TSC - Earnings call transcript Q3 2021 | TriState Capital Holdings, Inc.

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Operator

Good morning, everyone, and thank you for joining me a joint call with Raymond James Financial and TriState Capital Holdings. This call is being recorded and a replay will be available on the Investor Relations page of the Company's website at www.raymondjames.com and investors.tristatecapitalbank.com.

Now, I'll turn the conference call over to Kristie Waugh, Head of Investor Relations at Raymond James financial.

Kristie Waugh

Good morning. Thank you, Jamie. joining of we TriState for Financial Raymond everyone acquisition announced Capital you us discuss as James Thank Holdings. Jim CFO, With are us Shoukry; Reilly; Capital Raymond today and and Paul James Chairman of on and CEO, Holdings. the TriState Getz, Chairman call CEO Paul Capital, TriState Partners' during TriState Capital Tim Chartwell Q&A Investment Bank; David the President Fetterolf, available of the and Brian Also are and CEO. call portion Demas, CFO; CEO of Riddle, Relations available presentation websites. being Investor reviewed Raymond The is on morning James this

TriState Harbor of limited TriState benefits These remarks, to anticipated acquisition Raymond statements Raymond not including the results, and Following open to are line effects the XX-E nature prepared statements by identified will XX-A by the of the James' this Section including the the of hereby of transaction Capital about Securities statements facts. intended of future transaction that operating on not James' for Exchange financial and operator the for Safe of the in of Act Capital's included, Section as including communication purposes Securities expected of are but forward-looking post-transaction, be to related are other XXXX. plans and proposed questions. historical and Statements and provided James, expectations, historical the objectives, intentions, are Raymond the of not respective Act statements the which statements are timing in the of earnings, completion XXXX the

implied actual yesterday's achievements transaction. to ones such James in results, the listed by the TriState to or comparable such forward-looking uncertainties, press by potential, any other factors from of cause the release terminology. Capital Raymond continue results plans, anticipates, estimates, intends, statements or terminology or are forward-looking Such statements. other as statements and schedule, include or expressed should, of may negatives factors expects, may such subject All Forward-looking that differ be may, risks, identified materially will, or or performance, believes, concerning terms

Additional in XX-K, whether TriState available and and on of any of for SEC obligation future could on Form website report Form Raymond new which or reports as be the can TriState to Form SEC's found James' securities quarterly factors and reports Raymond result do information, contained reports communication, this as hereof report only and or XX-Q on www.sec.gov. reports and current affect Capital Form X-K Form statements not with by X-K; on James and annual and a which at Capital's current except XX-Q quarterly revise any James each on laws. results speak Raymond as on on annual future update forward-looking federal events Form intend in date the disclaims required case TriState in Capital XX-K, filed otherwise,

should exercised As forward-looking statements uncertainties and involve caution placing against significant undue such be reliance on risks statements.

Now, turn I'm TriState Mr. Capital Holdings' Getz? the over Getz. call CEO, and pleased Jim to to Chairman

Jim Getz

pleasure a Thank Paul and personally you thank have us. Pittsburgh. Reilly morning you and to joining with Good I'd like you us. to It's to an and much, welcome for Shoukry very Kristie. Paul honor

to And over per income, quarterly in growth clients independent of marketable XX% based last banking, attract full of some collateralized performance our year-to-date available organically from will middle-market nearly income, increase the of deliver as securities contributed digit well net the totaling net billion assets revenue, under the team's year. results James commercial growth with are they attention At the TriState securities. commercial as Investment banking leading net results the common we of performance earnings and the over each that These months. yesterday total loans believe million provider to enhance share of lending year revenue. Capital's inflows, retail the growth interest loans, last to months the we in also and and Chartwell we institutional period same team primarily organic asset businesses TriState Partners, to nation's private XX% Raymond position differentiated strong with to XX% and quarter continued income $XXX continued third continue our positive XX% place. as shareholders not management, today, grew that banking or management organic net XX focus surpass organic first While comments the our indicative again, Once by the along X Capital's reported over attracted by of to be XX double loans. in private last

network this advisory insurance dealers, intermediaries. also offices, to broker distribution firms, family regional trust national XXX companies, for grow, investment companies, financial firms, other securities and numbering continued offering Our independent

launched Our billion success funding billion offering. a during to clients. responsible for services has sophisticated growth, mechanism and TriState $X we more agile XX as perform deposit continue. to national past expect X.XX and including fully balances to account and our responsive up were record the and continued this Overall, profitable of months continues management we the liquidity Capital than organic deliver design, treasury since management and Treasury

In partnership fact, accelerate we in our expect James. further with our to at friends Raymond progress

yesterday made our the the for opportunity stakeholders. James believe discuss is announcement with So extraordinarily We transaction now, we afternoon. jointly an of all let's Raymond

are what place, our benefits. as will basis remain Chartwell by there operate The heavily served continue Capital TriState an technology, experience. will to with James. deployed Raymond we've many independently a provide exceptional They deal be client clients, it clients our daily continue to including to we've will talented and For in invested same on within the clear and people

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ahead. have its TriState growth founding, Capital's only growth has built for that going years since generated high with stock, price For have our in not the shareholders XXXX. XXXX vast its reflecting returns since we provides of realize common majority in we the full stockholders, common the pricing and receiving a public the to strong By company foundation potential the this purchase partnered transaction in RJF trajectory fair but its

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Paul Reilly

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of TriState weighted XX a of which Capital core weighted and has billion James Bank, amount small at $XX.X swept was $XX deposit basis of for includes has As of of June costs a average cost into which sources. has approximately average deposits deposits billion a points, higher X basis XX, Raymond points.

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as Advisers and to Tower approximately scale, of Carillon complementary asset combined distribution, XX. structure XX under billion Carillon, Carillon's brand and increase Chartwell while Slide and leverage maintaining and management, realize forma assets Chartwell to to independent are will a Investment businesses. management marketing management an subsidiary pro will operational Chartwell operate allowing of drive Partners Turning synergies. multi-boutique

dilution mix also allows our enabling future XX, the transaction dividend believe flexibility to the position to transaction the over upside with in considered shares capitalized. current to well to expected James for of closing. growth. with participate to and buy-back stock while maintain Xx well repurchase ability shareholders be offset Raymond continued to TriState capital liquidity positions structure Capital consideration capital deployment with strong of Slide post and to loan offset is capital required allows and regulatory dilution, the levels Turning to further associated sufficed this This liquidity strong policy, and maintain We capital our support

We are accelerated deploy approximately of excess be by XX%, our maintaining transaction. a this leverage which commitment X Tier achieve will significantly to capital, ratio

Now, of to an to call the provide over turn overview I Paul the Paul? transaction. Shoukry will

Paul Shoukry

discuss privilege team Thanks, this truly to the TriState transaction. this morning a is It to exciting be Paul. with here Capital

the prescribed the receive $X noncumulative $XX has to remain James to X.XX consideration of some Capital convertible entered into TriState Raymond ratio commons per Capital C TriState Series the Raymond shares acquire preferred TriState the on holder Series terms stock closing preferred The which into XX. converted Capital on Raymond with James. an of shares at common agreement, at to $XX.XX the transaction. of TriState non-voting price James cash Series be Capital will of out Raymond and A TriState the Turning perpetual James each which and expected C the the for the agreement is details convertible October preferred outstanding the will XXXX. Under stock converted common based cash share. and on sole Series of and B Capital transaction exchange stock be Slide per represents cashed and stockholders stock combination preferred James pursuant into will on of Raymond share, share XX, stock and

share the timing related in transaction closing Raymond their million to is and approval Capital's this Riddle a accretion this project this importantly Capital XXX after in close Paul TriState million will expected standalone full currently Chartwell's remain estimates Holdings' We accretive the support to this transaction. and per third depend the growth as TriState And XXXX. worth, of very XXX largely Boards in on CEO; operating like support to Capital's and the regulatory subject division approximately the explained, based approved associates continue maintain timing existing Capital of To Jim Brian post-closing. of high have remaining retention and of earnings transaction TriState both the in separately existing issued to which employees converting remaining Chairman of by We approximately will sufficient repurchases retention Jim are subsidiary liquidity James Raymond This consideration. the shares have of for approvals. firm X% will [Audio Both diluted Getz acquisition and Bank as a year. do capital CEO. that conditions, place share accretion and so stock and The as Management and and by continue service over post-closing firm funding in Fetterolf of including diluted is its TriState two equivalent to consideration to in $XX transaction remain would TriState approval James points, year the share expected full with meaningfully locations customary assuming with be remaining as retention shareholders earnings increased transaction first place we to year issued to $XX Capital and Tim sources. acquisition retention, to as believe the part And branded excluding office and offset value assumes have TriState regulatory CEO; as per levels. Gap] Capital part post-closing, expenses, as associates. certain sometime an stock share north basis many and includes as of Importantly,

balanced will we So, always the long-term we as on approach just a focused do. take

basis in points estimates points next three interest XXX of a accretion in TriState that assume years. rates term increase basis our XX% Capital's over short XXXX basis It's and to XX floating of Finally, total XX XXXX another rate. points assets important are for note increased a the

prior we model well TriState NIM XXX around And NIM of increases their So short points to is interest points which around would Capital's after this basis increases, only first XX basis that X% increase transaction to the exposure significantly rate term the higher below rates. upside to our pandemic.

of about consideration will Raymond to cash X.X RJF's shares the table be and XX the the of for million this James million provide out total consideration. around represents consideration price the in the a This let to billion of total stock. $XXX this reflected breaks current between The $X.X me instruments flip At total cash Slide consideration. summary stock. of capital also stock Now, transaction total and components the of

the impact ratio, would consideration have to basis transaction Tier offset X about of which Paul, our upon hand And to guided we repurchase XX% XXX leverage accelerates regulatory work expect to I explain twice is projected this which mix. another Before requirement. points incremental XXX if to XXX down basis transaction, over let points an our to goal, closing our shares expectation. hitting we equity to of we based path current meaningfully current as impact our call on the this me back overtime, around expect consideration we still the This impact glide the to in would

between and and Tier So closing, somewhere XXX our between But to current to given back closing. now on X ratio and ratio a grow also earnings remember, leverage to total our expect XXX our impact stock restrictions around of now points. we basis buying

with So that, I'll back Paul. over the call Reilly. to Paul turn

Paul Reilly

outcomes long long of positive as Thanks, too for transaction said will yield think term. TriState clients, part the of associates family. confident in about I I the for Jim both will Paul. we're TriState questions. extremely term. people we've we this over Capital's long were and followed about transaction growth and more for you it's to think I shareholders strike that Raymond hoarding could James their and time, benefit there's the the for and shareholders our of know lot are be a who a sometimes are I prospects And And capital, us not we deal and going excited optimistic great the but those think deliberate we a always know when we're

turn I'm to So operator. that, with to going the it over Operator?

Operator

go today from question. Morgan Our Manan [Operator Stanley. your first Please Instructions] Gosalia ahead with from question comes

Manan Gosalia

paying the between I additional platform you and on of premium us talk the loan synergies little and the organically? X% the SBL understand and see the is there and And the more the the I having deal. the you deal mentioned commercial on, management ABS beyond coming are lending know the accretion synergies a side from businesses. risk room bit portfolio brings. was management help that Can significant digital at asset two portfolios versus for Congrats hoping about benefits the you and you're growth Paul, TriState technology some what that that could suggest you grown on synergies the the also loan

Paul Reilly

will first, mean, I whole think the different grow organically SBLs Well, don't bank a the clients. market service be I our have because Raymond to is TriState to we continue fast that and be high-quality one RIAs a advisers, to transactions have independent James the it's serving deposits. continue needs And you and separate. needs will there to organization that very these kind business unique of of capital that's growing

we have have difficult deposit have that client First, that, they we excess and excess we needs. at a deploying And good deposits. to capital to their need beyond service they're going But cost. deposits

we time. and higher our on with just financial growth tremendous deposits, do earn we a And their own. So a growth, would our spread not than opportunity over that low-cost going just they get see but only to lot we're on depositing cash

know So clients Towers, we a is their everything but they is to the arbitrage service we as deposits us, technology and TriState Carillon of sure believe them with independent financial their be use keeping they aren't firms operations that that where will service significant. their just will on data, advisers make their separate, grow No funds important and continue clients. independent is and our have different to lot clients, but their their separate. than

and one different markets and thing, at markets with Raymond tremendous Bank little and a And and deposits perfect a doing having the just opportunity different see two meeting loan so organizations growth as TriState fit, we different we And capital at do it's deposits. same like with excess one James capital customers.

Manan Gosalia

I'm why And -- back just until morning you this some are Great. another is a around can cash getting Is and not buy there eventually do stock is buying later doing why the deal more the -- component, buy question restrictions with then with stock opposed equity capital on? there then structure right Okay. your as large back? the what back you now you there stock? will And to which do

Paul Reilly

think pretty I simple. of kind it's

You have The a buyer stock. -- use and happy buyer buyer seller wanted a cash. seller, the to all wanted the was

and So, the wanted. the and that's team, management. is we the we of retention simulate SEC the James is when stock, buy a It till back what are And to have founder management long back transaction will we we -- because a long-term stock both rules, by we for which when we're Raymond the which after transaction believe will more term, they of can. the But holders, buy -- kind closes. good structured back hold commitment buy transaction large permitted shows By cash restrictions. stock we Jim

have also. from So our use what to was to in done, invested we long for get retention the cash. a have took to off we them restriction. wasn't a been future would this and transaction that -- It we probably better were it happy But felt and term, standpoint,

Manan Gosalia

Great.

after which is to there back up Just buy would you completed? time within the is deal that, a on follow frame the stock

Paul Reilly

closes, But what's it predict restricted to will stock. everything and back can we from we're happen be to you are until never else. going in Yes, markets buying going -- essentially

if know be longer. transactions six or don't could I could minus, So take these shorter, average be plus months,

be have today stock much more then transaction our that it's this more aggressive to a clear And to -- to to in is going we're back purchase. be like cash look make buying hurdle. So to plan going

Paul Shoukry

tailored would this that, around I opportunistic a with a deliberate not Yes, be buying This more back be would action more modeled an to think typical like much just our objective. stock messaging on reinforce basis.

quickly following pretty other things, closing, volumes and be obviously. subject will it So to

Manan Gosalia

Okay. congrats deal. queue in and on Great. the the I'll again back hop

Operator

from JMP comes question next Our Devin Please ahead question. go from with Ryan Securities. your

Devin Ryan

both Congratulations to sides line guess kind previous the here just I the following questioning. of up on on of announcement.

we resources, just growth drove on on that they actually leverage? a to and you're adding clearly, what robust the dig just bit Like you potential of there specifically last left what with tremendous James, adding deal, that could touch think last sense how a trying funding should Just XX we was opportunities we little the combination better little providing get efficiency, momentum ago, can on can year, accelerate ability was forward, bank. there? the can TriState expand the and what you're happened around about clients bit is about better there this just mean, it capital, work then if bit have think we I over the that, more months so that as Raymond Or to assets growth kind if say, over more combination? this a doing well. about more modeling year can TriState's adding opportunity how the if Chartwell we infrastructure are little even a and growth moving also, you the in to been the And be with think And table? should more that just now platform then have a And growth? and more And

Paul Reilly

So there. Devin, good a multipart question

of to lot areas a cover. So

First, big the is a market market. SBL

you the securities. the be funding industry, you for know, look can used source If traditional of only marginally, as at

the that If at pretty growth and really industry margin the the SBL you market look flat. been been has market has

mechanism. financing is it preferred the -- method So

independent or Or isn't their most to to broker-dealers relationship, in extra a cheap isn't have they bank, isn't very the bank to regulators, which which alternatives on For one-off RIAs, and or brings go either, start limited really go efficient. technology-driven, own marketplace.

RIAs allow have created it wasn't SBLs another people only could very really but one-off loan not trend, where on where a this to advisers, put them have efficiently, and really a go except platform really on there go quickly cumbersome approved and the their source, and business. saw independent and leading very, they TriState effectively and technology these So other to to

So they has capital been how and process need that market's and tell how it saw growing. that. is the the can And I'll only limitation they I fast cash think market because huge. they much their you

where and given and they've actually slower great they into they've capital, raising they at I given requests, their SBL think started cash because third job. but second they're inning or think going make and we're that the for if penetration, disciplined the of their you I organization, sure and thoughtfully to within look very their But They're a managers, growing grew funding. I volumes done operational growth they're the had fast needs. and capital and capital size into think cash

to sources There's will ramping can could so think, future, grow believe able extra So too. the now and platform that be deposit they you substantially and quickly. they extra much with I the mature, base capital, they loans with think now. too and And much more do to up, with look us, is only those I that you're fund when really the have technology funding grown into if you capital

think, So their service quality they're the and I But I the to clients. growth very opportunity, early think focused they're in yes, on innings. existing

a grow more to investments growth. more they're efficiently. And capital quicker their invest strongly we think and in willing And and both we're believe will technology their they and I leader. that

It's synergy. -- the earn putting reason, our you that very everybody. to time a have in to it's liquidity. organizations deposits they going what know, it's where a challenge same that's the our earn spread just the So be on in based put can And load earning, point capital deposits, unique our as they're that's cost where the -- and for needs think accretive lower to significant off two opposite on

going market advisers And Raymond Raymond the much and short other strong, but be if can things so And And synergistic. look lend -- continue outlook, very, now, will will as you that's separately, term. confident James James very stronger platform. to confident, happen growth long end Bank it at market, to our of can family be They we're do be James Client you Bank, Raymond any Private think the outside as the to structure. in only should I We market, be not in Group, than the term, can very on to it. at we right

Paul Shoukry

relationships. an the Chartwell Chartwell distribution And will been They generating -- last products, good high-yield as enhance their under management. very that pretty that billion income Tower Advisers Carillon into have on around fixed products flows we years. that's high-grade, of particularly good They products as over the has have type well. have further They And as able the net far exciting $XX intermediate assets opportunity both short have on goes, side. client to term the couple the tap think of multi-boutique be to structure. And

And so that under affiliation multi-boutique and our model, Reams their that will brand like Tower and separate all umbrella. affiliates be keeping with the Scout just and Carillon independence other Advisers synergistic

Devin Ryan

real just a follow-up. And quick terrific. Okay,

is dictate like the capital mix is at as side, commercial evolving growth but are pro quality, good here, about of forma mix the how they much as sheet the as Tristate? balance in all occur you the mix let of consideration of you the SBLs safe comfortable well, on any shift? loan. forma that them are of Or Bank you think or any I see just But know answer they think high to extent TriState I is the as pro bank to obviously aggregate allocate to bank there it the can? and Or could fast allow kind grow with consideration opportunities, there

Paul Shoukry

to our combined lender. We're primarily referring that to XX we are going I thresholds bank years to when want maybe ago to mean corporate the was a facilitate thresholds growth, that you're set Devin. our continue

bank on were risk, we those sheet. forma then as has with our securities pro portfolio mix. very setting their you And agency-backed the loan securities SBLs know, portfolio. basis But in thresholds really mix, those is manage they and their overall change portfolio on now would all the And of balance investment-grade a credit so in with And risk credit securities today lot a have mortgages. bank to our corporates limited of represent XX%

really same that most don't in XX and will Group-focused diversified more banking importantly, much institution. And of always James now Private the thresholds set so we to way a be has we a those always firm. apply we're -- But been Raymond some XX Client years ago

[Audio FDIC that of be our TriState that Capital Gap]. to of And so and deposits nothing. benefit insurance to first always transaction Client capacity as lifeblood mix we now. all the will will is our declined revenues Group clients this to well that FDIC increase we help and foremost, use fund Private does lifeblood which a in the third-party This Client that because market with other deposits. as focus, our represents, has clients, almost want TriState the is It of actually let's not demand for bank do say, and Private part change particularly almost and The for the our internal insurance synergistically to XX% businesses Group nor on We want business of change of mix.

Operator

ahead Our with next go Wolfe question your Please Steven from question. comes Chubak from Research.

Steven Chubak

the a everybody. Certainly, transaction. on deal, Congrats really interesting

just at the to a synergies accretion merger terms model just underpinning that wanted in works assumptions the I assumption. question SBL of revenue, assuming just And the with accretion some just outline off math. I get First, insight what you're underpinning expense I TSC. you growth to of some how X% start was and that math compensation into are or hoping on hoping was could

reasonable a assumption what's growth, revenue terms every for incremental dollar revenues? of about think we As marginal in of the margin

Paul Shoukry

Thanks, we conservatively. fairly know, Steven. -- you as We model

we of SBL growth rates that projections. straight-line growth fantastic commercial -- lending their and had they've growth don't of type But across type in So our portfolios. those

almost essentially actually, be cases, rates most growth five we strong historical model, reasonable. modeling. how of half, last actually the So next over frankly, good in been. we're that conservative our the cutting saw those has still night, And wanted be Steven, I just growth would growth years, But which to in in your their was given

basis each. I was two now years from think the short-term years in in rates three, XX two and only factoring points increases we're in major difference starting

assets some, get obviously, given rate XX% we their floating assets. that uplift So are of there

funded we cash exposure our in and forget, we reason base. ago, coming And to sometimes may then again. one mostly deposit more you precious. the from is two capacity, lot believe to as growth again, a forward recall, really, expense important charter Jim, just were higher cost going we was but with another sources met mention years talking will know we we all the of provide I insurance first the FDIC when us internal the rates. gives I ago, we then wanted billion cash diversify this year But synergies go, short-term that deposits replacement our to precious of because to as it's -- from more because, years three think far And funding it's $X become as needed and XX% So lower of

TriState operation. We want to having source, diversified of diminish relationships. continue to to strengthening has that excellent the want management accretion. their their an great and They've which client is a -- treasury funding there particularly years just great next something get one, got over couple value so short-term we not And technology in

that's diversify well of continuing area of for the overall. so kind firm funding as for be an the us to sources to as going And focus

when becomes positioned again. So we're scarce well funding

Steven Chubak

forward. since Thanks rate brought I topic. have for Paul. actually a appetite And help And have handicap the impact curious been overall during sensitivity? SBL SBL can has least much stronger rates you could on I'm the that low much perspective, how actually on of periods higher increases your question, rates, multifaceted rates. hoping the point that historically of Was growth that going you at transaction

Paul Shoukry

of the in part the forward upgrade growth rate scenario. reduced significantly going our of That's kind reason Yes. we

are again, of the exposure, rate their balance sheet. of assets on assets the bank floating terms And XX% so in

too. So straightforward. higher the rates, parts that then And even over relatively our are fixed price rate, with it's that and securities little pretty duration we time

us gives it higher environment short-term forward. rate interest a exposure So going more to much

Steven Chubak

sales get a, of how to on how J Ray that products. for operate whereas one of I Ray that with also sense potential revenue the one you're of just competitors? And me, of versus partner more not? or you reluctant the had Recognizing conflicts final clients call risk it, that J and mean dissynergies. conflict some potential is to historically And compensated do getting personnel be you marketing TSC it. push a I potential for independently. marketing managing TSC let's approach largest Got pull has may product, I how for just conflicts. to mitigating those TSC their recognize to want going advisers SBL SBL manage do just And are handicap

Paul Reilly

Yes.

of and just if think and Towers, an mean, everyone So by each the we're Carillon first, New that was as on on Promontory products York. uses other's funds and and competes you on industry in services, I of I on. it's there, and owned any Bank take

yes, question their just not to are independent? very data, they going be is answer operational not call their on going is are they Carillon, like be the everything their separate. the is And salespeople They're clients going is, very, really in to different. -- for So James. going to do to Raymond It's

by with one, that, that's when and see mutual so fund one And determined a start will is put relationships, deal, information. client The all any you organization and people with like to been there's other think change, other bank. they the would a they So or key to business associated competitor services the client separately independent. be services, think to great people It or see appear on is we're they're and they'll just pricing And being products see the on that's interfere just a why statements very I change? won't branding. not that good the that that show The James able just any Raymond probably that TriState, name the business very important I they'll going very, successful. financial have TriState, happen, it's in

bank a you to going or you So you're is you and it integrating. do have systems the need technology yourself that where don't SBL the be in the if one-off question do are business, you do where just relationships you go

that You -- platform clients, the to that service has for statements you on go competitor their have another their name mean. I or do to TriState's don't the built,

be choice the think clear. I pretty So will

think we we're that this paid operated but the would independence. business think that comfortable, I what good why do we And that? people we years. don't, to we for so mess trusted committed many name. do, very if see because keeping will And we way just be if And watch. a do and Carillon are We've up we'll independence say for, we'll they'll and I fair in that most we they'll price Towers that so a

we operate and way. an us. that here to how segments, That's issue operated plan other not it's in continue we've So for to

Operator

comes next your question. with go Our from Goldman Alexander ahead Instructions] Blostein from Please [Operator question Sachs.

Alexander Blostein

a So on broadly. Paul, maybe question M&A just strategy

market at of on were you could now look a deals years things takes maybe you the deals guys done that just you but of of If banking, about management type at that of little of of investment balance focus couple sheet more sort type more of for little focused all the willing thinking smaller going the for guys of type of to of I'm transactions. Does advisory time, assuming bit a are side kind out and of some that broader? and kind have kind not last acquisition bit the signal that the over contemplate the forward. this on you look asset you

Paul Reilly

continue great we sale. was would there join for I We've but you Northwest This, our asset that looked platforms of believe number very of said that. at if they're capital. in Securities going retirement lot firms, focus. a we those service as could our look we've us deploy we are said haven't the of and in think get We've afield -- and help are group one we've to to advisers. growing even on you and few buy our ironically, firms advisers we've all purchased we'd further plans M&A changed focus for always not -- that that management. to businesses, and processing technology private do we or platform, But can a will our But other firm, don't generally continued or

ratio. it enough the but fast bank Tier doesn't affect your cash, X really can't back get grow our deploy We You X down. to Tier really

think buying here, bigger that capital. approached buy for that's a where a investing can growth growth And of this. management time. we they franchises, looking a what's believe we a We have think I We've our and to And advantage, TriState's or better for return which is get really engine at high-quality deploy. at a growth don't high really really to on portfolio. assets, no everything stock good technology, We business. many for extremely we've of been going period banks. banking that one something It the we times and investment are high-quality, long-term a help there's capital, And capital a choices team, acquiring strategic us. long engine, long, banking use looked we but haven't real anything needs but we want So grow a in been great do loan us cash, it's what a except we

But So we that to do Bank. -- another that was growing the think happy and don't our James don't and plan TriState businesses, Capital reason for it. I we're look core Raymond it's with focusing to it changes sense, continue on one-off. for in plan We bank.

retail-oriented I is mix we of areas good and balance like, think really that Private have Group the we deploying Client on and and a which capital mortgages. really into products SBLs

very and of a always been game plan. one our to really unusual that. just So in think was accelerate that's opportunity This I a kind

Paul Shoukry

is while I significant add, Alex, a would thing only is the maybe transaction And this us. Yes. for

have be a Capital unlike on which our of will that going operations to And significant sheet implications, integration Private and be separate We TriState Group acquisitions. to or to there's team. still plenty acquisition, we're or pursue major other have would highly where flexibility a systems technology keeping the back balance not capacity integration Client the technology really disruptive end would

call of deliberate, for Paul the patient, through opportunities extremely have, we're going the all always on the acquisition still as say, Reilly acquisition run business on to that and to we're that open just front. criteria saying But we all So the earlier. be, mentioned

Paul Reilly

transaction U.K., to we them just and Charles want they reinforce, Stanley and -- doing I service, systems. office look back the our Yes. into in if at really have integrating the aren't again you

going how to They're really That's up. in their impact and the rolls business will going the continue. be it thing. financial own kind will to it, same have systems the -- it's operation. There's Here, of reporting it

But that we what there it's independent know don't going and other to on on tools can be seeing with. high certainly -- lift. to a we So each other getting see help relationships each and isn't demand and

So it. we react if comes bandwidth the and something up capability to have to

Operator

ahead Please question Compass your And ladies from and from gentlemen, question. next Christopher with go comes Allen Point. our

Christopher Allen

side, Congrats was on from maybe competitors if TSC the some entry deal. barriers us wondering up to a similar what give are for the the starting you I color could platform?

Jim Getz

limited periodically formidable two And the we marketplace. honest, there quite come parties be very by that, we have other competition across. are To essentially, in

Delaware it's of You basis characterize a take if business have, banking have and our highly out niche into the are if entity look banking private in may specifically continue about that that board, whether of -- Sachs. have carved banking. the grow commercial out dominant they And a that what pretty on All have the market business a and to across able Chartwell banking priced the type But our I solicits there we've commercial we've this you speaking business. growth. They an over-collateralized, loans business to to heard in responsible And all or then that's market And far, you're there. an that liquid. as entity at a get these Bancorp businesses daily business, Goldman out dramatically. or would a it's company private been that goes called the by we there's Bancorp. share the of

We have highly individuals. experienced

this of what off sheet over a strong a much statement higher leveraging at our put pace about is are history. they've with built at today. We over and our taking billion of tomorrow And James and have we little as over and place It's it today past assets. balance of really company income now the very their doing friends And $XX turnover we about in look where Raymond we've a to foundation what years not very we're company. at XX-year

Paul Reilly

up technology, the to did own think business diligence, different if to the the which at the obviously, with, to technology just the our of flows multiple even a is advisers technology period that their lot serve developed When our time. as long you're and organization, speeding you're where these they're technology could sophistication it. these and of and easier. get able of we then go approved, that we into SBL able on were when And processing over back-end same And at focusing they've technology in we the front-end the we overly be thoughtfulness organizations that the see servicing organizations, gets and what their a be advisers systems and that we SBL have systems they systems with the went has different integrated. and by when look impressed to continued due customed developed which and and our impressed I critical, looked the we development into you get the lead was of will all and And support. really robustness be to their clients, be the and with really were you it,

the really barrier. that's So

to it behind be went want do from you be say is we it rolled at say wouldn't the by SBLs focusing TriState this with can create the systems, We have all that and a time could to system wanted to we'd technology competitive Raymond out, probably this. further -- do party, to You and third even years But Bank, Capital even James we the takes we really process, we development. if everything their where else.

-- to overnight an it, robust developed they on, niche to take you do say a it, created it's So technologies. found to thing. It want early it's very it. very do And can you not but would years

just to And technology apart. clearly the the continue sets develop they lead. that's continually and some invest So hopefully,

Jim Getz

have and look glance is their business, their all technology. their statement. infrastructure invested do company a a has you to our at is at people, you take historically income in that our If this And their clients,

consistently technology. investing amount every that you to of single can $X.X the million separate for quarter. we've money a there And have been We from see anywhere million $X.X category

Paul Reilly

a do on And each those effectively would you to are when the Yes. account held-away basis custodial develop. I add, platforms, that all just took years across this of relationships key

decade has amount of taken those of custody that's is within this over expertise third-party we work building will, and So with the build. to -- a organization if platforms ecosystem, you the how

those technology and needed to an things. security, adviser we includes things from built like custodial of we from deliver, things all perspective, expertise around knew So includes that great experience a safety, basically, we that. which our perspective, client soundness, the the ease use, But platform

it finance of together as of side, talked would had in we our amount really other technology from treasury there an the manifest take well organic So think, technology sort others. are and where -- fund both a that it's in the into management. We on on expertise side, business replicate spend commercial to where product been places verticals, work, to again, our has referenced agree us technology. coming development the tremendous long done we as a that time couple on Paul, we've basis. the distribution business a well, as that all we've some separates built as And the side, again, about before, of

Operator

Our next ahead James question. from your question go Mitchell from comes Partners. Research Seaport with Please

James Mitchell

you maybe Just $XX billion have banks. of away at third-party held client deposits

sweet there little could of funding want longer-term it is billion quickly? That conservative. Or seems more for $X at replacing targeting TriState maintain deposit that Is you you those replace growth? why You're a to simply more reason relationships a TriState.

Paul Reilly

is We their business. -- relationship first, business a

both an deposits. asset So with or their and whether clients, it's and liability it's SBL their commercial loans business, clients

So you gone, but then kind are away you you your destroy deposits and say can of whisk the can all relationship.

they on they're side, deposits. can, to they're key they'll deposit use relationships maintain one-off, is, So we critical or aren't the to where those need those. the the relationships But where our where key lending

don't franchise we the want use saying, to all short-term of hurting ours, out So and the but a have by destroy we'll long-term here, a gain, deposits these take franchise. and

reason. So that's the

with But liability So it think, opportunities used, their more. maintain if a doesn't it aren't we be match deposit the deploy be them can and where important, But there's target. going asset what's And both deliberate. which to We want I they relationships conservative or believe could their they growth, them. utilize to is, oriented. client we're relationships, -- but with again, more, very we'll

of can't the away can't the You you part -- part one sweep and relationship stays. other assume

James Mitchell

of it billion $XX capacity the hold of TriState's it the rates second you balance years sheets? benefit your moving Could bank all you've now have the you yours balance rising charter, on the cash a that client second have does about No, with that But sheet, that's charter? flip way you change? change fair. from -- to Now cash on on couple or client that cash, maybe of over to next some think you does side, a by

Paul Reilly

more they'll just than aggressive. conservative not overly will as a strategy James Raymond grow. And fair will more we think confident chosen So use that. that a We're Hopefully, growth, consume what security on to in market right? it cash, give -- they cash. again, just their more that very and we on more projection I bunch think Bank. that they'll want spread to on determine cash changes has with We think this we over time, right? of be to Well, good, will a good our So quickly, that us with but We've don't has of don't that point, it's but this. like pile the

Paul Shoukry

Bank Listen, has generating cash and well. as significant Raymond is I forget, needs growth James phenomenal also

So for part -- and the rate as well. as most all know, Jim, floating balance cash the that we sheet, have off that's you

and to kind their be in to of like Paul deliberate. we market for else any do, hope So lot for We're environment going -- any of going kind said, client -- a strength et of to like TriState we we're cash And everything again, cetera. Capital help environment, to of as respect in build relationships. cash, flexibility strengthen terms demand

Operator

Bill Our from Katz next with Citigroup. go Please your question ahead from comes question.

Bill Katz

Congratulations as well.

Raymond an separate is not the back the coming clients. security-based for Just appreciate that novo opportunity other's lending, take you're James brands Paul, and side TSC's opportunity de there accelerate have to But for each calling technology and to going to SBL?

Paul Reilly

Yes.

to we So both is into platforms clients. of clients their not our technology, think taking may terms you borrow and can technology reporting with ours for because use -- -- in I client sides, integrated -- from

advisers, going front-end migrate James a we'll be servicing Bank those it. Raymond So lessons we technology James our terms lot decision-making, utilize learned processing them back-end own of to we'll we're not client, I not will. to Raymond in think the as have technology, some we've the and and in from But certainly TriState, of

that So advantage. be an will

their us. treasury utilize that. kind we of the borrow clients, and think and Their systems think like their will bank systems relationships probably management I we things can for will in it that for help that software and

I be it, in the It's things borrow will, separate. they because, planning for of the it's their some that and we be would those changes it be taking would to it integration but to would not technology be their accelerate do, frankly, And So, clients, going may huge. call going huge.

ours both I separate and time of those more into taking think best-in-class learning integrating in them lessons we'll to the migrate So over technologies.

Bill Katz

a then Understood. follow-up. And just Okay.

time there share maybe spent any acceleration to synergies of any as that of result comprehensive, clients? It the gains that for of talking can services market more you're a of set offer you could middle-market really or a you Is sort going on haven't both opportunity anticipate or of, the an You to the investment services like bank. seems those. about opportunity treasury get

Paul Shoukry

just Absolutely. We of TriState the actually they it's private months Capital focuses have firms. guess, on firms. type fantastic acquired, a deal, large fund and couple focus finance those -- on serving for has they ago of And equity franchise small, that now, I a a here midsized and

an that's of example synergy. So a

were able There's those at commercial through they refer some last were to they haven't platform. synergies. able talking even that investment type to refer, about their regional lot be opportunities not their managers commercial a night lending going prior of We modeled even of of that We will opportunities, forward banking their corporate dinner clients. to with

forward combined of securities-based business in there's lending the going makes whole opportunity. all so synergy us internally. I excited. the But lot really on really a been deposit the franchise, think terms more which We've we're excited of and focused So in

Operator

ladies gentlemen, question. comes with Voigt final ahead Please morning from question And this and our your from for Kyle KBW. go

Kyle Voigt

TriState deposits, those impact TriState Just basis question expect for how keep a to that's growth XXX Part that on assumption So beta increase deposit the NIM regarding A. deposits wondering current using of about Paul deposits? having include to basis points RJF you deposits specifically? those B some the in and around XXX rates. basis should for then And point incremental think just balance Part we just that to expectation increase XX% replacing mix? those is with TriState for for that Does the TriState clarification quick that would Or the of XXX of using point funding sheet, be, just the short-term

Paul Shoukry

can X%, to provide more with something get base. own the as on and But as of detail just question more pandemic do really, deposits. the should they be we able that, that done without the we to our Great down road. prior than they've benefit their And deposit the

the X% giving benefit of deposit So expectation. -- them not and synergy really our that we're

their of floating they floors do have Now some rate loans. in

most of in question, to really, -- back-end of floors. second the was question bit second that points basis for around is of your What of little the benefit Really first NIM was the loan more see Kyle? increase So some that XXX their where be the basis the first will the But points. of given a XX weighted part part terms benefit after we'll

Kyle Voigt

It how the the deposit. keep, expect wondering about deposits we TriState was just you to just should around think

Paul Shoukry

not management would for as the example, it's because higher deposit it replace deposit, David, to depend maybe, deposit future system. could a you presumably we that, the speak as that beta have of treasury The obviously their but of TriState kind -- on relationship-oriented will ones beta

of deposit I that? deposits don't David to relationship-oriented have you So add would I lower think their But equal a want the deposit increased have franchise of that things clients. being experienced beta to with mix historically as going deposit beta, commercial their Brian, really if quality forward the than all they've or know,

David Demas

I NIM without going it, go-forward see on NIM easily XXX rates. Paul's is X% projection basis to quite Paul. in got think about any you've And a We movement accurate.

or in XX us of So remaining so. rate the keep points that probably to for basis every the X XX client move, basis on pass and XX see points to you'll

Brian Fetterolf

Yes.

again, different account service couple products, of diversifying through would Paul I of very as types, focus. deposit growing base, think years, add, just the last type focused certainly as different on liquidity much relationships, said, over the on a I our we've

version. will which we have building an whether that's now, interest 'XX said, of two rate the for normalize, than pure years preparing But for we've thing to sure. a same that a version that we're 'XX is, So a better Paul or data flow those. from out relationship again, And for been anticipate cash either here

So enhance And good James sources more. data a going certainly pretty will expect deposit even that's we forward. the that Raymond

Paul Reilly

Yes.

as under transaction businesses feel this goes a first. the just like and I'm as back me know of time. the excited we've period family Jim believe over for asked to quick both I and do. associates, But great the is in and they few a way was Raymond part and requests think, him know transaction. saw we always this -- statements let we lot and, relationship we of the months discussions the this long a no have and for doing James same for digest. all the really sudden on to very organizations, last as just diligence that So his of the sure any commercial relationship for -- family. I'd future had I And weekend, don't amount really both last few I closing did to you then in due we synergies that interest the through his over still months. the for work became they're is in it's at But founder this map years ready

had sure week, up. questions more next I'm call one earnings few a an other where have And will comment. we'll So pop Paul,

Paul Shoukry

to Yes, We're questions. end service going quiet public call we be transaction, just until we're in also is the announcement. earnings. technically release this public But a answering terms on our really limited of because public to to period hate in a public,

we'll but So us our send your -- questions, address we'll try call to earnings week. them on next

So...

Paul Reilly

too we're notice on conservative. always us you thank joining short again, for sometimes said So deliberate, you've too

So homework, you transaction long do believe really just didn't wouldn't -- assume we're boost and we to term the did big franchise. -- that our we will be any we we

So, to and you, talk you thank week. next we'll

Operator

today's conclude and we'll conference for do call. attending. you with We Ladies thank that, gentlemen,

You may now

TriState Capital (TSC) 21 Oct 212021 Q3 Earnings call transcript