Business
Texas Capital Bancshares, Inc. Completes Sale of Its Insurance Premium Finance Business
Enhances financial resiliency: $3.4 billion in cash results in record liquidity while materially improving tangible book value per share and earnings
About this update from Texas Capital Bancshares, Inc.
[{"type":"text","content":"Enhances financial resiliency: $3.4 billion in cash results in record liquidity while materially improving tangible book value per share and earnings accretion DALLAS, Nov. 01, 2022 (GLOBE NEWSWIRE) -- 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, ent...