Investor presentation TRISTATE CAPITAL HOLDINGS, INC. (NASDAQ: TSC) Second quarter ended June 30, 2019
Important Information About this presentation Financial information and data: Unless noted otherwise herein, income statement data is for the trailing twelve-months ended June 30, 2019, compared to the same TTM period the year prior; and balance sheet data is as of June 30, 2019, compared to one year prior. Forward looking statements: This presentation may contain “forward-looking” statements. Such forward-looking statements are subject to risks that could cause actual results or outcomes to differ materially from those currently anticipated. TriState Capital has no duty to, and does not intend to, update or revise forward-looking statements after the date on which they are made. For further information about the factors that could affect TriState Capital’s future results, please see the company’s most recent annual and quarterly reports filed on Form 10-K and Form 10-Q. Non-GAAP measures: To the extent non-GAAP financial measures are presented herein, comparable GAAP measures and reconciliations can be found in TriState Capital’s most recent quarterly financial results news release. 2 Investor presentation
Three Businesses Drive Differentiated Growth Sophistication of a super regional financial firm with the high touch of a boutique firm Private Banking Investment Management Commercial Banking NATIONAL NATIONAL PA, NY, NJ & OH Organic growth Organic & acquisitive growth Organic growth Low capital requirements Low capital requirements Traditional capital requirements Self-funding liquidity management Relationship-driven liquidity and treasury management funding 3 Investor presentation
Three Businesses Drive Differentiated Growth For the trailing twelve-months and period ending June 30, 2019 Growth in net income available 20% to common stockholders Asset quality Operating leverage Asset sensitive & LIBOR neutral balance sheet 12% Total revenue growth 28% 22% 20% Private banking Investment management fee Commercial loan growth contribution to total revenue loan growth 4 Investor presentation
Unique Model Sophisticated, high-touch, client-focused approach to financial services positions us to do well while empowering our clients to do well 29% of revenue from non-interest income 16% organic NII growth YOY driven through lower credit risk and variable rate loans 24% organic loan growth YOY 30% organic deposit growth YOY 93% of loans and 29% of debt securities variable rate 55.72% YTD Bank efficiency ratio ~$627k quarterly revenue/FTE, annualized ~18% insider ownership 0 branches 5 Investor presentation
Strong Foundation for Future Growth since 2013 IPO illustrates the strength and effectiveness of strategy % Change 6/30/2019 3/31/2013 since IPO (Dollars in Thousands) Among Fortune’s 100 Assets $ 6,846,003 $ 2,074,287 230% Fastest-Growing Companies Total revenue (TTM) $ 169,336 $ 63,548 166% Net interest income $ 120,026 $ 58,487 105% Ranked by Fortune1 in 2018 for (TTM) Non-interest income 2nd consecutive year based on: $ 49,310 $ 5,061 874% (TTM) • 30% growth in EPS Income before tax $ 65,058 $ 17,629 269% • 19% growth in revenue (TTM) • 26% total return EPS2 (TTM) $ 1.92 $ 0.48 300% on a three-year annualized basis 1 The September 2018 issue of Fortune reported that it ranks the 100 Fastest-Growing Companies listed on major U.S. stock exchanges by "revenue growth rate, EPS growth rate, and total return for the period ended June 29, 2018 on a three-year annualized. (To compute the revenue and EPS growth rates, Fortune uses a trailing-four-quarters log linear least square regression fit.)." 2 Fully diluted earnings per share. 6 Investor presentation
DOUBLE -DIGIT EPS GROWTH $2.20 $2.00 $1.92 $1.81 $1.80 CAGR Record of Growth $1.60 35% $1.40 $1.32 Double-digit YOY EPS growth for $1.20 $1.01 21 of 25 quarters $1.00 $0.80 $0.80 $0.60 $0.55 $0.40 2014 2015 2016 2017 2018 TTM 2Q19 7 Investor presentation
2019 Financial Performance Goals Aimed at sustaining record of double-digit earnings growth over long term Grow pre-tax Organically grow Grow treasury Surpass $7B in income at a double- loans at a management bank assets digit pace of double-digit pace deposit accounts by 15%–25% of 15%–25% $500 million Deliver double-digit Surpass $15B Drive operating leverage Maintain strong credit organic growth of in AUM at Chartwell through revenue quality metrics Chartwell revenues Through a combination of growth and disciplined Continuing to distinguish us by While continuing to evaluate organic and inorganic growth driving peer leading risk expense management adjusted returns investment management M&A Maintaining bank efficiency ratio in the low 50s while limiting annual operating expense growth to a single-digit rate 8 Investor presentation
Operating Leverage Driven by revenue growth, exceptional client focus, scalable model and prudent management SUPERIOR REVENUE / EMPLOYEE $650,000 Unique branchless model $600,000 276 FTEs $550,000 Highly experienced and high-performing team $500,000 2014 2015 2016 2017 2018 2Q19 Annualized* 55.72% YTD Bank efficiency ratio compared to 52.38% in prior year period *Revenue per employee was ~$627,000 in 2Q19, more than twice that of our peer group1 1 Peer data for bank holding companies with $5B-$10B in MRQ 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. 9 Investor presentation
Private Banking TriState Capital’s fastest-growing channel for lending PRIVATE BANKING LOANS Loans over-collateralized by marketable $3.5 securities, cash value life insurance $3.189 policies or cash are monitored utilizing $3.0 $2.870 the bank’s proprietary technology • No loss history to date $2.5 CAGR $2.266 31% $2.0 Favorable regulatory capital treatment s n $1.736 o i l l given reduced risk weighting enhances i B capital efficiency $1.5 $1.345 $0.989 Marketable securities collateral consist of $1.0 liquid and primarily well-diversified portfolios $0.5 $0.0 2014 2015 2016 2017 2018 2Q19 % of Total Loans 41.2% 47.3% 51.0% 54.1% 55.9% 56.3% 10 Investor presentation
Private Banking TriState Capital’s network of financial intermediary referral relationships is steadily expanding National distribution of private banking loans and other services through financial intermediaries including broker-dealers, regional securities firms, registered investment advisors, wealth managers, family offices and trust companies • 201 financial intermediaries, providing access to 50,000+ individual financial advisors, up from around 50 at 2013 IPO • Encompasses those that do not offer banking services themselves Private banking loans prove attractive to the fast-growing numbers of financial advisors moving from wire houses to independent platforms <35% High net worth Loans to HNW Median LTV individuals, trusts and individuals used for of these businesses any purpose (except to outstanding loans purchase securities) 11 Investor presentation
ORGANIC, IN-MARKET COMMERCIAL LOAN GROWTH $3.0 $2.476 $2.5 CAGR Middle-Market 13% $2.263 Commercial $2.0 $1.919 $1.665 s Banking n $1.496 o i l $1.5 $1.410 l i Four-state Mid-Atlantic footprint B $1.0 commercial loan $0.5 20% growth YOY $0.0 2014 2015 2016 2017 2018 2Q19 C&I CRE: owner-occupied CRE: non-owner occupied 12 Investor presentation
Middle-Market Commercial Banking In-market relationships diversified across industries, property type and geographies Highly experienced in-market regional presidents and relationship managers, with 25+ years average experience, source and serve local clients through our Mid-Atlantic representative offices 22% 53% 24% 15% 12% 41% COMMERCIAL C&I LOANS CRE LOANS LOANS BY $908M $1.57B 26% REGION 10% $2.48B 17% 21% 5% 20% 14% 20% Income-producing Owner-occupied Service Real estate Western PA Eastern PA Multifamily/apartment Construction/land Manufacturing Transportation Ohio New Jersey All others NYC 13 Investor presentation
Superior Credit Quality Drives consistently low annual credit costs ALLOWANCE / NPLs NPLs / TOTAL LOANS 800% 1.5% $6 640.3% 1.26% 590.4% $5 600% 452.9% 1.0% $4 s n o i 400% $3 l 0.59% l 0.52% i 0.5% $2 B 200% 107.9% 105.5% 67.1% $1 0.08% 0.04% 0.04% 0% 0.0% $0 2014 2015 2016 2017 2018 2Q19 2014 2015 2016 2017 2018 2Q19 Total Loans NCOs / AVERAGE LOANS 0.6% allowance to 0.4% 0.41% 640.3% NPLs ratio 0.2% 0.09% 0.10% —% 0.02% —% 0.0% -0.2% 2014 2015 2016 2017 2018 2Q19 US Bank Aggregate NCOs / Avg Loans 14 Investor presentation
Organic Deposit Growth DIVERSE AND HIGH-QUALITY DEPOSIT FRANCHISE World class financial institutions and national deposit team $6 3.0% Treasury management $5 2.40% 2.5% capabilities and team enhanced 2.41% in 2016 $4 2.0% s n o i Enhanced capabilities to serve l $3 1.5% l i family offices and ultra high net B worth clients in 2018 $2 1.0% 0.49% $1 0.5% of deposits are 0.17% 26% fixed-rate CDs $0 0.0% 2014 2015 2016 2017 2018 2Q19 Annualized 1-Month LIBOR1 Average Cost of Deposits Certificates of Deposit Money Market Deposits Noninterest and Interest Checking 1 1-Month London Interbank Offered Rate (LIBOR), based on U.S. dollar, percent. daily, not seasonally adjusted. 15 Investor presentation
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 more than 60% year-to-date 12 dedicated professionals across regional footprint Sophisticated and high touch service combined with transparent fee structures driving growth with existing clients and rapid expansion of new clients ~500 clients and growing, including deposit-only clients with essential need for treasury management services 16 Investor presentation
Chartwell Investment management fees provide significant income diversification Leveraging TSC's distribution network CHARTWELL REVENUE AND EBITDA and expertise to grow Chartwell Investment Partners' AUM $50 Enhancing institutional inflows while $40 $37.0 $37.1 $37.6 $37.8 maintaining strong retail momentum $29.6 $30 s • Retail up to 27% in MRQ from n o i l l i 8% when Chartwell was acquired M $20 in 2014 $13.2 $8.5 $10 $7.4 $6.9 $7.9 12% Institutional $0 15% Subadvisory 2015 2016* 2017 2018* TTM 2Q19* $9.49B AUM Mutual Funds 8% Revenue EBITDA 65% Managed Accounts * EBITDA reflects change in the fair value of acquisition earnout in the period. 17 Investor presentation
Chartwell Offers strategies not easily replicated by passive products AUM of $9.49B up 19% since TSC acquired Chartwell in 2014 strategies outperforming respective 9 benchmarks for 3 and 5 years Growth driven by superior investment performance Small Cap Value Mid Cap Value Smid Cap Value Dividend Value 13% Value Equity Covered Call 23% Short Duration BB-Rated High Yield Fixed Income Growth Equity AUM BY Intermediate High Grade Fixed Income INVESTMENT 4% Balanced Core High Grade Fixed Income TEAM Core Plus Fixed Income 14% Fixed Income 46% Large Cap Large Cap Growth Small Cap Growth Berwyn Income Fund High Yield Fixed Income Short Duration High Grade Corporate 18 Investor presentation
Capital and Investment Profile History of deploying capital in accretive acquisitions while organically growing balance sheet Deployed $66M raised in 2013 IPO Investment Profile2 (last common equity raise) in three accretive investment management Closing Price $ 19.91 acquisitions1 while organically growing 52-Week High $ 30.10 bank’s balance sheet by more than $4B 52-Week Low $ 18.20 Raised net capital of $116M in Common Shares Outstanding 29.3M 2018-2019 offerings of non-cumulative Float 24.2M perpetual preferred stock, providing additional Tier 1 capital for the holding Average Daily Volume (3 mos.) ~99 company Insider Ownership ~18% Repurchased 2.0M shares since 4Q14 for $31.3M (~$15.25 per share) 1 Chartwell acquisition closed 3/5/2014, TKG acquisition closed 4/29/2016, and Columbia acquisition closed 4/6/2018. 2 Market data as of July 19, 2019. 19 Investor presentation
appendix 20 Investor presentation
Key Performance Ratios As of and For the As of and For the Three Months Ended Years Ended (Dollars in thousands) June 30, March 31, December 31, September 30, June 30, December 31, December 31, 2019 2019 2018 2018 2018 2018 2017 Performance ratios: Return on average assets (1) 0.91% 0.97 % 1.04 % 1.06% 1.16 % 1.04% 0.89% Return on average common equity (2) 11.63% 12.50 % 13.16 % 12.78% 13.57 % 12.57% 10.30% Net interest margin 2.03% 2.10 % 2.12 % 2.22% 2.38 % 2.26% 2.25% Total revenue $ 43,170 $ 43,413 $ 41,183 $ 41,570 $ 41,292 $ 161,391 $ 138,009 Bank efficiency ratio 55.16% 56.30 % 54.60 % 52.86% 50.49 % 53.09% 57.39% Non-interest expense to average assets 1.71% 1.77 % 1.81 % 1.90% 2.00 % 1.93% 2.15% Asset quality: Non-performing loans $ 2,189 $ 7,329 $ 2,237 $ 2,269 $ 2,437 $ 2,237 $ 3,183 Non-performing assets $ 5,213 $ 10,453 $ 5,661 $ 5,845 $ 6,013 $ 5,661 $ 6,759 Other real estate owned $ 3,024 $ 3,124 $ 3,424 $ 3,576 $ 3,576 $ 3,424 $ 3,576 Non-performing assets to total assets 0.08% 0.16 % 0.09 % 0.10% 0.11 % 0.09% 0.14% Non-performing loans to total loan 0.04% 0.14 % 0.04 % 0.05% 0.05 % 0.04% 0.08% Allowance for loan and lease losses to loans 0.25% 0.28 % 0.26 % 0.29% 0.34 % 0.26% 0.34% Allowance for loan and lease losses to non- performing loans 640.29% 200.74 % 590.43 % 598.63% 628.68 % 590.43% 452.94% Net charge-offs (recoveries) $ (16) $ (1,881) $ (206) $ 1,504 $ (88) $ 1,004 $ 3,722 Net charge-offs (recoveries) to average total loans —% (0.15)% (0.02)% 0.13% (0.01)% 0.02% 0.10% Investment management segment: Assets under management $ 9,485,000 $ 9,732,000 $ 9,189,000 $ 9,865,000 $ 9,554,000 $ 9,189,000 $ 8,309,000 EBITDA $ 1,557 $ 2,621 $ 1,890 $ 1,867 $ 1,627 $ 6,900 $ 7,421 (1) Net income divided by total average assets. (2) Net income available to common shareholders divided by average common equity. 21 Investor presentation
Income Statement For the Three Months Ended For the Years Ended (Dollars in thousands, except per share data) June 30, March 31, December 31, September 30, June 30, December 31, December 31, 2019 2019 2018 2018 2018 2018 2017 Income statement data: Interest income $ 66,339 $ 62,902 $ 58,162 $ 52,424 $ 47,784 $ 199,786 $ 134,295 Interest expense 35,036 32,530 28,630 23,605 18,993 86,382 42,942 Net interest income 31,303 30,372 29,532 28,819 28,791 113,404 91,353 Provision (credit) for loan and lease losses (712) (377) (581) (234) 415 (205) (623) Net interest income after provision for loan and lease losses 32,015 30,749 30,113 29,053 28,376 113,609 91,976 Non-interest income: Investment management fees 9,254 9,424 9,225 9,828 9,686 37,647 37,100 Net gain (loss) on the sale and call of debt securities 112 28 (76) — 1 (70) 310 Other non-interest income 2,613 3,617 2,426 2,923 2,815 10,340 9,556 Total non-interest income 11,979 13,069 11,575 12,751 12,502 47,917 46,966 Non-interest expense: Intangible amortization expense 502 502 503 502 502 1,968 1,851 Change in fair value of acquisition earn out — — (218) — — (218) — Other non-interest expense 27,083 26,170 26,018 25,184 24,816 99,407 89,621 Total non-interest expense 27,585 26,672 26,303 25,686 25,318 101,157 91,472 Income before tax 16,409 17,146 15,385 16,118 15,560 60,369 47,470 Income tax expense 1,718 2,582 265 1,807 968 5,945 9,482 Net income $ 14,691 $ 14,564 $ 15,120 $ 14,311 $ 14,592 $ 54,424 $ 37,988 Preferred stock dividends 1,150 679 679 679 762 2,120 — Net income available to common shareholders $ 13,541 $ 13,885 $ 14,441 $ 13,632 $ 13,830 $ 52,304 $ 37,988 Earnings per common share: Basic $ 0.49 $ 0.50 $ 0.52 $ 0.49 $ 0.50 $ 1.90 $ 1.38 Diluted $ 0.47 $ 0.48 $ 0.50 $ 0.47 $ 0.48 $ 1.81 $ 1.32 22 Investor presentation
Period-End Balance Sheet As of (Dollars in thousands) June 30, March 31, December 31, September 30, June 30, 2019 2019 2018 2018 2018 Period-end balance sheet data: Cash and cash equivalents $ 458,269 $ 243,911 $ 189,985 $ 186,535 $ 164,367 Total investment securities 431,426 487,087 466,759 393,139 288,674 Loans and leases held-for-investment 5,664,934 5,336,725 5,132,873 4,758,356 4,552,928 Allowance for loan and lease losses (14,016) (14,712) (13,208) (13,583) (15,321) Loans and leases held-for-investment, net 5,650,918 5,322,013 5,119,665 4,744,773 4,537,607 Goodwill and other intangibles, net 66,859 67,361 67,863 68,365 68,867 Other assets 238,531 223,638 191,383 180,476 174,421 Total assets $ 6,846,003 $ 6,344,010 $ 6,035,655 $ 5,573,288 $ 5,233,936 Deposits $ 5,786,983 $ 5,337,704 $ 5,050,461 $ 4,754,588 $ 4,441,202 Borrowings, net 335,000 398,216 404,166 262,365 264,814 Other liabilities 135,039 111,533 101,674 88,715 74,026 Total liabilities 6,257,022 5,847,453 5,556,301 5,105,668 4,780,042 Preferred stock 116,142 38,468 38,468 38,468 38,432 Common shareholders' equity 472,839 458,089 440,886 429,152 415,462 Total shareholders' equity 588,981 496,557 479,354 467,620 453,894 Total liabilities and shareholders' equity $ 6,846,003 $ 6,344,010 $ 6,035,655 $ 5,573,288 $ 5,233,936 23 Investor presentation
Capital Ratios As of June 30, March 31, December 31, September 30, June 30, 2019 2019 2018 2018 2018 TSCH capital ratios: Tier 1 leverage ratio 8.21 % 7.13 % 7.28 % 7.53 % 7.68 % Common equity tier 1 risk-based capital ratio 9.83 % 9.98 % 9.64 % 10.52 % 10.94 % Tier 1 risk-based capital ratio 12.56 % 10.92 % 10.58 % 11.57 % 12.06 % Total risk-based capital ratio 12.82 % 11.26 % 10.86 % 11.89 % 12.66 % TSCB capital ratios: Tier 1 leverage ratio 7.43 % 7.29 % 7.49 % 7.71 % 7.87 % Common equity tier 1 risk-based capital ratio 11.38 % 11.18 % 10.90 % 11.92 % 12.38 % Tier 1 risk-based capital ratio 11.38 % 11.18 % 10.90 % 11.92 % 12.38 % Total risk-based capital ratio 11.73 % 11.57 % 11.25 % 12.30 % 12.82 % 24 Investor presentation
Loan Composition (Dollars in thousands) As of June 30, March 31, December 31, September 30, June 30, Loan and Lease Composition 2019 2019 2018 2018 2018 Private banking $ 3,188,668 $ 2,981,973 $ 2,869,543 $ 2,627,749 $ 2,488,162 C&I 908,054 862,405 785,320 771,546 741,901 CRE 1,568,212 1,492,347 1,478,010 1,359,061 1,322,865 Loans and leases held-for-investment $ 5,664,934 $ 5,336,725 $ 5,132,873 $ 4,758,356 $ 4,552,928 Private banking 56.3% 55.9% 55.9% 55.2% 54.6% C&I 16.0% 16.1% 15.3% 16.2% 16.3% CRE 27.7% 28.0% 28.8% 28.6% 29.1% Loans and leases held-for-investment 100.0% 100.0% 100.0% 100.0% 100.0% 25 Investor presentation
Deposit Composition (Dollars in thousands) As of June 30, March 31, December 31, September 30, June 30, Deposit Composition 2019 2019 2018 2018 2018 Noninterest-bearing checking accounts $ 270,435 $ 292,188 $ 258,268 $ 236,422 $ 247,705 Interest-bearing checking accounts 971,081 895,948 778,131 713,833 612,501 Money market deposit accounts 3,021,610 2,760,147 2,781,870 2,565,561 2,494,927 Certificates of deposit 1,523,857 1,389,421 1,232,192 1,238,772 1,086,069 Total deposits $ 5,786,983 $ 5,337,704 $ 5,050,461 $ 4,754,588 $ 4,441,202 Noninterest-bearing checking accounts 4.7% 5.5% 5.1% 5.0% 5.5% Interest-bearing checking accounts 16.8% 16.8% 15.4% 15.0% 13.8% Money market deposit accounts 52.2% 51.7% 55.1% 53.9% 56.2% Certificates of deposit 26.3% 26.0% 24.4% 26.1% 24.5% Total deposits 100.0% 100.0% 100.0% 100.0% 100.0% 26 Investor presentation
Average Balance Sheet Three Months Ended June 30, 2019 March 31, 2019 June 30, 2018 Interest Average Interest Average Interest Average Average Income (1)/ Yield/ Average Income (1)/ Yield/ Average Income (1)/ Yield/ (Dollars in thousands) Balance Expense Rate Balance Expense Rate Balance Expense Rate Assets Interest-earning deposits $ 255,697 $ 1,542 2.42% $ 202,474 $ 1,256 2.52% $ 186,009 $ 842 1.82% Federal funds sold 11,218 67 2.40% 8,595 31 1.46% 6,650 28 1.69% Debt securities available-for-sale 249,281 2,053 3.30% 236,235 1,986 3.41% 181,718 1,356 2.99% Debt securities held-to-maturity 181,495 1,712 3.78% 211,833 2,018 3.86% 72,166 678 3.77% Equity securities 7,701 28 1.46% 12,755 72 2.29% 8,620 64 2.98% FHLB stock 20,235 385 7.63% 20,498 305 6.03% 19,061 230 4.84% Total loans and leases 5,462,489 60,579 4.45% 5,177,844 57,262 4.49% 4,378,514 44,614 4.09% Total interest-earning assets 6,188,116 66,366 4.30% 5,870,234 62,930 4.35% 4,852,738 47,812 3.95% Other assets 266,905 242,553 213,320 Total assets $ 6,455,021 $ 6,112,787 $ 5,066,058 Liabilities and Shareholders' Equity Interest-bearing deposits: Interest-bearing checking accounts $ 868,721 4,965 2.29% $ 792,690 $ 4,542 2.32% $ 604,324 $ 2,576 1.71% Money market deposit accounts 2,855,795 18,200 2.56% 2,682,390 16,540 2.50% 2,319,320 9,722 1.68% Certificates of deposit 1,361,372 8,990 2.65% 1,300,296 8,251 2.57% 928,210 4,398 1.90% Borrowings: FHLB borrowings 430,770 2,334 2.17% 459,333 2,585 2.28% 418,187 1,743 1.67% Line of credit borrowings 857 10 4.68% 4,139 58 5.68% — — —% Subordinated notes payable, net 34,984 537 6.16% 34,933 554 6.43% 34,781 554 6.39% Total interest-bearing liabilities 5,552,499 35,036 2.53% 5,273,781 32,530 2.50% 4,304,822 18,993 1.77% Noninterest-bearing deposits 256,404 261,682 245,412 Other liabilities 113,031 88,485 68,491 Shareholders' equity 533,087 488,839 447,333 Total liabilities and shareholders' equity $ 6,455,021 $ 6,112,787 $ 5,066,058 Net interest income (1) $ 31,330 $ 30,400 $ 28,819 Net interest spread (1) 1.77% 1.85% 2.18% Net interest margin (1) 2.03% 2.10% 2.38% (1) Calculated on a fully taxable equivalent basis. 27 Investor presentation
Average Balance Sheet Years Ended December 31, 2018 2017 Interest Average Interest Average Average Income (1)/ Yield/ Average Income (1)/ Yield/ (Dollars in thousands) Balance Expense Rate Balance Expense Rate Assets Interest-earning deposits $ 188,921 $ 3,598 1.90% $ 126,888 $ 1,466 1.16% Federal funds sold 8,315 156 1.88% 6,923 68 0.98% Debt securities available-for-sale 205,652 6,195 3.01% 144,735 3,122 2.16% Debt securities held-to-maturity 90,895 3,399 3.74% 58,635 2,463 4.20% Debt securities trading — — —% 188 4 2.13% Equity securities 10,517 277 2.63% 8,539 266 3.12% FHLB stock 15,136 924 6.10% 13,286 603 4.54% Total loans and leases 4,500,117 185,349 4.12% 3,711,701 126,544 3.41% Total interest-earning assets 5,019,553 199,898 3.98% 4,070,895 134,536 3.30% Other assets 221,467 193,532 Total assets $ 5,241,020 $ 4,264,427 Liabilities and Shareholders' Equity Interest-bearing deposits: Interest-bearing checking accounts $ 612,921 $ 11,440 1.87% $ 336,337 $ 3,706 1.10% Money market deposit accounts 2,429,203 45,106 1.86% 1,999,399 22,350 1.12% Certificates of deposit 1,071,556 21,947 2.05% 967,503 11,429 1.18% Borrowings: FHLB borrowings 325,356 5,555 1.71% 295,315 3,152 1.07% Line of credit borrowings 2,568 119 4.63% 2,214 90 4.07% Subordinated notes payable, net 34,807 2,215 6.36% 34,605 2,215 6.40% Total interest-bearing liabilities 4,476,411 86,382 1.93% 3,635,373 42,942 1.18% Noninterest-bearing deposits 244,090 210,860 Other liabilities 75,473 49,279 Shareholders' equity 445,046 368,915 Total liabilities and shareholders' equity $ 5,241,020 $ 4,264,427 Net interest income (1) $ 113,516 $ 91,594 Net interest spread (1) 2.05% 2.12% Net interest margin (1) 2.26% 2.25% (1) Calculated on a fully taxable equivalent basis. 28 Investor presentation
Segments Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 Investment Parent Investment Parent (Dollars in thousands) Bank Management and Other Consolidated Bank Management and Other Consolidated Income statement data: Interest income $ 66,311 $ — $ 28 $ 66,339 $ 47,720 $ — $ 64 $ 47,784 Interest expense 34,517 — 519 35,036 18,440 — 553 18,993 Net interest income (loss) 31,794 — (491) 31,303 29,280 — (489) 28,791 Provision (credit) for loan and lease losses (712) — — (712) 415 — — 415 Net interest income (loss) after provision for loan and lease losses 32,506 — (491) 32,015 28,865 — (489) 28,376 Non-interest income: Investment management fees — 9,364 (110) 9,254 — 9,743 (57) 9,686 Net gain on the sale and call of debt securities 112 — — 112 1 — — 1 Other non-interest income 2,478 4 131 2,613 2,849 1 (35) 2,815 Total non-interest income 2,590 9,368 21 11,979 2,850 9,744 (92) 12,502 Non-interest expense: Intangible amortization expense — 502 — 502 — 502 — 502 Other non-interest expense 18,903 7,930 250 27,083 16,223 8,242 351 24,816 Total non-interest expense 18,903 8,432 250 27,585 16,223 8,744 351 25,318 Income (loss) before tax 16,193 936 (720) 16,409 15,492 1,000 (932) 15,560 Income tax expense (benefit) 1,658 264 (204) 1,718 955 277 (264) 968 Net income (loss) $ 14,535 $ 672 $ (516) $ 14,691 $ 14,537 $ 723 $ (668) $ 14,592 29 Investor presentation
Segments Six Months Ended June 30, 2019 Six Months Ended June 30, 2018 Investment Parent Investment Parent (Dollars in thousands) Bank Management and Other Consolidated Bank Management and Other Consolidated Income statement data: Interest income $ 129,142 $ — $ 99 $ 129,241 $ 89,071 $ — $ 129 $ 89,200 Interest expense 66,436 — 1,130 67,566 32,990 — 1,157 34,147 Net interest income (loss) 62,706 — (1,031) 61,675 56,081 — (1,028) 55,053 Provision (credit) for loan and lease losses (1,089) — — (1,089) 610 — — 610 Net interest income (loss) after provision for loan and lease losses 63,795 — (1,031) 62,764 55,471 — (1,028) 54,443 Non-interest income: Investment management fees — 18,896 (218) 18,678 — 18,707 (113) 18,594 Net gain on the sale and call of debt securities 140 — — 140 6 — — 6 Other non-interest income 5,355 25 850 6,230 5,026 1 (36) 4,991 Total non-interest income 5,495 18,921 632 25,048 5,032 18,708 (149) 23,591 Non-interest expense: Intangible amortization expense — 1,004 — 1,004 — 963 — 963 Other non-interest expense 37,923 14,987 343 53,253 32,010 15,815 380 48,205 Total non-interest expense 37,923 15,991 343 54,257 32,010 16,778 380 49,168 Income (loss) before tax 31,367 2,930 (742) 33,555 28,493 1,930 (1,557) 28,866 Income tax expense (benefit) 3,683 827 (210) 4,300 3,809 504 (440) 3,873 Net income (loss) $ 27,684 $ 2,103 $ (532) $ 29,255 $ 24,684 $ 1,426 $ (1,117) $ 24,993 30 Investor presentation
Reconciliation of Non-GAAP Financial measures to GAAP Income Statement Items For the Three Months Ended For the Years Ended June 30, March 31, December 31, September 30, June 30, December 31, December 31, (Dollars in thousands) 2019 2019 2018 2018 2018 2018 2017 Total revenue: Net interest income $ 31,303 $ 30,372 $ 29,532 $ 28,819 $ 28,791 $ 113,404 $ 91,353 Total non-interest income 11,979 13,069 11,575 12,751 12,502 47,917 46,966 Less: net gain (loss) on the sale and call of debt securities 112 28 (76) — 1 (70) 310 Total revenue $ 43,170 $ 43,413 $ 41,183 $ 41,570 $ 41,292 $ 161,391 $ 138,009 For the Three Months Ended For the Years Ended June 30, March 31, December 31, September 30, June 30, December 31, December 31, (Dollars in thousands) 2019 2019 2018 2018 2018 2018 2017 Bank total revenue: Net interest income $ 31,794 $ 30,911 $ 30,058 $ 29,316 $ 29,280 $ 115,455 $ 93,380 Total non-interest income 2,590 2,905 3,161 2,850 2,850 11,042 9,864 Less: net gain (loss) on the sale and call of debt securities 112 28 (76) — 1 (70) 310 Bank total revenue $ 34,272 $ 33,788 $ 33,295 $ 32,166 $ 32,129 $ 126,567 $ 102,934 Bank efficiency ratio: Total non-interest expense (numerator) $ 18,903 $ 19,021 $ 18,179 $ 17,002 $ 16,223 $ 67,190 $ 59,073 Total revenue (denominator) $ 34,272 $ 33,788 $ 33,295 $ 32,166 $ 32,129 $ 126,567 $ 102,934 Bank efficiency ratio 55.16% 56.30% 54.60% 52.86% 50.49% 53.09% 57.39% For a comprehensive discussion on the use of non-GAAP data, please refer to the Company’s most recent quarterly financial results news release filed with the Securities and Exchange Commission and available at www.tscbank.com 31 Investor presentation
Reconciliation of Non-GAAP Financial measures to GAAP Income Statement Items For the Three Months Ended For the Years Ended June 30, March 31, December 31, September 30, June 30, December 31, December 31, (Dollars in thousands) 2019 2019 2018 2018 2018 2018 2017 Investment Management EBITDA: Net income $ 672 $ 1,431 $ 1,468 $ 957 $ 723 $ 3,851 $ 4,551 Interest expense — — — — — — — Income taxes expense (benefit) 264 563 (207) 282 277 579 522 Depreciation expense 119 125 126 126 125 502 497 Intangible amortization expense 502 502 503 502 502 1,968 1,851 EBITDA $ 1,557 $ 2,621 $ 1,890 $ 1,867 $ 1,627 $ 6,900 $ 7,421 For a comprehensive discussion on the use of non-GAAP data, please refer to the Company’s most recent quarterly financial results news release filed with the Securities and Exchange Commission and available at www.tscbank.com 32 Investor presentation
Reconciliation of Non-GAAP Financial measures to GAAP Balance Sheet Items As of June 30, March 31, December 31, September 30, June 30, (Dollars in thousands, except per share data) 2019 2019 2018 2018 2018 Tangible book value per common share: Common shareholders' equity $ 472,839 $ 458,089 $ 440,886 $ 429,152 $ 415,462 Less: goodwill and intangible assets 66,859 67,361 67,863 68,365 68,867 Tangible common equity $ 405,980 $ 390,728 $ 373,023 $ 360,787 $ 346,595 Common shares outstanding 29,339,152 29,351,833 28,878,674 28,920,978 28,947,883 Tangible book value per common share $ 13.84 $ 13.31 $ 12.92 $ 12.47 $ 11.97 For a comprehensive discussion on the use of non-GAAP data, please refer to the Company’s most recent quarterly financial results news release filed with the Securities and Exchange Commission and available at www.tscbank.com 33 Investor presentation