Texas Capital drops as merger with rival Independent Bank Group terminated

Independent Bank

26/05/2020 17:53

** Texas Capital Bancshares Inc  TCBI.O  shares down 5.1% at
$27.06 as merger with Independent Bank Group  IBTX.O  called off
    ** Shares of IBTX rise 12.1% to over 2-mth high of $35
    ** Regional banks mutually agree to terminate their merger
agreement "due to unprecedented impact of the COVID-19
pandemic"; neither party will pay any termination fee
 urn:newsml:reuters.com:*:nGNX2MmSB5  urn:newsml:reuters.com:*:nACStzV5xa
    ** On Dec 9, the banks agreed to an all-stock merger of
equals with market value of ~$5.5 bln  urn:newsml:reuters.com:*:nL4N28J2XT
    ** Also on Tues, TCBI says CEO C. Keith Cargill steps down
effective immediately; board chair Larry Helm will serve as CEO
on interim basis  urn:newsml:reuters.com:*:nGNX8TMpfs
    ** RBC analyst Jon Arfstrom says in flash note he's not
"overly" surprised by announcement, highlighting that the stocks
were trading at spread recently suggesting merger was less
likely to close
    ** Arfstrom says for TCBI, similar to peer outlook, views
near term operating environment challenging "given the COVID-19
headwinds on credit as well as the depressed rate environment"
    ** Energy-exposed regional bank stocks plummeted in Mar as
oil prices and interest rates plunged amid mounting coronavirus
fears  urn:newsml:reuters.com:*:nL1N2B94JV  urn:newsml:reuters.com:*:nL1N2B23L0
    ** With moves on Tues, TCBI has lost ~57% since Dec 9 merger
announcement, while IBTX has fallen ~43% over same time frame

 (Lance Tupper is a Reuters market analyst. The views expressed
are his own)
 ((lance.tupper.tr.com@reuters.net
lance.tupper@tr.com 646-223-5017))