Kroll Bond Rating Agency Releases TriState Capital Holdings, Inc. Earnings Comment – Second Quarter 2014

Kroll Bond Rating Agency (KBRA) released today an earnings comment on TriState Capital Holdings, Inc. (NYSE:TSC). During the second quarter of 2014, TSC reported mixed results, including growth in loans, deposits, and fee revenue, but lower income due to a significant credit event. Net income for the three months ending June 30, 2014 totaled $514,000, compared to $4.6 million for the same period a year earlier. This was driven by an increase in loan loss provisioning expenses, which totaled $9.1 million in the second quarter of 2014, compared to $608,000 in the previous quarter and $671,000 in the second quarter of 2013. In addition to funds raised from its 2013 IPO, TSC completed a private placement of subordinated debt, raising $35 million in new capital in early June. Overall, the second quarter of 2014 results remain in line with Kroll Bond Rating Agency’s (KBRA’s) assigned ratings of BBB and BBB+, respectively, for TriState and its banking subsidiary, TriState Capital Bank, (“TriState Capital Holdings, Inc.”, May 12, 2014).

At the end of the second quarter, total loan balances increased by 14.2% ($274 million) compared to March 31, 2014, and 27.1% ($470 million) from June 2013. For the second quarter, higher loan balances reflected continued growth in its private banking channel lending and its commercial real estate loan portfolio. TSC acquired an additional $220 million of marketable-securities-backed loans through its private banking channel in April 2014. As of June 30, 2014, the $2.2 billion lending portfolio comprised of private banking channel loans (39.8%), commercial real estate loans (28.7%), and commercial and industrial loans (31.5%). In addition, total deposits grew 1.5% over the previous quarter and 18.88% from June 30, 2013.

KBRA maintains senior unsecured long-term and short-term debt ratings of BBB and K3, respectively, for TriState Capital Holdings, Inc. TSC’s subordinated debt rating stands at BBB-. In addition, KBRA maintains a long-term rating of BBB+ and short-term rating of K2 for the deposits of the parent’s lead subsidiary, TriState Capital Bank. The outlook on all ratings is stable.

The ratings are based on KBRA’s Global Bank and Bank Holding Company Rating Methodology, published on May 2, 2013. The ratings and supporting rationale are available at https://www.krollbondratings.com.

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KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).