Texas Capital Bank Announces Agreement to Sell Its Mortgage Servicing Rights Asset to PHH Mortgage
April 21 2021 - 4:04PM
Texas Capital Bank, N.A., referred to herein as “Texas Capital
Bank” or the “Company,” today announced that it has entered into an
agreement with PHH Mortgage (“PHH”), a subsidiary of Ocwen
Financial Corporation (NYSE: OCN), under which PHH will
purchase, in a bulk sale, the Company’s portfolio of Mortgage
Servicing Rights (“MSRs”) attributable to a mortgage loan portfolio
approximating $14 billion. In a related Letter of Intent, PHH has
also confirmed it will extend employment opportunities to many of
the Company’s Correspondent Lending employees, and Texas Capital
Bank has agreed to make best efforts to cooperate with PHH in
transitioning its Correspondent Lending client base. The MSR sale
and transition of employees and clients is expected to be completed
in the second quarter of 2021, subject to customary closing
conditions.
The transaction is consistent with Texas Capital Bank’s
strategic objectives to increase capital flexibility and better
align resources and investments to core, high-growth opportunities
for long-term value creation. Importantly, Texas Capital
Bank is reinforcing its commitment to its Mortgage Finance,
Mortgage Warehouse and Specialty Lending businesses, which will
continue to be core to the Company’s go-forward strategy and is not
expected to be impacted by this transaction. The Company expects to
increase its investments to those lines of business and continue
providing innovative mortgage solutions to its
clients.
Rob C. Holmes, President and Chief Executive Officer of Texas
Capital Bank, said, “Today’s announcement represents another
important step to optimize our balance sheet, implement enhanced
discipline and mitigate risk across Texas Capital Bank. Over the
last several weeks, we have been taking important actions to
strengthen our financial position and hone our focus on our core
growth drivers, including through this agreement with PHH, our
recently announced Credit Risk Transfer transaction and our
issuance of new preferred stock. We believe the transaction with
PHH maximizes value for our Correspondent Lending and MSR assets
while continuing to support those clients’ needs with a strong
partner. As a result, Texas Capital Bank is expected to have
additional capital resources to strategically deploy in support of
our objectives to deliver enhanced services and solutions for our
clients and drive more predictable, profitable results.”
Mr. Holmes continued, “Importantly, this announcement does not
impact our commitment to our Mortgage Finance, Mortgage Warehouse
or Specialty Lending businesses, which will continue to be core to
our long-term strategy. I want to express my appreciation to all of
our Correspondent Lending stakeholders, in particular our dedicated
colleagues. Over the last five years, the team has helped to expand
our capabilities and grow this division, and we are pleased PHH
recognizes the talent of our experienced team. We are confident
that PHH is the right partner to advance the business, and we look
forward to working with them to ensure a smooth and successful
transition for our Correspondent Lending clients and
employees.”
Alston & Bird LLP and Simpson Thacher & Bartlett LLP
acted as legal counsel to Texas Capital Bank.
About Texas Capital Bancshares, Inc.
Texas Capital Bancshares, Inc. (NASDAQ®: TCBI), a member of the
Russell 2000® Index and the S&P MidCap 400®, is the parent
company of Texas Capital Bank, a commercial bank that delivers
highly personalized financial services to businesses and
entrepreneurs. Headquartered in Dallas, the bank has full-service
locations in Austin, Dallas, Fort Worth, Houston and San Antonio.
Member FDIC.
Forward Looking Statements
This communication may be deemed to include “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995 regarding our financial condition, results of
operations, business plans and future performance of Texas Capital
Bancshares, Inc. These statements are not historical in nature and
can generally be identified by such words as “believe,” “expect,”
“estimate,” “anticipate,” “plan,” “may,” “will,” “forecast,”
“could,” “projects,” “intend” and similar expressions. Because
forward-looking statements relate to future results and
occurrences, they are subject to inherent uncertainties, risks, and
changes in circumstances that are difficult to predict. A number of
factors, many of which are beyond our control, could cause actual
results to differ materially from future results expressed or
implied by such forward-looking statements. These risks and
uncertainties include, but are not limited to, the credit quality
of our loan portfolio, general economic conditions in the United
States and in our markets, including the continued impact on our
customers from volatility in oil and gas prices, the material risks
and uncertainties for the U.S. and world economies, and for our
business, resulting from the COVID-19 pandemic, expectations
regarding rates of default and loan losses, volatility in the
mortgage industry, our business strategies, and our expectations
about future financial performance, future growth and earnings, the
appropriateness of our allowance for loan losses and provision for
credit losses, the impact of changing regulatory requirements and
legislative changes on our business, increased competition,
interest rate risk, new lines of business, new product or service
offerings and new technologies. These and other factors that could
cause results to differ materially from those described in the
forward-looking statements, as well as a discussion of the risks
and uncertainties that may affect our business, can be found in our
Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and
in other filings we make with the Securities and Exchange
Commission. The information contained in this communication speaks
only as of its date. Except to the extent required by applicable
law or regulation, Texas Capital Bancshares, Inc. disclaims any
obligation to update such factors or to publicly announce the
results of any revisions to any of the forward-looking statements
included herein to reflect future events or developments.
INVESTOR CONTACT
Jamie Britton, 214.932.6721
Jamie.Britton@texascapitalbank.com
MEDIA CONTACT
Shannon Wherry, 469.399.8527
Shannon.Wherry@texascapitalbank.com
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