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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________

FORM 10-K

_________


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2020~~2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission file number: 001-35913

_________

TRISTATE CAPITAL HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

_________


Pennsylvania						20-4929029
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


One Oxford Centre
301 Grant Street, Suite 2700
Pittsburgh, Pennsylvania 15219
(Address of principal executive offices and zip code)


(412) 304-0304
(Registrant’s telephone number, including area code)

_________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	TSC	The Nasdaq Stock Market
Depositary Shares, Each Representing a 1/40th Interest in a Share of 6.75% Fixed-to-Floating Rate Series A Non-Cumulative Perpetual Preferred Stock	TSCAP	The Nasdaq Stock Market
Depositary Shares, Each Representing a 1/40th Interest in a Share of 6.375% Fixed-to-Floating Rate Series B Non-Cumulative Perpetual Preferred Stock	TSCBP	The Nasdaq Stock Market

Securities registered pursuant to section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ¨ Yes ý No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ¨ Yes ý No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ý Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ý No

As of June 30, ~~2020~~2021, the aggregate market value of the shares of common stock held by non-affiliates, based on the closing price per share of the registrant’s common stock as reported on The Nasdaq Global Select Market, was approximately $~~384~~498,~~742~~142,~~959~~483.

As of January 31, ~~2021~~2022, there were 33,~~060~~581,~~097~~303 shares of the registrant’s common stock, no par value, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement to be ~~filed~~mailed ~~with~~to ~~the~~shareholders ~~Securities~~in ~~and~~connection ~~Exchange~~with ~~Commission~~our no2022 ~~later~~annual ~~than~~meeting ~~April 30~~of shareholders or, ~~2021~~alternatively, ~~for~~in ~~the~~an ~~annual~~amendment ~~shareholders meeting~~ to bethis ~~held~~Annual Report on orForm ~~around May 17~~10-K, ~~2021,~~ are incorporated by reference into Part III of this Annual Report on Form 10-K.

TRISTATE CAPITAL HOLDINGS, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		4
PART I
	ITEM 1. BUSINESS	6
	ITEM 1A. RISK FACTORS	2627
	ITEM 1B. UNRESOLVED STAFF COMMENTS	4448
	ITEM 2. PROPERTIES	4448
	ITEM 3. LEGAL PROCEEDINGS	4448
	ITEM 4. MINE SAFETY DISCLOSURES	4548
PART II
	ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	4649
	ITEM 6. SELECTED FINANCIAL DATA	4851
	ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	5355
	ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	9189
	ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	9290
	ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	~~150~~146
	ITEM 9A. CONTROLS AND PROCEDURES	~~150~~146
	ITEM 9B. OTHER INFORMATION	~~152~~148
PART III
	ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	~~152~~148
	ITEM 11. EXECUTIVE COMPENSATION	~~153~~148
	ITEM 12. SECURITY OWNERSHIP OF CERTAIN OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	~~153~~149
	ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTORS INDEPENDENCE	~~153~~149
	ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES	~~153~~149
PART IV
	ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	~~153~~149
	ITEM 16. FORM 10-K SUMMARY	~~154~~150
EXHIBIT INDEX		~~154~~150
SIGNATURES		~~157~~153

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements reflect our current views with respect to, among other things, future events, and our financial performance, as well as our goals and objectives for future operations, financial and business trends, business prospects and management’s outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality or other future financial or business performance, strategies or expectations. These statements are often, but not always, made through the use of words or phrases such as “achieve,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “maintain,” “may,” “opportunity,” “outlook,” “plan,” “potential,” “predict,” “projection,” “seek,” “should,” “sustain,” “target,” “trend,” “will,” “will likely result,” and “would,” or the negative version of those words or other comparable of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, and beliefs of assumptions made by management, many of which, by their nature, are inherently uncertain. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that change over time and are difficult to predict, including, but not limited to, the following:

•risks associated with COVID-19 and their expected impact and duration, including effects on our operations, our clients, economic conditions and the demand for our products and services;

•risks associated with the acquisition of our Company by Raymond James Financial, Inc. (“Raymond James”), including risks related to the failure of our Company to satisfy conditions of the closing of the acquisition, which could result in the acquisition not closing which could have a material adverse impact on the value of our stock;

•deterioration of our asset quality;

•our ~~ability~~level ~~to prudently manage our growth and execute our strategy, including the successful integration~~ of ~~past~~non-performing ~~and~~assets ~~future acquisitions~~ and ~~our ability to fully realize~~ the ~~cost~~costs ~~savings~~associated ~~and~~with ~~other~~resolving ~~benefits~~problem ~~of our acquisitions~~loans, ~~manage~~including ~~risks~~litigation ~~related to business disruption following those acquisitions,~~ and ~~customer~~other ~~disintermediation~~costs;

•possible additional loan and lease losses and impairment, changes in the value of collateral securing our loans and leases and the collectability of loans and leases, particularly as a result of the COVID-19 pandemic and the programs implemented by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, including its automatic loan forbearance provisions;

•our ability to prudently manage our growth and execute our strategy;

•possible changes in the speed of loan prepayments by customers and loan origination or sales volumes;

•business and economic conditions generally and in the financial services industry, nationally and within our local market ~~area~~areas, including the effects of an increase in unemployment levels, slowdowns in economic growth and changes in demand for products or services or the value of assets under management;

•changes in management personnel;

•our ability to recruit and retain key employees;

•our ability to maintain important deposit customer relationships, our reputation and otherwise avoid liquidity risks;

•our ability to provide investment management performance competitive with our peers and benchmarks;

•operational risks associated with our business, including technology and cyber-security related risks;

•risks related to the phasing out of London Interbank Offered Rate (“LIBOR”) and changes in the manner of calculating reference rates, as well as the impact of the phase out of LIBOR and introduction of alternative reference rates on the value of loans and other financial instruments that are linked to LIBOR;

•volatility and direction of market interest rates;

•increased competition in the financial services industry, particularly from regional and national institutions;

•negative perceptions or publicity with respect to any products or services we offer;

•adverse judgments or other resolution of pending and future legal proceedings, and cost incurred in defending such proceedings;

•changes in ~~the~~accounting ~~laws~~policies, ~~rules,~~accounting ~~regulations~~standards, ~~interpretations~~ or ~~policies~~authoritative ~~relating to financial institutions,~~ accounting, ~~tax, trade, monetary and fiscal matters~~guidance;

•any impairment of our goodwill or other intangible assets;

•our ability to develop and provide competitive products and services that appeal to our customers and target markets;

•fluctuations in the carrying value of the assets under management held by our Chartwell Investment Partners, LLC (“Chartwell”) subsidiary, as well as the relative and absolute investment performance of such subsidiary’s investment products;

•changes in the laws, rules, regulations, interpretations or policies relating to financial institutions, accounting, tax, trade, monetary and fiscal matters , including economic stimulus programs, and potential expenses associated with complying with such laws and regulations;

•our ability to comply with applicable capital and liquidity requirements, including our ability to generate liquidity internally or raise capital on favorable terms;

•regulatory limits on our ability to receive dividends from our subsidiaries and pay dividends to shareholders;

•changes and direction of government policy towards and intervention in the U.S. financial system;

•natural disasters and adverse weather, acts of terrorism, regional or national civil unrest, cyber-attacks, an outbreak of hostilities or war, a public health outbreak (such as COVID-19) or other international or domestic calamities, and other matters beyond our control; ~~and~~

•the effects of any reputation, credit, interest rate, market, operational, legal, liquidity, regulatory or compliance risk resulting from developments related to any of the risks discussed above; and

•other factors that are discussed in the section entitled “Risk Factors,” in Part I - Item 1A.

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this document. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

PART I

ITEM 1. BUSINESS

Overview

TriState Capital Holdings, Inc. (“we,” “us,” “our,” the “holding company,” the “parent company,” or the “Company”) is a bank holding company headquartered in Pittsburgh, Pennsylvania. The Company has three wholly owned subsidiaries: TriState Capital Bank (the “Bank”), a Pennsylvania chartered bank; Chartwell ~~Investment Partners~~, ~~LLC (“Chartwell”),~~ a registered investment advisor; and Chartwell TSC Securities Corp. (“CTSC Securities”), a registered broker/-dealer. Through our bank subsidiary we serve middle-market businesses in our primary markets throughout the states of Pennsylvania, Ohio, New Jersey and New York and we also serve high-net-worth individuals on a national basis through our private banking channel. We market and distribute our banking products and services through a scalable branchless banking model, which creates significant operating leverage throughout our business as we continue to grow. Through our investment management subsidiary, we provide investment management services primarily to institutional investors, mutual funds and individual investors on a national basis. Our broker/-dealer subsidiary, CTSC Securities, supports the marketing efforts for Chartwell’s proprietary investment products.

On October 20, 2021, the Company announced that it entered into a definitive agreement under which Raymond James will acquire the outstanding shares of stock of the Company for consideration that is a combination of cash and Raymond James stock at a fixed exchange rate, valued in aggregate at approximately $1.1 billion based on the trading value of Raymond James’ stock on the announcement date. The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to close in 2022.

We operate two reportable segments: Bank and Investment Management.

•The Bank segment provides commercial banking products and services to middle-market businesses and private banking products and services to high-net-worth individuals through the Bank. Total assets of the Bank were $912.8293 billion as of December 31, ~~2020~~2021.

•The Investment Management segment provides investment management services primarily to institutional investors, mutual funds and individual investors through Chartwell and also supports marketing efforts for Chartwell’s proprietary investment products through CTSC Securities. Assets under management of Chartwell were $1011.2684 billion as of December 31, ~~2020~~2021.

For additional financial information by segment, refer to Note 23, Segments, to our consolidated financial statements.

Our Business Strategy

Our success has been built upon the vision and focus of our executive management team to combine the sophisticated products, services and risk management efforts of a large financial institution with the personalized service of a community bank. We believe that aour results-based culture, combined with a well-managed middle-market and private banking business, and our targeted investment management business, we will allow us to continue to grow and generate attractive returns for shareholders. The key components of our business strategies are described below:

Our Sales and Distribution Culture. We focus on efficient and profitable sales and distribution of investment management services and banking products and services to middle-market businesses and private banking clients. Our relationship managers and distribution professionals have significant experience in the banking and financial services industries and are focused on client service. In our banking business, we monitor net interest income contribution, loan and deposit growth, and asset quality by market and by relationship manager. Our compensation program is designed within our banking business to incentivize our regional presidents and relationship managers to prudently grow their loans, deposits and profitability, while maintaining strong asset quality. In our investment management business, our compensation program is designed to incentivize new assets under management while maximizing the retention of existing clients and exceeding benchmark investment performance.

Disciplined Risk Management. We place a strong emphasis on effective risk management as an integral component of our organizational culture and responsible growth strategy. We use our risk management infrastructure to establish risk appetite, monitor existing operations, support decision-making and improve the success rate of existing products and services as well as new initiatives. A major part of our risk management effort is focused on our balanced, lower-risk loan portfolio. This includes our focus on growing loans originated through our private banking channel. We believe these loans have lower credit risk because they are typically secured by readily liquid collateral, such as marketable securities, and/or are personally guaranteed by high-net-worth borrowers. In addition, we mitigate risk associated with these loans through active daily monitoring of the collateral, utilizing our proprietary technology. We ~~also focus on increasing non-interest income, including the expansion of our investment management business organically as well as through acquisitions.~~

Experienced Professionals. Having successful and high quality professionals is critical to continuing to drive prudent growth in our business. In addition to our experienced executive management team and board of directors, we employ highly experienced personnel across our entire organization. Our commercial and private banking presidents as well as our regional banking presidents have an average of more than 30 years of banking experience and our middle-market and private banking relationship managers have an

~~average~~also offocus ~~over~~on 20increasing ~~years~~non-interest ofincome, ~~banking~~including ~~experience. Chartwell’s mission is successfully executed through~~ the ~~dedication~~expansion of ~~investment professionals who average over 20 years of industry experience. We believe that~~ our ~~distinct~~investment management business ~~model,~~organically ~~culture,~~as ~~and~~well ~~scalable~~as ~~platform~~through ~~enable us to attract and retain high quality professionals~~acquisitions. ~~Additionally, our low overhead costs give us the financial capability to attract and incentivize qualified professionals who desire to work in an entrepreneurial and results-oriented organization.~~

~~Technology~~Experienced ~~Enabled~~Professionals. Having ~~Efficient~~successful and ~~Scalable~~high ~~Operating~~quality ~~Model~~professionals is critical to continuing to drive prudent growth in our business. ~~With~~In ~~respect~~addition to our ~~banking~~experienced ~~business~~executive management team and board of directors, we ~~believe~~employ ~~our~~highly ~~branchless~~experienced ~~banking~~personnel ~~model~~across ~~gives~~our usentire aorganization. Our ~~competitive~~commercial ~~advantage~~and byprivate ~~eliminating~~banking ~~the~~presidents ~~overhead~~as ~~and~~well ~~intense~~as ~~management~~our ~~requirements~~regional ofbanking apresidents ~~traditional~~have ~~branch~~an ~~network. Moreover,~~average weof ~~believe~~more ~~that~~than we30 ~~have~~years aof ~~scalable~~banking ~~platform~~experience and ~~organizational~~our ~~infrastructure~~middle-market ~~that~~and ~~positions~~private usbanking torelationship ~~grow~~managers ~~our~~have ~~revenue~~an ~~more~~average ~~rapidly~~of ~~than~~over ~~our~~20 ~~operating~~years ~~expenses~~of banking experience. WeChartwell’s ~~also~~mission ~~believe~~is ~~that~~successfully ~~our~~executed through the dedication of investment ~~management~~professionals ~~business~~who ~~has~~average anover ~~efficient~~20 ~~and~~years ~~scalable~~of ~~business~~industry ~~model~~experience. We believe that ~~focuses~~our ondistinct ~~institutional~~business ~~direct~~model, ~~clients~~culture, and ~~wholesale~~scalable ~~distribution~~platform ~~channels~~enable us to ~~reach~~attract ~~retail~~and ~~investors~~retain high quality professionals. ~~This~~Additionally, ~~enables~~our uslow tooverhead ~~invest~~costs ingive ~~meaningful~~us ~~technology~~the ~~development~~financial ~~that~~capability ~~appeals~~ to ~~these~~attract ~~sophisticated needs~~ and ~~competes~~incentivize ~~with~~qualified ~~premier~~professionals ~~providers,~~who ~~while~~desire ~~having~~to ~~longer~~work ~~obsolescence~~in ~~cycles~~an entrepreneurial and ~~better~~results-oriented ~~return on investment~~organization.

~~Lending~~Technology ~~Strategy~~Enabled Efficient and Scalable Operating Model. WeWith ~~generate~~respect ~~loans~~to ~~through~~our banking business, we believe our ~~middle-market~~branchless banking model gives us a competitive advantage by eliminating the overhead and ~~private~~management ~~banking~~requirements ~~channels~~of a traditional branch network. ~~These~~Moreover, ~~channels~~we ~~provide~~believe ~~diversification~~that we have a scalable platform and ~~offer~~organizational ~~significant~~infrastructure ~~responsible~~that ~~growth~~positions ~~opportunities~~us to grow our revenue more rapidly than our operating expenses. We also believe that our investment management business has an efficient and scalable business model that focuses on institutional direct clients and wholesale distribution channels to reach retail investors. This enables us to invest in ~~breadth~~meaningful technology development that appeals to these sophisticated needs and ~~scale~~competes with premier providers, while having longer obsolescence cycles and better return on investment..

Lending Strategy. We generate loans through our middle-market banking and private banking channels. These channels provide diversification and offer significant responsible growth opportunities in breadth and scale.

•Middle-Market Banking Channel. Our middle-market banking channel primarily targets businesses with revenues between $5.0 million and $300.0 million located within our primary markets. To capitalize on this opportunity, each of our representative offices is led by an experienced regional president so we can understand the unique borrowing needs of the middle-market businesses in their area. They are supported by highly experienced relationship managers with reputations for success in targeting middle-market business customers and maintaining strong credit quality within their loan portfolios.

•Private Banking Channel. We provide loan products and services nationally to executives and high-net-worth individuals, most of whom we source through referral relationships with independent broker/-dealers, wealth managers, family offices, trust companies and other financial intermediaries. Our private banking products primarily include loans secured by cash and/or marketable securities. The Company also originates loans secured by cash value life insurance and other asset-based loans. Our relationship managers have cultivated referral arrangements with ~~249~~351 financial intermediaries. Under these arrangements, the financial intermediaries are able to refer their clients to us for responsive and sophisticated banking services. We believe many of our referral relationships with these intermediaries also create cross-selling opportunities with respect to our deposit products and our investment management business. Since inception, we have had no charge-offs related to our loans secured by cash, marketable securities and/or cash value life insurance.

As shown in the following table, we have continued to achieve loan growth through both of our banking channels. As of December 31, ~~2020~~2021, loans and leases sourced through our middle-market banking channel were $3.4388 billion, or 4136.60% of our loans held-for-investment.

As of December 31, ~~2020~~2021, loans sourced through our private banking channel were $46.8189 billion, or 5864.40% of our loans held-for-investment, of which $46.7482 billion, or 9899.60%, were secured by cash, marketable securities and/or cash value life insurance. We expect continued strong loan and deposit growth in this channel, in part, because we added 36102 new loan referral relationships during the year ended December 31, 2020, for a total of 249 referral relationships at the end of 2020. We have also experienced continued growth in the number of customers resulting from our existing referral relationships.

	December 31,				2020 Change from 2019
(Dollars in thousands)	2020		2019		Amount		Percent
Middle-market banking offices:
Western Pennsylvania	$	884,860	$	765,461	$	119,399	15.6%
Eastern Pennsylvania	867,267		644,483		222,784		34.6%
New Jersey	572,607		487,496		85,111		17.5%
New York	572,265		524,016		48,249		9.2%
Ohio	532,619		460,701		71,918		15.6%
Total middle-market banking loans	3,429,618		2,882,157		547,461		19.0	%
Total private banking loans	4,807,800		3,695,402		1,112,398		30.1	%
Loans and leases held-for-investment	$	8,237,418	$	6,577,559	$	1,659,859	25.2	%

~~91%~~ended ofDecember ~~our~~31, 2021, for a total ~~deposits~~of to351 bereferral ~~sourced~~relationships ~~from~~at ~~direct~~the ~~customer~~end ~~relationships~~of 2021. We ~~believe~~have ~~our~~also ~~sources~~experienced ofcontinued ~~deposits~~growth ~~continue~~in tothe ~~provide~~number ~~excellent~~of ~~opportunities~~customers ~~for~~resulting ~~growth~~from ~~both within~~ our ~~primary~~existing ~~markets~~referral ~~and nationally~~relationships.


	December 31,				2021 Change from 2020
(Dollars in thousands)	2021		2020		Amount		Percent
Middle-market banking offices:
Western Pennsylvania	$	979,660	$	884,860	$	94,800	10.7%
Eastern Pennsylvania	1,019,547		867,267		152,280		17.6%
New Jersey	661,099		572,607		88,492		15.5%
New York	592,573		572,265		20,308		3.5%
Ohio	623,947		532,619		91,328		17.1%
Total middle-market banking loans	3,876,826		3,429,618		447,208		13.0	%
Total private banking loans	6,886,498		4,807,800		2,078,698		43.2	%
Loans and leases held-for-investment	$	10,763,324	$	8,237,418	$	2,525,906	30.7	%

Deposit Funding Strategy. Since inception, we have focused on creating and growing a branchless, diversified, stable, and low cost deposit channels, both in our primary markets and across the United States. As of December 31, 2021, we consider approximately 92% of our total deposits to be sourced from direct customer relationships. We believe our sources of deposits continue to provide excellent opportunities for growth both within our primary markets and nationally.

We take a multi-faceted approach to our deposit growth strategy. We believe our relationship managers are an integral part of this approach and, accordingly, we measure and incentivize them to increase the breadth and scope of deposits associated with their relationships. We have relationship managers who are specifically dedicated to deposit generation and treasury management, and we plan to continue adding such professionals as appropriate to support our growth. Additionally, we believe that our financial performance and our products and services, which are targeted to our markets, enhance our responsible growth of cost-effective deposits.

Investment Management Strategy. We will continue to execute on our investment management strategy of organically growing our business through innovative distribution strategies, as well as selectively acquiring other investment management assets that complement Chartwell’s business, as evidenced by our acquisition of Columbia Partners, L.L.C. in 2018. We believe that this segment has and will continue to enhance our recurring fee revenue, ~~continuing~~build ~~building~~ robust institutional relationships, provide new product offerings for our national network of financial intermediaries, and leverage our financial services distribution capabilities through the financial intermediaries with which our banking business has worked and developed.

Our Markets

For our middle-market banking business, our primary markets of Pennsylvania, Ohio, New Jersey and New York include the four major metropolitan statistical areas (“MSA”) of Pittsburgh and Philadelphia, Pennsylvania; Cleveland, Ohio and New York (which includes northern New Jersey). We believe that our primary markets including these MSAs are long-term, attractive markets for the types of products and services that we offer, and we anticipate that these markets will continue to support our projected growth. With respect to our loans and other financial services and products, we selected the locations for our representative offices partially based upon the number of middle-market businesses located in these MSAs and their respective states. According to SNL Financial, as of December 31, ~~2020~~2021, there were over ~~166~~849,000 middle-market businesses in our primary markets with annual sales between $5.0 million and $300.0 million, which represented approximately 1110% of the national total of such businesses as of that date. The ~~2020~~2021 aggregate population of the four MSAs in which our headquarters and four representative offices are located was approximately 30 million, which represented approximately 109% of the national population. We believe that the population and business concentrations within our primary markets provide attractive opportunities to grow our business.

In addition to our commercial bank focus on middle-market businesses in our primary markets, our private banking business focuses on serving clients on a national basis. We primarily source this business through referral relationships with independent broker/-dealers, wealth managers, family offices, trust companies and other financial intermediaries. We view our product offerings as being most appealing to those households with $500,000 or more in net worth (not including their primary residence).

Through all of our distribution channels, we pursue and create deposit relationships, including treasury management relationships, with customers in our primary markets and throughout the United States. Because our deposit operations are centralized in our Pittsburgh headquarters, all of our deposits are aggregated and accounted for in that MSA. For these distribution and reporting reasons, we do not consider deposit market share in any MSA or any of our primary markets to be relevant data. However, for perspective on the size of the deposit markets in which we have offices, the total aggregate domestic deposits of banks headquartered within the four MSAs were approximately $2.8 trillion as of December 31, 2020, according to SNL Financial.

Our investment management products are primarily distributed in two markets. These markets and their relative percentage of our assets under management as of December 31, 2020, were as follows: institutional and sub-advisory (80%) and broker/dealers and registered investment advisors (20%).

Institutional and Sub-Advisory. Chartwell maintains a dedicated sales and client service staff to focus on the distribution of its products to a wide variety of institutional and sub-advisory clients, including corporate pension and profit-sharing plans, public pension plans, Taft-Hartley plans, foundations, endowments and registered investment companies. As of December 31, 2020, assets under management in the institutional and sub-advisory market included $3.18 billion in equity products and $5.03 billion in fixed-income products.

Broker/Dealer and Independent Registered Investment Advisors. Chartwell maintains sales staff dedicated to calling on national, regional and independent broker/dealers and registered investment advisors. Broker/dealers and registered investment advisors use Chartwell’s products to meet the needs of their customers, who are typically retail and/or high-net-worth investors. As of December 31, 2020, assets under management in the broker/dealer and independent registered investment advisor market included $1.42 billion in equity products and $634.0 million in fixed-income products.

perspective on the size of the deposit markets in which we have offices, the total aggregate domestic deposits of banks headquartered within the four MSAs was approximately $3.1 trillion as of December 31, 2021, according to SNL Financial.

Our investment management products are primarily distributed in two markets. These markets and their relative percentage of our assets under management as of December 31, 2021, were as follows: institutional and sub-advisory (81%) and broker-dealers and registered investment advisors (19%).

Institutional and Sub-Advisory. Chartwell maintains a dedicated sales and client service staff to focus on the distribution of its products to a wide variety of institutional and sub-advisory clients, including corporate pension and profit-sharing plans, public pension plans, Taft-Hartley plans, foundations, endowments and registered investment companies. As of December 31, 2021, assets under management in the institutional and sub-advisory market included $3.41 billion in equity products and $6.21 billion in fixed-income products.

Broker-Dealer and Independent Registered Investment Advisors. Chartwell maintains sales staff dedicated to calling on national, regional and independent broker-dealers and registered investment advisors. Broker-dealers and registered investment advisors use Chartwell’s products to meet the needs of their customers, who are typically retail and/or high-net-worth investors. As of December 31, 2021, assets under management in the broker-dealer and independent registered investment advisor market included $1.56 billion in equity products and $661.0 million in fixed-income products.

Our Products and Services

We offer our clients an array of products and services, including loan and deposit products, cash management services, capital market services such as interest rate swaps and investment management products.

Our loan products include, among others, loans secured by cash, marketable securities, cash value life insurance, commercial and industrial loans, commercial real estate loans, personal loans, asset-based loans, acquisition financing, and letters of credit. Our deposit products are designed for sophisticated client needs and include, among others, checking accounts, money market deposit accounts, certificates of deposit, and Promontory’s Certificate of Deposit Account Registry Service® (“CDARS®”) and Insured Cash Sweep® (“ICS®”) services. Our liquidity and treasury management services are built to support clients in sophisticated and complex situations and include online balance reporting, online bill payment, remote deposit, liquidity services, wire and ACH services, foreign exchange and controlled disbursement. Our investment management business provides equity and fixed income advisory and sub-advisory services to third party mutual funds, series trust mutual funds, and to separately managed accounts for a spectrum of clients, but primarily focused on ultra-high-net-worth and institutional clients, including corporations, ERISA plans, Taft-Hartley funds, municipalities, endowments and foundations. We expect to continue to develop and implement additional products for our clients, including additional investment management product offerings to our financial intermediary referral sources.

More information about our key products and services, including a discussion about how we manage our products and services within our overall business and enterprise risk strategy, is set forth below.

Loans and Leases

Our primary source of income in our Bank segment is interest on loans and leases. Our loan and lease portfolio primarily consist of loans to our private banking clients, commercial and industrial loans and leases, and real estate loans secured by commercial real estate properties. Our loan and lease portfolio represents the largest component of our earning assets.

The following table presents the composition of our loan and lease portfolio as of December 31, ~~2020~~2021.

(Dollars in thousands)	December 31, ~~2020~~2021		Percent of Loans
Private banking loans	$	46,~~807~~886,~~800~~498	5864.40	%
Middle-market banking loans:
Commercial and industrial	1,~~274~~513,~~152~~423		1514.51	%
Commercial real estate	2,~~155~~363,~~466~~403		2621.19	%
Total middle-market banking loans	3,~~429~~876,~~618~~826		4136.60	%
Loans and leases held-for-investment	$	810,~~237~~763,~~418~~324	100.0	%

Private Banking Loans. Our private banking loans are comprised of both personal and commercial loans sourced through our private banking channel, which operates on a national basis. These loans primarily consist of loans made to high-net-worth individuals, trusts and businesses that may be secured by cash, marketable securities, cash value life insurance and/or other financial assets and to a lesser degree, residential property. We also have a small number of unsecured loans and lines of credit in our private banking loans. The primary source of repayment for these loans is the income and assets of the borrowers. Since a majority of our private banking loans are secured by cash, marketable securities and/or cash value life insurance which is actively monitored on a daily basis utilizing our proprietary technology, we believe the credit risk inherent in this portfolio is lower than the risk associated with other types of loans.

Our private banking lines of credit predominantly are due on demand or have terms of 365 days or less. Our term loans (other than mortgage loans) in this category generally have maturities of three to five years. On an accommodative basis, we have made personal residential real estate loans consisting primarily of first and second mortgage loans for residential properties, including jumbo mortgages. Our residential mortgage loans typically have maturities of seven years or less. On a limited basis we originated mortgage loans with maturities of up to 10 years and acquired other residential mortgages that had original maturities of up to 30 years. Our personal lines of credit typically have floating interest rates. We examine the personal cash flow, amount of outstanding business and related debt service, and liquidity of our individual borrowers when underwriting our private banking loans not secured by cash, marketable securities and/or cash value life insurance. In some cases we require our borrowers to agree to maintain a minimum level of liquidity that will be sufficient to repay the loan.

lesser degree, residential property. We also have a small number of unsecured loans and lines of credit in our private banking loans. The primary source of repayment for these loans is the income and assets of the borrowers. Since a majority of our private banking loans are secured by cash, marketable securities and/or cash value life insurance which is actively monitored on a daily basis utilizing our proprietary technology, we believe the credit risk inherent in this portfolio is lower than the risk associated with other types of loans.

The table below includes all loans made through our private banking channel by collateral type as of the date indicated.

(Dollars in thousands)	December 31, ~~2020~~2021		Percent of Private Banking Loans		Percent of Loans
Private banking loans:
Secured by cash, marketable securities and/or cash value life insurance	$	46,~~738~~816,~~594~~517	9899.60	%	5763.53	%
Secured by real estate	4537,~~014~~285		0.95	%	0.64	%
Other	2432,~~192~~696		0.5	%	0.3	%
Total private banking loans	$	46,~~807~~886,~~800~~498	100.0	%	5864.40	%

Commercial and Industrial Loans and Leases. Our commercial and industrial loan and lease portfolio primarily includes loans and leases made to a variety of commercial borrowers generally for the purposes of financing production, operating capacity, accounts receivable, inventory, equipment, acquisitions and recapitalizations. Cash flow from the borrower’s operations is the primary source of repayment for these loans, except for certain commercial loans that are secured by marketable securities. The primary risks associated with commercial and industrial loans include a deterioration in cash flow, a decline in the value of collateral securing these loans, increased leverage and/or reduced liquidity. We work throughout the lending process to manage and mitigate such risks within this portfolio. In addition, a portion of our commercial and industrial loans consist of loans to private investment funds for short-term liquidity purposes which are secured by their ability to call additional capital and/or the net asset value of the investments held and managed by the fund.

Our commercial and industrial loans and leases include both lines of credit and term loans. Lines of credit generally have maturities ranging from one to five years. Availability under our commercial lines of credit is typically limited to a percentage of the value of the assets securing the line. Those assets typically include accounts receivable, inventory and equipment, or in the case of fund financing, the value of uncalled capital and/or the investments held by the borrowing funds. Depending on the risk profile of the borrower, we require borrowing base certificates representing and supporting borrowing availability after applying appropriate eligibility and advance percentage rates to the collateral. Our commercial and industrial term loans and leases generally have maturities between three to seven years, and typically do not extend beyond 10 years. Our commercial and industrial lines of credit and term loans typically have floating interest rates.

The table below shows the composition of our commercial and industrial loan and lease portfolio by borrower industry as of December 31, 2020.

(Dollars in thousands)	December 31, 2020		Percent of Commercial and Industrial Loans		Percent of Loans
Industry:
Finance and Insurance	$	397,853	31.2	%	4.9	%
Real Estate, Rental and Leasing	284,132		22.3	%	3.4	%
Service	185,569		14.6	%	2.3	%
Manufacturing	117,393		9.2	%	1.4	%
Information	58,768		4.6	%	0.7	%
Transportation & Warehousing	53,531		4.2	%	0.6	%
Mining	22,651		1.8	%	0.3	%
Wholesale Trade	20,702		1.6	%	0.3	%
Construction	30,754		2.4	%	0.4	%
Private Household	1,202		0.1	%	—	%
Retail Trade	982		0.1	%	—	%
All other	100,615		7.9	%	1.2	%
Total commercial and industrial loans and leases	$	1,274,152	100.0	%	15.5	%

~~collateral~~The ~~securing~~table ~~the~~below ~~loans. We~~shows ~~work throughout~~ the ~~lending~~composition ~~process~~of ~~to manage and mitigate such risks within~~ our commercial ~~real~~and ~~estate~~industrial loan ~~portfolio. The~~and ~~commercial~~lease ~~real estate~~ portfolio ~~also includes loans secured~~ by ~~owner-occupied~~borrower ~~real~~industry ~~estate~~as ~~and the primary source~~ of ~~repayment~~December 31, ~~for these loans is cash flow from the borrower’s business~~2021.


(Dollars in thousands)	December 31, 2021		Percent of Commercial and Industrial Loans		Percent of Loans
Industry:
Finance and Insurance	$	573,215	37.9	%	5.3	%
Real Estate, Rental and Leasing	300,739		19.9	%	2.8	%
Service	195,977		12.9	%	1.8	%
Manufacturing	112,827		7.5	%	1.0	%
Transportation & Warehousing	72,519		4.8	%	0.7	%
Wholesale Trade	50,149		3.3	%	0.5	%
Information	49,155		3.2	%	0.5	%
Construction	29,680		2.0	%	0.3	%
Mining	22,029		1.5	%	0.2	%
Retail Trade	3,670		0.2	%	—	%

All other	103,463		6.8	%	1.0	%
Total commercial and industrial loans and leases	$	1,513,423	100.0	%	14.1	%

Commercial Real Estate Loans. We concentrate on making commercial real estate loans to experienced borrowers that have an established history of successful projects. The cash flow from income-producing properties or the sale of property from for-sale construction and development loans are generally the primary sources of repayment for these loans. The equity sponsors of our borrowers generally provide a secondary source of repayment from their excess global cash flows and liquidity. The primary risks associated with commercial real estate loans include credit risk arising from the dependency of repayment upon income generated from the property securing the loan, the vulnerability of such income to changes in market conditions, and difficulty in liquidating collateral securing the loans. We work throughout the lending process to manage and mitigate such risks within our commercial real estate loan portfolio. The commercial real estate portfolio also includes loans secured by owner-occupied real estate and the primary source of repayment for these loans is cash flow from the borrower’s business.

Our commercial real estate loans are primarily made to borrowers with projects or properties located within our primary markets. Our relationship managers are experienced lenders who are familiar with the trends within their local real estate markets.

The table below shows the composition of our commercial real estate portfolio as of December 31, ~~2020~~2021.

(Dollars in thousands)	December 31, ~~2020~~2021		Percent of Commercial Real Estate Loans		Percent of Loans
Commercial real estate loans:
Multifamily	$	~~625~~731,~~418~~781	2931.0	%	7.6.8	%
Office	~~470~~540,~~226~~765		2122.89	%	5.70	%
Retail	330,721		15.3	%	4.0	%
Industrial	382,120		16.2	%	3.6	%
Industrial	314,435		14.6	%	3.8	%
Retail	309,891		13.0	%	2.7	%
Educational/Other Centers	~~116~~113,~~033~~276		5.4.8	%	1.41	%
Senior Housing/Healthcare	60,790		2.8	%	0.7	%
Developed Land	71,470		3.0	%	0.7	%
Developed Land	55,006		2.6	%	0.7	%
Self Storage	60,645		2.6	%	0.6	%
Raw Land	53,472		2.5	%	0.6	%
Senior Housing/Healthcare	48,013		2.0	%	0.4	%
Self Storage	47,926		2.2	%	0.6	%
Hotel	39,032		1.7	%	0.4	%
Hotel	45,717		2.1	%	0.6	%
Residential	35,998		1.5	%	0.3	%
Residential	35,722		1.7	%	0.4	%
Raw Land	30,412		1.3	%	0.3	%
Total commercial real estate loans	$	2,~~155~~363,~~466~~403	100.0	%	2621.19	%

Loan and Lease Underwriting

Our focus on maintaining strong asset quality is pervasive through all aspects of our lending activities, ~~and~~including ~~it is apparent in~~ our loan and lease underwriting function. We are selective in targeting our lending to middle-market businesses, commercial real estate investors and developers, and high-net-worth individuals that we believe will meet our credit standards. Our credit standards are determined by our Credit Risk Policy Committee that is made up of senior bank officers, including our Chief Credit Officer, Chief Risk Officer, Bank President and Chief Executive Officer, President of Commercial Banking and President of Private Banking.

Our underwriting process is multilayered. Prospective loans are first reviewed by our relationship managers and regional presidents. The prospective commercial and certain private banking loans are then discussed in a pre-screen group composed of the Chief Credit Officer, Senior Credit Officer, President of Commercial Banking, President of Private Banking and all of our regional presidents. Applications for prospective loans that are accepted are fully underwritten by our credit administration group in combination with the relationship manager. Finally, the prospective loans are submitted to our Senior Loan Committee for approval, with the exception of certain loans that are fully secured by cash, marketable securities and/or cash value life insurance. Members of the Senior Loan Committee include our Chairman and Chief Executive Officer, Chief Financial Officer, Vice Chairman, Chief Credit Officer, Senior Credit Officer, Bank President and Chief Executive Officer, President of Commercial Banking, President of Private Banking and our regional presidents. All of our lending personnel, from our relationship managers to the members of our Senior Loan Committee, have significant experience that benefits our underwriting process.11

developers, and high-net-worth individuals that we believe will meet our credit standards. Our credit standards are determined by our Credit Risk Policy Committee that is made up of senior bank officers, including our Chief Credit Officer, Chief Risk Officer, Bank President and Chief Executive Officer, Chief Financial Officer, President of Commercial Banking and President of Private Banking.

Our underwriting process is multilayered. Prospective loans are first reviewed by our relationship managers and regional presidents. The prospective commercial and certain private banking loans are then discussed in a pre-screen group composed of the Chief Credit Officer, Senior Credit Officer, President of Commercial Banking, President of Private Banking and all of our regional presidents. Applications for prospective loans that are accepted are fully underwritten by our credit administration group in combination with the relationship manager. Finally, the prospective loans are submitted to our Senior Loan Committee for approval, with the exception of certain loans that are fully secured by cash, marketable securities and/or cash value life insurance. Members of the Senior Loan Committee include our Chairman, Vice Chairman, Bank President and Chief Executive Officer, Chief Financial Officer, Chief Credit Officer, Senior Credit Officer, President of Commercial Banking, President of Private Banking and our regional presidents. All of our lending personnel, from our relationship managers to the members of our Senior Loan Committee, have significant experience that benefits our underwriting process.

We maintain high credit quality standards. Each credit approval, renewal, extension, modification or waiver is documented in written form to reflect all pertinent aspects of the transaction. Our underwriting analysis generally includes an evaluation of the borrower’s business, industry, operating performance, financial condition and typically includes a sensitivity analysis of the borrower’s ability to repay the loan. Our underwriting is conducted by our team of highly experienced portfolio managers.

Our lending activities are subject to internal exposure limits that restrict concentrations of loans within our portfolio to certain targets and maximums based on a percentage of total loan commitments and as a multiple of total risk-based capital. These exposure limits are approved by our Senior Loan Committee and our board of directors. Our internal exposure limits are established to avoid unacceptable concentrations in a number of areas, including in our different loan categories and in specific industries. In addition, we have established a preferred lending limit that is significantly lower than our legal lending limit.

Our loan portfolio includes Shared National Credits (“SNC”). Effective January 1, 2018, the bank regulatory agencies revised the SNC definition to increase the loan size from $20 million or more to $100 million or more and shared by three or more financial institutions. We are typically part of the originating bank group in connection with these loan participations. We utilize the same underwriting criteria for these loans that we use for loans that we originate directly. These loans are to borrowers typically located within our primary markets and are generally made to companies that are known to us and with whom we have direct contact. We participate in the SNC loans of the financial intermediaries that refer private banking loans to us. These intermediaries are also a source of significant deposit balances. These loans have helped us to diversify the risk inherent in our loan portfolio by allowing us to access a broader array of corporations with different credit profiles, repayment sources, geographic footprints and with larger revenue bases than those businesses associated with our direct loans. Still, we are focused more on growing our direct loans than SNC loans. As of December 31, 2021, we had $250.0 million of SNC loans compared to $273.6 million as of December 31, 2020.

institutions. We are typically part of the originating bank group in connection with these loan participations. We utilize the same underwriting criteria for these loans that we use for loans that we originate directly. These loans are to borrowers typically located within our primary markets and are generally made to companies that are known to us and with whom we have direct contact. We participate in the SNC loans of the financial intermediaries that refer private banking loans to us. These intermediaries are also a source of significant deposit balances. These loans have helped us to diversify the risk inherent in our loan portfolio by allowing us to access a broader array of corporations with different credit profiles, repayment sources, geographic footprints and with larger revenue bases than those businesses associated with our direct loans. Still, we are focused more on growing our direct loans than SNC loans. As of December 31, 2020, we had $273.6 million of SNC loans compared to $281.2 million as of December 31, 2019.

Loan and Lease Portfolio Concentrations

Geographic criteria. We focus on developing client relationships with companies that have headquarters and/or significant operations within our primary markets.

The table below shows the composition of our commercial loan and lease portfolios based upon the states where our borrowers are located. Loans and leases to borrowers located in our four primary market states made up 8583.40% of our total commercial loans outstanding as of December 31, ~~2020~~2021. When those loans are aggregated with our loans to borrowers located in states that are contiguous to our primary market states, the percentage increases to approximately 9088.35% of our commercial loan and lease portfolio. ~~Loans in contiguous and other states include loans to the financial intermediaries that have substantial deposits with us, and are a referral source for private banking loans.~~

(Dollars in thousands)	December 31, 2020		Percent of Total Commercial Loans
Geographic region of borrower:
Pennsylvania	$	1,224,768	35.7	%
New York	604,240		17.6	%
New Jersey	561,151		16.4	%
Ohio	537,032		15.7	%
Contiguous states	169,437		4.9	%
Other states	332,990		9.7	%
Total commercial loans and leases	$	3,429,618	100.0	%

Loans in contiguous and other states include loans to the financial intermediaries that have substantial deposits with us, and are a referral source for private banking loans.


(Dollars in thousands)	December 31, 2021		Percent of Total Commercial Loans
Geographic region of borrower:
Pennsylvania	$	1,368,082	35.3	%
New Jersey	634,324		16.4	%
New York	627,823		16.2	%
Ohio	585,009		15.1	%
Contiguous states	214,913		5.5	%
Other states	446,675		11.5	%
Total commercial loans and leases	$	3,876,826	100.0	%

Diversified lending approach. We are committed to maintaining a diversified loan and lease portfolio. We also concentrate on making loans and leases to businesses where we have or can obtain the necessary expertise to understand the credit risks commonly associated with the borrower’s industry. We generally avoid lending to businesses that would require a high level of specialized industry knowledge not present within the Bank.

Deposits

An important aspect of our business franchise is the ability to gather deposits and establish and grow meaningful relationships related to liquidity and treasury management customers. Deposits provide the primary source of funding for our lending activities. We offer traditional depository products including checking accounts, money market deposit accounts and certificates of deposit in addition to CDARS® and ICS® reciprocal products. We also offer cash management and treasury management services, including online balance reporting, online bill payment, remote deposit, liquidity services, wire and automated clearing house (“ACH”) services and collateral disbursement. Our deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to statutory limits.

As of December 31, ~~2020~~2021, non-brokered deposits represented approximately 91.17% of our total deposits. Our non-brokered deposit sources primarily include deposits from financial institutions, high-net-worth individuals, family offices, trust companies, wealth management firms, and corporations and their executives. We compete for deposits by offering a range of deposit products at competitive rates. We also attract deposits by offering customers a variety of cash management services. We maintain direct customer relationships with nearly all of our depositors that participate in CDARS® and ICS® reciprocal deposits.

The table below shows the balances of our deposit portfolio by type as of the dates indicated.

	December 31,						~~2020~~2021 Change from ~~2019~~2020
(Dollars in thousands)	~~2020~~2021			~~2019~~2020			Amount		Percent
Non-brokered deposits:
Noninterest-bearing checking accounts	$	456,426		$	356,102		$	100,324	28.2	%
Non-interest bearing checking accounts	$	776,256		$	456,426		$	319,830	70.1	%
Interest-bearing checking accounts	2,911,669			1,274,859			1,636,810		128.4	%
Interest bearing checking accounts	4,139,343			2,911,669			1,227,674		42.2	%
Money market deposit accounts	34,~~482~~905,~~381~~108			3,~~104~~482,~~565~~381			~~377~~1,~~816~~422,727		1240.29	%
Certificates of deposit	~~885~~728,~~310~~163			1885,~~132,477~~310			(~~247~~157,~~167~~147)		(2117.8)	%
Total non-brokered deposits	710,~~735~~548,~~786~~870			57,~~868~~735,~~003~~786			12,~~867~~813,~~783~~084		3136.84	%
Brokered deposits:
Interest-bearing checking accounts	157,165			123,405			33,760		27.4	%
Interest bearing checking accounts	179,180			157,165			22,015		14.0	%
Money market deposit accounts	~~445~~726,~~416~~985			~~322~~445,~~180~~416			~~123~~281,~~236~~569		3863.32	%
Certificates of deposit	~~150~~49,~~722~~354			~~321~~150,~~025~~722			(~~170~~101,~~303~~368)		(5367.03)	%
Total brokered deposits	~~753~~955,~~303~~519			~~766~~753,~~610~~303			~~(13~~202,~~307)~~216		(126.7)8	%
Total deposits	$	811,~~489~~504,~~089~~389		$	68,~~634~~489,~~613~~089		$	13,~~854~~015,~~476~~300	2835.05	%
Non-brokered deposits to total deposits	91.17		%	8891.41		%

Investment Management Products

Chartwell Investment Partners manages $1011.2684 billion in a variety of equity and fixed income investment styles, for over 250 institutional investors, mutual funds and individual investors as of December 31, ~~2020~~2021. A description of each investment style is provided below.

Equity Investment Strategies:

•Small Cap Value: Chartwell’s Small Cap Value portfolio employs a traditional value style supplemented with both deep and relative value stocks. Our opportunity set is selected using multiple valuation yardsticks and focuses heavily on company valuation relative to history. Portfolio decisions result from business reviews assessing the prospects of erasing these valuation discounts with a focus on fundamental and event-driven catalysts which we believe the market should recognize. The portfolio aims to be well diversified across all economic sectors and exhibit better growth, profitability and financial strength characteristics than the small cap value benchmark. Our objective is to outperform small cap value benchmarks over the long term while producing lower risk scores versus peers.

•Mid Cap Value: Chartwell’s Mid Cap Value portfolio employs a traditional value style supplemented with both deep and relative value stocks, similar to Chartwell’s Small Cap Value strategy. Our objective is to outperform mid cap value benchmarks over the long term while producing lower risk scores versus peers.

•SMID Cap Value: For clients in our SMID Cap Value portfolio, we invest in a select set of value oriented companies with small to mid-market caps focused on securities held in Chartwell’s Small Cap Value and Mid Cap Value portfolios.

•Small Cap Growth: Our Small Cap Growth portfolio invests in a select set of small growth oriented companies that have demonstrated strong increases in earnings per share. More significantly, we look to invest in companies that have historically continued to broaden, deepen and enhance their fundamental capabilities, competitive positions, product and service offerings and customer bases. Our plan is to invest in these companies for an intermediate time horizon. Our portfolios focus on a narrow set of such investments.

•SMID Cap Value: For clients in our SMID Cap Value portfolio we invest in a select set of value oriented companies with small to mid-market caps focused on securities held in Chartwell’s Small Cap Value and Mid Cap Value portfolios.

•Dividend Value: The objective of our Dividend Value strategy is to deliver investment returns that exceed the Russell 1000 Value index over a full market cycle by focusing on stocks with above-average dividend yields. We invest in the highest 40% of dividend-yielding stocks to take advantage of the attractive risk-return characteristics of this subset. A secondary consideration is the inclusion of companies that raise their dividends on a consistent basis. Finally, we employ a valuation overlay that we believe enhances total returns and aids in downside protection.

•Covered Call: The objective of our Covered Call strategy is to provide market-like returns in rising equity markets while earning superior returns in flat or down equity markets. We combine a portfolio of higher yielding stocks with a disciplined covered call strategy to provide a lower volatility total return solution for clients. Our focus is on creating a well -diversified portfolio of stocks that we believe are undervalued relative to their strong and/or improving fundamentals. The addition of a tactical and flexible call overwriting strategy seeks to provide additional cash flow and reduced volatility of returns.

13•Large Cap Growth: The objective of our Large Cap Growth strategy is to help clients outperform benchmarks by owning a diversified portfolio of Premier Growth companies. These are businesses that possess some or all of the following characteristics: large and growing total addressable markets, superior products or services, and sustainable competitive advantages. We seek to hold positions in these companies when doing so is likely to generate significant long term capital appreciation.

portfolio of stocks which we believe are undervalued relative to their strong and/or improving fundamentals. The addition of a tactical and flexible call overwriting strategy seeks to provide additional cash flow and reduced volatility of returns.

•Large Cap Growth: The objective of our Large Cap Growth strategy is to help clients outperform benchmarks by owning a diversified portfolio of Premier Growth companies. These are businesses that possess some or all of the following characteristics; large and growing total addressable markets, superior products or services, and sustainable competitive advantages. We seek to hold positions in these companies when doing so is likely to generate significant long term capital appreciation.

Fixed Income Investment Strategies:

•Intermediate/Core/Short Duration Fixed Income: Chartwell'’s philosophy of investment grade fixed income management stresses security selection, preservation of principal, and compounding of the income stream as keys to consistently add value in the bond market. We focus our research efforts in the corporate sector of the market. Because the return potential of any bond tends to be asymmetric, with limited capital appreciation potential, but considerably greater capital loss potential, - Chartwell targets high quality credits with stable-to improving profiles.

•Core Plus Fixed Income: With flexibility to adjust to each client’s specific guidelines, Chartwell’s Core Plus product invests across both the U.S. Investment Grade and High Yield markets. By strategically expanding our credit-driven, valued-based opportunity set, the portfolio is able to take advantage of Chartwell’s broad ranging corporate bond expertise and to benefit from the potential for increased income, total return and diversification.

•High Yield Fixed Income: Chartwell's philosophy of high yield bond management stresses preservation of principal and compounding of the income stream as keys to adding value in the high yield bond market. In evaluating investment candidates our perspective is that of a lender. We focus on the higher quality tiers of the market, which offer an attractive yield premium but a lower incidence of credit erosion relative to the market as a whole. Chartwell believes that the consistent application of high credit standards and strict trading disciplines is the most predictable route to outperformance in the high yield bond market.14

•~~Short Duration BB-Rated~~ High Yield Fixed Income: Chartwell'’s philosophy of high yield bond management stresses preservation of principal and compounding of the income stream as keys to adding value in the high yield bond market. ~~Again,~~In evaluating investment candidates our ~~focus~~perspective is that of a lender. We focus on the higher quality tiers of the market, which offer an attractive yield premium but a lower incidence of credit erosion relative to the market as a whole. WeChartwell ~~focus~~believes onthat ~~duration~~the consistent application of ~~less~~high ~~than~~credit ~~three~~standards ~~years~~and ~~with~~strict ~~maximum~~trading ~~maturities~~disciplines ofis ~~five~~the ~~years~~most predictable route to outperformance in the high yield bond market.

•Short Duration BB-Rated High Yield Fixed Income: Chartwell’s philosophy of high yield bond management stresses preservation of principal and compounding of the income stream as keys to adding value in the high yield bond market. Again, our focus is on the higher quality tiers of the market, which offer an attractive yield premium but a lower incidence of credit erosion relative to the market as a whole. We focus on duration of less than three years with maximum maturities of five years.

Balanced Investment Strategies:

•Conservative Allocation: The Conservative Allocation strategy is managed utilizing Chartwell’s value-oriented security selection process and includes the ~~Berwyn~~Chartwell Income Fund as one of its main products. While the majority of funds managed under this strategy are invested in bonds, it may invest up to 30% of its assets in dividend-paying common stocks. We believe the fund’s balanced, income-oriented approach may afford a greater level of price stability than an all equity portfolio.

Our total assets under management of $1011.2684 billion increased $~~562~~1.058 ~~million~~billion, or 515.84%, as of December 31, ~~2020~~2021, from $910.7026 billion as of December 31, ~~2019~~2020. We reported new business and new flows from existing accounts and acquired assets of $12.7311 billion and market appreciation of $~~410~~1.006 ~~million~~billion, partially offset by outflows of $1.5759 billion during the year ended December 31, ~~2020~~2021.

The following table shows the changes of our assets under management by investment style for the year ended December 31, ~~2020~~2021.

Year Ended December 31, 2020

Year Ended December 31, 2021

(Dollars in thousands)

Beginning Balance

Inflows (1)

Outflows (2)

Market Appreciation (Depreciation)

Ending Balance

Equity investment styles

34,~~932~~042,000

~~608~~431,000

(~~663~~970,000)

~~165~~951,000

4,~~042~~454,000

Fixed income investment styles

45,~~816~~663,000

1,~~081~~628,000

(~~483~~494,000)

~~249~~72,000

56,~~663~~869,000

Balanced investment styles

~~953~~558,000

3749,000

(~~428~~123,000)

(437,000)

~~558~~521,000

Total assets under management

910,~~701~~263,000

12,~~726~~108,000

(1,~~574~~587,000)

~~410~~1,060,000

1011,~~263~~844,000

(1)Inflows consist of new business and contributions to existing accounts.

(2)Outflows consist of business lost as well as distributions from existing accounts.

Competition

We operate in a very competitive industry and face significant competition for customers from bank and non-bank competitors, particularly regional and national institutions, in originating loans, attracting deposits and providing other financial services. We compete for loans and deposits based upon the personal and responsive service offered by our highly experienced relationship managers, access to management and interest rates. As a result of our low operating costs, we believe we are able to compete for customers with the competitive interest rates that we pay on deposits and that we charge on our loans.

Our most direct competition for deposits comes from commercial banks, savings and loan associations, credit unions, money market funds and brokerage firms, particularly national and large regional banks, many of which target the same customers as we do. With respect to our deposits from treasury management, competition is mainly based on sophistication and reliability of service, experience and expertise with our clients’ businesses, and fee structure. Competition for other deposit products is generally based on length and depth of relationship, comfort with the bank, and pricing. Our cost of funds fluctuates with market interest rates and our ability to further reduce our cost of funds may be affected by higher rates being offered by other financial institutions. During certain interest rate environments, additional significant competition for deposits may be expected to arise from corporate and government debt securities and money market mutual funds.

Our competition in making commercial loans comes principally from national, regional and large community banks and insurance companies. Many large national and regional commercial banks have a significant number of branch offices in the areas in which we operate. Competition for our private banking loans is more limited than for commercial loans due largely to our niche offering of loans backed by cash, marketable securities and/or or cash value life insurance, which represent 5863% of our entire loan portfolio~~. Aggressive~~ ~~pricing~~as ~~policies and terms~~ of our competitors on middle-market and private banking loans may result in a decrease in our loan origination volume and a decrease in our yield on loans. We compete for loans principally through the quality of products and service we provide to middle-market customers, financial services firms, and private banking referral relationships, while maintaining competitive interest rates, loan fees and other loan terms.

December 31, 2021. Aggressive pricing policies and terms of our competitors on middle-market and private banking loans may result in a decrease in our loan origination volume and a decrease in our yield on loans. We compete for loans principally through the quality of products and service we provide to middle-market customers, financial services firms, and private banking referral relationships, while maintaining competitive interest rates, loan fees and other loan terms.

Our relationship-based approach to business also enables us to compete with other financial institutions in attracting loans and deposits. Our relationship managers and regional presidents have significant experience in the banking industry in the markets they serve and are focused on customer service. By capitalizing on this experience and by tailoring our products and services to the specific needs of our clients, we have been successful in cultivating stable relationships with our customers and also with financial intermediaries who refer their clients to us for banking services. We believe our approach to customer relationships will assist us in continuing to compete effectively for loans and deposits in our primary markets and nationally through our private banking channel.

The investment management business is intensely competitive. In the markets where we compete, there are over 1,000 firms which we consider to be primary competitors. In addition to competition from other institutional investment management firms, Chartwell, along with the active-management industry, competes with passive index funds, exchange traded funds (“ETFs”) and investment alternatives such as hedge funds. We compete for investment management business by delivering excellent investment performance with a committed customer service model.

Employees and Human Capital Resources

As of December 31, ~~2020~~2021, we had ~~308~~361 full-time employees with ~~255~~308 in our bank segment and 53 in our investment management segment. During ~~2020~~2021, our voluntary turnover rate was 67.58%. We consider our employee relations to be very good, and we aspire to keep them exceptional. Our employees are not represented by a collective bargaining unit.

Compensation and Benefits

We endeavor to create an environment based in fairness, respect, and equal opportunity that encourages high-performance; provides challenging opportunities; promotes safety and well-being; fosters diversity and new thought; and rewards execution. We focus on attracting, developing, and retaining a team of exceptionally talented and motivated employees. We conduct regular assessments of our compensation and benefits practices and pay levels to help ensure that employees are compensated competitively and fairly. We provide every full-time employee the ability to participate in comprehensive benefits programs, including paid time off, company-paid health insurance and medical concierge services, § 401(k) plan with a company funded matching program, and company-paid identity theft protection.

Health, Safety, and Wellness

The safety, health and wellness of our employees is always a top priority for us. We know that the ~~well-being~~success of our business is intricately tied to the well-being of our team. We have always approached this priority with a holistic approach, focused on physical, mental, and financial health, and continuously review existing and potential programming and the evolving needs of our team. We strongly encourage work-life balance, minimize the employee portion of health care premiums and sponsor a medical concierge service that provides healthcare education and support from personal consultants designed to help employees and their families navigate their healthcare experience.

15In response to the COVID-19 pandemic, we used this holistic approach to craft our strategy and execution. We promptly initiated remote work plans to enhance the health environment within our offices and mitigate against transmission of the virus by significantly reducing the number of employees working on-site. As an essential business, we retained an in-office-work environment, and took many initiatives to promote the health and well-being of those in our offices, including continuous enhanced cleaning, paid on-site parking, delivered lunches, and access to on-site nurses in our offices with mandatory temperature checks. In consideration the financial health of our team during this time, we established enhanced benefit programs to address expenses tied to balancing work with life under quarantine conditions, including stipends for employees working in our offices as well as working from home to assist in that transition, which we ultimately made permanent through salary increases. We also formed a COVID-19 steering team to advise on the Company’s overall response to the pandemic, including developing and monitoring mitigation strategies; tracking relevant national, state and local government guidelines, directives and regulations; and assessing appropriate work-in-office protocols.

The success of our business is fundamentally connected to the well-being of our employees. On an ongoing basis, we promote the physical, mental, and financial health and wellness of our employees, including through strongly encouraging work-life balance, minimizing the employee portion of health care premiums and sponsoring a medical concierge service that provides healthcare education and support from personal consultants designed to help employees and their families navigate their healthcare experience.

In response to the COVID-19 pandemic, we used this holistic approach to craft our strategy and execution. We promptly initiated remote work plans to enhance the health environment within our offices and mitigate against transmission of the virus through significantly reducing the number of employees working on-site. As an essential business, we retained an in-office-work environment, and took many initiatives to promote the health and well-being of those in our offices, including continuous enhanced cleaning, paid on-site parking, delivered lunches, and access to on-site nurses in our offices with mandatory temperature checks. When considering the financial health of our team during this time, we established enhanced benefit programs to address expenses tied to balancing work with life under quarantine conditions, including stipends for employees working in our offices as well as working from home to assist in that transition, which we ultimately made permanent through salary increases. We also formed a COVID-19 steering team to advise on the Company’s overall response, including developing and monitoring mitigation; tracking relevant national, state and local government guidelines, directives and regulations; and assessing appropriate work-in-office protocols.

Diversity and Inclusion

We are committed to maintaining a diverse and inclusive workforce and culture. To foster this goal, we focus on promoting a culture that leverages the talents of all employees, as well as implementing practices that attract, develop, and retain diverse talent. For example, we are a member of Vibrant Pittsburgh, an economic development nonprofit that seeks to accelerate the growth rate of diverse workers in the Pittsburgh region, and we continue to pursue similar opportunities where we have our loan production offices.

Supervision and Regulation

The following is a summary of material laws, rules and regulations governing banks, investment management businesses and bank holding companies, but does not purport to be a complete summary of all applicable laws, rules and regulations. These laws and regulations may change from time to time and the regulatory agencies often have broad discretion in interpreting them. We cannot predict the outcome of any future changes to these laws, regulations, regulatory interpretations, guidance and policies, which may have a material and adverse impact on the financial markets in general, and our operations and activities, financial condition, results of operations, growth plans and future prospects.

General

The common stock and preferred stock of TriState Capital Holdings, Inc. is publicly traded and listed and, as a result, we are subject to securities laws and stock market rules, including oversight from the Securities and Exchange Commission (“SEC”) and the Nasdaq Stock Market Rules. Banking is highly regulated under federal and state law. Regulation and supervision by the federal and state banking agencies are intended primarily for the protection of depositors, the Deposit Insurance Fund (“DIF”) administered by the FDIC, consumers and the banking system as a whole, and not for the protection of our investors. We are a bank holding company registered under the Bank Holding Company Act of 1956, as amended, and are subject to supervision, regulation and examination by the Federal Reserve. TriState Capital Bank is a commercial bank chartered under the laws of the Commonwealth of Pennsylvania. It is not a member of the Federal Reserve System and is subject to supervision, regulation and examination by the Pennsylvania Department of Banking and Securities and the FDIC.

~~Our~~Banking ~~investment management business~~ is ~~subject~~highly toregulated ~~extensive~~under ~~regulation~~federal inand ~~the~~state ~~United States~~law. ~~Chartwell~~Regulation and ~~CTSC~~supervision ~~Securities~~by ~~are~~the ~~subject~~federal toand ~~Federal~~state ~~securities~~banking ~~laws,~~agencies ~~principally~~are ~~the~~intended ~~Securities~~primarily ~~Act~~for the protection of ~~1933~~depositors, the ~~Investment~~Deposit ~~Company~~Insurance ~~Act~~Fund of(“DIF”) ~~1940~~administered by the FDIC, consumers and the ~~Investment~~banking ~~Advisers~~system ~~Act~~as ofa ~~1940~~whole, ~~state~~and ~~laws~~not ~~regarding~~for ~~securities~~the ~~fraud~~protection ~~and~~of ~~regulations~~our ~~and~~investors. We ~~rules~~are ~~promulgated~~a bybank ~~various~~holding ~~regulatory~~company ~~authorities,~~registered ~~including~~under the ~~SEC,~~Bank ~~Financial~~Holding ~~Industry~~Company ~~Regulatory~~Act ~~Authority~~of ~~(“FINRA”)~~1956, ~~state~~as ~~regulators~~amended, and ~~stock~~are ~~exchanges. With~~subject ~~respect~~ to ~~certain~~supervision, ~~derivative~~regulation ~~products,~~and ~~our~~examination ~~investment~~by ~~management~~the ~~business~~Federal ~~also~~Reserve. TriState ~~may~~Capital beBank ~~subject~~is toa ~~regulation~~commercial bybank chartered under the ~~U.S.~~laws ~~Commodity~~of ~~Futures~~the ~~Trading~~Commonwealth ~~Commission~~of ~~(“CFTC”)~~Pennsylvania. It ~~and~~is not a member of the ~~National~~Federal ~~Futures~~Reserve ~~Association~~System ~~(“NFA”). Changes~~and inis ~~laws~~subject to supervision, ~~regulations~~regulation orand ~~governmental~~examination ~~policies,~~by ~~both~~the ~~domestically~~Pennsylvania Department of Banking and ~~abroad,~~Securities (the “PDBS”) and the ~~costs~~FDIC. The ~~associated~~Consumer ~~with~~Financial ~~compliance,~~Protection ~~could~~Bureau ~~materially~~(“CFPB”) ~~and~~examines ~~adversely~~the ~~affect~~Bank ~~our~~for ~~business,~~compliance ~~results~~with offederal ~~operations,~~consumer ~~financial~~protection ~~condition~~laws and~~/or~~ ~~cash flows~~regulations.

Our investment management business is subject to extensive regulation in the United States. Chartwell and CTSC Securities are subject to federal securities laws, principally the Securities Act of 1933, the Investment Company Act of 1940, the Investment Advisers Act of 1940, state laws regarding securities fraud and regulations and rules promulgated by various regulatory authorities, including the SEC, the Financial Industry Regulatory Authority, Inc. (“FINRA”), state regulators and stock exchanges. With respect to certain derivative products, our investment management business also may be subject to regulation by the U.S. Commodity Futures Trading Commission (“CFTC”) and the National Futures Association (“NFA”). Changes in laws, regulations or governmental policies, both domestically and abroad, and the costs associated with compliance, could materially and adversely affect our business, results of operations, financial condition and/or cash flows.

This system of supervision and regulation establishes a comprehensive framework for our operations. Failure to meet regulatory standards could have a material and adverse impact on our operations and activities, financial condition, results of operations, growth plans and future prospects.

Regulatory Developments

The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), enacted in 2010, has resulted in broad changes to the U.S. financial system where its provisions have resulted in enhanced regulation and supervision of the financial services industry. In May 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act (“EGRRCPA”) was signed into law. While the EGRRCPA preserves the fundamental elements of the post Dodd-Frank regulatory framework, it includes modifications that are intended to result in meaningful regulatory relief for smaller and certain regional banking organizations.

Over several years the Department of Labor (“DOL”) developed a rule governing the circumstances in which a person rendering investment advice with respect to an employee benefit plan under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), would be treated as a fiduciary for the recipient of the advice. DOL finalized a regulation in 2016, but extended the effective date, and the U.S. Court of Appeals for the Tenth Circuit effectively vacated the rule in 2018. In December 2020, the DOL finalized a new fiduciary regulation that becomes fully effective in February ~~2021~~2022. A ~~comparable~~similar rule, issued by the SEC, popularly known as Regulation BI, for best interest took effect in June 2020. These regulations will affect our investment advisory business, but we cannot predict the nature or extent of these effects at this time, or whether these regulations will change in the future.

Regulatory Capital Requirements

Capital adequacy. The Federal Reserve monitors the capital adequacy of our holding company, on a consolidated basis, and the FDIC and the ~~Pennsylvania~~PDBS ~~Department of Banking and Securities~~ monitor the capital adequacy of TriState Capital Bank. The regulatory agencies use a combination of risk-based ratios and a leverage ratio to evaluate capital adequacy and consider these capital levels when taking action on various types of applications and when conducting supervisory activities related to safety and soundness. The current capital rules, which began to take effect for us in 2015, are popularly known as the Basel III Capital Rules because they are based on international standards known as Basel III. The risk-based capital standards are designed to make regulatory capital requirements more sensitive to differences in risk profiles among banking institutions and their holding companies, to account for off-balance sheet exposure, and to minimize disincentives for holding liquid assets. Assets and off-balance sheet items, such as letters of credit and unfunded loan commitments, are assigned to broad risk categories, each with appropriate risk weights. Regulatory capital, in turn, is classified into three “tiers” of capital. Common Equity Tier 1 capital (“CET 1”) includes common equity, retained earnings, and minority interests in equity accounts of consolidated subsidiaries, less goodwill, most intangible assets and certain other assets. Additional “Tier 1” capital includes, among other things, qualifying non-cumulative perpetual preferred stock. “Tier 2” capital includes, among other things, qualifying subordinated debt and allowances for credit losses, subject to limitations. Total capital is the total of all three tiers. The resulting capital ratios represent capital as a percentage of average assets or total risk-weighted assets, including off-balance sheet items.

In the meantime, the Basel III Capital Rules require banks and bank holding companies generally to maintain four minimum capital standards to be “adequately capitalized”: (1) a tier 1 capital to total average assets ratio (“tier 1 leverage capital ratio”) of at least 4%; (2) a common equity tier 1 capital to risk-weighted assets ratio (“CET 1 risk-based capital ratio”) of at least 4.5%; (3) a tier 1 capital to risk-weighted assets ratio (“tier 1 risk-based capital ratio”) of at least 6%; and (4) a total risk-based capital to risk-weighted assets ratio (“total risk-based capital ratio”) of at least 8%. These capital requirements are minimum requirements. Higher capital levels may be required if warranted by the particular circumstances or risk profiles of individual institutions, or if required by the banking regulators due to the economic conditions impacting our primary markets. For example, FDIC regulations provide that higher capital may be required to take adequate account of, among other things, interest rate risk and the risks posed by concentrations of credit, nontraditional activities or securities trading activities.17

The risk-based capital standards are designed to make regulatory capital requirements more sensitive to differences in risk profiles among banking institutions and their holding companies, to account for off-balance sheet exposure, and to minimize disincentives for holding liquid assets. Assets and off-balance sheet items, such as letters of credit and unfunded loan commitments, are assigned to broad risk categories, each with appropriate risk weights. Regulatory capital, in turn, is classified into three categories of capital. Common Equity Tier 1 capital (“CET 1”) includes common equity, retained earnings, and minority interests in equity accounts of consolidated subsidiaries, less goodwill, most intangible assets and certain other assets. Additional “Tier 1” capital includes, among other things, qualifying non-cumulative perpetual preferred stock. “Tier 2” capital includes, among other things, qualifying subordinated debt and allowances for credit losses, subject to limitations. Total risk-based capital is the total of all three categories. The resulting capital ratios represent capital as a percentage of average assets or total risk-weighted assets, including off-balance sheet items.

The Basel III Capital Rules require banks and bank holding companies generally to maintain four minimum capital standards to be “adequately capitalized”: (1) a tier 1 capital to total average assets ratio (“tier 1 leverage capital ratio”) of at least 4%; (2) a common equity tier 1 capital to risk-weighted assets ratio (“CET 1 risk-based capital ratio”) of at least 4.5%; (3) a tier 1 capital to risk-weighted assets ratio (“tier 1 risk-based capital ratio”) of at least 6%; and (4) a total risk-based capital to risk-weighted assets ratio (“total risk-based capital ratio”) of at least 8%. These capital requirements are minimum requirements. Higher capital levels may be required if warranted by the particular circumstances or risk profiles of individual institutions, or if required by the banking regulators due to the economic conditions impacting our primary markets. For example, the Basel III Capital Rules provide that higher capital may be required to take adequate account of, among other things, a bank’s or bank holding company’s credit, market, operational, or other risks.

In addition, the Basel III Capital Rules subject a banking organization to certain limitations on capital distributions and discretionary bonus payments to executive officers if the organization does not maintain a capital conservation buffer (a ratio of CET1 to total risk-based assets of at least 2.5% on top of the minimum risk-based capital requirements). The implementation of the capital conservation buffer began on January 1, 2016, and the full 2.5% requirement took effect on January 1, 2019. As a result, the Company and the Bank must meet or exceed the following capital ratios to satisfy the Basel III Capital Rule requirements and to avoid the limitations on capital distributions and discretionary bonus payments to executive officers:

•tier 1 leverage ratio of 4.0%;

•CET1 risk-based capital ratio of 7.0%;

•tier 1 risk-based capital ratio of 8.5%; and

•total risk-based capital ratio toof 10.5%.

When assets are risk weighted for the purpose of the risk-based capital ratios, the Basel III Capital Rules present a large number of risk weight categories, depending on the nature of the assets, generally ranging from 0% for U.S. government and agency securities, to 600% for certain equity exposures. These categories may result in higher risk weights than under the earlier rules for a variety of asset classes, including certain commercial real estate mortgages. Additional aspects of the Basel III Capital Rules that have particular relevance to us include:

•a formula-based approach, referred to as the collateral haircut approach, to determine the risk weight of eligible margin loans collateralized by liquid and readily marketable debt or equity securities, where the collateral is marked to fair value daily, and the transaction is subject to daily margin maintenance requirements;

•consistent with the prior risk-based capital rules, assigning exposures secured by single family residential properties to either a 50% risk weight for first-lien mortgages that meet prudential underwriting standards or a 100% risk weight category for all other mortgages;

•providing for a 20% credit conversion factor for the unused portion of a commitment with an original maturity of one year or less that is not unconditionally cancellable (previously set at 0%);

•assigning a 150% risk weight to all exposures that are non-accrual or 90 days or more past due (previously set at 100%), except for those secured by single family residential properties, which will be assigned a 100% risk weight, consistent with the prior risk-based capital rules;

•applying a 150% risk weight instead of a 100% risk weight for certain high volatility commercial real estate loans for acquisition, development and construction; and

•the option to use a formula-based approach referred to as the simplified supervisory formula approach to determine the risk weight of various securitization tranches in addition to the previous “gross-up” method (replacing the credit ratings approach for certain securitization).

Further, under the Dodd-Frank Act, the federal banking agencies adopted new capital requirements to address the risks that the activities of an institution poses to the institution and the public and private stakeholders, including risks arising from certain enumerated activities. Capital guidelines may continue to evolve and may have material impacts on us or our banking subsidiary.

Under the EGRRCPA and implementing regulations of the federal banking agencies, certain banking organizations with less than $10 billion in assets may elect to satisfy a single Community Bank Leverage Ratio (“CBLR”) in lieu of the generally applicable minimum capital requirements that apply under the Basel III Capital Rules. We and TriState Capital Bank have not elected to use the CBLR framework.

In the first quarter of 2020, U.S. federal regulatory authorities issued an interim final rule that provides banking organizations that adopt CECL during the 2020 calendar year with the option to delay the impact of CECL on regulatory capital for up to two years (beginning January 1, 2020), followed by a three-year transition period. Due to the delayed implementation of CECL under the CARES Act, the Company will be eligible and has elected to utilize the two-year delay of CECL’s impact on its regulatory capital (from January 1, 2020 through December 31, 2021) followed by the three-year transition period of CECL impact on regulatory capital (from January 1, 2022 through December 31, 2024).

Based on our calculations, we expect that TriState Capital Holdings, Inc. and TriState Capital Bank will continue to meet all minimum capital requirements, inclusive of the capital conservation buffer, without material adverse effects on our business. However, the capital rules may continue to evolve over time and future changes may have a material adverse effect on our business. Failure to meet capital guidelines could subject us to a variety of enforcement remedies, including issuance of a capital directive, a prohibition on accepting brokered deposits, other restrictions on our business and the termination of deposit insurance by the FDIC.

Prompt corrective action regulations. Under the prompt corrective action regulations, the FDIC is required and authorized to take supervisory actions against undercapitalized insured depository institutions. For this purpose, a bank is placed in one of the following five categories based on its capital level: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized.”

Under the current prompt corrective action provisions of the FDIC, after adopting the Basel III Capital rules, an insured depository institution generally will be classified in the following categories based on the capital measures indicated:

“Well capitalized”			“Adequately capitalized”
Tier 1 leverage ratio of at least 5%,			Tier 1 leverage ratio of at least 4%,
CET 1 risk-based ratio of at least 6.5%,			CET 1 risk-based ratio of at least 4.5%,
Tier 1 risk-based ratio of at least 8%,			Tier 1 risk-based ratio of at least 6%, and
Total risk-based ratio of at least 10%, and			Total risk-based ratio of at least 8%
Not subject to written agreement, order, capital directive or prompt corrective action directive that requires a specific capital level.
“Undercapitalized”			“Significantly undercapitalized”
Tier 1 leverage ratio less than 4%,			Tier 1 leverage ratio less than 3%,
CET 1 risk-based ratio less than 4.5%,			CET 1 risk-based ratio less than 3%,
Tier 1 risk-based ratio less than 6%, or			Tier 1 risk-based ratio less than 4%, or
Total risk-based ratio less than 8%			Total risk-based ratio less than 6%
“Critically undercapitalized”
Tangible equity to total assets less than 2%
Tangible equity to total assets equal to or less than 2%

Various consequences flow from a bank’s prompt corrective action category. A bank that is adequately capitalized but not well capitalized must obtain a waiver from the FDIC in order to continue to accept, renew or roll over brokered deposits. Federal banking regulators are required to take various mandatory supervisory actions and are authorized to take other discretionary actions with respect to institutions in the three undercapitalized categories. The severity of the action depends upon the capital category in which the institution is placed. Subject to a narrow exception, banking regulators must appoint a receiver or conservator for an institution that is critically undercapitalized. An institution that is categorized as undercapitalized, significantly undercapitalized, or critically undercapitalized is required to submit an acceptable capital restoration plan to its appropriate federal banking agency. An undercapitalized institution also is generally prohibited from increasing its average total assets, making acquisitions, establishing any branches or engaging in any new ~~line~~lines of business, except under an accepted capital restoration plan or with FDIC approval. The regulations also establish procedures for downgrading an institution to a lower capital category based on supervisory factors other than capital.

A bank holding company must guarantee that a subsidiary bank performs under a capital restoration plan, including an obligation to contribute capital to the bank up to the lesser of 5% of an “undercapitalized” subsidiary bank’s assets at the time it became “undercapitalized” or the amount required to meet regulatory capital requirements.

The prompt corrective action classification of a bank affects the frequency of regulatory examinations, the bank’s ability to engage in certain activities and the deposit insurance premiums paid by the bank. As of December 31, ~~2020~~2021, TriState Capital Bank met the requirements to be categorized as “well capitalized” based on the aforementioned ratios for purposes of the prompt corrective action regulations.

Source of Strength Doctrine for Bank Holding Companies

Under longstanding Federal Reserve policy which has been codified by the Dodd-Frank Act, we are ~~expected~~required to act as a source of financial strength to, and to commit resources to support, TriState Capital Bank. This support may be required at times when we may not be inclined to provide it. In addition, any capital loans that we make to TriState Capital Bank are subordinate in right of payment to deposits and to certain other indebtedness of TriState Capital Bank. In the event of our bankruptcy, any commitment by us to a federal bank regulatory agency to maintain the capital of TriState Capital Bank will be assumed by the bankruptcy trustee and entitled to a priority of payment. These obligations are in addition to the performance guaranty we must provide in the event that TriState Capital Bank is required to develop a capital restoration plan under prompt corrective action.

Acquisitions by Bank Holding Companies

We must obtain the prior approval of the Federal Reserve before: (1) acquiring more than five percent of the voting stock of any bank or other bank holding company; (2) acquiring all or substantially all of the assets of any bank or bank holding company; or (3) merging or consolidating with any other bank holding company. The Federal Reserve may determine not to approve any of these transactions if it would result in or tend to create a monopoly or substantially lessen competition or otherwise function as a restraint of trade, unless the anticompetitive effects of the proposed transaction are clearly outweighed by the public interest in meeting the convenience and needs of the community to be served. The Federal Reserve also may not approve a transaction in which the resulting institution would hold a share of state or nationwide deposits in excess of certain caps. The Federal Reserve is also required to consider the financial condition and managerial resources and future prospects of the bank holding companies and banks concerned, the convenience and needs of the community to be served, whether the transaction would result in greater or more concentrated risks to the stability of the United States banking or financial system, and the records of a bank holding company and its subsidiary bank(s) in compliance with applicable banking, consumer protection, and anti-money laundering laws.

trade, unless the anticompetitive effects of the proposed transaction are clearly outweighed by the public interest in meeting the convenience and needs of the community to be served. The Federal Reserve also may not approve a transaction in which the resulting institution would hold a share of state or nationwide deposits in excess of certain caps. The Federal Reserve is also required to consider the financial condition and managerial resources and future prospects of the bank holding companies and banks concerned, the convenience and needs of the community to be served, whether the transaction would result in greater or more concentrated risks to the stability of the United States banking or financial system, and the records of a bank holding company and its subsidiary bank(s) in compliance with applicable banking, consumer protection, and anti-money laundering laws.

Scope of Permissible Bank Holding Company Activities

In general, the Bank Holding Company Act limits the activities permissible for bank holding companies to the business of banking, managing or controlling banks and such other activities as the Federal Reserve has determined to be so closely related to banking as to be properly incident thereto.

A bank holding company may elect to be treated as a financial holding company if it and its depository institution subsidiaries are categorized as “well capitalized” and “well managed.” and if its depository institution subsidiaries have Community Reinvestment Act (“CRA”) records of at least “satisfactory.” A financial holding company may engage in a range of activities that are (1) financial in nature or incidental to such financial activity or (2) complementary to a financial activity and which do not pose a substantial risk to the safety and soundness of a depository institution or to the financial system generally. These activities include securities dealing, underwriting and market making, insurance underwriting and agency activities, merchant banking and insurance company portfolio investments. Expanded financial activities of financial holding companies generally will be regulated according to the type of such financial activity: banking activities by banking regulators, securities activities by securities regulators and insurance activities by insurance regulators. While we may determine in the future to ~~become~~elect a financial holding company status, we do not have an intention to make that election at this time.

The Bank Holding Company Act does not place territorial limitations on permissible non-banking activities of bank holding companies. The Federal Reserve has the power to order any bank holding company or its subsidiaries to terminate any activity or to terminate its ownership or control of any subsidiary when the Federal Reserve has reasonable grounds to believe that continuation of such activity or such ownership or control constitutes a serious risk to the financial soundness, safety or stability of any bank subsidiary of the bank holding company.

Dividends

As a bank holding company, we are subject to certain restrictions on dividends under applicable banking laws and regulations. The Federal Reserve has issued a policy statement that provides that a bank holding company should not pay dividends unless: (1) its net income over the last four quarters (net of dividends paid during that period) has been sufficient to fully fund the dividends; (2) the prospective rate of earnings retention appears to be consistent with the capital needs, asset quality and overall financial condition of the bank holding company and its subsidiaries; and (3) the bank holding company will continue to meet minimum required capital adequacy ratios. Accordingly, a bank holding company should not pay cash dividends that exceed its net income or that can only be funded in ways that weaken the bank holding company’s financial health, such as by borrowing. The Dodd-Frank Act and the Basel III Capital Rules impose additional restrictions on the ability of banking institutions to pay dividends, such as limits that come into play when the capital conservation buffer falls below the required ratio. In addition, in the current financial and economic environment, the Federal Reserve has indicated that bank holding companies should carefully review their dividend policy and has discouraged payment ratios that are at maximum allowable levels unless both asset quality and capital are very strong.

A part of our income could be derived from, and a potential material source of our liquidity could be, dividends from TriState Capital Bank. The ability of TriState Capital Bank to pay dividends to us is also restricted by federal and state laws, regulations and policies. Under applicable Pennsylvania law, TriState Capital Bank may only pay cash dividends out of its accumulated net earnings, subject to certain requirements regarding the level of surplus relative to capital.

Under federal law, TriState Capital Bank may not pay any dividend to us if the Bank is undercapitalized or the payment of the dividend would cause it to become undercapitalized. The FDIC may further restrict the payment of dividends by requiring TriState Capital Bank to maintain a higher level of capital than would otherwise be required for it to be adequately capitalized for regulatory purposes. Moreover, if, in the opinion of the FDIC, TriState Capital Bank is engaged in an unsafe or unsound practice (which could include the payment of dividends), the FDIC may require, generally after notice and hearing, the Bank to cease such practice. The FDIC has indicated that paying dividends that deplete a depository institution’s capital base to an inadequate level would be an unsafe banking practice.

Incentive Compensation Guidance

The federal banking agencies have issued comprehensive guidance intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of those organizations by encouraging excessive risk-taking. The incentive compensation guidance sets expectations for banking organizations concerning their incentive compensation arrangements and related risk-management, control and governance processes. In addition, under the incentive compensation guidance, a banking organization’s federal supervisor may initiate enforcement action if the organization’s incentive compensation arrangements pose a risk to the safety and soundness of the organization. Further, provisions of the Basel III regime described above limit discretionary bonus payments to bank and bank holding company executives if the institution’s regulatory capital ratios fail to exceed certain thresholds. The scope and content of the U.S. banking regulators’ policies on incentive compensation are likely to continue evolving. In 2016, the federal banking agencies, together with certain other federal agencies, proposed a regulation to limit certain incentive-based compensation arrangements that encourage inappropriate risks by banks, bank holding companies, and certain other financial institutions. We do not know whether and when the agencies will finalize this regulation, what the final requirements will be, and how a final rule would apply to institutions of our size.

Restrictions on Transactions with Affiliates and Loans to Insiders

Federal law strictly limits the ability of banks to engage in transactions with their affiliates, including their bank holding companies. Section 23A and 23B of the Federal Reserve Act, impose quantitative limits, qualitative standards, and collateral requirements on certain transactions by a bank with, or for the benefit of, its affiliates, and generally require those transactions to be on terms at least as favorable to the bank as transactions with non-affiliates. The Dodd-Frank Act significantly expands the coverage and scope of the limitations on affiliate transactions within a banking organization, including an expansion of the covered transactions to include credit exposures related to derivatives, repurchase agreements and securities lending arrangements and an increase in the amount of time for which collateral requirements regarding covered transactions must be satisfied.

Federal law also limits a bank’s authority to extend credit to its directors, executive officers and ~~10%~~principal shareholders, as well as to entities controlled by such persons. Among other things, extensions of credit to insiders are required to be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than, those prevailing for comparable transactions with unaffiliated persons. In addition, the terms of such extensions of credit may not involve more than the normal risk of repayment or present other unfavorable features and may not exceed certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of the bank’s capital. TriState Capital Bank maintains a policy that does not permit loans to employees, including executive officers.

FDIC Deposit Insurance Assessments

FDIC-insured banks are required to pay deposit insurance assessments to the FDIC, which fund the ~~Deposit Insurance Fund (“~~DIF”). An institution’s assessment rate is determined by a number of factors and metrics, including the weighted average of the ~~institutions~~institution’s CAMELS composite rating, and metrics to measure the institution’s ability to withstand asset-related stress and funding-related stress, and has different calculation methodologies for banks that are considered “large banks” for regulator examination purposes, which the Bank began implementing in the fourth quarter of 2020. The rate also may be adjusted by the institution’s long-term unsecured debt and its brokered deposits. In addition, the FDIC can impose special assessments in certain instances. The FDIC has in past years raised assessment rates to increase funding for the ~~Deposit Insurance Fund~~DIF.

All assessment rates may change based on the reserve ratio of the DIF. The Dodd-Frank Act changed the way that deposit insurance premiums are calculated, increased the minimum designated reserve ratio of the ~~Deposit~~DIF ~~Insurance Fund~~ from 1.15% to 1.35% of the estimated amount of total insured deposits, and eliminated the upper limit for the reserve ratio designated by the FDIC each year, and eliminates the requirement that the FDIC pay dividends to depository institutions when the reserve ratio exceeds certain thresholds. AsSince the outbreak of ~~September~~the 30COVID-19 pandemic, ~~2020~~the amount of total estimated insured deposits has grown very rapidly while the funds in the DIF have grown at a normal rate, causing the DIF’s reserve ratio ~~was~~to fall below the statutory minimum of 1.3035%. ~~Rates~~The ~~may~~FDIC beadopted ~~reduced~~a ifrestoration ~~this~~plan on September 15, 2020, to restore the DIF reserve ratio ~~rises~~to ~~above~~at 2least 1.035% orby 2September 30, 2028.~~5%.~~ WeUnder ~~cannot~~the ~~predict~~restoration ~~how~~plan, the FDIC will continue to closely monitor the factors that affect the DIF reserve ratio ~~may~~and ~~change~~maintain its current schedule of assessment rates. Any future changes in insurance premiums could have an adverse effect on the operating expenses and results of operations and we cannot predict what insurance assessment rates will be in the future.

Further increases in assessment rates or special assessments may occur in the future, especially if there are significant additional financial institution failures. Continued action by the FDIC to replenish and increase the ~~Deposit~~DIF ~~Insurance Fund,~~ as well as the changes contained in the Dodd-Frank Act, or changes in the assessment calculation methodologies, may result in higher assessment rates, which could reduce our profitability or otherwise negatively impact our operations, financial condition or future prospects.

Branching and Interstate Banking

TriState Capital Bank is permitted to establish branch offices within Pennsylvania, subject to the approval of the ~~Pennsylvania~~PDBS ~~Department of Banking~~ and ~~Securities and~~ the FDIC. The Bank is also permitted to establish additional offices outside of Pennsylvania, subject to prior regulatory approval.

TriState Capital Bank operates four representative offices, with one each located in the states of Pennsylvania, Ohio, New Jersey and New York. Because our representative offices are not branches for purposes of applicable state law and FDIC regulations, there are restrictions on the types of activities we may conduct through our representative offices. Relationship managers in our representative offices may solicit loan and deposit products and services in their markets and act as liaisons to our headquarters in Pittsburgh, Pennsylvania. However, consistent with our centralized operations and regulatory requirements, we do not disburse or transmit funds, accept loan repayments or accept or contract for deposits or deposit-type liabilities through our representative offices.

Community Reinvestment Act

TriState Capital Bank has a responsibility under the CRA, and related FDIC regulations to help meet the credit needs of its communities, including low-income and moderate-income borrowers. In connection with its ~~examination~~supervision of TriState Capital Bank, the FDIC is required to assess the Bank’s record of compliance with the CRA. The Bank’s failure to maintain a satisfactory record of CRA performance could result in denial of certain corporate applications, such as for branches or mergers, or in restrictions on its or our activities, including additional financial activities if we elect to be treated as a financial holding company.

CRA regulations provide that a financial institution may elect to have its CRA performance evaluated under the strategic plan option. The strategic plan enables the institution to structure its CRA goals and objectives to address the needs of its community consistent with its business strategy, operational focus, capacity and constraints. The Bank has operated under FDIC approved CRA Strategic Plans since January 1, 2013 and has maintained an Outstanding CRA rating since its first examination under a strategic plan in 2015.

The federal banking agencies have indicated their intent to engage in an interagency rulemaking process to modernize the CRA regulatory framework.

Financial Privacy

The federal banking and securities regulators have adopted rules that limit the ability of banks and other financial institutions to disclose non-public information about consumers to non-affiliated third parties. These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a non-affiliated third party. These regulations affect how consumer information is transmitted through financial services companies and conveyed to outside vendors. In addition, consumers may also prevent disclosure of certain information among affiliated companies that is assembled or used to determine eligibility for a product or service, such as that shown on consumer credit reports and asset and income information from applications. Consumers also have the option to direct banks and other financial institutions not to share information about transactions and experiences with affiliated companies for the purpose of marketing products or services. In addition to applicable federal privacy regulations, TriState Capital Bank is subject to certain state privacy laws.

conveyed to outside vendors. In addition, consumers may also prevent disclosure of certain information among affiliated companies that is assembled or used to determine eligibility for a product or service, such as that shown on consumer credit reports and asset and income information from applications. Consumers also have the option to direct banks and other financial institutions not to share information about transactions and experiences with affiliated companies for the purpose of marketing products or services. In addition to applicable federal privacy regulations, TriState Capital Bank is subject to certain state privacy laws.

Anti-Money Laundering and OFAC

Under federal law, including the Bank Secrecy Act (“BSA”) and the USA PATRIOT Act of 2001, certain financial institutions must maintain anti-money laundering programs that are reasonably designed to prevent and detect money laundering and terrorist financing, including enhanced scrutiny of account relationships, and to comply with the recordkeeping and reporting requirements of the BSA including the requirement to report suspicious activities. The programs are required to include established internal policies, procedures and controls; a designated compliance officer; an ongoing employee training program; and testing of the program by an independent audit function. Financial institutions are also prohibited from entering into specified financial transactions and account relationships and must meet enhanced standards for due diligence and customer identification in their dealings with foreign financial institutions and foreign customers. Law enforcement authorities also have been granted increased access to financial information maintained by financial institutions to investigate suspected money laundering or terrorist financing. The United States Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) and the federal banking agencies continue to issue regulations and guidance with respect to the application and requirements of the BSA and their expectations for effective anti-money laundering programs. The Anti-Money Laundering Act of 2020, which became law in January 2021, made a number of changes to anti-money laundering laws, including increasing penalties for anti-money laundering violations.

The United States Department of Treasury’s Office of Foreign Assets Control (“OFAC”) administers laws and Executive Orders that prohibit U.S. entities from engaging in transactions with certain prohibited parties. OFAC publishes lists of persons and organizations suspected of aiding, harboring or engaging in terrorist acts, known as Specially Designated Nationals and Blocked Persons. Generally, if a bank identifies a transaction, account or wire transfer relating to a person or entity on an OFAC list, it must freeze the account or block the transaction, file a suspicious activity report and notify the appropriate authorities.

Bank regulators routinely examine institutions for compliance with these obligations and they must consider an institution’s compliance in connection with the regulatory review of applications, including applications for bank mergers and acquisitions. Failure of a financial institution to maintain and implement adequate programs to combat money laundering and terrorist financing and comply with OFAC sanctions, or to comply with relevant laws and regulations, could have serious legal, reputational and financial consequences for the institution.

Safety and Soundness Standards

Federal bank regulatory agencies have adopted guidelines that establish general standards relating to internal controls and information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth and compensation, fees and benefits. Additionally, the agencies have adopted regulations that provide the authority to order an institution that has been given notice by an agency that it is not satisfying any of these safety and soundness standards to submit a compliance plan. If, after being so notified, an institution fails to submit an acceptable compliance plan or fails in any material respect to implement an acceptable compliance plan, the agency must issue an order directing action to correct the deficiency and may issue an order directing other actions of the types to which an undercapitalized institution is subject under the “prompt corrective action” provisions of the Federal Deposit Insurance Act. If an institution fails to comply with such an order, the agency may seek to enforce such order in judicial proceedings and to impose civil money penalties.

In addition to federal consequences for failure to satisfy applicable safety and soundness standards, the Pennsylvania Department of Banking and Securities Code grants the ~~Pennsylvania~~PDBS ~~Department of Banking and Securities~~ the authority to impose a civil money penalty of up to $25,000 per violation against a Pennsylvania financial institution, or any of its officers, employees, directors, or trustees for: (1) violations of any law or department order; (2) engaging in any unsafe or unsound practice; or (3) breaches of a fiduciary duty in conducting the institution’s business.

Bank holding companies are also prohibited from engaging in unsound banking practices. For example, the Federal Reserve’s Regulation Y requires a holding company to give the Federal Reserve prior notice of any redemption or repurchase of its own equity securities, if the consideration to be paid, together with the consideration paid for any repurchases in the preceding year, is equal to 10% or more of the company’s consolidated net worth. The Federal Reserve may oppose the transaction if it concludes that the transaction would constitute an unsafe or unsound practice or would violate any law or regulation. As another example, a bank holding company is forbidden from impairing its subsidiary bank’s soundness by causing it to make funds available to non-banking subsidiaries or their customers if the Federal Reserve deems it not prudent to do so. The Federal Reserve has broad authority to prohibit activities of bank holding companies and their nonbanking subsidiaries that present unsafe and unsound banking practices or that constitute violations of laws or regulations.

In addition to complying with the agencies’ written regulations, standards and guidelines, banks and bank holding companies are regularly examined for safety and soundness by their appropriate federal and state regulators. These examinations are extensive and cover many items, including loan concentrations. At the end of an examination, a bank is assigned ratings for capital, assets, management, earnings, liquidity, and sensitivity to market risk as well as on overall composite rating for these elements, commonly referred to as the CAMELS rating. The Federal Reserve makes comparable findings for bank holding companies. These ratings and the reports on which they are based are highly confidential and not available to the public.

Consumer Laws and Regulations

TriState Capital Bank is subject to numerous laws and regulations intended to protect consumers in transactions with the Bank. These laws include, among others, laws regarding unfair, deceptive ~~and~~or abusive acts and practices, usury laws, and other federal consumer protection statutes. These federal laws include the Electronic Fund Transfer Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Real Estate Settlement Procedures Act of 1974, the S.A.F.E. Mortgage Licensing Act of 2008, the Truth in Lending Act and the Truth in Savings Act, among others. Many states and local jurisdictions have consumer protection laws analogous, and in addition, to those enacted under federal law. These laws and regulations mandate certain disclosure requirements and regulate the manner in which financial institutions deal with customers when taking deposits, making loans and conducting other types of transactions. Failure to comply with these laws and regulations could give rise to regulatory sanctions, customer rescission rights, action by state and local attorneys general and civil or criminal liability.

In addition, the ~~Dodd-Frank Act created a new independent Consumer Finance Protection Bureau, or (“~~CFPB”) ~~that~~ has broad authority to regulate and supervise retail financial services activities of banks with greater than $10 billion in total consolidated assets and various non-bank providers. The CFPB has authority to promulgate regulations, issue orders, guidance and policy statements, conduct examinations and bring enforcement actions with regard to consumer financial products and services. InBecause ~~general,~~TriState ~~banks~~Capital ~~with~~Bank ~~assets~~has ofsurpassed $10 billion orin ~~less,~~total ~~such~~consolidated asassets ~~TriState~~for ~~Capital~~four ~~Bank~~consecutive quarters, ~~will~~the ~~continue~~CFPB toexamines beTriState ~~examined~~Capital Bank for ~~consumer~~ compliance bywith ~~their primary~~ federal ~~bank~~consumer ~~regulator. Nevertheless,~~protection ~~certain~~laws ~~regulations~~ and ~~positions established by the~~ regulations. CFPB ~~may~~rulemaking ~~become~~with ~~applicable~~respect to ~~us,~~these ~~and~~federal ~~the~~consumer ~~CFPB~~protection ~~may~~laws ~~recommend~~also ~~that~~has ~~our~~the ~~primary~~potential ~~federal~~to ~~bank~~have ~~regulators~~a ~~take~~significant animpact ~~enforcement~~on ~~action~~our ~~against us~~operations.

Effect of Governmental Monetary Policies

Our commercial banking business and investment management business are affected not only by general economic conditions but also by U.S. fiscal policy and the monetary policies of the Federal Reserve. Some of the instruments of monetary policy available to the Federal Reserve include changes in the discount rate on member bank borrowings, the fluctuating availability of borrowings at the “discount window,” open market operations, the imposition of and changes in reserve requirements against member banks’ deposits and assets of foreign branches, the imposition of and changes in reserve requirements against certain borrowings by banks and their affiliates, and asset purchase programs. These policies influence to a significant extent the overall growth of bank loans, investments, and deposits, as well as the performance of our investment management products and services and the interest rates charged on loans or paid on deposits. We cannot predict the nature of future fiscal and monetary policies or the effect of these policies on our operations and activities, financial condition, results of operations, growth plans or future prospects.

Federal Reserve include changes in the discount rate on member bank borrowings, the fluctuating availability of borrowings at the “discount window,” open market operations, the imposition of and changes in reserve requirements against member banks’ deposits and assets of foreign branches, the imposition of and changes in reserve requirements against certain borrowings by banks and their affiliates, and asset purchase programs. These policies influence to a significant extent the overall growth of bank loans, investments, and deposits, as well as the performance of our investment management products and services and the interest rates charged on loans or paid on deposits. We cannot predict the nature of future fiscal and monetary policies or the effect of these policies on our operations and activities, financial condition, results of operations, growth plans or future prospects.

Sarbanes-Oxley Act of 2002

The Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”) implemented a broad range of corporate governance, accounting and reporting measures for companies that have securities registered under the Exchange Act, including publicly-held bank holding companies. Specifically, the Sarbanes-Oxley Act and the various regulations promulgated thereunder, established, among other things: (i) requirements for audit committees, including independence, expertise, and responsibilities; (ii) responsibilities regarding financial statements for the Chief Executive Officer and Chief Financial Officer of the reporting company; (iii) the forfeiture of bonuses or other incentive-based compensation and profits from the sale of the reporting company’s securities by the Chief Executive Officer and Chief Financial Officer in the ~~twelve~~12-month period following the initial publication of any financial statements that later require restatement; (iv) the creation of an independent accounting oversight board; (v) standards for auditors and regulation of audits, including independence provisions that restrict non-audit services that accountants may provide to their audit clients; (vi) disclosure and reporting obligations for the reporting company and their directors and executive officers, including accelerated reporting of stock transactions and a prohibition on trading during pension blackout periods; (vii) a prohibition on personal loans to directors and officers, except certain loans made by insured financial institutions on non-preferential terms and in compliance with other bank regulatory requirements; and (viii) a range of civil and criminal penalties for fraud and other violations of the securities laws.

Asset Management

The asset management industry is subject to extensive federal, state and international laws and regulations promulgated by various governments, securities exchanges, central banks and regulatory bodies that are intended to benefit and protect investors in products. In addition, our distribution activities also may be subject to regulation by U.S. federal agencies, self-regulatory organizations and securities commissions in those jurisdictions in which we conduct business. Due to the extensive laws and regulations to which we are subject, we must devote substantial time, expense and effort to remaining vigilant about, and addressing, legal and regulatory compliance matters.

securities commissions in those jurisdictions in which we conduct business. Due to the extensive laws and regulations to which we are subject, we must devote substantial time, expense and effort to remaining vigilant about, and addressing, legal and regulatory compliance matters.

Existing U.S. Regulation

Chartwell is a registered investment adviser regulated by the SEC. Chartwell is also currently subject to regulation by the DOL and other government agencies and regulatory bodies. The Investment Advisers Act of 1940 imposes numerous obligations on registered investment advisers such as Chartwell, including recordkeeping, operational and marketing requirements, disclosure obligations and prohibitions on fraudulent activities. The Investment Company Act of 1940 imposes stringent governance, compliance, operational, disclosure and related obligations on registered investment companies and their investment advisers and distributors. The SEC is authorized to institute proceedings and impose sanctions for violations of the Investment Advisers Act of 1940 and the Investment Company Act of 1940, ranging from fines and censure to termination of an investment adviser’s registration. Investment advisers also are subject to certain state securities laws and regulations. Non-compliance with the Investment Advisers Act of 1940, the Investment Company Act of 1940 or other federal and state securities laws and regulations could result in investigations, sanctions, disgorgement, fines and reputational damage.

Chartwell’s trading and investment activities for client accounts are also regulated under the Exchange Act, and implementing regulations, and the rules of various U.S. exchanges and self-regulatory organizations. These laws, regulations, and rules govern trading on inside information and, market manipulation, and include a broad number of technical requirements and market regulation policies.

CTSC Securities, our broker/-dealer subsidiary, is subject to regulations that cover all aspects of the securities business. Much of the regulation of broker/-dealers has been delegated to self-regulatory organizations, principally FINRA. These self-regulatory organizations have adopted extensive regulatory requirements relating to matters such as sales practices, compensation and disclosure, and conduct periodic examinations of member broker/-dealers in accordance with rules they have adopted and amended from time to time, subject to approval by the SEC. The SEC, self-regulatory organizations and state securities commissions may conduct administrative proceedings that can result in censure, fine, suspension or expulsion of a broker/-dealer, its officers or registered employees. These administrative proceedings, whether or not resulting in adverse findings, can require substantial expenditures and can have an adverse impact on the reputation or business of a broker/-dealer. The principal purpose of regulation and discipline of broker/-dealers is the protection of clients and the securities markets, rather than protection of creditors and stockholders of the regulated entity.

24There has been substantial regulatory and legislative activity at federal and state levels regarding standards of care for financial services firms, related to both retirement and taxable accounts. In December 2020, the DOL finalized a new fiduciary regulation that becomes fully effective in February 2022. A comparable rule issued by the SEC, popularly known as Regulation BI, for best interest, took effect in June 2020. Further actions that the DOL, SEC or other applicable regulatory or legislative bodies take to alter duties to clients may impact our business activities and increase our costs.

~~There~~In ~~has~~addition, ~~been~~Chartwell ~~substantial~~also ~~regulatory~~may ~~and~~be ~~legislative~~subject ~~activity~~to atERISA ~~federal~~ and ~~state~~related ~~levels~~regulations, ~~regarding~~particularly ~~standards~~insofar ofas ~~care~~it ~~for~~acts ~~financial~~as ~~services~~a ~~firms,~~“fiduciary” ~~related~~or to“investment ~~both~~manager” ~~retirement~~under ~~and~~ERISA ~~taxable~~with ~~accounts. In~~respect ~~December~~to ~~2020,~~benefit ~~the~~plan ~~DOL~~clients. ERISA ~~finalized~~imposes aduties ~~new~~on ~~fiduciary~~persons ~~regulation~~who ~~that~~are ~~becomes~~fiduciaries ~~effective~~of inERISA ~~February~~plan ~~2021. A comparable rule issued by the SEC~~clients, ~~popularly~~and ~~known~~ERISA asand ~~Regulation~~related ~~BI,~~provisions ~~for~~of ~~best~~the ~~interest,~~Internal ~~took~~Revenue ~~effect~~Code inprohibit ~~June~~certain ~~2020. Further~~transactions ~~actions~~involving ~~that~~ the ~~DOL,~~assets ~~SEC~~of orERISA ~~other~~plan ~~applicable~~and ~~regulatory~~Individual orRetirement ~~legislative~~Account ~~bodies~~(“IRA”) ~~take~~clients toand ~~alter~~certain ~~duties~~transactions toby ~~clients~~the ~~may~~fiduciaries ~~impact~~(and ~~our~~several ~~business~~other ~~activities~~related ~~and~~parties) ~~increase~~to ~~our~~such ~~costs~~clients.

In addition, Chartwell also may be subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and related regulations, particularly insofar as it acts as a “fiduciary” or “investment manager” under ERISA with respect to benefit plan clients. ERISA imposes duties on persons who are fiduciaries of ERISA plan clients, and ERISA and related provisions of the Internal Revenue Code prohibit certain transactions involving the assets of ERISA plan and Individual Retirement Account (“IRA”) clients and certain transactions by the fiduciaries (and several other related parties) to such clients.

Net Capital Requirements

CTSC Securities is a non-clearing broker/-dealer subsidiary with a primary business of wholesaling and marketing the proprietary investment products and services provided by Chartwell. CTSC Securities is subject to net capital rules imposed by various federal, state, and foreign authorities that mandate that it maintain certain levels of capital.

Impact of Current Laws and Regulations

The cumulative effect of these laws and regulations, adds significantly to the cost of our operations and may reduce revenue opportunities, and thus has a negative impact on our profitability. There has also been a notable expansion in recent years of financial service providers that are not subject to the examination, oversight, and other rules and regulations to which we are subject. In this regard, these providers may have a competitive advantage over us and may successfully compete against traditional banking institutions, with a continuing adverse effect on the banking industry in general.

Future Legislation and Regulatory Reform

New statutes, regulations and policies are regularly proposed that contain wide-ranging proposals for altering the structures, regulations and competitive relationships of financial institutions operating in the United States. We cannot predict whether or in what form any statute, regulation or policy will be proposed or adopted or the extent to which our business may be affected by any new statue or regulation. Future legislation and policies, and the effects of that legislation and those policies, may have a significant influence on our operations and activities, financial condition, results of operations, growth plans or future prospects and the overall growth and distribution of loans, investments and deposits. Such legislation and policies have had a significant effect on the operations and activities, financial condition, results of operations, growth plans and future prospects of commercial banks and investment management businesses in the past and are expected to continue having such effects.

Available Information

All of our reports filed electronically with the SEC, including this Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and proxy statements, as well as any amendments to those reports are accessible at no cost on our website at www.tristatecapitalbank.com under “Who We Are,” “Investor Relations,” “SEC Documents”. These filings are also accessible on the SEC’s website at www.sec.gov.

2526

ITEM 1A. RISK FACTORS

An investment in our common stock involves a high degree of risk. There are risks, many beyond our control, that could cause our financial condition or results of operations to differ materially from management’s expectations. Some of the risks that may affect us are described below. If any of the following risks, singly or together with one or more other factors, actually occur, our business, financial condition, results of operations and future prospects could be materially and adversely affected. These risks are not the only risks that we may face. Our business, financial condition, results of operations and future prospects could also be affected by additional risks that apply to all companies operating in the United States, as well as other risks that are not currently known to us or that we currently consider to be immaterial to our business, financial condition, results of operations and growth prospects. Further, some statements contained herein constitute forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements” on page 4. The risks described below should also be considered together with the other information included in this Annual Report on Form 10-K, including the disclosures in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included in “Item 8. Financial Statements and Supplementary Data”.

Risk Factor Summary

The risks and uncertainties facing our company include, but are not limited to, the following:

Risks Relating to our Business

•COVID-19 and ~~the~~mitigation ~~impact~~efforts ~~of actions to mitigate it~~ may materially and adversely affect our business, financial condition and results of operations.

•We may not be able to adequately measure and limit our credit risk, which could lead to unexpected losses.

•Our allowance for credit losses on loans and leases may prove to be insufficient~~, which could have a material adverse effect on our financial condition and results of operations~~.

•Our business may be adversely affected by competition, changes in interest rates, and ~~conditions~~market ~~in the financial markets and economic~~ conditions ~~generally, and in the states in which we operate in particular~~.

•Our private banking business could be negatively impacted by ~~rapid~~ volatility or a prolonged downturn in the securities markets.

•A ~~downturn in the~~ real estate market, ~~especially~~downturn ~~in our primary markets,~~ could result in losses and adversely affect our profitability.

•Our lending limit may restrict our growth and prevent us from effectively implementing our business strategy.

•WeThe ~~rely~~loss ~~heavily~~of ~~on our~~ executive ~~management~~ team members and other key employees, ~~and the loss of the services of any of these individuals~~ could adversely impact our business and reputation.

•Our business has grown rapidly, and we may not be able to maintain our historical rate of growth, including by way of strategic investments or acquisitions.

•Liquidity risk could impair our ability to fund operations and meet our obligations as they become due.

•WeIf ~~may need to raise additional capital in the future, and if~~ we fail to maintain sufficient capital, we may not be able to maintain regulatory compliance.

•~~Any~~Reductions ~~future~~to ~~reductions in~~ our credit ratings may increase ~~our~~ funding costs or impair our ability to effectively compete for business.

•~~The~~A ~~intention~~transition ofaway ~~the~~from ~~United~~LIBOR ~~Kingdom’s Financial Conduct Authority, or FCA,~~ to ~~cease~~an ~~support~~alternative ofreference ~~LIBOR~~interest ~~after~~rate ~~June 30, 2023~~ could negatively affect the ~~fair~~ value of our financial assets and liabilities, ~~results of operations~~ and ~~net worth. A transition to an alternative reference interest rate could~~ present operational problems ~~and~~due ~~result~~to in market disruption~~, including inconsistent approaches for different financial products, as well as disagreements with counterparties~~.

•Our ability to maintain our reputation is critical to the success of our business.

•Our financial results depend on management’s selection of accounting methods and certain assumptions and estimates.

•ByDerivative ~~engaging in derivative~~ transactions, weexpose ~~are~~us ~~exposed~~ to additional credit and market risk in our banking business.

•WeFailure ~~rely~~of on third parties to provide key components of our business infrastructure, ~~including to monitor the value of and control marketable securities that collateralize our loans, and a failure of these parties to perform for any reason~~ could disrupt our operations.

•We could be subject to losses, regulatory action and reputational harm due to fraudulent and negligent acts on the part of loan applicants, our borrowers, our clients, our employees and our vendors.

•The value of our goodwill and other intangible assets may decline in the future.

•~~Unauthorized access, cyber~~Cyber-crime and ~~other~~ threats to data security may ~~require significant resources,~~ harm our reputation, and adversely affect our business.

•WeAny ~~are~~violation ~~subject~~of to laws regarding the privacy, information security and protection of personal information ~~and any violation of these laws~~ or another incident involving personal, confidential or proprietary information of individuals could damage our reputation and otherwise adversely affect our operations and financial condition.

•We ~~have a continuing need for technological change, and we~~ may ~~not~~ have ~~the~~insufficient resources ~~to effectively implement new technology,~~ or weface ~~may experience~~ operational challenges when implementing new technology.

•We may take tax filing positions or follow tax strategies that may be subject to challenge.

Risks Relating to Our Proposed Acquisition by Raymond James

•Because the market price of Raymond James common stock fluctuates, TriState Capital shareholders cannot be certain of the market value of the merger consideration they will receive.

•The market price of Raymond James common stock after the mergers may be affected by factors different from those currently affecting the shares of our common stock or Raymond James’s common stock.

•We and Raymond James are expected to incur incremental costs related to the mergers and integration.

•The mergers and integration may be more difficult, costly or time-consuming than expected, and we and Raymond James may fail to realize the anticipated benefits of the mergers.

•The future results of the combined company may suffer if the company does not effectively manage its expanded operations.

•The combined company may be unable to retain our and Raymond James’s personnel after the completion of the mergers.

•The Merger Agreement limits our ability to pursue alternatives to the Acquisition and may discourage other companies from trying to acquire us.

•Regulatory approvals for the Acquisition may not be received, may take longer than expected or may impose conditions that are not presently anticipated or cannot be met.

•Failure of the Acquisition to be completed, the termination of the Merger Agreement or a significant delay in the consummation of the Acquisition could negatively impact us.

•We will be subject to business uncertainties and contractual restrictions while the Acquisition is pending.

•Litigation against us or Raymond James, or the members of our or Raymond James’ board of directors, could prevent or delay the completion of the Acquisition.

Risks Relating to Regulations

•We operate in a highly regulated environment and the laws and regulations that govern our operations, corporate governance, executive compensation and accounting principles, or changes in them, or our failure to comply with them, could subject us to regulatory action or penalties.

•Federal and state bank regulators periodically conduct examinations of our business and we may be required to remediate adverse examination findings or be subject to enforcement actions.

•The Bank’s FDIC deposit insurance premiums and assessments my increase.

•We are subject to numerous laws designed to protect customers, including fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions.

•We face a risk of noncompliance with and enforcement action under the Bank Secrecy Act and other anti-money laundering statutes and regulations.

•We are a holding company and we depend upon our subsidiaries for liquidity.

•Applicable laws and regulations, including capital and liquidity requirements, may restrict our ability to transfer funds from our subsidiaries to us or other subsidiaries.

•IfWe weare ~~grow~~now subject to ~~over~~additional regulation because we have surpassed $10 billion in total consolidated assets~~, we will become subject to increased regulation~~.

•Our use of third-party service providers and other ongoing third-party business relationships may become subject to increasing regulatory requirements and attention.

Risks Relating to an Investment in our Common Stock and Preferred Stock

•Shares of our common stock, preferred stock and underlying depositary shares are not an insured deposit.

•~~The~~An ~~market price of our securities may be subject to substantial fluctuations~~active, ~~including~~liquid asmarket afor ~~result of actual or anticipated issuances or sales of~~ our securities ~~in the future, which~~ may ~~make~~not itbe ~~difficult for us to raise additional capital or for you to sell your shares at the volume, prices and times desired~~sustained.

•~~The~~Our ~~rights of holders of our common stock are generally subordinate to the rights of holders of our debt securities and~~ preferred stock ~~and~~is ~~may~~thinly ~~be subordinate to the rights of holders of any class of preferred stock or any debt securities that we may issue in the future~~traded.

•The market price of our securities may be subject to substantial fluctuations, which may make it difficult for us to raise additional capital or for you to sell your shares at the volume, prices and times desired.

•The rights of holders of our common stock are generally subordinate to the rights of holders of our debt securities and preferred stock and may be subordinate to the rights of holders of any preferred stock or debt securities that we may issue in the future.

•Holders of our preferred stock and depositary shares have limited voting rights.

•We have not paid dividends on our common stock and are subject to regulatory restrictions on our ability to pay dividends.

•Our ~~corporate~~ governance documents, and certain applicable federal and Pennsylvania laws, could make a takeover more difficult.

•There are substantial regulatory limitations on changes of control of bank holding companies.

~~Risks~~General ~~Relating~~Risk ~~to our Business~~Factors

~~COVID-19~~•Climate change and ~~the~~societal ~~impact~~responses ~~of actions~~ to ~~mitigate~~climate itchange ~~may~~could ~~materially and~~ adversely affect our business and performance, ~~financial~~including ~~condition~~indirectly ~~and~~through ~~results~~impacts ofon ~~operations~~our customers.

~~Federal~~•Severe weather, ~~state~~natural ~~and local governments have enacted various restrictions in an attempt to limit the spread of COVID-19~~disasters, ~~including~~acts ~~the declaration~~ of awar ~~national~~or ~~emergency;~~terrorism ~~multiple cities’ and states’ declarations of states of emergency; school and business closings; limitations on social~~ or ~~public gatherings and~~ other ~~social~~external ~~distancing~~events ~~measures,~~could ~~such~~significantly asimpact ~~working~~our ~~remotely, travel restrictions, quarantines and stay at home orders. Such measures have disrupted economic activity and contributed to job losses and reductions in consumer and~~ business ~~spending~~.

In response to the economic and financial effects of COVID-19, the Federal Reserve has sharply reduced interest rates and instituted quantitative easing measures, as well as domestic and global capital market support programs. In addition, the Trump Administration, Congress, various federal agencies and state governments have taken measures to address the economic and social consequences of the pandemic, including the passage of the CARES Act, which, among other things, provides certain measures to support individuals and businesses in maintaining solvency through monetary relief, including in the form of financing, loan forgiveness and automatic forbearance. The Consolidated Appropriations Act, 2021, enacted on December 27, 2020, extended some of these relief provisions in certain respects.

In addition, the CARES Act and related guidance from the federal banking agencies provide financial institutions the option to temporarily suspend requirements under GAAP related to classification of certain loan modifications as troubled debt restructurings, or TDRs, to account for the current and anticipated effects of COVID-19. The CARES Act, as amended by the Consolidated Appropriations Act, 2021, specified that COVID-19 related loan modifications executed between March 1, 2020 and the earlier of (i) 60 days after the date of termination of the national emergency declared by the President and (ii) January 1, 2022, on loans that were current as of December 31, 2019 are not TDRs. Additionally, under guidance from the federal banking agencies, other short-term modifications made on a good faith basis in response to COVID-19 to borrowers that were current prior to any relief are not TDRs under ASC Subtopic 310-40, “Troubled Debt Restructuring by Creditors.” These modifications include short-term (e.g., up to six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or delays in payment that are insignificant. Further, our loan portfolio includes loans that are in forbearance but which are not classified as TDRs because they were current at the time forbearance began. When the forbearance periods end, we may be required to classify a portion of these loans as problem loans.

The CARES Act included a provision that permits financial institutions to defer temporarily the use of CECL until the earlier of the end of the national emergency declaration related to the COVID-19 crisis or December 31, 2020. The Consolidated Appropriations Act, 2021 extended the option to delay CECL implementation until January 1, 2022. Additionally, in an action relating to the COVID-19 pandemic, the joint federal bank regulatory agencies issued an interim final rule effective March 31, 2020, that allows banking organizations that implemented CECL in 2020 to elect to mitigate the effects of the CECL accounting standard on their regulatory capital for two years. This two-year delay is in addition to a three-year transition period that the agencies had already made available in December 2018. The Company temporarily elected to delay the adoption of the CECL standard in accordance with the relief provided under the CARES Act and Consolidated Appropriations Act, 2021, though it subsequently adopted CECL retroactively to January 1, 2020, and elected to defer the regulatory capital effects of CECL in accordance with the rule promulgated by the banking agencies. As a result, the effects of CECL on the Company's and the Bank’s regulatory capital will be delayed through the year 2021, after which the effects will be phased-in over a three-year period from January 1, 2022 through December 31, 2024. See “Recent Accounting Developments.”

The CARES Act and the Consolidated Appropriations Act, 2021, also include a range of other provisions designed to support the U.S. economy and mitigate the impact of COVID-19 on financial institutions and their customers, including through the authorization of various programs and measures that the U.S. Department of the Treasury, the Federal Reserve and other federal agencies may or are required to implement. Among other provisions, sections 4022 and 4023 of the CARES Act provide mortgage loan forbearance relief to certain borrowers experiencing financial hardship during the COVID-19 emergency.

Further, in response to the COVID-19 outbreak, the Federal Reserve has implemented or announced a number of emergency lending programs and facilities to provide liquidity to various segments of the U.S. economy and financial markets. Many of these facilities expired on December 31, 2020, or were extended for brief periods into 2021. The expiration of these facilities could have an adverse effect on the U.S. economy and ultimately on our business. Moreover, if federal stimulus measures and emergency lending programs and liquidity facilities are not effective in mitigating the effect of the COVID-19 pandemic, credit issues for our loan customers may be severe and adversely affect our business, results of operations, and financial condition more substantially over a longer period of time.

Additionally, TriState Capital Bank is a participating lender in one of the Federal Reserve’s emergency lending programs, the Main Street Lending Program, which the Federal Reserve established to support lending to small- and medium-sized businesses and nonprofit organizations that were in sound financial condition before the onset of the COVID-19 pandemic. The Bank’s participation in this program could subject us to increased governmental and regulatory scrutiny, negative publicity or increased exposure to litigation, which could increase our operational, legal and compliance costs and damage our reputation.

In response to the COVID-19 pandemic, all of the federal banking regulatory agencies have encouraged lenders to extend additional loans, and the federal government is considering additional stimulus and support legislation focused on providing aid to various sectors, including small businesses. The full impact on our business activities as a result of new government and regulatory policies, programs and guidelines, as well as regulators’ reactions to such activities, remains uncertain.

The economic effects of the COVID-19 pandemic have had a destabilizing effect on financial markets, key market indices and overall economic activity. The uncertainty regarding the duration of the pandemic and the resulting economic disruption has caused increased market volatility and has led to an economic recession (including due to uncertainty regarding the impacts of a resurgence of COVID-19 infections, as well as a significant decrease in consumer confidence and business generally). The continuation of these conditions, the impacts of the CARES Act, and other federal and state measures, specifically with respect to loan forbearances, has adversely impacted our businesses and results of operations and the business and operations of at least some of our borrowers, customers and business partners, and these impacts may be material. In particular, these events have had, or may have, the following effects, among other things:

Risks Relating to our Business

COVID-19 and the impact of actions to mitigate it could have a material adverse effect on our business, financial condition and results of operations, and such effects will depend on future developments, which are highly uncertain and are difficult to predict.

Federal, state and local governments have enacted various restrictions in an attempt to limit the spread of COVID-19, including the declaration of a national emergency; multiple cities’ and states’ declarations of states of emergency; school and business closings; limitations on social or public gatherings and other social distancing measures, such as working remotely, travel restrictions, quarantines and stay-at-home orders. Such measures have disrupted economic activity and contributed to job losses and reduced levels of consumer and business spending. Although local jurisdictions have subsequently lifted stay-at-home orders and moved to phased opening of businesses, worker shortages, vaccine and testing requirements, new variants of COVID-19 and other health and safety recommendations have impacted the ability of businesses to return to pre-pandemic levels of activity and employment. In response to the economic and financial effects of COVID-19, the Federal Reserve sharply reduced interest rates and instituted quantitative easing measures, which the Federal Reserve began tapering in November 2021 by reducing the pace of its asset purchases, as well as domestic and global capital market support programs. In addition, the President’s Administration, Congress, various federal agencies and state governments have taken measures to address the economic and social consequences of the pandemic, including the passage of the CARES Act. The CARES Act, among other things, provides certain measures to support individuals and businesses in maintaining solvency through monetary relief, including in the form of financing, loan forgiveness and automatic forbearance. The full impact on our business activities as a result of new government and regulatory policies, programs and guidelines, as well as regulators’ reactions to such activities, remains uncertain.

The COVID-19 pandemic has had a destabilizing effect on financial markets, key market indices, and overall economic activity. The uncertainty regarding the duration of the pandemic and the resulting economic disruption caused increased market volatility and led to an economic recession. Uncertainty regarding the impacts of a resurgence of COVID-19 infections, including new strains of the virus, as well as a significant decrease in consumer confidence and business generally furthered economic concerns. The continuation of these conditions, the impacts of the CARES Act, and other federal and state measures, specifically with respect to loan forbearances, have adversely impacted our businesses, results of operations, and the business and operations of at least some of our borrowers, customers and business partners. These impacts may be material. In particular, even as COVID-19 vaccines have become widely available, these events have had, and/or can be expected to continue to have, the following effects, among other things:

•impair the ability of borrowers to repay outstanding loans or other obligations, resulting in increases in delinquencies;

•impair the value of collateral securing loans;

•impair the value of our securities portfolio;

•require an increase in our allowance for credit losses on loans and leases ~~(ACL)~~;

•adversely affect the stability of our deposit base, or otherwise impair our liquidity;

•reduce our asset management revenues and the demand for our products and services;

•impair the ability of loan guarantors to honor commitments;

•negatively impact our regulatory capital ratios;

•result in increased compliance risk as we become subject to new regulatory and other requirements associated with any ~~new~~government stimulus programs in which we ~~participate~~participated;

•negatively impact the productivity and availability of key personnel and other employees necessary to conduct our business, and of third-party service providers who perform critical services for us, or otherwise cause operational failures due to changes in our normal business practices necessitated by the outbreak and related governmental actions;

•increase cyber and payment fraud risk, and other operational risks, given increased online and remote activity; ~~and~~

•negatively impact revenue and income.; and

~~Prolonged~~•impede ~~measures~~the bysuccess ~~health~~of orthe ~~other~~Acquisition, ~~governmental~~such ~~authorities~~as ~~encouraging~~by ordelaying ~~requiring~~regulatory ~~significant~~approvals ~~restrictions on travel, assembly~~ or ~~other~~causing ~~core~~additional ~~business~~regulatory ~~practices~~burdens ~~could~~prior ~~further~~to ~~harm~~completion ~~our business and those~~ of ~~our~~the ~~customers, in particular our middle market business customers~~merger. ~~Although we have business continuity plans and other safeguards in place, there is no assurance that they will continue to be effective.~~

~~The~~Prolonged ~~ultimate~~measures ~~impact~~by ofhealth ~~these~~or ~~factors~~other isgovernmental ~~highly~~authorities ~~uncertain~~encouraging ator ~~this~~requiring ~~time~~significant ~~and~~restrictions weon dotravel, ~~not~~assembly ~~yet~~or ~~know~~other ~~the~~core ~~full~~business ~~extent~~practices ofcould ~~the~~further ~~impacts~~harm on our business, ~~our~~and ~~operations~~those ~~or the national or global economies, nor the pace~~ of ~~the~~our ~~economic recovery when the COVID-19 pandemic subsides~~customers. ~~The~~Although ~~decline~~we inhave ~~economic~~business ~~conditions~~continuity ~~generally~~plans and aother ~~prolonged~~safeguards ~~negative impact on middle market businesses,~~ in ~~particular~~place, ~~due~~we tocan ~~COVID-19~~provide ~~are~~no ~~likely~~assurance tothat ~~result~~they inwill acontinue ~~material adverse effect~~ to ~~our~~be ~~business, financial condition and results of operations in future periods~~effective.

InThe ~~addition,~~ultimate toimpact of these factors is highly uncertain at this time and we do not yet know the full extent ~~COVID-19~~of ~~adversely~~the ~~affects~~impacts on our business, ~~financial~~our ~~condition~~operations ~~and~~or ~~results~~the ofnational ~~operations~~or global economies, ~~and~~nor ~~global~~the pace of the economic ~~conditions~~recovery ~~more~~when the COVID-19 pandemic subsides. The continuing impact of COVID-19 on economic conditions generally and on middle market businesses, itin particular, may ~~also~~result ~~have~~in ~~the~~a ~~effect~~material ofadverse ~~heightening~~effect ~~many~~to ofour ~~the~~business, ~~other~~financial ~~risks~~condition ~~described~~and inresults ~~this~~of ~~“Risk~~operations ~~Factors”~~in ~~section~~future periods.

In addition, to the extent COVID-19 adversely affects our business, financial condition, and results of operations, and global economic conditions more generally, it may also have the effect of heightening many of the other risks described in the “Risk Factors” section of this report.

We may not be able to adequately measure and limit our credit risk, which could lead to unexpected losses.

Our business depends on our ability to successfully measure and manage credit risk and maintain disciplined and prudent underwriting standards. The business of lending is inherently risky, and includes the risk that the principal or interest on any loan will not be repaid timely or at all orand that the value of any collateral supporting the loan will be insufficient to cover our outstanding exposure. In addition, we are exposed to risks with respect to the period of time over which loans may be repaid, risks relating to proper loan underwriting, risks resulting from changes in economic and industry conditions, and risks inherent in dealing with individual loans and borrowers. The creditworthiness of a borrower is affected by many factors, including local market conditions and general economic conditions, and many of our loans are made to middle-market businesses that may be less able to withstand competitive, economic and financial pressures than larger borrowers.

Our risk management practices, such as monitoring the concentration of our loans within specific industries, employing analytical and forecasting models and our credit approval, review and administrative practices, may not adequately reduce credit risk. Additionally, ~~and~~ our credit administration personnel, policies and procedures may not adequately adapt to changes in economic or any other conditions affecting customers and the quality of our loan portfolio,. ~~which~~As ~~may~~a result, inwe may incur loan defaults, foreclosures and additional charge-offs, and may ~~require~~be usrequired to significantly increase our ACL, each of which could adversely affect our net income. In addition, the weakening of our underwriting standards for any reason, such as to seek higher yielding loans, or a lack of discipline or diligence by our employees, may result in loan defaults, foreclosures, ~~and~~ additional charge-offs, or an increase in ACL,. ~~any~~Any of ~~which~~these consequences could adversely affect our net income. As a result, our inability to successfully manage credit risk and our underwriting standards could have a material adverse effect on our business, financial condition, results of operations and future prospects.

Our allowance for credit losses on loans and leases may prove to be insufficient, which could have a material adverse effect on our financial condition and results of operations.

Our experience in the banking industry indicates that some portion of our loans will not be fully repaid in a timely manner or at all. Accordingly, we maintain an ACL that represents management’s judgment of probable losses in our loan portfolio. The level of the allowance reflects management’s continuing evaluation of ~~historical~~past ~~losses~~events, incurrent ~~our~~conditions, ~~portfolio~~and reasonable and ~~general~~supportable economic ~~conditions~~forecasts, ~~among~~including ~~other~~historical ~~factors~~charge-offs and subsequent recoveries. Management also considers qualitative factors that influence our credit quality, including, but not limited to, delinquency and non-performing loan trends, changes in loan underwriting guidelines and credit policies, and the results of internal loan reviews. The determination of the ACL is inherently subjective and requires us to make significant assumptions, which may change or be incorrect. Inaccurate assumptions, deterioration of economic conditions, new information, the identification of additional problem loans and other factors, both within and outside of our control, may require us to increase our ACL. In addition, our regulators, as an integral part of their periodic examination, review the adequacy of our ACL and may direct us to make additions to it. Further, if actual charge-offs in future periods exceed the amounts allocated to the ACL, we may need additional provision for loan losses to restore the adequacy of our ACL. While we believe that our ACL was adequate at December 31, 2021, we can provide no assurance that it will be sufficient to cover future loan losses, especially if there is a significant deterioration in economic conditions. If we are required to materially increase our level of ACL for any reason, such increase could materially decrease our net income and could have a material adverse effect on our business, financial condition, results of operations and future prospects.

problem loans and other factors, both within and outside of our control, may require us to increase our ACL. In addition, our regulators, as an integral part of their periodic examination, review the adequacy of our ACL and may direct us to make additions to it. Further, if actual charge-offs in future periods exceed the amounts allocated to the ACL, we may need additional provision for loan losses to restore the adequacy of our ACL. While we believe that our ACL was adequate at December 31, 2020, there is no assurance that it will be sufficient to cover future loan losses, especially if there is a significant deterioration in economic conditions. If we are required to materially increase our level of ACL for any reason, such increase could materially decrease our net income and could have a material adverse effect on our business, financial condition, results of operations and future prospects.

A material portion of our loan portfolio is comprised of commercial loans secured by general business assets, the deterioration in value of which could expose us to credit losses.

Historically, a material portion of our loans held-for-investment have been comprised of commercial loans to businesses collateralized by business assets including, among other things, accounts receivable, inventory, equipment, cash value life insurance and owner-occupied real estate. These commercial loans are typically larger in amount than loans to individuals and, therefore, have the potential for larger losses on a single loan basis. Additionally, the repayment of commercial loans is subject to the ongoing business operations of the borrower. The collateral securing such loans generally includes movable property, such as equipment and inventory, which may decline in value more rapidly than we anticipate, exposing us to increased credit risk. In addition, a portion of our customer base may be exposed to volatile businesses or industries which are sensitive to commodity prices or market fluctuations, such as energy prices. Accordingly, negative changes in commodity prices, real estate values and liquidity could impair the value of the collateral securing these loans.

Historically, losses in our commercial credits have been higher than losses in other segments of our loan portfolio. Significant adverse changes in various industries could cause rapid declines in values and collectability resulting in inadequate collateral coverage that may expose us to credit losses. An increase in specific reserves and charge-offs related to our commercial and industrial loan portfolio could have a material adverse effect on our business, financial condition, results of operations and future prospects. As of December 31, ~~2020~~2021, we had commercial and industrial loans outstanding of $1.2751 billion, or 1514.51% of our loans held-for-investment, and owner-occupied commercial real estate loans outstanding of $~~470~~212.26 million, or 52.70% of our loans held-for-investment.

Our business may be adversely affected by conditions in the financial markets and economic conditions generally, and in the states in which we operate in particular.

If the overall economic climate in the United States, generally, and our market areas, specifically, experiences material disruption, our borrowers may experience difficulties in repaying their loans, the collateral we hold may decrease in value or become illiquid, and the level of non-performing loans, charge-offs and delinquencies could rise and require significant additional provisions for credit losses.

Many of our customers are commercial enterprises whose business and financial condition are sensitive to changes in the general economy of the United States. Our businesses and operations are, in turn, sensitive to these same general economic conditions. If the United States experiences a deterioration or other significant volatility in economic conditions, our growth and profitability could be constrained. In addition, any future downgrade of the credit rating of the United States, failures to raise the U.S. statutory debt limit, or deterioration in the fiscal outlook of the United States federal government, could, among other things, materially adversely affect the market value of the U.S. and other government and governmental agency securities that we may hold, the availability of those securities as collateral for borrowing, and our ability to access capital markets on favorable terms. In addition, any resulting decline in the financial markets could affect the value of marketable securities that serve as collateral for our loans and the ability of our customers to repay loans. In addition, economic conditions in foreign countries, including uncertainty over the stability of the euro currency and the withdrawal of the United Kingdom from the European Union, as well as concerns regarding terrorism, war and potential hostilities with various countries, could affect the stability of global financial markets, which could negatively affect U.S. economic conditions. Any of these developments could have a material adverse effect on our business, financial condition and future prospects.

Our commercial banking operations are concentrated in Pennsylvania, New Jersey, New York, and Ohio. As a result, our business is affected by changes in the economic conditions of those states and the regions of which they are a part. Our success depends to a significant extent upon the business activity, population, income levels, deposits and real estate activity in these markets, and we are vulnerable to a downturn in the local economies in these areas. For example, low energy prices have adversely impacted and may continue to adversely impact the economies of Western Pennsylvania and Northeastern Ohio, two of our significant commercial banking markets, which have industries focused on shale gas exploration and shale gas production. Although we do not make loans to companies directly engaged in oil and gas production, adverse conditions that affect these market areas could reduce our growth rate, affect the ability of our customers to repay their loans, affect the value of collateral underlying loans, impact our ability to attract deposits and generally affect our business and financial condition. Because of our geographic concentration, we may be less able than other financial institutions to diversify our credit risks across multiple markets.

Weak economic conditions can be characterized by deflation, fluctuations in debt and equity capital markets, lack of liquidity and depressed prices in the secondary market for loans, increased delinquencies on loans, real estate price declines, and lower commercial activity. All of these factors can be detrimental to the business and/or financial position of our customers and their ability to repay loans as well as the value of the collateral supporting our loans, which could adversely impact demand for our credit products as well as our credit quality. Adverse economic conditions and government policy responses to such conditions could have a material adverse effect on our business, financial condition, results of operations and future prospects.

Our non-owner-occupied commercial real estate loan portfolio exposes us to credit risks that may be greater than the risks related to other types of loans.

Our loan portfolio includes non-owner-occupied commercial real estate loans for individuals and businesses for various purposes, which are secured by commercial properties, as well as real estate construction and development loans. As of December 31, ~~2020~~2021, we had outstanding loans secured by non-owner-occupied commercial properties of $12.9315 billion, or 2320.0%, of our loans held-for-investment. These loans typically involve repayment dependent upon income generated, or expected to be generated, by the secured property. These loans typically expose a lender to greater credit risk than loans secured by other types of collateral due to a number of factors, including the concentration of principal in a limited number of loans and borrowers, the difficulty of liquidating the collateral securing these loans, and the relatively larger loan balances compared to single borrowers. In addition, the amount we may realize after a default is dependent upon factors outside of our control, including, but not limited to, economic conditions, environmental cleanup liabilities, assessments, interest rates, real estate tax rates, operating expenses of the mortgaged property, occupancy rates, zoning laws, regulatory rules, and natural disasters. Accordingly, charge-offs on non-owner-occupied commercial real estate loans may be larger on a per loan basis than those incurred with residential or consumer loan portfolios.

An unexpected deterioration in the credit quality of our non-owner-occupied commercial real estate loan portfolio or the inability of only a few of our largest borrowers to repay their loan obligations could result in us increasing our ACL, which would reduce our profitability and have a material adverse effect on our business, financial condition, and future prospects.

Our private banking business could be negatively impacted by rapid volatility or a prolonged downturn in the securities markets.

Marketable-securities-backed private banking loans represent a material portion of our business and constitute the fastest growing portion of our loan portfolio. As of December 31, ~~2020~~2021, we had outstanding marketable-securities-backed private banking loans of $46.7482 billion, or 5763.53% of our loans held-for-investment. We expect to continue to increase the percentage of our loan portfolio represented by marketable-securities-backed private banking loans in the future. A sharp or prolonged decline in the value of the collateral that secures these loans could materially adversely affect the growth prospects and loan performance in this segment of our loan portfolio and, as a result, could materially adversely affect our business, financial condition, results of operations and future prospects.

A downturn in the real estate market, especially in our primary markets, could result in losses and adversely affect our profitability.

A material portion of our loans are secured by real estate as a primary component of collateral. Real estate collateral provides an alternate source of repayment in the event of default by the borrower and may deteriorate in value. A general decline in real estate values, particularly in our primary markets, could impair the value of our collateral and our ability to sell the collateral upon any foreclosure~~, which would likely require us to increase our ACL~~. In ~~addition,~~As ~~we could be subject to costly environmental liabilities with respect to foreclosed properties. In the event of~~ a ~~default with respect to any of these loans~~result, ~~the~~our ~~amount~~ability ~~we receive upon sale of the collateral may be insufficient~~ to recover the ~~outstanding~~ principal ~~and~~amount ~~interest~~due on ~~the~~defaulted ~~loan. If~~loans weby ~~are~~selling ~~required to re-value~~ the ~~collateral~~underlying ~~securing a loan to satisfy the debt during a period of reduced~~ real estate ~~values~~will orbe ~~to increase our ACL~~diminished, ~~our~~and ~~profitability~~we ~~could~~will be ~~adversely~~more ~~affected,~~likely ~~which~~to ~~could~~suffer ~~have~~losses ~~a material adverse effect~~ on ~~our~~defaulted ~~business~~loans, ~~financial~~in ~~condition~~turn, ~~results~~which ofwould ~~operations~~likely ~~and~~require ~~future~~us ~~prospects~~to increase our ACL.

In the event of a default with respect to any of these loans, the amount we receive upon sale of the collateral may be insufficient to recover the outstanding principal and interest on the loan. If we are required to re-value the collateral securing a loan to satisfy the debt during a period of reduced real estate values or to increase our ACL, our profitability could be adversely affected, which could have a material adverse effect on our business, financial condition, results of operations and future prospects.

We are subject to environmental liability risk associated with any real estate collateral we acquire upon foreclosure.

During the ordinary course of business, we may foreclose on and take title to properties securing certain loans. In doing so, there is a risk that hazardous or toxic substances could be found on these properties. The costs associated with investigation and remediation activities could be substantial. If hazardous or toxic substances are found, we may be liable for remediation costs, as well as for personal injury and property damage, including damages and costs resulting from environmental contamination emanating from the property. Although we have policies and procedures to perform an environmental review before initiating foreclosure, these actions may not be sufficient to detect all potential environmental hazards.

Our lending limit may restrict our growth and prevent us from effectively implementing our business strategy.

We are limited in the amount we can lend to a single borrower by the amount of our capital. Generally, under current law, weTriState Capital Bank may lend up to 15.0% of ~~our~~the ~~unimpaired~~aggregate of its capital, surplus, undivided profits, capital securities, and ~~surplus~~reserve for loan losses to any one borrower. We have established an internal lending limit that is significantly lower than our legal lending limit and, based upon our current capital levels, the amount we may lend is significantly less than that of many of our competitors and may discourage potential borrowers who have credit needs in excess of our lending limit from doing business with us. We accommodate larger loans by selling participations in those loans to other financial institutions, but this strategy may not always be available. If we are unable to compete effectively for loans, we may not be able to effectively implement our business strategy, which could have a material adverse effect on our business, financial condition, results of operations and future prospects.

We rely heavily on our executive management team and other key employees, and the loss of the services of any of these individuals could adversely impact our business and reputation.

Our success depends in large part on the performance of our key personnel, as well as on our ability to attract, motivate and retain highly qualified senior and middle management and other skilled employees. Competition for employees is intense, and the process of locating key personnel with the combination of skills and attributes required to execute our business plan may be lengthy. We currently do not have any employment or non-compete agreements with any of our executive officers or key employees other than certain non-solicitation and restrictive agreements from certain key employees in connection with our investment management business. We may not be successful in retaining our key employees, and the loss of one or more of our key personnel could have a material adverse effect on our business because of their skills, knowledge of our markets, relationships, industry experience and the difficulty of finding qualified replacement personnel. If the services of any of our key personnel become unavailable for any reason, we may not be able to hire qualified persons on terms acceptable to us, or at all, which could have a material adverse effect on our business, financial condition, results of operations and future prospects.

Our business has grown rapidly, and we may not be able to maintain our historical rate of growth.

~~Our~~Continued ~~business has grown rapidly. Although rapid business~~ growth ~~can be a favorable business condition, financial institutions that grow rapidly can experience significant difficulties as a result of rapid growth. Successful growth~~ in our banking business requires that we follow adequate loan underwriting standards, and balance loan and deposit growth while managing interest rate risk and our net interest margin, ~~maintain~~maintaining adequate capital at all times, ~~produce~~producing investment ~~performance results competitive with our peers and benchmarks, further diversify our revenue sources, meet the expectations of our clients, and hire and retain qualified employees.~~

We may not be able to sustain our historical rate of growth or continue to grow our business at all. Because of factors such as the uncertainty in the general economy and the recent government intervention in the credit markets, it may be difficult for us to repeat our historic earnings growth as we continue to expand. Failure to grow or failure to manage our growth effectively could have a material adverse effect on our business and future prospects, and could adversely affect the implementation our business strategy.32

performance results competitive with our peers and benchmarks, further diversifying our revenue sources, meeting the expectations of our clients, and hiring and retaining qualified employees.

We may not be able to sustain our historical rate of growth or continue to grow our business at all. Because of factors such as the uncertainty in the general economy and the possibility of government intervention in the credit markets, it may be difficult for us to repeat our historic earnings growth as we continue to expand. Failure to grow or failure to manage our growth effectively could have a material adverse effect on our business and future prospects, and could adversely affect the implementation our business strategy.

Our utilization of brokered deposits could adversely affect our liquidity and results of operations.

Since our inception, we have utilized both brokered and non-brokered deposits as a source of funds to support our growing loan demand and other liquidity needs. As a bank regulatory supervisory matter, reliance upon brokered deposits as a significant source of funding is discouraged~~. Brokered~~ because brokered deposits may not be as stable as other types of deposits and, in the future, those depositors may not renew their deposits, or we may have to pay a higher interest rate to keep those deposits or replace them with other deposits or with funds from other sources. Additionally, if TriState Capital Bank ceases to be categorized as “well capitalized” for bank regulatory purposes, it will not be able to accept, renew or roll over brokered deposits without a waiver from the ~~Federal Deposit Insurance Corporation, or~~ FDIC. ~~Our~~If ~~inability~~we are unable to maintain or replace these brokered deposits as they mature, it could adversely affect our liquidity and results of operations. Further, paying higher interest rates to maintain or replace these deposits could adversely affect our net interest margin, net income and financial condition.

Liquidity risk could impair our ability to fund operations and meet our obligations as they become due.

Our ability to implement our business strategy will depend on our liquidity and ability to obtain funding for loan originations, working capital and other general purposes. Our preferred source of funds for our banking business consists of core customer deposits; however, we rely on other sources such as brokered deposits and Federal Home Loan Bank, or (“FHLB,”) advances. In addition to our competition with other banks for deposits, such account and deposit balances can decrease when customers perceive alternative investments as providing a better risk/return trade off. If customers move money out of bank deposits and into other investments, we may increase our utilization of brokered deposits, FHLB advances and other wholesale funding sources necessary to fund desired growth levels.

We rely on our ability to generate deposits and effectively manage the repayment and maturity schedules of our loans and investment securities and other sources of liquidity, respectively, to ensure that we have adequate liquidity to fund our banking operations. Any decline in available funding could adversely impact our ability to fund new loan balances, invest in securities, meet our expenses or fulfill obligations such as repaying our borrowings or meeting deposit withdrawal demands, any of which could have a material adverse effect on our liquidity, financial condition, results of operations and future prospects.

We may need to raise additional capital in the future, and if we fail to maintain sufficient capital, we may not be able to maintain regulatory compliance.

We face significant capital and other regulatory requirements as a financial institution. We may need to raise additional capital in the future to provide us with sufficient capital resources and liquidity to meet our commitments and business needs, which could include the financing of acquisitions. In addition, we, on a consolidated basis, and TriState Capital Bank, on a stand-alone basis, must meet certain regulatory capital requirements and maintain sufficient liquidity as required by regulators. Regulatory capital requirements could increase from current levels or our regulators could expect us to maintain capital levels that are in excess of such requirements, which could require us to raise additional capital or reduce our operations. Our ability to raise additional capital depends on conditions in the capital markets, economic conditions and a number of other factors, including investor perceptions regarding the banking industry, market conditions and governmental activities, as well as on our financial condition and performance. Accordingly, we may not be able to raise additional capital if needed or on terms acceptable to us. If we fail to maintain adequate levels of capital to meet regulatory requirements, we could be subject to enforcement actions or other regulatory consequences, which could have an adverse effect on our business, financial condition, results of operations and future prospects.

the financing of acquisitions. In addition, we, on a consolidated basis, and TriState Capital Bank, on a stand-alone basis, must meet certain regulatory capital requirements and maintain sufficient liquidity required by regulators. Regulatory capital requirements could increase from current levels or our regulators could ask us to maintain capital levels that are in excess of such requirements, which could require us to raise additional capital or reduce our operations. Our ability to raise additional capital depends on conditions in the capital markets, economic conditions and a number of other factors, including investor perceptions regarding the banking industry, market conditions and governmental activities, as well as on our financial condition and performance. Accordingly, we may not be able to raise additional capital if needed or on terms acceptable to us. If we fail to maintain capital to meet regulatory requirements, we could be subject to enforcement actions or other regulatory consequences, which could have an adverse effect on our business, financial condition, results of operations and future prospects.

Any future reductions in our credit ratings may increase our funding costs or impair our ability to effectively compete for business.

Credit ratings or changes in ratings policies and practices are subject to change at any time, and it is possible that any rating agency will take action to downgrade us in the future. We have used and may in the future use debt as a funding source. One or more rating agencies regularly evaluate us and their ratings of our long-term debt are based on many quantitative and qualitative factors, including capital adequacy, liquidity, asset quality, business mix and level and quality of earnings, and we may not be able to maintain our current credit ratings.

Any future decrease in our credit ratings by one or more rating agencies could impact our access to the capital markets or short-term funding or increase our financing costs, and thereby adversely affect our financial condition and liquidity. In the event of a ratings downgrade, our clients and counterparties may terminate their relationships with us, be less likely to engage in transactions with us, or only engage in transactions with us on terms that are less favorable than those currently in place. We cannot predict whether client relationships or opportunities for future relationships could be adversely affected by clients who choose to do business with a higher-rated institution. The inability to maintain our credit ratings have a material adverse effect on our business, financial condition, results of operations or future prospects.

Changes in interest rates could negatively impact the profitability of our banking business.

Our profitability depends to a significant extent on our net interest income, which is the difference between our interest income on interest-earning assets, such as loans and investment securities, and our interest expense on interest-bearing liabilities, such as deposits and borrowings. Net interest income is affected by changes in market interest rates because different types of assets and liabilities may react differently, and at different times, to market interest rate changes. When interest-bearing liabilities mature or reprice more quickly than interest-earning assets in a period, an increase in market rates of interest could reduce net interest income. Similarly, when interest-earning assets mature or reprice more quickly than interest-bearing liabilities, falling interest rates could reduce net interest income. These rates are highly sensitive to many factors beyond our control, including general economic conditions and policies of various governmental and regulatory agencies including, in particular, the Federal Reserve. Changes in monetary policy, including changes in interest rates, could not only influence the interest we receive on loans and securities and the interest we pay on deposits and borrowings, but such changes could also affect our ability to originate loans and obtain deposits, the fair value of our financial assets and liabilities, and the average duration of our assets. If the interest rates paid on deposits and other borrowings increase at a faster rate than the interest rates received on loans and other investments, our net interest income, and therefore our net income, could be adversely affected.

Our loans are predominantly variable rate loans, with the majority being based on the London Interbank Offered Rate, or LIBOR. A decline in interest rates could cause the spread between our loan yields and our deposit rates paid to compress our net interest margin and our net income could be adversely affected. Further, any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our business, financial condition, results of operations and future prospects.

In addition, an increase in interest rates could also have a negative impact on our results of operations by reducing the market value of our investment securities and the ability of borrowers to repay their current loan obligations. These circumstances could not only result in increased loan defaults, foreclosures and charge-offs, but also necessitate increases to our ALL. Each of these factors could have a material adverse effect on our business, results of operations, financial condition and future prospects.

The intention of the United Kingdom’s FCA to cease support of LIBOR after June 30, 2023 could negatively affect the fair value of our financial assets and liabilities, results of operations and net worth. A transition to an alternative reference interest rate could present operational problems and result in market disruption, including inconsistent approaches for different financial products, as well as disagreements with counterparties.

The FCA has announced its intention to cease publication of certain tenors of LIBOR at the end of 2021 and to extend the publication of certain tenors of LIBOR through June 30, 2023, but the Federal Reserve has continued to encourage banks to transition away from

~~LIBOR~~Any asfuture ~~soon~~decrease asin ~~practicable. Although~~our wecredit ~~expect~~ratings ~~that~~by one or more rating agencies could impact our access to the capital ~~and~~markets ~~debt~~or ~~markets~~short-term ~~will~~funding ~~cease~~or toincrease ~~use~~our ~~LIBOR~~financing ascosts, aand ~~benchmark~~thereby inadversely affect our financial condition and liquidity. In the ~~near~~event ~~future~~of a ratings downgrade, weour ~~cannot~~clients ~~predict~~and ~~when~~counterparties ~~LIBOR~~may ~~will~~terminate ~~actually~~their ~~cease~~relationships towith us, be ~~available,~~less ~~whether~~likely ~~the~~to ~~Secured~~engage ~~Overnight~~in ~~Funding~~transactions ~~Rate~~with us, or ~~SOFR,~~only ~~will~~engage ~~become~~in ~~the~~transactions ~~market~~with ~~benchmark~~us inon ~~its~~terms that are less favorable than those currently in place. We cannot predict whether client relationships or ~~what~~opportunities ~~impact~~for ~~such~~future relationships could be adversely affected by clients who choose to do business with a ~~transition~~higher-rated institution. The inability to maintain our credit ratings may have a material adverse effect on our business, financial condition, results of operations ~~and~~or ~~financial~~future ~~condition~~prospects.

~~The~~Changes ~~selection~~in ofinterest SOFR as the alternative reference rate for these products currently presents certain market concerns because SOFR (unlike LIBOR) does not have an inherent term structure or credit risk component. A methodology has been developed to calculate SOFR-based term rates, ~~and~~could ~~the~~negatively ~~Federal~~impact ~~Reserve has published such rates daily since early 2020. However,~~ the ~~methodology~~profitability ~~has not been tested for an extended period~~ of ~~time, which may limit market acceptance of the use of SOFR. In addition, SOFR may not be a suitable alternative to LIBOR for all of~~ our ~~financial~~banking ~~products, and it is uncertain what other rates might be appropriate for that purpose~~business. It is uncertain whether these other indices will remain acceptable alternatives for such products. The replacement of LIBOR also may result in economic mismatches between different categories of instruments that now consistently rely on the LIBOR benchmark.

WeOur ~~have~~profitability depends to a significant ~~number~~extent ofon ~~financial~~our ~~products~~net interest income, ~~including~~which ~~mortgage~~is ~~loans,~~the ~~mortgage~~difference between our interest income on interest-~~related~~earning ~~securities~~assets, ~~other~~such ~~debt~~as loans and investment securities, and ~~derivatives~~our interest expense on interest-bearing liabilities, ~~that~~such ~~are~~as ~~tied~~deposits toand ~~LIBOR~~borrowings. Net interest income is affected by changes in market interest rates because different types of assets and liabilities may react differently, and weat ~~continue~~different times, to ~~enter~~market ~~into~~interest ~~transactions~~rate ~~involving~~changes. When ~~such~~interest-bearing ~~products~~liabilities ~~that~~mature ~~will~~or ~~mature~~reprice ~~beyond~~more ~~2021~~quickly ~~with~~than ~~appropriate~~interest-earning ~~fallback~~assets ~~transition~~in ~~language~~a ~~for~~period, an ~~alternative~~increase ~~reference~~in ~~rate~~market rates of interest could reduce net interest income. ~~Inconsistent~~Similarly, ~~approaches~~when tointerest-earning aassets ~~transition~~mature ~~from~~or ~~LIBOR~~reprice more quickly than interest-bearing liabilities, falling interest rates could reduce net interest income. These rates are highly sensitive to anmany ~~alternative~~factors ~~rate~~beyond ~~among~~our ~~different~~control, ~~market~~including ~~participants~~general economic conditions and ~~for~~policies ~~different~~of ~~financial~~various ~~products~~governmental ~~may~~and ~~cause~~regulatory ~~market~~agencies ~~disruption~~including, ~~and~~in ~~operational~~particular, ~~problems~~the Federal Reserve, which ~~could~~has ~~adversely~~suggested ~~affect~~that usit may take steps to raise interest rates in 2022. Changes in monetary policy, including bychanges ~~exposing~~in usinterest torates, ~~increased~~could ~~basis~~not ~~risk~~only influence the interest we receive on loans and ~~resulting~~securities ~~costs~~and inthe ~~connection~~interest ~~with~~we ~~remediating~~pay ~~these~~on ~~problems~~deposits and borrowings, but such changes could also affect our ability to originate loans and byobtain ~~creating~~deposits, the ~~possibility~~fair value of ~~disagreements~~our ~~with~~financial ~~counterparties~~assets and liabilities, and the average duration of our assets. If the interest rates paid on deposits and other borrowings increase at a faster rate than the interest rates received on loans and other investments, our net interest income, and therefore our net income, could be adversely affected.

Our loans are predominantly variable rate loans, with the majority still being based on the London Interbank Offered Rate (“LIBOR”). A decline in interest rates could cause the spread between our loan yields and our deposit rates paid to compress our net interest margin, which would adversely affect our net interest income. Further, any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our business, financial condition, results of operations and future prospects.

In addition, an increase in interest rates could also have a negative impact on our results of operations by reducing the market value of our investment securities and the ability of borrowers to repay their current loan obligations. These circumstances could not only result in increased loan defaults, foreclosures and charge-offs, but also necessitate increases to our ACL. Each of these factors could have a material adverse effect on our business, results of operations, financial condition, and future prospects.

The intention of the United Kingdom’s FCA to cease support of LIBOR by June 30, 2023, could negatively affect the fair value of our financial assets and liabilities, results of operations and net worth, and transition to an alternative reference interest rate could present operational problems and result in market disruption.

Although the publication of most LIBOR rates will cease on June 30, 2023 (excluding 1-week U.S. LIBOR and 2-month U.S. LIBOR, which ceased on December 31, 2021), U.S. banking regulators expected banks, subject to certain exceptions, to cease originating new products using LIBOR by December 31, 2021, and to ensure existing contracts have robust fallback language that includes a clearly defined alternative reference rate. We cannot predict exactly when the capital and debt markets will cease to use LIBOR as a benchmark, whether the Secured Overnight Financing Rate (“SOFR”) will become the market benchmark in its place, or what impact such a transition may have on our business, results of operations and financial condition.

The selection of SOFR as the alternative reference rate for these products currently presents certain market concerns because SOFR, unlike LIBOR, does not have an inherent term structure. A methodology has been developed to calculate SOFR-based term rates, and the Federal Reserve Bank of New York has published such rates daily since early 2020. However, the methodology has not been tested for an extended period of time, which may limit market acceptance of the use of SOFR. In addition, SOFR may not be a suitable alternative to LIBOR for all of our financial products, and it is uncertain what other rates or indices might be appropriate for that purpose. The replacement of LIBOR also may result in economic mismatches between different categories of instruments that now consistently rely on the LIBOR benchmark.

Inconsistent approaches to a transition from LIBOR to an alternative rate among different market participants and for different financial products may cause market disruption and operational problems, which could adversely affect us, including by exposing us to increased basis risk and resulting costs in connection with this risk, and by creating the possibility of disagreements with counterparties.

The transition has changed, and will continue to change our market risk profiles, requiring changes to risk and pricing models, valuation tools, product design and hedging strategies. We have organized an internal initiative to identify operational and contractual best practices, assess risks, manage the transition from LIBOR, facilitate communication with customers, and monitor the impacts of the transition.

Our investment management business may be negatively impacted by competition, changes in economic and market conditions, changes in interest rates and investment performance.

AWe derive a material portion of our earnings ~~is derived~~ from Chartwell, our investment management business. Chartwell may be negatively impacted by competition, changes in economic and market conditions, changes in interest rates and investment performance. The investment management business is intensely competitive. There are over 1,000 firms which we consider to be primary competitors of Chartwell. In addition to competition from other institutional investment management firms, Chartwell competes with passive index funds, ETFs and investment alternatives such as hedge funds. Many competitors offer similar products to those offered by Chartwell and the performance of competitors’ products could lead to a loss of investment in similar Chartwell products, regardless of the performance of such products.

Our investment management contracts are typically terminable in nature and our ability to successfully attract and retain investment management clients will depend on, among other things, our ability to compete with our competitors’ investment products, our investment performance, fees, client services, and marketing and distribution capabilities. Most of our clients may withdraw funds from under our management at their discretion at any time for any reason, including as a result of competition or poor performance of our products. If we cannot effectively attract and retain customers, our business, financial condition, results of operations and future prospects may be adversely affected.

Additionally, it is possible our management fees could be reduced for a variety of reasons, including, among other things, pressure resulting from competition or regulatory changes, and we may from time to time reduce or waive investment management fees, or limit total expenses, on certain products or services offered for particular time periods in order to manage fund expenses, to help retain or increase managed assets or for other reasons. If our revenues decline without a commensurate reduction in our expenses, our net income from our investment management business would be reduced, which could have a material adverse effect on our business, financial condition, results of operations and future prospects.

We cannot guarantee that our investment performance will be favorable in the future. The financial markets and businesses operating in the securities industry are highly volatile and affected by, among other factors, economic conditions and trends in business, all of which are beyond our control. Declines in the financial markets, changes in interest rates or a lack of sustained growth may result in declines in the performance of our investment management business and the assets under management. Because the revenues of our investment management business are, to a large extent, comprised of fees based on assets under management, such declines could adversely affect our business.

We face significant competitive pressures that could impair our growth, decrease our profitability, or reduce our market share.

We operate in the highly competitive financial services industry and face significant competition for customers from bank and non-bank competitors, particularly regional and nationwide institutions, in originating loans, attracting deposits, providing financial management products and services, and providing other financial services. Our competitors are generally larger and may have significantly more resources, greater name recognition, and more extensive and established branch networks or geographic footprints. Because of their scale, many of these competitors can be more aggressive than we can be on loan, deposit and financial services pricing. In addition, many of our non-bank and non-institutional financial management competitors have fewer regulatory constraints and may have lower cost structures. We expect competition to continue to intensify due to financial institution consolidation, legislative, regulatory and technological changes, and the emergence of alternative banking sources and investment management products and services. Additionally, technology has lowered barriers to entry.

34Our ability to compete successfully will depend on a number of factors, including our ability to build and maintain long-term customer relationships while ensuring high ethical standards and safe and sound business practices, the scope, relevance, performance and pricing of products and services that we offer, customer satisfaction with our products and services, industry and general economic trends, and our ability to keep pace with technological advances and to invest in new technology. Increased competition could require us to increase the rates we pay on deposits or lower the rates we offer on loans or the fees we charge on banking or investment management products and services, all of which could reduce our profitability. Our failure to compete effectively in our primary markets could cause us to lose market share and could have a material adverse effect on our business, financial condition, results of operations and future prospects.

pricing. In addition, many of our non-bank and non-institutional financial management competitors have fewer regulatory constraints and may have lower cost structures. We expect competition to continue to intensify due to financial institution consolidation; legislative, regulatory and technological changes; and the emergence of alternative banking sources and investment management products and services. Additionally, technology has lowered barriers to entry.

Our ability to compete successfully will depend on a number of factors, including our ability to build and maintain long-term customer relationships while ensuring high ethical standards and safe and sound business practices; the scope, relevance, performance and pricing of products and services that we offer; customer satisfaction with our products and services; industry and general economic trends; and our ability to keep pace with technological advances and to invest in new technology. Increased competition could require us to increase the rates we pay on deposits or lower the rates we offer on loans or the fees we charge on banking or investment management products and services, all of which could reduce our profitability. Our failure to compete effectively in our primary markets could cause us to lose market share and could have a material adverse effect on our business, financial condition, results of operations and future prospects.

Our ability to maintain our reputation is critical to the success of our business.

Our business plan emphasizes building and maintaining strong relationships with our clients. We have benefited from strong relationships with and among our customers, and also from our relationships with financial intermediaries. As a result, our reputation is one of the most valuable components of our business. If our reputation is negatively affected by the actions of our employees or otherwise, our existing relationships may be damaged. We could lose some of our existing customers, including groups of large customers who have relationships with each other, and we may not be successful in attracting new customers from competing financial institutions. Any of these developments could have a material adverse effect on our business, financial condition, results of operations and future prospects.

customers who have relationships with each other, and we may not be successful in attracting new customers from competing financial institutions. Any of these developments could have a material adverse effect on our business, financial condition, results of operations and future prospects.

The fair value of our investment securities can fluctuate due to factors outside of our control.

Factors beyond our control can significantly influence the fair value of securities in our portfolio and can cause potential adverse changes to the fair value of these securities. These factors include, but are not limited to, rating agency actions in respect to the securities, defaults by the issuer or with respect to the underlying securities, changes in market interest rates and continued instability in the capital markets. Any of these factors, among others, could cause other-than-temporary impairments and realized or unrealized losses in future periods, which could have a material adverse effect on our business, financial condition, results of operations and future prospects. The process for determining whether impairment of a security is other-than-temporary often requires complex, subjective judgments about whether there has been a significant deterioration in the financial condition of the issuer, whether management has the intent or ability to hold a security for a period of time sufficient to allow for any anticipated recovery in fair value, the future financial performance and liquidity of the issuer and any collateral underlying the security, and other relevant factors which may be inaccurate.

Our financial results depend on management’s selection of accounting methods and certain assumptions and estimates.

Our financial condition and results of operations are based on our consolidated financial statements, which are prepared in accordance with generally accepted accounting principles in the United States, or (“GAAP,”) and with general practices within the financial services industry. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that have a possibility of producing results that could be materially different than originally reported.

For example, effective January 1, 2020, TriState Capital Bank adopted new accounting guidance for estimating credit losses on loans receivable, held-to-maturity debt securities, and unfunded loan commitments. The current expected credit losses, or CECL, model significantly changed how entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses that occur over the life of the financial asset. This requires reserves over the life of the loan rather than the loss emergence period used in the prior model. The CECL guidance requires the implementation of new modeling to quantify this estimate by using principles of not only relevant historical experience and current conditions, but also reasonable and supportable forecasts of future events and circumstances, thus incorporating a broad range of estimates and assumptions in developing credit loss estimates, which could result in significant changes to both the timing and amount of credit loss expense and allowance. Adoption of, and efforts to implement, this guidance has caused and may cause our ACL to change materially in the future, which could have a material adverse effect on our business, financial condition, results of operations and future prospects. Since inception, our company has very limited loss experience. As a result, our implementation of CECL utilizes a combination of internal and external data to estimate lifetime loss rates. The availability and quality of relevant historical information under this estimation process, the accuracy of forecasts that are required under the CECL methodology, and the development of effective modeling to implement the CECL methodology can have material impacts on current and future provision reserve requirements.

By engaging in derivative transactions, we are exposed to additional credit and market risk in our banking business.

We use interest rate swaps to help manage interest rate risk in our banking business with respect to recorded financial assets and liabilities when they can be demonstrated to effectively hedge a designated asset or liability and the asset or liability exposes us to interest rate risk or risks inherent in customer related derivatives. We use other derivative financial instruments to help manage other economic risks, such as liquidity and credit risk and risk arising from differences in the amount, timing, and duration of our known or expected cash receipts, which are principally related to certain of our fixed-rate loan assets or certain of our variable-rate borrowings. We also have derivatives that result from a service we provide to certain qualifying customers approved through our credit process.

By engaging in derivative transactions, we are exposed to credit and market risk. Hedging interest rate risk is a complex process, requiring sophisticated models and routine monitoring, and is not a perfect science. As a result of interest rate fluctuations, hedged assets and liabilities will appreciate or depreciate in value. The effect of this unrealized appreciation or depreciation will generally be offset by income or loss on the derivative instruments. If the counterparty fails to perform, credit risk exists to the extent of the fair value gain in the derivative. Market risk exists to the extent that interest rates change in ways that are significantly different from what we expected when we entered into the derivative transaction. The existence of credit and market risk associated with our derivative instruments could adversely affect our net interest income and, therefore, could have an adverse effect on our business, financial condition, results of operations and future prospects.

We may be adversely affected by a decrease in the soundness of other financial services companies.

Our ability to engage in routine funding and other transactions could be adversely affected by the actions and commercial soundness of other financial services companies. The financial services industry is highly interrelated as a result of trading, clearing, servicing, custody arrangements, counterparty relationships, and other relationships. We have exposure to different industries and counterparties, including through transactions with counterparties and intermediaries in the financial services industry such as brokers and dealers, commercial banks, insurance companies, investment banks, mutual and hedge funds, and other institutional clients. In addition, we participate in loans originated by other financial institutions (including shared national credits) and our private banking channel relies on relationships with other financial services companies for referrals. As a result, declines in the financial condition of, defaults of, or even rumors or questions about, one or more financial service companies or the financial services industry generally, may lead to market-wide liquidity, asset quality or other problems and could lead to losses or defaults by us or by other institutions. In addition, problems that arise in our relationships with financial services companies may result in a slow-down or cessation in referrals that we receive from these financial services companies. These problems, losses or defaults could have a material adverse effect on our business, financial condition, results of operations and future prospects.

We rely on third parties to provide key components of our business infrastructure, including to monitor the value of and control marketable securities that collateralize our loans, and a failure of these parties to perform for any reason could disrupt our operations.36

We rely on third parties to provide key components of our business infrastructure, including to monitor the value of and control marketable securities that collateralize our loans, and a failure of any of these parties to perform for any reason could disrupt our operations.

Third parties provide key components of our business infrastructure such as loan and account servicing, data processing, internet connections, network access, core application processing, statement production and account analysis. Our business depends on the successful and uninterrupted functioning of our information technology and telecommunications systems and third-party servicers. In addition, we utilize the systems of these third parties to provide information to us so that we can quickly and accurately monitor changes in the value of marketable securities that serve as collateral. We also rely on these third parties to provide control over marketable securities for purposes of perfecting our security interests and retaining the collateral in the applicable accounts.

The failure of these systems, or the termination of a third-party software license or service agreement on which any of these systems is based, could interrupt our operations. Because our information technology and telecommunications systems interface with and depend on third-party systems, we could experience service denials if demand for such services exceeds capacity or such third-party systems fail or experience interruptions or impaired performance of our systems and technology due to malfunctions, programming inaccuracies or other circumstances or events. Replacing vendors or addressing other issues with our third-party service providers could entail significant delay and expense. If we are unable to efficiently replace ineffective service providers, or if we experience a significant, sustained or repeated system failure or service denial, it could compromise our ability to effectively operate, assess and react to a risk in our loan portfolio, damage our reputation, result in a loss of customer business or financial damages from customer businesses, and subject us to additional regulatory scrutiny and possible financial liability, any of which could have a material adverse effect on our business, financial condition, results of operations and future prospects.

We could be subject to losses, regulatory action and reputational harm due to fraudulent and negligent acts on the part of loan applicants, our borrowers, our clients, our employees and our vendors.

In deciding whether to extend credit or enter into other transactions with clients and counterparties, we may rely on information furnished by or on behalf of clients and counterparties, including financial statements, property appraisals, title information, income documentation, account information and other financial information. We may also rely on representations of counterparties as to the accuracy and completeness of such information and, with respect to financial statements, on reports of independent auditors. Any such misrepresentation or incorrect or incomplete information may not be detected prior to funding a loan or during our ongoing monitoring of outstanding loans. In addition, one or more of our employees or vendors could cause a significant operational breakdown or failure, either as a result of human error or fraud. Any of these developments could have a material adverse effect on our business, financial condition, results of operations and future prospects.

documentation, account information and other financial information. We may also rely on representations of counterparties as to the accuracy and completeness of such information and, with respect to financial statements, on reports of independent auditors. Any such misrepresentation or incorrect or incomplete information may not be detected prior to funding a loan or during our ongoing monitoring of outstanding loans. In addition, one or more of our employees or vendors could cause a significant operational breakdown or failure, either as a result of human error or fraud. Any of these developments could have a material adverse effect on our business, financial condition, results of operations and future prospects.

Our growth and expansion strategy may involve strategic investments or acquisitions, and we may not be able to overcome risks associated with such transactions.

Although we plan to continue to grow our business organically, we may seek opportunities to invest in or acquire investment management businesses or other businesses that we believe would complement our existing business model. Any potential future investment or acquisition activities could be material to our business and involve a number of risks, including significant time and expense required to identify, evaluate and negotiate potential transactions; an inability to attract acceptable funding; failure to secure regulatory approvals or to secure those approvals on favorable terms; the limited experience of our management team in working together on acquisitions and integration activities; the time, expense and difficulty of integrating the combined businesses; an inability to realize expected synergies or returns on investment; potential disruption of our ongoing business; an inability to maintain adequate regulatory capital; and a loss of key employees or key customers. We may not be successful in overcoming these risks or any other problems. Our inability to overcome these risks could have an adverse effect on our ability to implement our business strategy and enhance shareholder value, which, in turn, could have a material adverse effect on our business, financial condition, results of operations and future prospects.

New lines of business or new or enhanced products and services may subject us to additional risks.

From time to time, we may develop, grow or acquire new lines of business or offer new products and services. There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. In developing, implementing, and marketing new lines of business or new or enhanced products and services, we may invest significant time and resources. Initial timetables for the introduction and development of new lines of business or new products or services may not be achieved and price and profitability targets may not prove feasible. External factors, such as compliance with regulations, competitive alternatives and shifting market preferences, may also impact the successful implementation of a new line of business or a new product or service. Furthermore, any new line of business or new or enhanced product or service could have a significant impact on the effectiveness of our system of internal controls. Failure to successfully manage these risks could have a material adverse effect on our business, financial condition, results of operations and future prospects.

The value of our goodwill and other intangible assets may decline in the future.

In our prior asset management acquisitions, we have generally recognized intangible assets, including customer relationship intangible assets and goodwill, in our consolidated statements of financial condition, but we may not realize the value of these assets. Management performs an annual review of the carrying values of goodwill and indefinite-lived intangible assets and periodically reviews the carrying values of all other intangible assets to determine whether events and circumstances indicate that an impairment in value may have occurred. Although we have determined that goodwill and other intangible assets were not impaired during ~~2020~~2021, a significant and sustained decline in assets under management in our investment management business, a significant decline in our expected future cash flows, a significant adverse change in the business climate, slower growth rates, or other factors could result in impairment of goodwill or other intangible assets. Should a review indicate impairment, a write-down of the carrying value of the asset would occur, resulting in a non-cash charge which could result in a material charge to earnings and would adversely affect our results of operations.

Unauthorized access, cyber-crime and other threats to data security may require significant resources, harm our reputation, and adversely affect our business.

We necessarily collect, use and hold personal and financial information concerning individuals and businesses with which we have a relationship. In addition, we provide our clients with the ability to bank and make investment decisions remotely, including over the internet. Threats to data security, including unauthorized access and cyber-attacks, rapidly emerge and change, exposing us to additional costs related to protection or remediation and competing time constraints to secure our data in accordance with customer expectations, statutory and regulatory privacy regulations, and other requirements. It is difficult or impossible to defend against every risk being posed by changing technologies, as well as the intent of criminals, terrorists or foreign governments or their agents with respect to committing cyber-crime. Because of the increasing sophistication of cyber-criminals and terrorists, data breaches could result despite our best efforts. These risks may increase in the future as we continue to increase our internet-based product offerings and expand our internal use of web-based products and applications, and controls employed by our information technology department and our other employees and vendors could prove inadequate to resolve or mitigate these risks.

Unauthorized access, cyber-crime, and other threats to data security may require significant resources, harm our reputation, and adversely affect our business.

We could also experience a breach due to intentional or negligent conduct on the part of employees, vendors or other internal sources, software bugs or other technical malfunctions, or other causes. As a result of any of these threats, our customer accounts and the personal and financial information of our customers and employees may become vulnerable to account takeover schemes, identity theft or cyber-fraud. In addition, our customers use their own electronic devices to do business with us and may provide their information to a third party in connection with obtaining services from such third party. Our ability to assure security is limited in these instances. Our systems and those of our third-party vendors may also become vulnerable to damage or disruption due to circumstances beyond our or their control, such as catastrophic events, power anomalies or outages, natural disasters, network failures, viruses and malware.

A breach of our security or the security of any of our third-party vendors that results in unauthorized access to our data, including personal and financial information of our customers, could expose us to a disruption or challenges relating to our daily operations as well as to data loss, litigation, damages, fines and penalties, significant increases in compliance costs, regulatory scrutiny and reputational damage. Maintaining our security measures may also create risks associated with implementing and integrating new systems. In addition, our investment management business could be harmed by cyber incidents affecting issuers in which its customers’ assets are invested, and our private banking business could be harmed by such incidents. Any such breaches of security or cyber-incidents could have a material adverse effect on our business, financial condition, results of operations and future prospects.

Beyond breaches of our security or the security of our third-party vendors or their affiliates, as a result of financial entities and technology systems becoming more interdependent and complex, a cyber-incident, information breach or loss, or technology failure that compromises the systems or data of one or more financial entities could have a material impact on counterparties or other market participants, including us. We have taken measures to implement backup systems and other safeguards to support our operations, but our ability to conduct business may be adversely affected by any significant disruptions to us or to third parties with whom we interact.

We are subject to laws regarding the privacy, information security and protection of personal information and any violation of these laws or another incident involving personal, confidential or proprietary information of individuals could damage our reputation and otherwise adversely affect our operations and financial condition.

Our business requires the collection and retention of large volumes of customer data, including personally identifiable information, in various information systems that we maintain and in those maintained by third-party service providers. We also maintain important internal company data such as personally identifiable information about our employees and information relating to our operations. We are subject to complex and evolving laws and regulations governing the privacy and protection of personal information of individuals (including customers, employees, suppliers and other third parties). Various state and federal banking regulators and other law enforcement bodies have also enacted data security breach notification requirements with varying levels of individual, consumer, regulatory or law enforcement notification in the event of a security breach. For example, a final rule that the federal banking agencies issued in November 2021, for which the compliance date is May 1, 2022, requires banking organizations to notify their primary federal regulator of significant computer security incidents within 36 hours of determining that such an incident has occurred. Ensuring that our collection, use, transfer and storage of personal information comply with all applicable laws and regulations may increase our costs. Furthermore, we may not be able to ensure that all of our clients, suppliers, counterparties and other third parties have appropriate controls in place to protect the confidentiality of the information that they exchange with us. If personal, confidential or proprietary information of our customers or others were to be mishandled or misused, we could be exposed to litigation or regulatory sanctions under personal information laws and regulations. Concerns regarding the effectiveness of our measures to safeguard personal information, or even the perception that such measures are inadequate, could cause us to lose customers or potential customers and thereby reduce our revenues. Accordingly, any failure or perceived failure to comply with applicable privacy or data protection laws and regulations may subject us to inquiries, examinations and investigations that could result in requirements to modify or cease certain operations or practices or in significant liabilities, fines or penalties, and could damage our reputation and otherwise adversely affect our business, financial condition, results of operations, and future prospects.

We have a continuing need for technological change, and we may not have the resources to effectively implement new technology, or we may experience operational challenges when implementing new technology.

The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services. The effective use of technology increases efficiency and enables financial institutions to better serve customers and to reduce costs. Our future success depends, in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in our operations. Although we are committed to keeping pace with technological advances and to investing in new technology, our competitors may, through the use of new technologies that we have not implemented, whether due to cost or otherwise, be able to offer additional or superior products, which would put us at a competitive disadvantage. We also may not be able to effectively implement new technology-driven products and services, be successful in marketing such products and services or replace technologies that are out of date with new technologies, which could result in a loss of customers seeking new technology-driven products and services. In addition, the implementation of technological changes and upgrades to maintain current systems and

~~integrate~~We ~~new~~have ~~ones~~a ~~may~~continuing ~~cause~~need ~~service~~for ~~interruptions~~technological change, ~~transaction processing errors~~ and ~~system~~we ~~conversion delays,~~ may ~~cause~~not ushave tothe ~~fail~~resources to ~~comply~~effectively ~~with~~implement ~~applicable~~new ~~laws~~technology, ~~and~~or ~~may~~we ~~cause us to incur additional expenses, which~~ may beexperience ~~substantial. Failure~~operational tochallenges ~~successfully~~when ~~keep~~implementing ~~pace~~new with technological change affecting the financial services industry and avoid interruptions, errors and delays could have a material adverse effect on our business, financial condition, results of operations and future prospectstechnology.

We may take tax filing positions or follow tax strategies that may be subject to challenge.

The amount of income taxes that we are required to pay on our earnings is based on federal and state legislation and regulations. We provide for current and deferred taxes in our financial statements based on our results of operations, business activity, legal structure, and interpretation of tax statutes. We may take filing positions or follow tax strategies that are subject to audit and may be subject to challenge. Our net income may be reduced if a federal, state or local authority assesses charges for taxes that have not been provided for in our consolidated financial statements. Taxing authorities could change applicable tax laws, challenge filing positions or assess taxes and interest charges. If taxing authorities take any of these actions, our business, financial condition, results of operations and future prospects could be adversely affected, perhaps materially.

Risks Relating to Our Proposed Acquisition by Raymond James

Because the market price of Raymond James common stock fluctuates, TriState Capital shareholders cannot be certain of the market value of the merger consideration they will receive.

Under our pending Acquisition by Raymond James, each share of our common stock that is issued and outstanding immediately prior to the effective time of the merger, with certain limited additions and exceptions, will be converted into the right to receive (A) $6.00 in cash and (B) 0.25 shares of Raymond James common stock. The exchange ratio for the stock consideration is fixed and will not be adjusted for changes in the market price of either Raymond James common stock or our common stock. Changes in the price of Raymond James common stock between now and the time of the Acquisition will affect the value that holders of our common stock will receive in the merger. Neither we nor Raymond James are permitted to terminate the Merger Agreement as a result of, in and of itself, any increase or decrease in the market price of our common stock or Raymond James’ common stock. Stock price changes may result from a variety of factors, including general market and economic conditions, changes in our and Raymond James’s businesses, operations and prospects, volatility in the prices of securities in global financial markets, including market prices of our common stock, Raymond James’s common stock and other banking companies, the effects of the COVID-19 pandemic and regulatory considerations and tax laws, many of which are beyond our and Raymond James’s control. Therefore, at the time of the special meeting, holders of our common stock will not know the market value of the consideration that they will receive at the effective time of the Acquisition. You should obtain current market quotations for shares of Raymond James common stock (NYSE: RJF) and shares of TriState Capital common stock (Nasdaq: TSC).

The market price of Raymond James common stock after the Acquisition may be affected by factors different from those currently affecting the shares of our common stock or Raymond James’s common stock.

Upon consummation of the Acquisition, holders of our common stock will become holders of Raymond James common stock. Raymond James’s business differs from ours and certain adjustments may be made to Raymond James’s and our business as a result of the Acquisition. Accordingly, the results of operations of the combined company and the market price of Raymond James common stock after the completion of the Acquisition may be affected by factors different from those currently affecting the independent results of operations of each of Raymond James and TriState Capital.

We and Raymond James are expected to incur incremental costs related to the Acquisition and integration.

We and Raymond James have incurred and expect to incur a number of incremental costs associated with the Acquisition, including legal, financial advisory, accounting, consulting and other advisory fees, employee benefit-related costs, public company filing fees

and other regulatory fees, financial printing and other printing costs and other related costs. Some of these costs are payable by us or Raymond James regardless of whether or not the Acquisition is completed.

In addition, the combined company will incur integration costs following the completion of the Acquisition and may also incur additional costs to maintain employee morale and to retain key employees. Integration costs may result in the combined company taking charges against earnings following the completion of the Acquisition, and the amount and timing of such charges are uncertain at present. There can be no assurances that the expected benefits related to the integration of the businesses will be realized to offset these transaction and integration costs over time.

The Acquisition and integration may be more difficult, costly or time-consuming than expected, and we and Raymond James may fail to realize the anticipated benefits of the Acquisition.

The success of the Acquisition will depend, in part, on the ability to realize the anticipated synergies from combining our and Raymond James’s businesses. The anticipated benefits of the Acquisition may not be realized fully or at all or may take longer to realize than expected, and could have an adverse effect upon the revenues, levels of expenses and operating results of the combined company following the completion of the Acquisition, which may adversely affect the value of the common stock of the combined company following the completion of the Acquisition.

We and Raymond James have operated and, until the completion of the Acquisition, must continue to and, after completion of the Acquisition, will continue to in some respects operate, independently. It is possible that the integration process could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits of the Acquisition. Integration efforts between the two companies may also divert management attention and resources. These integration matters could have an adverse effect on each company during this transition period and on the combined company for an undetermined period after completion of the Acquisition.

The future results of the combined company following the Acquisition may suffer if the combined company does not effectively manage its expanded operations.

Following the Acquisition, the size of the business of the combined company will increase beyond the current size of either our or Raymond James’s current business. The combined company’s future results will depend, in part, upon its ability to manage this expanded business, which may pose challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity. The combined company may also face increased scrutiny from governmental authorities as a result of the increased size of its business. There can be no assurances that the combined company will be successful or that it will realize the expected benefits currently anticipated from the Acquisition.

The combined company may be unable to retain our and Raymond James’s personnel after the completion of the Acquisition.

The success of the Acquisition will depend in part on the combined company’s ability to retain the talents and dedication of key employees currently employed by us and Raymond James. It is possible that these employees may decide not to remain with us or Raymond James, as applicable, while the Acquisition is pending or with the combined company after the Acquisition is consummated. If the combined company is unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, the combined company could face disruptions in its operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs. In addition, following the Acquisition, if key employees terminate their employment, the combined company’s business activities may be adversely affected, and management’s attention may be diverted from successfully hiring suitable replacements, all of which may cause the combined company’s business to suffer. The combined company also may not be able to locate or retain suitable replacements for any of our key employees who leave the combined company.

The shares of Raymond James common stock to be received by our shareholders as a result of the Acquisition will have different rights from the shares of our common stock.

Upon consummation of the Acquisition, holders of our common stock will become holders of Raymond James common stock and their rights as holders of Raymond James common stock will be governed by Florida law and the governing documents of Raymond James following the Acquisition. The rights associated with Raymond James common stock are different from the rights associated with our common stock.

We will be subject to business uncertainties and contractual restrictions while the Acquisition is pending.

Uncertainty about the effects of the Acquisition on employees, customers (including depositors and borrowers), counterparties, suppliers and vendors may have an adverse effect on our business, financial condition and results of operations. These uncertainties may impair our ability to attract, retain and motivate key personnel and customers pending the consummation of the Acquisition, as such personnel and customers may experience uncertainty about their future roles and relationships following the consummation of the Acquisition. Additionally, these uncertainties could cause our customers, counterparties, suppliers, vendors and others with whom we

deal to seek to change, or fail to extend, existing business relationships with us. In addition, competitors may target our existing customers by highlighting potential uncertainties and integration difficulties that may result from the Acquisition.

In addition, the Merger Agreement restricts us from taking certain actions without Raymond James’ consent while the Acquisition is pending. In particular, we have agreed to operate our business in the ordinary course in all material respects and to refrain from taking certain actions that may adversely affect our ability to consummate the transactions contemplated by the Merger Agreement. These restrictions may prevent us from pursuing attractive business opportunities that may arise prior to the completion of the Acquisition. If the Acquisition is not completed, these restrictions could have a material adverse effect on our business, financial condition and results of operations.

The Merger Agreement limits our ability to pursue alternatives to the Acquisition and may discourage other companies from trying to acquire us.

The Merger Agreement contains “no shop” covenants that restrict our ability to, directly or indirectly, among other things, initiate, solicit, knowingly encourage or knowingly facilitate inquiries or proposals with respect to or, subject to certain exceptions generally related to the exercise of fiduciary duties by our board of directors, engage in any negotiations concerning, or provide any confidential or non-public information or data relating to, any alternative acquisition proposals. These provisions, which include an approximately $42 million termination fee payable under certain circumstances, may discourage a potential third-party acquirer that might have an interest in acquiring all or a significant part of us from considering or proposing that acquisition.

Litigation against us or Raymond James, or the members of our or Raymond James’ board of directors, could prevent or delay the completion of the Acquisition.

The results of any potential legal claims that may be asserted by purported stockholder plaintiffs related to the Acquisition are difficult to predict and could delay or prevent the Acquisition from being completed in a timely manner. Moreover, any litigation could be time-consuming and expensive for the parties and could divert our and Raymond James’ management’s attention away from their regular business. Any lawsuit adversely resolved against us, Raymond James or members of our or Raymond James’ board of directors could have a material adverse effect on each party’s business, financial condition and results of operations.

One of the conditions to the consummation of the Acquisition is the absence of any order, injunction, law, regulation or other legal restraint preventing, prohibiting or making illegal the completion of the Acquisition or any other transactions contemplated by the Merger Agreement. Consequently, if a settlement or other resolution is not reached in any lawsuit that is filed or any regulatory proceeding and a claimant secures injunctive or other relief or a regulatory authority issues an order or other directive having the effect of making the Acquisition illegal or otherwise prohibiting consummation of the Acquisition, then such injunctive or other relief may prevent the Acquisition from becoming effective in a timely manner.

Regulatory approvals for the Acquisition may not be received, may take longer than expected or may impose conditions that are not presently anticipated or cannot be met.

Before the transactions contemplated by the Merger Agreement may be completed, various approvals, consents and non-objections must be obtained from the Federal Reserve, the PDBS, and other regulatory authorities in the United States. In determining whether to grant these approvals, the applicable regulatory authorities consider a variety of factors, including the competitive impact of the proposal in the relevant geographic markets; financial, managerial and other supervisory considerations of each party; convenience and needs of the communities to be served and the record of the insured depository institution subsidiaries under the CRA and the regulations promulgated thereunder; effectiveness of the parties in combating money laundering activities; and the extent to which the proposal would result in greater or more concentrated risks to the stability of the United States banking or financial system. These approvals could be delayed or not obtained at all, including due to either party’s regulatory standing or any other factors considered by regulators when granting such approvals; governmental, political or community group inquiries, investigations or opposition; or changes in legislation or the political environment generally.

The approvals that are granted may impose terms and conditions, limitations, obligations or costs, or place restrictions on the conduct of the combined company’s business or require changes to the terms of the transactions contemplated by the Merger Agreement. There can be no assurance that regulators will not impose any such conditions, limitations, obligations or restrictions or that such conditions, limitations, obligations or restrictions will not have the effect of delaying the completion of any of the transactions contemplated by the Merger Agreement, imposing additional material costs on or materially limiting the revenues of the combined company following the Acquisition or otherwise reduce the anticipated benefits of the Acquisition if the Acquisition is consummated successfully within the expected timeframe. In addition, there can be no assurance that any such conditions, terms, obligations or restrictions will not result in the delay or abandonment of the Acquisition or termination of the Merger Agreement. Additionally, the completion of the Acquisition is conditioned on the absence of certain orders, injunctions or decrees by any court or regulatory agency of competent jurisdiction that would prohibit or make illegal the completion of any of the transactions contemplated by the Merger Agreement. Conditions that the regulatory authorities may impose in connection with the Acquisition could have the effect of delaying completion of the Acquisition or of imposing additional costs or limitations on the combined company following the Acquisition. Such conditions may constitute a burdensome condition that may allow Raymond James to terminate the Merger Agreement on or after June 30, 2022.

Failure to complete the Acquisition or a significant delay in the consummation of the Acquisition could negatively impact us.

The Merger Agreement is subject to a number of conditions that must be fulfilled in order to complete the Acquisition, including approval of the Acquisition by our shareholders. These conditions to the consummation of the Acquisition may not be fulfilled and, accordingly, the Acquisition may not be completed or may be significantly delayed. In addition, if the Acquisition is not completed by October 20, 2022, either we or Raymond James can choose to terminate the Merger Agreement. Furthermore, the consummation of the Acquisition may be significantly delayed due to various factors, including potential litigation related to the Acquisition.

If the Acquisition is not consummated or is significantly delayed, our ongoing business, financial condition and results of operations may be materially adversely affected, and the market price of our common stock may decline significantly, particularly to the extent that the current market price reflects a market assumption that the Acquisition will be consummated. If the consummation of the Acquisition is delayed, including by the receipt of a competing acquisition proposal, our business, financial condition and results of operations may be materially adversely affected.

In addition, we have incurred and will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the Merger Agreement and, under certain circumstances, we may be required to pay a termination fee of approximately $42 million to Raymond James. If the Acquisition is not completed or is significantly delayed, we would have to recognize these expenses without realizing the expected benefits of the Acquisition. Any of the foregoing, or other risks arising in connection with the failure of or delay in consummating the Acquisition, including the diversion of management attention from pursuing other opportunities and the constraints in the Merger Agreement on our ability to make significant changes to our ongoing business during the pendency of the Acquisition, could have a material adverse effect on our business, financial condition and results of operations.

Additionally, our business may have been adversely impacted by the failure to pursue other beneficial opportunities due to the focus of management on the Acquisition, without realizing any of the anticipated benefits of completing the Acquisition, and the market price of our common stock might decline to the extent that the current market price reflects a market assumption that the Acquisition will be completed. If the Merger Agreement is terminated and a party’s board of directors seeks another merger or business combination, our shareholders cannot be certain that we will be able to find a party willing to engage in a transaction on more attractive terms than the Acquisition.

The Merger Agreement may be terminated in accordance with its terms and the Acquisition may not be completed.

The Merger Agreement is subject to a number of conditions, which must be fulfilled in order to complete the Acquisition. Those conditions include: (i) approval of the Merger Agreement by our shareholders; (ii) the shares of Raymond James common stock that shall be issuable pursuant to the Merger Agreement shall have been authorized for listing on the NYSE, subject to official notice of issuance; (iii) the shares of Raymond James preferred stock that shall be issuable pursuant to the Merger Agreement shall have been authorized for listing on the NYSE, subject to official notice of issuance (this condition will be satisfied upon the authorization for listing of the Raymond James depositary shares); (iv) all regulatory approvals necessary to permit the parties to effect the Acquisition and the other transactions contemplated by the Merger Agreement shall have been obtained and shall remain in full force and effect and all statutory waiting periods in respect thereof shall have expired or been terminated; (v) no such regulatory approval nor the consummation of the Acquisition and the other transactions contemplated by the Merger Agreement shall have resulted in, or is reasonably likely to result in, a burdensome regulatory condition, or if a burdensome regulatory condition was imposed or existed, it is no longer existing or applicable; (vi) the Registration Statement on Form S-4 filed with the SEC by Raymond James in connection with the transactions contemplated by the Merger Agreement shall have become effective and no stop order suspending the effectiveness of such registration statement shall have been issued and no proceedings for such purpose shall have been initiated or threatened by the SEC and not withdrawn; and (vii) the absence of any order, injunction, law, regulation or other legal restraint preventing, prohibiting or making illegal the completion of the Acquisition or any other transactions contemplated by the Merger Agreement. Each party’s obligation to complete the Acquisition is also subject to the following additional conditions: (A) the accuracy of the representations and warranties of the other party, subject to specified materiality standards; (B) performance in all material respects by the other party of its obligations under the Merger Agreement and receipt of a certificate of specified officers of the other party to such effect; and (C) receipt by such party of an opinion from its specified counsel to the effect that the Acquisition will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended. These conditions to the closing may not be fulfilled in a timely manner or at all, and, accordingly, the Acquisition may not be completed. In addition, the parties can mutually decide to terminate the Merger Agreement at any time, before or after the requisite shareholder approvals, or we or Raymond James may elect to terminate the Merger Agreement in certain other circumstances.

Risks Relating to Regulations

We operate in a highly regulated environment and the laws and regulations that govern our operations, corporate governance, executive compensation and accounting principles, or changes in them, or our failure to comply with them, could subject us to regulatory action or penalties.

Banking is highly regulated under federal and state law. We are subject to extensive regulation and supervision that governs almost all aspects of our operations. As a registered bank holding company, we are subject to supervision, regulation and examination by the Federal Reserve. As a commercial bank chartered under the laws of Pennsylvania with $10 billion or more assets, TriState Capital Bank is subject to supervision, regulation and examination by the ~~Pennsylvania~~PDBS ~~Department~~and ofthe ~~Banking~~FDIC, and ~~Securities,~~by orthe ~~PDBS,~~CFPB ~~and~~with ~~the~~respect ~~FDIC~~to consumer financial laws. Our investment management business is subject to extensive regulation in the United States. Chartwell and Chartwell TSC are subject to federal securities laws, principally the Securities Act of 1933, ~~as amended,~~ the Investment Company Act of 1940, ~~as amended,~~ the Investment Advisers Act of 1940, ~~as amended,~~ and other regulations promulgated by various regulatory authorities, including the SEC, the Financial Industry Regulatory Authority, Inc., stock exchanges, and applicable state laws. Our investment management business also may be subject to regulation by the Commodity Futures Trading Commission and the National Futures Association. Our investment management business also is affected by various regulations governing banks and other financial institutions. Failure to appropriately comply with any such laws, regulations or regulatory policies could result in sanctions by regulatory agencies, civil monetary penalties or damage to our reputation, all of which could adversely affect our business, financial condition, results of operations and future prospects.

The banking agencies have broad enforcement power over bank holding companies and banks, including with respect to unsafe or unsound practices or violations of law. See “Federal and state bank regulators periodically conduct examinations of our business and we may be required to remediate adverse examination findings or be subject to enforcement actions.”

In addition to the safety and soundness focus, there are significant banking regulations relating to other aspects of our business, including ~~borrower~~consumer protection and community development. With respect to our community development obligations under the ~~Community Reinvestment Act, or~~ CRA, we have an approved CRA strategic plan for the years 2021 through 2023. While we currently believe we will succeed in obtaining approval from the FDIC for our CRA strategic plan commencing in 2024, we cannot guarantee that we will obtain such an approval, in which case we would be subject to the CRA for traditional large banks, which could have material adverse effects on our business, results of operations, financial condition and future prospects. For additional information, see “Supervision and Regulation-—Community Reinvestment Act.”

~~Another~~Compliance ~~significant~~with ~~banking~~the ~~regulation~~myriad laws and regulations applicable to usour isorganization ~~the~~can ~~Dodd-Frank~~be ~~Act~~difficult and costly. In addition, ~~which~~these ~~comprehensively~~laws, ~~reformed~~regulations ~~the~~and ~~regulation~~policies ofare ~~financial~~subject ~~institutions,~~to ~~products~~continual review by governmental authorities, and ~~services. The~~changes ~~Dodd-Frank~~to ~~Act~~these ~~required~~laws, ~~various~~regulations ~~federal~~and ~~agencies~~policies, toincluding ~~adopt~~changes ain ~~broad~~interpretation ~~range~~or implementation of ~~new~~these ~~implementing~~laws, ~~rules~~regulations and ~~regulations~~policies, ~~and~~could toaffect ~~prepare~~us ~~numerous~~in ~~studies~~substantial and ~~reports~~unpredictable ~~for~~ways ~~Congress. While~~and aimpose ~~significant~~additional ~~number~~compliance ofcosts. Further, ~~regulations~~any ~~have~~new ~~already~~laws, ~~been~~regulations ~~promulgated~~or topolicies ~~implement~~could ~~the~~make ~~Dodd-Frank~~compliance ~~Act,~~more ~~the~~difficult ~~regulatory~~or ~~agencies~~expensive. Failure ~~may~~to ~~revise~~comply ~~certain~~with of these laws, regulations ~~that~~and ~~have~~policies, ~~been~~even ~~promulgated. We~~if ~~may~~the befailure ~~forced~~follows togood ~~invest~~faith ~~significant~~effort ~~management~~or ~~attention~~reflects ~~and~~a ~~resources~~difference toin ~~make~~interpretation, ~~any~~could ~~necessary~~subject ~~changes~~us ~~related~~ to ~~the~~restrictions ~~Dodd-Frank~~on ~~Act~~our ~~and~~business ~~regulations~~activities, ~~promulgated~~fines ~~thereunder~~and other penalties, which ~~may~~could ~~adversely~~have ~~affect~~an adverse impact on our business, financial condition, results of operations and future prospects.

Compliance with the myriad laws and regulations applicable to our organization can be difficult and costly. In addition, these laws, regulations and policies are subject to continual review by governmental authorities, and changes to these laws, regulations and policies, including changes in interpretation or implementation of these laws, regulations and policies, could affect us in substantial and unpredictable ways and impose additional compliance costs. Further, any new laws, regulations or policies, could make compliance more difficult or expensive. Failure to comply with these laws, regulations and policies, even if the failure follows good

faith effort or reflects a difference in interpretation, could subject us to restrictions on our business activities, fines and other penalties, which could have an adverse impact on our business, financial condition, results of operations and future prospects.

Federal and state bank regulators periodically conduct examinations of our business and we may be required to remediate adverse examination findings or be subject to enforcement actions.

The Federal Reserve, the FDIC, the PDBS, and the ~~PDBS~~CFPB periodically conduct examinations of our business, including our compliance with laws and regulations. If, as a result of an examination, a bank regulatory agency were to determine that our financial condition, capital resources, asset quality, earnings prospects, management, liquidity or other aspects of any of our operations had become unsatisfactory, or that we or TriState Capital Bank were in violation of any law or regulation, it may take a number of different remedial actions. These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative action to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in our capital, to restrict our growth, to assess civil monetary penalties against us, TriState Capital Bank or our respective officers or directors, to remove officers and directors and, if it is concluded that such conditions cannot be corrected or there is an imminent risk of loss to depositors, to terminate TriState Capital Bank’s charter or deposit insurance and place the Bank into receivership or conservatorship. Any regulatory action against us could have a material adverse effect on our business.

The Bank’s FDIC deposit insurance premiums and assessments may increase.

The deposits of TriState Capital Bank are insured by the FDIC up to legal limits and, accordingly, subject the Bank to the payment of FDIC deposit insurance assessments. The FDIC uses a risk-based assessment system that imposes insurance premiums as determined by multiplying an insured bank’s assessment base by its assessment rate. A bank’s deposit insurance assessment base is generally equal to its total assets minus its average tangible equity during the assessment period. The Bank’s regular assessments are determined within a range of base assessment rates based in part on the Bank’s CAMELS composite rating, taking into account other factors and adjustments. The CAMELS rating system is a supervisory rating system developed to classify a bank’s overall condition by taking into account capital adequacy, assets, management capability, earnings, liquidity and sensitivity to market and interest rate risk. Moreover, the FDIC has the unilateral authority to change deposit insurance assessment rates and the manner in which deposit insurance is calculated, and also to charge special assessments to FDIC-insured institutions. High levels of bank failures since 2007 and increases in the statutory deposit insurance limits have increased costs to the FDIC to resolve bank failures and have put significant pressure on the Deposit Insurance Fund. In order to maintain a strong funding position and restore the reserve ratios of the Deposit Insurance Fund, the FDIC increased deposit insurance assessment rates and charged a special assessment to all FDIC-insured financial institutions. Further increases in assessment rates or special assessments may occur in the future, especially if there are significant additional financial institution failures. If the Bank exceeds $10 billion in total assets for four consecutive quarters, it will become subject to the FDIC’s large bank pricing methodology, which may result in the Bank paying different, and potentially higher, deposit assessment rates.

determined within a range of base assessment rates based in part on the Bank’s CAMELS composite rating, taking into account other factors and adjustments. The CAMELS rating system is a supervisory rating system developed to classify a bank’s overall condition by taking into account capital adequacy, assets, management capability, earnings, liquidity and sensitivity to market and interest rate risk. Moreover, the FDIC has the unilateral authority to change deposit insurance assessment rates and the manner in which deposit insurance is calculated, and also to charge special assessments to FDIC-insured institutions. Since the outbreak of the COVID-19 pandemic, the amount of total estimated insured deposits has grown very rapidly while the funds in the FDIC’s DIF have grown at a normal rate, causing the DIF reserve ratio to fall below the statutory minimum of 1.35%. The FDIC adopted a restoration plan on September 15, 2020, to restore the DIF reserve ratio to at least 1.35% by September 30, 2028. Further increases in assessment rates or special assessments may occur in the future, especially if there are significant financial institution failures. Additionally, the Bank has exceeded $10 billion in total assets for four consecutive quarters and has become subject to the FDIC’s large bank pricing methodology, which may result in the Bank paying different, and potentially higher, deposit assessment rates.

We are subject to numerous laws designed to protect consumers, including fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions.

The Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations impose nondiscriminatory lending requirements on financial institutions. The Federal Trade Commission Act prohibits unfair or deceptive acts or practices, and the Dodd-Frank Act prohibits unfair, deceptive, or abusive acts or practices by financial institutions. The CFPB, the Department of Justice and other federal and state banking agencies are responsible for enforcing these laws and regulations~~. Smaller banks~~, ~~including the Bank~~and, ~~are~~because ~~subject~~we tohave ~~rules~~surpassed ~~promulgated~~$10 bybillion ~~the~~in ~~CFPB~~total ~~but~~consolidated ~~continue~~assets tofor befour ~~examined~~consecutive ~~and~~quarters, ~~supervised~~the byCFPB ~~federal~~examines ~~banking~~the ~~agencies~~Bank for compliance with federal consumer protection laws and regulations. ~~Accordingly,~~The CFPB ~~rulemaking~~also ~~has~~promulgates ~~the~~regulations ~~potential~~with respect to ~~have~~these afederal ~~significant impact on the operations of financial institutions offering~~ consumer ~~financial~~protection ~~products~~laws orand, ~~services~~accordingly, ~~including~~CFPB rule-making has the ~~Bank. Additionally,~~potential ~~banking~~to ~~organizations~~have ~~with~~a ~~$10~~significant ~~billion~~impact oron ~~more~~our inoperations. ~~assets~~See “We are now subject to ~~examination~~additional ~~and~~regulation ~~supervision~~because ~~by the CFPB. See “If~~ we ~~grow~~have tosurpassed ~~over~~ $10 billion in total consolidated assets~~, we will become subject to increased regulation~~.”

A successful regulatory challenge to an institution’s performance under fair lending laws and regulations could result in a wide variety of sanctions, including damages and civil money penalties, injunctive relief, restrictions on ~~mergers~~merger and ~~acquisitions~~acquisition activity, restrictions on expansion, and restrictions on entering new business lines. Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private litigation, including through class action litigation. Such actions could have a material adverse effect on our business, financial condition, results of operations and future prospects.

We face a risk of noncompliance with and enforcement action under the Bank Secrecy Act and other anti-money laundering statutes and regulations.

The Bank Secrecy Act, the USA PATRIOT Act of 2001, and other federal and state laws and regulations require financial institutions, among other duties, to institute and maintain an effective anti-money laundering program and file suspicious activity and currency transaction reports when appropriate. In addition to other bank regulatory agencies, the federal Financial Crimes Enforcement Network of the U.S. Department of the Treasury is authorized to impose significant civil money penalties for violations of those requirements and may engage in coordinated enforcement efforts with state and federal banking regulators, as well as the Department of Justice, the CFPB, the Drug Enforcement Administration, the Office of Foreign Assets Control (“OFAC”), and the Internal Revenue Service. We are also subject to increased scrutiny of compliance with the rules enforced by OFAC regarding, among other things, the prohibition of transacting business with, and the need to freeze assets of, certain persons and organizations identified as a threat to the national security, foreign policy or economy of the United States. To comply with regulations, guidelines and examination procedures in these areas, we have dedicated significant resources to our anti-money laundering program and OFAC compliance. If our policies, procedures and systems are deemed deficient, we would be subject to liability, including fines and regulatory actions, which may include restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plan, and an inability to obtain regulatory approvals for any acquisitions we desire to make. We could also incur increased costs and expenses to improve our anti-money laundering procedures and systems to comply with any regulatory requirements or actions. Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us. Any of these results could have a material adverse effect on our business, financial condition, results of operations and future prospects.

Network of the U.S. Department of the Treasury is authorized to impose significant civil money penalties for violations of those requirements and has recently engaged in coordinated enforcement efforts with state and federal banking regulators, as well as the Department of Justice, the CFPB, the Drug Enforcement Administration, the Office of Foreign Assets Control, or OFAC, and the Internal Revenue Service. We are also subject to increased scrutiny of compliance with the rules enforced by OFAC regarding, among other things, the prohibition of transacting business with, and the need to freeze assets of, certain persons and organizations identified as a threat to the national security, foreign policy or economy of the United States. To comply with regulations, guidelines and examination procedures in these areas, we have dedicated significant resources to our anti-money laundering program and OFAC compliance. If our policies, procedures and systems are deemed deficient, we would be subject to liability, including fines and regulatory actions, which may include restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plan, and an inability to obtain regulatory approvals for any acquisitions we desire to make. We could also incur increased costs and expenses to improve our anti-money laundering procedures and systems to comply with any regulatory requirements or actions. Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us. Any of these results could have a material adverse effect on our business, financial condition, results of operations and future prospects.

We are a holding company and we depend upon our subsidiaries for liquidity. Applicable laws and regulations, including capital and liquidity requirements, may restrict our ability to transfer funds from our subsidiaries to us or other subsidiaries.

TriState Capital Holdings, Inc., as the parent company, is a separate and distinct legal entity from our banking and nonbank subsidiaries. We evaluate and manage liquidity on a legal entity basis. Legal entity liquidity is an important consideration as there are legal and other limitations on our ability to utilize liquidity from one legal entity to satisfy the liquidity requirements of another, including the parent company. For instance, the parent company depends on distributions and other payments from our banking and nonbank subsidiaries to fund all payments on our other obligations, including debt obligations. Our bank and investment management subsidiaries are subject to laws that restrict dividend payments or authorize regulatory bodies to prohibit or limit the flow of funds from those subsidiaries to the parent company or other subsidiaries. In addition, our bank and investment management subsidiaries are subject to restrictions on their ability to lend to or transact with affiliates and to minimum regulatory capital and liquidity requirements, as well as restrictions on their ability to use funds deposited with them in bank or brokerage accounts to fund their businesses. These limitations may hinder our ability to implement our business strategy which, in turn, could have a material adverse effect on our business, financial condition, results of operations and future prospects.

~~If we grow to over $10 billion in total consolidated assets, we will become subject to increased regulation.~~44

~~Federal~~are ~~law~~subject ~~imposes~~to ~~heightened~~restrictions ~~requirements~~ on ~~bank~~their ~~holding~~ability ~~companies~~to ~~and~~lend ~~depository~~to ~~institutions~~or ~~that~~transact ~~exceed $10 billion in total consolidated assets. An insured depository institution~~ with ~~$10~~affiliates ~~billion or more in total assets is subject to supervision, examination,~~ and ~~enforcement with respect~~ to ~~consumer~~minimum ~~protection~~regulatory ~~laws~~capital byand ~~the~~liquidity ~~CFPB. Under its current policies~~requirements, ~~the~~as ~~CFPB~~well ~~will~~as ~~assert~~restrictions ~~jurisdiction~~on intheir ~~the~~ability ~~first~~to ~~quarter~~use ~~after~~funds ~~the~~deposited ~~insured~~with ~~depository~~them ~~institution’s~~in ~~call~~bank ~~reports show total consolidated assets of $10 billion~~ or ~~more~~brokerage ~~for~~accounts ~~four~~to ~~consecutive~~fund ~~quarters~~their businesses. ~~Additionally,~~These ~~other~~limitations ~~regulatory~~may ~~requirements~~hinder ~~apply~~our ability to ~~insured~~implement ~~depository~~our ~~institution~~business ~~holding~~strategy ~~companies~~which, ~~and insured depository institutions with $10 billion or more~~ in ~~total consolidated assets~~turn, ~~including~~could ~~the~~have ~~restrictions~~a onmaterial ~~proprietary~~adverse ~~trading~~effect ~~and~~on ~~investment~~our ~~and~~business, ~~sponsorship~~financial ~~in hedge funds and private equity funds known as the Volcker Rule. Further~~condition, ~~deposit~~results ~~insurance~~of ~~assessment~~operations ~~rates are calculated differently,~~ and ~~may~~future ~~be higher, for insured depository institutions with $10 billion or more in total consolidated assets~~prospects.

We are now subject to additional regulation because we have surpassed $10 billion in total consolidated assets.

As of December 31, 2021, we have exceeded $10 billion in total consolidated assets for four consecutive quarters. Federal law imposes heightened requirements on bank holding companies and depository institutions that exceed $10 billion in total consolidated assets. The Bank has become subject to supervision, examination, and enforcement with respect to consumer protection laws by the CFPB. Additionally, other regulatory requirements apply to insured depository institution holding companies and insured depository institutions with $10 billion or more in total consolidated assets, including the restrictions on proprietary trading and investment and sponsorship in hedge funds and private equity funds known as the Volcker Rule. Further, deposit insurance assessment rates are calculated differently, and may be higher, for insured depository institutions with $10 billion or more in total consolidated assets. These and other additional regulatory requirements could have a material adverse effect on our business, financial condition, results of operations and future prospects.

Our use of third-party service providers and other ongoing third-party business relationships may become subject to increasing regulatory requirements and attention.

We regularly use third-party service providers and subcontractors as part of our business. These types of third-party relationships are subject to increasingly demanding regulatory requirements and attention by regulators, including the Federal Reserve, FDIC, and CFPB. Under regulatory guidance, we are required to apply stringent due diligence, conduct ongoing monitoring and maintain effective control over third-party service providers and subcontractors and other ongoing third-party business relationships. These regulatory expectations may change, and potentially become more rigorous in certain ways, due to an interagency effort to replace existing guidance on the risk management of third-party relationships with new guidance. We expect that the regulators will hold us responsible for deficiencies in our oversight and control of our third-party relationships and in the performance of the parties with which we have these relationships. Any such supervisory criticism or regulatory enforcement action could have a material adverse effect on our business, financial condition, results of operations and future prospects.

Risks Relating to an Investment in our Common Stock and Preferred Stock

Shares of our common stock, preferred stock and underlying depositary shares are not an insured deposit.

Shares of our common stock, preferred stock and underlying depositary shares are not bank deposits and are not insured or guaranteed by the FDIC or any other government agency. An investment in our common stock, preferred stock or underlying depositary shares has risks, and you may lose your entire investment.

An active, liquid market for our securities may not be sustained.

Our common stock and depositary shares underlying our 6.75% Fixed-to-Floating Rate Series A Non-Cumulative Perpetual Preferred Stock, no par value (“Series A Preferred Stock”) and our 6.375% Fixed-to-Floating Rate Series B Non-Cumulative Perpetual Preferred Stock, no par value (the “Series B Preferred Stock”) are listed on Nasdaq, but we may be unable to meet continued listing standards. In addition, an active, liquid trading market for such securities may not be sustained. A public trading market having depth, liquidity and orderliness depends upon the presence in the marketplace and independent decisions of willing buyers and sellers of our common stock, over which we have no control. Without an active, liquid trading market for our common stock, shareholders may not be able to sell their shares at the volume, prices and times desired. The lack of an established market could adversely affect the value of our common stock.

Our preferred stock is thinly traded.

There is only a limited trading volume in our preferred stock due to the small size of the issue and its largely institutional holder base. Significant sales of our preferred stock, or the expectation of these sales, could cause the price of our preferred stock to fall substantially.

The market price of our securities may be subject to substantial fluctuations, which may make it difficult for you to sell your shares at the volume, prices and times desired.

The market price of our common stock and depositary shares underlying our Series A Preferred Stock and Series B Preferred Stock may be highly volatile, which may make it difficult to resell shares of our securities at the volume, prices and times desired. There are many factors that may impact the market price and trading volume of our securities, including, without limitation:

•actual or anticipated fluctuations in our operating results or financial condition or general changes in economic conditions;

•the effects of, and changes in, trade, monetary and fiscal policies, accounting standards, policies, interpretations or principles or in laws or regulations affecting us;

•public reaction to our press releases, our other public announcements or our filings with the SEC;

•publication of research reports about us, our competitors, or the financial services industry or changes in, or failure to meet, securities analysts’ estimates of our performance, or lack of research reports by industry analysts or ceasing of coverage;

•operating and stock price performance of companies that investors deemed comparable to us;

•additional or anticipated sales of our common stock or other securities by us or our existing shareholders;

•significant amounts of short selling of our common stock, or the perception that a significant amount of short sales could occur;

•additions or departures of key personnel;

•perceptions in the marketplace regarding our competitors and/or us;

•significant acquisitions or business combinations, partnerships, joint ventures or capital commitments by us or our competitors;

•other economic, competitive, governmental, regulatory and technological factors affecting our business; and

•other news, announcements or disclosures (whether by us or others) related to us, our competitors, our core market or the financial services industry.

The stock market has experienced substantial fluctuations in recent years, which in many cases have been unrelated to the operating performance and prospects of particular companies. In addition, significant fluctuations in the trading volume in our common stock may cause significant price variations. Increased market volatility may adversely affect the market price of our common stock, which could make it difficult to sell your shares at the volume, prices and times desired.

Actual or anticipated issuances or sales of our securities in the future could adversely affect the prevailing market price of our common stock, preferred stock and underlying depositary shares and could impair our ability to raise capital through future sales of equity securities.

Actual or anticipated issuances or sales of substantial amounts of our common stock, preferred stock or depositary shares could cause the market price of any of our securities to decline significantly and make it more difficult for us to sell equity or equity-related securities in the future at a time and on terms that we deem appropriate. The issuance of any shares of our securities also would, and the issuance of equity-related securities could, dilute the percentage ownership interest held by shareholders with respect to such security. We may issue additional equity securities, or debt securities convertible into or exercisable or exchangeable for equity securities, from time to time to raise additional capital, support growth or to make acquisitions. Further, we expect to issue stock options or other stock awards to retain and motivate our employees and directors. These issuances of securities could dilute the

voting and economic interests of our existing shareholders, result in a significant decline in the market price of our common stock or other securities and make it more difficult for us to raise capital through future sales of equity securities.

In addition, in December 2020, we issued, in a private placement for aggregate consideration of $105 million, (i) 2,770,083 shares of common stock, (ii) 650 shares of Series C perpetual non-cumulative convertible non-voting preferred stock, no par value (“Series C Preferred Stock”) and (iii) warrants exercisable for an aggregate of 922,438 shares of common stock (or, if approved by our stockholders, a future series of non-voting common stock). Each share of Series C Preferred Stock may be converted into shares of our common stock or, if created, a future series of non-voting common stock, for an initial conversion price of $13.75 per share. Conversion of all of the shares of Series C Preferred Stock issued in the private placement would result in the issuance of an aggregate of 4,727,272 shares of common stock or, if created, non-voting common stock, as applicable. If holders of the Series C Preferred Stock choose to receive dividends in the form of additional shares of Series C Preferred Stock and all 138 shares of Series C Preferred Stock to be authorized as dividends are issued, an additional 1,003,636 shares of common stock or, if created, non-voting common stock could be issuable upon conversion of such shares. Exercise of all of the warrants issued in the private placement would result in the issuance of an aggregate of 922,438 additional shares of common stock or, if created, non-voting common stock, as applicable. We granted registration rights covering the common stock issued in the private placement as well as the common stock (and, if approved by our stockholders, non-voting common stock) issuable in connection with conversion of the Series C Preferred Stock and exercise of the warrants.

Our current management and board of directors have significant control over our business.

Our directors, as well as their related parties, and executive officers beneficially own a material portion of our outstanding common stock. Consequently, our directors and executive officers, acting together, may be able to significantly affect the outcome of the election of directors and the potential outcome of other matters submitted to a vote of our shareholders, such as mergers, the sale of substantially all of our assets and other corporate matters. The interests of these insiders could conflict with the interest of our shareholders.

The rights of holders of our common stock are generally subordinate to the rights of holders of our debt securities and preferred stock and may be subordinate to the rights of holders of any class of preferred stock or any debt securities that we may issue in the future.

Our board of directors has the authority to issue debt securities as well as an aggregate of up to 150,000 shares of preferred stock on the terms it determines without shareholder approval. In 2018, we issued 40,250 shares of Series A Preferred Stock in the form of 1.6 million depositary shares, each representing a 1/40th interest in a share of Series A Preferred Stock. In 2019, we issued 80,500 shares of Series B Preferred Stock in the form of 3.2 million depositary shares, each representing ownership of a 1/40th interest in a share of Series B Preferred Stock. In 2020, we issued 650 shares of Series C perpetual non-cumulative convertible non-voting preferred stock, no par value (“Series C Preferred Stock”). Any debt or shares of preferred stock that we may issue in the future will be senior to our common stock. Because our decision to issue debt or equity securities or incur other borrowings in the future will depend on market conditions and other factors beyond our control, the amount, timing, nature or success of our future capital raising efforts is uncertain. Thus, holders of our common stock bear the risk that our future issuances of debt or equity securities or our incurrence of other borrowings may negatively affect the market price of our common stock.

Holders of our preferred stock and depositary shares have limited voting rights.

Holders of the Series A Preferred Stock and Series B Preferred Stock (and, accordingly, holders of the depositary shares underlying such stock), as well as holders of the Series C Preferred Stock, will have no voting rights with respect to matters that generally require the approval of our voting common shareholders. Holders of preferred stock have voting rights that are generally limited to, with respect to the series of preferred stock held, (i) authorizing, creating or issuing any capital stock ranking senior to such preferred stock as to dividends or the distribution of assets upon liquidation, and (ii) amending, altering or repealing any provision of our Articles of Incorporation, so as to adversely affect the powers, preferences or special rights of such series of preferred stock,; and ~~(iii)~~ with respect to the Series C Preferred Stock, holders have the right to vote on any voluntary liquidation, dissolution, or winding up of the Company.

We have not paid dividends on our common stock and are subject to regulatory restrictions on our ability to pay dividends.

We have not paid any dividends on our common stock since inception and have instead utilized our earnings to finance the growth and development of our business. In addition, if we decide to pay dividends on our common stock in the future (and we have not made such a decision), we are subject to certain restrictions as a result of banking laws, regulations and policies. Moreover, because TriState Capital Bank is our most significant asset, our ability to pay dividends to our shareholders depends in large part on our receipt of dividends from the Bank, which is also subject to restrictions on dividends as a result of banking laws, regulations and policies. Finally, so long as any shares of our Series A Preferred Stock or Series B Preferred Stock remain outstanding, unless we have paid in full (or declared and set aside funds sufficient for) applicable dividends on the Preferred Stock, we may not declare or

4346

TriState Capital Bank is our most significant asset, our ability to pay dividends to our shareholders depends in large part on our receipt of dividends from the Bank, which is also subject to restrictions on dividends as a result of banking laws, regulations and policies. Finally, so long as any shares of our Series A Preferred Stock, Series B Preferred Stock, or Series C Preferred Stock remain outstanding, unless we have paid in full (or declared and set aside funds sufficient for) applicable dividends on the preferred stock, we may not declare or pay any dividend on our common stock, other than a dividend payable solely in shares of common stock or in connection with a shareholder rights plan.

Our corporate governance documents, and certain applicable federal and Pennsylvania laws, could make a takeover more difficult.

Certain provisions of our amended and restated articles of incorporation, our bylaws, as amended, and federal and Pennsylvania corporate and banking laws, could make it more difficult for a third party to acquire control of our organization or conduct a proxy contest, even if those events were perceived by many of our shareholders as beneficial to their interests. These provisions, and the corporate and banking laws and regulations applicable to us:

•empower our board of directors, without shareholder approval, to issue preferred stock, the terms of which, including voting power, are set by our board of directors;

•divide our board of directors into four classes serving staggered four-year terms;

•eliminate cumulative voting in elections of directors;

•require the request of holders of at least 10% of the outstanding shares of our capital stock entitled to vote at a meeting to call a special shareholders’ meeting;

•require at least 60 days’ advance notice of nominations by shareholders for the election of directors and the presentation of shareholder proposals at meetings of shareholders; and

•require prior regulatory application and approval of any transaction involving control of our organization.

These provisions may discourage potential acquisition proposals and could delay or prevent a change in control, including circumstances in which our shareholders might otherwise receive a premium over the market price of our shares.

There are substantial regulatory limitations on changes of control of bank holding companies.

With certain limited exceptions, federal regulations prohibit a person or company or a group of persons deemed to be “acting in concert” from, directly or indirectly, acquiring 10% or more (5% or more if the acquirer is a bank holding company) of any class of our voting stock or obtaining the ability to control in any manner the election of a majority of our directors or otherwise direct the management or policies of our company without prior notice or application to and the approval of the Federal Reserve. Similarly, prior approval of the PDBS is required for a person to acquire more than 10% of any class of our outstanding shares. Accordingly, prospective investors need to be aware of and comply with these requirements, if applicable, in connection with any purchase of shares of our common stock. These provisions effectively inhibit certain takeovers, mergers or other business combinations, which, in turn, could adversely affect the market price of our common stock.

General Risk Factors

Climate change and societal responses to climate change could adversely affect our business and performance, including indirectly through impacts on our customers.

Concerns over the long-term impacts of climate change have led and will continue to lead to governmental efforts around the world to mitigate those impacts. Consumers and businesses also may change their behavior as a result of these concerns. We and our customers will need to respond to new laws, regulations and supervisory guidance as well as consumer and business preferences resulting from climate change concerns. We and our customers may face cost increases, asset value reductions and operating process changes. The impact on our customers will likely vary depending on their specific attributes, including reliance on or role in carbon-intensive activities. We could face reduced demand for our products and services and reductions in creditworthiness on the part of some of our customers or in the value of assets securing loans in response to efforts to mitigate climate change. Our efforts to take these risks into account in making lending and other decisions, including by increasing our business with climate-friendly companies, may not be effective in protecting us from the negative impact of new laws and regulations or changes in consumer or business behavior.

Severe weather, natural disasters, acts of war or terrorism or other external events could significantly impact our business.

Severe weather, natural disasters, widespread disease or new pandemics, acts of war or terrorism or other adverse external events could have a significant impact on our ability to conduct business. In addition, such events could affect the stability of our deposit base, impair the ability of borrowers to repay outstanding loans, impair the value of collateral securing loans, cause significant property damage, result in loss of revenue or cause us to incur additional expenses. The occurrence of any of these events in the future could have a material adverse effect on our business, financial condition or results of operations.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our main office consists of leased office space located at One Oxford Centre, Suite 2700, 301 Grant Street, Pittsburgh, Pennsylvania. We also lease office space for each of our four representative bank offices in the metropolitan areas of Philadelphia, Pennsylvania; Cleveland, Ohio; Edison, New Jersey; and New York, New York; and we lease office space for Chartwell Investment Partners, LLC in Berwyn, Pennsylvania. The leases for our facilities have terms expiring at dates ranging from ~~2021~~2022 and 2036, although certain of the leases contain options to extend beyond these dates. We believe that our current facilities are adequate for our current level of operations. During quarter ended September 30, 2021, we entered into a lease agreement for additional office space in Pittsburgh. This lease is expected to commence in mid-2022 when we begin to occupy the property.

ITEM 3. LEGAL PROCEEDINGS

From time to time the Company is a party to various litigation matters incidental to the conduct of its business. During the year ended December 31, ~~2020~~2021, the Company was not a party to any legal proceedings the resolution of which management believes will be material to the Company’s business, future prospects, financial condition, liquidity, results of operation, cash flows or capital levels., except as set forth below:

44Following the public announcement of the Merger Agreement among the Company, Raymond James, Macaroon One LLC (“Merger Sub 1”) and Macaroon 2 LLC (“Merger Sub 2”), six lawsuits have been filed in connection with the disclosures associated with the Acquisition. On January 5, 2022, a purported Company stockholder filed a lawsuit against the Company and members of the Company’s board of directors in the United States District Court for the Southern District of New York, captioned Stein v. TriState Capital Holdings, Inc. et al., No. 1:22-cv-00077 (the “Stein Complaint”). On January 7, 2022, a purported Company stockholder filed a lawsuit against the Company, members of the Company’s board of directors, Raymond James, Merger Sub 1 and Merger Sub 2 in the United States District Court for the Southern District of New York captioned Ciccotelli v. TriState Capital Holdings, Inc. et al., No. 1:22-cv- 00164 (the “Ciccotelli Complaint”). On February 1, 2022, a purported Company stockholder filed a lawsuit against the Company and members of the Company’s board of directors in the United States District Court for the District of New Jersey captioned Bushansky v. TriState Capital Holdings, Inc. et al., No. 2:22-cv-00509 (the “Bushansky Complaint”). On February 9, 2022, a purported Company stockholder filed a lawsuit against the Company and members of the Company’s board of directors in the United States District Court for the District of New Jersey captioned Wolfson v. TriState Capital Holdings, Inc. et al., No. 2:22-cv-00705 (the “Wolfson Complaint”). On February 11, 2022, a purported Company stockholder filed a lawsuit against the Company and members of the Company’s board of directors in the United States District Court for the Eastern District of Pennsylvania captioned Justice v. TriState Capital Holdings, Inc. et al., No. 2:22-cv-00562 (the “Justice Complaint”). On February 14, 2022, a purported Company stockholder filed a lawsuit against the Company and members of the Company’s board of directors in the United States District Court for the District of New Jersey captioned Rubin v. TriState Capital Holdings, Inc., No. 2:22-cv-00780 (the “Rubin Complaint” and, collectively with the Stein Complaint, the Ciccotelli Complaint, the Bushansky Complaint, the Wolfson Complaint and the Justice Complaint, the “Complaints”). The Complaints contain allegations contending, among other things, that the proxy statement/prospectus contained within the Registration Statement on Form S-4 filed in connection with the proposed Acquisition failed to disclose certain allegedly material information in violation of the federal securities laws. The Complaints seek injunctive relief enjoining the Acquisition, attorneys’ and experts’ fees, and other remedies.

The outcome of the Complaints and any additional litigation related to the Acquisition that is filed in the future is uncertain. If any case is not resolved, the lawsuit(s) could prevent or delay completion of the Acquisition and result in substantial costs to Raymond James and the Company, including any costs associated with the indemnification of directors and officers. One of the conditions to the closing of the Acquisition is the absence of any order, injunction, law, regulation or other legal restraints preventing, prohibiting or making illegal the completion of the Acquisition or any other transactions contemplated by the Merger Agreement. As such, if plaintiffs are successful in obtaining an injunction prohibiting the completion of the Acquisition on the agreed-upon terms, then such injunction may prevent the Acquisition from being completed, or from being completed within the expected timeframe. The defense or settlement of any lawsuit or claim that remains unresolved at the time the Acquisition is completed may adversely affect the combined company’s business, financial condition, results of operations and cash flows.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

4548

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is traded on The Nasdaq Global Select Market under the symbol “TSC.” On ~~December 31~~January 20, ~~2020~~2022, there were approximately ~~164~~175 holders of record of our common stock, listed with our registered agent.

No cash dividends have ever been paid by us on our common stock. Our principal source of funds to pay cash dividends on our common stock would be cash dividends from our Bank and Chartwell subsidiaries. The payment of dividends by our bank is subject to certain restrictions imposed by federal and state banking laws, regulations and authorities.

Stock Performance Graph

The following graph sets forth the cumulative total stockholder return for the Company’s common stock for the five-year period ending December 31, ~~2020~~2021, compared to an overall stock market index (Russell 2000 Index) and the Company’s peer group index (Nasdaq Bank Index). The Russell 2000 Index and Nasdaq Bank Index are based on total returns assuming reinvestment of dividends. The graph assumes an investment of $100 on December 31, ~~2015~~2016. The performance graph represents past performance and should not be considered to be an indication of future performance.

4649

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The table below sets forth information regarding the Company’s purchases of its common stock during its fiscal quarter ended December 31, ~~2020~~2021:

	Total Numberof SharesPurchased (1)	WeightedAveragePrice Paid per Share		Total Number ofShares Purchasedas Part of PubliclyAnnounced Plansor Programs (2)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
October 1, 2020 - October 31, 2020	832	$	14.83	—	$	9,758,275
October 1, 2021 - October 31, 2021	—	$	—	—	$	7,273,785
November 1, 2020 - November 30, 2020	3,756	15.67		—	9,758,275
November 1, 2021 - November 30, 2021	284	30.05		—	7,273,785
December 1, 2020 - December 31, 2020	10,764	16.30		—	9,758,275
December 1, 2021 - December 31, 2021	2,381	29.86		—	7,273,785
Total	152,~~352~~665	$	1629.0788	—	$	97,~~758~~273,~~275~~785

(1)The 152,~~352~~665 shares of treasury stock in the table above were acquired during the periods mentioned in connection with the exercise, net settlement, cancellation, or vesting of equity awards. These shares were not part of a publicly announced plan or program.

(2)On July 15, 2019, the Board approved a share repurchase program of up to $10 million. Under this authorization, purchases of shares may be made at the discretion of management from time to time in the open market or through negotiated transactions, as well as purchases of shares or the options to acquire shares subject to common stock incentive compensation award agreements from officers, directors or employees of the Company.

Recent Sales of Unregistered Securities

None.

4750

ITEM 6. SELECTED FINANCIAL DATA

You should read the selected financial data set forth below in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes included elsewhere in this Form 10-K. We have derived the selected statements of income data for the years ended December 31, ~~2020~~2021, ~~2019~~2020 and ~~2018~~2019, and the selected balance sheet data as of December 31, ~~2020~~2021 and ~~2019~~2020, from our audited consolidated financial statements included elsewhere in this Form 10-K. We have derived the selected statements of income data for the years ended December 31, ~~2017~~2018 and ~~2016~~2017, and the selected balance sheet data as of December 31, ~~2018~~2019, ~~2017~~2018 and ~~2016~~2017, from our audited consolidated financial statements not included in this Form 10-K. The performance, asset quality and capital ratios are unaudited and derived from the audited financial statements as of and for the years presented. Average balances have been computed using daily averages. Our historical results may not be indicative of our results for any future period.

As of and for the Years Ended December 31,

(Dollars in thousands)

~~2020~~2021

~~2019~~2020

~~2018~~2019

~~2017~~2018

~~2016~~2017

Period-end balance sheet data:

Cash and cash equivalents

~~435~~452,~~442~~016

~~403~~435,~~855~~442

~~189~~403,~~985~~855

~~156~~189,~~153~~985

~~103~~156,~~994~~153

Total investment securities, net

~~842~~1,~~545~~405,678

~~469~~842,~~150~~545

~~466~~469,~~759~~150

~~220~~466,~~552~~759

~~238~~220,~~473~~552

Loans and leases held-for-investment

810,~~237~~763,~~418~~324

68,~~577~~237,~~559~~418

56,~~132~~577,~~873~~559

45,~~184~~132,~~244~~873

34,~~401~~184,~~054~~244

Allowance for credit losses on loan and lease losses

(34,630)

(14,108)

(13,208)

(14,417)

(18,762)

Allowance for credit losses on loans and leases

(28,563)

(34,630)

(14,108)

(13,208)

(14,417)

Loans and leases held-for-investment, net

810,~~202~~734,~~788~~761

68,~~563~~202,~~451~~788

56,~~119~~563,~~665~~451

45,~~169~~119,~~827~~665

34,~~382~~169,~~292~~827

Goodwill and other intangibles, net

6362,~~911~~000

6563,~~854~~911

6765,~~863~~854

6567,~~358~~863

6765,~~209~~358

Other assets

~~352~~350,~~130~~397

~~263~~352,~~500~~130

~~191~~263,~~383~~500

~~166~~191,~~007~~383

~~138~~166,~~489~~007

Total assets

913,~~896~~004,~~816~~852

79,~~765~~896,~~810~~816

67,~~035~~765,~~655~~810

46,~~777~~035,~~897~~655

34,~~930~~777,~~457~~897

Deposits

811,~~489~~504,~~089~~389

68,~~634~~489,~~613~~089

56,~~050~~634,~~461~~613

35,~~987~~050,~~611~~461

3,~~286~~987,~~779~~611

Borrowings, net

~~400~~470,~~493~~163

~~355~~400,~~000~~493

~~404~~355,~~166~~000

~~335~~404,~~913~~166

~~239~~335,~~510~~913

Other liabilities

~~250~~193,~~089~~578

~~154~~250,~~916~~089

~~101~~154,~~674~~916

65101,~~302~~674

5265,~~361~~302

Total liabilities

912,~~139~~168,~~671~~130

79,~~144~~139,~~529~~671

57,~~556~~144,~~301~~529

45,~~388~~556,~~826~~301

34,~~578~~388,~~650~~826

Preferred stock

~~177~~181,~~143~~544

~~116~~177,~~079~~143

38116,~~468~~079

—38,468

—

Common shareholders' equity

~~580~~655,~~002~~178

~~505~~580,~~202~~002

~~440~~505,~~886~~202

~~389~~440,~~071~~886

~~351~~389,~~807~~071

Total shareholders' equity

~~757~~836,~~145~~722

~~621~~757,~~281~~145

~~479~~621,~~354~~281

~~389~~479,~~071~~354

~~351~~389,~~807~~071

Total liabilities and shareholders' equity

913,~~896~~004,~~816~~852

79,~~765~~896,~~810~~816

67,~~035~~765,~~655~~810

46,~~777~~035,~~897~~655

34,~~930~~777,~~457~~897

Income statement data:

Interest income

~~217~~231,~~095~~297

~~262~~217,~~447~~095

~~199~~262,~~786~~447

~~134~~199,~~295~~786

98134,~~312~~295

Interest expense

7951,~~151~~938

~~135~~79,~~390~~151

86135,~~382~~390

4286,~~942~~382

2342,~~499~~942

Net interest income

~~137~~179,~~944~~359

~~127~~137,~~057~~944

~~113~~127,~~404~~057

91113,~~353~~404

7491,~~813~~353

Provision (credit) for credit losses

~~19,400~~808

~~(968)~~19,400

(~~205~~968)

(~~623~~205)

~~838~~(623)

Net interest income after provision for credit losses

~~118~~178,~~544~~551

~~128~~118,~~025~~544

~~113~~128,~~609~~025

91113,~~976~~609

7391,~~975~~976

Non-interest income:

Investment management fees

3237,~~035~~454

3632,~~442~~035

3736,~~647~~442

37,~~100~~647

37,~~035~~100

Net gain (loss) on the sale and call of debt securities

~~3,948~~242

~~416~~3,948

~~(70)~~416

~~310~~(70)

77310

Other non-interest income

2120,~~222~~950

1521,~~924~~222

1015,~~340~~924

910,~~556~~340

9,~~396~~556

Total non-interest income

5758,~~205~~646

5257,~~782~~205

4752,~~917~~782

4647,~~966~~917

46,~~508~~966

Non-interest expense:

Intangible amortization expense

1,~~944~~911

21,~~009~~944

12,~~968~~009

1,~~851~~968

1,~~753~~851

Change in fair value of acquisition earn out

—

~~(218)~~—

—(218)

~~(3,687)~~—

Other non-interest expense

~~121~~144,~~159~~583

~~110~~121,~~140~~159

99110,~~407~~140

8999,~~621~~407

8089,~~728~~621

Non-interest expense

~~123~~146,~~103~~494

~~112~~123,~~149~~103

~~101~~112,~~157~~149

91101,~~472~~157

7891,~~794~~472

Income before tax

5290,~~646~~703

6852,~~658~~646

6068,~~369~~658

4760,~~470~~369

4147,~~689~~470

Income tax expense

712,~~412~~643

87,~~465~~412

58,~~945~~465

95,~~482~~945

139,~~048~~482

Net income

4578,~~234~~060

6045,~~193~~234

5460,~~424~~193

3754,~~988~~424

2837,~~641~~988

Preferred stock dividends

712,~~873~~348

57,~~753~~873

25,~~120~~753

—2,120

—

Net income available to common shareholders

3765,~~361~~712

5437,~~440~~361

5254,~~304~~440

3752,~~988~~304

2837,~~641~~988

4851

	As of and for the Years Ended December 31,
(Dollars in thousands, except per share data)	~~2020~~2021			~~2019~~2020			~~2018~~2019			~~2017~~2018			~~2016~~2017
Per share and share data:
Earnings per common share:
Basic	$	1.3277		$	1.9532		$	1.9095		$	1.3890		$	1.0438
Diluted	$	1.3071		$	1.8930		$	1.8189		$	1.3281		$	1.0132
Book value per common share	$	1719.7870		$	17.2178		$	1517.2721		$	1315.6127		$	1213.3861
Tangible book value per common share (1)	$	1517.8283		$	1415.9782		$	1214.9297		$	1112.3292		$	1011.0232
Common shares outstanding, at end of period	3233,~~620~~263,~~150~~498			2932,~~355~~620,~~986~~150			2829,~~878~~355,~~674~~986			28,~~591~~878,~~101~~674			28,~~415~~591,~~654~~101
Weighted average common shares outstanding:
Basic	2831,~~267~~315,~~512~~235			2728,~~864~~267,~~933~~512			27,~~583~~864,~~519~~933			27,~~550~~583,~~833~~519			27,~~593~~550,~~725~~833
Diluted	2832,~~738~~459,~~468~~948			28,~~833~~738,~~335~~468			28,833,~~396~~335			28,~~711~~833,~~322~~396			28,~~359~~711,~~152~~322
Performance ratios:
Return on average assets	0.5069		%	0.8950		%	10.0489		%	01.8904		%	0.8189		%
Return on average common equity	710.1564		%	117.4715		%	1211.5747		%	1012.3057		%	810.4830		%
Net interest margin (2)	1.5864		%	1.9758		%	21.2697		%	2.2526		%	2.2325		%
Total revenue (1)	$	~~191~~237,~~201~~763		$	~~179~~191,~~423~~201		$	~~161~~179,~~391~~423		$	~~138~~161,~~009~~391		$	~~121~~138,~~244~~009
Pre-tax, pre-provision net revenue (1)	$	6891,~~098~~269		$	6768,~~274~~098		$	6067,~~234~~274		$	4660,~~537~~234		$	4246,~~450~~537
Bank efficiency ratio (1)	5552.5703		%	5455.4957		%	5354.0949		%	5753.3909		%	6157.1739		%
Non-interest expense to average assets	1.3530		%	1.6635		%	1.9366		%	21.1593		%	2.2315		%
Asset quality:
Non-performing loans	$	94,~~680~~313		$	~~184~~9,680		$	~~2,237~~184		$	32,~~183~~237		$	173,~~790~~183
Non-performing assets	$	126,~~404~~318		$	412,~~434~~404		$	54,~~661~~434		$	65,~~759~~661		$	216,~~968~~759
Other real estate owned	$	2,~~724~~005		$	42,~~250~~724		$	34,~~424~~250		$	3,~~576~~424		$	43,~~178~~576
Non-performing assets to total assets	0.1305		%	0.0613		%	0.0906		%	0.1409		%	0.5614		%
Non-performing loans to total loans	0.1204		%	—0.12		%	~~0.04~~—		%	0.0804		%	0.5208		%
Allowance for credit losses on loans and leases to loans	0.4227		%	0.2142		%	0.2621		%	0.3426		%	0.5534		%
Allowance for credit losses on loans and leases to non-performing loans	~~357~~662.7525		%	~~7,667~~357.3975		%	~~590~~7,667.4339		%	~~452~~590.9443		%	~~105~~452.4694		%
Net charge-offs (recoveries)	$	~~(279)~~6,887		$	(~~1,868~~279)		$	(1,~~004~~868)		$	31,~~722~~004		$	503,722
Net charge-offs (recoveries) to average total loans	—0.07		%	~~(0.03)~~—		%	(0.0203)		%	0.1002		%	—0.10		%
Capital ratios:
Average equity to average assets	7.0005		%	87.2900		%	8.4929		%	8.6549		%	98.5665		%
Tier 1 leverage ratio	76.2936		%	7.5429		%	7.2854		%	7.2528		%	7.9025		%
Common equity tier 1 risk-based capital ratio	8.9996		%	98.3299		%	9.6432		%	119.1464		%	11.4914		%
Tier 1 risk-based capital ratio	11.9964		%	11.7599		%	1011.5875		%	1110.1458		%	11.4914		%
Total risk-based capital ratio	1413.1243		%	1214.0512		%	1012.8605		%	1110.7286		%	1211.6672		%
Bank tier 1 leverage ratio	7.8376		%	7.2283		%	7.4922		%	7.5549		%	87.0455		%
Bank common equity tier 1 risk-based capital ratio	1214.8922		%	1112.2689		%	1011.9026		%	1110.6290		%	11.7562		%
Bank tier 1 risk-based capital ratio	1214.8922		%	1112.2689		%	1011.9026		%	1110.6290		%	11.7562		%
Bank total risk-based capital ratio	1314.4160		%	1113.5741		%	11.2557		%	11.9925		%	1211.3999		%
Investment Management Segment:
Assets under management	$	1011,~~263~~844,000		$	910,~~701~~263,000		$	9,~~189~~701,000		$	89,~~309~~189,000		$	8,~~055~~309,000
EBITDA (1)	$	57,~~473~~218		$	5,~~824~~473		$	65,~~900~~824		$	76,~~421~~900		$	137,~~208~~421

(1)These measures are not measures recognized under GAAP and are therefore considered to be non-GAAP financial measures. See “Non-GAAP Financial Measures” for a reconciliation of these measures to their most directly comparable GAAP measures.

(2)Net interest margin is calculated on a fully taxable equivalent basis.

4952

Non-GAAP Financial Measures

This Annual Report on Form 10-K contains certain financial information determined by methods other than in accordance with GAAP. These non-GAAP financial measures are “tangible common equity,” “tangible book value per common share,” “~~tangible assets,” “tangible assets excluding private banking loans,” tangible common equity ratio,” “tangible common equity ratio excluding private banking loans,” “~~total revenue,” “pre-tax, pre-provision net revenue,” “efficiency ratio,” and “EBITDA.” These non-GAAP financial measures are supplemental measures that we believe provide management and our investors with a more detailed understanding of our performance, although these measures are not necessarily comparable to similar measures that may be presented by other companies. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP.

The non-GAAP financial measures presented herein are calculated as follows:

“Tangible common equity” is defined as common shareholders’ equity reduced by intangible assets, including goodwill. We believe this measure is important to management and investors so that they can better understand and assess changes from period to period in common shareholders’ equity exclusive of changes in intangible assets associated with prior acquisitions. Intangible assets are created when we buy businesses that add relationships and revenue to our Company. Intangible assets have the effect of increasing both equity and assets, while not increasing our tangible equity or tangible assets.

“Tangible book value per common share” is defined as common shareholders’ equity reduced by intangible assets, including goodwill, divided by common shares outstanding. We believe this measure is important to many investors who are interested in changes from period to period in book value per common share exclusive of changes in intangible assets associated with prior acquisitions.

“Tangible assets” is defined as total assets reduced by intangible assets, including goodwill. We believe this measure is important to many investors who are interested in changes from period to period in total assets exclusive of changes in intangible assets.

“Tangible assets excluding private banking loans” is defined as total assets reduced by intangible assets, including goodwill, and private banking loans. We believe this measure is important to many investors who are interested in changes from period to period in total assets exclusive of changes in intangible assets and private banking loans.

“Tangible common equity ratio” is defined as (i) common shareholders’ equity reduced by intangible assets, including goodwill, divided by (ii) total assets reduced by intangible assets, including goodwill. We believe this measure is important to many investors who are interested in changes from period to period in the ratio of common shareholders’ equity to total assets exclusive of changes in intangible assets.

“Tangible common equity ratio excluding private banking loans” is defined as (i) common shareholders’ equity reduced by intangible assets, including goodwill, divided by (ii) total assets reduced by intangible assets, including goodwill, and private banking loans. We believe this measure is important to many investors who are interested in changes from period to period in the ratio of common shareholders’ equity to total assets exclusive of changes in intangible assets and private banking loans.

“Total revenue” is defined as net interest income and total non-interest income, excluding gains and losses on the sale and call of debt securities. We believe adjustments made to our operating revenue allow management and investors to better assess our core operating revenue by removing the volatility that is associated with certain items that are unrelated to our core business.

“Pre-tax, pre-provision net revenue” is defined as net interest income and non-interest income, excluding gains and losses on the sale and call of debt securities and total non-interest expense. We believe this measure is important because it allows management and investors to better assess our performance in relation to our core operating revenue, excluding the volatility that is associated with provision for credit losses ~~on loans~~ and ~~leases and~~ changes in our tax rates and other items that are unrelated to our core business.

“Efficiency ratio” is defined as total non-interest expense divided by our total revenue. We believe this measure allows management and investors to better assess our operating expenses in relation to our core operating revenue, particularly at the Bank.

“EBITDA” is defined as net income before interest expense, income tax expense, depreciation expense and intangible amortization expense. We use EBITDA particularly to assess the strength of our investment management business. We believe this measure is important because it allows management and investors to better assess our investment management performance in relation to our core operating earnings by excluding certain non-cash items and the volatility that is associated with certain discrete items that are unrelated to our core business.


	December 31,
(Dollars in thousands, except per share data)	2021		2020		2019		2018		2017
Tangible common equity and tangible book value per common share:
Common shareholders' equity	$	655,178	$	580,002	$	505,202	$	440,886	$	389,071
Less: goodwill and intangible assets	62,000		63,911		65,854		67,863		65,358
Tangible common equity (numerator)	$	593,178	$	516,091	$	439,348	$	373,023	$	323,713
Common shares outstanding (denominator)	33,263,498		32,620,150		29,355,986		28,878,674		28,591,101
Tangible book value per common share	$	17.83	$	15.82	$	14.97	$	12.92	$	11.32

	December 31,
(Dollars in thousands, except per share data)	2020		2019		2018		2017		2016
Tangible common equity and tangible book value per common share:
Common shareholders' equity	$	580,002	$	505,202	$	440,886	$	389,071	$	351,807
Less: goodwill and intangible assets	63,911		65,854		67,863		65,358		67,209
Tangible common equity (numerator)	$	516,091	$	439,348	$	373,023	$	323,713	$	284,598
Common shares outstanding (denominator)	32,620,150		29,355,986		28,878,674		28,591,101		28,415,654
Tangible book value per common share	$	15.82	$	14.97	$	12.92	$	11.32	$	10.02

(Dollars in thousands)	December 31,
	Years Ended December 31,
	2020			2019			2018			2017			2016
(Dollars in thousands)	2021			2020			2019			2018			2017
Tangible common equity ratio excluding private banking channel loans:
Total revenue and pre-tax, pre-provision net revenue:
Common shareholders' equity	$	580,002		$	505,202		$	440,886		$	389,071		$	351,807
Net interest income	$	179,359		$	137,944		$	127,057		$	113,404		$	91,353
Less: goodwill and intangible assets	63,911			65,854			67,863			65,358			67,209
Total non-interest income	58,646			57,205			52,782			47,917			46,966
Tangible common equity (numerator)	$	516,091		$	439,348		$	373,023		$	323,713		$	284,598
Less: net gain (loss) on the sale and call of debt securities	242			3,948			416			(70)			310
Total assets	9,896,816			7,765,810			6,035,655			4,777,897			3,930,457
Total revenue	$	237,763		$	191,201		$	179,423		$	161,391		$	138,009
Less: goodwill and intangible assets	63,911			65,854			67,863			65,358			67,209
Less: total non-interest expense	146,494			123,103			112,149			101,157			91,472
Tangible assets	9,832,905			7,699,956			5,967,792			4,712,539			3,863,248
Pre-tax, pre-provision net revenue	$	91,269		$	68,098		$	67,274		$	60,234		$	46,537
Tangible common equity ratio	5.25		%	5.71		%	6.25		%	6.87		%	7.37		%
Less: private banking loans	4,807,800			3,695,402			2,869,543			2,265,737			1,735,928
Tangible assets excluding private banking loans (denominator)	5,025,105			4,004,554			3,098,249			2,446,802			2,127,320
Tangible common equity ratio excluding private banking loans	10.27		%	10.97		%	12.04		%	13.23		%	13.38		%

	Years Ended December 31,
(Dollars in thousands)	2020		2019		2018		2017		2016
Total revenue and pre-tax, pre-provision net revenue:
Net interest income	$	137,944	$	127,057	$	113,404	$	91,353	$	74,813
Total non-interest income	57,205		52,782		47,917		46,966		46,508
Less: net gain (loss) on the sale and call of debt securities	3,948		416		(70)		310		77
Total revenue	$	191,201	$	179,423	$	161,391	$	138,009	$	121,244
Less: total non-interest expense	123,103		112,149		101,157		91,472		78,794
Pre-tax, pre-provision net revenue	$	68,098	$	67,274	$	60,234	$	46,537	$	42,450

BANK SEGMENT

	Years Ended December 31,
(Dollars in thousands)	~~2020~~2021			~~2019~~2020			~~2018~~2019			~~2017~~2018			~~2016~~2017
Bank total revenue:
Net interest income	$	~~141~~185,~~756~~408		$	~~127~~141,~~996~~756		$	~~115~~127,~~455~~996		$	93115,~~380~~455		$	7693,~~727~~380
Total non-interest income	2521,~~112~~183			1525,~~467~~112			1115,~~042~~467			911,~~864~~042			9,~~470~~864
Less: net gain (loss) on the sale and call of debt securities	~~3,948~~242			~~416~~3,948			~~(70)~~416			~~310~~(70)			77310
Bank total revenue	$	~~162~~206,~~920~~349		$	~~143~~162,~~047~~920		$	~~126~~143,~~567~~047		$	~~102~~126,~~934~~567		$	86102,~~120~~934
Bank efficiency ratio:
Total non-interest expense (numerator)	$	90107,~~541~~373		$	7790,~~945~~541		$	6777,~~190~~945		$	5967,~~073~~190		$	5259,~~676~~073
Total revenue (denominator)	$	~~162~~206,~~920~~349		$	~~143~~162,~~047~~920		$	~~126~~143,~~567~~047		$	~~102~~126,~~934~~567		$	86102,~~120~~934
Bank efficiency ratio	5552.5703		%	5455.4957		%	5354.0949		%	5753.3909		%	6157.1739		%

INVESTMENT MANAGEMENT SEGMENT

Years Ended December 31,

(Dollars in thousands)

~~2020~~2021

~~2019~~2020

~~2018~~2019

~~2017~~2018

~~2016~~2017

Investment Management EBITDA:

Net income

23,~~798~~786

2,~~433~~798

32,~~851~~433

43,~~551~~851

64,~~933~~551

Income tax expense

~~308~~1,100

~~918~~308

~~579~~918

~~522~~579

~~4,357~~522

Depreciation expense

~~423~~421

~~465~~423

~~502~~465

~~497~~502

~~165~~497

Intangible amortization expense

1,~~944~~911

21,~~009~~944

12,~~968~~009

1,~~851~~968

1,~~753~~851

EBITDA

57,~~473~~218

5,~~824~~473

65,~~900~~824

76,~~421~~900

137,~~208~~421

5254

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This section presents management’s perspective on our financial condition and results of operations and highlights material changes to our financial condition and results of operations as of and for the years ended December 31, ~~2020~~2021 and ~~2019~~2020. The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes contained herein.

To the extent that this discussion describes prior performance, the descriptions relate only to the periods listed, which may not be indicative of our future financial outcomes. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the sections titled “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this document and “Item 1A. Risk Factors.”

General

We are a bank holding company that operates through two reportable segments: Bank and Investment Management. Through TriState Capital Bank, a Pennsylvania chartered bank (the “Bank”), the Bank segment provides commercial banking services to middle-market businesses and private banking services to high-net-worth individuals and trusts. The Bank segment generates most of its revenue from interest on loans and investments, swap fees, loan fees, and liquidity and treasury management related fees. Its primary source of funding for loans is deposits and its secondary source of funding is borrowings. The Bank’s largest expenses are interest on these deposits and borrowings, and salaries and related employee benefits. Through Chartwell Investment Partners, LLC, an SEC registered investment adviser (“Chartwell”), the Investment Management segment provides advisory and sub-advisory investment management services primarily to institutional investors, mutual funds and individual investors. It also supports marketing efforts for Chartwell’s proprietary investment products through Chartwell TSC Securities Corp., our registered broker/-dealer subsidiary (“CTSC Securities”). The Investment Management segment generates its revenue from investment management fees earned on assets under management and its largest expenses are salaries and related employee benefits.

This discussion and analysis ~~present~~presents our financial condition and results of operations on a consolidated basis, except where significant segment disclosures are necessary to better explain the operations of each segment and related variances. In particular, the discussion and analysis of non-interest income and non-interest expense is reported by segment.

We measure our performance primarily through our net income available to common shareholders, earnings per common share (“EPS”) and total revenue. Other salient metrics include the ratio of allowance for credit losses on loans and leases to loans and leases; net interest margin; the efficiency ratio of the Bank segment (which is a non-GAAP financial measure); return on average assets; return on average common equity; regulatory leverage and risk-based capital ratios,; and assets under management and EBITDA of the Investment Management segment (which is a non-GAAP financial measure).

Executive Overview

~~TriState~~We ~~Capital~~are ~~Holdings, Inc. (“we,” “us,” “our,” the “holding company,” the “parent company,” or the “Company”) is~~ a bank holding company headquartered in Pittsburgh, Pennsylvania. The Company has three wholly owned subsidiaries: the Bank, Chartwell, and CTSC Securities. Through the Bank, we serve middle-market and financial services businesses in our primary markets throughout the states of Pennsylvania, Ohio, New Jersey and New York. We also serve high-net-worth individuals and trusts on a national basis through our private banking channel. We market and distribute our products and services through a scalable, branchless banking model, which creates significant operating leverage throughout our business as we continue to grow. Through Chartwell, our investment management subsidiary, we provide investment management services primarily to institutional investors, mutual funds and individual investors on a national basis. CTSC Securities, our broker/dealer subsidiary, supports marketing efforts for Chartwell’s proprietary investment products ~~that~~and ~~require~~is ~~SEC~~regulated orby ~~Financial~~the ~~Industry~~SEC ~~Regulatory~~and ~~Authority,~~the ~~Inc. (“~~FINRA~~”) licensing~~.

~~Developments~~2021 ~~Related~~Compared to ~~COVID-19~~2020 Operating Performance

InFor ~~March~~the ~~2020~~year ended December 31, ~~the~~2021, ~~World~~our ~~Health~~net ~~Organization~~income ~~declared~~available ~~the~~to ~~outbreak~~common ofshareholders ~~the~~was ~~novel~~$65.7 ~~coronavirus~~million ~~(“COVID-19”)~~compared asto a$37.4 ~~global~~million ~~pandemic~~in 2020, an increase of $28.4 million, or 75.9%. ~~This~~Our ~~public~~diluted ~~health~~EPS ~~crisis~~was ~~has~~$1.71 ~~resulted~~for inthe ~~unprecedented~~year ~~uncertainty~~ended December 31, ~~volatility~~2021, ~~and~~compared ~~disruption~~to $1.30 in ~~financial~~2020. The ~~markets~~increase in net income available to common shareholders and EPS was primarily due to an increase in ~~governmental~~net interest income of $41.4 million, ~~commercial~~or 30.0%, and ~~consumer~~a ~~activity~~decrease in ~~the~~provision ~~United~~for ~~States~~credit ~~and~~losses ~~globally~~of $18.6 million, ~~including~~which ~~the~~were ~~markets~~partially ~~that~~offset weby ~~serve. In~~an ~~response~~increase toof ~~the~~$23.4 ~~crisis~~million, ~~the~~or ~~Board~~19.0%, ofin ~~Governors~~our ofnon-interest ~~the~~expenses, ~~Federal~~a ~~Reserve~~$5.2 ~~(the~~million ~~“Federal~~increase ~~Reserve”)~~in ~~cut~~income ~~benchmark~~taxes, ~~federal~~and ~~fund~~an ~~interest~~increase ~~rates~~in topreferred ~~near~~stock ~~zero~~dividends of $4.5 million. InEPS ~~addition,~~is incomputed ~~March~~using ~~2020,~~ the ~~Coronavirus~~two-class ~~Aid~~method, ~~Relief,~~which ~~and~~is ~~Economic~~an ~~Security~~earnings ~~(“CARES”)~~allocation ~~Act~~formula ~~was~~that ~~enacted. The~~determines ~~CARES~~EPS ~~Act~~for ~~contains~~each ~~substantial~~class ~~tax~~of common stock and ~~spending~~participating ~~provisions~~security ~~intended~~according to ~~address~~dividends accumulated or declared and participation rights in undistributed earnings. For more information on the ~~impact~~Company’s calculation of ~~the~~EPS, ~~COVID-19~~refer ~~pandemic.~~ to Note 1, Basis of

At the onset of the pandemic, we pro-actively conducted outreach to all commercial loan customers to understand the potential impact that COVID-19 could have on their business. We implemented deferral arrangements in accordance with the CARES Act and bank 55

53Information and Summary of Significant Accounting Policies, and Note 15, Earnings per Common Share, to our consolidated financial statements.

~~regulatory~~Net ~~guidance. The~~interest ~~majority~~income ofand ~~our~~non-interest ~~deferrals~~income, ~~have~~excluding ~~already~~net ~~resumed~~gains ~~payment. Only~~and 13losses ~~loans~~on ~~representing~~the ~~$84.5~~sale ~~million~~of securities, orcombined 1%to ofgenerate total ~~loans~~revenue ~~had~~of ~~not~~$237.8 ~~yet~~million ~~resumed~~for ~~payment~~the atyear ended December 31, ~~2020~~2021, ~~which~~compared ~~was~~to ~~ahead of our previous forecasts~~$191. ~~While~~2 ~~this~~million ~~crisis~~in may have substantial impact on many businesses, we have maintained our disciplined approach of focusing on commercial lending opportunities within our four-state Mid-Atlantic region and financial services companies where our team has deep experience and relationships2020. ~~Additionally,~~The weincrease ~~have worked to keep our commercial loan sizes predominately below our preferred hold level~~ of $1046.06 million~~. The~~, ~~Bank is not a qualified lender~~ or ~~additional~~24.4% ~~lender~~was ~~registered~~driven ~~with~~largely ~~the~~by ~~Small~~higher ~~Business~~net ~~Administration~~interest income and isinvestment ~~not~~management ~~participating~~fees inoffset ~~the Paycheck Protection Program, established~~ by ~~the~~lower ~~CARES~~swap ~~Act~~fees.

Our net interest margin was 1.64% for the year ended December 31, 2021, as compared to 1.58% in 2020. The increase in net interest margin for the year ended December 31, 2021 was driven primarily by lower cost of funds and higher average interest-earning balances, which were partially offset by a lower yield on interest-earning assets.

The significant reduction in interest rates by the Federal Reserve in response to the COVID-19 pandemic has continued to impact our interest-earning assets and interest-bearing liabilities. Our loans are predominantly variable rate loans, of which many are indexed to one-month LIBOR. At the end of the first quarter 2020, we placed interest rate floors on the majority of our floating rate loans, particularly our private banking loans, and we have continued to implement floors on newly originated loans. As a result, approximately 50% of our total loans have floors that are currently benefiting the Bank compared to their contractual index. While we

continue our strategy to implement floors on most recently originated loans, we have modified our pricing strategy to balance wider spreads with lower floor rates to manage our interest rate sensitivity while managing overall yield. Our deposits include fixed-rate time deposits but are primarily comprised of variable rate deposits, many of which are linked to an index such as the effective federal funds rate and others that are priced at the Bank’s discretion. While our deposit rates have declined during 2021 and 2020, the majority of the impact from repricing of floating rate deposits was achieved with the initial repricing in March 2020, in line with the Federal Reserve rate reduction. The Federal Reserve has suggested that it may take steps to raise interest rates in 2022.

Our non-interest income is largely comprised of investment management fees for Chartwell, which totaled $37.5 million for the year ended December 31, 2021, as compared to $32.0 million in 2020. The increase was due primarily due to higher levels of assets under management. Assets under management were $11.84 billion as of December 31, 2021, an increase of $1.58 billion from December 31, 2020, driven by market appreciation of $1.06 billion, and net inflows of $520.0 million. Chartwell’s annual run-rate revenue increased to $40.0 million as of December 31, 2021, compared to $35.6 million as of December 31, 2020. For the year ended December 31, 2021, investment fees grew $5.4 million, or 16.9%, while expenses grew $4.2 million, or 14.1%. Importantly, EBITDA improved 31.9% for the year ended December 31, 2021 from $5.5 million to $7.2 million.

Another large component of our non-interest income are swap fees at the Bank, which totaled $14.1 million for the year ended December 31, 2021, as compared to $16.3 million for the same period in 2020, due in part to the extremely low interest rate environment and very flat or negative term structure for interest rates that persisted for most of 2020 and to the opportunity for originating long duration loans that sought to lock in interest rates. This created strong demand and pricing structures from borrowers seeking fixed rates in 2020 that were not replicated in 2021. While swap fees decreased for the year ended December 31, 2021 from the year-ago period, we have continued to enhance our distribution and product strategies to drive consistent opportunities for interest rate protection through swaps in both our commercial banking and private banking clients. The number of swaps executed as well as the notional amount and term of each swap transaction impact the fee income from period to period.

We recorded a $242,000 net gain on the sale and call of debt securities during the year ended December 31, 2021, compared to $3.9 million during the year ended December 31, 2020, primarily attributable to the repositioning of a portion of the corporate bond portfolio into government agency securities that took place during 2020.

For the year ended December 31, 2021, the Bank’s efficiency ratio was 52.03%, as compared to 55.57% in 2020. The Bank’s efficiency ratio reflects improvement in operating leverage through growth in the Bank’s total revenue of 26.7%, partially offset by the growth in the Bank’s non-interest expense of 18.6% for the year ended December 31, 2021. The Bank’s efficiency ratio improved for the year ended December 31, 2021 despite the increase in non-interest expense of 18.6%, demonstrating that we are making worthwhile investments in the technology and people necessary to drive responsible growth.

The Company’s non-interest expense was $146.5 million for the year ended December 31, 2021 compared to $123.1 million in 2020. Our non-interest expense to average assets for the year ended December 31, 2021, was 1.30%, as compared to 1.35% in 2020.

Our return on average assets (net income to average total assets) was 0.69% for the year ended December 31, 2021, as compared to 0.50% in 2020. Our return on average common equity (net income available to common shareholders to average common equity) was 10.64% for the year ended December 31, 2021, as compared to 7.15% in 2020. Both ratios increased primarily due to increased earnings during the year ended December 31, 2021, as compared to the same period in 2020.

Total assets of $13 billion as of December 31, 2021, increased $3.11 billion, or 31.4%, from December 31, 2020. Loans and leases held-for-investment increased by $2.53 billion to $10.76 billion as of December 31, 2021, an increase of 30.7% from December 31,

2020, as a result of growth in our commercial and private banking loan and lease portfolios. Total investment securities, which were $1.41 billion as of December 31, 2021, increased $563.1 million from the prior period, an increase of 66.8%. Total deposits increased $3.02 billion, or 35.5%, to $11.50 billion as of December 31, 2021, from $8.49 billion as of December 31, 2020. We focus on high quality loan growth and correspondingly grow our investment portfolio at a similar pace as part of our strategy to continue building greater on-balance sheet liquidity, funded by our deposits. Our shareholders’ equity increased $79.6 million, or 10.5% primarily due to our earnings for the year ended December 31, 2021.

Our ratio of adverse-rated credits to total loans declined to 0.34% at December 31, 2021, from 0.62% at December 31, 2020. Our ratio of allowance for credit losses on loans and leases to loans decreased to 0.27% as of December 31, 2021, from 0.42% as of December 31, 2020. We recorded a provision for credit losses of $808,000 for the year ended December 31, 2021 compared to a provision of $19.4 million for the year ended December 31, 2020 primarily driven by an improving economic outlook.

Our book value per common share increased $1.92, or 10.8%, to $19.70 as of December 31, 2021, from $17.78 as of December 31, 2020, largely as a result of higher levels of retained earnings as of December 31, 2021, which was partially offset by increased common shares outstanding as of December 31, 2021.

2020 Compared to 2019 Operating Performance

For the year ended December 31, 2020, our net income available to common shareholders was $37.4 million compared to $54.4 million in 2019, a decrease of $17.1 million, or 31.4%. Our diluted ~~earnings per share (“~~EPS”) was $1.30 for the year ended December 31, 2020, compared to $1.89 in 2019. This decrease in net income and EPS was primarily due to an increase in provision for credit losses of $20.4 million, an increase of $11.0 million, or 9.8%, in our non-interest expense and an increase in preferred stock dividends of $2.1 million, partially offset by the net impact of $10.9 million, or 8.6%, increase in our net interest income, an increase of $4.4 million, or 8.4%, in non-interest income and a $1.1 million decrease in income taxes.

Net interest income and non-interest income, excluding net gains and losses on the sale of securities, combined to generate total revenue of $191.2 million for the year ended December 31, 2020, compared to $179.4 million in 2019. The increase of $11.8 million, or 6.6% was driven largely by higher net interest income and swap fees for the Bank as a result of loan growth, partially offset by lower investment management fees.

Our net interest margin was 1.58% for the year ended December 31, 2020, as compared to 1.97% in 2019. The decrease in net interest margin for the year ended December 31, 2020, resulted from the Federal Reserve interest rate cuts, contributing to lower net interest spread, and higher average balances of lower-earning assets. This included excess liquidity in interest-bearing cash deposits and investments during certain times of the year in anticipation of clients’ potential liquidity and credit needs during the COVID-19.

The significant reduction in interest rates by the Federal Reserve in response to the COVID-19 pandemic impacted our interest-earning assets and interest-bearing liabilities. Our loans are predominantly variable rate loans indexed to 1-month LIBOR. At the end of the first quarter of 2020, we placed interest rate floors on many of these floating rate loans, particularly our private banking loans. Our deposits are a combination of fixed-rate time deposits and variable rate deposits, many of which are indexed to the Effective Federal Funds Rate and others that are priced at the Bank’s discretion. The majority of the floating rate deposits were initially repriced in March 2020, in line with the Federal Reserve rate reduction. In addition, we intentionally increased our liquid assets for the express purpose of carrying more on balance sheet liquidity in anticipation of clients’ needs during the first six months of the COVID-19 pandemic. Even though we continued to reduce our cost of deposits, as well as excess deposit levels, throughout the year. These carrying costs resulted in marginally lower returns based on the interest rate environment.

Our non-interest income is largely comprised of investment management fees for Chartwell, which totaled $32.0 million for the year ended December 31, 2020, as compared to $36.4 million in 2019. The decrease was driven by a lower weighted average fee rate from the change in asset composition across investment products, partially offset by higher assets under management. Assets under management were $10.26 billion as of December 31, 2020, an increase of $562.0 million from December 31, 2019, driven by market appreciation of $410.0 million, and net inflows of $152.0 million.

Another large component of our non-interest income are swap fees at the Bank, which totaled $16.3 million for the year ended December 31, 2020, as compared to $11.0 million for the same period in 2019, due to an increase in swap transactions from both new and existing customers.

We recorded a $3.9 million net gain on the sale and call of debt securities during the year ended December 31, 2020, compared to $416,000 during the year ended December 31, 2019, primarily attributable to the repositioning of a portion of the corporate bond portfolio into government agency securities to take advantage of market appreciation and enhance the overall credit quality of the investment portfolio.

For the year ended December 31, 2020, the Bank’s efficiency ratio was 55.57%, as compared to 54.49% in 2019. The Bank’s efficiency ratio reflects growth in the Bank’s total revenue of 13.9% and growth in the Bank’s non-interest expense of 16.2%. Non-interest expense was $123.1 million for the year ended December 31, 2020. Our non-interest expense to average assets for the year ended December 31, 2020, was 1.35%, as compared to 1.66% in 2019.

Our return on average assets (net income to average total assets) was 0.50% for the year ended December 31, 2020, as compared to 0.89% in 2019. Our return on average common equity (net income available to common shareholders to average common equity) was 7.15% for the year ended December 31, 2020, as compared to 11.47% in 2019. Both ratios declined due to a reduction in earnings during the year ended December 31, 2020, as compared to the same period in 2019.

54Total assets of $9.90 billion as of December 31, 2020, increased $2.13 billion, or 27.4%, from December 31, 2019. Loans and leases held-for-investment increased by $1.66 billion to $8.24 billion as of December 31, 2020, an increase of 25.2% from December 31, 2019, as a result of growth in our commercial and private banking loan and lease portfolios. Total investment securities, which were $842.5 million as of December 31, 2020, increased $373.4 million from the prior period, an increase of 79.6%. Total deposits increased $1.85 billion, or 28.0%, to $8.49 billion as of December 31, 2020, from $6.63 billion as of December 31, 2019. Our shareholder’s equity increased $135.9 million, or 21.9% primarily driven by the net proceeds from the issuance of $100.0 million in capital and retained earnings of our operations.

7.15% for the year ended December 31, 2020, as compared to 11.47% in 2019. Both ratios declined due to a reduction in earnings during the year ended December 31, 2020, as compared to the same period in 2019.

Total assets of $9.90 billion as of December 31, 2020, increased $2.13 billion, or 27.4%, from December 31, 2019. Loans and leases held-for-investment increased by $1.66 billion to $8.24 billion as of December 31, 2020, an increase of 25.2% from December 31, 2019, as a result of growth in our commercial and private banking loan and lease portfolios. Total investment securities, which were $842.5 million as of December 31, 2020, increased $373.4 million from the prior period, an increase of 79.6%. Total deposits increased $1.85 billion, or 28.0%, to $8.49 billion as of December 31, 2020, from $6.63 billion as of December 31, 2019. We focus only on high quality loan growth and in the absence of this, we increase our assets by adding to our investment portfolio and through cash and cash equivalents as part of our strategy to build greater on balance sheet liquidity funded through our deposits. Our shareholder’s equity increased $135.9 million, or 21.9% primarily driven by the net proceeds from the issuance of $100.0 million in capital and retained earnings of our operations.

Our ratio of adverse-rated credits to total loans increased to 0.62% at December 31, 2020, from 0.53% at December 31, 2019. Our ratio of allowance for credit losses on loans and leases to loans increased to 0.42% as of December 31, 2020, from 0.21% as of December 31, 2019. We recorded provision for credit losses of $19.4 million for the year ended December 31, 2020, primarily due to an increase in general reserves in response to the unprecedented speed of the economic slowdown associated with the COVID-19 pandemic and an increase in specific reserves due to an addition of non-accrual loans, compared to a credit to provision of $968,000 for the year ended December 31, 2019. In addition, we implemented the Current Expected Credit Losses (“CECL”) model as of January 1, 2020, and recorded a net decrease to retained earnings of $1.7 million, for the cumulative effect (net of tax) of adopting CECL. For more information on our adoption of CECL, refer to Note 1, Summary of Significant Accounting Policies and Note 5, Allowance for Credit Losses on Loans and Leases.

Our book value per common share increased $0.57, or 3.3%, to $17.78 as of December 31, 2020, from $17.21 as of December 31, 2019, largely as a result of an increase in our net income available to common shareholders, partially offset by the issuance of restricted stock during year ended December 31, 2020.

2019 Compared to 2018 Operating Performance

For the year ended December 31, 2019, our net income available to common shareholders was $54.4 million compared to $52.3 million in 2018, an increase of $2.1 million, or 4.1%. This increase was primarily due to the net impact of a $13.7 million, or 12.0%, increase in our net interest income; an increase in the credit to provision for loan and lease losses of $763,000; an increase of $4.9 million, or 10.2%, in non-interest income; offset by an increase of $11.0 million, or 10.9%, in our non-interest expense; a $2.5 million increase in income taxes; and an increase in preferred stock dividends of $3.6 million.

Our diluted EPS was $1.89 for the year ended December 31, 2019, compared to $1.81 in 2018. The increase in diluted EPS was a result of the continued growth of our business lines, which was the driver of additional net income available to common shareholders.

For the year ended December 31, 2019, net interest income and non-interest income, excluding net gains and losses on the sale of securities, combined to generate total revenue of $179.4 million from $161.4 million in 2018, increasing $18.0 million, or 11.2%, driven largely by higher net interest income and swap fees for the Bank.

Our net interest margin was 1.97% for the year ended December 31, 2019, as compared to 2.26% in 2018. The decrease in net interest margin for the year ended December 31, 2019, was driven by an increase of 41 basis points in the cost of interest-bearing liabilities, partially offset by an increase of 10 basis points in the yield on loans.

Our loans are predominantly variable rate loans indexed to 1-month LIBOR and our deposits are a combination of fixed-rate time deposits and variable rate deposits, some of which are indexed or otherwise priced in reference to the Effective Federal Funds Rate. When the financial markets anticipate an interest rate cut, LIBOR rates typically decrease in advance of action taken by the Federal Reserve, which compresses and can invert the historical spread between 1-month LIBOR and the Effective Federal Funds Rate. This occurred at certain times during the year ended December 31, 2019. In addition, we intentionally increased our liquid assets as a component of our assets and our deposits as portion of our assets for the purpose of carrying more balance sheet liquidity. This increased the level of liquid assets that were generating lower returns based on the interest rate environment and interest rate term structure curve. Also, certain hedge arrangements that we had in place which provided beneficial pricing on certain liquidity expired in 2019 and could not be replicated in the 2019 interest rate environment. All of this contributed to the compression of our net interest margin, impacted our net interest income and our rate of revenue growth, and affected profitability ratios such as the Bank’s efficiency ratio, return on average assets, and return on average common equity.

Our non-interest income is largely comprised of investment management fees for Chartwell, which totaled $36.4 million for the year ended December 31, 2019, as compared to $37.6 million in 2018. The decrease was driven by a lower weighted average fee rate from

the change in asset composition across investment products, partially offset by higher assets under management. Assets under management were $9.70 billion as of December 31, 2019, an increase of $512.0 million from December 31, 2018, driven by market appreciation of $1.3 billion, partially offset by net outflows of $771.0 million. The non-interest income from the Bank’s operations, which consisted of swap fee revenue, loan and service fees, and treasury management program fees, grew to $15.5 million from $11.0 million in 2018.

For the year ended December 31, 2019, the Bank’s efficiency ratio was 54.49%, as compared to 53.09% in 2018. The Bank’s efficiency ratio reflects growth in the Bank’s total revenue of 13.0% and growth in the Bank’s non-interest expense of 16.0%. Non-interest expense was $112.1 million for the year ended December 31, 2019, which included approximately $850,000 of expenses related to the due diligence with an investment management acquisition candidate, which concluded before the parties reached a definitive agreement. Our non-interest expense to average assets for the year ended December 31, 2019, was 1.66%, as compared to 1.93% in 2018.

Our return on average assets (net income to average total assets) was 0.89% for the year ended December 31, 2019, as compared to 1.04% in 2018. Our return on average common equity (net income available to common shareholders to average common equity) was 11.47% for the year ended December 31, 2019, as compared to 12.57% in 2018.

Total assets of $7.77 billion as of December 31, 2019, increased $1.73 billion, or 28.7%, from December 31, 2018. Loans and leases held-for-investment grew by $1.44 billion to $6.58 billion as of December 31, 2019, an increase of 28.1% from December 31, 2018, as a result of growth in our commercial and private banking loan and lease portfolios. Total deposits increased $1.58 billion, or 31.4%, to $6.63 billion as of December 31, 2019, from $5.05 billion as of December 31, 2018.

Our ratio of adverse-rated credits to total loans increased to 0.53% at December 31, 2019, from 0.48% at December 31, 2018. Our ratio of allowance for loan and lease losses to loans decreased to 0.21% as of December 31, 2019, from 0.26% as of December 31, 2018, reflecting growing history of few credit losses, current low non-performing loans and lower levels of provision required for private banking loans. We had a credit to provision for loan and lease losses of $968,000 for the year ended December 31, 2019, primarily due to recoveries of $2.0 million in the commercial and industrial portfolio, partially offset by a net increase in general reserves of $1.2 million due to growth of the loan and lease portfolio.

Our book value per common share increased $1.94, or 12.7%, to $17.21 as of December 31, 2019, from $15.27 as of December 31, 2018, largely as a result of an increase in our net income available to common shareholders, partially offset by the issuance of restricted stock during year ended December 31, 2019.

Results of Operations

Net Interest Income

Net interest income represents the difference between the interest received on interest-earning assets and the interest paid on interest-bearing liabilities. Net interest income is affected by changes in the volume of interest-earning assets and interest-bearing liabilities and changes in interest yields earned and interest rates paid. Net interest income comprised 7275.14%, 7072.81% and 70.38% of total revenue for the years ended December 31, ~~2020~~2021, ~~2019~~2020 and ~~2018~~2019, respectively.

The table below reflects an analysis of net interest income, on a fully taxable equivalent basis, for the periods indicated. The adjustment to convert certain income to a fully taxable equivalent basis consists of dividing tax-exempt income by one minus the statutory federal income tax rate of 21%.

	Years Ended December 31,
(Dollars in thousands)	~~2020~~2021			~~2019~~2020			~~2018~~2019
Interest income	$	~~217~~231,~~095~~297		$	~~262~~217,~~447~~095		$	~~199~~262,~~786~~447
Fully taxable equivalent adjustment	6030			~~101~~60			~~112~~101
Interest income adjusted	~~217~~231,~~155~~327			~~262~~217,~~548~~155			~~199~~262,~~898~~548
Less: interest expense	7951,~~151~~938			~~135~~79,~~390~~151			86135,~~382~~390
Net interest income adjusted	$	~~138~~179,~~004~~389		$	~~127~~138,~~158~~004		$	~~113~~127,~~516~~158
Yield on earning assets (1)	2.4912		%	42.0649		%	34.9806		%
Cost of interest-bearing liabilities	10.0153		%	21.3401		%	12.9334		%
Net interest spread (1)	1.4859		%	1.7248		%	21.0572		%
Net interest margin (1)	1.5864		%	1.9758		%	21.2697		%

(1)Calculated on a fully taxable equivalent basis.

5658

The following table provides information regarding the average balances and yields earned on interest-earning assets and the average balances and rates paid on interest-bearing liabilities for each of the three years ended December 31, ~~2020~~2021, ~~2019~~2020 and ~~2018~~2019. Non-accrual loans are included in the calculation of average loan balances, while interest payments collected on non-accrual loans are recorded as a reduction to principal. Where applicable, interest income and yield are reflected on a fully taxable equivalent basis and have been adjusted based on the statutory federal income tax rate of 21%.

	Years Ended December 31,
	2020						2019						2018
	2021						2020						2019
(Dollars in thousands)	AverageBalance		Interest Income (1)/Expense		Average Yield/Rate		AverageBalance		Interest Income (1)/Expense		Average Yield/Rate		AverageBalance		Interest Income (1)/Expense		Average Yield/Rate
Assets
Interest-earning deposits	$	~~775~~453,~~276~~625	$	~~2,199~~573	0.2813	%	$	~~313~~775,~~413~~276	$	62,~~628~~199	20.1128	%	$	~~188~~313,~~921~~413	$	36,~~598~~628	12.9011	%
Federal funds sold	811,~~076~~148		259		0.3108	%	8,~~803~~076		~~167~~25		10.9031	%	8,~~315~~803		~~156~~167		1.8890	%
Debt securities available-for-sale	~~438~~402,~~293~~391		65,~~550~~640		1.4940	%	~~250~~438,~~064~~293		86,~~119~~550		31.2549	%	~~205~~250,~~652~~064		68,~~195~~119		3.0125	%
Debt securities held-to-maturity, net	~~246~~866,~~054~~245		69,~~439~~301		21.6207	%	~~193~~246,~~443~~054		6,~~921~~439		32.5862	%	90193,~~895~~443		36,~~399~~921		3.7458	%
Debt securities trading	~~592~~555		5		0.8490	%	—592		—5		—0.84	%	—		—		—	%
Equity securities	—1,298		—		—	%	~~6,733~~—		~~115~~—		~~1.71~~—	%	106,~~517~~733		~~277~~115		21.6371	%
FHLB stock	1411,~~994~~766		~~1,098~~613		75.3221	%	1814,~~043~~994		1,~~270~~098		7.0432	%	1518,~~136~~043		~~924~~1,270		67.1004	%
Total loans and leases	79,~~255~~187,~~035~~492		~~200~~215,~~839~~186		2.7734	%	57,~~669~~255,~~507~~035		~~239~~200,~~328~~839		42.2277	%	45,~~500~~669,~~117~~507		~~185~~239,~~349~~328		4.1222	%
Total interest-earning assets	810,~~738~~934,~~320~~520		~~217~~231,~~155~~327		2.4912	%	68,~~460~~738,~~006~~320		~~262~~217,~~548~~155		42.0649	%	56,~~019~~460,~~553~~006		~~199~~262,~~898~~548		34.9806	%
Other assets	~~387~~371,~~080~~876						~~281~~387,~~171~~080						~~221~~281,~~467~~171
Total assets	$	911,~~125~~306,~~400~~396					$	69,~~741~~125,~~177~~400					$	56,~~241~~741,~~020~~177
Liabilities and Shareholders' Equity
Interest-bearing deposits:
Interest-bearing checking accounts	$	23,~~407~~768,~~087~~446	$	1413,~~493~~106	0.6035	%	$	12,~~058~~407,~~064~~087	$	2114,~~480~~493	20.0360	%	$	~~612~~1,~~921~~058,064	$	1121,~~440~~480	12.8703	%
Money market deposit accounts	34,~~812~~735,~~942~~297		3523,~~095~~299		0.9249	%	23,~~943~~812,~~541~~942		6935,~~336~~095		20.3692	%	2,~~429~~943,~~203~~541		4569,~~106~~336		12.8636	%
Certificates of deposit	1920,~~223,631~~820		195,~~614~~099		10.6055	%	1,~~371~~223,~~038~~631		3419,~~776~~614		21.5460	%	1,~~071~~371,~~556~~038		2134,~~947~~776		2.0554	%
Borrowings:
FHLB borrowings	~~330~~251,~~314~~164		64,~~095~~348		1.8573	%	~~394~~330,~~480~~314		86,~~639~~095		21.1985	%	~~325~~394,~~356~~480		58,~~555~~639		12.7119	%
Line of credit borrowings	63,~~243~~433		~~261~~148		4.1831	%	16,~~234~~243		68261		54.5118	%	21,~~568~~234		~~119~~68		45.6351	%
Subordinated notes payable, net	59,078		3,593		6.08	%	17,335		1,091		6.29	%	34,807		2,215		6.36	%
Senior & subordinated notes payable, net	101,413		5,938		5.86	%	59,078		3,593		6.08	%	17,335		1,091		6.29	%
Total interest-bearing liabilities	79,~~839~~780,~~295~~573		7951,~~151~~938		10.0153	%	57,~~785~~839,~~692~~295		~~135~~79,~~390~~151		21.3401	%	45,~~476~~785,~~411~~692		86135,~~382~~390		12.9334	%
Noninterest-bearing deposits	~~408~~508,~~313~~404						~~267~~408,~~846~~313						~~244~~267,~~090~~846
Other liabilities	~~239~~220,~~137~~303						~~128~~239,~~618~~137						75128,~~473~~618
Shareholders' equity	~~638~~797,~~655~~116						~~559~~638,~~021~~655						~~445~~559,~~046~~021
Total liabilities and shareholders' equity	$	911,~~125~~306,~~400~~396					$	69,~~741~~125,~~177~~400					$	56,~~241~~741,~~020~~177
Net interest income (1)			$	~~138~~179,~~004~~389					$	~~127~~138,~~158~~004					$	~~113~~127,~~516~~158
Net interest spread					1.4859	%					1.7248	%					21.0572	%
Net interest margin (1)					1.5864	%					1.9758	%					21.2697	%

(1)Calculated on a fully taxable equivalent basis.

5759

Net Interest Income for the Years Ended December 31, ~~2020~~2021 and ~~2019~~2020. Net interest income, calculated on a fully taxable equivalent basis, increased $1041.84 million, or 830.50%, to $~~138~~179.04 million for the year ended December 31, ~~2020~~2021, from $~~127~~138.20 million in ~~2019. The increase in net interest income for the year ended December 31,~~ 2020~~, was primarily attributable to a $2~~.~~28 billion, or 35.3%, increase in average interest-earning assets driven primarily by loan growth.~~ The increase in net interest income reflects aan ~~decrease~~increase of $4514.42 million, or 176.35%, in interest income, ~~more~~and ~~than offset by~~ a decrease of $5627.2 million, or 4134.54%, in interest expense. Our net interest margin was 1.5864% for the year ended December 31, ~~2020~~2021, as compared to 1.9758% in ~~2019. The decrease in net interest margin for the year ended December 31,~~ 2020, ~~resulted~~driven ~~from~~primarily ~~the~~by ~~Federal Reserve interest rate cuts, contributing to~~ lower ~~net~~cost ~~interest~~of ~~spread,~~funds and higher average ~~balances of lower~~interest-earning ~~assets. This~~balances, ~~included~~which ~~excess~~were ~~liquidity~~partially inoffset ~~interest-bearing~~by ~~cash~~a ~~deposits~~lower ~~and~~yield ~~investments~~on ~~during certain times of the year in anticipation of clients’ potential liquidity and credit needs during the COVID~~interest-19earning assets.

The increase in interest income on interest-earning assets was primarily the result of an increase in average total loans, which are our primary earning assets, of $1.93 billion, or 26.6%, mostly offset by a decrease of 43 basis points in yield on our loans, for the year ended December 31, 2021 compared to the same period in 2020. The change in yield is attributable to an increased portion of our portfolio being comprised of our lower-risk, lower-yielding marketable-securities backed private banking loans. The overall yield on interest-earning assets declined 37 basis points to 2.12% for the year ended December 31, 2021, as compared to 2.49% in 2020, primarily due to the lower loan yields. Our loans are predominantly variable rate loans indexed to one-month LIBOR.

The decrease in interest expense on interest-bearing liabilities was primarily the result of a decrease of 48 basis points in the average rate paid on our average interest-bearing liabilities, partially offset by an increase of $1.94 billion, or 24.8%, in average interest-bearing liabilities for the year ended December 31, 2021, compared to 2020. The decrease in the average rate paid reflected decreases in rates paid in all deposit categories, which was largely driven by the repricing of our deposits as a result of the current interest rate environment. The increase in average interest-bearing liabilities was driven primarily by an increase of $1.36 billion in average interest-bearing checking accounts and an increase of $922.4 million in average money market deposit accounts, partially offset by a decrease of $302.8 million in average certificates of deposit.

Net Interest Income for the Years Ended December 31, 2020 and 2019. Net interest income, calculated on a fully taxable equivalent basis, increased $10.8 million, or 8.5%, to $138.0 million for the year ended December 31, 2020, from $127.2 million in 2019. The increase in net interest income for the year ended December 31, 2020, was primarily attributable to a $2.28 billion, or 35.3%, increase in average interest-earning assets driven primarily by loan growth. The increase in net interest income reflects a decrease of $45.4 million, or 17.3%, in interest income, more than offset by a decrease of $56.2 million, or 41.5%, in interest expense. Our net interest margin was 1.58% for the year ended December 31, 2020, as compared to 1.97% in 2019. The decrease in net interest margin for the year ended December 31, 2020, resulted from the Federal Reserve interest rate cuts, contributing to lower net interest spread, and higher average balances of lower-earning assets. This included excess liquidity in interest-bearing cash deposits and investments during certain times of the year in anticipation of clients’ potential liquidity and credit needs during the COVID-19 pandemic.

The decrease in interest income on interest-earning assets was primarily the result of a decrease of 145 basis points in yield on our loans, partially offset by an increase in average total loans, which are our primary earning assets, of $1.59 billion, or 28.0% for the year ended December 31, 2020, compared to the same period in 2019. The most significant factor driving the yield on our loan portfolio was the impact of the decrease to the Federal Reserve’s target federal funds rate on our floating-rate loans. The overall yield on interest-earning assets declined 157 basis points to 2.49% for the year ended December 31, 2020, as compared to 4.06% in 2019, primarily from the lower loan yields. Our loans are predominantly variable rate loans indexed to 1-month LIBOR. At the end of the first quarter of 2020, we placed interest rate floors on many of these floating rate loans, particularly for private banking loans.

The decrease in interest expense on interest-bearing liabilities was primarily the result of a decrease of 133 basis points in the average rate paid on our average interest-bearing liabilities, partially offset by an increase of $2.05 billion, or 35.5%, in average interest-bearing liabilities for the year ended December 31, 2020, compared to 2019. The decrease in the average rate paid was reflective of decreases in rates paid on all interest-bearing liabilities, which was largely driven by the impact of the recent decrease to the Federal Reserve’s target federal funds rate on our variable-rate liabilities. The increase in average interest-bearing liabilities was driven primarily by an increase of $1.35 billion in average interest-bearing checking accounts and an increase of $869.4 million in average money market deposit accounts, partially offset by a decrease of $147.4 million in average certificates of deposit.

Net Interest Income for the Years Ended December 31, 2019 and 2018. Net interest income, calculated on a fully taxable equivalent basis, increased $13.6 million, or 12.0%, to $127.2 million for the year ended December 31, 2019, from $113.5 million in 2018. The increase in net interest income for the year ended December 31, 2019, was primarily attributable to a $1.44 billion, or 28.7%, increase in average interest-earning assets driven primarily by loan growth. The increase in net interest income reflects an increase of $62.7 million, or 31.3%, in interest income, partially offset by an increase of $49.0 million, or 56.7%, in interest expense. Net interest margin decreased to 1.97% for the year ended December 31, 2019, as compared to 2.26% in 2018, driven higher costs of funds, partially offset by a higher yield on our loan portfolio.60

The increase in interest income on interest-earning assets was primarily the result of an increase in average total loans, which are our primary earning assets, of $1.17 billion, or 26.0% and an increase of 10 basis points in yield on our loans. The yield on our loan portfolio was primarily driven by the direction and timing of the Federal Reserve’s target Federal Funds Rate changes, which impacted our floating-rate loans. The change in yield is also attributable to our continuing gradual shift towards lower-risk marketable-securities-backed private banking loans and commercial loans. The overall yield on interest-earning assets increased 8 basis points to 4.06% for the year ended December 31, 2019, as compared to 3.98% in 2018, primarily from the higher loan yields.

The increase in interest expense on interest-bearing liabilities was primarily the result of an increase of 41 basis points in the average rate paid on our average interest-bearing liabilities, as well as an increase of $1.31 billion, or 29.2%, in average interest-bearing liabilities for the year ended December 31, 2019, compared to 2018. The increase in average rate paid was reflective of increases in rates paid in all interest-bearing deposit categories, FHLB borrowings and line of credit borrowings, which was driven by the direction and timing of the Federal Reserve’s target Federal Funds Rate changes, which impacted our variable-rate liabilities. The increase in average interest-bearing liabilities was driven primarily by an increase of $514.3 million in average money market deposit accounts, an increase of $445.1 million in average interest-bearing checking accounts and an increase of $299.5 million in average certificates of deposit.

The following tables analyze the dollar amount of the change in interest income and interest expense with respect to the primary components of interest-earning assets and interest-bearing liabilities. The tables show the amount of the change in interest income or interest expense caused by either changes in outstanding balances or changes in interest rates for the periods indicated. The effect of changes in balance is measured by applying the average rate during the first period to the balance (“volume”) change between the two periods. The effect of changes in rate is measured by applying the change in rate between the two periods to the average volume during the first period.

Years Ended December 31,

2020 over 2019

2021 over 2020

(Dollars in thousands)

Yield/Rate

Volume

Change (1)

Increase (decrease) in:

Interest income:

Interest-earning deposits

(~~8,891~~929)

~~4,462~~(697)

(41,~~429~~626)

Federal funds sold

(~~129~~23)

~~(13)~~7

(~~142~~16)

Debt securities available-for-sale

(~~5,781~~383)

~~4,212~~(527)

(~~1,569~~910)

Debt securities held-to-maturity

(25,~~123~~586)

18,~~641~~448

~~(482)~~2,862

Debt securities trading

—

FHLB stock

(277)

(208)

(485)

Equity securities

—

(115)

Total loans and leases

(33,498)

47,845

14,347

FHLB stock

(219)

(172)

Total increase (decrease) in interest income

(40,696)

54,868

14,172

Total loans and leases

(95,516)

57,027

(38,489)

Total increase (decrease) in interest income

(112,393)

67,000

(45,393)

Interest expense:

Interest-bearing deposits:

Interest-bearing checking accounts

(227,~~029~~566)

156,~~042~~179

(61,~~987~~387)

Money market deposit accounts

(5018,~~751~~883)

167,~~510~~087

(3411,~~241~~796)

Certificates of deposit

(1110,~~747~~529)

(3,~~415~~986)

(1514,~~162~~515)

Borrowings:

FHLB borrowings

(~~1,260~~346)

(1,~~284~~401)

(21,~~544~~747)

Line of credit borrowings

~~(20)~~9

~~213~~(122)

~~193~~(113)

Subordinated notes payable, net

(41129)

2,~~543~~474

2,~~502~~345

Total increase (decrease) in interest expense

(8537,~~848~~444)

2910,~~609~~231

(5627,~~239~~213)

Total increase (decrease) in net interest income

(263,~~545~~252)

3744,~~391~~637

1041,~~846~~385

(1)The change in interest income and expense due to changes in both composition and applicable yields/rates has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each.

5961

	Years Ended December 31,
	2019 over 2018
	2020 over 2019
(Dollars in thousands)	Yield/Rate		Volume		Change (1)
Increase (decrease) in:
Interest income:
Interest-earning deposits	$	~~435~~(8,891)	$	24,~~595~~462	$	3(4,~~030~~429)
Federal funds sold	2(129)		9(13)		11(142)
Debt securities available-for-sale	~~510~~(5,781)		14,~~414~~212		(1,~~924~~569)
Debt securities held-to-maturity	(~~153~~2,123)		31,~~675~~641		~~3,522~~(482)
Equity securities	(80)		(82)		(162)
Debt securities trading	—		5		5
FHLB stock	153		193		346
Equity securities	—		(115)		(115)
Total loans and leases	4,720		49,259		53,979
FHLB stock	47		(219)		(172)
Total increase in interest income	5,587		57,063		62,650
Total loans and leases	(95,516)		57,027		(38,489)
Total increase in interest income	(112,393)		67,000		(45,393)
Interest expense:
Interest-bearing deposits:
Interest-bearing checking accounts	1(22,~~082~~029)		815,~~958~~042		10(6,~~040~~987)
Money market deposit accounts	13(50,~~549~~751)		1016,~~681~~510		24(34,~~230~~241)
Certificates of deposit	5(11,~~906~~747)		6(3,~~923~~415)		12(15,~~829~~162)
Borrowings:
FHLB borrowings	(1,~~761~~260)		(1,~~323~~284)		3(2,~~084~~544)
Line of credit borrowings	19(20)		~~(70)~~213		~~(51)~~193
Subordinated notes payable, net	(2441)		(12,~~100)~~543		(12,~~124)~~502
Total increase in interest expense	22,293		26,715		49,008
Total increase in (decrease) interest expense	(85,848)		29,609		(56,239)
Total increase (decrease) in net interest income	$	(1626,~~706~~545)	$	3037,~~348~~391	$	1310,~~642~~846

Provision for Credit Losses on Loans and Leases

The provision for credit losses on loans and leases ~~represent~~represents our determination of the amount necessary to be recorded against the current period’s earnings to maintain the allowance for credit ~~loss~~losses at a level that is consistent with management’s assessment of credit losses in the loan and lease portfolio at a specific point in time. We adopted CECL on December 31, 2020, which replaced the incurred loss methodology for determining our provision for credit losses and allowance for credit losses. We recorded a net decrease to retained earnings of $942,000 related to the allowance for credit losses on loans and leases as of January 1, 2020, for the cumulative effect of adopting CECL. Results for full year and period end December 31, 2020, are presented under CECL methodology while prior period amounts continue to be reported in accordance with previously applicable GAAP. For additional information regarding our allowance for credit losses on loans and leases, see “Allowance for Credit Losses on Loans and Leases.”

We recorded a provision for credit losses on loans and leases of $~~19.3 million~~820,000 for the year ended December 31, ~~2020~~2021, compared to a ~~credit to~~ provision for loan losses of $~~968,000~~19.3 million for the year ended December 31, ~~2019~~2020, and a credit to provision for loan losses of $~~205~~968,000 for the year ended December 31, ~~2018~~2019.

The provision for credit losses on loans and leases for the year ended December 31, ~~2020~~2021, was comprised of ana ~~increase~~decrease in net general reserves of approximately $189.70 million, largely due to ~~adjustments~~improvement toin the ~~macro-~~ economic ~~forecast~~forecasts ~~data~~utilized ~~such as gross domestic product (“GDP”) and unemployment~~ in ~~response~~the toqualitative ~~economic~~management ~~uncertainty~~overlay, ~~around~~which ~~the~~was ~~COVID-19~~more ~~pandemic~~than ~~and~~offset by an increase of $12.8 7 million in specific reserves on ~~non-performing~~individually ~~loans,~~evaluated ~~largely driven by new non-accrual~~ loans ~~in our commercial~~ and ~~industrial~~$7.1 ~~and~~million ~~commercial~~in ~~real estate portfolios~~charge-offs.

The ~~credit to~~ provision for ~~loan~~credit ~~and~~losses ~~lease~~on ~~losses~~loans and leases for the year ended December 31, ~~2019~~2020, was comprised of ~~recoveries~~an ofincrease ~~$2.0~~in ~~million~~general ~~related~~reserves ~~to commercial and industrial loans and a net decrease~~ of $~~266,000~~18.7 million inlargely ~~specific reserves primarily~~ due to ~~paydowns~~adjustments ofto ~~these non~~the macro-~~performing~~economic ~~loans~~forecast ~~and~~data ~~collateral~~such ~~related~~as togross andomestic ~~impaired~~product ~~loan~~(“GDP”) ~~that~~and ~~was~~unemployment ~~transferred~~in response to ~~other~~economic ~~real~~uncertainty ~~estate~~around ~~owned~~the ~~(“OREO”),~~COVID-19 ~~partially~~pandemic ~~offset~~and byan ~~a net~~ increase of $1.2 8 million in ~~general~~specific reserves ~~due~~on tonon-performing ~~growth~~loans, oflargely ~~the~~driven ~~loan~~by ~~and~~non-accrual ~~lease~~loans ~~portfolio~~in our commercial and ~~charge-offs~~industrial ofand ~~$112,000~~commercial real estate portfolios.

60The credit to provision for loan and lease losses for the year ended December 31, 2019, was comprised of recoveries of $2.0 million related to commercial and industrial loans and a net decrease of $266,000 in specific reserves primarily due to paydowns of these

nonperforming loans and collateral related to an impaired loan that was transferred to other real estate owned (“OREO”), partially offset by a net increase of $1.2 million in general reserves due to growth of the loan and lease portfolio and charge-offs of $112,000.

Non-Interest Income

Non-interest income is an important component of our revenue and is comprised ~~primarily~~largely of investment management fees from Chartwell coupled with fees generated from loan and deposit relationships with our Bank customers, including swap transactions. The information provided under the caption “Parent and Other” represents general operating activity of the Company not considered to be a reportable segment, which includes parent company activity as well as eliminations and adjustments that are necessary for purposes of reconciliation to the consolidated amounts.

The following table presents the components of our non-interest income by operating segment for the years ended December 31, 2021 and 2020:


	Year Ended December 31, 2021								Year Ended December 31, 2020
			Investment		Parent						Investment		Parent
(Dollars in thousands)	Bank		Management		and Other		Consolidated		Bank		Management		and Other		Consolidated
Investment management fees	$	—	$	38,702	$	(1,248)	$	37,454	$	—	$	32,727	$	(692)	$	32,035
Service charges on deposits	1,407		—		—		1,407		1,072		—		—		1,072
Net gain on the sale and call of debt securities	242		—		—		242		3,948		—		—		3,948

Swap fees	14,091		—		—		14,091		16,274		—		—		16,274
Commitment and other loan fees	2,448		—		—		2,448		1,715		—		—		1,715
Bank owned life insurance income	2,142		—		—		2,142		1,742		—		—		1,742
Other income (loss)	853		34		(25)		862		361		58		—		419
Total non-interest income	$	21,183	$	38,736	$	(1,273)	$	58,646	$	25,112	$	32,785	$	(692)	$	57,205

(1)Other income largely includes items such as change in fair value on swaps and equity securities, gains on the sale of loans or OREO, and other general operating income.

Non-Interest Income for the Years Ended December 31, 2021 and 2020. Our non-interest income was $58.6 million for the year ended December 31, 2021, an increase of $1.4 million, or 2.5%, from $57.2 million for 2020. This increase was primarily related to higher investment management fees, commitment and other loan fees, bank owned life insurance income, and other income largely offset by lower net gain on the sale and call of debt securities and swap fees, as follows:

Bank Segment:

•Net gain on the sale and call of debt securities decreased $3.7 million for the year ended December 31, 2021, as compared to 2020, due primarily to the repositioning of a portion of the corporate bond portfolio into government agency securities that took place during 2020.

•Swap fees decreased $2.2 million for the year ended December 31, 2021, as compared to 2020, due to changing demand from customers for interest rate protection through swaps given movement in the yield curve. The number of swaps executed as well as the notional amount and term of each swap transaction impact the fee income from period to period.

•Commitment and other loan fees for the year ended December 31, 2021, increased $733,000 as compared to 2020, primarily due to an increase in letter of credit fee income.

•Bank owned life insurance income for the year ended December 31, 2021, increased $400,000 as compared to 2020, primarily due to additional investments in bank owned life insurance during the second quarter of 2021.

•Other income increased $492,000 for year ended December 31, 2021, compared to 2020, primarily due to an early payoff of a customer’s equipment lease resulting in a gain, which was partially offset by lower income on trading securities.

Investment Management Segment:

•Investment management fees increased $6.0 million for the year ended December 31, 2021, as compared to 2020, primarily due to higher levels of assets under management. Assets under management were $11.84 billion as of December 31, 2021, an

increase of $1.58 billion from December 31, 2020. For additional information on assets under management, refer to Item 1, Business - Investment Management Products.

The following table presents the components of our non-interest income by operating segment for the years ended December 31, 2020 and 2019:


	Year Ended December 31, 2020								Year Ended December 31, 2019
			Investment		Parent						Investment		Parent
(Dollars in thousands)	Bank		Management		and Other		Consolidated		Bank		Management		and Other		Consolidated
Investment management fees	$	—	$	32,727	$	(692)	$	32,035	$	—	$	36,889	$	(447)	$	36,442
Service charges on deposits	1,072		—		—		1,072		559		—		—		559
Net gain on the sale and call of debt securities	3,948		—		—		3,948		416		—		—		416

Swap fees	16,274		—		—		16,274		11,029		—		—		11,029
Commitment and other loan fees	1,715		—		—		1,715		1,788		—		—		1,788
Bank owned life insurance income	1,742		—		—		1,742		1,736		—		—		1,736
Other income (loss)	361		58		—		419		(61)		31		842		812
Total non-interest income	$	25,112	$	32,785	$	(692)	$	57,205	$	15,467	$	36,920	$	395	$	52,782

(1)Other income largely includes items such as ~~income from BOLI,~~ change in fair value on swaps and equity securities, gains on the sale of loans or OREO, and other general operating income.

Non-Interest Income for the Years Ended December 31, 2020 and 2019. Our non-interest income was $57.2 million for the year ended December 31, 2020, an increase of $4.4 million, or 8.4%, from $52.8 million for 2019. This increase was primarily related to a higher net gain on the sale and call of debt securities and an increase in swap fees, partially offset by lower investment management fees, as follows:

Bank Segment:

•There was a net gain on the sale and call of debt securities of $3.9 million for the year ended December 31, 2020, as compared to a net gain of $416,000 for the year ended December 31, 2019. The variance was primarily due to the repositioning of a portion of the corporate bond portfolio into government agency securities to take advantage of market appreciation and enhance the overall credit quality of our investment portfolio.

•Swap fees increased $5.2 million for the year ended December 31, 2020, as compared to 2019, due to an increase in the number of customer swap transactions that closed during the year, from both of our private and commercial banking portfolios. While level and frequency of income associated with swap transactions can vary materially from period to period based on customers’ expectations of market conditions and term loan originations, there was strong customer demand for long-term interest rate protection in the current interest rate environment.

Investment Management Segment:

•Investment management fees decreased $4.2 million for the year ended December 31, 2020, as compared to 2019, primarily due to the effect of the COVID-19 pandemic on the equity markets resulting in a shift in the asset composition across investment products and a lower weighted average fee rate of 0.35% for the year ended December 31, 2020, compared to 0.36% for the year ended December 31, 2019, partially offset by higher assets under management of $562.0 million. For additional information on assets under management, refer to Item 1, Business - Investment Management Products.

Parent and Other

•Other income for the year ended December 31, 2019, reflected $842,000 of ~~unrealized~~realized gains on equity securities related to our mutual funds invested in short-duration, corporate bonds and mid-cap value equities, which were sold in 2019.

61Non-Interest Expense

~~The~~Our ~~following~~non-interest ~~table~~expense ~~presents~~represents the ~~components~~operating cost of maintaining and growing our business. The largest portion of non-interest ~~income~~expense byfor ~~operating~~each segment ~~for~~is compensation and employee benefits, which include employee payroll expense as well as the ~~years~~cost ~~ended~~of ~~December~~incentive 31compensation, ~~2019~~benefit plans, health insurance and ~~2018:~~payroll taxes, all of which are impacted by the growth in our employee

	Year Ended December 31, 2019								Year Ended December 31, 2018
			Investment		Parent						Investment		Parent
(Dollars in thousands)	Bank		Management		and Other		Consolidated		Bank		Management		and Other		Consolidated
Investment management fees	$	—	$	36,889	$	(447)	$	36,442	$	—	$	37,939	$	(292)	$	37,647
Service charges on deposits	559		—		—		559		570		—		—		570
Net gain on the sale and call of debt securities	416		—		—		416		(70)		—		—		(70)
Swap fees	11,029		—		—		11,029		7,311		—		—		7,311
Commitment and other loan fees	1,788		—		—		1,788		1,411		—		—		1,411
Bank owned life insurance income	1,736		—		—		1,736		1,716		—		—		1,716
Other income (loss)	(61)		31		842		812		104		1		(773)		(668)
Total non-interest income	$	15,467	$	36,920	$	395	$	52,782	$	11,042	$	37,940	$	(1,065)	$	47,917

~~(1)Other~~base, ~~income~~coupled ~~largely~~with ~~includes~~increases ~~items~~in ~~such~~the aslevel ~~income~~of ~~from~~compensation ~~bank~~and ~~owned~~benefits ~~life~~of ~~insurance~~our ~~(“BOLI”),~~existing ~~change~~employees. The ininformation ~~fair~~provided ~~value~~under onthe ~~swaps~~caption “Parent and ~~equity~~Other” ~~securities,~~represents ~~gains~~general onoperating activity of the ~~sale~~Company ofnot ~~loans~~considered orto ~~OREO~~be a reportable segment, which includes parent company activity as well as eliminations and ~~other~~adjustments ~~general~~that ~~operating~~are ~~income~~necessary for purposes of reconciliation to the consolidated amounts.

~~Non-Interest~~The ~~Income~~following ~~for~~table presents the ~~Years~~components ~~Ended~~of ~~December~~our ~~31, 2019 and 2018. Our~~ non-interest ~~income~~expense ~~was~~by ~~$52.8~~operating ~~million~~segment for the ~~year~~years ended December 31, ~~2019,~~2021 ~~an increase of $4.9 million, or 10.2%, from $47.9 million for 2018. This increase was primarily related to increases in swap fees~~ and ~~commitment and other loan fees and higher net gain on debt securities, partially offset by lower investment management fees and other income (loss), as follows~~2020:


	Year Ended December 31, 2021								Year Ended December 31, 2020
			Investment		Parent						Investment		Parent
(Dollars in thousands)	Bank		Management		and Other		Consolidated		Bank		Management		and Other		Consolidated
Compensation and employee benefits	$	59,687	$	23,527	$	1,385	$	84,599	$	50,240	$	19,738	$	1,219	$	71,197
Premises and equipment costs	4,560		1,277		—		5,837		4,318		1,557		—		5,875
Professional fees	7,353		766		2,701		10,820		4,773		829		599		6,201
FDIC insurance expense	5,080		—		—		5,080		9,680		—		—		9,680
General insurance expense	1,076		294		—		1,370		866		276		—		1,142
State capital shares tax	2,911		—		—		2,911		1,720		—		—		1,720
Travel and entertainment expense	2,288		346		—		2,634		2,093		291		39		2,423
Technology and data services	11,549		3,270		—		14,819		7,830		2,973		—		10,803
Intangible amortization expense	—		1,911		—		1,911		—		1,944		—		1,944

Marketing and advertising	2,260		1,364		—		3,624		1,210		1,192		—		2,402
Other operating expenses (1)	10,609		1,095		1,185		12,889		7,811		879		1,026		9,716
Total non-interest expense	$	107,373	$	33,850	$	5,271	$	146,494	$	90,541	$	29,679	$	2,883	$	123,103
Full-time equivalent employees (2)	308		53		—		361		255		53		—		308

(1)Other operating expenses include items such as organizational dues and subscriptions, charitable contributions, investor relations fees, sub-advisory fees, employee-related expenses, provision for unfunded commitments and other general operating expenses.

(2)Full-time equivalent employees shown are as of the end of the period presented.

Non-Interest Expense for the Years Ended December 31, 2021 and 2020. Our non-interest expense for the year ended December 31, 2021, increased $23.4 million, or 19.0%, as compared to 2020, of which $16.8 million relates to the increase in expenses of the Bank segment, $4.2 million relates to the increase in expenses of the Investment Management segment and $2.4 million relates to the increase in expenses of the Parent and Other. Notable changes in each segment’s expenses are as follows:

Bank Segment:

•~~Swap~~The ~~fees~~Bank’s compensation and employee benefits increased by $39.74 million for the year ended December 31, ~~2019~~2021, as compared to ~~2018~~2020, primarily due to an increase in the number of ~~customer~~full-time ~~swap~~equivalent ~~transactions~~employees, ~~closed~~increases ~~during~~in the ~~year. While~~overall ~~level~~annual wage and ~~frequency~~benefits ofcosts ~~income associated with swap transactions can vary materially from period to period based on customers’ expectations~~ of ~~market~~our ~~conditions~~existing ~~and applicable loan originations~~employees, ~~there~~and isincreases ~~strong~~in ~~customer~~incentive ~~demand~~and ~~for long~~stock-~~term~~based ~~interest~~compensation ~~rate~~expenses. ~~protection~~The increases in the ~~current~~number ~~interest~~of ~~rate~~employees ~~environment~~ and werelated ~~continue~~expenses toin ~~run~~2021 ~~the~~are ~~business~~a toresult ~~increase demand through targeted loan production, enhanced messaging~~ of ~~the~~our ~~opportunity,~~investment ~~process~~in ~~optimization~~talent ~~and refined emphasis on marketing swaps~~ to asupport ~~broader portion of~~ our ~~loan~~risk ~~portfolio~~management, ~~including~~scalable ~~loans~~growth ~~collateralized~~and byclient ~~marketable securities~~experience.

•~~There~~Professional ~~was~~fees aincreased ~~net~~$2.6 ~~gain~~million onfor the ~~sale~~year ~~and~~ended ~~call~~December of31, ~~debt~~2021, ~~securities~~as ofcompared ~~$416~~to 2020,~~000~~ ~~for~~primarily ~~the~~due ~~year~~to ~~ended~~higher ~~December 31~~audit, ~~2019,~~accounting asand ~~compared~~legal fees related to aroutine ~~net~~accounting ~~loss~~and ofregulatory ~~$70~~compliance,~~000~~ ~~for~~higher ~~the~~investment ~~year~~advisory ~~ended~~fees ~~December~~and 31increases in other professional fees, ~~2018~~including consulting fees related to the workout of non-performing loans.

•~~Commitment~~FDIC ~~and~~insurance ~~other~~expense ~~loan~~decreased ~~fees~~by ~~increased~~ $~~377,000~~4.6 million for the year ended December 31, ~~2019~~2021, ~~primarily~~as ~~due~~compared to ~~higher~~2020, ~~unused~~as ~~commitment~~the ~~fee~~Bank ~~income~~qualified ~~and~~for ~~other~~the ~~loan~~lower ~~fee~~assessment ~~income~~rates ~~due~~included toin the ~~continued~~FDIC’s ~~growth~~large bank assessment methodology beginning in ~~our~~the ~~loan~~fourth ~~and~~quarter ~~lease~~of ~~portfolio~~2020.

•~~Other~~Technology ~~income~~and ~~(loss)~~data ~~decreased~~services expense increased by $~~165,000~~3.7 million for the year ended December 31, ~~2019~~2021, as compared to ~~2018~~2020, primarily due to aincreased ~~loss~~software ondepreciation ~~the~~expense, ~~sale~~maintenance costs, and software licensing fees all as a result of ~~OREO~~our continued investments in technology and ~~lower~~product ~~unrealized~~innovation ~~gains~~to onsupport ~~swaps~~our risk management, scalable growth and client experience.

•Other operating expenses increased by $2.8 million for the year ended December 31, 2021, compared to 2020, primarily due to higher impairment expense associated with historic tax credit investments, partially offset by lower expenses associated with the reserve for unfunded commitments.

Investment Management Segment:

•~~Investment~~Chartwell’s ~~management~~compensation ~~fees~~and ~~decreased~~employee benefits costs increased by $13.18 million for the year ended December 31, ~~2019~~2021, as compared to ~~2018~~2020, primarily due to aan ~~shift~~increase in ~~the~~variable ~~asset~~incentive ~~composition~~compensation ~~across~~expense ~~investment~~as ~~products which resulted in~~ a ~~lower~~result ~~weighted average fee rate~~ of ~~0.36%~~increased ~~for the year ended December 31, 2019, compared to 0~~revenue.~~39%~~ for the year ended December 31, 2018, partially offset by higher assets under management of $512.0 million. For additional information on assets under management, refer to Item 1, Business - Investment Management Products.

Parent and Other:

•~~Other~~Parent ~~income~~and ~~was~~Other ~~comprised~~professional offees aincreased ~~net gain on equity securities of~~ $~~842,000~~2.1 for the year ended December 31, ~~2019~~2021, as compared to ~~a net loss of $773~~2020,~~000~~ ~~for~~primarily ~~the~~due ~~year ended December 31, 2018. These equity securities were related~~ to ~~our~~one-time ~~mutual~~costs ~~funds~~incurred ~~invested~~ in ~~short-duration,~~2021 ~~corporate~~associated ~~bonds~~with ~~and~~the ~~mid-cap~~previously ~~value~~announced ~~equities,~~agreement ~~which~~to ~~were~~be ~~sold~~acquired by ~~December~~Raymond ~~31, 2019~~James.

Non-Interest Expense

Our non-interest expense represents the operating cost of maintaining and growing our business. The largest portion of non-interest expense for each segment is compensation and employee benefits, which include employee payroll expense as well as the cost of incentive compensation, benefit plans, health insurance and payroll taxes, all of which are impacted by the growth in our employee base, coupled with increases in the level of compensation and benefits of our existing employees. The information provided under the caption “Parent and Other” represents general operating activity of the Company not considered to be a reportable segment, which includes parent company activity as well as eliminations and adjustments that are necessary for purposes of reconciliation to the consolidated amounts.

The following table presents the components of our non-interest expense by operating segment for the years ended December 31, 2020 and 2019:


	Year Ended December 31, 2020								Year Ended December 31, 2019
			Investment		Parent						Investment		Parent
(Dollars in thousands)	Bank		Management		and Other		Consolidated		Bank		Management		and Other		Consolidated
Compensation and employee benefits	$	50,240	$	19,738	$	1,219	$	71,197	$	46,841	$	22,335	$	—	$	69,176
Premises and equipment costs	4,318		1,557		—		5,875		3,911		1,547		—		5,458
Professional fees	4,773		829		599		6,201		5,170		1,159		(141)		6,188
FDIC insurance expense	9,680		—		—		9,680		5,292		—		—		5,292
General insurance expense	866		276		—		1,142		825		272		—		1,097
State capital shares tax	1,720		—		—		1,720		420		—		—		420
Travel and entertainment expense	2,093		291		39		2,423		3,481		1,139		—		4,620
Technology and data services	7,830		2,973		—		10,803		5,539		2,981		—		8,520

Intangible amortization expense	—		1,944		—		1,944		—		2,009		—		2,009

Marketing and advertising	1,210		1,192		—		2,402		1,461		801		1		2,263
Other operating expenses (1)	7,811		879		1,026		9,716		5,005		1,326		775		7,106
Total non-interest expense	$	90,541	$	29,679	$	2,883	$	123,103	$	77,945	$	33,569	$	635	$	112,149
Full-time equivalent employees (2)	255		53		—		308		219		57		—		276

(2)Full-time equivalent employees shown are as of the end of the period presented.

Non-Interest Expense for the Years Ended December 31, 2020 and 2019. Our non-interest expense for the year ended December 31, 2020, increased $11.0 million, or 9.8%, as compared to 2019, of which $12.6 million relates to the increase in expenses of the Bank segment, $3.9 million relates to the decrease in expenses of the Investment Management segment and $2.2 million relates to the increase in expenses of the Parent and Other. Notable changes in each segment’s expenses are as follows:

Investment Management Segment:

•Chartwell’s compensation and employee benefits costs for the year ended December 31, 2020, decreased by $2.6 million compared to 2019, primarily due to decreases in full-time equivalent employees, ~~and~~ targeted cuts to incentive programs to align Chartwell with industry peers and a decrease in revenue caused by lower assets under management as a result of lower pandemic related market valuations.

•Professional fees for the year ended December 31, 2020, decreased by $330,000 compared to 2019, primarily related to prior year costs for due diligence on ~~and discussions regarding~~ a potential investment management acquisition, which concluded before the parties reached a definitive agreement.

•Travel and entertainment expense for the year ended December 31, 2020, decreased by $848,000 compared to 2019, primarily related to decreased travel as a result of the COVID-19 pandemic.

•Other operating expenses for the year ended December 31, 2020, decreased by $447,000 compared to 2019, primarily due to lower mutual fund platform distribution expense due to lower assets under management in the mutual funds, and decreased organizational dues and subscriptions.

Bank Segment:

•Compensation and employee benefits of the Bank segment for the year ended December 31, 2020, increased by $3.4 million compared to 2019, primarily due to an increase in the number of full-time equivalent employees, increases in the overall annual wage and benefit costs of our existing employees, and increases in incentive and stock-based compensation expenses. These increases are a result of continued growth and investment in all areas of our company, in particular legal, compliance and private and commercial banking.

•FDIC insurance expense for the year ended December 31, 2020, increased by $4.4 million compared to 2019, due to an increase in the Bank’s assets aspartially ~~well~~offset asby a one-time bank assessment credit applicable to certain banks related to the deposit insurance fund reserve ratio exceeding a target threshold that was received in 2019.

•State capital shares tax for the year ended December 31, 2020, increased by $1.3 million compared to 2019, primarily due to a favorable ruling that the Company received in prior year that resulted in a tax benefit.

•Travel and entertainment expense for the year ended December 31, 2020, decreased by $1.4 million compared to 2019, primarily due to decreased travel and events as a result of the COVID-19 pandemic.

•Technology and data services for the year ended December 31, 2020, increased $2.3 million compared to the same period in 2019, primarily due to increased software licensing fees and software depreciation expense as a result of our ~~enhancements~~investments in technology, as well as increased information and data services expense.

•Other operating expenses for the year ended December 31, 2020, increased by $2.8 million compared to 2019, primarily driven by an increase in reserve for unfunded commitments and amortization on our historic tax credits.

Parent and Other:

•Compensation and employee benefits, professional fees, travel and entertainment expenses and other operating expenses increased for the year ended December 31, 2020, compared to the same period in 2019. Intercompany allocations vary based on individual segment business activities as well as where management spends their time and efforts.

The following table presents the components of our non-interest expense by operating segment for the years ended December 31, 2019 and 2018:

	Year Ended December 31, 2019								Year Ended December 31, 2018
			Investment		Parent						Investment		Parent
(Dollars in thousands)	Bank		Management		and Other		Consolidated		Bank		Management		and Other		Consolidated
Compensation and employee benefits	$	46,841	$	22,335	$	—	$	69,176	$	41,226	$	23,545	$	—	$	64,771
Premises and equipment costs	3,911		1,547		—		5,458		3,483		1,384		—		4,867
Professional fees	5,170		1,159		(141)		6,188		3,642		1,058		29		4,729
FDIC insurance expense	5,292		—		—		5,292		4,543		—		—		4,543
General insurance expense	825		272		—		1,097		762		268		—		1,030
State capital shares tax	420		—		—		420		1,521		—		—		1,521
Travel and entertainment expense	3,481		1,139		—		4,620		2,864		952		—		3,816
Technology and data services	5,539		2,981		—		8,520		4,347		2,407		—		6,754
Intangible amortization expense	—		2,009		—		2,009		—		1,968		—		1,968
Change in fair value of acquisition earn out	—		—		—		—		—		(218)		—		(218)
Marketing and advertising	1,461		801		1		2,263		1,040		642				1,682
Other operating expenses (1)	5,005		1,326		775		7,106		3,762		1,504		428		5,694
Total non-interest expense	$	77,945	$	33,569	$	635	$	112,149	$	67,190	$	33,510	$	457	$	101,157
Full-time equivalent employees (2)	219		57		—		276		189		68		—		257

(2)Full-time equivalent employees shown are as of the end of the period presented.

Non-Interest Expense for the Years Ended December 31, 2019 and 2018. Our non-interest expense for the year ended December 31, 2019, increased $11.0 million, or 10.9%, as compared to 2018, of which $10.8 million relates to the increase in expenses of the Bank segment and $59,000 relates to the increase in expenses of the Investment Management segment. Notable changes in each segment’s expenses are as follows:

Investment Management Segment:

•Chartwell’s compensation and employee benefits costs for the year ended December 31, 2019, decreased by $1.2 million compared to 2018, primarily due to a decrease in full-time equivalent employees and decreases in incentive and stock-based compensation expenses.

•Technology and data services for the year ended December 31, 2019, increased $574,000 compared to the same period in 2018, primarily due to investments in technology.

Bank Segment:

•Compensation and employee benefits of the Bank segment for the year ended December 31, 2019, increased by $5.6 million compared to 2018, primarily due to an increase in the number of full-time equivalent employees, increases in the overall annual wage and benefits costs of our existing employees, and increases in incentive and stock-based compensation expenses. These increases are a result of continued growth and our investment in all areas of the enterprise, in particular our private banking client service.

•Professional fees for the year ended December 31, 2019, increased by $1.5 million compared to 2018, primarily due to continued growth in loan production and certain routine accounting and regulatory matters.

•FDIC insurance expense for the year ended December 31, 2019, increased by $749,000 compared to 2018, due to the increase in the Bank’s assets. This variance also included a bank assessment one time credit applicable to certain banks related to the deposit insurance fund reserve ratio exceeding a target threshold.

•State capital shares tax for the year ended December 31, 2019, decreased by $1.1 million compared to 2018, due to a favorable tax ruling received by the Company.

•Travel and entertainment expense for the year ended December 31, 2019, increased by $617,000 compared to 2018, primarily due to a higher level of officer and relationship manager business development efforts consistent with our continued growth.

•Technology and data services for the year ended December 31, 2019, increased $1.2 million compared to the same period in 2018, primarily due to investments in technology.

•Other operating expenses for the year ended December 31, 2019, increased by $1.2 million compared to 2018, primarily due to a valuation adjustment on OREO, an increase in organization dues and subscriptions, and higher loan related expenses due to the continued growth in our loan and lease portfolio.

Income Taxes

We utilize the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the tax effects of differences between the financial statement and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities with regard to a change in tax rates is recognized in income in the period that includes the enactment date. We evaluate whether it is more likely than not that we will be able to realize the benefit of identified deferred tax assets.

Income Taxes for the Years Ended December 31, 2021 and 2020. For the year ended December 31, 2021, we recognized income tax expense of $12.6 million, or 13.9% of income before tax, as compared to income tax expense of $7.4 million, or 14.1% of income before tax, for 2020.

Income Taxes for the Years Ended December 31, 2020 and 2019. For the year ended December 31, 2020, we recognized income tax expense of $7.4 million, or 14.1% of income before tax, as compared to income tax expense of $8.5 million, or 12.3% of income before tax, for 2019. Our effective tax rate for the year ended December 31, 2020, increased to 14.1% as compared to the prior year largely due to the amount of tax credits recognized during the year ended December 31, 2020 compared to 2019.

Income Taxes for the Years Ended December 31, 2019 and 2018. For the year ended December 31, 2019, we recognized income tax expense of $8.5 million, or 12.3% of income before tax, as compared to income tax expense of $5.9 million, or 9.8% of income before tax, for 2018. Our effective tax rate for the year ended December 31, 2019, increased to 12.3% as compared to the prior year largely due to the amount of tax credits recognized during the year ended December 31, 2019 compared to 2018.

Financial Condition

Our total assets as of December 31, ~~2020~~2021, were $~~9.90~~13 billion, an increase of $23.1311 billion, or 2731.4%, from December 31, ~~2019~~2020, driven primarily by growth in our loan and lease portfolio, ~~investment portfolio~~ and ~~cash~~investment ~~and cash equivalents~~portfolio. As of December 31, ~~2020~~2021, our loan portfolio was $810.2476 billion, an increase of $12.6653 billion, or 2530.27%, from $68.5824 billion, as of December 31, ~~2019~~2020. Total investment securities increased $~~373~~563.41 million, or 7966.68%, to $~~842~~1.541 ~~million~~billion, as of December 31, ~~2020~~2021, from $~~469~~842.25 million as of December 31, ~~2019. Cash and cash equivalents increased $31.6 million to $435.4 million as of December 31,~~ 2020~~, from $403~~.~~9 million as of December 31, 2019.~~ We focus ~~only~~ on high quality loan growth and in the absence of this, we increase our assets through cash and cash equivalents as well as adding to our investment portfolio as part of our strategy to build greater on balance sheet liquidity, funded through our deposits.

quality loan growth and correspondingly grow our investment portfolio at a similar pace as part of our strategy to continue building greater on-balance sheet liquidity, funded by our deposits.

As of December 31, 2021, our total deposits were $11.50 billion, an increase of $3.02 billion, or 35.5%, from December 31, 2020, and such deposits were primarily used to fund loan growth. Net borrowings increased $69.7 million, or 17.4%, to $470.2 million as of December 31, 2021, compared to $400.5 million as of December 31, 2020. Our shareholders’ equity increased $79.6 million to $836.7 million as of December 31, 2021, compared to $757.1 million as of December 31, 2020. This increase was primarily the result of $78.1 million in net income and the impact of $11.0 million in stock-based compensation, partially offset by preferred stock cash dividends declared of $7.9, and the purchase of $2.1 million in treasury stock.

Our total assets as of December 31, 2020, were $9.90 billion, an increase of $2.13 billion, or 27.4%, from December 31, 2019, driven primarily by growth in our loan and lease portfolio, investment portfolio and cash and cash equivalents. As of December 31, 2020, our loan portfolio was $8.24 billion, an increase of $1.66 billion, or 25.2%, from $6.58 billion, as of December 31, 2019. Total investment securities increased $373.4 million, or 79.6%, to $842.5 million, as of December 31, 2020, from $469.2 million as of December 31, 2019. Cash and cash equivalents increased $31.6 million to $435.4 million as of December 31, 2020, from $403.9 million as of December 31, 2019.

As of December 31, 2020, our total deposits were $8.49 billion, an increase of $1.85 billion, or 28.0%, from December 31, 2019, and were primarily used to fund loan growth. Net borrowings increased $45.5 million, or 12.8%, to $400.5 million as of December 31, 2020, compared to $355.0 million as of December 31, 2019. Our shareholders’ equity increased $135.9 million to $757.1 million as of December 31, 2020, compared to $621.3 million as of December 31, 2019. This increase was primarily the result of the issuance of $100.0 million in net proceeds from our private placement, which closed December 30, 2020, $45.2 million in net income, and the impact of $9.5 million in stock-based compensation, partially offset by preferred stock dividends declared of $7.9 million, a decrease of $3.8 million in other accumulated comprehensive income, the purchase of $3.6 million in treasury stock, $2.5 million in cancellation of stock options and $1.7 million related to our adoption of CECL on December 31, 2020.

Our total assets as of December 31, 2019, were $7.77 billion, an increase of $1.73 billion, or 28.7%, from December 31, 2018, driven primarily by growth in our loan and lease portfolio and cash and cash equivalents. As of December 31, 2019, our loan portfolio was $6.58 billion, an increase of $1.44 billion, or 28.1%, from $5.13 billion, as of December 31, 2018. Total investment securities increased $2.4 million, or 0.5%, to $469.2 million, as of December 31, 2019, from $466.8 million as of December 31, 2018. Cash and cash equivalents increased $213.9 million to $403.9 million as of December 31, 2019, from $190.0 million as of December 31, 2018. Our Asset and Liability Committee (“ALCO”) is responsible for managing the investment portfolio and liquidity of the Bank, among other responsibilities. Given the current overall interest rate environment and the strength of our loan growth, our ALCO has kept excess liquidity in interest-earning cash deposits.

As of December 31, 2019, our total deposits were $6.63 billion, an increase of $1.58 billion, or 31.4%, from December 31, 2018, and were primarily used to fund loan growth. Net borrowings decreased $49.2 million, or 12.2%, to $355.0 million as of December 31, 2019, compared to $404.2 million as of December 31, 2018. Our shareholders’ equity increased $141.9 million to $621.3 million as of December 31, 2019, compared to $479.4 million as of December 31, 2018. This increase was primarily the result of the issuance of $77.6 million in preferred stock, $60.2 million in net income, the impact of $8.8 million in stock-based compensation, an increase of $2.5 million in other accumulated comprehensive income and $900,000 in proceeds from stock option exercises, partially offset by preferred stock dividends declared of $5.8 million and the purchase of $2.3 million in treasury stock.

Loans and Leases

Our loan and lease portfolio, which represents our largest earning asset, primarily consists of loans to our private banking clients, commercial and industrial loans and leases, and real estate loans secured by commercial properties.

The following table presents the composition of our loan portfolio as of the dates indicated:

December 31,

(Dollars in thousands)

~~2020~~2021

~~2019~~2020

~~2018~~2019

~~2017~~

~~2016~~

Private banking loans

46,~~807~~886,~~800~~498

34,~~695~~807,~~402~~800

23,~~869~~695,~~543~~402

~~2,265,737~~

~~1,735,928~~

Middle-market banking loans:

Commercial and industrial

1,~~274~~513,~~152~~423

1,~~085~~274,~~709~~152

~~785~~1,~~320~~085,709

~~667,684~~

~~587,423~~

Commercial real estate

2,~~155~~363,~~466~~403

12,~~796~~155,~~448~~466

1,~~478~~796,~~010~~448

~~1,250,823~~

~~1,077,703~~

Total middle-market banking loans

3,~~429~~876,~~618~~826

23,~~882~~429,~~157~~618

2,~~263~~882,~~330~~157

~~1,918,507~~

~~1,665,126~~

Loans and leases held-for-investment

810,~~237~~763,~~418~~324

68,~~577~~237,~~559~~418

56,~~132~~577,~~873~~559

~~4,184,244~~

~~3,401,054~~

Loans and Leases Held-for-Investment. Loans and leases held-for-investment increased by $12.6653 billion, or 2530.27%, to $810.2476 billion as of December 31, ~~2020~~2021, as compared to December 31, ~~2019~~2020. Our growth for the year ended December 31, ~~2020~~2021, was comprised of an increase in private banking loans of $12.1108 billion, or 3043.12%; an increase in commercial real estate loans of $~~359~~207.09 million, or 209.06%; and an increase in commercial and industrial loans and leases of $~~188~~239.43 million, or 1718.48%.

Loans and leases held-for-investment increased by $1.66 billion, or 25.2%, to $8.24 billion as of December 31, 2020, as compared to December 31, 2019. Our growth for the year ended December 31, 2020, was comprised of an increase in private banking loans of $1.11 billion, or 30.1%; an increase in commercial real estate loans of $359.0 million, or 20.0%; and an increase in commercial and industrial loans and leases of $188.4 million, or 17.4%.

Loans and leases held-for-investment increased by $1.44 billion, or 28.1%, to $6.58 billion as of December 31, 2019, as compared to December 31, 2018. Our growth for the year ended December 31, 2019, was comprised of an increase in private banking loans of $825.9 million, or 28.8%; an increase in commercial real estate loans of $318.4 million, or 21.5%; and an increase in commercial and industrial loans and leases of $300.4 million, or 38.3%.

Primary Loan Categories

Private Banking Loans. Our private banking loans include personal and commercial loans that are sourced through our private banking channel (which operates on a national basis), including referral relationships with financial intermediaries. These loans primarily consist of loans made to high-net-worth individuals, trusts and businesses that are secured by cash and marketable securities. We also originate loans that are secured by cash value life insurance and to a lesser extent residential property or other financial assets. ~~The primary source of repayment for these loans is the income and assets of the borrower. We also have a limited number of unsecured loans and lines of credit in our private banking loan portfolio.~~

As of December 31, 2020, private banking loans were approximately $4.81 billion, or 58.4% of loans held-for-investment, of which $4.74 billion, or 98.6%, were secured by cash, marketable securities and/or cash value life insurance. As of December 31, 2019, private banking loans were approximately $3.70 billion, or 56.2% of loans held-for-investment, of which $3.60 billion, or 97.4%, were secured by cash, marketable securities and/or cash value life insurance. Our private banking lines of credit are typically due on demand. The growth in these loans is expected to increase, as a result of our continued focus on this portion of our banking business. We believe we have strong competitive advantages in this line of business given our robust distribution channel relationships and proprietary technology. These loans tend to have a lower risk profile and are an efficient use of capital because they typically are zero percent risk-weighted for regulatory capital purposes. On a daily basis, we monitor the collateral of loans secured by cash, marketable securities and/or cash value life insurance, which further reduces the risk profile of the private banking portfolio. Since inception, we have had no charge-offs related to our loans secured by cash, marketable securities and/or cash value life insurance.68

The primary source of repayment for these loans is the income and assets of the borrower. We also have a limited number of unsecured loans and lines of credit in our private banking loan portfolio.

As of December 31, 2021, private banking loans were approximately $6.89 billion, or 64.0% of loans held-for-investment, of which $6.82 billion, or 99.0%, were secured by cash, marketable securities and/or cash value life insurance. As of December 31, 2020, private banking loans were approximately $4.81 billion, or 58.4% of loans held-for-investment, of which $4.74 billion, or 98.6%, were secured by cash, marketable securities and/or cash value life insurance. Our private banking lines of credit are typically due on demand. The growth in these loans is expected to increase, as a result of our continued focus on this portion of our banking business. We believe we have strong competitive advantages in this line of business given our robust distribution channel relationships and proprietary technology. These loans tend to have a lower risk profile and are an efficient use of capital because they typically are zero percent risk-weighted for regulatory capital purposes. On a daily basis, we monitor the collateral of loans secured by cash, marketable securities and/or cash value life insurance, which further reduces the risk profile of the private banking portfolio. Since inception, we have had no charge-offs related to our loans secured by cash, marketable securities and/or cash value life insurance.

Loans sourced through our private banking channel also include loans that are classified for regulatory purposes as commercial, most of which are also secured by cash, marketable securities or and/or cash value life insurance. The table below includes all loans made through our private banking channel, by collateral type, as of the dates indicated.

	December 31,
(Dollars in thousands)	~~2020~~2021		~~2019~~2020		~~2018~~2019
Private banking loans:
Secured by cash, marketable securities and/or cash value life insurance	$	46,~~738~~816,~~594~~517	$	34,~~599~~738,~~198~~594	$	23,~~774~~599,~~800~~198
Secured by real estate	4537,~~014~~285		6245,~~782~~014		6962,~~766~~782
Other	2432,~~192~~696		3324,~~422~~192		2433,~~977~~422
Total private banking loans	$	46,~~807~~886,~~800~~498	$	34,~~695~~807,~~402~~800	$	23,~~869~~695,~~543~~402

As of December 31, ~~2020~~2021, there were $46.7380 billion of total private banking loans with a floating interest rate and $7784.14 million with a fixed interest rate, as compared to $34.5373 billion and $~~169~~77.41 million, respectively, as of December 31, ~~2019~~2020.

Commercial Banking: Commercial and Industrial Loans and Leases. Our commercial and industrial loan and lease portfolio primarily includes loans and equipment leases made to financial and other service companies or manufacturers generally for the purposes of financing production, operating capacity, accounts receivable, inventory, equipment, acquisitions and recapitalizations. Cash flow from the borrower’s operations is the primary source of repayment for these loans and leases, except for certain commercial loans that are secured by marketable securities.

As of December 31, ~~2020~~2021, our commercial and industrial loans comprised $1.2751 billion, or 1514.51% of loans held-for-investment, as compared to $1.0927 billion, or 1615.5%, as of December 31, ~~2019~~2020. As of December 31, ~~2020~~2021, there were $~~966~~1.616 ~~million~~billion of total commercial and industrial loans with a floating interest rate and $~~307~~350.64 million with a fixed interest rate, as compared to $~~867~~966.76 million and $~~218~~307.06 million, respectively, as of December 31, ~~2019~~2020.

Commercial Banking: Commercial Real Estate Loans. Our commercial real estate loan portfolio includes loans secured by commercial purpose real estate, including both owner-occupied properties and investment properties for various purposes, including office, industrial, multifamily, retail, hospitality, healthcare and self-storage. Also included are commercial construction loans to finance the construction or renovation of structures as well as to finance the acquisition and development of raw land for various purposes. Individual project cash flows, global cash flows and liquidity from the developer, or the sale of the property, are the primary sources of repayment for commercial real estate loans secured by investment properties. The primary source of repayment for commercial real estate loans secured by owner-occupied properties is cash flow from the borrower’s operations. There were $212.6 million and $220.8 million of owner-occupied commercial real estate loans as of December 31, 2021 and December 31, 2020, respectively.

67Commercial real estate loans as of December 31, 2021, totaled $2.36 billion, or 21.9% of loans held-for-investment, as compared to $2.16 billion, or 26.1%, as of December 31, 2020. As of December 31, 2021, $2.26 billion of total commercial real estate loans had a floating interest rate and $105.2 million had a fixed interest rate, as compared to $2.03 billion and $123.3 million, respectively, as of December 31, 2020.

~~million and $210.7 million of owner-occupied commercial real estate loans as of December 31, 2020 and December 31, 2019, respectively.~~69

Commercial real estate loans as of December 31, 2020, totaled $2.16 billion, or 26.1% of loans held-for-investment, as compared to $1.80 billion, or 27.3%, as of December 31, 2019. As of December 31, 2020, $2.03 billion of total commercial real estate loans had a floating interest rate and $123.3 million had a fixed interest rate, as compared to $1.69 billion and $111.2 million, respectively, as of December 31, 2019.

Loan and Lease Maturities and Interest Rate Sensitivity

The following table presents the contractual maturity ranges and the amount of such loans with fixed rates and adjustable rates in each maturity range as of the date indicated.

December 31, 2020

December 31, 2021

(Dollars in thousands)

Due on Demand

One Year or Less

One to Five Years

~~Greater~~Five ~~Than~~to ~~Five~~Fifteen Years

~~Total~~Greater than Fifteen Years

Total

Maturity:

Private banking

46,~~551~~637,~~754~~934

4351,~~584~~898

~~109~~100,~~749~~579

~~102~~89,~~713~~971

46,~~807,800~~116

6,886,498

Commercial and industrial

67,~~547~~292

~~397~~484,~~325~~219

~~679~~826,~~277~~980

~~191~~193,~~003~~150

1,~~274,152~~782

1,513,423

Commercial real estate

—

~~377~~179,~~366~~154

~~830~~880,~~745~~492

~~947~~1,~~355~~288,013

215,~~155,466~~744

2,363,403

Loans and leases held-for-investment

46,~~558~~645,~~301~~226

~~818~~715,~~275~~271

1,~~619~~808,~~771~~051

1,~~241~~571,~~071~~134

823,~~237,418~~642

10,763,324

Interest rate sensitivity:

Fixed interest rates

5364,~~785~~820

3332,~~301~~158

~~220~~250,~~486~~647

~~200~~186,~~458~~287

~~508~~6,~~030~~116

540,028

Floating or adjustable interest rates

46,~~504~~580,~~516~~406

~~784~~683,~~974~~113

1,~~399~~557,~~285~~404

1,~~040~~384,~~613~~847

717,~~729,388~~526

10,223,296

Loans and leases held-for-investment

46,~~558~~645,~~301~~226

~~818~~715,~~275~~271

1,~~619~~808,~~771~~051

1,~~241~~571,~~071~~134

823,~~237,418~~642

10,763,324

Large Credit Relationships

We originate and maintain large credit relationships with numerous customers in the ordinary course of our business. We have established a preferred limit on loans that is significantly lower than our legal lending limit of approximately $~~118~~148.40 million as of December 31, ~~2020~~2021. Our present preferred lending limit is $10.0 million based upon our total credit exposure to any one borrowing relationship. However, exceptions to this limit may be made based on the strength of the underlying credit and sponsor, type and composition of the credit exposure, collateral support, including over-collateralization and liquidity nature of collateral, structure of the credit facilities as well as the presence of other potential positive credit factors. Additionally, we review this along with other aspects of our credit policy which can change from time to time. As of December 31, ~~2020~~2021, our average commercial loan size was approximately $34.95 million and average private banking loan size was approximately $~~428~~435,000.

The following table summarizes the aggregate committed and outstanding balances of our larger credit relationships as of December 31, ~~2020~~2021 and December 31, ~~2019~~2020.

	December 31, 2020					December 31, 2019
	December 31, 2021					December 31, 2020
(Dollars in thousands)	Number of Relationships	Commitment(based on availability)		Outstanding Balance		Number of Relationships	Commitment(based on availability)		Outstanding Balance
Large credit relationships:
>$25 million	2332	$	~~930~~1,~~061~~275,596	$	~~664~~729,~~614~~628	1723	$	~~645~~930,~~608~~061	$	~~442~~664,~~437~~614
>$20 million to $25 million	1729	$	~~381~~660,~~275~~940	$	~~236~~444,~~085~~620	1217	$	~~273~~381,~~908~~275	$	~~185~~236,~~651~~085
>$15 million to $20 million	4659	$	~~814~~1,~~098~~032,736	$	~~505~~607,~~452~~144	3846	$	~~679~~814,~~411~~098	$	~~423~~505,~~893~~452
>$10 million to $15 million	~~105~~170	$	12,~~302~~137,~~010~~083	$	~~958~~1,~~840~~446,553	93105	$	1,~~138~~302,~~966~~010	$	~~803~~958,~~301~~840

Approximately $12.8354 billion and $1.2783 billion of commitments to large credit relationships were secured by cash, marketable securities and/or cash value life insurance as of December 31, ~~2020~~2021 and December 31, ~~2019~~2020, respectively.

Loan Pricing

We generally extend variable-rate loans on which the interest rate fluctuations are based upon a predetermined indicator, such as the LIBOR or United States prime rate. Our use of variable-rate loans is designed to mitigate our interest rate risk to the extent that the rates that we charge on our variable-rate loans will rise or fall in tandem with rates that we must pay to acquire deposits and vice versa. As of December 31, 2021, approximately 95.0% of our loans had a floating rate. Consistent with regulatory guidance, the Bank has transitioned away from LIBOR for purposes of new transactions effective January 1, 2022.

rates that we charge on our variable-rate loans will rise or fall in tandem with rates that we must pay to acquire deposits and vice versa. As of December 31, 2020, approximately 93.8% of our loans had a floating rate.

Interest Reserve Loans

As of December 31, ~~2020~~2021, loans with interest reserves totaled $~~389~~350.15 million, which represented 43.73% of loans held-for-investment, as compared to $~~348~~389.01 million, or 54.37%, as of December 31, ~~2019~~2020, largely attributable to growth in the commercial real estate portfolio. Certain loans reserve a portion of the proceeds to be used to pay interest due on the loan. These loans with interest reserves are common for construction and land development loans. The use of interest reserves is based on the feasibility of the project, the creditworthiness of the borrower and guarantors, and the loan to value coverage of the collateral. The interest reserve may be used by the borrower, when certain financial conditions are met, to draw loan funds to pay interest charges on the outstanding balance of the loan. When drawn, the interest is capitalized and added to the loan balance, subject to conditions specified during the initial underwriting and at the time the credit is approved. We have procedures and controls for monitoring compliance with loan covenants, advancing funds and determining default conditions. In addition, most of our construction lending is performed within our geographic footprint and our lenders are familiar with trends in the local real estate market.

Certain loans reserve a portion of the proceeds to be used to pay interest due on the loan. These loans with interest reserves are common for construction and land development loans. The use of interest reserves is based on the feasibility of the project, the creditworthiness of the borrower and guarantors, and the loan to value coverage of the collateral. The interest reserve may be used by the borrower, when certain financial conditions are met, to draw loan funds to pay interest charges on the outstanding balance of the loan. When drawn, the interest is capitalized and added to the loan balance, subject to conditions specified during the initial underwriting and at the time the credit is approved. We have procedures and controls for monitoring compliance with loan covenants, advancing funds and determining default conditions. In addition, most of our construction lending is performed within our geographic footprint and our lenders are familiar with trends in the local real estate market.

Allowance for Credit Losses on Loans and Leases

Our allowance for credit losses on loans and leases represent our current estimate of expected credit losses in the portfolio at a specific point in time. This estimate includes credit losses associated with loans and leases evaluated on a collective or pool basis, as well as expected credit losses of the individually evaluated loans and leases that do not share similar risk characteristics. Additions are made to the allowance through both periodic provisions recorded in the consolidated statements of income and recoveries of losses previously incurred. Reductions to the allowance occur as loans are charged off or when the current estimate of expected credit losses in any of the three loan portfolios decreases. Results for full year and period end December 31, 2020, are presented under CECL methodology while prior period amounts continue to be reported in accordance with previously applicable GAAP. Refer to Note 1, Summary of Significant Accounting Policies and Note 5, Allowance for Credit Losses on Loans and Leases, for more details on the Company’s allowance for loan and lease losses.

The following table summarizes the allowance for credit losses on loans and leases, as of the dates indicated:

December 31,

(Dollars in thousands)

~~2020~~2021

~~2019~~2020

~~2018~~2019

~~2017~~

~~2016~~

General reserves

3223,~~642~~880

1332,~~937~~642

1213,~~771~~937

~~11,910~~

~~11,823~~

Specific reserves

14,~~988~~683

~~171~~1,988

~~437~~171

~~2,507~~

~~6,939~~

Total allowance for credit losses on loans and leases

3428,~~630~~563

1434,~~108~~630

1314,~~208~~108

~~14,417~~

~~18,762~~

Allowance for credit losses on loans and leases to loans and leases

0.4227

0.2142

0.2621

~~0.34~~

~~0.55~~

As of December 31, ~~2020~~2021, we had specific reserves totaling $24.07 million related to ~~impaired~~individually evaluated loans with an aggregated total outstanding balance of $916.78 million, $4.3 million of which were on non-accrual status. As of December 31, ~~2019~~2020, we had specific reserves totaling $~~171,000~~2.0 million related to ~~impaired~~individually evaluated loans with an aggregated total outstanding balance of $~~171,000~~9.7 million. All loans with specific reserves were on non-accrual status as of December 31, 2020 ~~and December 31, 2019~~.

The following tables summarize allowance for credit losses on loans and leases and the percentage of loans by loan category, as of the dates indicated:

	December 31,
	2020				2019			2018				2017			2016
	2021				2020			2019
(Dollars in thousands)	Reserve		Percent of Loans			Reserve		Percent of Loans		Reserve			Percent of Loans		~~Reserve~~		~~Percent of Loans~~		~~Reserve~~		~~Percent of Loans~~
Private banking	$	21,~~047~~891	5864.40	%		$	12,~~973~~047	5658.24	%	$	1,~~942~~973		5556.92	%	$	~~1,577~~	~~54.1~~	%	$	~~1,424~~	~~51.0~~	%
Commercial and industrial	58,~~254~~453		1514.51	%		5,~~262~~254		1615.5	%	5,~~764~~262			1516.35	%	~~8,043~~		~~16.0~~	%	~~12,326~~		~~17.3~~	%
Commercial real estate	2718,~~329~~219		2621.19	%		627,~~873~~329		2726.31	%	56,~~502~~873			2827.83	%	~~4,797~~		~~29.9~~	%	~~5,012~~		~~31.7~~	%
Total allowance for credit losses on loans and leases	$	3428,~~630~~563	100.0	%		$	1434,~~108~~630	100.0	%	$	1314,~~208~~108		100.0	%	$	~~14,417~~	~~100.0~~	%	$	~~18,762~~	~~100.0~~	%

69Allowance for Credit Losses on Loans and Leases as of December 31, 2021 and 2020. Our allowance for credit losses on loans and leases was $28.6 million, or 0.27% of loans, as of December 31, 2021, as compared to $34.6 million, or 0.42% of loans, as of December 31, 2020. Our allowance for credit losses related to private banking loans decreased $156,000 from December 31, 2020 to December 31, 2021 as the increase attributable to the growth of the marketable securities portfolio was more than offset by the improvement in the economic factors. Our allowance for credit losses related to commercial and industrial loans and leases increased $3.2 million from December 31, 2020 to December 31, 2021, due to decreased general reserves more than offset by increasing specific reserves on individually evaluated loans. Our allowance for credit losses related to commercial real estate loans decreased $9.1 million from December 31, 2020 to December 31, 2021, due to decreased general reserves as well as decreased specific reserves on individually evaluated loans. The decrease in general reserves in our commercial loan portfolio was primarily driven by improvement in economic forecasts related to assumptions utilized in the qualitative management overlay. We applied a management overlay to our allowance for credit loss model to provide a reserve level that supports management’s best estimate of current expected credit losses within the loan portfolio. The management overlay includes scenarios with both near-term economic stress and a next-cycle recession as well as other factors based upon management judgement. The consensus forecast within our model provided for a greater reserve release based on optimism around the economic environment and loss forecasts, which we believe may be an overreaction to the early onset of historically high level and rate of changes in the forecast and transactional values within commercial asset types. We would

Allowance for Credit Losses on Loans and Leases as of December 31, 2020 and 2019. Our allowance for credit losses on loans and leases was $34.6 million, or 0.42% of loans, as of December 31, 2020, as compared to $14.1 million, or 0.21% of loans, as of December 31, 2019. Our allowance for credit losses on loans and leases increased to 1.0% of commercial loans (excluding private banking loans primarily collateralized by liquid, marketable securities) as of December 31, 2020, compared to 0.5% of commercial loans as of December 31, 2019. The increase is primarily due to adjustments to the macro-economic forecast data such as GDP and unemployment in response to the economic uncertainty around the COVID-19 pandemic as well as an increase to our specific reserves related to the addition of non-performing loans. In addition, our adoption of CECL on December 31, 2020 resulted in an immediate increase of $942,000 in our allowance, which was unrelated to the COVID-19 pandemic. Our allowance for credit losses on loans and leases related to private banking loans increased $74,000 from December 31, 2019 to December 31, 2020, which was primarily attributable to growth in this portfolio. Our allowance for credit losses on loans and leases related to commercial real estate loans increased $20.5 million from December 31, 2019 to December 31, 2020, due to increased general reserves from growth and macro-economic forecast adjustments as well as increased specific reserves related to the addition of non-performing loans. The implementation of the CECL methodology also added an immediate increase of $3.6 million of reserves to our commercial real estate portfolio. 71

~~Allowance~~release ~~for~~reserves ~~Loan and Lease Losses as of December 31, 2019 and 2018. Our allowance for loan and lease losses was $14.1 million, or 0.21% of loans, as of December 31, 2019, as compared~~ to ~~$13.2~~the ~~million,~~extent orsuggested ~~0.26%~~by ofour ~~loans,~~model asif ofwe ~~December~~believe ~~31,~~that ~~2018. Our~~there ~~allowance~~is ~~for~~a ~~loan~~sustained ~~and~~trend ~~lease losses related to private banking loans increased $31,000 from December 31, 2018 to December 31, 2019, which was attributable to growth~~ in ~~this~~the ~~portfolio,~~economic ~~partially~~recovery ~~offset~~data byand ~~lower~~continued ~~specific~~progress ~~reserves~~overcoming onthe ~~non~~COVID-~~performing~~19 ~~loans. Our~~pandemic ~~allowance for loan~~ and ~~lease~~associated ~~losses~~supply ~~related~~chain ~~to commercial and industrial loans decreased $502,000 from December 31, 2018 to December 31, 2019, which was attributable to lower general reserves due to an improved credit loss history~~issues. Our allowance for loan and lease losses related to commercial real estate loans increased $1.4 million from December 31, 2018 to December 31, 2019, which was attributable to higher general reserves primarily due to growth in this portfolio.

Allowance for Credit Losses on Loans and Leases as of December 31, 2020 and 2019. Our allowance for credit losses on loans and leases was $34.6 million, or 0.42% of loans, as of December 31, 2020, as compared to $14.1 million, or 0.21% of loans, as of December 31, 2019. The increase is primarily due to adjustments to the macro-economic forecast data such as GDP and unemployment in response to the economic uncertainty around the COVID-19 pandemic as well as an increase to our specific reserves related to the addition of non-performing loans. In addition, our adoption of CECL on December 31, 2020 resulted in an immediate increase of $942,000 in our allowance, which was unrelated to the COVID-19 pandemic. Our allowance for credit losses on loans and leases related to private banking loans increased $74,000 from December 31, 2019 to December 31, 2020, which was primarily attributable to growth in this portfolio. Our allowance for credit losses on loans and leases related to commercial real estate loans increased $20.5 million from December 31, 2019 to December 31, 2020, due to increased general reserves from growth and macro-economic forecast adjustments as well as increased specific reserves related to the addition of non-performing loans. The implementation of the CECL methodology also added an immediate increase of $3.6 million of reserves to our commercial real estate portfolio.

Charge-Offs and Recoveries

Our charge-off policy for commercial and private banking loans and leases requires that obligations that are not collectible be promptly charged off in the month the loss becomes probable, regardless of the delinquency status of the loan or lease. We recognize a partial charge-off when we have determined that the value of the collateral is less than the remaining ledger balance at the time of the evaluation. An obligation is not required to be charged off, regardless of delinquency status, if we have determined there exists sufficient collateral to protect the remaining loan or lease balance and there exists a strategy to liquidate the collateral. We may also consider a number of other factors to determine when a charge-off is appropriate, including: the status of a bankruptcy proceeding, the value of collateral and probability of successful liquidation; and the status of adverse proceedings or litigation that may result in collection.

70The following table provides an analysis of the net charge-offs and average total loans and leases by channel for the years indicated:

The following table provides an analysis of the allowance for credit losses on loans and leases and charge-offs, recoveries and provision for credit losses on loans and leases for the years indicated:


	Years Ended December 31,
(Dollars in thousands)	2021			2020			2019
Net charge-offs (recoveries):
Commercial and industrial	$	4,405		$	(450)		$	(1,980)
Commercial real estate	2,482			—			—
Private banking	—			171			112
Total	$	6,887		$	(279)		$	(1,868)

Average total loans and leases:
Commercial and industrial	$	1,236,279		$	1,130,565		$	903,501
Commercial real estate	2,270,019			1,959,401			1,579,530
Private banking	5,681,194			4,165,069			3,186,476
Total	$	9,187,492		$	7,255,035		$	5,669,507

Net loan charge-offs (recoveries) to average total loans and leases:
Commercial and industrial	0.36		%	(0.04)		%	(0.22)		%
Commercial real estate	0.11		%	—		%	—		%
Private banking	—		%	—		%	—		%
Total	0.07		%	—		%	(0.03)		%

	Years Ended December 31,
(Dollars in thousands)	2020			2019			2018			2017			2016
Beginning balance	$	14,108		$	13,208		$	14,417		$	18,762		$	17,974
Impact of adopting CECL	942			—			—			—			—
Charge-offs:
Private banking	(171)			(112)			—			—			—
Commercial and industrial	—			—			(2,068)			(4,302)			(4,258)
Commercial real estate	—			—			—			—			—
Total charge-offs	(171)			(112)			(2,068)			(4,302)			(4,258)
Recoveries:
Private banking	—			—			—			—			—
Commercial and industrial	450			1,980			1,064			575			797
Commercial real estate	—			—			—			5			3,411
Total recoveries	450			1,980			1,064			580			4,208
Net recoveries (charge-offs)	279			1,868			(1,004)			(3,722)			(50)
Provision (credit) for credit losses on loans and leases	19,301			(968)			(205)			(623)			838
Ending balance	$	34,630		$	14,108		$	13,208		$	14,417		$	18,762
Net loan charge-offs (recoveries) to average total loans and leases	—		%	(0.03)		%	0.02		%	0.10		%	—		%
Provision (credit) for credit losses on loans and leases to average total loans and leases	0.27		%	(0.02)		%	—		%	(0.02)		%	0.03		%

Non-Performing Assets

Non-performing assets consist of non-performing loans and OREO. Non-performing loans are loans that are on non-accrual status. OREO is real property acquired through foreclosure on the collateral underlying defaulted loans and including in-substance foreclosures. We record OREO at fair value, less estimated costs to sell the assets.

Our policy is to place loans in all categories on non-accrual status when collection of interest or principal is doubtful, or when interest or principal payments are 90 days or more past due. There were no loans 90 days or more past due and still accruing interest as of December 31, ~~2020~~2021, ~~2019~~2020 and ~~2018~~2019, and there was no interest income recognized on loans while on non-accrual status for the years ended December 31, 2020, 2019 and 2018. As of December 31, 2020, non-performing loans were $9.7 million, or 0.12% of total loans, compared to $184,000, or 0%, and $2.2 million, or 0.04%, as of December 31, 2019 and 2018, respectively. We had specific reserves of $2.0 million, $171,000 and $437,000 as of December 31, 2020, 2019 and 2018, respectively, on these non-performing loans. The net loan balance of our non-performing loans was 79.2%, 6.3% and 74.3% of the customer’s outstanding balance after payments, charge-offs and specific reserves as of December 31, 2020, 2019 and 2018, respectively.

For additional information on our non-performing loans as of December 31, 2020, 2019 and 2018, refer to Note 5, Allowance for Credit Losses on Loans and Leases, to our consolidated financial statements.72

ended December 31, 2021, 2020 and 2019. As of December 31, 2021, non-performing loans were $4.3 million, or 0.04% of total loans, compared to $9.7 million, or 0.12%, and $184,000, or 0.00%, as of December 31, 2020 and 2019, respectively. We had specific reserves of $4.3 million, $2.0 million and $171,000 as of December 31, 2021, 2020 and 2019, respectively, on these non-performing loans. The net loan balance of our non-performing loans was 0.0%, 79.2% and 6.3% of the customer’s outstanding balance after payments, charge-offs and specific reserves as of December 31, 2021, 2020 and 2019, respectively.

For additional information on our non-performing loans as of December 31, 2021, 2020 and 2019, refer to Note 5, Allowance for Credit Losses on Loans and Leases, to our consolidated financial statements.

Once the determination is made that a foreclosure is necessary, the loan is reclassified as “in-substance foreclosure” until a sale date and title to the property is finalized. Once we own the property, it is maintained, marketed, rented and/or sold to repay the original loan. Historically, foreclosure trends in our loan portfolio have been low due to the seasoning of our portfolio. Any loans that are modified or extended are reviewed for potential classification as a TDR loan. For borrowers that are experiencing financial difficulty, we complete a process that outlines the terms of the modification, the reasons for the proposed modification and documents the current status of the borrower.

InWe ~~response~~had ~~to the COVID~~non-19performing ~~pandemic~~assets ~~and~~of ~~its~~$6.3 ~~economic~~million, ~~impact~~or on0.05% ~~our~~of ~~customers~~total assets, weas ~~implemented~~of aDecember 31, ~~short-term~~2021, ~~loan~~as ~~modification~~compared ~~program~~to in$12.4 ~~compliance~~million, ~~with~~or ~~the~~0.13% ~~CARES~~of ~~Act~~total ~~and~~assets, ~~applicable~~as ~~regulatory~~of ~~guidance~~December 31, to2020. The ~~provide~~decrease ~~temporary~~in ~~payment~~non-performing ~~relief~~assets was due to ~~those~~reductions ~~borrowers~~of ~~directly~~$5.4 ~~impacted~~million byin ~~COVID~~non-~~19.~~performing ~~These~~loans ~~deferral~~and ~~levels~~$719,000 ~~are~~in ~~declining~~OREO. This ~~more~~decrease ~~rapidly~~was ~~than~~considered ~~our~~within ~~earlier~~the ~~forecasts~~assessment ~~and~~of the ~~majority~~determination of ~~them~~the ~~have~~allowance ~~already~~for ~~resumed~~credit ~~payment~~losses on loans and leases. WeAs ~~had~~of ~~deferrals~~December 31, ~~outstanding~~2021, ofwe ~~approximately~~had OREO properties totaling $~~444~~2.40 million, oras 6%compared ofto ~~total~~$2.7 ~~loans~~million atas ~~June~~of 30December 31, 2020,. During ~~our~~the ~~highest~~year ~~level~~ended atDecember 31, 2021, a ~~quarter-end,~~property ~~and~~was atsold ~~December~~from ~~31,~~OREO ~~2020~~for $351,000 ~~only~~with 13a ~~loans~~net ~~representing~~loss of $8439,000.5 There ~~million,~~were orno 1%residential ofmortgage ~~total~~ loans ~~had~~in ~~not~~the ~~resumed~~process ~~payment~~of ~~yet. Under~~foreclosure ~~the~~as ~~applicable~~of ~~guidance~~December 31, ~~these loan modifications were not considered TDRs~~2021.

The table below shows the composition of the deferrals on our commercial and industrial loan and lease portfolio by borrower industry as of December 31, 2020.

	Commercial and Industrial
(Dollars in thousands)	Balances at12/31/20		Deferrals at 12/31/20		Deferrals as % of TotalDeferrals
Manufacturing	$	117,393	$	1,969	2	%
Mining	22,651		1,795		2	%

The table below shows the composition of the deferrals on our commercial real estate portfolio as of December 31, 2020.

	Commercial Real Estate
(Dollars in thousands)	Balances at12/31/20		Deferrals at 12/31/20		Deferrals as % of TotalDeferrals
Multifamily	$	625,418	$	11,966	14	%
Office	470,226		18,701		22	%
Retail	330,721		12,164		14	%
Industrial	314,435		6,897		8	%
Developed Land	55,006		4,453		5	%
Self Storage	47,926		7,891		9	%
Hotel	45,717		17,889		21	%

In addition to the deferrals in our commercial banking portfolio shown in the tables above, we also had a temporary payment deferral of $752,000 related to a private banking real estate loan, that has not yet resumed payment as of December 31, 2020.

We had non-performing assets of $12.4 million, or 0.13% of total assets, as of December 31, 2020, as compared to $4.4 million, or 0.06% of total assets, as of December 31, 2019. The increase in non-performing assets was due to the addition of new non-performing loans of $9.7 million, partially offset by a decrease in our OREO balance of $1.6 million. This increase was considered within the assessment of the determination of the allowance for credit losses on loans and leases. As of December 31, 2020, we had OREO properties totaling $2.7 million as compared to $4.3 million as of December 31, 2019. During the year ended, December 31, 2020, a property was sold from OREO for $1.5 million with a net gain of $65,000. There were no residential mortgage loans in the process of foreclosure as of December 31, 2020.

We had non-performing assets of $4.4 million, or 0.06% of total assets, as of December 31, 2019, as compared to $5.7 million, or 0.09% of total assets, as of December 31, 2018. The decrease in non-performing assets was due to $6.4 million in charge-offs and paydowns on non-performing loans, partially offset by the addition of a new non-performing loan of $5.1 million. This decrease was considered within the assessment of the determination of the allowance for loan and lease losses. As of December 31, 2019, we had OREO properties totaling $4.3 million as compared to $3.4 million as of December 31, 2018.

The following table summarizes our non-performing assets as of the dates indicated:

December 31,

(Dollars in thousands)

~~2020~~2021

~~2019~~2020

~~2018~~2019

~~2017~~

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