Raymond James Financial, Inc. (NYSE: RJF) and TriState Capital
Holdings, Inc. (NASDAQ: TSC) have entered into a definitive
agreement under which Raymond James will acquire TriState Capital
in a combination cash and stock transaction, valued at
approximately $1.1 billion. Under the terms of the agreement,
TriState Capital common stockholders will receive $6.00 cash and
0.25 Raymond James shares for each share of TriState Capital common
stock, which represents per share consideration of $31.09 based on
the closing price of Raymond James common stock on October 19,
2021. Raymond James has entered into an agreement with the
sole holder of the TriState Capital Series C Perpetual
Non-Cumulative Convertible Non-Voting Preferred Stock pursuant to
which the Series C Convertible Preferred will be converted to
common shares at the prescribed exchange ratio and cashed out at
$30 per share. The TriState Capital Series A
Non-Cumulative Perpetual Preferred Stock and Series B
Non-Cumulative Perpetual Preferred Stock will remain outstanding
and be converted into equivalent Preferred Stock of Raymond
James.
“TriState Capital has a terrific, client-centric franchise
focused on serving clients with premier private banking, commercial
banking and niche investment management products and services,”
said Paul Reilly, Chairman and CEO of Raymond James. “As we have
followed the firm and management team over the past several
years, including as its largest deposit client, we’ve admired
its leadership position in offering securities-based
lending through a scalable and robust technology platform.
Importantly, this acquisition further illustrates our commitment to
utilize excess capital through organic and inorganic growth that we
expect to drive strong returns for shareholders over the long
term.”
“We founded TriState Capital 14 years ago because we saw an
incredible opportunity to build a successful company built on a
commitment to independence, a long-term perspective, integrity, and
putting clients squarely at the center of everything we do and
every decision we make,” said Jim Getz, Chairman and CEO of
TriState Capital Holdings. “Raymond James shares those values
and allows us to be part of one of the most highly regarded
financial services companies in the nation. Our clients will
continue to benefit from working with the same talented teams
and the TriState Capital and Chartwell brands they already know so
well, along with the technology we’ve invested in to provide
an exceptional and responsive client experience. Raymond James’
strong balance sheet will provide supplemental capital and
liquidity to continue enabling our fast-growing and highly scalable
business model to meet clients’ commercial and securities-based
lending and asset management needs.”
TriState Capital will continue operating as a separately branded
firm and as a stand-alone division and independently chartered
bank subsidiary of Raymond James, with Jim Getz remaining Chairman,
Brian Fetterolf remaining TriState Capital Bank’s CEO and Tim
Riddle remaining Chartwell’s CEO. Management and approximately 350
associates are expected to remain with the firm in its existing
office locations to support TriState Capital’s continued growth and
high service levels.
Key Strategic Highlights:
- TriState Capital has grown private banking securities-based
lending (SBL) organically at a 32% compound annual rate since 2017
and 39% over the last 12 months to $6.2 billion as of September 30,
2021. Supported by a leading digital lending platform and a robust
risk management technology system, TriState Capital offers these
loans to high net worth borrowers nationally by working with
independent investment advisory firms, trust companies,
broker-dealers, regional securities firms, family offices,
insurance companies and other financial intermediaries
- Raymond James provides TriState Capital with relatively
low-cost capital and a stable funding base to enable continued and
more profitable growth
- The combination will provide TriState Capital additional
resources to continue investing in its people, products and
technology to further strengthen its client relationships
- Combination provides an additional bank charter and a
sophisticated national liquidity and treasury management business
to diversify Raymond James’ deposit gathering capabilities and to
provide additional internal FDIC-insured deposit capacity to
Raymond James’ Private Client Group clients
- TriState Capital has organically grown middle-market commercial
loans at an 18% compound annual rate since 2017 and 15% over the
last 12 months to $3.7 billion as of September 30, 2021
- TriState Capital’s highly-experienced lending and credit
management teams, combined with its disciplined loan approval
process and collateral monitoring system, has led to superb credit
quality across the entire portfolio
- Chartwell Investment Partners will maintain an independent
brand and management and operate as a subsidiary of Carillon Tower
Advisers with pro forma combined assets under management of
approximately $80 billion. Chartwell will leverage Carillon Tower
Advisers’ multi-boutique structure to increase scale, drive
distribution, and realize operational and marketing synergies
- TriState Capital’s long-standing commercial fund finance
solutions for private fund managers provides an opportunity to
expand relationships with Raymond James’ investment banking
clients
Key Financial Metrics:
- Projected to be accretive to diluted earnings per share in the
first full year post closing (excluding acquisition-related
expenses), with over 8% accretion in diluted earnings per share
after the third year; accretion estimates increase meaningfully, by
approximately 400 basis points, assuming share repurchases
post-closing to offset shares issued as part of the transaction
consideration
- Primary driver of cost synergies is replacing a portion of
TriState Capital Bank’s current and future higher-cost deposits
with Raymond James’ lower-cost deposits from the Raymond James Bank
Deposit Program
Raymond James is a leading diversified financial services
company providing private client group, capital markets, asset
management, banking and other services to individuals, corporations
and municipalities. The firm serves more than 8,400 financial
advisors managing approximately $1.2 trillion in client assets
through a multiple affiliation model. Raymond James’ bank
subsidiary, Raymond James Bank, has assets of $35 billion serving
corporations and Private Client Group clients. The firm’s
asset management subsidiary, Carillon Tower Advisers, manages
retail and institutional fixed income and equity strategies of
$69 billion.
TriState Capital Holding is a diversified financial services
firm providing banking and asset management services to
individuals, corporations and municipalities. Through a branchless
bank model with over $12 billion in assets, TriState Capital is the
nation’s leading provider of securities-based loans for clients of
independent investment advisory firms, trust companies,
broker-dealers, regional securities firms, family offices,
insurance companies and other financial intermediaries that do not
offer proprietary banking services. The firm’s banking franchise
includes private banking and middle-market focused commercial
lending with approximately $10 billion in loans. Additionally, the
firm’s asset management franchise, Chartwell Investment Partners,
manages assets of approximately $11 billion predominantly in
equity and fixed income strategies.
The acquisition is subject to customary closing conditions,
including regulatory approvals and approval by TriState Capital
shareholders, and is expected to close in 2022.
Advisors to Raymond James are Raymond James & Associates as
financial advisor and Sullivan & Cromwell LLP as legal counsel.
Advisors to TriState Capital are Stephens Inc. as financial advisor
and Mayer Brown LLP as legal counsel.
Transaction Presentation and Investor Conference
Call
A conference call to discuss the announced transaction will be
held Thursday, Oct 21, at 8:30 a.m. ET. Raymond James Chairman and
CEO Paul Reilly and CFO Paul Shoukry will join TriState Capital
Holdings’ Chairman and CEO Jim Getz, CFO David Demas; TriState
Capital Bank President and CEO Brian Fetterolf and Chartwell
Managing Partner and CEO Tim Riddle for the live call and webcast.
A supplemental slide presentation on the transaction and the link
to the live webcast will be provided at
https://www.raymondjames.com/investor-relations.
Interested parties should pre-register for the call using the
link https://dpregister.com/sreg/10160497/edacb54f34 to receive a
special dial-in number and PIN. The call may also be accessed by
dialing 888-339-0757 from the United States or Canada and
412-902-4194 from other international locations and asking for the
“TriState Capital investor call.” The live conference call will
also be available through an audio webcast accessible
at https://investors.tristatecapitalbank.com, where an
archived replay will also be made available.
A telephone replay of the call will be available approximately
one hour after the end of the conference through October 28, 2021.
The telephone replay may be accessed by dialing 877-344-7529 from
the United States, 855-669-9658 from Canada or 412-317-0088 from
other international locations, and entering the conference number
10160497.
Forward-Looking Statements
Statements included in this communication, which are not
historical in nature are intended to be, and are hereby identified
as, forward-looking statements for purposes of the safe harbor
provided by Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. These statements
include, but are not limited to, statements about the benefits of
the proposed acquisition of TriState Capital Holdings by Raymond
James Financial, including future financial and operating results
(including the anticipated effect of the transaction on Raymond
James Financial’s and TriState Capital Holdings’ respective
earnings), statements related to the expected timing of the
completion of the transaction, Raymond James Financial’s plans
post-transaction, objectives, expectations and intentions, and
other statements that are not historical facts. Forward-looking
statements may be identified by terminology such as “may,” “will,”
“should,” “scheduled,” “plans,” “intends,” “anticipates,”
“expects,” “believes,” “estimates,” “potential,” or “continue”
or negatives of such terms or other comparable terminology. All
forward-looking statements are subject to risks, uncertainties and
other factors that may cause the actual results, performance or
achievements of Raymond James Financial or TriState Capital
Holdings to differ materially from any results expressed or implied
by such forward-looking statements. Such factors include, among
others: (1) the risk that the cost savings and any revenue
synergies from the transaction may not be fully realized or may
take longer than anticipated to be realized; (2) disruption to the
parties’ businesses as a result of the announcement and pendency of
the transaction; (3) the occurrence of any event, change or other
circumstances that could give rise to the termination of the
transaction agreement; (4) the risk that the integration of each
party’s operations will be materially delayed or will be more
costly or difficult than expected or that the parties are otherwise
unable to successfully integrate each party’s businesses into the
other’s businesses; (5) the failure to obtain the necessary
approvals by the shareholders of TriState Capital Holdings; (6) the
amount of the costs, fees, expenses and charges related to the
transaction; (7) the ability by each of Raymond James Financial and
TriState Capital Holdings to obtain required governmental approvals
of the transaction (and the risk that such approvals may result in
the imposition of conditions that could adversely affect the
combined company or the expected benefits of the transaction); (8)
reputational risk and the reaction of each company's customers,
suppliers, employees or other business partners to the transaction;
(9) the failure of the closing conditions in the transaction
agreement to be satisfied, or any unexpected delay in closing the
transaction; (10) the possibility that the transaction may be more
expensive to complete than anticipated, including as a result of
unexpected factors or events; (11) the dilution caused by Raymond
James Financial’s issuance of additional shares of its common stock
in the transaction; (12) general competitive, economic, political
and market conditions, and (13) other factors that may affect
future results of TriState Capital Holdings and Raymond James
Financial including changes in asset quality and credit risk; the
inability to sustain revenue and earnings growth; changes in
interest rates and capital markets; inflation; customer borrowing,
repayment, investment and deposit practices; the impact, extent and
timing of technological changes; capital management activities; and
other actions of the Board of Governors of the Federal Reserve
System and the Federal Deposit Insurance Corporation and
legislative and regulatory actions and reforms. Additional factors
which could affect future results of Raymond James Financial and
TriState Capital Holdings can be found in Raymond James Financial’s
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and
Current Reports on Form 8-K, and TriState Capital Holdings’ Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current
Reports on Form 8-K, in each case filed with the SEC and available
on the SEC’s website at http://www.sec.gov. Raymond James Financial
and TriState Capital Holdings disclaim any obligation and do not
intend to update or revise any forward-looking statements contained
in this communication, which speak only as of the date hereof,
whether as a result of new information, future events or otherwise,
except as required by federal securities laws. As forward-looking
statements involve significant risks and uncertainties, caution
should be exercised against placing undue reliance on such
statements.
Important Information About the Transaction and Where to
Find It
Raymond James Financial intends to file a registration statement
on Form S-4 with the SEC to register the shares of Raymond James
Financial’s common stock and preferred stock that will be issued to
TriState Capital Holdings’ shareholders in connection with the
transaction. The registration statement will include a proxy
statement of TriState Capital Holdings that also constitutes a
prospectus of Raymond James Financial. The definitive proxy
statement/prospectus will be sent to the shareholders of TriState
Capital Holdings in connection with the proposed transaction.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION
STATEMENT AND PROXY STATEMENT/PROSPECTUS WHEN THEY BECOME AVAILABLE
(AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE
TRANSACTION OR INCORPORATED BY REFERENCE INTO THE PROXY
STATEMENT/PROSPECTUS) BECAUSE SUCH DOCUMENTS WILL CONTAIN IMPORTANT
INFORMATION REGARDING THE PROPOSED TRANSACTION AND RELATED MATTERS.
Investors and security holders may obtain free copies of these
documents and other documents filed with the SEC by Raymond James
Financial or TriState Capital Holdings through the website
maintained by the SEC at http://www.sec.gov or by contacting the
investor relations department of Raymond James Financial or
TriState Capital Holdings at:
Raymond James Financial880 Carillon ParkwaySaint Petersburg, FL
33716Attention: Investor Relations |
TriState Capital Holdings301 Grant Street, Suite
2700Pittsburgh, PA 15219Attention: Investor Relations |
Before making any voting or investment decision, investors and
security holders of Raymond James Financial and TriState Capital
Holdings are urged to read carefully the entire registration
statement and proxy statement/prospectus when they become
available, including any amendments thereto, because they will
contain important information about the proposed transaction. Free
copies of these documents may be obtained as described above.
Participants in the Solicitation
Raymond James Financial, TriState Capital Holdings, and certain
of their respective directors and executive officers may be deemed
participants in the solicitation of proxies in respect of the
proposed transaction. Information about the directors and executive
officers of Raymond James Financial can be found in Raymond James
Financial’s definitive proxy statement in connection with its 2021
annual meeting of shareholders, as filed with the SEC on January 8,
2021, and other documents subsequently filed by Raymond James
Financial with the SEC. Information about the directors and
executive officers of TriState Capital Holdings can be found in
TriState Capital Holdings’ definitive proxy statement in connection
with its 2021 annual meeting of shareholders, as filed with the SEC
on April 7, 2021, and other documents subsequently filed by
TriState Capital Holdings with the SEC. Other information regarding
the participants in the proxy solicitation and a description of
their direct and indirect interests, by security holdings or
otherwise, will be contained in the proxy statement/prospectus and
other relevant materials to be filed with the SEC regarding the
transaction when they become available.
Media Contact: Tracey Bustamante / Investor Contact: Kristina Waugh
Raymond James
727.567.2824 / 727.567.7654
Media Contact: Jack Horner / Investor Contact: Jeff Schoenborn
TriState Capital
267.932.8760, ext. 302 / 888.609.8351
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