TriState reloads with $50M

TriState Capital Bank had the good fortune to open its doors with $85 million in new capital on the eve of the 2008 financial crisis, so it still had money to lend over the next two years, when loan growth stalled at larger and smaller banks.

Last week, the Pittsburgh-based company, with a branch in Villanova and offices in Manhattan, Cleveland and Lawrenceville, NJ, raised another $50 million, this time from the Radnor- and Los Angeles-based Lovell Minnick investment firm (the Philadelphia partner, James Minnick, is a past Morgan Grenfell and SEI Corp. executive).

"This will allow us to continue to grow, with our capital levels well above where they need to be," Joseph Finley, President of the bank's Philadelphia region, told me. "We look at ourselves as a growth company in a non-growth industry. We're building a great book of business in Philadelphia. And we recently opened an office in Manhattan."

The $50 million allows TriState to make hundreds of millions of dollars in new loans. Lovell Minnick pays premium prices for banks it believes are already set to grow, unlike the Philadelphia-based, Ira Lubert-backed Patriot Financial Partners and other bargain-hunting bank funds. 

TriState was founded by a group of veteran PA bankers led by ex-state banking secretary A. William Schenck 3d and James Getz,  a past Girard Bank executive.

TriState typically makes commerical and industrial loans in the $2 million to $12 million range, to companies with over $10 million in yearly sales. Local clients have included Main Line investors Milestone Capital Partners and Guardian Capital Partners, Capital Solutions' Crozer-Chester hospital financing project, municipal-finance adviser PFM,  Warminster police-equipment maker Havis Inc., developer Silverang-Hallowell, shopping-center owner (and Inquirer landlord) PREIT.

"We're not competing with the community banks, and we often get things done faster" than the big multistate banks, Finley added. Loans total $1.6 billion; the bank has reported a modest profit each year starting in 2010.  With only a handful of offices, operating costs are low; the bank employs 110, about one-third as many as Bryn Mawr Trust Co., a similarly-sized firm that maintains a network of local branches.