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Why Shares of Tristate Capital Are Surging Today

By Bram Berkowitz – Oct 21, 2021 at 11:10AM

Key Points

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Tristate earlier today announced that it plans to be acquired by Raymond James.

What happened

Shares of the branchless bank Tristate Capital Holdings (TSC) had shot up more than 30% as of 11 a.m. EDT Thursday after the company announced it will be acquired by Raymond James Financial (RJF 0.91%).

So what

Raymond James announced it plans to purchase Tristate in a part stock, part cash transaction valued at $1.1 billion. The total consideration for each Tristate shareholder is $31.09. Shares of Tristate closed at $22.75 yesterday, which implies a roughly 37% premium over yesterday's closing price.

"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 in a statement.

Tristate comes with nearly $11 billion of deposits and nearly $10 billion of loans including a large securities-based lending unit. Tristate also has an investment management unit with $11.5 billion of assets under management.

Outline of two people shaking hands.

Image source: Getty Images.

Now what

Raymond James stock, which Tristate is now tied to, is down more than 3% today, as it's not uncommon to see an acquirer's stock get dinged up following a deal announcement. Considering Tristate shareholders received a 37% premium and the bank is only up 31%, there could be more room to run.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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