Texas capital

Texas Capital Bancshares, Inc. Announces More

  • Expected to be financially accretive and offer significant capital generation, improved liquidity profile, greater funding flexibility
  • Improves financial resilience to support the growth of our Texas-based commercial customer strategy
  • Consistency with transformation initiatives to reallocate our balance sheet and improve customer relevance

DALLAS, Sept. 06, 2022 (GLOBE NEWSWIRE) — Texas Capital Bancshares, Inc. (“Texas Capital”) (NASDAQ: TCBI) today announced that it has entered into a definitive agreement to sell BankDirect Capital Finance (“BankDirect”), its insurance premium financing 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 loan portfolio of approximately $3.1 billion as of June 30, 2022. AFCO is buying BankDirect from Texas Capital in an all-cash transaction for a purchase price of approximately $3.4 billion, representing an asset premium of 8.5%. relative to the value of the loan portfolio purchased as of June 30, 2022. The purchase price is subject to customary adjustments, including for the net asset value of the loan portfolio, as set forth in the purchase agreement. This transaction represents the divestment of the entire business unit, including BankDirect’s equity interests and associated loan balances held by Texas Capital Bank and no parent company funding, deposits or capital will be transferred.

“The sale of BankDirect represents an important step for Texas Capital, allowing us to refocus our capital and expense base in line with our strategy of building the leading full-service financial services company in Texas,” said Rob C. Holmes. , Chief Executive Officer and President of Texas Capital. “The sale follows a deliberate process designed to maximize shareholder value, strengthen our balance sheet, simplify our business model and free up additional resources to redeploy to our core businesses. BankDirect operates a nationwide business and generates desirable and granular commercial loans with superior credit quality. I would like to thank the BankDirect team for their long-term partnership and strong commitment to building an exceptional franchise that made this transaction a success.

The transaction is expected to increase Texas Capital’s capital levels. Compared to June 30, 2022, the Common Equity Tier 1 ratio is expected to increase by 199 basis points and the revaluation of the tangible book value per share is estimated at 6.5%. In addition, the divestiture will improve Texas Capital’s liquidity position as the loan to deposit ratio is expected to decline and the asset to asset cash ratio is expected to increase, before giving effect to future redeployment actions. Additionally, given the expected growth of the core business strategy, Texas Capital reaffirms its guidance to deliver quarterly year-over-year operating leverage by the end of the year.

The sale is expected to close in the fourth quarter of 2022, subject to various customary closing conditions.

Morgan Stanley & Co. LLC and Texas Capital Securities served as financial advisors to Texas Capital. Cravath, Swaine & Moore LLP served as counsel to Texas Capital. RBC Capital Markets and Truist Securities acted as financial advisors, and Willkie Farr & Gallagher LLP acted as legal advisor to Truist in this transaction.

Conference call information

Texas Capital will host a public conference call to discuss the transaction at 9:00 a.m. Central Time today. The presentation is also available on the Texas Capital Investor Relations website at https://investors.texascapitalbank.com.

Attendees can pre-register for the call by visiting https://www.netroadshow.com/events/login?show=0a75c14c&confId=41685 and will receive a unique PIN to use when logging into the call for immediate access . Alternatively, participants can call +1.833.470.1428 and use conference ID 547919 at least fifteen minutes before the call to join through an operator. International callers should dial +1.404.975.4839 and enter the same access code.

A live webcast can also be found on the Texas Capital Investor Relations website or at https://events.q4inc.com/attendee/755858622. Replays of the conference call will be available on the webcast by visiting the Investor Relations website from September 6, 2022 through September 6, 2023 or by calling +1.866.813.9403 (US) or +44.204.525.0658 (international) with the code d access 009241 from September 6, 2022 to September 20, 2022.

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 company that provides customized solutions for businesses, contractors, and individual customers. Founded in 1998, the institution is based 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 serve customers across their entire the cycles of life, 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 is registered with the SEC and other state securities regulatory authorities as as a broker. 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 relating to, among other things, our financial condition, results of operations, business plans and future performance. These statements are not historical in nature and can often be identified by the use of words such as “expect”, “estimate”, “anticipate”, “plan”, “may”, “will”, “expect”. ‘, ‘could,’ ‘should’, ‘plans’, ‘targeted’, ‘continues’, ‘becomes’, ‘intends’ and similar expressions.

Because forward-looking statements relate to future results and events, they are subject to inherent and diverse uncertainties, risks and changes in circumstances that are difficult to predict, may change over time, are based on expectations and management’s 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 the timing of the sale of BankDirect Capital Finance and the risk that the transaction will not close in a timely manner or at all, the possibility that one or all of the conditions to the completion of the sale of BankDirect Capital Finance may not be satisfied or waived, the risks associated with diversion of management’s attention from Texas Capital’s ongoing business operations, uncertainties as to the ability of Texas capital and the time required to realize the expected benefits of the transaction, changes in the economic and financial conditions of Texas Capital’s business and uncertainties and matters beyond management’s control, credit quality and risk, COVID-19 pandemic, industrial 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, and market conditions in Texas, the United States or internationally, as well as government and consumer responses at those economic and market conditions, funds availablity, accounting estimates and risk management process, London Interbank Offered Rate (LIBOR) transition, legislative and regulatory changes, execution of business strategy, 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 actual results to differ materially from those described in the forward-looking statements, together with a discussion of the risks and uncertainties that could 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 with the Securities and Exchange Commission. The information contained in this communication is valid only as of its date. Except to the extent required by applicable law or regulation, we undertake no obligation to update these factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect events or future developments.