Texas Capital Bancshares, Independent Bank scrap $5.5bn merger deal

Texas Capital Bancshares and Independent Bank Group have mutually scrapped their previously announced $5.5bn merger deal owing to the impact of the Covid-19 pandemic on global markets.

The Texan bank holding companies also said that the pandemic has a significant effect on their ability to fully realise the benefits they expected to achieve via their all-stock merger of equals, which was announced in December 2019.

Texas Capital Bancshares is the parent company of Texas Capital Bank, while Independent Bank Group is the holding company for Independent Bank, which operates in both Texas and Colorado.

Texas Capital Bancshares chairman Larry Helm said: “Due to the unprecedented impact of the COVID-19 pandemic, both companies’ boards of directors believe it is in the best interests of our employees, clients and all of our shareholders to focus on managing our business during this time.

“With the talent and depth of our team and strong organic growth model, Texas Capital Bank has built a resilient business with lasting client relationships and a record of value creation through changing market dynamics and economic pressures.

‘Texas Capital Bank remains focused on supporting the health and safety of our colleagues and meeting all our clients’ needs during these challenging times and for many years thereafter.”

Neither of the bank holding companies will be paying any termination fee to the other as a result of the mutual decision to cancel the merger agreement.

The deal was signed with an intention to create a premier, Texas-based super-regional bank with nearly $48bn in assets and $39bn in deposits.

As per the merger terms, shareholders of Texas Capital Bancshares were to exchange each of their shares with 1.0311 shares of Independent Bank Group. Texas Capital Bancshares’ shareholders would hold a stake of 55% in the combined bank holding company, while Independent Bank Group shareholders would own the remaining 45% stake had the deal gone ahead.

As per the merger plan, the combined holding company would keep the name Independent Bank Group, while the name of the combined bank would have been Texas Capital.