Dallas-based Texas Capital Bancshares and McKinney-based Independent Bank Group Inc. on Dec. 9 announced they will combine in an all-stock merger to create the second-largest lender by assets in Texas.

The merger will have a total market value of $5.5 billion. The combined companies will have about $48 billion in assets and $39 billiion in deposits.

The name of the combined holding company will be Independent Bank Group and the name of the combined bank will be Texas Capital. Retail locations in Colorado will continue to operate and retain the Independent Financial branding. The corporate headquarters of the combined company will be located in McKinney, current headquarters of Independent Bank. The combined company will trade under the Independent Bank Group ticker symbol "IBTX" on the Nasdaq.

Under the terms of the merger agreement, which was unanimously approved by the Boards of Directors of both companies, Texas Capital shareholders will receive 1.0311 shares of Independent Bank Group for each Texas Capital share they own. Former Texas Capital shareholders will own 55% and Independent Bank Group shareholders will own 45% of the combined company. Upon consummation of the transaction, the combined company expects to offer an annualized dividend on its common stock of $1.00 per share, subject to approval by the Board of Directors.

The chairman, president and CEO of the combined company will be David Brooks, current president and CEO of Independent Bank. C. Keith Cargill, current Texas Capital president and CEO, will serve as Special Advisor to the chairman, president and CEO and continue to assist the franchise in talent and client retention in addition to advising on key strategic initiatives. The leadership team led by Brooks will include five current Texas Capital executives and four current Independent Bank Group executives. The Board of Directors will be composed of seven directors from Texas Capital and six directors from Independent Bank Group. Larry L. Helm, Texas Capital Non-Executive Chairman of the Texas Capital Board, will serve as Lead Independent Director of the combined company’s Board of Directors.

“Combining Independent Bank Group and Texas Capital is the logical next step for both companies,” said Brooks. “We have built a strong, broad commercial branch footprint across Texas and in Colorado through multiple transactions, which have effectively doubled our assets every two years. This combination with Texas Capital is a singular opportunity to significantly diversify our customer base, business lines and loan concentrations, enabling us to accelerate our growth and enhance our financial flexibility for continued strategic investments. At the same time, Independent Bank Group will benefit from the strength of Texas Capital’s technology, processes and systems to ensure we are even better positioned to serve and compete for clients in all lines of business while mitigating risk.”

The merger is expected to close in mid-2020, subject to satisfaction of customary closing conditions, including receipt of customary regulatory approvals and approval by the shareholders of each company.

Jefferies LLC is serving as lead financial advisor to Texas Capital. Goldman Sachs & Co. LLC is also serving as financial advisor to Texas Capital. Sullivan & Cromwell LLP is serving as legal advisor to Texas Capital.

Keefe, Bruyette & Woods, A Stifel Company, is serving as exclusive financial advisor to Independent Bank Group. Sandler O’Neill + Partners, L.P rendered a fairness opinion to the Board of Directors of Independent Bank Group. Wachtell, Lipton, Rosen & Katz is serving as legal advisor to Independent Bank Group.

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