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IBTX - Independent Bank Inc News Story

$72.98 -1.6  -2.1%

Last Trade - 20/04/21

Sector
Financials
Size
Mid Cap
Market Cap £2.30bn
Enterprise Value £2.39bn
Revenue £430.2m
Position in Universe 1803rd / 6848

Texas banks call off merger, citing coronavirus impact

Tue 26th May, 2020 7:08pm
By David French
    NEW YORK, May 26 (Reuters) - Texas Capital Bancshares
 TCBI.O  and Independent Bank Group  IBTX.O  called off their
merger on Tuesday, saying the coronavirus pandemic has hit
markets too hard and crushed the benefits of tying up.
    The merger of these two Texas lenders would have created the
second-largest bank by assets in the Lone Star state. They
joined a slew of U.S. regional banks consolidating to share
technology costs and soften the sting of low interest rates.
 urn:newsml:reuters.com:*:nL4N28J2XT
    But since they announced the deal in December, the world has
been hit by the novel coronavirus, which has killed nearly 
100,000 people in the United States alone and led to
government-imposed lockdowns of major metropolises. [GRAPHICS
LINK]
    While Texas has been looser than other states in applying
quarantine measures, it still faces a sharp uptick in
unemployment, with its energy sector hit hard by plunging oil
prices. Among U.S. banks, Texas Capital has one of the highest
concentrations of oil and gas loans in its loan book.
    Market volatility has also hurt companies' ability to
transact. Stock prices have plunged and soared as corporate bond
markets have suffered price disparities, giving companies shaky
currency to finance deals. Bank stocks have come under
particular pressure as investors worry about the harm they will
face during the coronavirus-fueled recession.
    Texas Capital and Independent Bank Group had structured the
deal as a merger of equals, but Texas Capital shareholders would
control 55% of the combined entity as the larger bank by assets.
Independent Bank's David Brooks was slated to run the combined
entity.
    Texas Capital Chief Executive C. Keith Cargill stepped down
on Tuesday, with Chairman Larry Helm taking over his role until
a permanent successor is appointed. Brooks is still in charge of
Independent Bank.
    Independent Bank shares were trading 11.8% higher in
mid-afternoon, with Texas Capital's stock down 6.8%.

 (Reporting by David French in New York; 
Editing by Lauren Tara LaCapra and Dan Grebler)
 ((davidj.french@thomsonreuters.com; +1 646 223 5211; Reuters
Messaging: davidj.french.thomsonreuters.com@reuters.net))
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