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Based in Pittsburgh, PA, TriState Capital Holdings (NASDAQ:TSC) scheduled a $65.6 million IPO with a market capitalization of $320 million at a price range mid-point of $11.5, for Thursday, May 9, 2013.

Nine other IPOs were scheduled for the week of May 6th. The full IPO calendar is here.

  • S-1 filed April 24, 2013
  • Manager, Joint Managers: Stephens; Keefe, Bruyette & Woods (A Stifel Company); Baird
  • Co Managers: Macquarie Capital

SUMMARY
TSC is a regional bank that has achieved comparatively rapid organic, internal growth. Its rate of top line revenue growth, however, has slowed.

Comparing the 2012 year with 2011, total interest revenue grew only 9% and but profits were up 47%., and net interest income was up 21% But comparing the March 2013 quarter with the March 2012 quarter we find the net interest income is up only 8% and profits were up only 3%. That rate of net interest income and profit growth doesn't deserve a premium multiple. Compare with recent regional bank IPOs.

Compare with recent regional bank IPOs.

COMPARE

Mrkt

Price /

Price /

 

Cap (NYSE:MM)

Erngs

BkValue

TriState Capital Holdings (TSC)

$320

30.2

1.2

Independent Bank Group (NASDAQ:IBTX)

$288

16.5

1.5

ConnectOne Bancorp (NASDAQ:CNOB)

$131

16.1

1.2

Glossary

VALUATION
While TSC is in line with the two most recent regional bank IPOs in terms of price-to-book, it seems high relative to its P/E ratio.

CONCLUSION
TSC seems priced high on a P/E basis. Although there is an investor demand for a regional bank that has shown historic organic growth, so it might be an IPO trade.

BUSINESS
TriState Capital Holdings, Inc. is a bank holding company headquartered in Pittsburgh, Pennsylvania. Through itsr wholly owned bank subsidiary, TriState Capital Bank, TSC serves middle market businesses in itsr primary markets throughout the states of Pennsylvania, Ohio, New Jersey and New York.

TSC also serves high net worth individuals on a national basis through a private banking channel.

FAST, ORGANIC GROWTH
TSC is one of the fastest growing banks formed in 2007 and has maintained strong asset quality. TSC achieved loan and deposit growth without mergers or acquisitions.

TSC's significant organic loan growth is the result of the sales and distribution culture, niche lending focus and a disciplined approach to risk management.

As of December 31, 2012, TSC'sr diversified loan portfolio was composed of approximately 53.2% commercial and industrial loans, approximately 28.8% commercial real estate loans and approximately 18.0% private banking-personal loans.

DEMONSTRATED GROWTH
TSC demonstrated an ability to grow its customer deposit base rapidly by adapting product and service offerings and marketing activities, rather than incurring the investment in branch offices and higher fixed operating costs inherent in traditional branch-based banking models.

TSC also believes its deposit channels provide a stable and diversified funding, as well as low all-in funding costs and greater scalability than traditional branch networks.

PERFORMANCE
As of December 31, 2012, on a consolidated basis, TSC had total assets of $2.1 billion, total loans of $1.6 billion, total deposits of $1.8 billion and shareholders' equity of $217.7 million.

According to SNL Financial, of the 167 banks established in 2007, as of December 31, 2012 TriState Capital Bank was the largest in terms of total assets based solely on organic growth. TTotal loans grew 16.7% for the year ended December 31, 2012.

TSC's ratio of nonperforming assets to total assets was 1.10% as of December 31, 2012, and the ratio of net loan charge-offs to average loans was 0.43% for the year ended December 31, 2012.

TSC achieved this growth, strong asset quality ratios and profitability during a time that included a severe national recession and slow economic growth.

DIVIDEND POLICY
No dividends are planned.

USE OF PROCEEDS

TSC expects to sell 5.5 million shares to net $57.5 million, which is allocated to general corporate purposes.

A selling shareholder expects to sell 200,000 shares.

Disclaimer: This TSC IPO report is based on a reading and analysis of TSC's S-1A filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Source: IPO Preview: TriState Capital Holdings