TriState Capital Holdings, Inc.

TriState said quarterly revenue, net interest income, net income, and net income available to common shareholders all showed strong organic growth, and EPS was up 69% year over year. Chartwell reported year-to-date net inflows of about $499 million and double-digit organic growth in assets under management and revenue; TriState also said private banking securities-based loans grew 39% over the last 12 months to surpass $6 billion, or 63% of total loans, and treasury management deposit balances rose more than $1 billion over the past 12 months and to $2.45 billion since launch. Raymond James said TriState has annualized net revenues of $244 million and pre-tax income of $92 million, a 38% pre-tax margin, with total assets of $12 billion and total loans of nearly $10 billion. Transaction terms call for TriState common shareholders to receive $6 cash and 0.25 Raymond James shares per share, implying $31.09 per share based on Raymond James’ October 19, 2021 closing price; total consideration was described as about $354 million of cash and 7.8 million Raymond James shares, or around $1.1 billion at current stock price. Raymond James expects the deal to close sometime in 2022, to be accretive to diluted EPS in the first full year post-closing excluding acquisition-related expenses, and to exceed 8% accretion by year three, with about 400 basis points of additional accretion potential if shares are repurchased post-close. It estimated the transaction would reduce Tier 1 leverage by about 150 to 200 basis points at close, and by about 250 to 300 basis points including expected buybacks.

Jim Getz said the quarter showed the kind of organic growth that attracted Raymond James in the first place, and he stressed that each business kept contributing: asset management, private banking, and commercial banking. His tone was optimistic and celebratory, with a strong emphasis on client service, independence, and continuity for employees and clients under the new ownership. He framed the transaction as a way to accelerate growth without changing the way TriState operates day to day.

Paul Shoukry focused on valuation, capital, and accretion. He said TriState shareholders will receive $6 cash plus 0.25 RJF shares per share, the deal is about $1.1 billion at current stock price, and the transaction should be EPS accretive in year one and over 8% accretive by year three, with roughly 400 basis points of extra accretion if Raymond James repurchases stock post-close. He also walked through capital impact, saying Tier 1 leverage should fall by about 150 to 200 basis points on close, or 250 to 300 basis points including the anticipated buyback, while noting Raymond James still expects to maintain flexibility for dividends, buybacks, and continued loan growth.

Analysts pressed on whether the deal’s value came mainly from the loan portfolios or from broader synergies, and management said the key upside is TriState’s high-growth SBL platform plus Raymond James’ excess deposits and capital, which can earn a better spread than Raymond James can deploy alone. Questions also focused on why use stock instead of more cash, and management said the structure reflected seller preference and long-term retention, while Raymond James plans to buy back stock after closing as allowed. Later questions covered growth capacity, conflicts, and whether TriState’s technology could help Raymond James expand SBL; management said TriState’s tech and distribution were hard to replicate organically, and that the businesses will stay separate to avoid conflicts and preserve client trust.