Business
Texas Capital Bancshares, Inc. Announces Continued Execution of Its Strategic Transformation Through the Sale of Its Insurance Premium Finance Business
Expected to be financially accretive and to offer significant capital generation, enhanced liquidity profile, greater funding flexibilityEnhances financial
About this update from Texas Capital Bancshares, Inc.
[{"type":"text","content":"Expected to be financially accretive and to offer significant capital generation, enhanced liquidity profile, greater funding flexibilityEnhances financial resiliency to support the growth of our core Texas-based commercial client strategyConsistent with transformation initiatives to reallocate our balance sheet and improve client relevance DALLAS, Sept. 06, 2022 (GLOBE NEWSWIRE) -- Texas Capital Bancshares, Inc. (“Texas Capital”) (NASDAQ: TCBI) announced today that it entered into a definitive agreement to sell BankDirect Capital Finance (“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 loan portfolio of approximately $3.1 billion as of June 30, 2022. AFCO is purchasing BankDirect from Texas Capital in an all-cash transaction for a purchase price of approximately $3.4 billion, representing an 8.5% asset premium compared to the value of the purchased loan portfolio 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 divestiture of the entire business unit including the equity interests of BankDirect and the associated loan balances held by Texas Capital Bank and no parent funding, deposits or capital will be transferred. “The sale of BankDirect represents an important milestone for Texas Capital, further enabling us to re-focus our capital and expense base consistent with our strategy of creating the flagship full-service financial services firm 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 incremental resources to be redeployed to our core businesses. BankDirect operates a nationwide business and generates desirable, granular commercial loans with superior credit quality. I want to thank the team at BankDirect for their long-term partnership and solid commitment to building an outstanding franchise resulting in the success of this transaction.” The transaction is expected to increase Texas Capital’s capi...