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TCBI announces steps to enhance the company's balance sheet

Published on Mar 09, 2021

DALLAS, March 9, 2021 -- Texas Capital Bank, N.A., and its parent company Texas Capital Bancshares, Inc. (NASDAQ: TCBI), collectively referred to herein as “Texas Capital Bank,” today announced the closing of a Credit Risk Transfer (CRT) transaction with institutional investors. The CRT is an important step forward in Texas Capital Bank’s proactive efforts to optimize its balance sheet and support its Mortgage Finance offerings through multiple cycles. The transaction enables the Company to expand the Warehouse Lending program and better serve clients in all market environments. Due to current market conditions and an oversubscription in investor appetite, the initial transaction references $2.20 billion of loan exposure via a Credit Linked Note (CLN) issue of $275 million. The transaction closed on March 9, 2021, subject to customary closing conditions.

In addition, as previously announced on February 24, 2021, the Company closed on its public offering of  $300 million of Series B preferred stock.

“This CRT is a notable transaction for Texas Capital Bank, and advances our proactive efforts to optimize our balance sheet,” said Rob C. Holmes, President and Chief Executive Officer of Texas Capital Bank. “As we are the first regional bank in the U.S. to enter into this type of sophisticated transaction, and in partnership with leading financial institutions, Texas Capital Bank is demonstrating its ability to lead the market in innovative approaches to capital and risk management to the benefit of our company, our clients and our shareholders. In combination with our recently closed preferred stock capital raise, this initiative provides enhanced credit protection and significantly improves our regulatory capital ratios. As a result, Texas Capital Bank is better positioned to serve our Warehouse Lending clients through all market environments.”

Citigroup Global Markets Inc. acted as structuring and placement agent and Clifford Chance US LLP acted as legal counsel to Texas Capital Bank.

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 commercial bank that delivers highly personalized financial services to  businesses and entrepreneurs. Headquartered in Dallas, the bank has full-service locations in Austin, Dallas, Fort Worth, Houston and San Antonio. Member FDIC.

Forward Looking Statements

This communication may be deemed to include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding our financial condition, results of operations, business plans and future performance of Texas Capital Bancshares, Inc. These statements are not historical in nature and can generally be identified by such words as “believe,” “expect,” “estimate,” “anticipate,” “plan,” “may,” “will,” “forecast,” “could,” “projects,” “intend” and similar expressions. Because forward-looking statements relate to future results and occurrences, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. 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 risks and uncertainties include, but are not limited to, the credit quality of our loan portfolio, general economic conditions in the United States and in our markets, including the continued impact on our customers from volatility in oil and gas prices, the material risks and uncertainties for the U.S. and world economies, and for our business, resulting from the COVID-19 pandemic, expectations regarding rates of default and loan losses, volatility in the mortgage industry, our business strategies, and our expectations about future financial performance, future growth and earnings, the appropriateness of our allowance for loan losses and provision for credit losses, the impact of changing regulatory requirements and legislative changes on our business, increased competition, interest rate risk, new lines of business, new product or service offerings and new technologies. 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, Texas Capital Bancshares, Inc. disclaims 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.

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