020 and 1.53% in the fourth quarter of 2020.

Non-interest income totaled $13.7 million in the first quarter of 2021, compared to $13.3 million in the same period the year prior and $14.0 million in the linked quarter. Chartwell investment management fees grew to $9.0 million in the first quarter of 2021, up 17.8% from $7.6 million in the same period the prior year and 5.1% from $8.6 million in the linked quarter, reflecting market appreciation and positive net inflows of client assets. Fees from the bank’s back-to-back, loan-level interest rate swap offering for clients totaled $2.7 million in the first quarter of 2021, compared to $4.4 million in the prior year quarter and $4.1 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 $52.3 million for the first quarter of 2021, increasing from $48.2 million in the year-ago period and $49.9 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 its si