Texas Capital calls off merger, announces departure of president & CEO
One of the primary capital providers for buy-here, pay-here dealers not only called off a merger agreement with another bank in the Lone Star State, the institution also announced a significant change in leadership.
Texas Capital Bancshares, the parent company of Texas Capital Bank, on Tuesday announced that Texas Capital Bancshares and Independent Bank Group, the holding company for Independent Bank, have mutually agreed to terminate their merger agreement.
Furthermore, Texas Capital announced that Keith Cargill has stepped down as president and chief executive officer and a member of the board of directors, effective immediately.
Back on Dec. 9, the banks announced the merger under which the companies had agreed to combine in an all-stock combination of equals. According to a news release, the termination was approved by both companies’ boards of directors after careful consideration and given the significant impact of the COVID-19 pandemic on global markets and on the companies’ ability to fully realize 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,” Texas Capital Bancshares chairman Larry Helm said. “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,” Helm continued.
According to the announcement, neither party will pay any termination fee as a result of the mutual decision to terminate the merger agreement.
“As a result of our significant multi-year investments, healthy balance sheet, ability to recruit and foster the best talent and history of driving strong results, Texas Capital Bank is well positioned to continue to execute against a standalone strategy,” Helm said. “Our team and resources will be focused on leveraging our innovative and differentiated capabilities to continue providing a premier client experience and deliver elevated returns.
“Further, we maintain the scalability and commitment to operational excellence that will enable us to drive increased efficiencies and profitability and support sustainable, long-term value creation. 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,” he went on to say.
More details about leadership changes
Along with merger decision, Texas Capital also said Keith Cargill has stepped down as president and chief executive officer and a member of the board of directors of both companies, effective immediately.
The bank then said Helm, who has served as chairman of the Texas Capital Bancshares board since 2012, will serve as executive chair, CEO and president of both companies until a permanent successor has been named.
The bank added Cargill will serve as vice chairman of both companies through the end of 2020 to help support a smooth transition.
In addition, the announcement indicated James Browning, an independent director and member of the Texas Capital Bancshares board since 2009, has been appointed lead director.
The company highlighted Helm has served as a director of the Texas Capital Bancshares board since 2006, contributing significant operational and financial expertise.
The bank noted Helm has extensive knowledge of Texas Capital’s strategy, operations and culture having worked closely with the Texas Capital management team. During his tenure, Helm has provided important oversight and counsel to support Texas Capital in driving shareholder value and growth as well as navigating challenging market environments. He brings more than 30 years of commercial banking experience, including management positions at Bank One Corp., most notably as CEO of the Dallas Region and CEO of U.S. Middle Market Banking.
Elysia Ragusa, chair of the Texas Capital Bancshares governance and nominating committee, said, “As part of our focus on succession planning, the board believes that it is the right time for a transition in leadership as the company executes a strategy to achieve enhanced operational focus and profitable, long-term value creation.
“We are fortunate to have someone of Larry’s caliber and experience ready to assume the role of executive chair, CEO and president at this important juncture for the company,” Ragusa continued. “Larry has worked closely with the entire management team over the last 14 years, gaining a deep understanding of the ccompany’s unique opportunities. We are confident that he is the right person to lead Texas Capital Bank until we have identified a permanent successor for the CEO role.”
Texas Capital Bancshares said its board intends to conduct a search process to identify a permanent CEO and continues to be engaged with Egon Zehnder, a leading executive search firm, as part of the board’s robust and ongoing succession planning process.
“Under Keith’s leadership, the Texas Capital Bank team has built one of the best, fastest-growing business and private wealth banks in the United States,” Helm said. “Through multiple cycles, the company has achieved significant growth by fostering top talent and a culture of integrity, innovation and collaboration, earning and keeping the trust of our clients through exceptional service and meeting the needs of middle-market entrepreneurs.
“With this strong foundation in place, the team is well-positioned to continue executing against the company’s strategic priorities and generate returns for our clients and shareholders,” he continued.
“On behalf of the entire board, I want to thank Keith for his contributions as CEO and as a founder of Texas Capital Bank,” Helm went on to say. “I look forward to working with Keith and our leadership team to ensure a smooth transition for all our stakeholders, particularly as we navigate the current impact presented by the global pandemic. We wish Keith the very best in his future endeavors.”
Cargill offered these comments about the leadership change.
“After much deliberation, the Board and I have decided that now is the right time for me to step down as president and CEO of Texas Capital Bancshares and Texas Capital Bank,” he said. “It has been one of the greatest honors of my life to be one of the founders of this great company and serve as CEO alongside our exceptional management team and our talented colleagues.
“Our team has transformed Texas Capital Bank into one the most successful banks in the country that caters to entrepreneurs, business owners, private wealth clients and other loyal individuals,” Cargill went on to say.