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Texas Capital Issues 3M Common Shares for $210 Million


Texas-based banking products and services provider, Texas Capital Bancshares, Inc. TCBI announced the public offering of 3 million shares of its common stock at approximately $210 million, excluding expected offering expenses. The offering is likely to end on or around Dec 2, 2016, subject to certain conditions.

Texas Capital has permitted a 30-day option to the underwriters for covering over-allotments, if any. The option includes the purchase of an additional 0.45 million shares of common stock. Notably, if underwriters buy additional shares fully, then gross proceeds will sum up to $241.5 million.

JPMorgan Chase & Co. JPM, Morgan Stanley MS and BofA Merrill Lynch – a unit of Bank of America Corporation BAC – are acting as the joint book-running managers.

The net proceeds from this offering are anticipated to be used as capital for growth and general corporate purposes. These purposes might include funding of loans and purchase of investment securities. Further, debt repayment and other operational needs can be met through the funds.

During third-quarter 2016, Texas Capital had cash and due from banks of $117.3 million. As of Sep 30, 2016, the bank’s borrowings came in at $1.7 billion.

Though the unsettled economic environment and stringent regulatory issues remain concerns, the latest move of raising capital will aid the company in reducing its total debt burden to some extent. On the other hand, Texas Capital’s capital ratios will improve and the bank will be able to pursue growth and acquisition opportunities.

Texas Capital currently carries a Zacks Rank #3 (Hold).

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