Tristate Capital (TSC) Tops Q3 EPS by 5c

Tristate Capital (NASDAQ: TSC) reported Q3 EPS of $0.26, $0.05 better than the analyst estimate of $0.21.

THIRD QUARTER 2020 HIGHLIGHTS

• Chartwell client assets under management grew 4.3% during the quarter to $9.65 billion, drawing positive net inflows of $289.0 million year to date, including $156.0 million during the third quarter.
• Private banking loans primarily collateralized by marketable securities represented 58.3% of total loans at period end, growing 32.4% from September 30, 2019 and 9.7% during the quarter.
• Commercial loans increased by 20.7% from September 30, 2019 and 2.8% during the quarter.
• Cost of funds for deposits and interest-bearing liabilities averaged 0.77%, compared to 2.27% in the same period last year and 0.87% in the linked quarter.
• Allowance for loan and lease losses (ALLL) increased by 31.9% during the quarter to $30.7 million, representing 79.1% of adverse-rated credits and 0.96% of commercial loans.
• COVID-19 deferral levels declined more than earlier forecasts for this point in time, from $431.4 million or 5.9% of total loans on July 18 to $185.9 million or 2.4% on October 20.
• Even with provision expense supporting a $7.4 million ALLL build, credit costs across the portfolio remain relatively low given the company’s private banking loan portfolio, limited commercial exposure to the industries most directly impacted by the pandemic, and focus on commercial borrower sponsorship, as well as its proven approach to managing high quality commercial credits.
• Tangible common equity (TCE) and regulatory capital ratios are expected to benefit upon closing of the company’s recently announced agreement to issue common stock at $14.44 per share, convertible preferred stock and warrants to funds managed by Stone Point Capital LLC, in order to raise $105 million to support continued execution of TriState Capital’s high-growth strategy.

“We are very proud of what our team and businesses have been able to accomplish for our clients and our shareholders in a year of extraordinary disruption,” Chairman and Chief Executive Officer James F. Getz said. “For both the quarter and the year, each of our investment management, private banking and commercial banking businesses have contributed to profitable revenue growth as we serve greater numbers of clients and financial intermediaries, while maintaining superior credit quality metrics, investing in technology and talent, and optimizing the company’s agile balance sheet as we manage liquidity and capital. With continued confidence in our ability to manage long-term credit quality, we currently expect to be able to generate meaningful net income growth in the fourth quarter and next year, as we deploy capital and continue to expand each of our businesses through 2021 and beyond.”

For earnings history and earnings-related data on Tristate Capital (TSC) click here.

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