Good morning everyone and welcome to TriState Capital Holdings Conference Call to discuss the financial results for the three months ended September 30, 2016. All participants will be in listen-only mode. [Operator Instructions] Before turning the call over to management, I would like to remind everyone that today’s call may contain forward-looking statements related to TriState Capital that may generally be identified as describing the Company’s future plans, objectives or goals. Such forward-looking statements are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those currently anticipated. These forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. 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 Forms 10-K and 10-Q. You should keep in mind that any forward-looking statements made by TriState Capital speak only as of the date on which they were made. New risks and uncertainties come up from time to time and management cannot predict these events or how they may affect the Company. 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. To the extent non-GAAP financial measures are discussed in this call, comparable GAAP measures and reconciliations can be found in TriState Capital’s earnings release which is available on its website at tristatecapitalbank.com. Representing TriState Capital today is Jim Getz, Chairman, President and Chief Executive Officer. He will be joined by Mark Sullivan, Vice Chairman and Chief Financial Officer; as well as Chartwell Managing Partner and CEO, Tim Riddle for the question-and-answer session. Please note this event is being recorded. At this time, I would like to turn the conference over to Mr. Getz.

Good morning and thank you for joining us. The third quarter of 2016 was an outstanding quarter and our best yet as a public company. Robust earnings growth reflected new record levels of net interest income, fees and total revenue. These positives continue to reflect our expanding commercial banking, private banking and asset management businesses, which are firing on all cylinders, giving the company exceptional loan growth even better deposit growth and healthy assets under management growth. This was all achieved while maintaining excellent credit quality, making about $12 million in additional risk-based capital available to the bank and executing on our asset management acquisition strategy. Let me begin with a few specific highlights from the third quarter. The results again showcased TriState Capital’s unique risk profile and diversified financial services business model. With a proven ability to consistently generate robust earnings through sustainable revenue growth, we consistently increased net interest income dollars through strategic loan and deposit growth with a strong risk adjusted return that outpaces margin compression. Quarter-end loans surpassed $3 billion for the first time ever, totaling $3.2 billion at September 30. Loans grew by $513 million or more than 19% over the last 12 months and by $1.5 billion since our 2013 IPO. Exceptional organic growth in quality loans is something we’ve achieved in a low rate environment, really since our bank’s inception in 2007. In private banking, loan balances grew more than 32% over the last year to $1.6 billion, despite volatile equity markets over the last 12 months. Our private banking channel lending makes up half of all loans and demonstrates the effectiveness of our financial services distribution capability, which we continue to expand at an exceptional rate. Our national referral network of financial intermediaries is up to 136 firms, from 131 at the…

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Michael Perito of KBW. Please go ahead.

Good morning.

Good morning, Mike.

A couple questions. Maybe starting on the margin for Mark. Can you maybe talk a little bit about it seems like the loan yields are getting a bit closer to where the perceivable trough might be. Obviously, as the private banking piece grows. But can you give us some color on what you guys see there? And also just remind us, if we do see maybe a 25 basis point move in the Fed at year end what kind of benefit you would perceive on the net-interest income?

Sure, thanks, Mike. Good point and the NIM, it did decrease seven bips in this quarter, there is a couple of observations on that. On a one-year basis the NIM is down 15 basis points. At the same time our net interest income was up 10%. So looking at the two factors that impact NIM, the yield on a loan portfolio it continues as you indicated, continues to have pressure because of the outside growth of the private banking portfolio. The portfolio has never lost a dollar and is zero risk-weighted. In terms of the cost of funds, on a go-forward basis, we do expect to see the results of our investment in our treasury management platform, both the people and technology and increase deposit gathering focus. Jim mentioned the last three quarters deposit growth has exceeded loan growth in both at extremely beneficial rates. So we may see some improvement in Q4, but it’s really in the first half of 2017 that the results will have an impact. In terms of if we had another Fed increase in December, similar to December of 2016 a 25 basis increase would have a very positive impact on us. And if you recall the spread initially, the big impact is in the first quarter and by the second’s quarter it begins to dissipate as the pressure on cost of funds. But we earned about $700,000 attributable to the increase in the first quarter 2016, additional NII with the increased loan base and so forth that should be closer to a $1 million for Q1.

Okay. Thanks for that color, Mark. And then maybe from a second question, on the Aberdeen transaction. So, obviously the considerations are going to be paid at the end of next year. But in terms of the impact on capital. That will hit in the first quarter, correct? In terms of the intangibles and the impact on capital? And maybe also, comment Jim, on just obviously you freed up some regulatory capital in the quarter. But maybe in terms of your capital outlook. Have you had any thoughts on adding anything to the capital stack as we get out and the growth continues into 2017 and 2018?

Yes Mike, this is Mark, in terms of the capital and so forth, the fee raised are about 755 right now and tangible book value, we would expect that with the delusion coming on in Q1 that by the earnings that we have in Q4 and Q1 that we backed to where it is today. Another factor, when you are looking at the impacted delusion on an acquisition like this in a bank, acquisition typically in fact maybe 30% of the purchase price and goodwill and goodwill and intangibles, well as and we are looking for that to be paid back in five years or less. And in asset management acquisition virtually 100% of the purchase price, it is in goodwill and intangibles and we’d expect to recover that in our case in under five years, 100% of the purchase price under five years on a GAAP basis and under four years on a cash basis. So, we are not overly concerned about the short-term impact of the dilution on tangible book value T ratios and our capital ratios continue to growth between the earnings. And as Jim had mentioned the increase in $120 million in loans were 100% risk-weighted and now our zero risk-weighted.

Okay. Thanks, guys.

Thank you.

The next question comes from Matt Olney of Stephens. Please go ahead.

Hi, thanks. Good morning guys.

Good morning Matt.

Jim, you've indicated that the drag on loans in the last few years has been C&I. It sounds like C&I drag is stabilizing. I'm curious what this inflection point means for the future loan growth? Are we are going to see better loan growth than we've seen over the last few years? Or could it just be a more balanced type of mix of future loan growth?

I think you’re going to see a combination of the both, because it’s taken us now a couple of years to stabilize this and now we’re moving forward. And I think you’re going to begin to see that proven out in the fourth quarter. As you are aware with continually reinforced the 15% growth yet if you go over the numbers we’ve been close to 19% to 20% growth in loan outstandings and that’s what C&I has been a drag. So we’re very optimistic moving forward here and feel very confident in the future quarters with reference to the growth that we’re going to experience in the loan portfolio now to be ultimately, positively impacted by the C&I activity.

And then as a follow-up Jim, the private banking loan growth was a very strong in the third quarter. Anything specific you attribute this to? And any update in the overall level of competition for this niche product?

Well, a couple of things that I would indicate to you is that, we’ve had relatively over the past couple of months, we’ve had a relatively stable market. And when you have that, you have a lot of financial advisors that will in that environment consider moving from one organization to another. And many of them are moving out of the larger wire houses like the Morgan Stanley’s, the Merrill Lynch’s and setting up their own shops and groups. And these are top producers that have a lot of confidence in their ability to build business. And so they’re going to a lot of the registered investment advisors that we’re working with and their best clients have loans and those loans have to be paid off at Goldman, and Morgan Stanley and Merrill. And so we’re seeing a lot of A-Cap [ph] transactions occurring in the marketplace that are building a lot of froth in that business. So it’s not just the standard book of businesses that we have from the trust companies in the regional brokerage firms, there’s a lot of movement activity from one firm to another that we’re benefiting from.

And Jim the second part of that was about the overall competition for that niche product?

It’s a non-existent. I hate to be that direct, but there isn’t any type of competition of any formidable nation that we’re coming across.

Thank you.

[Operator Instructions] The next question comes from John Moran of Macquarie. Please go ahead.

Hey, good morning guys.

Good morning.

Hey, John.

Of course, I've got my two on private bank loans also. How many more of those do you have left that could qualify for favorable treatment under Basil III?

That you could see some additional capital coming in.

Exactly, yes.

Not enough. But what I mean by that is, what happens, the reason is occurred and if you remember several quarters ago we alluded to this. We’re very dependent on conversions with the IT Group at the broker dealer, or the trust company, or the advisor. And we need their cooperation. So these folks had been doing business with us for a little over 12 months and we were monitoring this. But it wasn’t on our system and if it’s not on our system we don’t treat it accordingly. So right now this was the only major party that had been accumulating over time at this point.

Got you. So substantially all of them are now qualified under Basel III?

I wish I could tell you we had a surprise every quarter but that won’t be the case.

Okay. Got it.

I think that John and follow-up on Mike’s questions too is the in terms of the capital ratios and the favorable impact here and so forth, as we took out there is no need to raise capital anytime in the foreseeable future. We stay well above well-capitalized and the only caveat on that obviously if we did a major acquisition on the asset management side that would obviously change things.

Okay, understood. And then just as a follow-up on the PB side of things. The pricing on that product, I think last time we caught up was LIBOR plus 2%, 2.25%. Has that held steady? And do see anything changing there?

Yes that’s remained relatively constant between 2 and 2.25. And just so the answered the asked the question to give everybody a sense of what we are seeing in the market in general with commercial real estate it’s running around two to three over LIBOR and a commercial, industrial running around two to 2 and 3.25. Now obviously the portfolios themselves are yielding higher because they have some legacy loans like the C&I portfolio is around 3.5% over LIBOR and the commercial real estate portfolios around 3.40% and private banking is around, little over 2.50% over LIBOR.

Great, thanks. I have a got a couple more but I will jump back in. Thanks.

Okay, thank you.

The next question is from Bryce Rowe of Baird. Please go ahead.

Thanks. Good morning. Congratulations on the asset management deal. It looks really nice.

Good morning Bryce. Thank you.

You're welcome. Jim, I just had one follow-up to comments in the press release about the specific reserve added onto non-performing loans. Can you tell me, potentially what that added specific reserve was in terms of dollars?

Yes I certainly can. There were two loans, and one loan was a manufacturer of a highly-engineered products used in liquid and gas separation processes serving a wide range of markets including chemical, power generation, waste, oil and gas and our exposure in that loan is a little over – or I’d say actually about $3.9 million and the reserve to specific reserve increase was $993,762. And the other one was a designer marketer branded niche products for exercise equipment and travel accessories and gift markets and that is an exposure of about $5.5 million and we put $2.7 million against that. And essentially what we did is on the real estate recovery that I alluded to, we just moved that over and kept it within the loan loss reserve so it offset it.

That's helpful. That's all I had. Thank you.

Great, thanks Bryce.

Your next question comes from Matt Schultise of Benning. Please go ahead.

Hi good morning.

Good morning Matt.

A couple of small questions. With regard to your buying out of the options effectively. Does that affect your share count going forward? For diluted EPS?

It reduces on the fully diluted count it reduces it. And the same time with the increase in the stock price in the past couple of months that puts more into play on the both vested and unvested, and restricted shares. So it’s coming out about a wash.

Okay thank you.

It’s fully diluted around 28 million to 120 million.

Okay. And with regard to the five parcels that you mentioned earlier that are now in OREO. Can you share with us the general geography of those?

General geography in the Mid-Atlantic states were specific Ohio.

Okay. Thank you.

And keep in mind that we put that – we’ve been working out that loan since 2009 as we put it on in 2007 and we really stayed with it and it was written down and everything and it went through all kinds of litigation and it was just two weeks ago that we got titled to it. But in the interim we came up with a creative idea over the past couple years of selling off the parcels and keeping them on in Escrow during the litigation. And that’s what caused the cash and now we have moved it all over to OREO and that's why the increase in OREO.

Understood, thank you.

Sure.

The next question is a follow-up from Matt Olney of Stephens. Please go ahead.

Hey thanks. Just want to go back to the asset manager and ask about the flows. I think there have been pretty good over – through most of this year, but the flows did reverse course in 3Q. Anything you can point to on the third quarter? And then what's the outlook there?

Matt this is Tim Riddle. We had had tremendous fortune in terms of not only new business, but also net flows. We had a couple of client losses in the third quarter, they did in the third quarter, we’ve known about them for a while, but again, we think those will certainly be offset by some of our fortune in being able to continue to distribute not only on the retail side, but also on the institutional side. We believe we've got a lot of open field ahead of us in some very strong products with good prospects in terms of their performance.

Keep in mind what I alluded to in the script earlier that since March of 2014 we've had organic growth of $1.1 billion as of 9/30 so it is fairly substantial in a market where most people have been experiencing net redemptions. But we’re not happy about what happened in the quarter, but in reality if you look at a longer perspective other than the quarter has been pretty positive.

Yes Matt just one more item on that. Remember that’s the institutional business is very lumpy. And we’ve had tremendous amount of luck long-term and good fortune and a lot of that is obviously based upon performance but it is also the quality of our institutional marketing efforts now being paired with an equally high quality retail effort. So again, on the institutional side it will be a little lumpy but we certainly have some things we believe that are in the queue and we would expect to see continued growth on the institutional side. And perhaps even a bit of a surprise in the fourth quarter, as well.

I understood. Thanks for that. And also wanted to ask Mark about the operating expenses. I think that it was a little bit higher than we expected a few months ago. And then you can point to in the third quarter and then what’s the outlook for operating expenses from here?

Good point Matt. There were elevated cost in that quarter, professional fees, FDIC insurance and incentive comp were a little higher. Incentive comp was the third quarter loan growth $177 million annualized that's over $700 million. So we had to adjust based on loan growth on the incentive comp.

And Mark any thoughts about the operating expenses from here?

I think you will see them pretty much in line with Q3. Perhaps slight increase, but not to the degree – remember Killen was only in the mix for two months in Q1 and has the full three months in Q3, so that's part of the elevation so when you go from Q3 to Q4 you won't see the increase that you saw Q2 to Q3.

And then Mark you have the amount of the swap fee income recognized in the third quarter?

Yes, the swap fees were just under a million, 970 something thousand and that was on to Q1, on to Q2 and just under a million in Q3. So about 3.4 million year-to-date compared to 1.6 million all of 2015. And the fourth quarter pipeline continues on pace, as well.

Thank you.

The next question is a follow-up from John Moran of Macquarie, please go ahead.

Hey thanks. So if I'm doing the math right on the Aberdeen assets at looks like the fee rate on those is kind of just under 20 basis point. Wondering if you could give us a split of what’s institutional versus retail there and where you think you might be able to drive that kind of as you get distribution sort of ramped up?

Absolutely John this is Tim Riddle. John, you are right, the fee on the total Aberdeen book is just under 20 basis points and that represents a 100% institutional business. And we would expect John that any growth at least in the short term and any new business prospects there would be on the institutional side. And longer-term we would see some potential on the retail side, as well.

Okay got it. And then Tim, and Jim and Mark, I guess too just if you could refresh us in terms of what you guys might be looking to add in terms of product capability on the asset management side? I think tax-free is still a whole and then international if there’s anything else that you guys are kind of hoped around for?

Yes, John the one hope and clear right in our face is the tax-free. And Time and I continue to pursue that aggressively and we’ve been to a lot of parties, but we have nothing near term that we can indicate to you. But it’s really necessary and that will pretty well fill it out. We do have an interest in international, that’s going to be a more of a longer-term perspective. But I would say that once we make a tax exempt situation, come about that in fact we will be pretty well done from the acquisition standpoint. We have just have to get everything acclimated and begin to see consequential organic growth that we expect we will. But it’s – we now have critical mass that’s a $15 billion company, at this point it was $7.7 billion, when we acquired it.

Yes and it has been a good string of deals here. Thanks very much.

Thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Getz for any closing remarks.

Thank you very much. I thank you for your continued interest in Tristate Capital and your participation today. We look forward to keeping you up-to-date on our progress and hosting out next quarterly call which will be in January. So have a great day. Thank you.

The conference has now concluded, thank you for attending today’s presentation. You may now disconnect.