Raymond James Financial and TriState Capital Holdings 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 cash and 0.25 Raymond James shares for each share of TriState Capital common stock they own, representing a per share consideration of $31.09 based on the closing price of Raymond James common stock on Oct. 19. In addition, Raymond James 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 stock 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,” Paul Reilly, chairman and CEO of Raymond James, said. “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,” Jim Getz, chairman and CEO of TriState Capital Holdings, said. “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 standalone division and independently chartered bank subsidiary of Raymond James, with Getz remaining chairman, Brian Fetterolf remaining TriState Capital Bank’s CEO and Tim Riddle remaining Chartwell Investment Partners’ CEO. Management and approximately 350 associates are expected to remain with the firm in its existing office locations.

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 Sept. 30, 2021. 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

The acquisition is projected to be accretive to diluted earnings per share in the first full year post closing (excluding acquisition-related expenses), with more than 8% accretion in diluted earnings per share after the third year.

The acquisition is subject to customary closing conditions, including regulatory approvals and approval by TriState Capital shareholders, and is expected to close in 2022.

Raymond James & Associates served as financial advisor to Raymond James and Sullivan & Cromwell served as legal counsel. Stephens served as financial advisor to TriState Capital and Mayer Brown served as legal counsel.