Filed Pursuant to Rule
424(b)(5)
Registration Statement No.
333-235713
PROSPECTUS
SUPPLEMENT
(To Prospectus dated January
16, 2020)
$37,500,000
5.75%
Fixed-to-Floating Rate Subordinated Notes due 2030
We are offering $37,500,000 aggregate
principal amount of 5.75% Fixed-to-Floating Rate Subordinated Notes due 2030, which are referred to herein as the “Offered
Notes.”
The Offered
Notes are being offered as additional notes under the Indenture (as defined herein) pursuant to which we previously issued $60,000,000
aggregate principal amount of our 5.75% Fixed-to-Floating Rate Subordinated Notes due 2030, which are referred to herein as the
“Original Notes.” Unless the context otherwise requires, the term “Notes” refers to the Offered Notes,
the Original Notes and any other additional notes of such series we may issue in the future. The Offered Notes constitute a further
issuance of, and will be fungible with, the Original Notes and form a single class of debt securities with the Original Notes
for all purposes under the Indenture governing the Notes. Immediately after giving effect to the issuance of the Offered Notes
contemplated by this prospectus supplement, we will have $97,500,000 aggregate principal amount of Notes.
The Notes will mature on May 15, 2030. From and including the date of
issuance to, but excluding, May 15, 2025, the Notes will bear interest at a fixed annual interest rate equal to 5.75%, payable
semi-annually in arrears on each May 15 and November 15, commencing November 15, 2020. From and including May 15, 2025 to, but
excluding, the maturity date or the date of earlier redemption, the interest rate will reset quarterly to an annual interest rate
equal to the Three-Month LIBOR (as defined herein) plus a spread of 536 basis points (5.36%), payable quarterly in arrears on
each February 15, May 15, August 15 and November 15, beginning on May 15, 2025.
We may,
at our option, beginning on August 15, 2025, and on any interest payment date thereafter, redeem the Notes, in whole or
in part, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest
to, but excluding, the date of redemption. The Notes will not otherwise be redeemable by us prior to maturity, unless certain
events occur, as described under “Description of the Notes—Optional Redemption and Redemption Upon Special Events”
on page S-30 of this prospectus supplement. Any redemption of the Notes prior to maturity will be subject to the receipt
of the approval of the Board of Governors of the Federal Reserve System, or the Federal Reserve, to the extent then required under
applicable laws or regulations, including capital regulations. The Notes will not be convertible or exchangeable.
There
is no sinking fund for the Notes. The Notes are unsecured and will rank equally with all other unsecured subordinated indebtedness
currently outstanding or issued in the future. The Notes will be subordinated in right of payment to the payment of our existing
and future senior indebtedness, including all of our general creditors, and they will be structurally subordinated to all of our
subsidiaries’ existing and future indebtedness and other obligations. The Notes are obligations of TriState Capital Holdings,
Inc. only and are not obligations of, and are not guaranteed by, any of our subsidiaries, including our bank subsidiary, TriState
Capital Bank. The holders of the Notes may be fully subordinated to interests held by the U.S. government in the event that we
enter into a bankruptcy, receivership, insolvency, liquidation, or similar proceeding.
Currently,
there is no public trading market for the Notes. The Original Notes are not listed on any securities exchange and are not quoted
on a quotation system, and we do not intend to list the Notes on any securities exchange or to have the Notes quoted on a
quotation system following the issuance of the Offered Notes.
|
|
|
Per
Note
|
|
|
Total
|
|
|
Public
offering price(1)
|
|
|
100
|
%
|
|
$
|
37,500,000
|
|
|
Underwriting
discounts and commissions(2)
|
|
|
1.50
|
%
|
|
$
|
562,500
|
|
|
Proceeds,
before expenses
|
|
|
98.50
|
%
|
|
$
|
36,937,500
|
|
(1) Without giving effect to accrued
interest that must be paid by the purchasers of the Offered Notes from May 11, 2020 to, but excluding, the date of issuance, which
will be $3.51 per $1,000 principal amount of the Offered Notes. On November 15, 2020, we will pay this pre-issuance accrued
interest to holders of the Offered Notes who are holders of record on October 31, 2020, along with interest accrued on the Offered
Notes from the date of issuance to, but excluding, November 15, 2020.
(2) See “Underwriting (Conflicts
of Interest)” for a description of the compensation payable to the underwriters.
Investing
in our Notes involves risks. See “Risk Factors” beginning on page S-14 of this prospectus supplement
and in the documents incorporated by reference in this prospectus supplement, including beginning on page 24 of our Annual Report
on Form 10-K for the year ended December 31, 2019 and beginning on page 70 of our Quarterly Report on Form 10-Q for the period
ended March 31, 2020.
Neither the
Securities and Exchange Commission, any state securities commission, the Federal Deposit Insurance Corporation (“FDIC”),
the Federal Reserve nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus
supplement or the accompanying prospectus are truthful or complete. Any representation to the contrary is a criminal offense.
The
Notes are not a savings account, deposit or other obligation of any of our bank or non-bank subsidiaries and are not insured or
guaranteed by the FDIC or any other governmental agency or instrumentality.
The
underwriters expect to deliver the Offered Notes to purchasers in book entry form only through the facilities of The Depository
Trust Company (“DTC”) and its participants, against payment therefor in immediately available funds on or about June
3, 2020.
Joint Book-running Managers
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Stephens Inc.
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PNC Capital Markets LLC
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Raymond James
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The date of this
prospectus supplement is May 29, 2020.
TABLE
OF CONTENTS
Prospectus
Supplement
Prospectus
ABOUT
THIS PROSPECTUS SUPPLEMENT
We have not,
and the underwriters have not, authorized any person to provide you with any information other than that contained in or incorporated
by reference into this prospectus supplement, the accompanying prospectus or any free writing prospectus. Neither we nor
the underwriters take any responsibility for, and can provide no assurances as to the reliability of, any information that others
may give to you. You should assume that the information appearing in this prospectus supplement, the accompanying prospectus
and any free writing prospectus is accurate only as of their respective dates. You should not assume that the information
that we have incorporated by reference is accurate as of any date other than the date of the document incorporated by reference.
Our business, financial condition, results of operations and prospects may have changed since those dates.
This document
is in two parts. The first part is this prospectus supplement, which describes the specific terms of this offering of our Offered
Notes and also adds to and updates information contained in the accompanying prospectus and the documents incorporated
by reference herein and therein. The second part, the accompanying prospectus, provides more general information. Generally,
when we refer to this prospectus, we are referring to both parts of this document combined. To the extent there is a conflict
between the information contained in this prospectus supplement and the information contained in the accompanying prospectus
or any document incorporated by reference therein filed prior to the date of this prospectus supplement, you should rely on
the information in this prospectus supplement. If any statement in one of these documents is inconsistent with a statement in
another document having a later date—for example, a document incorporated by reference in the accompanying prospectus—the
statement in the document having the later date modifies or supersedes the earlier statement.
This prospectus
supplement is part of a shelf registration statement on Form S-3 (File No. 333-235713) that the United States Securities and Exchange
Commission (the “SEC”) declared effective on January 16, 2020. Under the shelf registration process, we may from time
to time offer and sell any combination of the securities described in the accompanying prospectus. Neither we nor the underwriters
are making an offer to sell or a solicitation of an offer to buy these securities in any jurisdiction where the offer and sale
is not permitted.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus
supplement contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933,
as amended (the “Securities Act”), 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 measures of future financial or business performance, strategies or expectations. These statements are
often, but not always, indicated through the use of words or phrases such as “achieve,” “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “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 statements 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 or 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:
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•
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risks associated with the
novel coronavirus (“COVID-19”) pandemic and their expected impact and duration,
including effects on our operations, our clients, economic conditions and the demand
for our products and services;
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•
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our
ability to prudently manage our growth and execute our strategy, including the
successful integration of past and future acquisitions, our ability to fully realize
the cost savings and other benefits of our acquisitions, manage risks related to business
disruption following those acquisitions, and manage customer disintermediation;
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•
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deterioration of our asset quality;
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our level of non-performing assets and the costs associated
with resolving problem loans, including litigation and other costs;
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•
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possible
loan and lease losses and impairment, changes in the value of collateral securing our
loans and leases and the collectability of loans and leases;
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•
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possible changes
in the speed of loan prepayments by customers and loan origination or sales volumes;
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•
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business and economic conditions
and trends generally and in the financial services industry, nationally and within our
local market 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;
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•
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our ability to maintain important deposit customer
relationships, our reputation and otherwise avoid liquidity risks;
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changes in management personnel;
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•
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our ability to recruit and retain key employees;
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•
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volatility and direction
of interest rates;
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•
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changes in accounting policies, accounting standards,
or authoritative accounting guidance, including the current expected credit loss (“CECL”)
model, which may increase the level of our allowance for credit losses upon adoption;
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•
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any impairment of our goodwill or other intangible
assets;
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our ability to develop and provide competitive products
and services that appeal to our customers and target markets;
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•
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our ability to provide
investment management performance competitive with our peers and benchmarks;
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•
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fluctuations in the carrying
value of the assets under management held by our Chartwell Investment Partners, LLC subsidiary,
as well as the relative and absolute investment performance of such subsidiary’s
investment products;
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•
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operational risks associated with our business, including
technology and cyber-security related risks;
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increased competition in the financial services industry,
particularly from regional and national institutions;
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negative perceptions
or publicity with respect to any products or services we offer;
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•
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adverse judgments or other resolutions of pending and
future legal proceedings, and costs incurred in defending such proceedings;
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•
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changes in the laws, rules,
regulations, interpretations or policies relating to financial institutions, tax, trade,
monetary and fiscal matters, and potential expenses associated with complying with such
laws and regulations;
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•
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our ability to comply
with applicable capital and liquidity requirements, including our ability to generate
liquidity internally or raise capital on favorable terms;
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•
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regulatory limits on our ability to receive dividends
from our subsidiaries and pay dividends to shareholders;
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•
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changes and direction of government policy toward and
intervention in the U.S. financial system;
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•
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natural disasters and adverse
weather, acts of terrorism, cyber-attacks, an outbreak of hostilities, a public health
outbreak (such as COVID-19) or other international or domestic calamities, and other
matters beyond our control; and
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•
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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.
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For other factors,
risks and uncertainties that could cause our actual results to differ materially from estimates and projections contained in forward-looking
statements, please read the “Risk Factors” section beginning on page S-14 of this prospectus supplement
and the “Risk Factors” contained in our reports to the SEC that are incorporated by reference into this prospectus.
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. New factors emerge from time to time, and it is not possible for us to predict which will
arise. 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. 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.
PROSPECTUS
SUPPLEMENT SUMMARY
This summary
highlights information contained elsewhere in, or incorporated by reference into, this prospectus supplement. Because this is
a summary, it may not contain all the information that may be important to you. Therefore, you should also read the more detailed
information set forth in this prospectus supplement, our financial statements and documents incorporated by reference into this
prospectus supplement and the accompanying prospectus, before making a decision to invest in our Offered Notes.
See “Where You Can Find Additional Information.” Unless we indicate otherwise, the words “we,” “our,”
“us” and the “Company” refer to TriState Capital Holdings, Inc.
Company
Overview
TriState
Capital Holdings, Inc., a Pennsylvania corporation, 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 the Bank,
we provide commercial banking services to middle-market businesses in our primary markets throughout the states of Pennsylvania,
Ohio, New Jersey and New York. We also serve high net-worth individuals, business entities, and trusts 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. As of March 31, 2020,
the Bank had total assets of approximately $8.91 billion, total loans and leases held for investment of approximately $6.96
billion and total deposits of approximately $7.78 billion.
Through Chartwell,
we provide investment management services primarily to institutional investors, mutual funds and individual investors on a national
basis. As of March 31, 2020, Chartwell had assets under management of approximately $8.32 billion. CTSC Securities
supports marketing efforts for Chartwell’s proprietary investment products.
Our common stock
is traded on Nasdaq under the symbol “TSC.” Our principal executive office is located at One Oxford Centre, 301 Grant
Street, Suite 2700, Pittsburgh, Pennsylvania 15219, and our telephone number at that office is (412) 304-0304. Our website is
located at www.tristatecapitalbank.com. The information contained on our website is not part of this prospectus supplement or
the accompanying prospectus. We have included our website address in this prospectus solely as an inactive textual reference.
Recent Developments
Issuance of the Original Notes
On May 11, 2020, we issued $60 million aggregate
principal amount of the Original Notes. The Offered Notes are being offered as additional notes under the Indenture, dated as
of May 11, 2010, between the Company and U.S. Bank National Association, as trustee (the “Base Indenture”), as supplemented
by the First Supplemental Indenture dated as of May 11, 2020 (the “First Supplemental Indenture” and, together
with the Base Indenture, the “Original Indenture”), pursuant to which the Original Notes were issued. The Offered
Notes offered hereby will be issued pursuant to a second supplemental indenture, to be dated as of the issue date of the Offered
Notes (the “Second Supplemental Indenture” and, together with the Original Indenture, the “Indenture”), and will be treated
as a single series with the Original Notes under the Indenture.
The
Offering
The following
summary contains information about our Offered Notes and this offering. It does not contain all the information that you
should consider before deciding whether to invest in our Offered Notes. For a complete description of our Notes, you should
read the section of this prospectus supplement entitled “Description of the Notes.”
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Issuer
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TriState
Capital Holdings, Inc.
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|
Securities
offered
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5.75% Fixed-to-Floating Rate Subordinated Notes due 2030.
The
Offered Notes are being offered as additional notes under the Indenture pursuant to which
we previously issued $60,000,000 aggregate principal amount of 5.75% Fixed-to-Floating
Rate Subordinated Notes due 2030. The Offered Notes constitute a further issuance of,
and will be fungible with, the Original Notes and form a single class of debt securities
with the Original Notes for all purposes under the Indenture. Immediately after giving
effect to the issuance of the Offered Notes contemplated by this prospectus supplement,
we will have $97,500,000 aggregate principal amount of our Notes.
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Aggregate
Principal Amount
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$37,500,000
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|
Issue
Price
|
100%
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Maturity
Date
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The
Notes will mature on May 15, 2030.
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Interest
Rate
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From
and including the issuance date to, but excluding, May 15, 2025, a fixed per annum rate of 5.75%. From and including May 15,
2025 to, but excluding, the maturity date or the date of earlier redemption, a floating per annum rate equal to the Three-Month
LIBOR rate, determined on the determination date of the applicable interest period, plus a spread of 536 basis points (5.36%).
For any determination date, “Three-Month LIBOR” means the London interbank offered rate for deposits in U.S. dollars
for a three-month period, as that rate appears on the Reuters screen page “LIBOR01” (or any successor page) at
approximately 11:00 a.m., London time. If such rate is not available at such time for any reason, then the rate for that interest
period will be determined by such alternate method as provided in the Indenture (See “Description of the Notes”).
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Interest
Payment Dates
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Until,
but excluding May 15, 2025, interest at the fixed per annum rate on the Notes
will be payable on May 15 and November 15 of each year, commencing November 15, 2020.
From and including May
15, 2025 to the maturity date, interest at the floating per annum rate will be payable on the Notes on February
15, May 15, August 15 and November 15 of each year beginning on May 15, 2025.
On the maturity date
or a date of earlier redemption, interest will be paid to, but excluding, such date.
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The
initial interest payment on November 15, 2020 to holders of record of the Offered Notes on October 31, 2020 will be the same
per Note as the interest paid on such date with respect to the Original Notes. All pre-issuance accrued interest from May
11, 2020 to, but excluding, the date of issuance of the Offered Notes will be paid by purchasers of the Offered Notes
offered hereby.
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Record
Dates
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The
record date for the Notes on the fifteenth day (whether or not a business day) immediately preceding the applicable interest payment date.
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Day
Count Conversion
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Interest
will be computed on the basis of a 360-day year consisting of twelve 30-day months to, but excluding, May 15, 2025
and, thereafter, on the basis of the actual number of days in the relevant interest period divided by 360.
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No
Guarantees
|
The
Notes are not guaranteed by any of our subsidiaries, including the Bank. As a result, the Notes will be structurally
subordinated to the liabilities of our subsidiaries as discussed below under “Description of the
Notes—Subordination of the Notes.”
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Ranking
|
The Offered
Notes will be our unsecured, subordinated obligations and:
· will
rank junior in right of payment and upon our liquidation to any of our existing and all future Senior Indebtedness (as
defined in the Indenture and as discussed under “Description of the Notes—Subordination of the Notes”
in this prospectus supplement);
· will
rank junior in right of payment and upon our liquidation to any of our existing and all of our future general creditors;
· will
rank equal in right of payment and upon our liquidation with any of our existing and all of our future unsecured subordinated
indebtedness, including the Original Notes, and any indebtedness the terms of which provide that such indebtedness
ranks equally with the Notes;
· will
rank senior in right of payment and upon our liquidation to any of our indebtedness the terms of which provide that such
indebtedness ranks junior in right of payment to note indebtedness such as the Notes; and
· will
be effectively subordinated to our future secured indebtedness to the extent of the value of the collateral securing such
indebtedness, and structurally subordinated to the existing and future indebtedness of our subsidiaries, including without
limitation the Bank’s depositors, liabilities to general creditors and liabilities arising in the ordinary course
of business or otherwise.
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As of March
31, 2020, the Bank and our other subsidiaries had outstanding indebtedness, total deposits and other liabilities of approximately
$8.38 billion, excluding intercompany liabilities, all of which ranks structurally senior to the Notes. In addition, the $60 million aggregate principal amount
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of the Original Notes ranks on a parity with the Offered Notes. For more information, see “Description of the Notes—Subordination of the Notes” in this prospectus
supplement.
The Indenture
does not limit the amount of additional indebtedness we or our subsidiaries may incur.
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Optional
Redemption
|
We
may, beginning on August 15, 2025, and on any interest payment date thereafter, redeem the Notes, in whole or in part,
at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest to,
but excluding, the date of redemption.
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Special
Redemption
|
We
may also redeem the Notes at any time, including prior to August 15, 2025, at our option, in whole but not in part, if: (a) a change or prospective change in law or administrative
interpretation occurs that could prevent us from deducting interest payable on the Notes for U.S. federal income tax
purposes; (b) a subsequent event occurs that could preclude the Notes from being recognized as Tier 2 capital for regulatory
capital purposes; or (c) we are required to register as an investment company under the Investment Company Act of 1940, as
amended; in each case, at a redemption price equal to 100% of the principal amount of the Notes plus any accrued and unpaid
interest to, but excluding, the redemption date. For more information, see “Description of the Notes—Optional
Redemption and Redemption Upon Special Events” in this prospectus supplement.
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Sinking
Fund
|
There
is no sinking fund for the Notes.
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Further
Issuances
|
The
Offered Notes are our 5.75% Fixed-to-Floating Rate Subordinated Notes due 2030, of which we issued $60 million in
aggregate principal amount on May 11, 2020. We may from time to time, without notice to or consent of the holders, increase
the aggregate principal amount of the Notes outstanding by issuing additional notes in the future with the same terms as the
Notes, except for the offering price, the payment of interest accruing prior to the issue date and the first payment of interest
following the issue date, and such additional notes may be consolidated with the Notes and form a single series.
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Use
of Proceeds
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We
estimate that the net proceeds from this offering (exclusive of accrued interest prior to the date of issuance that is paid
by the purchasers), after deducting underwriting discounts and estimated expenses, will be approximately $36.7 million.
We intend to use the net proceeds from this offering for general corporate purposes, which may include working capital, repurchasing
shares of our common stock, providing capital to support the organic growth of the Bank or funding the opportunistic acquisition
of similar or complementary financial service organizations and may use certain of the net proceeds to repay outstanding indebtedness,
including amounts outstanding under our line of credit with Texas Capital Bank. See “Use of Proceeds” in
this prospectus supplement.
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Form
and Denomination
|
The
Offered Notes will be offered in book-entry form through the facilities of The Depository Trust Company in minimum
denominations of $1,000 and integral multiples of $1,000
in excess thereof.
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Listing
|
The
Original Notes were not listed on any securities exchange or quoted on any quotation system, and the Offered Notes will not
be listed on any securities exchange or quoted on any quotation system. Currently there is no public trading market
for the Notes, and there can be no assurances that any active market for the Notes will develop.
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Governing
Law
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The
Notes and the Indenture are governed by the laws of the State of New York.
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Trustee
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U.S.
Bank National Association
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Risk
factors
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See
“Risk Factors” beginning on page S-14 of this prospectus supplement and beginning on page 24 of
our Annual Report on Form 10-K for the year ended December 31, 2019 and beginning on page 70 of our Quarterly Report on Form
10-Q for the period ended March 31, 2020, as well as other information included in or incorporated by reference into this
prospectus supplement and the accompanying prospectus for a discussion of factors you should consider carefully before deciding
to invest in our Offered Notes.
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Conflicts
of Interest
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An
affiliate of PNC Capital Markets LLC, which is an underwriter in this offering, is a lender under our line of credit with
Texas Capital Bank. As disclosed in “Use of Proceeds” in this prospectus supplement, we may use the proceeds
of this offering to repay this line of credit, in which case the affiliate of PNC Capital Markets LLC may receive in excess
of 5% of the net proceeds of this offering. Consequently, PNC Capital Markets LLC is deemed to have a conflict of interest
within the meaning of FINRA Rule 5121. This offering will therefore be conducted in compliance with the applicable provisions
of FINRA Rule 5121. See “Underwriting (Conflicts of Interest)” in this prospectus supplement.
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Selected
Financial Information
The
following tables set forth selected historical financial and other information for the periods ended and as of the dates
indicated. The selected financial information presented below as of December 31, 2019 and 2018 and for the years ended
December 31, 2019, 2018 and 2017 is derived from our audited consolidated financial statements incorporated by reference into
this prospectus supplement from our Annual Report on Form 10-K for the year ended December 31, 2019. The selected financial
information presented below as of March 31, 2020 and 2019 is derived from our Quarterly Report on Form 10-Q for the period
ended March 31, 2020. The selected financial information as of December 31, 2017 is derived from our audited consolidated
financial statements for the year then ended, which are not included or incorporated by reference in this prospectus supplement.
Results from prior periods are not necessarily indicative of results that may be expected for any future period.
This selected
financial information should be read in conjunction with the sections entitled “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K
for the year ended December 31, 2019 and in our Quarterly Report on Form 10-Q for the period ended March 31, 2020, and
with our consolidated financial statements and related notes incorporated by reference into this prospectus supplement and accompanying
prospectus.
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(Dollars
in thousands, except per share data)
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|
As
of and For the
Three Months Ended
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As
of and For the
Years Ended December 31,
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Income
statement data:
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March 31,
2020
|
|
|
March 31,
2019
|
|
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2019
|
|
|
2018
|
|
|
2017
|
|
|
Interest
income
|
|
$
|
64,202
|
|
|
$
|
62,902
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|
$
|
262,447
|
|
|
$
|
199,786
|
|
|
$
|
134,295
|
|
|
Interest
expense
|
|
|
29,280
|
|
|
|
32,530
|
|
|
|
135,390
|
|
|
|
86,382
|
|
|
|
42,942
|
|
|
Net
interest income
|
|
|
34,922
|
|
|
|
30,372
|
|
|
|
127,057
|
|
|
|
113,404
|
|
|
|
91,353
|
|
|
Provision
(credit) for loan losses
|
|
|
2,993
|
|
|
|
(377
|
)
|
|
|
(968
|
)
|
|
|
(205
|
)
|
|
|
(623
|
)
|
Net
interest income after provision
for loan losses
|
|
|
31,929
|
|
|
|
30,749
|
|
|
|
128,025
|
|
|
|
113,609
|
|
|
|
91,976
|
|
|
Total
non-interest income
|
|
|
13,316
|
|
|
|
13,069
|
|
|
|
52,782
|
|
|
|
47,917
|
|
|
|
46,966
|
|
|
Total
non-interest expense
|
|
|
29,144
|
|
|
|
26,672
|
|
|
|
112,149
|
|
|
|
101,157
|
|
|
|
91,472
|
|
|
Income
before tax
|
|
|
16,101
|
|
|
|
17,146
|
|
|
|
68,658
|
|
|
|
60,369
|
|
|
|
47,470
|
|
|
Income
tax expense
|
|
|
3,206
|
|
|
|
2,582
|
|
|
|
8,465
|
|
|
|
5,945
|
|
|
|
9,482
|
|
|
Net
income
|
|
$
|
12,895
|
|
|
$
|
14,564
|
|
|
$
|
60,193
|
|
|
$
|
54,424
|
|
|
$
|
37,988
|
|
|
Earnings
per common share—basic
|
|
$
|
0.39
|
|
|
$
|
0.50
|
|
|
$
|
1.95
|
|
|
$
|
1.90
|
|
|
$
|
1.38
|
|
|
Earnings
per common share—diluted
|
|
$
|
0.38
|
|
|
$
|
0.48
|
|
|
$
|
1.89
|
|
|
$
|
1.81
|
|
|
$
|
1.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
sheet data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
1,010,128
|
|
|
$
|
243,911
|
|
|
$
|
403,855
|
|
|
$
|
189,985
|
|
|
$
|
156,153
|
|
|
Total
investment securities
|
|
|
606,736
|
|
|
|
487,087
|
|
|
|
469,150
|
|
|
|
466,759
|
|
|
|
220,552
|
|
|
Loans
held-for-investment
|
|
|
6,958,149
|
|
|
|
5,336,725
|
|
|
|
6,577,559
|
|
|
|
5,132,873
|
|
|
|
4,184,244
|
|
|
Allowance
for loan losses
|
|
|
(17,304
|
)
|
|
|
(14,712
|
)
|
|
|
(14,108
|
)
|
|
|
(13,208
|
)
|
|
|
(14,417
|
)
|
|
Loans
held-for-investment, net
|
|
|
6,940,845
|
|
|
|
5,322,013
|
|
|
|
6,563,451
|
|
|
|
5,119,665
|
|
|
|
4,169,827
|
|
|
Goodwill
and other intangible assets, net
|
|
|
65,352
|
|
|
|
67,361
|
|
|
|
65,854
|
|
|
|
67,863
|
|
|
|
65,358
|
|
|
Other
assets
|
|
|
367,000
|
|
|
|
223,638
|
|
|
|
263,500
|
|
|
|
191,383
|
|
|
|
166,007
|
|
|
Total
assets
|
|
|
8,990,061
|
|
|
|
6,344,010
|
|
|
|
7,765,810
|
|
|
|
6,035,655
|
|
|
|
4,777,897
|
|
|
Deposits
|
|
|
7,782,759
|
|
|
|
5,337,704
|
|
|
|
6,634,613
|
|
|
|
5,050,461
|
|
|
|
3,987,611
|
|
|
Borrowings,
net
|
|
|
330,000
|
|
|
|
398,216
|
|
|
|
355,000
|
|
|
|
404,166
|
|
|
|
335,913
|
|
|
Other
liabilities
|
|
|
262,922
|
|
|
|
111,533
|
|
|
|
154,916
|
|
|
|
101,674
|
|
|
|
65,302
|
|
|
Total
liabilities
|
|
|
8,375,681
|
|
|
|
5,847,453
|
|
|
|
7,144,529
|
|
|
|
5,556,301
|
|
|
|
4,388,826
|
|
|
Total
shareholders’ equity
|
|
|
614,380
|
|
|
|
496,557
|
|
|
|
621,281
|
|
|
|
479,354
|
|
|
|
389,071
|
|
|
Book
value per common share
|
|
|
16.74
|
|
|
|
15.61
|
|
|
|
17.21
|
|
|
|
15.27
|
|
|
|
13.61
|
|
|
Tangible
book value per share(1)
|
|
|
14.55
|
|
|
|
13.31
|
|
|
|
14.97
|
|
|
|
12.92
|
|
|
|
11.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars
in thousands, except per share data)
|
|
As
of and For the
Three Months Ended
|
|
|
As
of and For the
Years Ended December 31,
|
|
|
Performance
ratios:
|
|
March
31,
2020
|
|
|
March
31,
2019
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
Return
on average assets
|
|
|
0.65
|
%
|
|
|
0.97
|
%
|
|
|
0.89
|
%
|
|
|
1.04
|
%
|
|
|
0.89
|
%
|
|
Return
on average common equity
|
|
|
8.59
|
%
|
|
|
12.50
|
%
|
|
|
11.47
|
%
|
|
|
12.57
|
%
|
|
|
10.30
|
%
|
|
Net
interest margin(2)
|
|
|
1.84
|
%
|
|
|
2.10
|
%
|
|
|
1.97
|
%
|
|
|
2.26
|
%
|
|
|
2.25
|
%
|
|
Total
revenue(1)
|
|
$
|
48,181
|
|
|
$
|
43,413
|
|
|
$
|
179,423
|
|
|
$
|
161,391
|
|
|
$
|
138,009
|
|
|
Pre-tax,
pre-provision net revenue(1)
|
|
$
|
19,037
|
|
|
$
|
16,741
|
|
|
$
|
67,274
|
|
|
$
|
60,234
|
|
|
$
|
46,537
|
|
|
Bank
efficiency ratio(1)
|
|
|
51.86
|
%
|
|
|
56.30
|
%
|
|
|
54.49
|
%
|
|
|
53.09
|
%
|
|
|
57.39
|
%
|
|
Non-interest
expense to average assets
|
|
|
1.47
|
%
|
|
|
1.77
|
%
|
|
|
1.66
|
%
|
|
|
1.93
|
%
|
|
|
2.15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
quality:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing
loans
|
|
$
|
184
|
|
|
$
|
7,329
|
|
|
$
|
184
|
|
|
$
|
2,237
|
|
|
$
|
3,183
|
|
|
Non-performing
assets
|
|
$
|
4,434
|
|
|
$
|
10,453
|
|
|
$
|
4,434
|
|
|
$
|
5,661
|
|
|
$
|
6,759
|
|
|
Other
real estate owned
|
|
$
|
4,250
|
|
|
$
|
3,124
|
|
|
$
|
4,250
|
|
|
$
|
3,424
|
|
|
$
|
3,576
|
|
|
Non-performing
assets to total assets
|
|
|
0.05
|
%
|
|
|
0.16
|
%
|
|
|
0.06
|
%
|
|
|
0.09
|
%
|
|
|
0.14
|
%
|
|
Non-performing
loans to total loans
|
|
|
—
|
%
|
|
|
0.14
|
%
|
|
|
—
|
%
|
|
|
0.04
|
%
|
|
|
0.08
|
%
|
|
Allowance
for loan losses to loans
|
|
|
0.25
|
%
|
|
|
0.28
|
%
|
|
|
0.21
|
%
|
|
|
0.26
|
%
|
|
|
0.34
|
%
|
|
Allowance
for loan losses and lease losses to non-performing loans
|
|
|
9,404.35
|
%
|
|
|
200.74
|
%
|
|
|
7,667.39
|
%
|
|
|
590.43
|
%
|
|
|
452.94
|
%
|
|
Net
charge-offs (recoveries)
|
|
$
|
(203
|
)
|
|
$
|
(1,881
|
)
|
|
$
|
(1,868
|
)
|
|
$
|
1,004
|
|
|
$
|
3,772
|
|
|
Net
charge-offs (recoveries) to average total loans
|
|
|
(0.01
|
)%
|
|
|
(0.15
|
)%
|
|
|
(0.03
|
)%
|
|
|
0.02
|
%
|
|
|
0.10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
equity to average assets
|
|
|
7.89
|
%
|
|
|
8.00
|
%
|
|
|
8.29
|
%
|
|
|
8.49
|
%
|
|
|
8.65
|
%
|
|
Tier
1 leverage ratio
|
|
|
7.19
|
%
|
|
|
7.13
|
%
|
|
|
7.54
|
%
|
|
|
7.28
|
%
|
|
|
7.25
|
%
|
|
Common
equity tier 1 risk-based capital ratio
|
|
|
8.81
|
%
|
|
|
9.98
|
%
|
|
|
9.32
|
%
|
|
|
9.64
|
%
|
|
|
11.14
|
%
|
|
Tier
1 risk-based capital ratio
|
|
|
11.07
|
%
|
|
|
10.92
|
%
|
|
|
11.75
|
%
|
|
|
10.58
|
%
|
|
|
11.14
|
%
|
|
Total
risk-based capital ratio
|
|
|
11.42
|
%
|
|
|
11.26
|
%
|
|
|
12.05
|
%
|
|
|
10.86
|
%
|
|
|
11.72
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
Management Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
under management
|
|
$
|
8,323,000
|
|
|
$
|
9,732,000
|
|
|
$
|
9,701,000
|
|
|
$
|
9,189,000
|
|
|
$
|
8,309,000
|
|
|
Investment
Management EBITDA(1)
|
|
$
|
1,217
|
|
|
$
|
2,621
|
|
|
$
|
5,824
|
|
|
$
|
6,900
|
|
|
$
|
7,421
|
|
|
(1)
|
These
measures are not measures recognized under generally accepted accounting principles in
the United States (“GAAP”) and are therefore considered to be non-GAAP financial
measures. Our management uses these non-GAAP financial measures in their analysis of
the performance of the Company. These measures are not necessarily comparable to similar
measures that may be presented by other companies. The non-GAAP financial measures presented
in this prospectus supplement 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
to better understand and assess changes from period to period in 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 tangible common equity 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.
|
|
|
·
|
“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 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 income, without giving effect to loan
loss provision and income taxes, and excluding gains and losses on the sale and call
of investment securities. 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 loan and lease losses
and changes in our tax rates and other items that are unrelated to our core business.
|
|
|
·
|
“Bank
efficiency ratio” is defined as non-interest expense of our bank segment divided
by total revenue of our bank segment. We believe this measure allows management and investors
to better assess the Bank’s operating expenses in relation to its core operating
revenue.
|
|
|
·
|
“Investment
Management EBITDA” is defined as net income of our investment management segment
before interest expense, income tax expense, depreciation expense and amortization expense,
each with respect to our investment management segment. We use Investment Management
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.
|
Reconciliations
of non-GAAP numbers to their most directly comparable GAAP measures are included in the tables below.
|
(2)
|
Net
interest margin is calculated on a fully taxable equivalent basis.
|
Reconciliation
of Non-GAAP Financial Measures
|
(Dollars
in thousands, except per share data)
|
|
As
of and For the
Three Months Ended
|
|
|
As
of and For the
Years Ended December 31,
|
|
|
Tangible
book value per common share:
|
|
March
31,
2020
|
|
|
March
31,
2019
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
Common
shareholders’ equity
|
|
$
|
498,301
|
|
|
$
|
458,089
|
|
|
$
|
505,202
|
|
|
$
|
440,886
|
|
|
$
|
389,071
|
|
|
Less:
intangible assets
|
|
|
65,352
|
|
|
|
67,361
|
|
|
|
65,854
|
|
|
|
67,863
|
|
|
|
65,358
|
|
|
Tangible
common equity
|
|
$
|
432,949
|
|
|
$
|
390,728
|
|
|
$
|
439,348
|
|
|
$
|
373,023
|
|
|
$
|
323,713
|
|
|
Common
shares outstanding
|
|
|
29,762,578
|
|
|
|
29,351,833
|
|
|
|
29,355,986
|
|
|
|
28,878,674
|
|
|
|
28,591,101
|
|
|
Tangible
book value per common share
|
|
$
|
14.55
|
|
|
$
|
13.31
|
|
|
$
|
14.97
|
|
|
$
|
12.92
|
|
|
$
|
11.32
|
|
|
(Dollars
in thousands)
|
|
As
of and For the
Three Months Ended
|
|
|
As
of and For the
Years Ended December 31,
|
|
|
Total
revenue and pre-tax, pre-provision net revenue:
|
|
March
31,
2020
|
|
|
March
31,
2019
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
Net
interest income
|
|
$
|
34,922
|
|
|
$
|
30,372
|
|
|
$
|
127,057
|
|
|
$
|
113,404
|
|
|
$
|
91,353
|
|
|
Total
non-interest income
|
|
|
13,316
|
|
|
|
13,069
|
|
|
|
52,782
|
|
|
|
47,917
|
|
|
|
46,966
|
|
|
Less:
net gain (loss) on the sale and call of debt securities
|
|
|
57
|
|
|
|
28
|
|
|
|
416
|
|
|
|
(70
|
)
|
|
|
310
|
|
|
Total
revenue
|
|
$
|
48,181
|
|
|
$
|
43,413
|
|
|
$
|
179,423
|
|
|
$
|
161,391
|
|
|
$
|
138,009
|
|
|
Less:
total non-interest expense
|
|
|
29,144
|
|
|
|
26,672
|
|
|
|
112,149
|
|
|
|
101,157
|
|
|
|
91,472
|
|
|
Pre-tax,
pre-provision net revenue
|
|
$
|
19,037
|
|
|
$
|
16,741
|
|
|
$
|
67,274
|
|
|
$
|
60,234
|
|
|
$
|
46,537
|
|
|
BANK
SEGMENT
(Dollars
in thousands)
|
|
As
of and For the
Three Months Ended
|
|
|
As
of and For the
Years Ended December 31,
|
|
|
Bank
total revenue:
|
|
March
31,
2020
|
|
|
March
31,
2019
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
Net
interest income
|
|
$
|
34,906
|
|
|
$
|
30,911
|
|
|
$
|
127,996
|
|
|
$
|
115,455
|
|
|
$
|
93,380
|
|
|
Total
non-interest income
|
|
|
5,709
|
|
|
|
2,905
|
|
|
|
15,467
|
|
|
|
11,042
|
|
|
|
9,864
|
|
|
Less:
net gain (loss) on the sale and call of debt securities
|
|
|
57
|
|
|
|
28
|
|
|
|
416
|
|
|
|
(70
|
)
|
|
|
310
|
|
|
Bank
total revenue
|
|
$
|
40,558
|
|
|
$
|
33,788
|
|
|
$
|
143,047
|
|
|
$
|
126,567
|
|
|
$
|
102,934
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank
efficiency ratio:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
non-interest expense
|
|
$
|
21,034
|
|
|
$
|
19,021
|
|
|
$
|
77,945
|
|
|
$
|
67,190
|
|
|
$
|
59,073
|
|
|
Total
revenue
|
|
$
|
40,558
|
|
|
$
|
33,788
|
|
|
$
|
143,047
|
|
|
$
|
126,567
|
|
|
$
|
102,934
|
|
|
Bank
efficiency ratio
|
|
|
51.86
|
%
|
|
|
56.30
|
%
|
|
|
54.49
|
%
|
|
|
53.09
|
%
|
|
|
57.39
|
%
|
INVESTMENT
MANAGEMENT SEGMENT
(Dollars in thousands)
|
|
As
of and For the
Three Months Ended
|
|
|
As
of and For the
Years Ended December 31,
|
|
|
Investment
Management EBITDA:
|
|
March
31,
2020
|
|
|
March
31,
2019
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
Net
income
|
|
$
|
578
|
|
|
$
|
1,431
|
|
|
$
|
2,433
|
|
|
$
|
3,851
|
|
|
$
|
4,551
|
|
|
Income
tax expense
|
|
|
28
|
|
|
|
563
|
|
|
|
918
|
|
|
|
579
|
|
|
|
522
|
|
|
Depreciation
expense
|
|
|
109
|
|
|
|
125
|
|
|
|
464
|
|
|
|
502
|
|
|
|
497
|
|
|
Intangible
amortization expense
|
|
|
502
|
|
|
|
502
|
|
|
|
2,009
|
|
|
|
1,968
|
|
|
|
1,851
|
|
|
Investment
Management EBITDA
|
|
|
1,217
|
|
|
|
2,621
|
|
|
|
5,824
|
|
|
|
6,900
|
|
|
|
7,421
|
|
RISK
FACTORS
An investment
in our Offered Notes involves certain risks relating to our Notes and the Company. You should carefully consider the risks
described below and the risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2019, and our
Quarterly Report on Form 10-Q for the period ended March 31, 2020, as well as the other information included or incorporated
by reference in this prospectus supplement and the accompanying prospectus, before making an investment decision. Our business,
financial condition or results of operations could be materially adversely affected by any of these risks. The risks and uncertainties
we describe are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently
deem immaterial may also impair our business or operations. Any adverse effect on our business, financial condition or operating
results could result in a decline in the value of our Notes and the loss of all or part of your investment.
Risks Related
to an Investment in Our Notes and This Offering
Our
obligations under the Notes will be unsecured and subordinated to our existing and future Senior Indebtedness and general creditors,
and we may be precluded from making payments on the Notes in certain circumstances.
The Notes are
unsecured and will rank equally with all other unsecured subordinated indebtedness currently outstanding or issued in the future.
Our obligations with respect to the Notes will rank junior to right of payment to all of our existing and future Senior Indebtedness
and any other obligations that are subject to any priority or preferences under applicable law. This means that we generally cannot
make any payments on the Notes if we default on the Senior Indebtedness and the holders of Senior Indebtedness have accelerated
the maturity of such Senior Indebtedness due to such event of default or if any judicial proceeding is pending with respect to
an event of default. If the event of default is other than for a default in payment of principal, premium or interest or an event
of default arising from an insolvency event, the holders of Senior Indebtedness are required to provide notice to us that the
holders have accelerated the maturity of such Senior Indebtedness. In addition, in the event of our bankruptcy, liquidation or
dissolution or similar proceeding, any remaining assets would be available to pay obligations under the Notes only after we have
made payments on all Senior Indebtedness. Although our current Credit Agreement among the lenders party thereto and Texas Capital
Bank, as administrative agent, would require us to seek consent to issue additional debt in certain instances, neither the Notes
nor the Indenture limits our ability to incur additional indebtedness, including indebtedness that ranks senior in priority
of payment to the Notes. In addition, the Credit Agreement containing these consent requirements could be terminated at any time
and the loan outstanding under the Credit Agreement may be paid in full following the completion of this offering.
Holders
of the Notes should only look to the assets of the holding company as the source of payment of the Notes. The Notes are not obligations
of, or guaranteed by, the Bank. In addition, because we are a holding company, our right to participate in the distribution of
assets from any subsidiary, including the Bank, upon its liquidation or reorganization or otherwise (and thus the ability of holders
of the Notes to benefit indirectly from such distribution) is subject to the prior claims of creditors of the subsidiary (including
depositors of the Bank), except to the extent that we may be recognized as a creditor of that subsidiary. In the event of any
such distribution of assets of the Bank, the claims of depositors and other general or subordinated creditors would be entitled
to priority over the claims of holders of the Notes. Accordingly, the Notes will be effectively subordinated to all existing and
future liabilities of our subsidiaries, including the Bank. As of March 31, 2020, the Bank and our other subsidiaries had outstanding
indebtedness, total deposits and other liabilities of approximately $8.38 billion, excluding intercompany liabilities, all of
which ranks structurally senior to the Notes. In addition, the $60 million aggregate principal amount of the Original Notes
ranks on a parity with the Offered Notes. For more information, see “Description of the Notes—Subordination
of the Notes” in this prospectus supplement. On a pro forma basis, giving effect to the sale of the Notes, the Company,
at the holding
company level, would have had approximately
$8.47 billion in total liabilities as of March 31, 2020. There is no restriction in the Indenture governing the Notes on
the ability of the Company or the Bank to incur additional indebtedness or other liabilities. Any additional liabilities that
we may incur in the future may adversely affect our ability to pay our obligations on the Notes.
As
a consequence of the subordination of the Notes to our existing and future Senior Indebtedness or any other obligations that are
subject to any priority or preferences under applicable law, an investor in the Notes may lose all or some of its investment upon
our insolvency, bankruptcy, liquidation, winding up or similar proceeding. In such an event, our assets would be available to
pay the principal of, and any accrued and unpaid interest on, the Notes only after all of our Senior Indebtedness had been paid
in full. In the event of our insolvency, bankruptcy, liquidation, dissolution, winding up or similar proceeding, any of our other
general, unsecured obligations that do not constitute Senior Indebtedness, depending upon their respective preferences, will share
pro rata in our remaining assets after we have paid all of our Senior Indebtedness in full. In any of the foregoing events, we
may not have sufficient assets to make payments in respect of the Notes. As a result, if holders of the Notes receive any payments,
they may receive less, ratably, than holders of secured indebtedness. In addition, the holders of any Senior Indebtedness could
restrict or prohibit us from making payments on the Notes.
We
are a holding company with limited operations and depend on our subsidiaries for the funds required to make payments of principal
and interest on the Notes.
We
are a separate and distinct legal entity from the Bank and our other subsidiaries. Our primary source of funds to make payments
of principal and interest on the Notes and to satisfy any other financial obligations are dividends from the Bank. Our ability
to receive dividends from the Bank is contingent on a number of factors, including the Bank’s ability to meet applicable
regulatory capital requirements, the Bank’s profitability and earnings, and the general strength of its balance sheet. Various
federal and state regulatory provisions limit the amount of dividends bank subsidiaries are permitted to pay to their holding
companies without regulatory approval. In general, the Bank may only pay dividends either out of its net income after any required
transfers to surplus or reserves have been made or out of its retained earnings. In addition, the Federal Reserve and the FDIC
have issued policy statements stating that insured banks and bank holding companies generally should pay dividends only out of
current operating earnings.
Banks
and their holding companies are required to maintain a capital conservation buffer of 2.5% in addition to satisfying other applicable
regulatory capital ratios. Banking institutions that do not maintain capital in excess of the capital conservation buffer may
face constraints on dividends, equity repurchases and executive compensation based on the amount of the shortfall. Accordingly,
if the Bank fails to maintain the applicable minimum capital ratios and the capital conservation buffer, dividends to us (at the
holding company level) from the Bank may be prohibited or limited, and we may not have funds to make principal and interest payments
on the Notes.
In
addition, state or federal banking regulators have broad authority to restrict the payment of dividends, including in circumstances
where a bank under such regulator’s jurisdiction engages in (or is about to engage in) unsafe or unsound practices. Such
regulators have the authority to require that the bank cease and desist from unsafe and unsound practices and to prevent a bank
from paying a dividend if its financial condition is such that the regulator views the payment of a dividend to constitute an
unsafe or unsound practice.
Accordingly,
we can provide no assurance that we will receive dividends from the Bank in an amount sufficient to pay the principal of, or interest
on, the Notes.
Regulatory
guidelines may restrict our ability to pay the principal of, and accrued and unpaid interest on, the Notes, regardless of whether
we are the subject of an insolvency proceeding.
As a bank holding
company, our ability to pay the principal of, and interest on, the Notes is subject to the rules and guidelines of the Federal
Reserve regarding capital adequacy. We treat the Original Notes, and we intend to treat the Offered Notes,
as “Tier 2 capital” under these rules
and guidelines. The Federal Reserve guidelines generally require us to review the effects of the cash payment of Tier 2 capital
instruments, such as the Notes, on our overall financial condition. The guidelines also require that we review our net income
for the current and past four quarters, and the amounts we have paid on Tier 2 capital instruments for those periods, as well
as our projected rate of earnings retention. Moreover, pursuant to federal law and the Federal Reserve regulations, as a bank
holding company, we are required to act as a source of financial and managerial strength to the Bank and commit resources to its
support, including the guarantee of a capital plan of an undercapitalized bank subsidiary. Such support may be required at times
when we may not otherwise be inclined or able to provide it. As a result of the foregoing, we may be unable to pay accrued interest
on the Notes on one or more of the scheduled interest payment dates, or at any other time, or the principal of the Notes at the
maturity of the Notes.
If
we were to be the subject of a bankruptcy proceeding under Chapter 11 of the U.S. Bankruptcy Code, the bankruptcy trustee would
be deemed to have assumed, and would be required to cure, immediately any deficit under any commitment that we have to any of
the federal banking agencies to maintain the capital of the Bank, and any other insured depository institution for which we have
such a responsibility, and any claim for breach of such obligation would generally have priority over most other unsecured claims.
We
may not be able to generate sufficient cash to service all of our debt, including the Notes.
Our
ability to make scheduled payments of principal and interest or to satisfy our obligations in respect of our debt or to refinance
our debt will depend on our future operating performance. Prevailing economic conditions (including interest rates), regulatory
constraints, including, among other things, limitations on distributions to us from our subsidiaries and required capital levels
with respect to certain of our subsidiary banks and nonbanking subsidiaries, and financial, business and other factors, many of
which are beyond our control, will also affect our ability to meet these needs. We may not be able to generate sufficient cash
flows from operations, or obtain future borrowings in an amount sufficient to enable us to pay our debt, or to fund our other
liquidity needs. We may need to refinance all or a portion of our debt on or before maturity. We may not be able to refinance
any of our debt when needed on commercially reasonable terms or at all.
The Notes
are the obligations of the Company and not obligations of the Bank or any of our other subsidiaries, and will be structurally
subordinated to the debt and other liabilities of the Bank and our other subsidiaries, which will not guarantee the Notes.
Because we are
a holding company, our rights and the rights of our creditors, including the holders of the Notes, to participate in the assets
of any subsidiary during its liquidation or reorganization will be subject to the prior claims of the subsidiary’s creditors
unless and to the extent we are ourselves a creditor with recognized claims against the subsidiary. Any loans that we make to
the Bank would be subordinate in right of payment to deposits and to other indebtedness of the Bank. Claims from creditors (other
than us) against our subsidiaries may include long-term and medium-term debt and substantial obligations related to deposit liabilities,
federal funds purchased, securities sold under repurchase agreements, and other short-term borrowings, as well as liabilities
to general creditors. The Notes are not obligations of, or guaranteed by, the Bank or our other subsidiaries, and our subsidiaries
have no obligation to pay any amounts due on the Notes. The Indenture does not contain any limitation on the amount of
debt or other obligations that the Bank or our other subsidiaries may incur hereafter.
Holders
of the Notes will have limited rights, including limited rights of acceleration, if there is an event of default.
Payment
of principal of the Notes may be accelerated only in the case of certain bankruptcy-related events with respect to us. Thus, you
have no right to accelerate the payment of principal of the Notes if we fail to pay principal or interest on the Notes or if we
fail in the performance of any of our other obligations under the Notes. See “Description of the Notes—Events of
Default; Limitations on Suits.”
The Notes
do not restrict our ability to incur additional debt, to repurchase our securities or to take other actions that could negatively
impact holders of the Notes, and the Indenture governing the Notes does not contain any financial covenants.
Neither we nor
any of our subsidiaries is restricted from incurring additional indebtedness or other liabilities, including additional senior
or subordinated indebtedness, under the Indenture. If we incur additional indebtedness or liabilities, our ability to pay
our obligations on the Notes could be adversely affected. We expect that we will incur additional indebtedness and other liabilities
from time to time. In addition, we are not restricted under the Indenture from granting or incurring a lien on any of our
assets, selling or otherwise disposing of any of our assets, paying dividends or issuing or repurchasing our securities.
In addition,
there are no financial covenants in the Indenture governing the Notes. You are not protected under the Indenture
in the event of a highly-leveraged transaction, reorganization, default under our existing indebtedness, restructuring, merger
or similar transaction that may adversely affect you.
Our
credit ratings may not reflect all risks of an investment in the Notes.
Our
credit ratings are an assessment of our ability to pay our obligations as they become due. Consequently, real or anticipated changes
in our credit ratings will generally affect the trading value of the Notes. Our credit ratings, however, may not reflect the potential
risks related to the market or other factors on the value of the Notes. Furthermore, because your return on the Notes depends
upon factors in addition to our ability to pay our obligations, an improvement in our credit ratings will not reduce the other
investment risks related to the Notes. A credit rating is not a recommendation to buy, sell or hold securities and may be revised
or withdrawn by the rating agency at any time. Accordingly, you should consult your own financial and legal advisors as to the
risks entailed by an investment in the Notes and the suitability of investing in the Notes in light of your particular circumstances.
The
Notes are not insured or guaranteed by the FDIC.
The
Notes are not savings accounts, deposits or other obligations of our bank subsidiary or any of our nonbank subsidiaries. The Notes
are not insured by the FDIC or any other governmental agency or public or private insurer. The Notes are ineligible and may not
be used as collateral for a loan by us or the Bank. An investment in the Notes has risks, and you may lose your entire investment.
We cannot
assure you that an active trading market will develop for the Notes.
There is currently
no public trading market for the Notes, and we do not intend to apply for listing of the Notes on any securities exchange
or to have the Notes quoted on a quotation system. Consequently, the Notes will be relatively illiquid and you may be unable to
sell your Notes. Although we have been informed by the underwriters that they intend to make a market in the Notes after the offering
is completed, the underwriters may cease market-making at any time without notice. In addition, the liquidity of the trading market
in the Notes and the market price quoted for the Notes may be adversely affected by changes in the overall market for this type
of security and by changes in our financial performance or prospects or in the prospects for companies in our industry generally.
As a result, we cannot assure you that an active trading market will develop for the Notes. If
an active trading market does not develop or is not maintained, the market price and liquidity of the Notes may be adversely
affected. In that case you may not be able to sell your Notes at a particular time or you may not be able to sell your
Notes at a favorable price.
The
price at which you will sell your Notes prior to maturity will depend on a number of factors and may be substantially less
than the amount you originally invest.
Many factors
affect the trading market for, and the trading value of, the Notes. These factors include: the method of calculating the
principal, premium, if any, interest or other amounts payable, if any, on the Notes; the time remaining to the maturity of
the Notes; the ranking of the Notes; the redemption features of the Notes; the outstanding amount of subordinated notes with
terms identical to the Notes offered hereby; the prevailing interest rates being paid by other companies similar to us; our
financial condition, financial performance and future prospects; the level, direction and volatility of market interest rates
generally; general economic conditions of the capital markets in the United States; and public health outbreaks (including
COVID-19) and geopolitical conditions and other financial, political, regulatory, and judicial events that affect the capital
markets generally. The condition of the financial markets and prevailing interest rates have fluctuated significantly in the
past and are likely to fluctuate in the future. Such fluctuations could adversely affect the trading market (if any) for, and
the market price of, the Notes.
Because
the Notes may be redeemed at our option under certain circumstances prior to their maturity, you may be subject to reinvestment
risk.
Subject
to the prior approval of the Federal Reserve, to the extent that such approval is then required, we may redeem all or a portion
of the Notes on August 15, 2025 and on any interest payment date thereafter prior to their stated maturity date. In addition,
at any time at which any Notes remain outstanding, including prior to August 15, 2025, subject to the prior approval of
the Federal Reserve, to the extent that such approval is then required, we may redeem the Notes in whole but not in part upon
the occurrence of (i) a “Tax Event,” (ii) a “Tier 2 Capital Event” or (iii) a “1940 Act Event.”
In the event that we redeem the Notes, holders of the Notes will receive only the principal amount of the Notes plus any accrued
and unpaid interest to, but excluding, such earlier redemption date. If any redemption occurs, holders of the Notes will not have
the opportunity to continue to accrue and be paid interest to the stated maturity date. Any such redemption may have the effect
of reducing the income or return that you may expect to receive on an investment in the Notes by reducing the term of the investment.
If this occurs, you may not be able to reinvest the proceeds at an interest rate comparable to the rate paid on the Notes. See
“Description of the Notes—Optional Redemption and Redemption Upon Special Events” in this prospectus
supplement.
Investors should
not expect us to redeem the Notes on or after the date on which they become redeemable at our option. Under Federal Reserve regulations,
unless the Federal Reserve authorizes us in writing to do otherwise, we may not redeem the Notes unless they are replaced with
other Tier 2 capital instruments or unless we can demonstrate to the satisfaction of the Federal Reserve that, following redemption,
we will continue to hold capital commensurate with our risk.
The amount
of interest payable on the Notes will vary on and after May 15, 2025 and any interest may be less than the fixed annual rate in
effect until May 15, 2025.
As the interest
rate of the Notes will be calculated based on LIBOR from May 15, 2025 to, but excluding, the maturity date or earlier redemption
date. LIBOR is a floating rate and the interest rate on the Notes will vary on and after May 15, 2025. During this
period, the Notes will bear a floating interest rate set each quarterly interest period at a per annum rate equal to the then-current
Three-Month LIBOR (as defined herein) rate, plus a spread of 536 basis points (5.36%); provided, that in the event
Three-Month LIBOR is less than zero, then the Three-Month LIBOR shall be deemed to be zero. The per annum interest rate that is
determined on the relevant
determination date will apply to the entire quarterly interest period following such determination
date even if LIBOR increases during that period.
Floating
rate notes bear additional significant risks not associated with fixed rate debt securities. These risks include fluctuation of
the interest rates and the possibility that you will receive an amount of interest that is lower than expected. We have no control
over a number of matters, including economic, financial and political events, that are important in determining the existence,
magnitude and longevity of market volatility and other risks and their impact on the value of, or payments made on, the floating
rate Notes.
The
level of LIBOR may affect our decision to redeem the Notes.
We are more
likely to redeem the Notes on or after August 15, 2025 if the interest rate on them is higher than that which would be
payable on one or more other forms of borrowing. If we redeem the Notes prior to their maturity date, holders may not be able
to invest in other securities that yield as much interest as the Notes.
The
historical levels of Three-Month LIBOR are not an indication of the future levels of Three-Month LIBOR. In the past, the level
of Three-Month LIBOR has experienced significant fluctuations.
Historical
levels, fluctuations and trends of Three-Month LIBOR are not necessarily indicative of future levels. Any historical upward or
downward trend in Three-Month LIBOR is not an indication that Three-Month LIBOR is more or less likely to increase or decrease
at any time during the Floating Rate Period (as defined in “Description of the Notes—Interest Rate and Interest Payment Dates—Floating Rate Period” in this prospectus supplement),
and you should not take the historical levels of Three-Month LIBOR as an indication of its future performance.
Uncertainty
relating to the LIBOR calculation process and potential phasing out of LIBOR after 2021 may adversely affect the value of the
Notes.
On
July 27, 2017, the U.K. Financial Conduct Authority, which regulates LIBOR, announced that it will no longer persuade or compel
banks to submit rates for the calculation of LIBOR rates after 2021 (the “July 27th Announcement”). The July 27th
Announcement indicates that the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021. Consequently,
at this time, it is not possible to predict the effect of these changes, whether and to what extent banks will continue to provide
LIBOR submissions to the administrator of LIBOR or whether any additional reforms to LIBOR may be enacted in the United Kingdom
or elsewhere. Similarly, it is not possible to predict whether LIBOR will continue to be viewed as an acceptable benchmark for
securities such as the Notes, what rate or rates may become accepted alternatives to LIBOR or the effect of any such changes in
views or alternatives on the value of LIBOR-linked securities, such as the Notes. Any of the above developments or changes or
any other consequential changes to LIBOR, or any alternative rate or benchmark as a result of any international, national, or
other proposals for reform or other initiatives or investigations, or any further uncertainty in relation to the timing and manner
of implementation of such changes, could have a material adverse effect on the value of the Notes.
If
LIBOR is discontinued, the interest rate during the floating rate period will be calculated using an alternative reference rate.
Although
the initial interest rate on the Notes is fixed, the Notes will bear interest each quarterly interest period at a per annum rate
equal to the then-current Three-Month LIBOR rate, plus a spread of 536 basis points, for each interest period beginning
May 15, 2025. As described under “Description of the Notes—Interest Rate and Interest Payment Dates—Floating
Rate Period,” if we, in our sole discretion, determine that Three-Month LIBOR has been discontinued or is no longer
viewed as an acceptable benchmark for securities, then we may notify the calculation agent of such determination and the calculation
agent shall use, as directed by us, a
substitute or successor base rate for each future interest rate determination date (as defined
in “Description of the Notes” in this prospectus supplement), the alternative
reference rate selected by the central bank, reserve bank, monetary authority or any similar institution (including any committee
or working group thereof) plus an adjustment to such alternative reference rate or the spread thereon, in each case that are consistent
with market practice regarding a substitute for Three-Month LIBOR. Notwithstanding the foregoing, if the Company determines that
there is no alternative reference rate selected by the central bank, reserve bank, monetary authority
or any similar institution (including any committee or working group thereof) that is consistent with market practice regarding
a substitute for Three-Month LIBOR, the Company may, in its sole discretion, appoint an independent financial advisor (“IFA”)
to determine an appropriate alternative rate and any adjustments, and the decision of the IFA shall be binding upon the Company,
the calculation agent and the holders of the Notes.
Our
interests in making the foregoing determinations or adjustments may be adverse to the interests of holders of Notes, and any of
the foregoing determinations or actions by us could result in adverse consequences to the applicable interest rate on the Notes
during a floating rate interest period, which could have a material adverse effect on the return on, value of, and market for
the Notes. We will act initially as the calculation agent for purposes of determining Three-Month LIBOR for each floating rate
interest period.
Holders
of the Notes will have no rights against the publishers of LIBOR.
Holders of the
Notes will have no rights against the publishers of LIBOR, even though the amount they receive on each interest payment date after May
15, 2025 will depend upon the level of LIBOR. The publishers of LIBOR are not in any way involved in this offering and have
no obligations relating to the Notes or the holders of the Notes.
The
U.S. federal income tax consequences are uncertain with respect to the Notes if LIBOR is substituted with an alternative reference
rate.
Recently
proposed U.S. Treasury regulations provide guidance on the U.S. federal income tax consequences of substituting another reference
rate (other than another interbank offered rate) for LIBOR in debt instruments. The proposed U.S. Treasury regulations (which
taxpayers are permitted to rely on pending their finalization) explain that a significant modification of a debt instrument would
generally not result provided that the alternative reference rate is a “qualified rate” and the alteration does not
change the fair market value of the debt instrument. If LIBOR is discontinued, the alternative reference rate in lieu of LIBOR
in the floating rate period and certain other factors related to the Notes would need to meet the requirements of the U.S. Treasury
regulations such that a significant modification of the Notes would not result. We cannot guaranty that a significant modification
would not occur. If such substitution were a significant modification, there would be a deemed exchange of the Notes, which could
trigger recognition of gain or loss for holders of the Notes.
USE
OF PROCEEDS
We estimate that
the net proceeds from this offering (exclusive of accrued interest prior to the date of issuance that is paid by the purchasers),
after deducting underwriting discounts and estimated expenses, will be approximately $36.7 million. We intend to use the
net proceeds from this offering for general corporate purposes, which may include working capital, repurchasing shares of our
common stock, providing capital to support the organic growth of the Bank or funding the opportunistic acquisition of similar
or complementary financial service organizations and may use certain of the net proceeds to repay outstanding indebtedness, including
$30 million that was outstanding as of March 31, 2020 under our line of credit with Texas Capital Bank (which bears interest at
a rate of 4.25% and matures on October 17, 2020). Although our management actively evaluates acquisition opportunities, we do
not have any definitive plans relating to material acquisitions at this time.
Our management
will have broad discretion in the use of the net proceeds from the sale of the Offered Notes. Pending the use of the net
proceeds of this offering as described above, we may invest such proceeds in highly liquid, short-term securities or in deposit
accounts at the Bank.
CAPITALIZATION
The following
table sets forth, on a consolidated basis, our capitalization, including regulatory capital ratios as of March 31, 2020:
|
|
·
|
on
an “as adjusted” basis after giving pro forma effect to the sale of the Original
Notes for total net proceeds of approximately $58.8 million after deducting the underwriting
discounts and estimated expenses, and
|
|
|
·
|
on
an “as further adjusted” basis after giving pro forma effect to the sale
of the Offered Notes for total net proceeds (exclusive of accrued interest prior to the
date of issuance that is paid by the purchasers) of approximately $36.7 million
after deducting the underwriting discounts and estimated expenses.
|
The “as
further adjusted” information below is illustrative only and our capitalization following the closing of this offering
will be adjusted based on the final terms of this offering. You should read this table in conjunction with our consolidated financial
statements and notes thereto for the year ended December 31, 2019, “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” included in our Quarterly Report on Form
10-Q for the period ended March 31, 2020, and the “Use of Proceeds” section included in this prospectus
supplement, together with the other information included or incorporated by reference in this prospectus supplement and the accompanying
prospectus.
|
|
|
As
of March 31, 2020
|
|
|
(Dollars in thousands)
|
|
Actual
(Unaudited)
|
|
As Adjusted
(Unaudited)
|
|
As Further Adjusted
(Unaudited)
|
|
|
Cash and cash equivalents
|
|
$
|
1,010,128
|
|
|
$
|
1,068,928
|
|
|
$
|
1,105,606
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
$
|
7,782,759
|
|
|
$
|
7,782,759
|
|
|
$
|
7,782,759
|
|
|
Borrowings, net
|
|
|
330,000
|
|
|
|
330,000
|
|
|
|
330,000
|
|
|
Accrued interest payable on deposits and borrowings
|
|
|
4,462
|
|
|
|
4,462
|
|
|
|
4,462
|
|
|
Deferred tax liability, net
|
|
|
2,366
|
|
|
|
2,366
|
|
|
|
2,366
|
|
|
Acquisition earn out liability
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Operating lease liability
|
|
|
23,244
|
|
|
|
23,244
|
|
|
|
23,244
|
|
|
5.75% Fixed-to-Floating Rate Subordinated
Notes
|
|
|
—
|
|
|
|
58,800
|
(1)
|
|
|
95,478
|
(2)
|
|
Other accrued expenses
and other liabilities
|
|
|
232,850
|
|
|
|
232,850
|
|
|
|
232,850
|
|
|
Total liabilities
|
|
$
|
8,375,681
|
|
|
$
|
8,434,481
|
|
|
$
|
8,471,159
|
|
|
|
|
As
of March 31, 2020
|
|
|
(Dollars in thousands)
|
|
Actual
(Unaudited)
|
|
As Adjusted
(Unaudited)
|
|
As Further Adjusted
(Unaudited)
|
|
|
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, no par
value; Shares authorized - 150,000;
Series A Shares issued and outstanding - 40,250, 40,250 and 40,250, respectively
Series B Shares issued and outstanding - 80,500, 80,500 and 80,500, respectively
|
|
|
116,079
|
|
|
|
116,079
|
|
|
|
116,079
|
|
Common stock, no par value;
Shares authorized - 45,000,000;
Shares issued - 32,002,728, 32,002,728 and 32,002,728, respectively;
Shares
outstanding - 29,762,578, 29,762,578 and 29,762,578, respectively
|
|
|
295,587
|
|
|
|
295,587
|
|
|
|
295,587
|
|
|
Additional paid-in capital
|
|
|
22,783
|
|
|
|
22,783
|
|
|
|
22,783
|
|
|
Retained earnings
|
|
|
229,382
|
|
|
|
229,382
|
|
|
|
229,382
|
|
|
Accumulated other comprehensive income (loss), net
|
|
|
(14,049
|
)
|
|
|
(14,049
|
)
|
|
|
(14,049
|
)
|
|
Treasury stock (2,240,150, 2,240,150 and
2,240,150 shares, respectively)
|
|
|
(35,402
|
)
|
|
|
(35,402
|
)
|
|
|
(35,402
|
)
|
|
Total shareholders’
equity
|
|
$
|
614,380
|
|
|
$
|
614,380
|
|
|
$
|
614,380
|
|
|
Regulatory Capital Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio
|
|
|
7.19
|
%
|
|
|
7.19
|
%
|
|
|
7.19
|
%
|
|
Common equity tier 1 risk-based capital ratio
|
|
|
8.81
|
%
|
|
|
8.81
|
%
|
|
|
8.81
|
%
|
|
Tier 1 risk-based capital ratio
|
|
|
11.07
|
%
|
|
|
11.07
|
%
|
|
|
11.07
|
%
|
|
Total risk-based capital ratio
|
|
|
11.42
|
%
|
|
|
12.57
|
%
|
|
|
13.29
|
%
|
(1) Represents the aggregate principal amount of the Original
Notes, reduced by the underwriting discounts and estimated expenses.
(2) Represents the aggregate principal amount of the Original
Notes and the Offered Notes (exclusive of accrued interest prior to the date of issuance that is paid by the purchasers),
in each case, reduced by the underwriting discounts and estimated expenses.
DESCRIPTION
OF THE NOTES
We
previously issued $60,000,000 in aggregate principal amount of our Original Notes. We will issue the Offered Notes under
a Second Supplemental Indenture between TriState Capital Holdings, Inc. and the Trustee, to be dated as of the issue date
(the “Second Supplemental Indenture”) that amends and supplements the Original Indenture. We
refer to the Original Indenture, as supplemented by the Second Supplemental Indenture, as the “Indenture.”
You may request a copy of the Indenture from us as described under “Available Information.” We have summarized the
material terms of the Indenture and the Notes below, but the summary does not purport to be complete and is subject to and qualified
in its entirety by reference to the Indenture and the Notes. The following description of the terms of the Indenture and the Notes
supplements and, to the extent inconsistent therewith, replaces and supersedes the description of the general terms and provisions
of the subordinated debt securities in the accompanying base prospectus.
You
should read the Indenture and the Notes because they, and not this description, define your rights as holders of the Notes. For
purposes of this section, references to “we,” “us,” and “our” include only TriState Capital
Holdings, Inc. and not any of its subsidiaries.
General
The Offered
Notes will be unsecured and subordinated obligations of TriState Capital Holdings, Inc. and will be issued as a series of debt
securities under the Indenture, as the same may be supplemented and amended from time to time between us and the Trustee. The
Original Notes and the Offered Notes issued by us will constitute a single series of subordinated securities, in an aggregate
principal amount of $97,500,000. The Notes are solely obligations of TriState Capital Holdings, Inc. and are neither obligations
of, nor guaranteed by, TriState Capital Bank or any of our other subsidiaries. The Notes are not secured by any of our assets.
The Notes are not savings accounts, deposits or other obligations of TriState Capital Bank or any of our other subsidiaries and
are not insured or guaranteed by the FDIC, any other governmental agency or public or private insurer. The terms of the Indenture
permit us to increase the authorized principal amount of any series to provide for additional issuances of such series or issue
additional series of notes under the Indenture. See “—Further Issues.”
The Notes
will mature on May 15, 2030 (the “Maturity Date”), unless previously redeemed or otherwise accelerated. From and including
the date of issuance to, but excluding, May 15, 2025, the Notes will bear interest at a fixed annual interest rate equal
to 5.75%, payable semi-annually in arrears on each May 15 and November 15, commencing November 15, 2020. From and including May
15, 2025 to, but excluding, the maturity date or the date of earlier redemption, the interest rate will reset quarterly to an
annual interest rate equal to the Three-Month LIBOR (as defined herein) plus a spread of 536 basis points, payable quarterly in
arrears on each February 15, May 15, August 15 and November 15, beginning on May 15, 2025. On the maturity date or a date of earlier
redemption, interest will be paid to, but excluding, such date. See “—Interest Rate and Interest Payment Dates”
for additional details. Payment of principal on the Notes may be accelerated only in the case of certain events of bankruptcy
or insolvency. See “—Events of Default; Limitations on Suits.”
Beginning
on August 15, 2025, and on any Interest Payment Date thereafter, we may, at our option, subject to obtaining the prior
approval of the Federal Reserve (or any successor bank regulatory agency) to the extent such approval is then required under the
rules of the Federal Reserve (“Federal Reserve Approval”), redeem the Notes, in whole or in part, at a price equal
to 100% of the principal amount of the Notes to be redeemed plus any accrued and unpaid interest to, but excluding, the redemption
date. Prior to the Maturity Date, we may redeem the Notes, subject to Federal Reserve Approval, in whole, but not in part, upon
the occurrence of a “Redemption Event” (as such term is defined in the Indenture), in each case, at a price equal
to 100% of the principal amount of the Notes to be redeemed plus any accrued and unpaid interest to, but excluding the redemption date. Any partial redemption will be made in
accordance with the applicable procedures of DTC
(as defined below). See “—Optional Redemption and Redemption Upon Special Events.”
The Notes
are not convertible into, or exchangeable for, equity securities, other securities, or assets of TriState Capital Holdings, Inc.
or its subsidiaries. There is no sinking fund for the Notes. Except as described under “—Clearance and Settlement,”
the Notes will be represented by one or more global certificates deposited with or on behalf of The Depository Trust Company (with
its successors, “DTC”) and registered in the name of Cede & Co. or another nominee of DTC. The Notes will be issued
and may be transferred only in minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof in book-entry
form only. See “—Clearance and Settlement.”
As a bank
holding company, our ability to make payments on the Notes will depend primarily on the receipt of interest and other distributions
from TriState Capital Bank. There are various regulatory restrictions on the ability of TriState Capital Bank to pay dividends
or make other distributions to us. See “Risk Factors” in this prospectus supplement.
No recourse
will be available for the payment of principal of, or interest on, any Note, for any claim based thereon, or otherwise in respect
thereof, against any shareholder, employee, officer, or director of TriState Capital Holdings, Inc. or any successor entity. Although
our current Credit Agreement among the lenders party thereto and Texas Capital Bank, as administrative agent, would require us
to seek consent to issue additional debt in certain instances, neither the Indenture nor the Notes contain any covenants or restrictions
restricting the incurrence of debt, deposits, or other liabilities by us or by our subsidiaries. In addition, the Credit Agreement
containing these consent requirements could be terminated at any time and the loan outstanding under the Credit Agreement
may be paid in full following the completion of this offering. The Indenture and the Notes contain no financial covenants and
do not restrict us from paying dividends, selling assets, making investments, or issuing or repurchasing other securities, and
do not contain any provision that would provide protection to the holders of the Notes against a sudden and dramatic decline in
credit quality resulting from a merger, takeover, recapitalization, or similar restructuring or any other event involving us or
our subsidiaries that may adversely affect our credit quality.
We do not
intend to apply for the listing of the Notes on any securities exchange or the quotation of the Notes on any quotation system.
Interest Rate and Interest
Payment Dates
Fixed
Rate Period. From and including the date of original issuance, to but excluding May 15, 2025, or the date of earlier redemption
(the “Fixed Rate Period”), the Notes will bear interest at an initial rate of 5.75% per annum, payable semi-annually
in arrears on May 15 and November 15 of each year (each, a “Fixed Rate Interest Payment Date”), commencing on November
15, 2020. In addition to the public offering price of the Offered Notes that is set forth on the cover page of this prospectus
supplement, purchasers of the Offered Notes will pay accrued interest from May 11, 2020 to, but excluding, the date of issuance
of the Offered Notes. The last Fixed Rate Interest Payment Date for the Fixed Rate Period will be May 15, 2025.
Floating
Rate Period. From and including May 15, 2025, to, but excluding, the Maturity Date or the date of earlier redemption
(the “Floating Rate Period”), the interest rate on the Notes will reset quarterly to an annual interest rate equal
to Three-Month LIBOR plus 536 basis points for each quarterly interest period during the floating rate period, payable
quarterly in arrears on February 15, May 15, August 15 and November 15 of each year (each, a “Floating Rate
Interest Payment Date,” and, together with the Fixed Rate Interest Payment Dates, the “Interest Payment Dates”),
commencing on November 15, 2025.
For the
purpose of calculating the interest on the Notes for each interest period during the Floating Rate Period:
The interest
rate for each Floating Rate Period shall be determined by the calculation agent using Three-Month LIBOR as in effect on the second
(2nd) London Banking Day prior to the beginning of the Floating Rate Period, which date is the “Interest Rate Determination
Date” for the relevant Floating Rate Period. The calculation agent will then add Three-Month LIBOR as determined on the
Interest Rate Determination Date and the applicable spread. Once the interest rate for the Notes is determined, the calculation
agent shall deliver that information to us and the paying agent.
The term
“Business Day” means (a) with respect to any Fixed Rate Interest Payment Date, any weekday in New York, New York that
is not a day on which banking institutions in such city are authorized or required by applicable law, regulation, or executive
order to be closed and (b) with respect to any Floating Rate Interest Payment Date, any weekday in New York, New York that is
not a day on which banking institutions in such city are authorized or required by applicable law, regulation, or executive order
to be closed, and additionally, is a London Banking Day.
The term
“London Banking Day” means any day on which dealings in U.S. dollars are transacted or, with respect to any future
date, are expected to be transacted in the commercial banks are open and dealing in deposits in U.S. dollars in the London interbank
market.
The term
“Three-Month LIBOR” means, shall mean, for each Interest Rate Determination Date related to a Floating Rate Period,
the rate determined by the calculation agent as follows:
(i) the
London interbank offered rate for deposits in U.S. dollars for a three-month period, as that rate appears on Reuters screen page
“LIBOR01” (or any successor or replacement page) at approximately 11:00 a.m., London time, on the relevant Interest
Rate Determination Date.
(ii) If
no offered rate appears on Reuters screen page “LIBOR01” (or any successor or replacement page) on the relevant Interest
Rate Determination Date at approximately 11:00 a.m., London time, then the calculation agent, in consultation with us, shall select
four major banks in the London interbank market and shall request each of their principal London offices to provide a quotation
of the rate at which three-month deposits in U.S. dollars in amounts of at least $1 million are offered by it to prime banks in
the London interbank market, on that date and at that time. If at least two quotations are provided, Three-Month LIBOR shall be
the arithmetic average (rounded upward if necessary to the nearest .00001 of 1%) of the quotations provided. Otherwise, the calculation
agent, in consultation with us, shall select three major banks in New York City and shall request each of them to provide a quotation
of the rate offered by it at approximately 11:00 a.m., New York City time, on the Interest Rate Determination Date for loans in
U.S. dollars to leading European banks for a three-month period for the relevant Floating Rate Period in an amount of at least
$1 million. If three quotations are provided, Three-Month LIBOR shall be the arithmetic average (rounded upward if necessary to
the nearest .00001 of 1%) of the quotations provided. Otherwise, if a LIBOR Event (as defined below) has not occurred, Three-Month LIBOR for the next Floating Rate Period shall be equal to Three-Month LIBOR in effect for the then current Floating Rate Period
or, in the case of the first Floating Rate Period in the Interest Rate Period, the most recent rate on which Three-Month LIBOR
could have been determined in accordance with the first sentence of this paragraph had the interest rate been a floating rate
during the Fixed Rate Period.
(iii) Notwithstanding
subsections (i) and (ii) immediately above, if we, in our sole discretion, determine on the relevant Interest Rate Determination
Date that the Three-Month LIBOR has been discontinued or is no longer viewed as an acceptable benchmark for securities like the
Notes, and we have notified the calculation agent (if we are not then serving as the calculation agent) of such determination
(a “LIBOR Event”), then the calculation agent shall use, as directed by us, as a substitute or successor base rate
(the “Alternative Rate”) for
each future Interest Rate Determination Date, the alternative reference rate selected
by the central bank, reserve bank, monetary authority or any similar institution (including any committee or working group thereof)
that is consistent with market practice regarding a substitute for the Three-Month LIBOR. As part of such substitution, the calculation agent shall, as directed by us,
make such adjustment to the Alternative Rate or the spread thereon, as well as the business day convention, the Interest Rate
Determination Date and related provisions and definitions (“Adjustments”), in each case that are consistent with market
practice for the use of such Alternative Rate. Notwithstanding the foregoing, if we determine that there is no alternative reference
rate selected by the central bank, reserve bank, monetary authority or any similar institution (including any committee or working
group thereof) that is consistent with market practice regarding a substitute for Three-Month LIBOR, we may, in our sole discretion,
appoint an independent financial advisor (“IFA”) to determine an appropriate Alternative Rate and any Adjustments,
and the decision of the IFA shall be binding upon us, the calculation agent and the holders of the Notes. If on any Interest Rate
Determination Date during the Floating Rate Period (which may be the first Interest Rate Determination Date of the Floating Rate
Period) a LIBOR Event has occurred prior to such Interest Rate Determination Date and for any reason an Alternative Rate has not
been determined or there is no such market practice for the use of such Alternative Rate (and, in each case, an IFA has not determined
an appropriate Alternative Rate and Adjustments or an IFA has not been appointed) as of such Interest Rate Determination Date,
then, commencing on such Interest Rate Determination Date, the interest rate, business day convention and manner of calculating
interest applicable during the Fixed Rate Period shall be in effect for the applicable Interest Rate Period and shall remain in
effect during the remainder of the Floating Rate Period.
Calculation
of Interest. Absent manifest error, the determination of the interest rate for an interest period for the Notes by the calculation
agent or, if applicable, by the IFA (defined herein), will be binding and conclusive on you and the Trustee. The calculation agent
will promptly provide its determination of any interest rate during the Floating Rate Period to the Trustee and to us.
Interest
shall be calculated on the basis of a 360-day year consisting of twelve 30-day months during the fixed rate period and, during
the Floating Rate Period, on the basis of a 360-day year and the actual number of days elapsed. Dollar amounts resulting from
that calculation will be rounded to the nearest cent, with one-half cent being rounded upward.
Interest
on the Notes, subject to certain exceptions, will accrue during the applicable interest period. When we use the term “interest
period,” we mean the period from and including the immediately preceding Interest Payment Date in respect of which interest
has been paid or duly provided for or, if no interest has been paid or duly provided for, from and including the date of issuance
of the Notes to, but excluding, the applicable Interest Payment Date or the Maturity Date or date of earlier redemption, if applicable.
If an Interest Payment Date or the Maturity Date falls on a day that is not a Business Day, then the interest payment or the payment
of principal and interest at maturity will be postponed to the next succeeding Business Day, but the payments made on such dates
will be treated as being made on the date that the payment was first due and the holders of the Notes will not be entitled to
any further interest or other payments in respect thereof.
Interest
on each Note will be payable to the person in whose name such Note is registered on the fifteenth day immediately preceding the
applicable Interest Payment Date, whether or not such day is a Business Day. Any interest which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date shall cease to be payable to the holder on the relevant record date by
virtue of having been such holder, and such defaulted interest may be paid by us to the person in whose name the Notes are registered
at the close of business on a special record date for the payment of defaulted interest. However, interest that is paid on the
Maturity Date will be paid to the person to whom the principal is payable. Interest will be payable by wire transfer in immediately
available funds in U.S. dollars to DTC or its nominee or, at our option in the event the Notes are not represented by Global Notes
(as defined below), by check mailed to the address of the person specified for payment in the preceding sentences.
Subordination of the Notes
The Notes
are unsecured, subordinated obligations of TriState Capital Holdings, Inc. Our obligation to make any payment on account
of the Notes will be subordinated and junior to our Senior Indebtedness (as defined in the Indenture and described below). The
Notes will rank equal in right of payment and upon our liquidation with any of our existing and all of our future indebtedness
the terms of which provide that such indebtedness ranks equally with the Notes and senior in right of payment and upon our liquidation
to any of our future indebtedness the terms of which provide that such indebtedness ranks junior in right of payment to the Notes.
The Notes will be effectively subordinated to any secured indebtedness to the extent of the value of the collateral securing such
indebtedness, which means that such creditors generally will be paid from those assets before holders of the Notes would have
any claims to those assets. The Notes and Indenture do not limit the amount of Senior Indebtedness, secured indebtedness, or other
liabilities having priority over, or ranking equally with, the Notes that we or our subsidiaries may hereafter incur.
The Notes
are not guaranteed by any of our subsidiaries, including TriState Capital Bank, which is our principal banking subsidiary,
Chartwell Investment Partners, LLC, or Chartwell TSC Securities Corp. The Notes will be structurally subordinated to the existing
and future indebtedness of our subsidiaries, including without limitation TriState Capital Bank’s depositors and all other
liabilities of our subsidiaries, including liabilities to general creditors, and liabilities arising in the ordinary course of
business or otherwise, which means that such creditors generally will be paid from those subsidiaries’ assets before holders
of the Notes would have any claims to those assets.
The Indenture
and the Notes do not limit the amount of Senior Indebtedness, secured indebtedness, or other liabilities having priority over,
or ranking equally with, the Notes that we or our subsidiaries may hereafter incur. As of March 31, 2020, the Bank and our other
subsidiaries had outstanding indebtedness, total deposits and other liabilities of approximately $8.38 billion, excluding intercompany
liabilities, all of which ranks structurally senior to the Notes. In addition, the $60 million aggregate principal amount of
the Original Notes ranks on a parity with the Offered Notes.
“Senior
Indebtedness” means, without duplication, the principal, premium, if any, unpaid interest (including interest accruing on
or after the filing of any petition in bankruptcy or for reorganization relating to TriState Capital Holdings, Inc., whether or
not a claim for post-filing interest is allowed in such proceeding), fees, charges, expenses, reimbursement, and indemnification
obligations, and all other amounts payable under or in respect of the following indebtedness of TriState Capital Holdings, Inc.,
whether any such indebtedness exists as of the date of the Indenture or is created, incurred or assumed after such date:
|
|
·
|
all obligations for borrowed money;
|
|
|
·
|
all obligations evidenced by debentures, notes, debt securities, or other similar instruments;
|
|
|
·
|
all obligations
in respect of letters of credit, security purchase facilities, or bankers acceptances or similar instruments (or reimbursement
obligations with respect thereto);
|
|
|
·
|
a deferred obligation of ours, or any such obligation directly or indirectly guaranteed by us, incurred
in connection with the acquisition of any business, properties or assets or delivery of services not evidenced by a note or similar
instrument given in connection therewith, except trade accounts payable arising in the ordinary course of business;
|
|
|
·
|
indebtedness secured by any mortgage, pledge, lien, charge, encumbrance, or any security interest
existing on property owned by TriState Capital Holdings, Inc.;
|
|
|
·
|
our obligation to make payment pursuant to the terms of certain financial instruments such as (A)
securities contracts, interest rate, currency future or exchange contracts and foreign exchange contracts, (B) derivative instruments,
such as swap agreements (including interest rate and foreign exchange rate swap agreements), cap agreements, floor agreements,
collar agreements, interest rate agreements, foreign exchange rate agreements, options, commodity futures contracts and commodity
options contracts and (C) financial instruments similar to those set forth in (A) or (B) above;
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an obligation of
ours, or any such obligation directly or indirectly guaranteed by us, for purchased money or funds or similar obligations;
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our obligation under
direct credit substitutes;
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obligations to general
creditors of TriState Capital Holdings, Inc.;
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a deferred obligation
of, or any such obligation, directly or indirectly guaranteed by, TriState Capital Holdings, Inc. which obligation is incurred
in connection with the acquisition of any business, properties, or assets not evidenced by a note or similar instrument given
in connection therewith;
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all obligations of
the type referred to in the foregoing list of other persons or entities for the payment of which TriState Capital Holdings,
Inc. is responsible or liable as obligor, guarantor, or otherwise, whether or not classified as a liability on a balance
sheet prepared in accordance with generally accepted accounting principles in the United States; and
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any renewals, amendments,
deferrals, supplements, extensions, refundings, or replacements of any of the foregoing.
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Senior
Indebtedness excludes:
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any indebtedness,
obligation, or liability referred to in the list above as to which, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such indebtedness, obligation, or liability is not superior in right
of payment to the Notes, or ranks pari passu with the Notes;
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any such indebtedness,
obligation, or liability which is subordinated to indebtedness of TriState Capital Holdings, Inc. to substantially the same
extent as, or to a greater extent than, the Notes are subordinated;
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any indebtedness
to a subsidiary of TriState Capital Holdings, Inc.; and
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the Notes.
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Notwithstanding
the foregoing, if the Federal Reserve (or other applicable regulatory agency or authority) promulgates any rule or issues any
interpretation that defines general creditor(s), the main purpose of which is to establish criteria for determining whether the
subordinated debt of a financial or bank holding company is to be included in its capital, then the term “general creditors”
as used in the definition of “Senior Indebtedness” in the Indenture will have the meaning as described in
that rule or interpretation.
The Notes
are unsecured and are not guaranteed by any of our subsidiaries or affiliates. Any right we have to receive assets
of any of our subsidiaries upon their liquidation or reorganization and the resulting right of the holders of Notes to participate
in those assets effectively will be subordinated to the claims of that subsidiary’s creditors, including trade creditors,
except to the extent that we are recognized as a creditor of the subsidiary, in
which case our claims would be subordinated to
any security interests in the assets of the subsidiary granted to another creditor and any indebtedness of the subsidiary senior
to the debt held by us.
If
we become subject to any receivership, conservatorship, insolvency or similar proceedings, or upon the liquidation, dissolution,
winding up, or reorganization of TriState Capital Holdings, Inc., we must pay to the holders of all Senior Indebtedness the full
amounts of principal of, premium, interest, and any other amounts owing on, that Senior Indebtedness before any payment is made
on the Notes. If, after we have made those payments on our Senior Indebtedness there are amounts available for payment on the
Notes, then we may make full or partial payment on the Notes. Because of the subordination provisions and the obligation to pay
Senior Indebtedness described above, in the event of our insolvency, holders of the Notes may not recover any payments or may
recover less ratably than holders of the Senior Indebtedness and other creditors of ours.
If
the Notes are accelerated, all holders of Senior Indebtedness and any other obligations that are subject to any priority or preferences
under applicable law will be entitled to receive payment in full of all amounts due or to become due before the holders of the
Notes will be entitled to receive any payment of principal or interest on the Notes. In addition, in the event of and during the
continuation of any event of default with respect to any Senior Indebtedness and the holders of Senior Indebtedness have accelerated
the maturity of such Senior Indebtedness due to such event of default, or if any judicial proceeding is pending with respect to
the default in payment or event of default of such Senior Indebtedness, no payment on the principal of or interest on the Notes
will be made unless and until the event of default has been cured or waived or the acceleration rescinded or annulled. If the
event of default is other than for a default in payment of principal, premium or interest or an event of default arising from
an insolvency event, the holders of Senior Indebtedness are required to provide notice to us that the holders have accelerated
the maturity of such Senior Indebtedness.
No Additional Amounts
In the
event that any payment on the Notes is subject to withholding of any U.S. federal income tax or other tax or assessment (whether
as a result of a change in law or otherwise), we will not pay additional amounts with respect to such tax or assessment. For a
discussion relating to certain U.S. federal income tax consequences of the ownership and disposition of the Notes, see “Material
United States Federal Tax Considerations” in this prospectus supplement.
Optional Redemption and
Redemption Upon Special Events
We may,
at our option, beginning on August 15, 2025, and on any Interest Payment Date thereafter, redeem the Notes, in whole or
in part, from time to time, subject to obtaining the Federal Reserve Approval, at a price equal to 100% of the principal amount
of the Notes being redeemed plus interest that is accrued and unpaid to, but excluding, the date of redemption.
In addition,
we may, at our option, redeem the Notes at any time, including prior to August 15, 2025, in whole, but not in part, subject
to obtaining the Federal Reserve Approval, at a redemption price equal to 100% of the principal amount of the Notes being redeemed
plus interest that is accrued and unpaid to, but excluding, the date of redemption, at any time before the Maturity Date, upon
the occurrence of:
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a “Tax Event,”
defined in the Indenture to mean the receipt by us of an opinion of independent tax counsel to the effect that as a result
of (1) an amendment to or change (including any announced prospective amendment or change) in any law or treaty, or any regulation
thereunder, of the United States or any of its political subdivisions or taxing authorities; (2) a judicial decision,
administrative action, official administrative pronouncement, ruling, regulatory procedure, regulation, notice or announcement,
including any notice or announcement of intent to adopt or promulgate any ruling,
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regulatory procedure or regulation (any
of the foregoing, an “Administrative or Judicial Action”); (3) an amendment to or change in any official position
with respect to, or any interpretation of, an Administrative or Judicial Action or a law or regulation of the United States
that differs from the previously generally accepted position or interpretation; or (4) a threatened challenge asserted in writing
in connection with an audit of our federal income tax returns or positions or a similar audit of any of our subsidiaries
or a publicly known threatened challenge asserted in writing against any other taxpayer that has raised capital through the
issuance of securities that are substantially similar to the Notes, in each case, which change or amendment or challenge becomes
effective or which pronouncement, decision or challenge is announced on or after the Issue Date, there is more than an insubstantial
risk that interest payable by us on the Notes is not, or, within 90 days of the date of such opinion, will not be, deductible
by us, in whole or in part, for United States federal income tax purposes;
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a
“Tier 2 Capital Event,” defined in the Indenture to mean our good faith determination that, as a result of (1) any
amendment to, clarification of, or change in (including any announced prospective change), the laws, rules or regulations of the
United States (including, for the avoidance of doubt, any agency or instrumentality of the United States, including the Federal
Reserve and other federal bank regulatory agencies) or any political subdivision of or in the United States that is enacted or
becomes effective after the Issue Date, (2) any proposed change in those laws, rules or regulations that is announced or becomes
effective after the Issue Date, or (3) any official administrative decision or judicial decision or administrative action or other
official pronouncement interpreting or applying those laws, rules, regulations, policies or guidelines with respect thereto that
is announced after the Issue Date, there is more than an insubstantial risk that we will not be entitled to treat the Notes then
outstanding as “Tier 2 Capital” (or its equivalent), for purposes of the capital adequacy rules or regulations of
the Federal Reserve (or, as and if applicable, the capital adequacy guidelines or regulations of any successor appropriate federal
banking agency), as then in effect and applicable, as then in effect and applicable to us, for so long as any Notes are outstanding;
or
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us becoming required
to register as an investment company pursuant to the Investment Company Act of 1940, as amended.
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The
Notes may not otherwise be redeemed prior to the Maturity Date.
In the
event of any redemption of the Notes, we will cause to be delivered a notice of redemption (which notice may be conditional in
our discretion on one or more conditions precedent, and the redemption date may be delayed until such time as any or all of such
conditions have been satisfied or revoked by us if we determine that such conditions will not be satisfied) to each holder of
Notes not less than 10 business days nor more than 60 calendar days prior to the redemption date.
If less
than all the Notes of a series are to be redeemed, the Trustee shall select, pro rata, by lot or in such other manner is
it shall deem appropriate and fair (subject to the customary procedures of any depositary or exchange) the numbers of Notes to be redeemed in whole or in part. If any Note is to be redeemed in part
only, the notice of redemption relating to such Note shall state the portion of the principal amount thereof to be redeemed and
the depositary will request the Trustee to mark down, endorse or return the Note to reflect the reduction in the principal amount
as a result of such partial redemption.
Deemed Exchange
Under general principles of
U.S. federal income tax law, the modification of a debt instrument may result in a deemed exchange of the original debt instrument
for a new debt instrument. Generally, the modification of a debt instrument will result in a deemed exchange if such modification
is “significant” within the meaning of applicable U.S. Treasury regulations. A modification is generally “significant”
if, based on all the facts
and circumstances and taking into account all modifications collectively, the legal rights and obligations
that are altered and the degree to which they are altered are economically significant. If the Notes were treated as significantly
modified, a holder might recognize gain or loss on the deemed exchange of the Notes for “new” notes, and the timing
of a holder’s inclusion of income with respect to the “new” notes might be different from that described above.
Due to the possible discontinuance
of LIBOR, recently proposed U.S. Treasury regulations (which taxpayers are permitted to rely on pending their finalization) provide
guidance where substituting an alternative reference rate that is a “qualified rate” for LIBOR would generally not
result in a significant modification, provided the fair market value of the debt instrument is unchanged. If LIBOR is discontinued,
the alternative reference rate in lieu of LIBOR in the Floating Rate Period and certain other factors related to the Notes would
need to meet the requirements of the U.S. Treasury regulations such that a significant modification of the Notes would not result.
We cannot guaranty that a significant modification would not occur. If such substitution were a significant modification, there
would be a deemed exchange of the Notes, which could trigger recognition of gain or loss for holders of the Notes.
Events of Default; Limitations
on Suits
The Notes
and Indenture provide for only limited events upon which the principal of the Notes may be accelerated. These events are:
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a
court having jurisdiction enters (1) a decree or order for relief in an involuntary case
or proceeding under any applicable bankruptcy or other similar law or (2) a decree or
order adjudging us bankrupt or insolvent, or approving a petition seeking our reorganization,
arrangement, adjustment or composition of or in respect under any applicable law, or
appointing a custodian, liquidator, or other similar official of the Company or of any
substantial part of our property, or ordering the winding up or liquidation of our affairs,
and the continuance of any such decree or order for relief or any such other decree or
order unstayed and in effect for a period of 60 consecutive days;
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the
commencement of a voluntary case or proceeding under any applicable bankruptcy or other
similar law or of any other case or proceeding to be adjudicated bankrupt or insolvent,
or the consent by us to the entry of a decree or order for relief in respect in an involuntary
proceeding under any applicable bankruptcy or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against us, or the filing by us of
a petition or answer or consent seeking reorganization or relief under any applicable
bankruptcy or other similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against us, or the filing by us of a petition or answer or consent
seeking reorganization or relief under any applicable law, or the consent by us to the
filing of such petition or to the appointment of or taking possession by a custodian,
liquidator or similar official of the Company or of any substantial part of our property
or the taking of corporate action by us in furtherance of any such action; or
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the
appointment by a competent government agency having primary regulatory authority over
any Material Bank Subsidiary (as defined below) under any applicable banking, insolvency or similar law
now or the entry of a decree or order in any case or proceeding under any applicable
federal or state banking, insolvency or other similar law now or hereafter in effect
appointing any receiver of any Material Bank Subsidiary.
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A “Material
Bank Subsidiary” means TriState Capital Bank or any successor thereof or any of our subsidiaries that is a depository institution
and that has consolidated assets equal to 80% or more of our consolidated assets.
If any
of the foregoing occurs and is continuing, the principal and interest in respect of the Notes shall automatically, and without
any declaration or other action on the part of the Trustee or any Holder, become immediately due and payable.
The Notes
and Indenture provide for the following additional events of default, which do not permit acceleration of the payment of principal
or interest in respect of the Notes:
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our default in the
payment of any interest upon the Notes, when such interest becomes due and payable, and continuance of such default for a
period of 30 days (whether or not payment thereof is permitted pursuant to the subordination provisions of the Indenture);
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our default in the
payment of the principal of (or premium, if any, on) the Notes when due, whether at maturity, upon redemption,
by acceleration or otherwise (whether or not payment thereof is permitted pursuant to the subordination provisions of the
Indenture); or
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our default in the
performance, or breach, of any term, covenant or agreement in the Indenture applicable to us and the Notes in this series,
and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail,
to us by the Trustee or to us and the Trustee by the holders of at least 25% in aggregate principal amount of the outstanding
Notes a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a
notice of default under the Indenture.
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There
is no right of acceleration in the case of a default in the payment of principal of or interest on the Notes or in our performance
of any other obligation under the Notes or the Indenture. However, if any of the foregoing additional events of default occurs,
then the Trustee may, subject to certain limitations and conditions and the subordination provisions of the Indenture, exercise
all remedies otherwise permitted by applicable law.
The Indenture
provides that the Trustee will be under no obligation to exercise any remedy under the Indenture at the request or direction of
any of the holders of Notes unless such holders shall have offered to the Trustee security or indemnity acceptable to it
against the losses. costs, expenses, and liabilities which may be incurred by it in complying with such request or direction.
Subject to the foregoing and certain other rights of the Trustee, the holders of a majority in principal amount of the outstanding
Notes will have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee, with respect to the Notes. However, the Trustee may refuse to follow
any direction that conflicts with law or the Indenture, may take any other action deemed proper by the Trustee which is not inconsistent
with such direction and the Trustee need not take any action which it in good faith determines might involve it in personal liability
or be unjustly prejudicial to the holders not consenting.
No holder
of Notes will have any right to institute any proceeding, judicial or otherwise, with respect to the Indenture or a Note, or for
the appointment of a receiver or trustee, or for any other remedy under the Indenture, unless:
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such holder has previously
given written notice to the Trustee of a continuing event of default with respect to the Notes;
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the holders of not
less than 25% in aggregate principal amount of the outstanding Notes have made written request to the Trustee to institute
proceedings in respect of such event of default in its own name as Trustee under the Indenture;
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such holder or holders
have offered to the Trustee security or indemnity reasonably acceptable to the Trustee against the costs, expenses,
and liabilities to be incurred in compliance with such request;
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the Trustee for 60
days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and
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no direction inconsistent
with such written request has been given to the Trustee during such 60-day period by the holders of a majority in principal
amount of the outstanding Notes.
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In any
event, the Indenture provides that no holders of Notes shall have any right to affect, disturb or prejudice the rights of any
other holders of securities under the Indenture, or to obtain or to seek to obtain priority or preference over any such holders
or to enforce any right under the Indenture, except in the manner provided in the Indenture and for the equal and ratable benefit
of such holders of securities and the Trustee shall not be obligated to determine if any action of holders is prejudicial to any
other holder.
The Indenture
requires the Trustee to notify the holders of the Notes within 90 days regarding the existence of any default under the Indenture
known by the Trustee, unless the default has been cured or waived. However, except in the case of a payment default of the principal
of or interest on the Notes, the Trustee may withhold notice of a default if and so long as the Trustee in good faith determines
that withholding of such notice is in the interests of the holders of the Notes. For purposes of these requirements, a “default”
means any event which is, or after notice or lapse of time or both would become, an event of default under the Indenture with
respect to the Notes.
We are
required to deliver to the Trustee, within 120 days after the end of each of our fiscal years ending after the issue date of the
Notes, a written statement from our applicable officers regarding whether we have fulfilled all of our obligations under the Indenture
throughout the year and specifying any known default, its status, and steps to cure such default.
Modification and Waiver
The Indenture
provides that we and the Trustee may modify or amend the Indenture with, or, in certain cases, without the consent of the holders
of a majority in principal amount of outstanding Notes; provided that any modification or amendment may not, without the consent
of the holder of each outstanding Note affected thereby:
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reduce the principal
amount thereof or premium, if any, or the rate of interest thereon;
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extend the Maturity
Date of or extend the time of payment of interest thereon;
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modify the Indenture
with respect to the subordination of the Notes in a manner adverse to the holders of the Notes;
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reduce the percentage
in principal amount of the Notes required to consent to any supplemental indenture; or
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modify the provisions
requiring the consent of each holder with respect to modification and waiver.
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In addition,
the holders of a majority in aggregate principal amount of the outstanding Notes may, on behalf of all holders of Notes, waive
compliance by us with terms, conditions, and provisions of the Indenture, as well as any past default and the consequences of
the default, other than any default in the payment of principal or
interest, any breach in respect of a covenant or provision
that cannot be modified or amended without the consent of the holder of each outstanding Note or any Event of Default that permits
the acceleration of the Notes.
In addition,
we and the Trustee may modify and amend the Indenture without the consent of any holders of Notes for any of the following purposes:
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to evidence the succession
of another person to us as obligor under the Indenture;
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to add to our covenants for the protection
of holders of the Notes and to make the occurrence of a default in any of such additional covenants an Event of Default;
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to modify, change,
or eliminate any provisions of the Indenture, if the addition, change, or elimination becomes effective only when there are
no debt securities outstanding of any series issued under the Indenture that are entitled to the benefit of the provision
or if the addition, change or elimination will not apply to any outstanding Notes;
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to cure any ambiguity
or omission or correct or supplement any provision in the Indenture which may be defective or inconsistent with any other
provision in the Indenture;
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to
convey, transfer, assign, mortgage or pledge any property to or with the Trustee or to
make such other provisions in regard to matters or questions arising under the Indenture,
provided such other provisions shall not adversely affect in any material respect the
interests of the holders of the Notes;
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to evidence the acceptance of appointment
by a successor trustee;
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to effect or maintain
the qualification of the Indenture under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”)
and to add certain provisions expressly permitted by the Trust Indenture Act;
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to establish the
form or terms of the Notes;
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to provide for uncertificated
Notes or otherwise alter the Indenture to facilitate the issuance, legending, or transfer of the Notes in a manner that does
not materially adversely affect any holder of the Notes and does not result in any violation of applicable securities law;
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supplement any provisions
of the Indenture necessary to permit or facilitate the defeasance, covenant defeasance or discharge of the Notes, provided
that such action does not adversely affect the interests of the holders of the Notes or any other debt securities issued
under the Indenture;
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to comply with the
rules or regulations of any securities exchange or automated quotation system on which any of the Notes may be listed or traded;
or
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to implement any
Alternative Rate or any transition provisions after a LIBOR Event has occurred (or in anticipation thereof).
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The Trustee
shall be entitled to receive an officer’s certificate and opinion of counsel confirming that the supplemental indenture
complies with the terms of the Indenture.
Legal Defeasance and Covenant
Defeasance
We may
choose to either discharge our obligations under the Indenture and the Notes in a legal defeasance or to release ourselves from
certain or all of our covenant restrictions under the Indenture and the Notes in a covenant defeasance. We may do so after we
irrevocably deposit with the Trustee for the benefit of the holders of the Notes sufficient cash and/or U.S. government securities
to pay the principal of and interest and any other sums due on the Maturity Date or a redemption date of the Notes, as applicable.
If we choose the legal defeasance option, the holders of the Notes will not be entitled to the benefits of the Indenture except
for certain limited rights, including registration of transfer and exchange of Notes, replacement of lost, stolen, or mutilated
Notes and the right to receive payments of the principal of and interest on the Notes when such payments are due. We may discharge
our obligations under the Indenture or release ourselves from covenant restrictions only if we meet certain requirements, including,
among other things, providing an opinion of counsel, not having a default under the Indenture or the Notes, the discharge may
not cause the Trustee to have a conflicting interest for purposes of the Trust Indenture Act, and the discharge may not result
in our becoming an investment company under the Investment Company Act of 1940, as amended.
Any defeasance
of the Notes pursuant to the Indenture shall be subject to our obtaining the prior approval of the Federal Reserve and any additional
requirements that the Federal Reserve may impose with respect to defeasance of the Notes. Notwithstanding the foregoing, if, due
to a change in law, regulation, or policy subsequent to the issue date of the Notes the Federal Reserve does not require that
defeasance of instruments be subject to Federal Reserve approval in order for the instrument to be accorded Tier 2 capital treatment,
then no such approval of the Federal Reserve will be required for such defeasance.
Satisfaction and Discharge
We may
discharge our obligations under the Indenture with respect to the Notes (except for certain surviving rights of the Trustee and
our obligations in connection therewith) if:
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(i)
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all outstanding
Notes and all other outstanding debt securities issued under the Indenture
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(a)
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have
been delivered for cancellation; or
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(b)
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(1)
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have
become due and payable,
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(2)
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will become due and
payable at their stated maturity within one year, or
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(3)
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are to be called
for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice and redemption by the
Trustee
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(and
in each case, we have irrevocably deposited with the Trustee an amount sufficient to pay and discharge the principal of
and interest on all outstanding Notes and any other sums due on the stated Maturity Date or redemption date, as the case may
be);
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(ii)
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we have
paid all other sums payable by us with respect to the Notes; and
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(iii)
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we have
delivered an officer’s certificate and opinion of counsel confirming that all conditions precedent with respect to the
satisfaction and discharge (or any defeasance) of the Indenture have been satisfied.
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Consolidation, Merger and
Sale of Assets
The Indenture
provides that we may not consolidate with or merge into any other person or sell or convey all or substantially all of our and
our subsidiaries’ assets to any person unless:
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either
the we shall be the continuing corporation, or the successor corporation shall be a corporation organized and existing
under the laws of the United States of America and such corporation shall expressly assume the payment of the principal of
(and premium, if any, on) and any interest on all the Notes and our obligations under the Indenture; and
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we
or such successor corporation shall not, immediately after such merger or consolidation, or such sale or conveyance, be in
default under the Indenture.
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Further Issues
If no Event
of Default has occurred and is continuing with respect to the Notes, we may, from time to time, without notice to or the consent
of the holders of the Notes, create and issue additional notes under the Indenture ranking equally with the Notes and with identical
terms in all respects (or in all respects except for the offering price, the payment of interest accruing prior to the issue date
of such additional Notes and the first payment of interest following the issue date of such additional Notes); provided, however,
that a separate CUSIP number will be issued for any such additional Notes unless such additional Notes are fungible with the Notes
for U.S. federal income tax purposes, subject to the procedures of DTC. In addition, we may, from time to time, create and issue
other series of subordinated debt securities under the Indenture having different terms than the Notes.
Determinations and Decisions
We, the
calculation agent, and IFA are expressly authorized to make certain determinations, decisions, and elections under the terms of
the Notes, including with respect to an Alternative Rate for the use of Three-Month LIBOR for the Floating Rate Period. Any determination,
decision, or election that may be made by us or by the calculation agent under the terms of the Notes, including any determination
with respect to a tenor, rate, or adjustment, business day convention and manner of calculating interest or of the occurrence
or non-occurrence of an event, circumstance, or date and any decision to take or refrain from taking any action or any selection:
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will be conclusive
and binding on the holders of the Notes and the Trustee absent manifest error;
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if made by us, will
be made in our sole discretion;
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if made by the calculation
agent, will be made after consultation with us, and the calculation agent will not make any such determination, decision,
or election to which we reasonably object; and
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notwithstanding anything
to the contrary in the Indenture, shall become effective without consent from the holders of the Notes or the Trustee.
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The Indenture
provides that the Trustee will have no liability relating to any delay caused by the calculation agent’s failure to timely
or appropriately determine the rate of interest borne by the Notes and certain other actions related to Three-Month LIBOR.
Calculation Agent
We will
appoint a calculation agent for the Notes prior to the commencement of the Floating Rate Period. We or an affiliate of ours may
assume the duties of the calculation agent.
Paying Agent
We may
appoint one or more financial institutions to act as our paying agents, at whose designated offices the Notes in non-global form
may be surrendered for payment at their maturity. We call each of those offices a paying agent. We may add, replace, or terminate
paying agents from time to time. We may also choose to act as our own paying agent. Initially, we have appointed the Trustee,
at its principal corporate trust office at U.S. Bank National Association, 100 Wall Street, 6th Floor, New York, New York 10005,
as the paying agent for the Notes.
Governing Law
The Indenture
provides that the Notes will be governed by, and construed in accordance with, the laws of the State of New York.
Tier 2 Capital
The Notes
are intended to qualify as Tier 2 capital under the capital adequacy rules established by the Federal Reserve for bank holding
companies, as the same may be amended or supplemented from time to time. The rules set forth specific criteria for instruments
to qualify as Tier 2 capital. Among other things, the Notes must:
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have a minimum original
maturity of at least five years;
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be subordinated to
our general creditors;
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not contain provisions
permitting the holders of the Notes to accelerate payment of principal prior to maturity except in the event of receivership,
insolvency, liquidation, or similar proceedings of a bank holding company or a major bank subsidiary;
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only be callable
after a minimum of five years following issuance, except upon the occurrence of a “Tax Event” or a “Tier
2 Capital Event” (as such terms are defined in the Indenture) or if we are required to register as an investment company
pursuant to the Investment Company Act of 1940, as amended, and, in any case, subject to obtaining the prior approval of the
Federal Reserve to the extent such approval is then required under the rules of the Federal Reserve; and
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unless the Federal
Reserve authorizes us to do otherwise in writing, not be redeemed or repurchased unless they are replaced with an equivalent
amount of other Tier 2 capital instruments or we can demonstrate to the satisfaction of the Federal Reserve that following
redemption, we will continue to hold capital commensurate with our risk.
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Clearance and Settlement
Ownership of
the Offered Notes will be represented by one or more global certificates, which we refer to individually as a “Global
Note” and collectively as the “Global Notes,” deposited with or on behalf of DTC and registered in the name
of Cede & Co. or another nominee of DTC. The Offered Notes will be available for purchase in minimum denominations
of $1,000 and integral multiples of $1,000 in excess thereof in book-entry form only. So long as DTC or any successor depositary,
which we refer to collectively as the “Depositary,” or its nominee is the registered owner of the Global Notes, the
Depositary, or such nominee, as the case may be, will be considered to be the sole owner or holder of the Offered Notes
for all purposes of the Indenture. Upon the
issuance of the Offered Notes and the deposit of the Global Note or Global
Notes representing the Offered Notes with or on behalf of DTC, DTC will immediately credit, on its book-entry registration
and transfer system, the respective principal amounts of the Offered Notes represented by such certificate or certificates
to the accounts of the participants. The accounts to be credited will be designated by the purchasers of the Offered Notes.
Investors may not elect to receive a certificate representing their Offered Notes while the Offered Notes are held
by the Depositary. Investors may elect to hold interests in the Global Notes through DTC either directly if they are participants
in DTC or indirectly through organizations that are participants in DTC.
The laws
of some jurisdictions may require that some purchasers of securities take physical delivery of securities in definitive form.
These laws may impair the ability to transfer beneficial interests in the Notes, so long as the corresponding securities are represented
by Global Notes.
DTC has
advised us that it is a limited-purpose trust company organized under the New York Banking Law, a “banking organization”
within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within
the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions
of Section 17A of the Exchange Act. DTC holds securities that its direct participants deposit with DTC. DTC also facilitates the
post-trade settlement among participants of sales and other securities transactions in deposited securities, through electronic
computerized book-entry transfers and pledges between participants’ accounts. This eliminates the need for physical movement
of securities certificates. Direct participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is a wholly owned subsidiary of The Depository Trust & Clearing
Corporation, which, in turn, is owned by a number of direct participants of DTC. Access to the DTC system is also available to
others, referred to as indirect participants, such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies,
and clearing corporations that clear through or maintain a direct or indirect custodial relationship with a direct participant.
The rules applicable to DTC and its participants are on file with the SEC.
Persons
that are not participants may beneficially own securities held by or on behalf of DTC only through the participants or the indirect
participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are
recorded on the records of the participants and the indirect participants. Beneficial owners will not receive written confirmation
from DTC of their purchase. Beneficial owners are, however, expected to receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the direct or indirect participant through which the beneficial
owner entered into the transaction. Under a book-entry format, holders may experience some delay in their receipt of payments,
as such payments will be forwarded by the Depositary to Cede & Co., as nominee for DTC. DTC will forward the payments to its
participants, who will then forward them to indirect participants or holders. Beneficial owners of securities other than DTC or
its nominees will not be recognized by the relevant registrar, transfer agent, paying agent, or trustee as registered holders
of the securities entitled to the benefits of the Indenture. Beneficial owners that are not participants will be permitted to
exercise their rights only indirectly through and according to the procedures of participants and, if applicable, indirect participants.
To facilitate
subsequent transfers, all securities deposited by direct participants with DTC are registered in the name of DTC’s partnership
nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of securities
with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial
ownership. DTC has no knowledge of the actual beneficial owners of the securities; DTC’s records reflect only the identity
of the direct participants to whose accounts the securities are credited, which may or may not be the beneficial owners. The direct
and indirect participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance
of redemption notices and other communications by DTC to direct participants, by direct participants to indirect participants,
and by direct and indirect participants to beneficial owners will be governed
by arrangements among them, subject to any statutory
or regulatory requirements as may be in effect from time to time. If less than all of the securities of any class are being redeemed,
then DTC will determine the amount of the interest of each direct participant to be redeemed in accordance with its then current
procedures.
Neither
DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to any securities unless authorized by a
direct participant in accordance with DTC’s procedures. Under its usual procedures, DTC mails an omnibus proxy to the issuer
as soon as possible after the record date. The omnibus proxy assigns Cede & Co.’s consenting or voting rights to those
direct participants to whose accounts securities are credited on the record date (identified in a listing attached to the omnibus
proxy).
DTC may
discontinue providing its services as securities Depositary with respect to the Notes at any time by giving reasonable notice
to the issuer or its agent. Under these circumstances, in the event that a successor securities Depositary is not obtained, certificates
for the Notes are required to be printed and delivered. We may decide to discontinue the use of the system of book-entry-only
transfers through DTC (or a successor securities Depositary), in which case certificates for the Notes will be printed and delivered.
As long
as DTC or its nominee is the registered owner of the Global Notes, DTC or its nominee, as the case may be, will be considered
the sole owner and holder of the Global Notes and all securities represented by these certificates for all purposes under the
instruments governing the rights and obligations of holders of such securities. Except in the limited circumstances referred to
above, owners of beneficial interests in Global Notes:
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will not be entitled
to have such global security certificates or the securities represented by these certificates registered in their names;
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will not receive
or be entitled to receive physical delivery of securities certificates in exchange for beneficial interests in global security
certificates; and
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will not be considered
to be owners or holders of the global security certificates or any securities represented by these certificates for any purpose
under the instruments governing the rights and obligations of holders of such securities.
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All redemption
proceeds, distributions, and interest payments on the securities represented by the Global Notes and all transfers and deliveries
of such securities will be made to DTC or its nominee, as the case may be, as the registered holder of the securities. DTC’s
practice is to credit direct participants’ accounts upon DTC’s receipt of funds and corresponding detail information
from the issuer or its agent, on the payable date in accordance with their respective holdings shown on DTC’s records. Payments
by participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of
that participant and not of DTC, the Depositary, the issuer, the Trustee or any of their agents, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and interest payments to Cede
& Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the issuer
or its agent, disbursement of such payments to direct participants will be the responsibility of DTC, and disbursement of such
payments to the beneficial owners will be the responsibility of direct and indirect participants.
Ownership
of beneficial interests in the Global Notes will be limited to participants or persons that may hold beneficial interests through
institutions that have accounts with DTC or its nominee. Ownership of beneficial interests in Global Notes will be shown only
on, and the transfer of those ownership interests will be effected only through, records maintained by DTC or its nominee, with
respect to participants’ interests, or any participant, with respect to interests of persons held by the participant on
their behalf. Payments, transfers, deliveries, exchanges, redemptions, and other matters relating to beneficial interests in Global
Notes may be
subject to various policies and procedures adopted by DTC from time to time. None of TriState Capital Holdings, Inc.,
the Trustee, or any agent for any of them will have any responsibility or liability for any aspect of DTC’s or any direct
or indirect participant’s records relating to, or for payments made on account of, beneficial interests in Global Notes,
or for maintaining, supervising, or reviewing any of DTC’s records or any direct or indirect participant’s records
relating to these beneficial ownership interests.
Although
DTC has agreed to the foregoing procedures in order to facilitate transfer of interests in the Global Notes among participants,
DTC is under no obligation to perform or continue to perform these procedures, and these procedures may be discontinued at any
time. Neither TriState Capital Holdings, Inc. nor the Trustee will have any responsibility for the performance by DTC or its direct
participants or indirect participants under the rules and procedures governing DTC.
Because
DTC can act only on behalf of direct participants, who in turn act only on behalf of direct or indirect participants, and certain
banks, trust companies, and other persons approved by it, the ability of a beneficial owner of securities to pledge them to persons
or entities that do not participate in the DTC system may be limited due to the unavailability of physical certificates for the
securities.
DTC has
advised that it will take any action permitted to be taken by a registered holder of any securities under the Indenture, only
at the direction of one or more participants to whose accounts with DTC the relevant securities are credited.
The information
in this subsection concerning DTC and its book-entry system has been obtained from sources that we believe to be accurate, but
we assume no responsibility for the accuracy thereof.
Trustee
U.S. Bank
National Association is acting as Trustee under the Indenture.
Notices
Notices
to the Holders of individual certificates will be given to such holders at their respective addresses in the Register, or in the
case of Global Notes, electronic delivery in accordance with DTC’s applicable procedures.
MATERIAL
UNITED STATES FEDERAL TAX CONSIDERATIONS
The following
is a general discussion of material U.S. federal income tax consequences of the acquisition, ownership and disposition of the
Offered Notes offered hereby. This summary is for general information only, does not provide a complete analysis of all
potential tax considerations, and is based on the Internal Revenue Code of 1986, as amended (the “Code”), administrative
pronouncements, judicial decisions and final, temporary and proposed regulations of the United States Department of Treasury,
or the Treasury Regulations, as well as existing interpretations relating thereto, all as of the date hereof, and changes to any
of which subsequent to the date of this prospectus supplement may affect the tax consequences described herein (possibly with
retroactive effect). As a result, the tax considerations when acquiring, owning or disposing of the Offered Notes could
differ from those described below.
We have not sought,
and will not seek, any ruling from the Internal Revenue Service (the “IRS”) with respect to the statements made and
the conclusions reached in this summary including our conclusion that this offering will be treated as a “qualified reopening,”
and we cannot assure you that the IRS will agree with such statements and conclusions nor that the IRS will not assert, or
a court would not sustain, a challenge to one or more of the tax consequences described below. The offering of the Offered
Notes will be a qualified reopening for United States federal income tax purposes. Accordingly, the Offered Notes will have same
issue price and issue date as the Original Notes and will be treated as part of the same issue for United States federal income
tax purposes as the Original Notes.
Except where
otherwise noted, this discussion addresses only those beneficial owners of the Offered Notes that purchase their Offered Notes
in the offering and that hold the Notes as “capital assets” within the meaning of Section 1221 of the Code
for U.S. federal income tax purposes (generally, property held for investment). This summary does not address the tax consequences
to subsequent purchasers of the Notes or any persons who hold the Notes for any reason other than as capital assets. In addition,
this summary does not address the potential application of the Medicare contribution tax on net investment income or the tax laws
of any state, local or non-U.S. jurisdiction or U.S. federal tax laws (such as estate and gift taxes) other than U.S. federal
income tax law, nor does it address any consequences that may result pursuant to Treasury Regulations promulgated under Section
385 of the Code with respect to any holder that is considered related to us for purposes of such Treasury Regulations. We intend,
and by acquiring any Offered Notes each beneficial owner of an Offered Note will agree, to treat the Offered Notes as indebtedness
for U.S. federal income tax purposes, and this discussion assumes such treatment.
This discussion
does not address all aspects of U.S. federal income taxation that may be applicable to beneficial owners of the Offered
Notes in light of their particular circumstances, or to a class of beneficial owners subject to special treatment under U.S. federal
income tax laws, such as:
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entities
treated as partnerships or S corporations for U.S. federal income tax purposes or persons
who hold the Offered Notes through entities treated as partnerships or S corporations
for U.S. federal income tax purposes,
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financial
institutions and banks,
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qualified
insurance plans,
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tax-exempt
organizations,
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qualified
retirement plans and individual retirement accounts,
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brokers,
dealers or traders in securities or currencies,
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regulated
investment companies,
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real
estate investment trusts or grantor trusts,
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persons
whose functional currency is not the U.S. dollar,
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persons
subject to the alternative minimum tax provisions of the Code,
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persons
who purchase or sell the Offered Notes as part of a wash sale,
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persons
who hold the Offered Notes as part of a “hedge,” “straddle”
or other risk reduction mechanism, “constructive sale” or “conversion
transaction,” as these terms are used in the Code,
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certain
U.S. expatriates,
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persons
subject to special tax accounting rules as a result of any item of gross income with
respect to the Offered Notes being taken into account in an applicable financial
statement (as defined in Section 451 of the Code),
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Non-U.S.
Holders (as defined below) who are present in the United States for 183 days or more
in a taxable year, and
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controlled
foreign corporations and passive foreign investment companies and shareholders of such
corporations.
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You are urged
to consult your tax advisor with regard to the application of the U.S. federal income tax laws to your particular situation as
well as any tax consequences arising under other U.S. federal tax laws or the laws of any state, local or non-U.S. taxing jurisdiction.
Tax Consequences to U.S.
Holders
This section
applies to you if you are a “U.S. Holder.” As used herein, the term “U.S. Holder” means a beneficial owner
of an Offered Note that is, for U.S. federal income tax purposes:
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an
individual citizen or resident of the United States,
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a
corporation, or other entity treated as a corporation for U.S. federal income tax purposes,
created or organized in or under the laws of the United States, any state therein or
the District of Columbia,
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an
estate, the income of which is subject to U.S. federal income taxation regardless of
its source, or
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a
trust: (a) if a court within the United States is able to exercise primary supervision
over its administration and one or more United States persons have authority to control
all substantial decisions of the trust; or (b) it has a valid election in effect
under applicable Treasury Regulations to be treated as a United States person for U.S.
federal income tax purposes.
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If any entity
treated as a partnership for U.S. federal income tax purposes is a beneficial owner of Offered Notes, the treatment of
a partner in the partnership generally will depend upon the status of the partner and upon the activities of the partner and the
partnership. Partnerships and partners in partnerships considering an investment in the Offered Notes are urged to consult
their tax advisors about the U.S. federal income tax consequences of acquiring, owning and disposing of Notes.
Payments of
Interest and Original Issue Discount on the Offered Notes. The Offered Notes will initially bear interest at a fixed annual
rate. From and including May 15, 2025, the Offered Notes will bear interest at a variable rate equivalent to Three-Month LIBOR
plus a fixed mark-up. A U.S. Holder will be required to recognize as ordinary income any interest paid or accrued on the Offered
Notes (not including any pre-issuance accrued interest, as described below), in accordance with the holder’s regular method
of tax accounting. A portion of the initial purchase price of the Offered Notes is attributable to pre-issuance accrued interest,
which accrued from the issue date of the Original Notes. This amount will be treated as a return of the initial purchase price
when the first payment of interest is made, and reduce the amount treated as interest on the Offered Notes.
Amortizable
bond premium. A U.S. holder who purchases an Offered Note for an amount greater than its principal amount will be treated
as acquiring the Offered Notes with amortizable bond premium. For this purpose, the initial purchase price of an Offered Note
will not include amounts paid in respect of pre-issuance accrued interest as described above. A U.S. holder that acquires
an Offered Note with amortizable bond premium may elect to amortize the premium, under a constant yield method, over the term
of the Offered Notes, which will reduce the amount of interest income required to be included in the U.S. holder’s gross income.
An election to amortize bond premium applies to all taxable debt instruments then owned by the U.S. holder and may be revoked
only with the consent of the IRS.
Sale, Exchange,
Redemption, Retirement or Other Taxable Disposition. Upon the sale, exchange, redemption, retirement or other taxable disposition
(including early redemption) of a Note, a U.S. Holder generally will recognize taxable gain or loss equal to the difference between
the (i) amount of cash and the fair market value of any property received (excluding any amount attributable to accrued but unpaid
interest, which will be taxable as ordinary interest income to the extent the U.S. Holder has not previously included the accrued
interest in income) and (ii) such U.S. Holder’s adjusted tax basis in the Offered Note. A U.S. Holder’s adjusted
tax basis in the Offered Note generally will equal the cost of the Offered Note to the U.S. Holder less pre-issuance
accrued interest less any principal payments received by such U.S. Holder. Any gain or loss generally will be capital gain
or loss, and will be long-term capital gain or loss if, at the time of the disposition, the U.S. Holder has held the Offered
Note for more than one year. Long-term capital gains recognized by certain non-corporate U.S. Holders (including certain individuals)
are generally subject to preferential tax rates. The deductibility of capital losses may be subject to limitations. U.S. Holders
are urged to consult their tax advisor regarding such limitations.
Backup Withholding
and Information Reporting. Information returns generally will be filed with the IRS in connection with interest payments on
the Offered Notes and the proceeds from a sale or other disposition (including a retirement or redemption) of the Notes
unless the U.S. Holder is an exempt recipient and, if requested, certifies as to that status. Backup withholding (currently at
a rate of 24%) may be imposed on these payments unless the U.S. Holder provides the applicable withholding agent with a correct
taxpayer identification number, or TIN, certifies under penalties of perjury, that the TIN is correct as well as certain other
information, including that the holder has not been notified by the IRS that it is subject to backup withholding due to a prior
underreporting of interest or dividends, or otherwise establishes an exemption from backup withholding. Backup withholding is
not an additional tax; the amount of any backup withholding from a payment to a U.S. Holder generally will be allowable as a credit
against the U.S. Holder’s U.S. federal income tax liability, and the U.S. Holder may be entitled to a refund of any amounts
withheld under the backup withholding rules that exceed such U.S. Holder’s income tax liability, provided in each case the
required information is timely furnished to the IRS. U.S. Holders are urged to consult their tax advisor regarding qualification
for an exemption from backup withholding and the procedures for establishing such exemption, if applicable.
Tax Consequences to Non-U.S.
Holders
You are a “Non-U.S.
Holder” for purposes of this discussion if you are a beneficial owner of the Offered Notes that is an individual,
corporation, estate or trust for U.S. federal income tax purposes and, in each case, is not a U.S. Holder.
Withholding.
Subject to the discussions below under “—Information Reporting and Backup Withholding” and “—FATCA
Withholding,” payments of principal and interest on the Notes to any Non-U.S. Holder, and gain realized on any sale,
exchange, or other disposition of the Offered Notes by a Non-U.S. Holder will be exempt from U.S. federal income and withholding
tax provided that:
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such
payments and gain are not effectively connected with the conduct by such Non-U.S. Holder
of a trade or business in the United States (or, if a treaty applies, are not attributable
to a permanent establishment or fixed base maintained by the Non-U.S. Holder in the United
States);
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such
Non-U.S. Holder does not own, actually or constructively, 10 percent or more of the total
combined voting power of all classes of our voting stock;
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such
Non-U.S. Holder is not a controlled foreign corporation (as defined in Section 957(a)
of the Code that, for U.S. federal income tax purpose is related (within the meaning
of Section 864(d)(4) of the Code) to us;
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the
Non-U.S. Holder is not a bank that is receiving the interest on an extension of credit
made pursuant to a loan agreement entered into in the ordinary course of its trade or
business; and
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the
statement requirement set forth in Section 871(h) or Section 881(c) of the Code has been
fulfilled with respect to the beneficial owner, as discussed below.
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The statement
requirement referred to in the preceding paragraph will generally be fulfilled if the Non-U.S. Holder provides a properly executed
IRS Form W-8BEN or W-8BEN-E (or appropriate substitute or successor form or such other form as the IRS may prescribe) to the applicable
withholding agent certifying, under penalties of perjury, that it is not a “United States person” (as defined in the
Code) and provides it name and address. If the Non-U.S. Holder holds the Offered Notes through a financial institution
or other agent acting on its behalf, such holder may be required to provide the appropriate certifications to its agent. The holder’s
agent may then be required to provide the appropriate certifications to the applicable withholding agent, either directly or through
other intermediaries. Special rules apply to foreign estates and trusts, and in certain circumstances, certifications as to foreign
status of trust owners or beneficiaries may have to be provided to the applicable withholding agent. In addition, special rules
apply to qualified intermediaries that enter into withholding agreements with the IRS.
A Non-U.S. Holder
that cannot satisfy the “portfolio interest exemption” requirements described in the preceding paragraphs generally
will be subject to U.S. federal withholding tax at the rate of 30% with respect to payments of interest on the Offered
Notes, unless (i) the Non-U.S. Holder provides a properly completed IRS Form W-8BEN or Form W-8BEN-E (or any applicable successor
form) and other required documentation evidencing its entitlement to an exemption from (or a reduction of) withholding under an
applicable income tax treaty, or (ii) the Non-U.S. Holder provides a properly completed IRS W-8ECI stating that the payments of
interest on the Offered Notes are effectively connected with the conduct by the Non-U.S. Holder of a trade or business
in the United States (and, in the event that an income tax treaty is applicable, payments of interest are also attributable to
a U.S. permanent establishment or fixed base maintained by such Non-U.S. Holder in the United States) and the Non-U.S. Holder
meets the certification requirement discussed in the following section.
Non-U.S. Holders
should consult their tax advisors about the specific methods for satisfying these requirements. A claim for exemption will not
be valid if the person receiving the applicable form has actual knowledge or reason to know that the statements on the form are
false.
Income or
Gain Effectively Connected with a U.S. Trade or Business. If a Non-U.S. Holder is engaged in a trade or business in the United
States, and if interest on the Offered Notes or gain from the sale, exchange, or other disposition of the Offered
Notes is effectively connected with the conduct of such trade or business (and, if a treaty applies, such income or gain is attributable
to a permanent establishment or fixed base maintained
by such Non-U.S. Holder in the United States), the Non-U.S. Holder generally
will be subject to U.S. federal income tax on such interest or gain in the same manner as if it were a U.S. Holder. In lieu of
the certification described above under the heading “—Withholding,” such Non-U.S. Holder will be required
to provide to the applicable withholding agent a properly executed IRS Form W-8ECI (or appropriate substitute form) in order to
claim an exemption from withholding tax. In addition, if such a Non-U.S. Holder is a foreign corporation, it may be subject to
a branch profits tax, at a 30% rate (or such lower rate provided by an applicable treaty), on its effectively connected earnings
and profits for the taxable year, subject to certain adjustments.
Sale,
Exchange, Redemption, Retirement or Other Taxable Disposition. Subject to the discussions of FATCA and Information Reporting
and Backup Withholding below, except with respect to accrued and unpaid interest (which is subject to the rules discussed above
under “—Withholding”), a Non-U.S. Holder will generally not be subject to United States federal income
tax or withholding tax on gain realized on the sale, exchange or other disposition of the Offered Notes, unless (a) that
holder is an individual who is present in the United States for 183 days or more during the taxable year of the disposition and
certain other requirements are met or (b) the gain is effectively connected with the conduct of a United States trade or business
of the holder (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment or fixed
base maintained in the United States by the Holder). If the exception under (a) applies, the Non-U.S. holder will generally be
subject to tax equal to 30% on the gain realized except as provided under an applicable treaty. If the exception under (b) applies,
the Non-U.S. Holder will be subject to U.S. federal income tax in the same manner as a U.S. Holder unless an applicable treaty
provides otherwise, and if such holder is a corporation, it may be subject to an additional branch profits tax at a rate of 30%
(or such lower rate provided by an applicable treaty).
Information
Reporting and Backup Withholding. Any payments of interest on the Notes to a Non-U.S. Holder will generally be reported to
the IRS and to the Non-U.S. Holder. Copies of these information returns also may be made available under the provisions of a specific
treaty or agreement to the tax authorities of the country in which the Non-U.S. Holder is a resident. Backup withholding (currently
at a rate of 24%) generally will not apply to “reportable payments” if a Non-U.S. Holder satisfies the statement requirement
described under “—Withholding” above, or the holder otherwise establishes an exemption, provided that
no applicable withholding agent has actual knowledge or reason to know that the holder is a United States person. The proceeds
of a disposition (including a retirement or redemption) effected outside the United States by a Non-U.S. Holder of the Offered
Notes to or through a foreign office of a broker generally will not be subject to backup withholding or related information
reporting. However, the proceeds of a disposition effected at a foreign office of a broker will be subject to information reporting
and backup withholding if the proceeds are transferred to an account maintained by the Non-U.S. Holder in the United States, the
payment of proceeds or the confirmation of the sale is mailed to the Non-U.S. Holder at a United States address, or the sale has
some other specified connection with the United States as provided in the Treasury Regulations, unless that broker has documentary
evidence in its files of such holder’s status as a Non-U.S. Holder or an exemption is otherwise established, provided that
no applicable withholding agent has actual knowledge or reason to know that the holder is a United States person. If that broker
is, however, for U.S. tax purposes, a United States person, a controlled foreign corporation, a foreign person 50% or more of
whose gross income from all sources for certain periods is effectively connected with a trade or business within the United States
for a specified three-year period, or a foreign partnership that is engaged in the conduct of a trade or business in the United
States or that has one or more partners that are United States persons who in the aggregate hold more than 50% of the income or
capital interests in the partnership, such information reporting requirements will apply (but backup withholding generally will
not apply) unless that broker has documentary evidence in its files of such holder’s status as a Non-U.S. Holder or an exemption
is otherwise established, provided that no applicable withholding agent has actual knowledge or reason to know that the holder
is a United States person. Backup withholding is not an additional tax; any amounts withheld under the backup withholding
rules will generally be allowed as a credit against the Non-U.S. Holder’s U.S. federal income tax liability and the Non-U.S.
Holder may be entitled to a refund of any amounts withheld under the backup withholding rules that exceed such Non-U.S. Holder’s
income tax liability, provided in each case the
required information is timely furnished to the IRS. The information reporting
requirements may apply regardless of whether backup withholding is required.
FATCA Withholding
Sections 1471
through 1474 of the Code and applicable Treasury Regulations thereunder (commonly referred to as “FATCA”) impose a
30% withholding tax on “withholdable payments” made to a “foreign financial institution” and “non-financial
foreign entity” unless such entity satisfies certain requirements described below. The term “withholdable payment”
includes interest paid with respect to the Notes and, with respect to sales or other dispositions of the Offered Notes,
the gross proceeds of the sale or other disposition of the Notes. However, proposed Treasury Regulations have been issued that,
when finalized, will provide for the repeal of the 30% withholding tax that would have applied to payments of gross proceeds from
the sale, exchange or other disposition of the Offered Notes. In the preamble to the proposed regulations, the government
provided that taxpayers may rely upon this repeal until the issuance of final regulations. Potential holders are encouraged to
consult with their tax advisors regarding the possible implications of FATCA on an investment in the Offered Notes.
In the case of
withholdable payments made to a “foreign financial institution” (e.g., a foreign bank or broker, or certain foreign
investment entities), as a beneficial owner or as an intermediary, this tax generally will be imposed, subject to certain exceptions,
unless such institution (i) has agreed to (and does) comply with the requirements of an agreement with the United States, which
we refer to as an “FFI Agreement,” or (ii) is required by (and does comply with) applicable foreign law enacted in
connection with an intergovernmental agreement between the United States and a foreign jurisdiction, which we refer to as an “IGA,”
to, among other things, collect and provide to the U.S. tax authorities or other relevant tax authorities certain information
regarding U.S. account holders of such institution and, in either case, such institution provides the withholding agent with a
certification as to its FATCA status. FATCA also imposes the same withholding tax of 30% on withholdable payments made to a foreign
entity that is not a financial institution (as a beneficial owner), subject to certain exceptions, unless such entity provides
the withholding agent with a certification as to its FATCA status and, in certain cases, adequate information about any “substantial”
U.S. owner (generally, any specified United States person that directly or indirectly owns more than a specified percentage of
such entity).
If an Offered
Note is held through a foreign financial institution that has agreed to comply with the requirements of an FFI Agreement or
is subject to similar requirements under applicable foreign law enacted in connection with an IGA, such foreign financial institution
(or, in certain cases, a person paying amounts to such foreign financial institution) generally will be required, subject to certain
exceptions, to withhold tax on payments made to (i) a person (including an individual) that fails to provide any required information
or documentation or (ii) a foreign financial institution that has not agreed to comply with the requirements of an FFI Agreement
and is not subject to similar requirements under applicable foreign law enacted in connection with an IGA.
Non-U.S. Holders,
and U.S. Holders holding the Offered Notes through a non-U.S. intermediary, should consult with their own tax advisors
regarding the possible application of FATCA to the Offered Notes.
THE FOREGOING DISCUSSION IS FOR
GENERAL INFORMATION ONLY AND IS NOT A SUBSTITUTE FOR AN INDIVIDUAL ANALYSIS OF THE TAX CONSEQUENCES RELATED TO THE OFFERED
NOTES TO YOU. WE URGE YOU TO CONSULT A TAX ADVISOR REGARDING THE PARTICULAR FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES
RELATED TO THE OFFERED NOTES TO YOU.
BENEFIT
PLAN INVESTOR CONSIDERATIONS
The following
is a summary of material considerations arising under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
and Section 4975 of the Code that may be relevant if you are acting on behalf of, are using assets of, or are a fiduciary of,
employee benefit plans that subject to Part 4 of Subtitle B of Title I of ERISA (such as a profit sharing, pension, or other qualified
retirement plans (“ERISA Plans”)), individual retirement accounts, or IRAs, Keogh plans or other plans and other arrangements
subject to Section 4975 of the Code (collectively with ERISA Plans, the “Plans”, and each a “Plan”), or
if you are acting on behalf of or using assets of an entity that is deemed to hold assets of a Plan. The following also discusses
certain considerations for Non-ERISA Arrangements (as defined below).
ERISA and Section
4975 of the Code impose certain requirements and duties on Plans, fiduciaries of Plans, and entities (including certain insurance
company general accounts) whose underlying assets are deemed “plan assets” (as defined in U.S. Department of Labor
regulation 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA (the “plan asset regulations”)) by
reason of a Plan’s investment therein (a “Plan Asset Entity”).
Employee benefit
plans sponsored by a governmental agency, certain benefit plans sponsored by not for profit organizations or churches and certain
non-U.S. plans are not subject to Part 4 of Subtitle B of Title I of ERISA or Section 4975 of the Code (referred to as “Non-ERISA
Arrangements”), but may be subject to laws that are substantially similar (each, a “Similar Law”).
The following
discussion summarizes certain aspects of ERISA, the Code and Similar Laws that may affect the decision by a Plan or Non-ERISA
Arrangement to invest in the Offered Notes. The following discussion is general in nature and is not intended to be a complete
discussion of applicable laws and regulations pertaining to an investment in the Offered Notes by a Plan or Non-ERISA Arrangement.
The following discussion is not intended to be legal advice. The following discussion is based on applicable law and regulations
in effect as of the date of this prospectus supplement; we do not undertake any obligation to update this summary as a result
of changes in applicable law or regulations. Fiduciaries of Plans and Non-ERISA Arrangements should consult their own legal counsel
before purchasing the Offered Notes. References herein to the purchase, holding or disposition of Offered Notes
also refer to the purchase, holding or disposition of any beneficial interest in the Offered Notes.
Fiduciary Considerations
Before investing
in the Notes, the fiduciary of an ERISA Plan should consider whether an investment will satisfy the applicable requirements set
forth in Part 4 of Title I of ERISA, including whether the investment:
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·
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will
satisfy the prudence and diversification standards of ERISA;
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·
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will
be made solely in the interests of the participants and beneficiaries of the Plan;
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·
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is
permissible under the terms of the Plan and its investment policies and other governing
instruments; and
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·
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is
for the exclusive purpose of providing benefits to the participants and beneficiaries
of the Plan and for defraying the reasonable expenses of administering the Plan.
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The fiduciary
of a Plan should consider all relevant facts and circumstances, including the limitations imposed on transferability, whether
the Offered Notes will provide sufficient liquidity in light of the foreseeable needs of the Plan, that the Offered
Notes are unsecured and subordinated, and the tax consequences of the investment. The fiduciary of a Non-ERISA Arrangement
should consider whether an investment in the Offered Notes satisfies its obligations imposed under Similar Laws and whether
an investment is consistent with the terms of the governing instruments of the Non-ERISA Arrangement.
Prohibited Transactions
Section 406 of
ERISA and Section 4975 of the Code may prohibit Plans, fiduciaries of Plans and Plan Asset Entities from engaging in certain transactions
involving the assets of a Plan and those persons who have specified relationships with the Plan, called “parties in interest”
under ERISA and “disqualified persons” under Section 4975 of the Code (referred to here as “parties in interest”)
unless relief is available under an applicable statutory, regulatory or administrative exemption. Parties in interest who engage
in a non-exempt prohibited transaction may be subject to excise taxes or other liabilities, and the transaction may be subject
to rescission. If you are acting on behalf on an IRA that you maintain or a beneficiary maintains, engaging in a prohibited transaction
can result in the IRA losing its tax exempt status and its assets will be deemed to be distributed to you or the beneficiary,
as applicable, in a taxable distribution. In addition, a fiduciary of a Plan who permits the Plan to engage in a transaction that
the fiduciary knows or should know is a prohibited transaction may be liable to the Plan for any loss the Plan incurs as a result
of the transaction or for any profits the fiduciary earned in the transaction. Similar Laws may include prohibitions applicable
to Non-ERISA Arrangements that are similar to the prohibited transaction rules contained in ERISA and the Code. A fiduciary considering
an investment in the Offered Notes should consider whether the investment, including the holding or disposition of the
Offered Notes, may constitute or give rise to such a prohibited transaction for which an exemption is not available.
Without regard
to whether the Offered Notes may cause our assets to be treated as plan assets under the plan asset regulations, we, the
underwriters and our current and future affiliates may be parties in interest with respect to many Plans, and the purchase, holding
or disposition of the Offered Notes by, on behalf of, or with the assets of, any such Plan could give rise to a prohibited
transaction under ERISA or the Code. For example, a purchase of the Offered Notes may be deemed to represent a direct or
indirect sale of property, extension of credit or furnishing of services between us and an investing Plan, which would be prohibited
if we are a party in interest with respect to the Plan unless exemptive relief is available.
A prospective
purchaser that is, or is acting on behalf of, or with the assets of, a Plan may wish to consider the exemptive relief available
under the following prohibited transaction class exemptions, or PTCEs: (a) the in-house asset manager exemption (PTCE 96-23);
(b) the insurance company general account exemption (PTCE 95-60); (c) the bank collective investment fund exemption (PTCE 91-38);
(d) the insurance company pooled separate account exemption (PTCE 90-1); and (e) the qualified professional asset manager exemption
(PTCE 84-14). In addition, ERISA Section 408(b)(17) and Section 4975(d)(20) of the Code may provide limited exemptive relief for
the purchase and sale of the Offered Notes, provided that neither we nor certain of our affiliates have or exercise any
discretionary authority or control over, or render any investment advice with respect to, the assets of the Plan involved in the
transaction, and provided further that the Plan pays no more, and receives no less than, adequate consideration (as defined in
the exemption) in connection with the transaction (the so-called “service provider exemption”). There can be no assurance,
however, that any of these administrative or statutory exemptions will be available with respect to a transaction involving the
Offered Notes or with respect to any particular Plan. Purchasers should consult their own legal counsel to determine whether
any purchase will constitute a prohibited transaction and whether exemptive relief is available.
Plan Look-Through
As noted
above, the plan asset regulations provide that the assets of an entity may be deemed assets of a Plan by reason of that Plan’s
investment in equity interests of the entity (so-called “Plan look-through”) unless an exemption under the plan assets
regulations applies. If our assets were deemed to be assets of a Plan that purchased Offered Notes, among other things,
the provisions of ERISA and Section 4975 of the Code that apply to the Plan would apply to transactions in which we engage. There
will not be Plan look-through if the investment by Plans is in a form other than an equity interest, which is defined in the plan
asset regulations to mean an interest other than an instrument that is treated as indebtedness under applicable
local law and
which has no substantial equity features. Purchasers should consult their own legal counsel to determine whether the Offered
Notes will be treated as indebtedness with no substantial equity features for purposes of the plan asset regulations.
Representations and Obligations
Each purchaser
or holder of an Offered Note, including each fiduciary who causes an entity to purchase or hold an Offered Note,
shall be deemed to have represented and warranted on each day such purchaser or holder holds such Offered Note that either:
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it
is neither a Plan, Plan Asset Entity nor a Non-ERISA Arrangement, and it is not purchasing
or holding the Note on behalf of, or with the assets of, any Plan or Non-ERISA Arrangement;
or
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·
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its
purchase, holding and subsequent disposition of the Note will not constitute or result
in (a) a non-exempt prohibited transaction under Section 406 of ERISA, Section 4975 of
the Code or any provision of Similar Law, or (b) a breach of fiduciary or other duty
under applicable law.
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Each purchaser
or holder of an Offered Note will have exclusive responsibility for ensuring that its purchase, holding and subsequent
disposition of the Offered Note does not violate ERISA, the Code or any Similar Law. Nothing contained herein shall be
construed as a representation that an investment in the Offered Notes would meet any or all of the relevant legal requirements
with respect to investments by, or that an investment in the Offered Notes is appropriate for, Plans or Non-ERISA Arrangements,
whether generally or as to any particular Plan or Non-ERISA Arrangement.
UNDERWRITING
(CONFLICTS OF INTEREST)
We have entered
into an underwriting agreement with Stephens Inc., as representative of the underwriters,
with respect to the Offered Notes that we are offering hereby. Subject to certain conditions, we have agreed to sell to
the underwriters, and the underwriters have agreed to purchase from us, severally and not jointly, the principal amount of the
Offered Notes indicated in the table below.
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Underwriters
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|
Principal Amount
of Notes
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Stephens Inc.
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$
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16,875,000
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PNC Capital Markets LLC
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|
$
|
16,875,000
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Raymond James & Associates, Inc.
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$
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3,750,000
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Total
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$
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37,500,000
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Certain members of our management team have
indicated an interest in purchasing Offered Notes in this offering at the public offering price. However, because an indication
of interest is not a binding agreement or commitment to purchase, such members of management may determine to purchase a lesser
amount of Notes or not to purchase any Notes in this offering. In addition, the underwriters could determine to sell a lesser
amount or not to sell any Notes to such members. The underwriters will receive the same underwriting discount on any Notes sold
to members of our management team as they will on any other Notes sold to the public in this offering.
The underwriting
agreement provides that the obligations of the underwriters are subject to certain conditions precedent and that the underwriters
have agreed to purchase all of the Offered Notes sold under the underwriting agreement if any of these Offered Notes
are purchased.
The following
table shows the per Offered Note and total underwriting discounts and commissions we will pay the underwriters:
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Per
Note
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|
Total
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Public
offering price
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|
100
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%
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|
$
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37,500,000
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|
Underwriting
discounts and commissions
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|
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1.50
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%
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$
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562,500
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Proceeds,
before expenses
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|
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98.50
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%
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$
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36,937
500
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|
We estimate that
our total expenses of the offering, excluding underwriting discounts, will be approximately $260,000. We have also agreed
to reimburse the underwriters for certain of their fees and expenses, although we have not agreed to reimburse the underwriters
for their counsel’s fees. In accordance with FINRA Rule 5110, these reimbursed expenses are deemed underwriting compensation
for this offering.
Indemnity
We
have agreed to indemnify the underwriters and persons who control the underwriters against liabilities, including
liabilities under the Securities Act, and to contribute to payments that the underwriters may be required to make for these
liabilities.
Additional Issue of Notes
There is currently
outstanding $60 million in aggregate principal amount of Original Notes that were issued on May 11, 2020. The Offered Notes will
be fungible with the Original Notes and the Offered Notes and the Original Notes, taken together, will be treated as a single
series for all purposes. Upon the issuance of the Offered Notes, the outstanding aggregate principal amount of Notes will be $97,500,000
million.
Market
Making, Stabilization and Other Transactions
There is currently
no public trading market for the Notes. In addition, the Original Notes have not been listed on any securities exchange
or quoted on a quotation system, and we have not applied and do not intend to apply to list the Offered Notes on any securities
exchange or to have the Offered Notes quoted on a quotation system. The underwriters have advised us that they intend to make
a market in the Offered Notes. However, the underwriters are not obligated to do so and may discontinue any market-making in the
Offered Notes at any time in its sole discretion. Therefore, we cannot assure you that a liquid trading market for the Offered
Notes will develop, that you will be able to sell your Offered Notes at a particular time, or that the price you receive when
you sell will be favorable. If an active trading market for the Offered Notes does not develop, the market price and liquidity
of the Offered Notes may be adversely affected. If the Offered Notes are traded, they may trade at a discount from their initial
offering price, depending on prevailing interest rates, the market for similar securities, the credit ratings for the Offered
Notes, our operating performance and financial condition, general economic conditions and other factors.
In connection
with this offering of the Offered Notes, the underwriters may engage in overallotment and stabilizing transactions in accordance
with Regulation M under the Exchange Act. Overallotment involves sales in excess of the offering size, which create a short position
for the underwriters. Stabilizing transactions involve bids to purchase the Offered Notes in the open market for the purpose
of pegging, fixing, or maintaining the price of the Offered Notes. Stabilizing transactions may cause the price of the
Offered Notes to be higher than it would otherwise be in the absence of those transactions. If the underwriters engage
in stabilizing transactions, they may discontinue them at any time.
Neither we nor
the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described
above may have on the price of the Offered Notes. In addition, neither we nor the underwriters make any representation
that the underwriters will engage in these transactions or that these transactions, once commenced, will not be discontinued without
notice.
Electronic
Prospectus Delivery
A prospectus
supplement in electronic format may be made available by e-mail or on the websites maintained by the underwriters. In connection
with this offering, the underwriters or certain securities dealers may distribute prospectuses electronically. In those cases,
prospective investors may view offering terms online and may be allowed to place orders online. The underwriters may agree with
us to allocate the Offered Notes for sale to online brokerage account holders. Any such allocation of online distributions
will be made by the underwriters on the same basis as other allocations. Other than this prospectus supplement in electronic format,
the information on any of these websites and any other information contained on a website maintained by the underwriters or syndicate
member is not part of this prospectus supplement, has not been approved and/or endorsed by the underwriters or us and should not
be relied upon by investors.
Conflicts of Interest
An affiliate
of PNC Capital Markets LLC, which is an underwriter in this offering, is a lender under the Credit Agreement with Texas Capital
Bank. As disclosed in “Use of Proceeds” in this prospectus supplement, we may use the proceeds of this
offering to repay this line of credit, in which case the affiliate of PNC Capital Markets LLC may receive in excess of 5% of the
net proceeds of this offering. Consequently, PNC Capital Markets LLC is deemed to have a conflict of interest within the meaning
of FINRA Rule 5121. This offering will therefore be conducted in compliance with the applicable provisions of FINRA Rule 5121.
PNC Capital Markets LLC will not confirm any sales to any account over which it exercises discretionary authority without the
specific written approval of the transaction from the account holders. Pursuant to FINRA Rule 5121(a)(1)(C), the appointment of
a “qualified independent underwriter” is not required in connection with
this offering as the Notes will be investment grade-rated by one or more nationally recognized statistical rating agencies.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
We
file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read any documents we
have filed with the SEC on the SEC’s website found at www.sec.gov and our website described below.
We have filed
with the SEC a Registration Statement on Form S-3 (File No. 333-235713) relating to the securities covered by this
prospectus supplement and the accompanying prospectus. This prospectus supplement is a part of the registration statement
and does not contain all the information in the registration statement. Whenever a reference is made in this prospectus supplement
or the accompanying prospectus to a contract or other document, the reference is only a summary and you should refer to
the exhibits that are a part of the registration statement for a copy of the contract or other document. You may review a copy
of the registration statement through the SEC’s website and our website.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The SEC’s
rules allow us to “incorporate by reference” information into this prospectus supplement. This means that we can disclose
important information to you by referring you to another document. Any information referred to in this way is considered part
of this prospectus supplement from the date we file that document. Any reports filed by us with the SEC after the date of this
prospectus supplement and before the date that the offering of securities by means of this prospectus supplement and the accompanying
prospectus is terminated will automatically update and, where applicable, supersede any information contained in this prospectus
supplement or incorporated by reference in this prospectus supplement.
We incorporated
by reference into this prospectus supplement and the accompanying prospectus the following documents or information filed
with the SEC (File No. 001-35913) other than, in each case, documents or information deemed to have been furnished and not filed
in accordance with the SEC’s rules:
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our
Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on
February 24, 2020;
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our
Quarterly Report on Form 10-Q for the period ended March 31, 2020, filed with the SEC
on May 11, 2020;
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·
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our
Current Reports on Form 8-K filed with the SEC on January
22, 2020, February
7, 2020, March
26, 2020, April
16, 2020, May
5, 2020, May 11, 2020 and May 20, 2020; and
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·
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the
description of our common stock contained in our Registration Statement on Form 8-A
filed with the SEC on May 6, 2013, including any amendments or reports filed for the
purpose of updating such description.
|
All documents
filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus supplement and
the accompanying prospectus and before the termination of the offering shall also be deemed to be incorporated herein by
reference. We are not, however, incorporating by reference any documents or portions thereof, whether specifically listed above
or filed in the future, that are not deemed “filed” with the SEC, including our compensation committee report and
performance graph or any information furnished pursuant to Item 2.02 or 7.01 of Form 8-K or certain exhibits furnished pursuant
to Item 9.01 of Form 8-K.
AVAILABLE
INFORMATION
Our
filings with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all
amendments thereto, are available on our website as soon as reasonably practicable after the reports are filed with or furnished
to the SEC. Copies can be obtained free of charge in the “Investor Relations” section of our website at www.tristatecapitalbank.com.
Our SEC filings are also available through the SEC’s website at www.sec.gov. Copies of these
filings are also available by writing the Company at the following address:
TriState
Capital Holdings, Inc.
Attention:
Investor Relations
One
Oxford Centre
301
Grant Street, Suite 2700
Pittsburgh,
PA 15219
(412)
304-0304
The information
on our website is not incorporated by reference in this prospectus supplement or the accompanying prospectus and you should
not consider it a part of this prospectus supplement or the accompanying prospectus.
LEGAL
MATTERS
Certain legal
matters in connection with the offering of the Notes offered by this prospectus supplement will be passed upon for us by Karla
Villatoro de Friedman, our General Counsel, and Covington & Burling LLP, Washington, DC. As of May 28, 2020, Ms. Villatoro
de Friedman held 375 depositary shares, each representing a 1/40th ownership interest in a share of our 6.75% Fixed-to-Floating
Rate Series A Non-Cumulative Perpetual Preferred Stock, no par value, as well as 25,393 restricted shares of common stock
and options to purchase 3,000 shares of common stock granted under our equity incentive plans, and was eligible to receive additional
equity awards under such plans. Certain legal matters in connection with the offering will be passed upon for the underwriters
by Fenimore, Kay, Harrison & Ford, LLP.
EXPERTS
The
consolidated financial statements of TriState Capital Holdings, Inc. and subsidiaries as of December 31, 2019 and 2018, and for
each of the years in the three-year period ended December 31, 2019, and management’s assessment of the effectiveness of
internal control over financial reporting as of December 31, 2019 have been incorporated by reference herein and in the registration
statements in reliance upon the reports of KPMG LLP, independent registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and auditing.
PROSPECTUS
$250,000,000
Common Stock
Preferred
Stock
Debt Securities
Depositary
Shares
Warrants
Purchase Contracts
Purchase Units
Subscription
Rights
Units
We may offer,
issue and sell from time to time up to $250,000,000, together or separately, in one or more offerings, the above-referenced securities.
The securities we may offer may be convertible into or exchangeable for other securities. This prospectus describes some of the
general terms that may apply to these securities and the general manner in which they may be offered. Each time we offer any securities
pursuant to this prospectus, we will provide you with a prospectus supplement that will describe the specific amounts, prices
and terms of the securities being offered and the specific manner in which they may be offered. You should read this prospectus,
the information incorporated by reference in this prospectus, the accompanying prospectus supplement, including any information
incorporated by reference therein, and any applicable free writing prospectus carefully before you invest in the securities described
in the applicable prospectus supplement.
Our common stock
is listed on the Nasdaq Global Select Market and trades under the ticker symbol “TSC.”
We
may offer and sell these securities to or through one or more underwriters, dealers and agents, directly to purchasers or through
a combination of these methods, on a continuous or delayed basis from time to time. See “Plan of Distribution.”
The names of any underwriters, dealers or agents involved in the distribution of our securities, their compensation and any option
they hold to acquire additional securities will be described in the applicable prospectus supplement. Net proceeds from the sale
of securities will be set forth in the applicable prospectus supplement.
Investing
in our securities involves certain risks. Before buying our securities, you should carefully consider the risks described under
the caption “Risk Factors” beginning on page 1 of this prospectus, and in the documents incorporated by reference
into this prospectus and included or incorporated by reference into.
These securities
are not savings accounts, deposits or other obligations of any of our bank and non-bank subsidiaries and are not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government agency.
None of the
U.S. Securities and Exchange Commission, any state securities commission, the Federal Deposit Insurance Corporation, the Board
of Governors of the Federal Reserve System or any other regulatory body has approved or disapproved of these securities or determined
if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is January 16,
2020.
TABLE OF CONTENTS
ABOUT THIS
PROSPECTUS
This prospectus
is part of a registration statement on Form S-3 that we filed with the U.S. Securities and Exchange Commission, or SEC, using
a “shelf” registration process. Under this shelf registration statement, we may offer and sell from time to time,
separately or together, any combination of our common stock, preferred stock, debt securities, depositary shares, warrants, purchase
contracts, purchase units, subscription rights and units in one or more offerings at an aggregate offering price of up to $250,000,000.
The preferred stock, debt securities, warrants, purchase contracts, purchase units, subscription rights and units may be convertible
into, or exercisable or exchangeable for, our common or preferred stock or other securities issued by us, or debt or equity securities
issued by one or more other entities.
This prospectus
provides you with a general description of the securities we may offer. Each time we offer and sell securities, we will provide
a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may
also add, update or change information contained in this prospectus. You should read this prospectus and the applicable prospectus
supplement together with the additional information described under the heading “Where You Can Find More Information.”
We may also prepare free writing prospectuses that describe particular securities. Any free writing prospectus should also be
read in connection with this prospectus and any prospectus supplement referred to therein. For purposes of this prospectus, any
reference to an applicable prospectus supplement may also refer to a free writing prospectus, unless the context otherwise requires.
Unless otherwise indicated or the context otherwise requires, all references in this prospectus to “we,” “our,”
“us,” “our company” and “the Company” refer to TriState Capital Holdings, Inc., a Pennsylvania
corporation, and its consolidated subsidiaries.
The registration
statement of which this prospectus forms a part, including the exhibits to the registration statement, contains additional information
about us and the securities offered under this prospectus. The registration statement can be obtained from the SEC’s website,
www.sec.gov. Copies of information filed by us with the SEC are also available on our website at www.tristatecapitalbank.com.
The reference to our website is not intended to be an active link and the information on, or that can be accessed through, our
website is not, and you must not consider the information to be, a part of this prospectus or any other filings we make with the
SEC.
We have not
authorized anyone to provide you with information in addition to or different from that contained in this prospectus or any applicable
prospectus supplement or free writing prospectus. We take no responsibility for, and can provide no assurance as to the reliability
of, any information that others may provide. You should not assume that the information in this prospectus, any applicable prospectus
supplement or any free writing prospectus that we have prepared is accurate as of any date other than the date of those documents,
and that any information in documents that we have incorporated by reference is accurate only as of the date of such document,
regardless of the time of delivery of this prospectus or any prospectus supplement or any sale of a security. Our business, financial
condition, results of operations and prospects may have changed since those dates.
The distribution
of this prospectus and any applicable prospectus supplement and the offering of the securities in certain jurisdictions may be
restricted by law. Persons who obtain this prospectus and any applicable prospectus supplement should inform themselves about,
and observe, any such restrictions. This prospectus and any applicable prospectus supplement do not constitute, and may not be
used in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not permitted
or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to
make such offer or solicitation.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual,
quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public
on the SEC’s website at www.sec.gov.
The SEC allows
us to “incorporate by reference” into this prospectus the information in documents we file with the SEC, which means
that we can disclose important information to you by referring you to those documents. The information incorporated by reference
is considered to be a part of this prospectus and should be read with the same care. When we update the information contained
in documents that have been incorporated by reference by making future filings with the SEC, the information incorporated by reference
into this prospectus is considered to be automatically updated and superseded. In other words, in all cases, if you are considering
whether to rely on information contained in this prospectus or information incorporated by reference into this prospectus, you
should rely on the information contained in the document that was filed later. We incorporate by reference (other than any information
furnished to, rather than filed with, the SEC, unless expressly stated otherwise therein) the documents listed below (File No.
001-35913 unless otherwise stated), which are considered to be a part of this prospectus:
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our
Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on
February 19, 2019 (including the portions of our Definitive Proxy Statement on Schedule
14A, filed with the SEC on April 9, 2019, incorporated by reference therein);
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our
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019, June 30, 2019 and
September 30, 2019, filed with the SEC on May 7, 2019, August 6, 2019 and November 5,
2019, respectively;
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our
Current Reports on Form 8-K (other than any items, exhibits or portions thereof furnished
to, rather than filed with, the SEC) filed with the SEC on May 20, 2019, May 23, 2019,
May 29, 2019 and October 10, 2019;
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the
description of our common stock contained in our Registration Statement on Form 8-A filed
with the SEC pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended,
or the Exchange Act, on May 6, 2013, including any amendment or report filed with the
SEC for purposes of updating such description;
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the
description of our Series A 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, or the Series A Preferred Stock, contained (1) in our Registration
Statement on Form 8-A filed with the SEC pursuant to Section 12(b) of the Exchange Act
on March 20, 2018, including any amendment or report filed with the SEC for purposes
of updating such description and (2) under the headings “Description of Series
A Preferred Stock” and “Description of Depositary Shares” in our final
prospectus supplement, dated March 15, 2018, to the prospectus, dated December 21, 2017,
which constitutes a part of our Registration Statement on Form S-3 (File No. 333-222074),
filed under the Securities Act; and
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the
description of our Series B 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, or the Series B Preferred Stock, contained (1) in our Registration
Statement on Form 8-A filed with the SEC pursuant to Section 12(b) of the Exchange Act
on May 28, 2019, including any amendment or report filed with the SEC for purposes of
updating such description and (2) under the headings “Description of Series B Preferred
Stock” and “Description of Depositary Shares” in our final prospectus
supplement, dated May 21, 2019, to the prospectus, dated December 21, 2017, which constitutes
a part of our Registration Statement on Form S-3 (File No. 333-222074), filed under the
Securities Act.
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All reports and
other documents we subsequently file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until our offering
is completed will also be incorporated by reference into this prospectus and deemed to be part hereof (other than any information
furnished to, rather than filed with, the SEC, unless expressly stated otherwise therein). The most recent information that we
file with the SEC automatically updates and supersedes older information. The information contained in any such filing will be
deemed to be a part of this prospectus commencing on the date on which the document is filed.
Any documents
incorporated by reference into this prospectus are available without charge to you, upon written request on the Internet at www.tristatecapitalbank.com
or upon written or oral request by contacting our Investor Relations department at TriState Capital Holdings, Inc., One Oxford
Centre, 301 Grant Street, Suite 2700, Pittsburgh, PA 15219. Attention: Investor Relations, (412) 304-0304. The reference to our
website is not intended to be an active link and the information on, or that can be accessed through, our website is not, and
you must not consider the information to be, a part of this prospectus or any other filings we make with the SEC.
FORWARD-LOOKING
STATEMENTS
Certain statements
included or incorporated by reference in this prospectus and each prospectus supplement may not be based on historical facts and
are “forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of 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 measures of future financial or business performance, strategies or expectations. These statements are often, but not always,
indicated through the use of words or phrases such as “achieve,” “anticipate,” “believe,”
“continue,” “could,” “estimate,” “expect,” “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 statements of a future or forward- looking nature. These forward-looking statements are not historical facts, and are
based on current expectations, estimates and projections and beliefs or 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:
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our
ability to prudently manage our growth and execute our strategy;
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including
the successful integration of past and future acquisitions, our ability to fully realize
the cost savings and other benefits of our acquisitions, manage risks related to business
disruption following those acquisitions, and manage customer disintermediation;
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deterioration
of our asset quality;
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our
level of non-performing assets and the costs associated with resolving problem loans,
including litigation and other costs;
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possible
loan and lease losses and impairment, changes in the value of collateral securing our
loans and leases and the collectability of loans and leases;
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possible
changes in the speed of loan prepayments by customers and loan origination or sales volumes;
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business
and economic conditions and trends generally and in the financial services industry,
nationally and within our local market 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;
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our
ability to maintain important deposit customer relationships, our reputation and otherwise
avoid liquidity risks;
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changes
in management personnel;
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our
ability to recruit and retain key employees;
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volatility
and direction of interest rates;
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changes
in accounting policies, accounting standards, or authoritative accounting guidance, including
the current expected credit loss model, which may increase the level of our allowance
for credit losses after adoption on January 1, 2020;
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any
impairment of our goodwill or other intangible assets;
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our
ability to develop and provide competitive products and services that appeal to our customers
and target markets;
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our
ability to provide investment management performance competitive with our peers and benchmarks;
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fluctuations
in the carrying value of the assets under management held by our Chartwell Investment
Partners, LLC subsidiary, as well as the relative and absolute investment performance
of such subsidiary’s investment products;
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operational
risks associated with our business, including technology and cyber-security related risks;
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increased
competition in the financial services industry, particularly from regional and national
institutions;
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negative
perceptions or publicity with respect to any products or services we offer;
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adverse
judgments or other resolutions of pending and future legal proceedings, and costs incurred
in defending such proceedings;
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changes
in the laws, rules, regulations, interpretations or policies relating to financial institutions,
accounting, tax, trade, monetary and fiscal matters, and potential expenses associated
with complying with such laws and regulations;
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our
ability to comply with applicable capital and liquidity requirements, including our ability
to generate liquidity internally or raise capital on favorable terms;
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regulatory
limits on our ability to receive dividends from our subsidiaries and pay dividends to
shareholders;
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further
government intervention in the U.S. financial system;
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natural
disasters and adverse weather, acts of terrorism, cyber-attacks, an outbreak of hostilities
or other international or domestic calamities, and other matters beyond our control;
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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
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other
factors that are discussed in the section entitled “Item 1A. Risk Factors”
in our Annual Report on Form 10-K for the year ended December 31, 2018, and additional
risk factors that may be set forth in any applicable prospectus supplement.
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The foregoing
factors should not be construed as exhaustive and should be read together with the other cautionary statements included or incorporated
by reference in this prospectus. 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. New factors emerge from time to time, and it is not possible
for us to predict which will arise. 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. 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.
THE COMPANY
We are a bank
holding company headquartered in Pittsburgh, Pennsylvania. We have three wholly owned subsidiaries: TriState Capital Bank, or
the Bank, a Pennsylvania chartered bank; Chartwell Investment Partners, LLC, or Chartwell, a registered investment advisor;
and Chartwell TSC Securities Corp., or 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.
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 a results-based
culture, combined with a well-managed middle-market and private banking business, and our targeted investment management business,
will continue to grow and generate attractive returns for shareholders.
Our common stock
is traded on Nasdaq under the symbol “TSC.” Our depositary shares representing a 1/40th interest in a share of our
Series A Preferred Stock are traded on Nasdaq under the symbol “TSCAP” and our depositary shares representing a 1/40th
interest in a share of our Series B Preferred Stock is traded on Nasdaq under the symbol “TSCBP.”
Our principal
executive office is located at One Oxford Centre, 301 Grant Street, Suite 2700, Pittsburgh, Pennsylvania 15219, and our telephone
number at that office is (412) 304-0304.
Additional information
about us and our subsidiaries is included in documents incorporated by reference in this prospectus. See “Where You Can
Find More Information.”
RISK FACTORS
Investing in
securities issued by us involves certain risks. Before you invest in any securities issued by us, in addition to the other information
included in, or incorporated by reference into, this prospectus, as well as the information contained in any applicable prospectus
supplement, you should carefully consider the risk factors contained in the section titled “Item 1A. Risk Factors”
and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2018, which is incorporated by reference into
this prospectus, as updated by our Annual or Quarterly Reports for subsequent fiscal years or fiscal quarters that we file with
the SEC and that are so incorporated. See “Where You Can Find More Information” for information about how to
obtain a copy of these documents. You should also carefully consider the risks and other information that may be contained in,
or incorporated by reference into, any prospectus supplement relating to specific offerings of securities. Additional risks and
uncertainties not presently known to us or that we currently deem immaterial may also materially and adversely affect our business
and operations.
USE OF PROCEEDS
We intend
to use the net proceeds from the sales of the securities in the manner and for the purposes that will be set forth in the applicable
prospectus supplement, which may include general corporate purposes.
DESCRIPTION
OF SECURITIES WE MAY OFFER
This prospectus
contains summary descriptions of our capital stock. These summary descriptions are not meant to be complete descriptions of each
security. The applicable prospectus supplement for an offering may add, update or change the terms and conditions of the securities
as described in this prospectus. This summary is qualified by reference to the applicable provisions of the Pennsylvania Business
Corporation Law, our Amended and Restated Articles of Incorporation, which we refer to as our Articles of Incorporation, and our
By-Laws, as amended. You are urged to read those documents carefully. Copies of our Articles of Incorporation and By-Laws are
incorporated by reference in this prospectus as exhibits to the registration statement of which this prospectus forms a part.
See “Where You Can Find More Information.”
DESCRIPTION
OF COMMON STOCK
We may issue,
separately or together with, or upon conversion, exercise or exchange of other securities, shares of our common stock as set forth
in the applicable prospectus supplement. The following section describes the material features and rights of our common stock.
This summary does not purport to be exhaustive and is qualified in its entirety by reference to our Articles of Incorporation
and our By-Laws, each of which is incorporated by reference as an exhibit to the registration statement of which this prospectus
forms a part, and to applicable Pennsylvania law, including the Pennsylvania Business Corporation Law.
General
Our Articles
of Incorporation authorize us to issue a total of 45,000,000 shares of common stock, no par value per share. The authorized but
unissued shares of our capital stock will be available for future issuance without shareholder approval, unless otherwise required
by applicable law or the rules of any applicable securities exchange.
As of September
30, 2019, 29,296,970 shares of our common stock were issued and outstanding and held by 167 shareholders of record.
Voting. Each
holder of our common stock is entitled to one vote for each share on all matters submitted to the shareholders, except as otherwise
required by law and subject to the rights and preferences of the holders of any outstanding shares of our preferred stock. Holders
of our common stock are not entitled to cumulative voting in the election of directors.
Dividends
and other distributions. Subject to certain regulatory restrictions discussed in this prospectus and to the rights of holders
of any preferred stock that we may issue, all shares of our common stock are entitled to share equally in dividends from legally
available funds, when, as, and if declared by our board of directors. Upon any voluntary or involuntary liquidation, dissolution
or winding up of our affairs, all shares of our common stock would be entitled to share equally in all of our remaining assets
available for distribution to our shareholders after payment of creditors and subject to any prior distribution rights related
to our preferred stock.
Preemptive
rights. Holders of our common stock do not have preemptive or subscription rights to acquire any authorized but unissued shares
of our capital stock upon any future issuance of shares.
Preferred
Stock. Our Articles of Incorporation permit us to issue up to 150,000 shares of one or more series of preferred stock and
authorize our board of directors to designate the preferences, limitations and relative rights of any such series of preferred
stock. See “Description of our Preferred Stock” for a description of rights and preferences that series of
our preferred stock may have. As of September 30, 2019, 40,250 shares of our Series A Preferred Stock were issued and outstanding
and 80,500 shares of our Series B Preferred Stock were issued and outstanding.
Although
the creation and authorization of preferred stock does not, in and of itself, have any effect on the rights of the holders of
our common stock, the issuance of one or more series of preferred stock may affect the holders of common stock in a number of
respects, including the following: by subordinating our common stock to the preferred stock with respect to dividend rights, liquidation
preferences, and other rights, preferences, and privileges; by diluting the voting power of our common stock; by diluting
the earnings per share of our common stock; and by issuing common stock, upon the conversion of the preferred stock, at a
price below the fair market value or original issue price of the common stock that is outstanding prior to such issuance.
Rights of
Selling Stockholders. In connection with our issuance of the Series C preferred stock to the Lovell Minnick funds, we entered
into a Preferred Stock Purchase Agreement, dated as of April 24, 2012, as amended. Pursuant to the Preferred Stock Purchase Agreement,
we agreed to comply with certain continuing obligations which, as in effect after our initial public offering, are described in
more detail below.
Board representation.
We agreed under the terms of the Preferred Stock Purchase Agreement as amended to appoint one individual designated by the Lovell
Minnick funds to serve in the following positions for us and for TriState Capital Bank: (1) a Class IV director and, in
the case of the Bank, a director; (2) a member of the Compensation Committee; and (3) a member of the Nominating and
Corporate Governance Committee.
We also agreed
that, for so long as the Lovell Minnick funds collectively hold more than 4.9% of our outstanding common stock, we would nominate
the director designated by the Lovell Minnick funds for successive four-year terms and take any other lawful action within our
power to cause the designee to be elected for terms as a director of TriState Capital and TriState Capital Bank. In addition,
we agreed that vacancies created by any resignation or otherwise of a director designated by the Lovell Minnick funds will be
filled with a successor director that has been designated by the Lovell Minnick funds. If a director nominee that has been designated
by the Lovell Minnick funds is not elected for any reason, we have agreed that we will increase the number of directors, creating
a vacancy on our board of directors, and then fill that vacancy with the Lovell Minnick fund’s designee. Unless increased
pursuant to this covenant, we have agreed that the number of directors on our board will not exceed 14.
James E. Minnick
was appointed in August 2012 to, and continues to serve on, our board of directors and the board of directors of TriState Capital
Bank as the representative of the Lovell Minnick funds, and he also serves on certain of our committees, including the Compensation
Committee and the Nominating and Corporate Governance Committee.
Observer rights.
In addition to the above-described board representation rights, we also agreed that, for so long as the Lovell Minnick funds collectively
hold more than 4.9% of our outstanding common stock, we and TriState Capital Bank will invite one observer designated by the Lovell
Minnick funds to our respective board meetings. This observer will be entitled to attend meetings and take notes, but will not
be entitled to vote or participate in discussions at the meetings.
Indemnification.
We agreed under the terms of the Preferred Stock Purchase Agreement that we will be the indemnitor of “first resort”
with respect to any claims against the director designated by the Lovell Minnick funds for indemnification claims that are indemnifiable
by both us and the Lovell Minnick funds. Accordingly, to the extent that indemnification is permissible under applicable law,
we will have full liability for such claims (including for the advancement of any expenses) and we have waived all related rights
of contribution, subrogation or other recovery that we might otherwise have against the Lovell Minnick funds.
Registration Rights
In connection
with our issuance of the Series C preferred stock, we entered into a Registration Rights Agreement with the Lovell Minnick funds.
The Registration Rights Agreement provides that the holders of at least 50% of our common stock (on an as-converted basis) that
is held by the Lovell Minnick funds may require that we file a Form S-1 or similar “long-form” registration statement
with the SEC to register the shares of our common stock that are issuable upon conversion of our Series C preferred stock. It
is a condition to any such long-form demand registration that the aggregate offering price of the securities to be registered
be at least $25.0 million.
In addition,
holders of at least 25% of our common stock (on an as-converted basis) that is held by the Lovell Minnick funds may require that
we file a Form S-3 or similar “short-form” registration statement with the SEC to register the shares of our common
stock that are issuable upon conversion of our Series C preferred stock. It is a condition to any such short-form demand registration
that the aggregate offering price of the securities to be registered be at least $10.0 million. We have agreed with the Lovell
Minnick funds that the registration statement that includes this prospectus constitutes such a “short form” registration
statement under the Registration Rights Agreement.
All demand registrations
pursuant to the Registration Rights Agreement will be short-form registrations whenever we are permitted to use any applicable
short form. We have agreed to use our best efforts to make short-form registrations available for the sale of any securities for
which registration rights are available under the Registration Rights Agreement.
We are
required to pay the expenses associated with the above-described demand registrations, including the registration relating to
the offering made by this prospectus, even if the registration is not completed. Lovell Minnick, as the holder of a majority of
the securities included in this demand registration has the right to select investment bankers and managers to administer the
offering.
The Registration
Rights Agreement also provides certain “piggyback” registration rights to the Lovell Minnick funds which were waived
with respect to our initial public offering. Subject to certain limitations, in the event that we register any of our equity securities
under the Securities Act (other than pursuant to an above-described demand registration or in connection with registration statements
on Form S-4 or Form S-8), we must give notice to the Lovell Minnick funds of our intention to effect such a registration and must
include in the registration statement all registerable securities for which we have received a written request for inclusion.
We will be required to pay for all piggyback registration expenses, even if the registration is not completed. We will retain
the right to select the investment bankers and managers to administer any underwritten offering in which piggyback registration
rights are granted.
The rights of
any person to request a demand registration or to request inclusion in a piggyback registration pursuant to the Registration Rights
Agreement will terminate upon the earliest time after an initial public offering at which a holder of the registerable securities:
(1) can sell all shares held by it in compliance with Rule 144(b)(1)(i) or (ii) of the Securities Act; or (2) holds 1% or
less of our outstanding common stock and all of the registerable securities held by such holder may be sold in any three-month
period without registration in compliance with Rule 144.
Anti-Takeover Effect of Governing
Documents and Applicable Law
Provisions
of governing documents. Our Articles of Incorporation and By-Laws contain certain provisions that may have the effect of deterring
or discouraging, among other things, a non-negotiated tender or exchange offer for our common stock, a proxy contest for control
of TriState Capital, the assumption of control of TriState Capital by a holder of a large block of our voting stock and the removal
of our management. These provisions: empower our board of directors, without shareholder approval, to issue our 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; and require at least 60 days’ advance notice of nominations for the election of directors and the presentation
of shareholder proposals at meetings of shareholders.
Provisions
of applicable law. The Pennsylvania Business Corporation Law also contains certain provisions applicable to us which may have
the effect of impeding a change in control of TriState Capital. These provisions, among other things: prohibit shareholders from
calling a special meeting, in most circumstances, or by acting by less than unanimous written consent; prohibit shareholders
from proposing amendments to a corporation’s articles of incorporation; require (under Subchapter E of Chapter 25)
that, following any acquisition by any person or group of 20% of a public corporation’s voting power, the remaining shareholders
have the right to receive payment for their shares, in cash, from such person or group in an amount equal to the “fair value”
of the shares, including an increment representing a proportion of any value payable for control of the corporation; prohibit
(under Subchapter F of Chapter 25) for five years, subject to certain exceptions, a “business combination” (which
includes a merger or consolidation of the corporation or a sale, lease or exchange of assets) with a person or group beneficially
owning 20% or more of a public corporation’s voting power, provided that this provision does not apply to any business combinations
approved by a corporation’s board of directors; generally prohibit (under Subchapter G of Chapter 25) a person or group
who or which acquires voting power in an election of directors in excess of certain thresholds (20%, 33 1/3% and 50%) for the
first time from voting the “control shares” (i.e., the shares acquired which result in the person exceeding the applicable
threshold, plus all voting shares acquired in the preceding 180 days and any other voting shares acquired with the intent of making
a “control-share acquisition”) unless voting rights are restored at a shareholders meeting requested by the acquiring
shareholder by the affirmative vote of a majority of the shares eligible to vote in elections of directors of both (1) the disinterested
shareholders and (2) all voting shares; require (under Subchapter H of Chapter 25) any person or group that publicly announces
that it may acquire control of a public company, or that acquires or publicly discloses an intent to acquire twenty percent (20%)
or more of the voting power of a public company, to disgorge to the corporation any profits that it receives from sales of the
corporation’s equity securities purchased over the prior 24 or subsequent 18 months; require (under Subchapter I of
Chapter 25) the payment of minimum severance benefits to certain employees whose employment is terminated within two years of
the approval of a control-share acquisition under Subchapter G of Chapter 25 of the Act; prohibit (under Subchapter I of
Chapter 25) the cancellation of certain labor contracts in connection with a control-share acquisition under Subchapter G of Chapter
25 of the Act; expand the factors and groups (including, without limitation, shareholders) that a corporation’s board
of directors can consider in determining whether an action or transaction is in the best interests of the corporation; provide
that a corporation’s board of directors need not consider the interests of any particular stakeholder group as dominant
or controlling in determining whether an action or transaction is in the best interests of the corporation; provide that
a corporation’s directors, in order to satisfy the presumption that
they have acted in the best interests of the corporation,
need not satisfy any greater obligation or higher burden of proof with respect to actions relating to an acquisition or potential
acquisition of control; and provide that the fiduciary duty of a corporation’s directors is due solely to the corporation
and may be enforced by the corporation or by a shareholder in a derivative action, but not directly by a shareholder.
In addition to
the foregoing, the Pennsylvania Business Corporation Law also explicitly provides that the fiduciary duties of directors do not
require them to redeem any rights under, or to modify or render inapplicable, any shareholder rights plan; render inapplicable,
or make determinations under, provisions of the Act relating to control transactions, business combinations, control-share acquisitions
or disgorgement by certain controlling shareholders following attempts to acquire control; or act as the board of directors,
a committee of the board or an individual director, solely because of the effect that the action could have on an acquisition
or potential acquisition of control of the corporation or the consideration that might be offered or paid to shareholders in such
an acquisition.
The Pennsylvania
Business Corporation Law further provides that any act of the board of directors, a committee of the board or an individual director
relating to or affecting an acquisition or potential or proposed acquisition of control to which a majority of the disinterested
directors have assented will be presumed to satisfy the standard of care set forth in the statute, unless it is proven by clear
and convincing evidence that disinterested directors did not consent to such act in good faith after reasonable investigation.
As a result of this and the other provisions of the Pennsylvania Business Corporation Law, our directors have broad discretion
with respect to actions that may be taken in response to acquisitions or proposed acquisitions of corporate control.
Through amendments
to our Articles of Incorporation, we have opted out of coverage by Subchapters E, G and H of the Pennsylvania Business Corporation
Law which are described above. As a result, those provisions would not apply to a non-negotiated attempt to acquire control of
TriState Capital, although such an attempt would still be subject to the special provisions of our governing documents described
in the paragraphs above.
The overall effect
of these provisions may be to deter a future offer or other merger or acquisition proposals that a majority of our shareholders
might view to be in their best interests as the offer might include a substantial premium over the market price of our common
stock at that time. In addition, these provisions may have the effect of assisting our board of directors and our management in
retaining their respective positions and placing them in a better position to resist changes that the shareholders may want to
make if dissatisfied with the conduct of our business.
DESCRIPTION
OF PREFERRED STOCK
The following
section describes the general terms of preferred stock that we may issue. The specific terms of any series of preferred stock
will be described in the prospectus supplement relating to that series of preferred stock. The terms of any series of preferred
stock may differ from the terms described below. Certain provisions of our preferred stock described below and in any prospectus
supplement are not complete. The summary does not purport to be exhaustive and is qualified in its entirety by reference to our
Articles of Incorporation and our By-Laws, each of which is incorporated by reference as an exhibit to the registration statement
of which this prospectus forms a part, and to applicable Pennsylvania law, including the Pennsylvania Business Corporation Law.
General
Our Articles
of Incorporation permit us to issue, without shareholder approval, up to 150,000 shares of one or more series of preferred stock
and authorize our board of directors to designate the preferences, limitations and relative rights of any such series of preferred
stock. Each share of a series of preferred stock will have the same relative rights as, and be identical in all respects with,
all the other shares of the same series. Preferred stock may have voting rights, subject to applicable law and determination at
issuance of our board of directors. While
the terms of preferred stock may vary from series to series, holders of our common stock
should assume that all shares of preferred stock will be senior to our common stock in respect of distributions and on liquidation.
In addition,
as described under “Description of Depositary Shares,” we may, instead of offering full shares of any series of preferred
stock, offer depositary shares evidenced by depositary receipts, each representing a fraction of a share of the particular series
of preferred stock issued and deposited with a depositary. The fraction of a share of preferred stock which each depositary share
represents will be set forth in the prospectus supplement relating to such depositary shares.
In March 2018,
we completed the issuance and sale of a registered, underwritten public offering of depositary shares, each representing a 1/40th
interest in a share of our 6.75% Fixed-to-Floating Rate Series A Non-Cumulative Perpetual Preferred Stock, no par value, or the
Series A Preferred Stock, with a liquidation preference of $1,000 per share (equivalent to $25 per depository share).
In May 2019,
we completed the issuance and sale of a registered, underwritten public offering of depositary shares, each representing a 1/40th
interest in a share of our 6.375% Fixed-to-Floating Rate Series B Non-Cumulative Perpetual Preferred Stock, no par value, or the
Series B Preferred Stock, with a liquidation preference of $1,000 per share (equivalent to $25 per depository share).
The prospectus
supplement relating to a particular series of preferred stock will contain a description of the specific terms of that series,
including, as applicable:
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the
title, designation, number of shares and stated or liquidation value of the preferred
stock;
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the
dividend amount or rate or method of calculation, the payment dates for dividends and
the place or places where the dividends will be paid, whether dividends will be cumulative
or noncumulative, and, if cumulative, the dates from which dividends will begin to accrue;
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any
conversion or exchange rights;
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whether
the preferred stock will be subject to redemption and the redemption price and other
terms and conditions relative to the redemption rights;
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any
liquidation rights;
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any
sinking fund provisions;
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the
exchange or market, if any, where the preferred stock will be listed or traded;
and
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any
other rights, preferences, privileges, limitations and restrictions that are not inconsistent
with the terms of our Articles of Incorporation.
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Upon the issuance
and payment for shares of preferred stock, the shares will be fully paid and nonassessable. Except as otherwise may be specified
in the prospectus supplement relating to a particular series of preferred stock, holders of preferred stock will not have any
preemptive or subscription rights to acquire any class or series of our capital stock and each series of preferred stock will
rank on a parity in all respects with each other series of our preferred stock and prior to our common stock as to dividends and
any distribution of our assets.
As stated above
in the “Description of Our Common Stock”, the authorization of the preferred stock could have the effect of making
it more difficult or time consuming for a third party to acquire a majority of our outstanding voting stock or otherwise effect
a change of control. Shares of the preferred stock may also be sold to third parties that indicate that they would support the
board of directors in opposing a hostile takeover bid. The availability of the preferred stock could have the effect of delaying
a change of control and of increasing the consideration ultimately paid to our shareholders. The board of directors may authorize
the issuance of preferred stock for capital-raising activities, acquisitions, joint ventures or other corporate purposes that
have the effect of making an acquisition of the Company more difficult or costly, as could also be the case if the board of directors
were to issue additional common stock for such purposes. See “Anti-Takeover Effects of Governing Documents and Applicable
Law.”
Redemption
If so specified
in the applicable prospectus supplement, a series of preferred stock may be redeemable at any time, in whole or in part, at our
option, and may be mandatorily redeemable or convertible. Restrictions, if any, on the repurchase or redemption by us of any series
of our preferred stock will be described in the applicable prospectus supplement relating to that series. Generally, any redemption
of our preferred stock will be subject to prior Federal Reserve approval. Any partial redemption of a series of preferred stock
would be made in the manner described in the applicable prospectus supplement relating to that series.
Upon the redemption
date of shares of preferred stock called for redemption or upon our earlier call and deposit of the redemption price, all rights
of holders of the preferred stock called for redemption will terminate, except for the right to receive the redemption price.
Dividends
Holders of each
series of preferred stock will be entitled to receive cash dividends only when, as and if declared by our board of directors out
of funds legally available for dividends on such preferred stock. The rates or amounts and dates of payment of dividends will
be described in the applicable prospectus supplement relating to each series of preferred stock. Dividends will be payable to
holders of record of preferred stock on the record dates fixed by our board of directors. Dividends on any series of preferred
stock may be cumulative or noncumulative, as described in the applicable prospectus supplement.
Our board of
directors may not declare, pay or set apart funds for payment of dividends on a particular series of preferred stock unless full
dividends on any other series of preferred stock that ranks equally with or senior to such series of preferred stock with respect
to the payments of dividends have been paid or sufficient funds have been set apart for payment for either of the
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all
prior dividend periods of each such series of preferred stock that pay dividends on a
cumulative basis; or
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the
immediately preceding dividend period of each such series of preferred stock that pays
dividends on a noncumulative basis.
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Partial
dividends declared on shares of any series of preferred stock and other series of preferred stock ranking on an equal basis as
to dividends will be declared pro rata. A pro rata declaration means that the ratio of dividends declared per share to accrued
dividends per share will be the same for all series of preferred stock of equal priority.
Liquidation Preference
In the
event of the liquidation, dissolution or winding-up of us, holders of each series of preferred stock will have the right to receive
distributions upon liquidation in the amount described in the applicable prospectus supplement relating to each series of preferred
stock, plus an amount equal to any accrued but unpaid dividends. These distributions will be made before any distribution is made
on our common stock or on any securities ranking junior to such preferred stock upon liquidation, dissolution or winding-up.
However, holders
of the shares of preferred stock will not be entitled to receive the liquidation price of their shares until we have paid or set
aside an amount sufficient to pay in full the liquidation preference of any class or series of our capital stock ranking senior
as to rights upon liquidation, dissolution or winding up. Unless otherwise provided in the applicable prospectus supplement, neither
a consolidation or merger of the Company with or into another corporation nor a merger of another corporation with or into the
Company nor a sale or transfer of all or part of the Company’s assets for cash or securities will be considered a liquidation,
dissolution or winding up of the Company.
If the liquidation
amounts payable to holders of preferred stock of all series ranking on a parity regarding liquidation are not paid in full, the
holders of the preferred stock of these series will have the right to a ratable portion of our available assets up to the full
liquidation preference. Holders of these series of preferred stock or such other securities will not be entitled to any other
amounts from us after they have received their full liquidation preference.
Conversion and Exchange
The prospectus
supplement will indicate whether and on what terms the shares of any future series of preferred stock will be convertible into
or exchangeable for shares of any other class, series or security of the Company or any other corporation or any other property
(including whether the conversion or exchange is mandatory, at the option of the holder or our option, the period during which
conversion or exchange may occur, the initial conversion or exchange price or rate and the circumstances or manner in which the
amount of common or preferred stock or other securities issuable upon conversion or exchange may be adjusted). It will also indicate
for preferred stock convertible into common stock, the number of shares of common stock to be reserved in connection with, and
issued upon conversion of, the preferred stock (including whether the conversion or exchange is mandatory, the initial conversion
or exchange price or rate and the circumstances or manner in which the amount of common stock issuable upon conversion or exchange
may be adjusted) at the option of the holder or our option and the period during which conversion or exchange may occur.
Voting Rights
The holders of
shares of preferred stock will have no voting rights, except:
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as
otherwise stated in the applicable prospectus supplement;
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as
otherwise stated in the articles of amendment to our Articles of Incorporation establishing
the series of such preferred stock; and
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as
otherwise required by applicable law.
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Transfer Agent and Registrar
The transfer
agent, registrar, dividend paying agent and depositary, if any, for any preferred stock offering will be stated in the applicable
prospectus supplement.
DESCRIPTION
OF DEBT SECURITIES
The complete
terms of the debt securities will be contained in the indenture and supplemental indenture applicable to the debt securities.
These documents will be included or incorporated by reference into this prospectus or the applicable prospectus supplement. You
should read the indenture and applicable supplemental indenture relating to any debt securities. You should also read the applicable
prospectus supplement, which will contain additional information and which may update or change some of the information below.
We may issue,
separately or together with, or upon conversion, exercise or exchange of other securities, debt securities, including debentures,
notes, bonds and other evidence of indebtedness as set forth in the applicable prospectus supplement. The debt securities may
be either secured or unsecured and will be either senior debt securities or subordinated debt securities. The debt securities
will be issued under one or more separate indentures between us and a trustee to be specified in an accompanying prospectus supplement.
Senior debt securities will be issued under a senior indenture and subordinated debt securities will be issued under a subordinated
indenture. We refer to the senior indenture and the subordinated indenture together as the indentures. This prospectus, together
with the applicable prospectus supplement, will describe the terms of each series of debt securities that we may offer from time
to time.
The following
summary of the material provisions of the indentures and the debt securities does not purport to be complete and is subject to,
and is qualified in its entirety by reference to, the provisions of the applicable indenture and certificates evidencing the applicable
debt securities. The specific terms of the applicable indenture and debt securities will be described in the applicable prospectus
supplement. If any particular terms of the applicable indenture or debt securities described in a prospectus supplement differ
from any of the terms described below, then the terms described below will be deemed to have been superseded by those described
in the applicable prospectus supplement.
Capitalized terms
used but not defined in this section have the meanings given to those terms in the applicable prospectus supplement or, if not
defined in the applicable prospectus supplement, in the applicable indenture.
As used in this
section, “we,” “our,” “us” and the “Company” refer only to TriState Capital Holdings,
Inc. and not to any of its subsidiaries.
General
Debt securities
may be issued in separate series without limitation as to aggregate principal amount. We may specify a maximum aggregate principal
amount for the debt securities of any series. We are not limited as to the amount of debt securities that we may issue under the
indentures. Unless otherwise provided in a prospectus supplement, a series of debt securities may be reopened to issue additional
debt securities of such series. The subordinated debt securities will be subordinated as described below under the heading “—Subordinated
Debt.”
The prospectus
supplement relating to a particular series of debt securities will set forth the material terms of the debt securities being offered,
as established pursuant to a board resolution, in an officer’s certificate or in a supplemental indenture, including:
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the
title of the debt securities and whether they are senior debt securities or subordinated
debt securities;
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the
offering price (which may be expressed as a percentage of the aggregate principal amount)
of the debt securities;
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the
aggregate principal amount of such series that may be authenticated and delivered under
the indentures (except for securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other securities of the series pursuant
to the indenture and except for any securities deemed never to have been authenticated
and delivered);
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the
maturity date or dates;
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if
applicable, whether the debt securities shall be subject to the defeasance provisions
described below under “—Satisfaction and Discharge” or such
other defeasance provisions specified in the applicable prospectus supplement for the
debt securities;
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any
conversion or exchange provisions;
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the
date of the debt securities if other than the date of original issuance;
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the
person who shall be entitled to receive interest, if other than the record holder on
the record date and the manner in which such interest will be payable;
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the
date or dates on which the principal of the debt securities of such series is payable;
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the
rate or rates, and if applicable the method used to determine the rate, at which the
debt securities of such series will bear interest, if any, the date or dates from which
such interest will accrue, the date or dates on which such interest will be payable and
the record date or dates for the interest payable on any debt securities on any interest
payment date;
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the
place or places where payments of principal and interest may be made and securities may
be surrendered for registration of transfer or for exchange;
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the
obligation, if any, of the Company to redeem or purchase the debt securities of such
series, at the option of the Company or at the option of a holder thereof, pursuant to
any sinking fund or other redemption provisions and the period or periods within which,
the price or prices at which and the terms and conditions upon which the debt securities
of the series may be so redeemed or purchased, in whole or in part;
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if
issued other than in minimum denominations of $1,000 or any multiple of $1,000, or $5,000
in the case of Bearer Securities, the denominations in which the debt securities will
be issuable;
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the
portion of the principal amount that will be payable upon acceleration of maturity, if
other than the entire principal amount;
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if
other than U.S. currency, the currency, currencies or currency units in which principal,
premium, if any, or interest will be payable and the manner of determining the equivalent
thereof in U.S. currency;
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if
the principal of (and premium, if any, on) or any interest on the debt securities is
to be payable, at our election or the election of a holder thereof, in one or more currencies
other than that the currency or currencies in which the debt securities are stated to
be payable, the currency or currencies in which payment is to be made payable and the
periods and terms upon which such election is to be made;
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if
the amount of payments of principal of (and premium, if any, on) or any interest on the
debt securities of the series may be determined by reference to an index, the manner
in which such amounts shall be determined;
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whether
the debt securities will be issuable in book-entry only form;
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any
interest rate calculation agents, exchange rate calculation agents or other agents for
the debt securities, if other than the trustee;
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whether
and under what circumstances we will pay additional amounts in respect of any series
of debt securities and whether we have the option to redeem such debt securities rather
than pay such additional amounts;
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any
provisions relating to the extension of maturity of, or the renewal of, the debt securities
of such series, or the conversion of the debt securities of such series into other securities
of the Company;
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any
provisions relating to the purchase or redemption of all or any portion of a tranche
or series of debt securities, including the period of notice required to redeem those
debt securities;
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the
terms and conditions, if any, pursuant to which the debt securities are secured;
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any
subordination provisions applicable to the subordinated debt securities if different
from those described below under “—Subordinated Debt”;
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any
other terms or provisions relating to the payment of principal of, premium (if any) or
interest thereon, including, but not limited to, whether such debt securities are issuable
at a discount or premium, as amortizable debt securities and if payable in, convertible
or exchangeable for commodities or other securities of ours; and
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any
other specific terms of such debt securities.
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If we denominate
the purchase price of any of the debt securities in a foreign currency or currencies, or if the principal of or premium, if any,
or interest on any series of debt securities is payable in a foreign currency or currencies, we will include in the applicable
prospectus supplement information on the restrictions, elections, material United States federal income tax considerations, specific
terms and other information with respect to that issue of debt securities and the relevant foreign currency or currencies.
Unless otherwise
specified in the prospectus supplement, the debt securities will be registered debt securities. Debt securities may be sold at
a substantial discount below their stated principal amount, bearing no interest or interest at a rate which at the time of issuance
is below market rates. The material United States federal income tax considerations applicable to debt securities sold at a discount
will be described in the applicable prospectus supplement.
Senior Debt
Except
as otherwise provided in a prospectus supplement, senior debt securities will be unsecured and will rank equally with all other
unsecured and unsubordinated debt of the Company, and will rank senior in right of payment to any subordinated debt.
Subordinated Debt
Except as otherwise
provided in a prospectus supplement, subordinated debt securities will be unsecured and will be subordinated in right of payment
to the prior payment in full of all of our Senior Indebtedness, as more fully described in the applicable prospectus supplement.
Notwithstanding the foregoing, if a deposit is made in
accordance with the terms of the indenture with respect to any debt securities
(and provided all other conditions set out in the indenture shall have been satisfied with respect to such debt securities), then,
when the 90th day after such deposit has ended, no money obligations so deposited, and no proceeds thereon, will be
subject to any rights of holders of Senior Indebtedness, including any rights of subordination.
Under the subordinated
debt indenture, Senior Indebtedness means, without duplication, the principal, premium, if any, unpaid interest (including interest
accruing on or after the filing of any petition in bankruptcy or for reorganization, whether or not a claim for post-filing interest
is allowed in such proceeding), fees, charges, expenses, reimbursement and indemnification obligations, and all other amounts
payable under or in respect of the following indebtedness, whether any such indebtedness exists as of the date of the indenture
or is created, incurred or assumed after such date:
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all
obligations for borrowed money;
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all
obligations evidenced by debentures, debt securities or other similar instruments;
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all
obligations associated with derivative products, including but not limited to, securities
contracts, foreign currency exchange contracts, swap agreements (including interest rate
and foreign exchange rate swap agreements), cap agreements, floor agreements, collar
agreements, interest rate agreements, foreign exchange rate agreements, options, commodity
futures contracts, commodity option contracts and similar financial instruments;
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all
obligations in respect of letters of credit or bankers acceptances or similar instruments
(or reimbursement obligations with respect thereto);
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all
obligations to pay the deferred purchase price of property or services, except trade
accounts payable arising in the ordinary course of business;
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all
indebtedness of others guaranteed by us or any of our subsidiaries or for which we or
any of our subsidiaries is legally responsible or liable (whether by agreement to purchase
indebtedness of, or to supply funds or to invest in, others);
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indebtedness
secured by any mortgage, pledge, lien, charge, encumbrance or any security interest existing
on property owned by the Company but excluding any obligations of the Company which are
required (as opposed to elected) to be treated as finance leases under generally accepted
accounting principles;
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purchase
money and similar obligations; and
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any
renewals, extensions, refundings or replacements of any of the foregoing.
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Methods of Receiving Payments
on the Debt Securities
Unless otherwise
indicated in a prospectus supplement, the debt securities will be payable as to principal, redemption premium, if any, and interest
at the office or agency of the paying agent (which may be us) or, at our option, payment of interest may be made by check mailed
to the holders of the debt securities at their last addresses as they appear on the register of holders or wired if held in book-entry
form.
Events of Default; Waiver
Unless we indicate
otherwise in a prospectus supplement with respect to a particular series of debt securities, an “event of default,”
when used in the indentures, means any of the following:
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our
default in the payment of the principal (or premium, if any) on any of the debt securities
of such series as and when due, either at maturity, upon redemption, by declaration or
otherwise, or any payment required by any sinking or analogous fund with respect to any
series of the debt securities;
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our
default in the payment of any installment of interest on the debt securities when due,
and continuance of such default for a period of 90 days;
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our
failure to observe or perform any other covenant or agreement in the debt securities
or the applicable indenture and the continuance of such default or breach for a period
of 90 days after our receipt of written notice from the trustee or the holders of at
least 25% in aggregate principal amount of the debt securities then outstanding of that
series specifying such failure and requiring it to be remedied;
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a
court having jurisdiction enters a decree or order for relief in respect of us or a Material
Subsidiary in an involuntary case or proceeding under any applicable bankruptcy, insolvency
or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of us or a Material Subsidiary or for any substantial
part of our or its respective property, or ordering the winding-up or liquidation of
our affairs shall have been entered and remained unstayed and in effect for a period
of 60 consecutive days;
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we
or a Material Subsidiary commence a voluntary case or proceeding under any applicable
bankruptcy, insolvency or other similar law, or consent to the entry of a decree or order
for relief in an involuntary case or proceeding under any such law, or the consent to
the appointment of or taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of us or a Material Subsidiary or
of any substantial part of our or its respective property, or the making by us or a Material
Subsidiary of a general assignment for the benefit of creditors; or
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any
other event of default provided with respect to a particular series of debt securities,
as described in the prospectus supplement with respect to the offering of such series.
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A Material Subsidiary
means TriState Capital Bank or any successor thereof or any of our subsidiaries that is a depository institution and that has
consolidated assets equal to 80% or more of our consolidated assets.
If an event of
default occurs and continues as described in the first, second, third or sixth bullet above, either the trustee or the holders
of at least 25% in aggregate principal amount of the debt securities of that series then outstanding by written notice to us (with
a copy to the trustee, if given by holders) may declare the principal amount of the debt securities of that series to be immediately
due and immediately payable. If an event of default occurs and continues as described in the fourth or fifth bullet above, the
principal amount of all of the debt securities issued under the indentures shall automatically be deemed immediately due and payable.
The indentures
also provide that the holders of a majority in principal amount of the debt securities of each series outstanding at the time
may, on behalf of the holders of all of the debt securities of that series, waive any past default with respect to the debt securities
and its consequences, except a default in the payment of the principal of, premium, if any, and interest on the debt securities
or a bankruptcy or insolvency-related default, or with respect to any covenant or provision that cannot be modified or amended
under the terms of the indenture without the holder of such outstanding debt security so affected.
The holders of
a majority in principal amount of the debt securities of each series may direct the time, method and place of conducting any proceeding
for any remedy available to the trustee or exercising any trust or power conferred on the trustee. However, the trustee may refuse
to follow any direction that conflicts with law or the indentures or that the trustee determines in good faith may be unjustly
prejudicial to the holders of the debt securities not consenting or that may involve the trustee in personal liability. In addition,
the trustee may take any other action it deems proper that is not inconsistent with any such direction received from the holders
of a majority in principal amount of the debt securities.
The trustee shall
be under no obligation to exercise any of the rights or powers vested in it by the indentures at the request, order or direction
of any of the holders of any debt securities or related coupons pursuant to the provisions of the indentures, unless such holders
shall have offered to the trustee security or indemnity reasonably satisfactory to it against the losses, costs, expenses and
liabilities which might be incurred by it in compliance with such request, order or direction. Except to enforce the right to
receive payment of principal, premium, if any, or interest, no holder of a debt security will have any right to institute any
proceeding, judicial or otherwise, with respect to the indenture, or for the appointment of a receiver or trustee, or for any
other remedy under the indenture unless:
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such
holder has previously given the trustee written notice of a continuing event of default;
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holders
of at least 25% in aggregate principal amount of the outstanding debt securities of that
series have made a written request to the trustee to institute proceedings in respect
of such event of default in its own name as trustee under the indenture;
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such
holders provide to the trustee reasonable indemnity acceptable to the trustee against
the costs, expenses and liabilities to be incurred with such request;
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the
trustee has failed to institute a proceeding within 60 days after its receipt of the
notice, request and offer of indemnity; and
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the
holders of a majority in aggregate principal amount of the outstanding debt securities
do not give the trustee a direction inconsistent with the request within such 60-day
period.
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Each indenture
requires the applicable trustee to notify the holders of a series regarding the existence of any default known to the trustee,
unless the default has been cured or waived. In addition, except in the case of a default in payment of principal of or interest
on any debt security or the payment of any sinking or purchase fund installment, the trustee may withhold notice of a default
if and so long as the trustee in good faith determines that withholding the notice is in the interests of the holders of the debt
securities. Furthermore, the trustee shall not provide notice of default to the holders of debt securities following our failure
to duly observe or perform any of the covenants or agreements contained in the debt securities or indenture (other than certain
payment obligations) unless at least 30 days after the occurrence thereof. For purposes of these requirements, a “default”
means any event which is, or after notice or lapse of time or both would become, an event of default under the indentures with
respect to the debt securities of such series.
We are required
to deliver to the trustee, within 120 days after the end of each fiscal year, commencing with the year during which the first
series of debt securities is issued under an indenture, a written statement signed by certain officers regarding our performance
under the indenture throughout the year and specifying any known default in the fulfilment of any of our obligations under the
indenture, together with certain additional details regarding any such known default.
Merger, Consolidation, Sale, Lease
or Conveyance
Unless otherwise
indicated in a prospectus supplement with respect to a particular series of debt securities, we will not merge into or consolidate
with any other corporation, or sell or convey all or substantially all of our assets to any person, firm, or corporation, unless:
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either
we are the continuing corporation or the successor corporation is a corporation organized
and existing under the laws of the United States or a state thereof or the District of
Columbia and expressly assumes the due and punctual payment of the principal, premium,
if any, and interest on all the debt securities according to their tenor, and the due
and punctual performance and observance of all of the covenants and conditions of the
indenture to be performed by us by supplemental indenture, executed and delivered to
the trustee by such successor corporation;
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neither
we nor such successor corporation, immediately after giving effect to such merger, consolidation,
sale or conveyance, will be in default in the performance of any covenant or condition
under the applicable indenture; and
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we
shall have delivered to the trustee an officer’s certificate and an opinion of
counsel, each stating that the transaction complies with the terms of the applicable
indenture and that all conditions precedent in such indenture provided for relating to
such transaction have been complied with.
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In the case of
any such consolidation or merger, sale or conveyance and upon any such assumption by the successor corporation, the successor
corporation shall succeed to, and be substituted for, us under the applicable indenture with the same effect as if it had been
an original party to such indenture.
Certain Covenants
The applicable
prospectus supplement will describe any restrictive covenants applicable to any debt securities we offer for sale.
Modification of the Indenture
Unless we indicate
otherwise in a prospectus supplement and except as set forth below, modification and amendment of an indenture, or entry into
a supplemental indenture applicable to the debt securities, may be made only when authorized by our board of directors and with
the consent of the holders of not less than a majority in principal amount of the debt securities outstanding affected by such
supplemental indenture, voting together as a single class.
Notwithstanding
the foregoing, no modification or amendment of an indenture as applicable to any series of debt securities may:
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extend
the fixed maturity of any debt security, or reduce the principal amount thereof or premium,
if any, or reduce the rate or extend the time of payment of interest thereon, without
the consent of the holder of each debt security so affected;
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reduce
the percentage in principal amount of outstanding debt securities that is required for
any supplemental indenture without the consent of the holders of all debt securities
then outstanding;
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modify
the subordination provisions in a manner adverse to the holders of any debt security;
or
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modify
any of the applicable provisions with respect to modification and waiver.
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In addition,
we and the trustee may modify or amend the indentures as applicable to the debt securities, with the consent of our board of directors
but without the consent of any holder of the debt securities, for any of the following purposes:
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to
evidence the succession of another corporation to the Company, or successive successions,
and provide for the successor’s assumption of our covenants, agreements and obligations
under the indentures and the debt securities issued thereunder;
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to
add further covenants, restrictions, conditions or provisions as our board of directors
considers to be for the protection of the holders of the debt securities, and to make
the occurrence, or the occurrence and continuance, of a default in any of such additional
covenants, restrictions, conditions or provisions an event of default permitting the
enforcement of all or any of the remedies provided under the applicable indenture, with
such period of grace and subject to such conditions as such supplemental indenture may
provide;
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to
add or change any of the provisions of the indenture to provide that Bearer Securities
may be registrable as to principal, to change or eliminate any restrictions on the payment
of principal of or any premium or interest on Bearer Securities, to permit Bearer Securities
to be issued in exchange for Registered Securities, to permit Bearer Securities to be
issued in exchange for Bearer Securities of other authorized denominations or to permit
or facilitate the issuance of debt securities in uncertificated form; provided, that
any such action shall not adversely affect the interests of the holders of the debt securities
or any related coupons in any material respect;
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to
modify, eliminate or add provisions of the indenture to such extent as necessary in order
to effect the qualification of the applicable indenture under the Trust Indenture Act
of 1939, as amended, or the Trust Indenture Act, or any similar federal statute thereafter
enacted, and to add such other provisions as may be expressly permitted by the Trust
Indenture Act, excluding Section 316(a)(2) thereof or any corresponding provision in
any similar federal statute hereafter enacted;
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to
modify, eliminate or add to any provisions of the indenture; provided that any such change
or elimination (i) becomes effective only when there are no outstanding debt securities
and created prior to the execution of such supplemental indenture that is entitled to
the benefit from such provision or (ii) does not apply to any outstanding debt security;
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(i)
to cure any ambiguity or to correct or supplement any provision in the indenture or any
supplemental indenture which may be defective or inconsistent with any other provision,
(ii) to convey, transfer, assign, mortgage or pledge any property to or with the trustee
or (iii) to make such other provisions in regard to matters or questions arising under
the indenture; provided, that no such provision shall adversely affect in any material
respect the interests of the holders of the debt securities or any related coupons, including
provisions necessary or desirable to provide for or facilitate the administration of
the trusts;
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to
secure any series of debt securities; and
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to
evidence and provide for the acceptance and appointment by a successor trustee with respect
to the debt securities of one or more series and to add or change any provisions of the
indenture as necessary to provide for or facilitate the administration of the trusts.
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The trustee shall
not be obligated to enter into any amendment or supplemental indenture that adversely affects the trustee’s own rights,
duties or immunities under the applicable indenture or otherwise.
Subject
to the requirements for the holders to waive a default related to bankruptcy events, defaults related to covenants or provisions
that cannot be modified without the consent of each affected holder, and the rights of any holder of a debt security to receive
payment of principal of, premium, if any, on and interest on such debt securities, holders of a majority in aggregate principal
amount of the debt securities voting as a single class of such series or of all debt securities, as the case may be, then outstanding
may waive all defaults with respect to that series or with respect to all securities treated as a single class and rescind and
annul such declaration and its consequences, but no waiver or rescission and annulment will extend to or affect any subsequent
default.
Outstanding Debt Securities; Determinations
of Holders’ Actions
Debt securities
outstanding at any time are the debt securities authenticated and delivered by the trustee except for those cancelled by the trustee
or delivered to the trustee for cancellation, those debt securities, or portions thereof, for which we have deposited in trust
with the trustee or any paying agent a sufficient amount of money for the payment or redemption thereof, those debt securities
that have been defeased under the indenture, and those debt securities that have been exchanged for other debt securities issued
under the indenture or that have been mutilated, destroyed, lost or stolen and replaced by the trustee. A debt security does not
cease to be outstanding because we or an affiliate of ours holds the debt security; provided, that in determining whether the
holders of the requisite aggregate principal amount of debt securities have given or concurred in any request, demand, authorization,
notice, direction, consent or waiver, debt securities owned by us, any other obligor of the debt securities or any other person
directly or indirectly controlling or controlled by or under direct or indirect common control with us or any other obligor on
the debt securities, will be disregarded and deemed not to be outstanding for the purpose of any such determination, except for
determining whether the trustee shall be protected in relying on any such request, demand, authorization, direction, notice, consent
or waiver, only debt securities which the trustee knows are so owned will be so disregarded, and debt securities that have been
pledged in good faith may also be regarded as outstanding under certain circumstances.
Satisfaction and Discharge
Each indenture
may be discharged and cease to be of further effect as to the applicable debt securities, when:
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all
debt securities of any series that have been authenticated and all coupons, if any, appertaining
thereto have been delivered to the trustee for cancellation, except (i) coupons on Bearer
Securities that meet certain conditions, (ii) debt securities and coupons that have been
destroyed, lost or stolen and that have been replaced or paid as provided in the indenture,
(iii) coupons relating to debt securities called for redemption and maturing after
the relevant redemption date, whose surrender has been waived, and (iv) debt securities
and coupons for which payment has been deposited in trust or segregated and held in trust
by us and thereafter repaid to us or discharged from such trust; or
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all
debt securities and certain coupons discussed above that have not been delivered to the
trustee for cancellation (i) have become due and payable, (ii) are by their terms due
and payable within one year or (iii) are to be called for redemption within one year
under arrangements satisfactory to the trustee for the giving of notice of redemption,
and in the case of clauses (i) and (iii) in the preceding bullet point, we have deposited
or caused to be deposited with the trustee as trust funds the entire amount (other than
moneys repaid by the trustee or any paying agent to us under the terms of the indenture)
sufficient to pay at maturity or upon redemption all debt securities of such series and
coupons not delivered to the trustee for cancellation, including principal (and premium,
if any) and any interest due or to become due to such date of maturity or date of redemption;
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we
have paid or caused to be paid all other sums payable by us under the applicable indenture
with respect to the debt securities;
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upon
demand of and at our cost and expense, the trustee has executed instruments reasonably
requested by us acknowledging the satisfaction and discharge of the applicable indenture
with respect to the debt securities; and
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we
have delivered to the trustee an officer’s certificate and an opinion of counsel
stating that the conditions precedent to the satisfaction and discharge of the debt securities
have been complied with.
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Legal Defeasance and Covenant
Defeasance
Legal Defeasance
Under the terms
of the indentures and unless otherwise provided in a supplemental indenture, we will be deemed to have paid and will be discharged
from any and all obligations in respect of the debt securities after we have made the deposit referred to below and the conditions
precedent and subsequent set forth below are satisfied, and the provisions of the applicable indenture will cease to be applicable
with respect to the debt securities (except for, among other matters, certain rights of the holders to receive payments
of principal, premium and interest when due on such debt securities from the trust fund, and our obligations to register the transfer
of or exchange of the debt securities, prepare temporary debt securities, replace stolen, lost or mutilated debt securities, maintain
paying agents and hold funds for payment in trust, and rights, powers, trusts, duties and immunities with respect to the trustee)
if:
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we
have irrevocably deposited or caused to be deposited with the trustee, in trust, money
in an amount and/or non-callable or non-redeemable government securities that will provide
funds in amount sufficient, in the opinion of a nationally recognized public accounting
firm expressed in a written certification delivered to the trustee, to pay the principal
of, premium, if any, and accrued interest on the debt securities until maturity or redemption
in accordance with the terms of the applicable indenture and any mandatory sinking fund
payments or analogous payments applicable to such debt securities;
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no
default or event that after notice or lapse of time, or both, would become a default
with respect to such debt securities, will have occurred and be continuing on the date
of such deposit, or insofar as events of default due to certain events of bankruptcy,
insolvency or reorganization in respect of us are concerned, during the period ending
on the 123rd day after the date of such deposit or, if longer, ending on the
day following the expiration of the longest preference period applicable to the company
with respect to such deposit;
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such
defeasance or covenant defeasance does not (i) cause the trustee for the debt securities
to have a conflicting interest under the terms of the indenture or the Trust Indenture
Act or (ii) result in the trust arising from such deposit to constitute, unless it is
qualified, a regulated investment company under the Investment Company Act of 1940, as
amended;
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such
defeasance or covenant defeasance does not result in a breach or violation of, or constitute
a default under, the indenture or any other agreement or instrument to which we are a
party or by which we are bound;
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such
defeasance or covenant defeasance does not cause any debt securities of such series then
listed on any registered national securities exchange under the Exchange Act to be delisted;
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we
have delivered to the trustee an opinion of counsel stating that (i) we have received
from, or there has been published by, the Internal Revenue Service a ruling or (ii) since
the date of the indenture there has been a change in the applicable United States federal
income tax law to the effect that, and based thereon, holders of the debt securities
will not recognize income, gain or loss for federal income tax purposes as a result of
such defeasance and will be subject to United States federal income tax on the same amounts
and in the same manner and at the same times as would have been the case if such defeasance
had not occurred;
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such
defeasance is effected in compliance with any terms, conditions or limitations which
may be imposed on the Company in connection with a supplemental indenture or board resolutions
establishing such series of debt securities; and
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we
shall have delivered to the trustee an officer’s certificate and an opinion of
counsel, each stating that all conditions precedent and subsequent provided for in the
indenture relating to the defeasance have been complied with.
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Covenant Defeasance
Under the terms
of the indentures and unless as otherwise provided in a supplemental indenture, we will not need to comply with certain restrictive
covenants, and the provisions of the applicable indenture will cease to be applicable with respect to an event of default under
the debt securities other than an event of default due to our failure to pay the principal of or interest on the debt securities
when due, upon:
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the
satisfaction of the conditions described above in “–Legal Defeasance and
Covenant Defeasance – Legal Defeasance,” other than with respect
to the sixth bullet point; and
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our
delivery to the trustee of an opinion of counsel to the effect that the holders of the
debt securities will not recognize income, gain or loss for United States federal income
tax purposes as a result of such covenant defeasance and will be subject to United States
federal income tax on the same amount and in the same manner and at the same times as
would have been the case if such covenant defeasance had not occurred.
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If we exercise
our option to omit compliance with certain provisions of the applicable indenture as described in the immediately preceding paragraph
and the debt securities are declared due and payable because of the occurrence of an event of default that remains applicable,
the amount of money and/or non-callable government securities on deposit with the trustee may not be sufficient to pay amounts
due on the debt securities at the time of acceleration resulting from such event of default. In such event, we will remain liable
for such payments.
Limitation on Individual Liability
No incorporator
or past, present or future stockholder, officer or director of ours or any successor corporation, as such, will have any liability
for any obligations, covenants or agreements of ours under the debt securities or the indentures or because of any indebtedness
evidenced thereby. Each holder of a debt security, by accepting a debt security waives and releases such liability. The waiver
and release are part of the consideration for the issuance of the debt securities. Such waiver may not be effective to waive liabilities
under the federal securities laws.
Trustee
The accompanying
prospectus supplement will specify the trustee for the particular series of debt securities to be issued under the indentures.
At all times,
the trustee must be a corporation organized and doing business under the laws of the United States or any state or territory thereof
or of the District of Columbia, with authority to exercise corporate trust powers, be subject to the supervision or examination
by federal, state, territorial or District of Columbia authority, have at all times a combined capital and surplus of not less
than $50,000,000 and not be the Company or any person directly or indirectly controlled or controlled by or under common control
with the Company.
If the trustee
acquires any conflicting interest, as defined in the Trust Indenture Act, with respect to the debt securities, within 90 days
after the trustee has acquired a conflicting interest, which has not been cured or waived, the trustee would generally be required
by the Trust Indenture Act to eliminate that conflicting interest or resign as trustee with respect to the debt securities issued
under the applicable indenture. If the trustee resigns, we are required to appoint a successor trustee with respect to the affected
securities promptly. The trustee and/or certain of its affiliates may provide banking, investment and other services to us.
Notices
Any notices required
to be given to the holders of the debt securities will be given by mail to the addresses of the holders in the security register.
Governing Law
The indentures
and the debt securities are governed by, and will be construed in accordance with, the laws of the State of New York. The indentures
will be subject to the provisions of the Trust Indenture Act that are required to be part of the indentures and will, to the extent
applicable, be governed by such provisions.
Book-Entry Delivery and Settlement
Global Debt Securities
We will issue
any debt securities in the form of one or more global debt securities in definitive, fully registered, book-entry form. The global
debt securities will be deposited with or on behalf of DTC, and registered in the name of Cede & Co., as nominee of DTC. Beneficial
interests in the global debt securities will be represented through book-entry accounts of financial institutions acting on behalf
of beneficial owners as direct and indirect participants in DTC. Investors may hold interests in the global debt securities through
DTC.
DTC has advised
us that:
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DTC
is a limited-purpose trust company organized under the New York Banking Law, a “banking
organization” within the meaning of the New York Banking Law, a member of the Federal
Reserve System, a “clearing corporation” within the meaning of the New York
Uniform Commercial Code and a “clearing agency” registered under Section
17A of the Exchange Act.
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DTC
holds securities that its participants deposit with DTC and facilitates the post-trade
settlement among participants of sales and other securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry changes
in participants’ accounts, thereby eliminating the need for physical movement of
security certificates.
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Direct
participants include securities brokers and dealers, banks, trust companies, clearing
corporations and other organizations.
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DTC
is a wholly owned subsidiary of The Depository Trust & Clearing Corporation, or DTCC.
DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed
Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned
by the users of its regulated subsidiaries.
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Access
to the DTC system is also available to others such as both U.S. and non-U.S. securities
brokers and dealers, banks, trust companies and clearing corporations that clear through
or maintain a custodial relationship with a direct participant, either directly or indirectly.
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The
rules applicable to DTC and its direct and indirect participants are on file with the
SEC.
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We have provided
the description of the operations and procedures of DTC in this prospectus solely as a matter of convenience. These operations
and procedures are solely within the control of those organizations and are subject to change by them from time to time. None
of us, any underwriters or any trustee takes any responsibility for these operations or procedures, and you are urged to contact
DTC or their participants directly to discuss these matters.
We expect that
under procedures established by DTC:
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upon
deposit of the global debt securities with DTC or its custodian, DTC will credit on its
internal system the accounts of direct participants designated by any underwriters with
portions of the principal amounts of the global debt securities; and
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ownership
of the debt securities will be shown on, and the transfer of ownership thereof will be
effected only through, records maintained by DTC or its nominee, with respect to interests
of direct participants, and the records of direct and indirect participants, with respect
to interests of persons other than participants.
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The laws of some
jurisdictions may require that purchasers of securities take physical delivery of those securities in definitive form. Accordingly,
the ability to transfer interests in the debt securities represented by a global debt security to those persons may be limited.
In addition, because DTC can act only on behalf of its participants, who in turn act on behalf of persons who hold interests through
participants, the ability of a person having an interest in debt securities represented by a global debt security to pledge or
transfer those interests to persons or entities that do not participate in DTC’s system, or otherwise to take actions in
respect of such interest, may be affected by the lack of a physical definitive security in respect of such interest.
So long as DTC
or its nominee is the registered owner of a global debt security, DTC or that nominee will be considered the sole owner or holder
of the debt securities represented by that global debt security for all purposes under the indenture and under the debt securities.
Except as provided below, owners of beneficial interests in a global debt security will not be entitled to have debt securities
represented by that global debt security registered in their names, will not receive or be entitled to receive physical delivery
of certificated debt securities and will not be considered the owners or holders thereof under the applicable indenture or under
the debt securities for any purpose, including with respect to the giving of any direction, instruction or approval to the trustee.
Accordingly, each holder owning a beneficial interest in a global debt security must rely on the procedures of DTC and, if that
holder is not a direct or indirect participant, on the procedures of the participant through which that holder owns its interest,
to exercise any rights of a holder of debt securities under the applicable indenture or a global debt security.
Neither we nor
any trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of
debt securities by DTC, or for maintaining, supervising or reviewing any records of those organizations relating to the debt securities.
Payments on the
debt securities represented by the global debt securities will be made to DTC or its nominee, as the case may be, as the registered
owner thereof. We expect that DTC or its nominee, upon receipt of any payment on the debt securities represented by a global debt
security, will credit participants’ accounts with payments in amounts proportionate to their respective beneficial interests
in the global debt security as shown in the records of DTC or its nominee. We also expect that payments by participants to owners
of beneficial interests in the global debt security held through such participants will be governed by standing instructions and
customary practice as is currently the case with securities held for the accounts of customers registered in the names of nominees
for such customers. The participants will be responsible for those payments.
Settlement Procedures
Secondary market
trading between DTC participants will occur in the ordinary way in accordance with DTC rules and will be settled in immediately
available funds.
Certificated Debt Securities
Individual certificates
in respect of any debt securities will not be issued in exchange for the global debt securities, except in very limited circumstances.
We will issue or cause to be issued certificated debt securities to each person that DTC identifies as the beneficial owner of
the debt securities represented by a global debt security upon surrender by DTC of the global debt security if:
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DTC
notifies us that it is no longer willing or able to act as a depositary for such global
debt security or ceases to be a clearing agency registered under the Exchange Act, and
we have not appointed a successor depositary within 90 days of that notice or becoming
aware that DTC is no longer so registered;
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an
event of default has occurred and is continuing, and DTC requests the issuance of certificated
debt securities; or
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subject
to DTC’s procedures, we determine not to have the debt securities of such series
represented by a global debt security.
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Neither we nor
any trustee will be liable for any delay by DTC, its nominee or any direct or indirect participant in identifying the beneficial
owners of the debt securities. We and any trustee may conclusively rely on, and will be protected in relying on, instructions
from DTC or its nominee for all purposes, including with respect to the registration and delivery, and the respective principal
amounts, of any certificated debt security to be issued.
DESCRIPTION
OF DEPOSITARY SHARES
We may elect
to offer fractional interests in shares of our preferred stock, in which case we will issue receipts for depositary shares and
each depositary share will represent a fraction of a share of the applicable series of our preferred stock, as set forth in the
applicable prospectus supplement. The following summary of the terms of the depositary shares does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, the terms of the depositary shares and our preferred stock,
as well as the form of the deposit agreement, depositary receipts, our Articles of Incorporation and any amendments thereto relating
to the applicable series of our preferred stock that will be filed with the SEC. Therefore, you should carefully consider the
actual provisions in these documents.
General
Each owner of
a depositary share will be entitled, in proportion to the applicable fractional interest in shares of our preferred stock underlying
that depositary share, to all rights and preferences of our preferred stock underlying that depositary share. These rights may
include dividend, voting, redemption and liquidation rights.
The shares of
our preferred stock underlying the depositary shares will be deposited with a bank or trust company selected by us to act as depositary,
under a deposit agreement between us, the depositary and the holders of the depositary receipts. The depositary will be the transfer
agent, registrar and dividend disbursing agent for the depositary shares. The name and address of the principal executive office
of the depositary will be included in the prospectus supplement relating to the issue.
The depositary
shares will be evidenced by depositary receipts issued pursuant to the depositary agreement. Holders of depositary receipts agree
to be bound by the deposit agreement, which will require holders to take certain actions, such as filing proof of residence and
paying certain charges.
Dividends and Other Distributions
The depositary
will distribute cash dividends or other cash distributions, if any, received in respect of the series of our preferred stock underlying
the depositary shares to the record holders of depositary receipts in proportion to the number of depositary shares owned by those
holders on the relevant record date. The relevant record date for depositary shares will be the same date as the record date for
our preferred stock.
In the event
of a distribution other than in cash, the depositary will distribute property received by it to the record holders of depositary
receipts that are entitled to receive the distribution, unless the depositary determines that it is not feasible to make the distribution.
If this occurs, the depositary, with our approval, may adopt another method for the distribution, including selling the property
and distributing the net cash proceeds to the holders.
Liquidation Preference
If a series of
our preferred stock underlying the depositary shares has a liquidation preference, in the event of our voluntary or involuntary
liquidation, dissolution or winding-up, holders of depositary shares will be entitled to receive the fraction of the liquidation
preference accorded each share of the applicable series of our preferred stock, as set forth in the applicable prospectus supplement.
Redemption
If a series
of our preferred stock underlying the depositary shares is subject to redemption, the depositary shares will be redeemed from
the proceeds received by the depositary resulting from the redemption, in whole or in part, of our preferred stock held by the
depositary. Whenever we redeem any of our preferred stock held by the depositary, the depositary will redeem, as of the same redemption
date, the number of depositary shares representing our preferred stock so redeemed. The depositary will mail the notice of redemption
to the record holders of the depositary receipts promptly upon receiving the notice from us, unless otherwise provided in the
applicable prospectus supplement, prior to the date fixed for redemption of our preferred stock.
After the date
fixed for redemption, the depositary shares called for redemption will no longer be outstanding. When the depositary shares are
no longer outstanding, all rights of the holders will terminate, except the right to receive money, securities or other property
payable upon redemption.
Voting
Upon receipt
of notice of any meeting at which the holders of our preferred stock are entitled to vote, the depositary will mail the information
contained in the notice of meeting to the record holders of the depositary receipts underlying our preferred stock. Each record
holder of those depositary receipts on the record date will be entitled to instruct the depositary as to the exercise of the voting
rights pertaining to the amount of our preferred stock underlying that holder’s depositary shares. The record date for the
depositary will be the same date as the record date for our preferred stock. The depositary will try, as far as practicable, to
vote the shares of our preferred stock underlying the depositary shares in accordance with these instructions. We will agree to
take all action that may be deemed necessary by the depositary in order to enable the depositary to vote our preferred stock in
accordance with these instructions. The depositary will not vote our preferred stock to the extent that it does not receive specific
instructions from the holders of depositary receipts.
Withdrawal of Preferred Stock
Owners of depositary
shares will be entitled to receive, upon surrender of depositary receipts at the principal office of the depositary and payment
of any unpaid amount due to the depositary, the number of whole shares of our preferred stock underlying their depositary shares.
Partial shares
of our preferred stock will not be issued. Holders of our preferred stock will not be entitled to deposit the shares under the
deposit agreement or to receive depositary receipts evidencing depositary shares for our preferred stock.
Amendment and Termination of the
Deposit Agreement
The form of depositary
receipt evidencing the depositary shares and any provision of the deposit agreement may be amended by agreement between the depositary
and us. However, any amendment that materially and adversely alters the rights of the holders of depositary shares, other than
fee changes, will not be effective unless the amendment has been approved by the holders of at least a majority of the outstanding
depositary shares. The deposit agreement may be terminated by the depositary or us only if:
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all
outstanding depositary shares have been redeemed; or
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there
has been a final distribution of our preferred stock in connection with our dissolution
and such distribution has been made to all holders of depositary shares.
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Charges of Depositary
We will pay all
United States transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangement.
We will also pay charges of the depositary in connection with:
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the
initial deposit of our preferred stock;
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the
initial issuance of the depositary shares;
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any
redemption of our preferred stock; and
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all
withdrawals of our preferred stock by owners of depositary shares.
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Holders
of depositary receipts will pay transfer, income and other taxes and governmental charges and other specified charges as provided
in the deposit agreement for their accounts. If these charges have not been paid, the depositary may:
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refuse
to transfer depositary shares;
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withhold
dividends and distributions; and
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sell
the depositary shares evidenced by the depositary receipt.
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Miscellaneous
The depositary
will forward to the holders of depositary receipts all reports and communications we deliver to the depositary that we are required
to furnish to the holders of our preferred stock. In addition, the depositary will make available for inspection by holders of
depositary receipts at the principal office of the depositary, and at such other places as it may from time to time deem advisable,
any reports and communications we deliver to the depositary as the holder of our preferred stock.
Neither we nor
the depositary will be liable if either we or the depositary are prevented or delayed by law or any circumstance beyond the control
of either the depositary or us in performing our respective obligations under the deposit agreement. Our obligations and the depositary’s
obligations will be limited to the performance in good faith of our or the depositary’s respective duties under the deposit
agreement. Neither we nor the depositary will be obligated to prosecute or defend any legal proceeding in respect of any depositary
shares or our preferred stock unless satisfactory indemnity is furnished. The depositary and we may rely on:
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written
advice of counsel or accountants;
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information
provided by holders of depositary receipts or other persons believed in good faith to
be competent to give such information; and
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documents
believed to be genuine and to have been signed or presented by the proper party or parties.
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Resignation and Removal of Depositary
The depositary
may resign at any time by delivering a notice to us. We may remove the depositary at any time. Any such resignation or removal
will take effect upon the appointment of a successor depositary and its acceptance of such appointment. The successor depositary
must be appointed within 60 days after delivery of the notice for resignation or removal. The successor depositary must be a bank
and trust company having its principal office in the United States of America and having a combined capital and surplus of at
least $50,000,000.
DESCRIPTION
OF WARRANTS
General
We may issue
warrants in one or more series to purchase debt securities, common stock, preferred stock or any combination of these securities.
Warrants may be issued independently or together with any underlying securities and may be attached to or separate from the underlying
securities. We will issue each series of warrants under a separate warrant agreement to be entered into between us and a warrant
agent. The warrant agent will act solely as our agent in connection with the warrants of such series and will not assume any obligation
or relationship of agency for or on behalf of holders or beneficial owners of warrants. The following sets forth some of the general
terms and provisions of the warrants. Further terms of the warrants and the applicable
warrant agreement will be stated in the
applicable prospectus supplement. The following description and any description of the warrants in a prospectus supplement are
not complete and are subject to and qualified in their entirety by reference to the terms and provisions of the warrant agreement
and related form of warrant certificate representing the warrants, which we will file with the SEC in connection with an issuance
of any warrants.
The applicable
prospectus supplement will describe the terms of any warrants, including the following, as may be applicable:
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the
title of the warrants;
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the
total number of warrants to be issued;
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the
consideration for which we will issue the warrants, including the applicable currency
or currencies;
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anti-dilution
provisions to adjust the number or amount of shares of our common stock or other securities
to be delivered upon exercise of the warrants;
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the
designation and terms of the underlying securities purchasable upon exercise of the warrants;
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the
price at which and the currency or currencies in which investors may purchase the underlying
securities purchasable upon exercise of the warrants;
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the
dates on which the right to exercise the warrants will commence and expire;
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the
procedures and conditions relating to the exercise of the warrants;
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whether
the warrants will be in registered or bearer form;
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information
with respect to book-entry registration and transfer procedures, if any;
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the
minimum or maximum amount of warrants that may be exercised at any one time;
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the
designation and terms of the underlying securities with which the warrants are issued
and the number of warrants issued with each underlying security;
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the
date on and after which the warrants and securities issued with the warrants will be
separately transferable;
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a
discussion of material United States federal income tax considerations;
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the
identity of the warrant agent; and
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any
other terms of the warrants, including terms, procedures and limitations relating to
the exchange, transfer and exercise of the warrants.
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Warrant certificates
may be exchanged for new warrant certificates of different denominations, and warrants may be exercised at the warrant agent’s
corporate trust office or any other office indicated in the applicable prospectus supplement. Prior to the exercise of their warrants,
holders of warrants exercisable for shares of our common stock or preferred stock will not have any rights of holders of our common
stock or preferred stock purchasable upon such exercise, including any rights to vote such shares or to receive any distributions
or dividends thereon.
Exercise of Warrants
A warrant
will entitle the holder to purchase for cash an amount of securities at an exercise price that will be stated in, or that will
be determinable as described in, the applicable prospectus supplement. Warrants may be exercised at any time prior to the close
of business on the expiration date and in accordance with the procedures set forth in the applicable prospectus supplement. Upon
and after the close of business on the expiration date, unexercised warrants will be void and have no further force, effect or
value.
DESCRIPTION
OF PURCHASE CONTRACTS AND PURCHASE UNITS
We may issue
purchase contracts for the purchase or sale of common stock, preferred stock or debt securities issued by us as specified in the
applicable prospectus supplement. Each purchase contract will entitle the holder thereof to purchase or sell, and obligate us
to sell or purchase on specified dates, such securities at a specified purchase price, which may be based on a formula, all as
set forth in the applicable prospectus supplement. We may, however, satisfy our obligations, if any, with respect to any purchase
contract by delivering the cash value of such purchase contract or the cash value of the securities otherwise deliverable, as
set forth in the applicable prospectus supplement. The applicable prospectus supplement will also specify the methods by which
the holders may purchase or sell such securities, and any acceleration, cancellation or termination provisions or other provisions
relating to the settlement of a purchase contract. The price per security and the number of securities may be fixed at the time
the purchase contracts are entered into or may be determined by reference to a specific formula set forth in the applicable purchase
contracts.
The purchase
contracts may be issued separately or as part of units consisting of a purchase contract and debt securities, or any other securities
offered under this prospectus and described in the applicable prospectus supplement or any combination of the foregoing, securing
the holders’ obligations to purchase the securities under the purchase contracts, which we refer to herein as purchase units.
The purchase contracts may require holders to secure their obligations under the purchase contracts in a specified manner. The
purchase contracts also may require us to make periodic payments to the holders of the purchase contracts or the purchase units,
as the case may be, or vice versa, and those payments may be unsecured or pre-funded on some basis.
The prospectus
supplement relating to any offering of purchase contracts or purchase units will contain the specific terms of the purchase contracts
or purchase units. These terms may include, without limitation, the following:
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whether
the purchase contracts obligate the holder or us to purchase or sell, or both purchase
and sell, the securities subject to purchase under the purchase contract, and the nature
and amount of each of those securities, or the method of determining those amounts;
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whether
the purchase contracts are to be prepaid or not;
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whether
the purchase contracts are to be settled by delivery, or by reference or linkage to the
value, performance or level of the securities subject to purchase under the purchase
contract;
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any
acceleration, cancellation, termination or other provisions relating to the settlement
of the purchase contracts or purchase units;
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a
discussion of the material United States federal income tax considerations applicable
to the purchase contracts or purchase units;
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whether
the purchase contracts or purchase units will be issued in fully registered or global
form; and
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any
other terms of the purchase contracts or purchase units and any securities subject to
such purchase contracts.
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The description
in the applicable prospectus supplement of any purchase contracts and purchase units we offer will not necessarily be complete
and is subject to, and will be qualified in its entirety by reference to, the applicable purchase contract or unit agreement,
which will be filed with the SEC in connection with any offering of such securities.
DESCRIPTION
OF SUBSCRIPTION RIGHTS
We may issue
subscription rights to purchase our common stock, preferred stock or debt securities. These subscription rights may be issued
independently or together with any other security offered hereby and may or may not be transferable by the stockholder receiving
the subscription rights in such offering. In connection with any offering of subscription rights, we may enter into a standby
arrangement with one or more underwriters or other purchasers pursuant to which the underwriters or other purchasers may be required
to purchase any securities that have not been subscribed for after such offering.
The applicable
prospectus supplement will describe the specific terms of any offering of subscription rights for which this prospectus is being
delivered, including the following:
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the
price, if any, for the subscription rights;
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the
exercise price payable for each share of our common stock or preferred stock or for debt
securities upon the exercise of the subscription rights;
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the
number of subscription rights issued to each stockholder;
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the
number and terms of each share of our common stock or preferred stock or debt securities
that may be purchased per each subscription right;
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the
extent to which the subscription rights are transferable;
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the
conditions to completion of the offering of subscription rights;
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any
provisions for adjustment of the number or amount of securities receivable upon exercise
of the subscription rights or the exercise price of the subscription rights;
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any
other terms of the subscription rights, including the terms, procedures and limitations
relating to the exchange and exercise of the subscription rights;
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the
date on which the right to exercise the subscription rights will commence, and the date
on which the subscription rights will expire;
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the
extent to which the subscription rights may include an over-subscription privilege with
respect to unsubscribed securities or an over-allotment privilege to the extent the securities
are fully subscribed; and
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if
applicable, the material terms of any standby underwriting or purchase arrangement entered
into by us in connection with the offering of subscription rights.
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The description
in the applicable prospectus supplement of any subscription rights we offer will not necessarily be complete and is subject to,
and will be qualified in its entirety by reference to, the applicable subscription rights agreement and subscription rights certificate,
which will be filed with the SEC in connection with any offering of subscription rights.
DESCRIPTION
OF UNITS
We may issue
units comprised of any combination of two or more of the other securities described in this prospectus and as specified in the
applicable prospectus supplement. Each unit will be issued so that the holder of the unit is also the holder, with rights and
obligations of a holder, of each security included in the unit. The units may be issued under unit agreements to be entered into
between us and a unit agent.
The applicable
prospectus supplement will specify the terms of the units, including:
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the
designation and terms of the units and of any of the securities comprising the units,
including whether and under what circumstances the securities comprising the units may
be held or transferred separately;
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a
description of the terms of any unit agreement governing the units;
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a
description of the provisions for the issuance, payment, settlement, transfer or exchange
of the units or of the securities comprising the units;
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a
discussion of material United States federal income tax considerations, if applicable;
and
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whether
the units, if issued as a separate security, will be issued in fully registered or global
form.
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The
applicable prospectus supplement will describe the terms of any units. The description in the applicable prospectus supplement
of any units we offer will not necessarily be complete and is subject to, and will be qualified in its entirety by reference to,
the applicable unit agreement, which will be filed with the SEC in connection with any offering of units.
PLAN OF DISTRIBUTION
We may sell the
securities offered under this prospectus from time to time pursuant to underwritten public offerings, negotiated transactions,
block trades or a combination of these methods or through underwriters, dealers or agents or directly to one or more purchasers.
The securities may be distributed from time to time in one or more transactions (or in any combination) at:
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a
fixed price or prices, which may be changed;
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market
prices prevailing at the time of sale;
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prices
related to the prevailing market price; or
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For each type
and series of securities offered, the applicable prospectus supplement will set forth the terms of the offering, including, without
limitation:
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the
public offering price;
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the
names of any underwriters, dealers or agents and the amount of securities underwritten
or purchased by each of them, if any;
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any
delayed delivery arrangements;
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the
proceeds from the sale of securities to us and the use of proceeds from the sale of the
securities;
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any
underwriting discounts, concessions, commissions, agency fees or other compensation payable
to underwriters, dealers or agents;
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any
discounts or concessions allowed or re-allowed or repaid to dealers;
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estimated
offering expenses; and
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the
securities exchanges on which the securities will be listed, if any.
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We may grant
underwriters options to purchase additional securities at the public offering price, with additional underwriting commissions
or discounts, as applicable, set forth in the prospectus supplement. The terms of any such option will be set forth in the prospectus
supplement for those securities.
Underwriters
or agents may make sales in privately negotiated transactions and/or any other method permitted by law, including sales deemed
to be an “at-the-market” offering as defined in Rule 415 under the Securities Act, which includes sales made directly
on the Nasdaq Global Select Market, the existing trading market for our common stock, or sales made to or through a market maker
other than on an exchange.
We may issue
to our existing security holders, though a dividend or similar distribution, rights to purchase shares of our common stock or
preferred stock, which may or may not be transferable. In any distribution of rights to our existing security holders, if all
of the underlying securities are not subscribed for, we may then sell the unsubscribed securities directly to third parties or
may engage the services of one or more underwriters, dealers or agents, including standby underwriters, to facilitate the distribution
of the unsubscribed securities. The applicable prospectus supplement will describe the specific terms of any offering of our common
stock or preferred stock through the issuance of rights including, if applicable, the material terms of any standby underwriting
agreement or purchase agreement.
Sales Through Underwriters, Dealers
or Agents; Direct Sales
If we use underwriters
in any sale of securities offered under this prospectus, the underwriters will buy the securities for their own account, including
through underwriting, purchase, security lending or repurchase agreements with us. The underwriters may then resell the securities
in one or more transactions at a fixed public offering price or at varying prices determined at the time of sale or thereafter.
Unless otherwise indicated in the prospectus supplement, the obligations of the underwriters to purchase the securities will be
subject to certain conditions and the underwriters will be obligated to purchase all the securities offered if they purchase any
securities. The public offering price for the securities and any discounts or concessions allowed or re-allowed or paid to dealers
may be changed from time to time.
If we use
dealers in any sale of securities offered under this prospectus, the securities will be sold to such dealers as principals. The
dealers may then resell the securities to the public at varying prices to be determined by such dealers at the time of resale.
If agents are
used in any sale of securities offered under this prospectus, they will use their reasonable best efforts to solicit purchases
for the period of their appointment or to sell our securities on a continuing basis. If required, the prospectus supplement relating
to any particular offering of securities will name any agents designated to solicit offers and will include information about
any commissions they may be paid in that offering.
If securities
offered under this prospectus are sold directly, no underwriters, dealers or agents would be involved.
We are not making
an offer of securities in any state that does not permit such an offer. If we sell securities through dealers or agents, or directly,
the terms of any such sales will be described in the applicable prospectus supplement.
Delayed Delivery Contracts
We may authorize
underwriters, dealers or agents to solicit offers from certain institutions whereby the institution contractually agrees to purchase
the securities offered under this prospectus from us on a future date at a specific price. This type of contract may be made only
with institutions that we specifically approve. Such institutions could include banks, insurance companies, pension funds, investment
companies and educational and charitable institutions. The underwriters, dealers or agents will not be responsible for the validity
or performance of these contracts. The prospectus supplement relating to the contracts will set forth the price to be paid for
offered securities pursuant to such contracts, the commission payable for solicitation of the contracts and the date or dates
in the future for delivery of offered securities pursuant to the contracts.
Market Making, Stabilization and
Other Transactions
Each issue of
a new series of securities, other than issuances of our common stock, will not have an established trading market, except as indicated
in the applicable prospectus supplement. Unless indicated in the applicable prospectus supplement, we do not expect to list the
offered securities on a securities exchange, except for our common stock, which is listed on the Nasdaq Global Select Market.
We can provide no assurance as to whether any of our securities will have a liquid trading market.
In order to facilitate
the offering of any of the securities offered under this prospectus, the underwriters with respect to any such offering may, as
described in the prospectus supplement and in accordance with applicable law, engage in transactions that stabilize, maintain
or otherwise affect the price of the securities or any other securities the prices of which may be used to determine payments
on these securities. Stabilizing transactions involve bids to purchase the underlying security in the open market for the purpose
of preventing or delaying a decline in the price of the securities. Syndicate covering transactions involve purchases of the securities
in the open market after the distribution has been completed in order to cover syndicate short positions. Penalty bids permit
the underwriters to reclaim a selling concession from a syndicate member when the securities originally sold by the syndicate
member are purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions. Any of these activities
may have the effect of raising or maintaining the market price of our securities or preventing or delaying a decline in the market
price of our securities. As a result, the market price of the securities may be higher than it otherwise would be in the absence
of these transactions. The underwriters are not required to engage in these activities, and may end any of these activities at
any time, all as described in the applicable prospectus supplement.
Any person participating
in the distribution of securities will be subject to applicable provisions of the Exchange Act and the rules and regulations under
the Exchange Act, including Regulation M, which may limit the timing of transactions involving the securities offered under this
prospectus. Furthermore, Regulation M may restrict the ability of any person engaged in the distribution of such securities to
engage in market-making activities with respect to the particular securities being distributed. All of the above may affect the
marketability of the securities offered under this prospectus and the ability of any person or entity to engage in market-making
activities with respect to such securities.
Derivative Transactions and Hedging
We, the underwriters
or other agents engaged by us may engage in derivative transactions involving the securities. These derivatives may consist of
short sale transactions and other hedging activities. The underwriters or agents may acquire a long or short position in the securities,
hold or resell securities acquired and purchase
options or futures on the securities and other derivative instruments with returns
linked or related to changes in the price of the securities. In order to facilitate these derivative transactions, we may enter
into security lending or repurchase agreements with the underwriters or agents. The underwriters or agents may effect the derivative
transactions through sales of the securities to the public, including short sales, or by lending the securities in order to facilitate
short sale transactions by others. The underwriters or agents may also use the securities purchased or borrowed from us or others
(or, in the case of derivatives, securities received from us in settlement of those derivatives) to directly or indirectly settle
sales of the securities or close out any related open borrowings of the securities.
General Information
We expect that
any agreements we may have with underwriters, dealers and agents will include provisions indemnifying them against certain civil
liabilities, including certain liabilities under the Securities Act, or providing for contribution with respect to payments that
they may be required to make. An underwriter, dealer or agent, or any of their affiliates, may be a customer of, or otherwise
engage in transactions with or perform services for us in the ordinary course of business.
The specific
terms of any lock-up provisions with respect to any given offering will be described in the applicable prospectus supplement.
Under the securities
laws of various states, the securities offered under this prospectus may be sold in those states only through registered or licensed
brokers or dealers. In addition, in various states the securities offered under this prospectus may not be offered and sold unless
such securities have been registered or qualified for sale in the state or an exemption from such registration or qualification
is available. We are not making an offer of securities in any state that does not permit such an offer.
LEGAL MATTERS
Unless otherwise
indicated in the applicable prospectus supplement, the validity of the securities will be passed upon for us by our General Counsel,
Karla Villatoro de Friedman, and Covington & Burling LLP, Washington, D.C. If legal matters are passed upon by counsel for
the underwriters, dealers or agents, if any, such counsel will be named in the prospectus supplement relating to such offering.
EXPERTS
The consolidated
financial statements of TriState Capital Holdings, Inc. as of December 31, 2018 and 2017, and for each of the years in the three-year
period ended December 31, 2018, and management’s assessment of the effectiveness of internal control over financial reporting
as of December 31, 2018 have been incorporated by reference herein in reliance upon the reports of KPMG LLP, independent registered
public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
$37,500,000
5.75%
Fixed-to-Floating Rate Subordinated Notes due 2030
PROSPECTUS
SUPPLEMENT
Joint Book-running Managers
Stephens Inc.
PNC Capital
Markets LLC
Raymond James
May
29, 2020
TriState Capital (NASDAQ:TSCBP)
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