Texas Capital Bancshares, Inc. (“Texas Capital”) (NASDAQ: TCBI)
announced today that it closed the previously announced sale of
BankDirect Capital Finance LLC (“BankDirect”), its insurance
premium finance subsidiary, to AFCO Credit Corporation (“AFCO”), an
indirect wholly-owned subsidiary of Truist Financial Corp.
(“Truist”) (NYSE: TFC).
The sale of BankDirect includes its business operations and an
associated loan portfolio of approximately $3.1 billion as of
September 30, 2022. Texas Capital recorded a pre-tax book gain of
approximately $250 million in conjunction with the sale and expects
to recognize approximately $15 million in related transaction
expenses paid to third parties during the fourth quarter of
2022.
“This sale allows Texas Capital to continue to focus on creating
the flagship full-service financial services firm headquartered in
Texas,” said Rob C. Holmes, Chief Executive Officer and President
of Texas Capital. “The approximately $3.4 billion in cash proceeds
received by Texas Capital in the transaction enhances our financial
resiliency, materially improving tangible book value per share
while being accretive to earnings. Texas Capital will be in the
most favorable capital position in the history of our firm,
allowing us to support the growth of our core Texas-based
commercial client strategy.”
The transaction results in an immediate increase of Texas
Capital’s capital levels. Relative to September 30, 2022 and
calculated on an adjusted basis giving effect to the transaction,
the transaction is estimated to result in an increase in Texas
Capital’s Common Equity Tier 1 ratio by approximately 200 basis
points and result in accretion of Tangible Book Value per Share of
approximately 7%.
Morgan Stanley & Co. LLC and Texas Capital Securities served
as financial advisors and Cravath, Swaine & Moore LLP served as
legal counsel to Texas Capital.
About Texas Capital Bancshares, Inc.
Texas Capital Bancshares, Inc. (NASDAQ: TCBI), a
member of the Russell 2000 Index and the S&P MidCap 400, is the
parent company of Texas Capital Bank, a full-service financial
services firm that delivers customized solutions to businesses,
entrepreneurs, and individual customers. Founded in 1998, the
institution is headquartered in Dallas with offices in Austin,
Houston, San Antonio, and Fort Worth, and has built a network of
clients across the country. With the ability to service clients
through their entire lifecycles, Texas Capital Bank has established
commercial banking, consumer banking, investment banking and wealth
management capabilities. TCBI Securities, Inc., doing business as
Texas Capital Securities, is a member of FINRA and SIPC and has
registered with the SEC and other state securities regulators as a
broker dealer. TCBI Securities, Inc. is a subsidiary of Texas
Capital Bank. Securities and other investment products offered by
TCBI Securities, Inc. are not FDIC insured, may lose value and are
not bank guaranteed.
Forward Looking Statements
This communication contains “forward-looking
statements” within the meaning of and pursuant to the Private
Securities Litigation Reform Act of 1995 regarding, among other
things, our financial condition, results of operations, business
plans and future performance. These statements are not historical
in nature and may often be identified by the use of words such as
“expect,” “estimate,” “anticipate,” “plan,” “may,” “will,”
“forecast,” “could,” “should,” “projects,” “targeted,” “continue,”
“become,” “intend” and similar expressions.
Because forward-looking statements relate to
future results and occurrences, they are subject to inherent and
various uncertainties, risks, and changes in circumstances that are
difficult to predict, may change over time, are based on
management’s expectations and assumptions at the time the
statements are made and are not guarantees of future results. A
number of factors, many of which are beyond our control, could
cause actual results to differ materially from future results
expressed or implied by such forward-looking statements. These
factors include, but are not limited to, uncertainties as to Texas
Capital’s ability and the amount of time necessary to realize the
expected benefits of the sale of BankDirect Capital Finance LLC,
changes in the economic and financial conditions of Texas Capital’s
business and uncertainties and matters beyond the control of
management, credit quality and risk, the COVID-19 pandemic,
industry and technological changes, cyber incidents or other
failures, disruptions or security breaches, interest rates,
commercial and residential real estate values, economic conditions,
including inflation and the threat of recession, as well as market
conditions in Texas, the United States or internationally, as well
as governmental and consumer responses to those economic and market
conditions, fund availability, accounting estimates and risk
management processes, the transition away from the London Interbank
Offered Rate (LIBOR), legislative and regulatory changes, business
strategy execution, key personnel, competition, mortgage markets,
fraud, environmental liability and severe weather, natural
disasters, acts of war or terrorism or other external events.
These and other factors that could cause results
to differ materially from those described in the forward-looking
statements, as well as a discussion of the risks and uncertainties
that may affect our business, can be found in our Annual Report on
Form 10- K, our Quarterly Reports on Form 10-Q and in other filings
we make with the Securities and Exchange Commission. The
information contained in this communication speaks only as of its
date. Except to the extent required by applicable law or
regulation, we disclaim any obligation to update such factors or to
publicly announce the results of any revisions to any of the
forward-looking statements included herein to reflect future events
or developments.
INVESTOR CONTACT
Jocelyn Kukulka, 469.399.8544
investor.relations@texascapitalbank.com
MEDIA CONTACT
Julia Monter, 469.399.8425
julia.monter@texascapitalbank.com
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