BY Fraser Tennant
Citing the volatile economic conditions caused by coronavirus (COVID-19), Texas Capital Bancshares and Independent Bank Group have mutually agreed to terminate their $5.5bn merger agreement.
The termination was approved by both companies’ boards of directors after careful consideration of the significant impact of COVID-19 on global markets and on the companies’ ability to fully realise the benefits they expected to achieve through the merger.
“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,” said Larry Helm, chairman of Texas Capital Bancshares. “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.”
Neither party will pay any termination fee as a result of the mutual decision to terminate the merger agreement.
“While both companies believed in the benefits of the proposed transaction, it would not be prudent to continue to pursue the combination and integration of our companies at this time,” said David R. Brooks, group chairman and chief executive of Independent Bank Group. “I am confident this is the right decision for our company and our customers, employees, shareholders and other stakeholders. This decision allows us to dedicate our focus and resources toward ensuring the strength of our business, serving the interests of our customers and protecting the health and safety of our employees during these unprecedented times.”
Coinciding with the termination of the merger, Texas Capital Bank president and chief executive Keith Cargill announced that he had stepped down from both roles with immediate effect.
Mr Helm concluded: “Our dedicated team, whose tireless efforts to enhance our clients’ experience and the communities where we operate, will continue to guide Texas Capital Bank’s purpose and success.”
News: Texas banks call off merger, citing coronavirus impact