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As
filed with the U.S. Securities and Exchange Commission on February 13, 2009
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TEXAS CAPITAL BANCSHARES, INC.
(Exact Name of Registrant as Specified in its Charter)
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Delaware
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75-2679109 |
(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.) |
2000 McKinney Avenue
Suite 700
Dallas, Texas 75201
(214) 932-6600
(Address, including zip code, and telephone number, including area code, of Registrants principal executive offices)
Peter B. Bartholow
Chief Financial Officer
Texas Capital Bancshares, Inc.
2000 McKinney Avenue
Suite 700
Dallas, Texas 75201
(214) 932-6600
(Name, address, including zip code, and telephone number, including area code, of agent for
service for Registrant)
with copies to:
Norman R. Miller, Esq.
Patton Boggs LLP
2001 Ross Avenue Street, Suite 3000
Dallas, TX 75201
(214) 758-6630
Approximate date of commencement of proposed sale to the public: From time to time after this
Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant to dividend or
interest reinvestment plans, please check the following box. o
If any of the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities
offered only in connection with the dividend or interest reinvestment plans, check the following
box. þ
If this Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same
offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. o
If this Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment hereto that shall become effective upon filing with the Commission
pursuant to Rule 462(e) under the Securities Act, check the following box. o
If this Form is a post-effective amendment to a registration statement filed pursuant to
General Instruction I.D. filed to register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities Act, check the following box. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer or a smaller reporting company. See the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
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Large accelerated filer o |
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Accelerated filer þ |
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Non-accelerated filer o
(Do not check if a smaller reporting company) |
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Smaller reporting company o |
CALCULATION OF REGISTRATION FEE
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Proposed Maximum |
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Amount of |
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Title of Each Class of |
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Amount to be |
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Proposed Maximum |
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Aggregate |
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Registration |
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Securities to be Registered |
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Registered |
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Price per Unit |
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Offering Price |
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Fee(l) |
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Fixed Rate Cumulative
Perpetual Preferred,
Series A, $0.01 par value
per share |
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75,000 |
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$1,000(1) |
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$75,000,000(1) |
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$2,948 |
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Warrant to Purchase Common
Stock, $0.01 par value per
share, and underlying
shares of Common Stock(2) |
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758,086(2) |
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$14.84(3) |
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$11,249,997(3) |
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$443 |
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TOTAL: |
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$86,249,997 |
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$3,391 |
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(1) |
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Calculated in accordance with Rule 457(a) and includes such additional
number of shares of Fixed Rate Cumulative Perpetual Preferred, Series
A, of a currently indeterminable amount, as may from time to time
become issuable by reason of stock splits, stock dividends or similar
transactions. |
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(2) |
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In addition to the Fixed Rate Cumulative Perpetual Preferred, Series
A, there are being registered hereunder (a) a warrant for the purchase
of 758,086 shares of common stock with an initial per share exercise
price of $14.84 per share, (b) the 758,086 shares of common stock
issuable upon exercise of such warrant and (c) such additional number
of shares of common stock, of a currently indeterminable amount, as
may from time to time become issuable by reason of stock splits, stock
dividends and certain anti-dilution provisions set forth in such
warrant, which shares of common stock are registered hereunder
pursuant to Rule 416. |
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(3) |
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Calculated in accordance with Rule 457(i) with respect to the per
share exercise price of the warrant of $14.84. |
The Registrant hereby amends this Registration Statement on such date or dates as may be
necessary to delay its effective date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement
shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may
determine.
We will amend and complete the information in this prospectus. The selling securityholders may not
sell any of these securities or accept your offer to buy any of them until the documentation filed
with the Securities and Exchange Commission relating to these securities has been declared
effective by the Securities and Exchange Commission. This prospectus is not an offer to sell
these securities and the selling securityholders are not soliciting your offer to buy these
securities in any state or other jurisdiction where that would not be permitted or legal.
SUBJECT
TO COMPLETION, DATED FEBRUARY 13, 2009
PROSPECTUS
TEXAS CAPITAL BANCSHARES, INC.
FIXED RATE CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES A
WARRANT TO PURCHASE 758,086 SHARES OF COMMON STOCK
758,086 SHARES OF COMMON STOCK
This prospectus relates to the potential resale from time to time by selling securityholders
of some or all of the shares of our Fixed Rate Cumulative Perpetual Preferred Stock, Series A, or
the Series A perpetual preferred stock, a warrant to purchase 758,086 shares of our common stock,
or the warrant, and any shares of our common stock issuable from time to time upon exercise of the
warrant. In this prospectus, we refer to the shares of Series A perpetual preferred stock, the
warrant and the shares of common stock issuable upon exercise of the warrant, collectively, as the
securities. The Series A perpetual preferred stock and the warrant were originally issued by us
pursuant to the Letter Agreement dated January 16, 2009, and the related Securities Purchase
Agreement Standard Terms, between us and the United States Department of the Treasury, which we
refer to as the initial selling securityholder, in a transaction exempt from the registration
requirements of the Securities Act of 1933, as amended, or the Securities Act.
The initial selling securityholder and its successors, including transferees, which we
collectively refer to as the selling securityholders, may offer the securities from time to time
directly or through underwriters, broker-dealers or agents and in one or more public or private
transactions and at fixed prices, prevailing market prices, at prices related to prevailing market
prices or at negotiated prices. If these securities are sold through underwriters, broker-dealers
or agents, the selling securityholders will be responsible for underwriting discounts or
commissions or agents commissions.
We will not receive any proceeds from the sale of the securities by the selling
securityholders.
The Series A perpetual preferred stock is not listed on an exchange, and, unless requested by
the initial selling securityholder, we do not intend to list the Series A perpetual preferred stock
on any exchange.
Our common stock is traded on the Nasdaq Global Select Market under the symbol TCBI. On
___, 2009, the closing price of our common stock on the Nasdaq Global Select Market was
$ per share. You are urged to obtain current market prices of our common stock.
Investing in our securities involves a high degree of risk. See Risk Factors beginning on
page 2.
Our principal executive offices are located at 2000 McKinney Avenue, Suite 700, Dallas, Texas
75201 and our telephone number is (214) 932-6600. Our Internet address is
http://www.texascapitalbank.com.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.
These securities are not savings accounts, deposits or other obligations of any bank and are
not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental
agency.
The date of this prospectus is ___, 2009.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement we filed with the Securities and Exchange
Commission, or the SEC, using a shelf registration process. Under this shelf registration
process, the selling securityholders may, from time to time, offer and sell, in one or more
offerings, the securities described in this prospectus.
The registration statement containing this prospectus, including the exhibits to the
registration statement, provides additional information about us and the securities offered under
this prospectus. The registration statement, including the exhibits and the documents incorporated
herein by reference, can be read on the SEC website or at the SEC offices mentioned under the
heading Where You Can Find More Information.
We may provide a prospectus supplement containing specific information about the terms of a
particular offering by the selling securityholders. The prospectus supplement may add, update or
change information in this prospectus. If the information in this prospectus is inconsistent with
a prospectus supplement, you should rely on the information in that prospectus supplement. You
should read both this prospectus and, if applicable, any prospectus supplement. See Where You Can
Find More Information for more information.
In this prospectus, TCBI, we, our, ours, and us refer to Texas Capital Bancshares,
Inc., which is a financial holding company headquartered in Dallas, Texas, and its subsidiaries on
a consolidated basis, unless the context otherwise requires. References to Texas Capital Bank
mean Texas Capital Bank, National Association, which is our principal banking subsidiary.
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference contain statements that are
considered forward looking statements within the meaning of United States securities laws. In
addition, TCBI and its management may make other written or oral communications from time to time
that contain forward-looking statements. Forward-looking statements, including statements about
industry trends, managements future expectations and other matters that do not relate strictly to
historical facts, are based on assumptions by management, and are often identified by such
forward-looking terminology as expect, look, believe, anticipate, estimate, seek,
may, will, trend, target, and goal or similar statements or variations of such terms.
Forward-looking statements may include, among other things, statements about TCBIs confidence in
its strategies and its expectations about financial performance, market growth, market and
regulatory trends and developments, acquisitions and divestitures, new technologies, services and
opportunities and earnings.
Forward-looking statements are subject to various risks and uncertainties, which change over
time, are based on managements expectations and assumptions at the time the statements are made,
and are not guarantees of future results. Managements expectations and assumptions, and the
continued validity of the forward-looking statements, are subject to change due to a broad range of
factors affecting the national and global economies, the equity, debt, currency and other financial
markets, as well as factors specific to TCBI and its subsidiaries, including Texas Capital Bank.
Actual outcomes and results may differ materially from what is expressed in our
forward-looking statements and from our historical financial results due to the factors discussed
elsewhere in this prospectus or disclosed in our other SEC filings. Forward-looking statements
should not be relied upon as representing our expectations or beliefs as of any date subsequent to
the time this prospectus is filed with the SEC. TCBI undertakes no obligation to revise the
forward-looking statements contained in this
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prospectus to reflect events after the time it is filed with the SEC. The factors discussed
herein are not intended to be a complete summary of all risks and uncertainties that may affect our
businesses. Though we strive to monitor and mitigate risk, we cannot anticipate all potential
economic, operational and financial developments that may adversely impact our operations and our
financial results.
Forward-looking statements should not be viewed as predictions, and should not be the primary
basis upon which investors evaluate TCBI. Any investor in TCBI should consider all risks and
uncertainties disclosed in our SEC filings described below under the heading Where You Can Find
More Information, all of which are accessible on the SECs website at http://www.sec.gov.
ABOUT TEXAS CAPITAL BANCSHARES, INC.
Texas Capital Bancshares, Inc., a financial holding company, is the parent of Texas Capital
Bank, National Association, a Texas-based bank headquartered in Dallas, with banking offices in
Dallas, Houston, Fort Worth, Austin and San Antonio, the states five largest metropolitan areas.
TCBI offers a variety of banking products and services to our customers. We have focused on
organic growth of Texas Capital Bank and on quality loan and deposit relationships.
RISK FACTORS
An investment in our securities involves significant risks. You should carefully consider the
risks and uncertainties described in this prospectus and the risk factors set forth below and in
the documents and reports filed with the SEC that are incorporated by reference into this
prospectus, as well as any risks described in any applicable prospectus supplement, before you make
an investment decision regarding the securities. Additional risks and uncertainties not presently
known to us or that we currently deem immaterial may also affect our business operations.
Risk Factors Associated With Our Business
We must effectively manage our credit risk. There are risks inherent in making any loan,
including risks with respect to the period of time over which the loan may be repaid, risks
resulting from changes in economic and industry conditions, risks inherent in dealing with
individual borrowers and risks resulting from uncertainties as to the future value of collateral.
The risk of non-payment of loans is inherent in commercial banking. Although we attempt to minimize
our credit risk by carefully monitoring the concentration of our loans within specific industries
and through prudent loan approval practices in all categories of our lending, we cannot assure you
that such monitoring and approval procedures will reduce these lending risks. We cannot assure you
that our credit administration personnel, policies and procedures will adequately adapt to changes
in economic or any other conditions affecting customers and the quality of the loan portfolio.
Our results of operation and financial condition would be adversely affected if our allowance
for loan losses is not sufficient to absorb actual losses. Experience in the banking industry
indicates that a portion of our loans in all categories of our lending business will become
delinquent, and some may only be partially repaid or may never be repaid at all. Our methodology
for establishing the adequacy of the allowance for loan losses depends on subjective application of
risk grades as indicators of borrowers ability to repay. Deterioration in general economic
conditions and unforeseen risks affecting customers may have an adverse effect on borrowers
capacity to repay timely their obligations before risk grades could reflect those changing conditions. In
times of improving credit quality, with growth in our loan portfolio, the allowance for loan losses
may decrease as a percent of total loans. Changes in economic and market conditions may increase
the risk that the allowance would become inadequate if borrowers experience economic and other
conditions adverse to their businesses. Maintaining the adequacy of our
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allowance for loan losses may require that we make significant and unanticipated increases in
our provisions for loan losses, which would materially affect our results of operations and capital
adequacy. Recognizing that many of our loans individually represent a significant percentage of our
total allowance for loan losses, adverse collection experience in a relatively small number of
loans could require an increase in our allowance. Federal regulators, as an integral part of their
respective supervisory functions, periodically review our allowance for loan losses. The regulatory
agencies may require us to change classifications or grades on loans, increase the allowance for
loan losses with large provisions for loan losses and to recognize further loan charge-offs based
upon their judgments, which may be different from ours. Any increase in the allowance for loan
losses required by these regulatory agencies could have a negative effect on our results of
operations and financial condition.
Our growth plans are dependent on the availability of capital and funding. The
Companys dependence on trust preferred and other forms of debt capital, as well as other
short-term sources of funding may become limited by market conditions beyond our control, as has
been evidenced with the economic downturn and issues affecting the financial services industry.
Pricing of capital, in terms of interest or dividend requirements or dilutive impact on earnings
available to shareholders have increased dramatically, and an increase in costs of capital can have
a direct impact on operating performance and the ability to achieve growth objectives. Costs of
funding could also increase dramatically and affect our growth objectives, as well as our financial
performance. Adverse changes in operating performance and financial condition could make capital
necessary to support or maintain well capitalized status either difficult to obtain or extremely
expensive.
Our operations are significantly affected by interest rate levels. Our profitability is
dependent to a large extent on our net interest income, which is the difference between interest
income we earn as a result of interest paid to us on loans and investments and interest we pay to
third parties such as our depositors and those from whom we borrow funds. Like most financial
institutions, we are affected by changes in general interest rate levels, which are currently at
record low levels, and by other economic factors beyond our control. Interest rate risk can result
from mismatches between the dollar amount of repricing or maturing assets and liabilities and from
mismatches in the timing and rate at which our assets and liabilities reprice. Although we have
implemented strategies which we believe reduce the potential effects of changes in interest rates
on our results of operations, these strategies may not always be successful. In addition, any
substantial and prolonged increase in market interest rates could reduce our customers desire to
borrow money from us or adversely affect their ability to repay their outstanding loans by
increasing their costs since most of our loans have adjustable interest rates that reset
periodically. If our borrowers ability to repay is affected, our level of non-performing assets
would increase and the amount of interest earned on loans will decrease, thereby having an adverse
effect on operating results. Any of these events could adversely affect our results of operations
or financial condition.
Our business faces unpredictable economic and business conditions. General economic conditions
and specific business conditions impact the banking industry and our customers businesses. The
credit quality of our loan portfolio necessarily reflects, among other things, the general economic
conditions in the areas in which we conduct our business. Our continued financial success depends
somewhat on factors beyond our control, including:
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national and local economic conditions; |
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the supply and demand for investable funds; |
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interest rates; and |
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federal, state and local laws affecting these matters. |
Substantial deterioration in any of the foregoing conditions, as we have experienced with the
current economic downturn, can have a material adverse effect on our results of operation and
financial condition, and may not
be able to sustain our historical rate of growth.
Our banks customer base is primarily commercial in nature, and our bank does not
have a significant branch network or retail deposit base. In periods of economic downturn, business
and commercial deposits may tend to be more volatile than traditional retail consumer deposits and,
therefore, during these periods our financial condition and results of operations could be
adversely affected to a greater degree than our competitors that have a larger retail customer
base.
We are dependent upon key personnel. Our success depends to a significant extent upon the
performance of certain key employees, the loss of whom could have an adverse effect on our
business. Although we have entered into employment agreements with certain employees, we cannot
assure you that we will be successful in retaining key employees.
Our business is concentrated in Texas and a downturn in the economy of Texas may adversely
affect our business. A substantial majority of our business is located in Texas. As a result, our
financial condition and results of operations may be affected by changes in the Texas economy. A
prolonged period of economic recession or other adverse economic conditions in Texas may result in
an increase in non-payment of loans and a decrease in collateral value.
Our business strategy includes growth plans within our target markets and, if we fail to
manage our growth effectively as we pursue our expansion strategy, it could negatively affect our
operations. We intend to develop our business by pursuing a significant growth strategy. Our
prospects must be considered in light of the risks, expenses and difficulties frequently
encountered by companies in significant growth stages of development. In order to execute our
growth strategy successfully, we must, among other things:
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identify and expand into suitable markets and lines of business; |
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build our customer base; |
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maintain credit quality; |
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attract sufficient deposits to fund our anticipated loan growth; |
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attract and retain qualified bank management in each of our targeted markets; |
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identify and pursue suitable opportunities for opening new banking locations; and |
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maintain adequate regulatory capital. |
Failure to manage our growth effectively could have a material adverse effect on our business,
future prospects, financial condition or results of operations, and could adversely affect our
ability to successfully implement our business strategy.
We compete with many larger financial institutions which have substantially greater financial
resources than we have. Competition among financial institutions in Texas is intense. We compete
with other financial and bank holding companies, state and national commercial banks, savings and
loan associations, consumer finance companies, credit unions, securities brokerages, insurance
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companies, mortgage banking companies, money market mutual funds, asset-based non-bank lenders
and other financial institutions. Many of these competitors have substantially greater financial
resources, lending limits and larger branch networks than we do, and are able to offer a broader
range of products and services than we can. Failure to compete effectively for deposit, loan and
other banking customers in our markets could cause us to lose market share, slow our growth rate
and may have an adverse effect on our financial condition and results of operations.
The risks involved in commercial lending may be material. We generally invest a greater
proportion of our assets in commercial loans than other banking institutions of our size, and our
business plan calls for continued efforts to increase our assets invested in these loans.
Commercial loans may involve a higher degree of credit risk than some other types of loans due, in
part, to their larger average size, the effects of changing economic conditions on commercial
loans, the dependency on the cash flow of the borrowers businesses to service debt, the sale of
assets securing the loans, and disposition of collateral which may not be readily marketable.
Losses incurred on a relatively small number of commercial loans could have a materially adverse
impact on our results of operations and financial condition.
Real estate lending in our core Texas markets involves risks related to a decline in value of
commercial and residential real estate. Our real estate lending activities, and the exposure to
fluctuations in real estate values, are significant and expected to increase. The market value of
real estate can fluctuate significantly in a relatively short period of time as a result of market
conditions in the geographic area in which the real estate is located. If the value of the real
estate serving as collateral for our loan portfolio were to decline materially, a significant part
of our loan portfolio could become under-collateralized and we may not be able to realize the
amount of security that we anticipated at the time of originating the loan. Conditions in certain
segments of the real estate industry, including homebuilding, lot development and mortgage lending,
may have an effect on values of real estate pledged as collateral in our markets. The inability of
purchasers of real estate, including residential real estate, to obtain financing may weaken the
financial condition of borrowers dependent on the sale or refinancing of property. Failure to
sell some loans held for sale in accordance with contracted terms may result in mark to market
charges to other operating income. In addition, after the mark to market, we may transfer the
loans into the loans held for investment portfolio where they will then be subject to changes in
grade, classification, accrual status, foreclosure, or loss which could have an effect on the
adequacy of the allowance for loan losses.
Our future profitability depends, to a significant extent, upon revenue we receive from our
middle market business customers and their ability to meet their loan
obligations. Our future profitability depends, to a significant extent, upon revenue we receive from middle
market business customers, and their ability to continue to meet existing loan obligations. As a
result, adverse economic conditions or other factors adversely affecting this market segment may
have a greater adverse effect on us than on other financial institutions that have a more
diversified customer base.
System failure or breaches of our network security could subject us to increased operating
costs as well as litigation and other liabilities. The computer systems and network infrastructure
we use could be vulnerable to unforeseen problems. Our operations are dependent upon our ability to
protect our computer equipment against damage from fire, power loss, telecommunications failure or
a similar catastrophic event. Any damage or failure that causes an interruption in our operations
could have an adverse effect on our customers. In addition, we must be able to protect the computer
systems and network infrastructure utilized by us against physical damage, security breaches and
service disruption caused by the Internet or other users. Such computer break-ins and other
disruptions would jeopardize the security of information stored in and transmitted through our
computer systems and network infrastructure, which may result in significant liability to us and
deter potential customers. Although we,
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with the help of third-party service providers, will continue to implement security technology
and establish operational procedures to prevent such damage, there can be no assurance that these
security measures will be successful. In addition, the failure of our customers to maintain
appropriate security for their systems may increase our risk of loss. We have and will continue to
incur costs with the training of our customers about protection of their systems. However, we
cannot be assured that this training will be adequate to avoid risk to our customers or, under
unknown circumstances to us.
We are subject to extensive government regulation and supervision. We are subject to extensive
federal and state regulation and supervision. Banking regulations are primarily intended to protect
depositors funds, federal deposit insurance funds and the banking system as a whole, not
shareholders. These regulations affect our lending practices, capital structure, investment
practices, dividend policy, operations and growth, among other things. These regulations also
impose obligations to maintain appropriate policies, procedures and controls, among other things,
to detect, prevent and report money laundering and terrorist financing and to verify the identities
of our customers. Congress and federal regulatory agencies continually review banking laws,
regulations and policies for possible changes. Changes to statutes, regulations or regulatory
policies, including changes in interpretation or implementation of statutes, regulations or
policies, could affect us in substantial and unpredictable ways. Such changes could subject us to
additional costs, limit the types of financial services and products we may offer and/or increase
the ability of non-banks to offer competing financial services and products, among other things. We
expend substantial effort and incur costs to improve our systems, audit capabilities, staffing and
training in order to satisfy regulatory requirements, but the regulatory authorities may determine
that such efforts are insufficient. Failure to comply with relevant laws, regulations or policies
could result in sanctions by regulatory agencies, civil money penalties and/or reputation damage,
which could have a material adverse effect on our business, financial condition and results of
operations. While we have policies and procedures designed to prevent any such violations, there
can be no assurance that such violations will not occur.
In addition, the FDIC could impose higher assessments on deposits
based on general industry conditions and as a result of changes in specific
programs. These increased assessments could affect our earnings.
Furthermore, the Sarbanes-Oxley Act of 2002, and the related rules and regulations promulgated
by the SEC and NASD that are applicable to us, have increased the scope, complexity and cost of
corporate governance, reporting and disclosure practices. As a result, we have experienced, and may
continue to experience, greater compliance costs.
We chose to participate in the U.S. Department of Treasurys voluntary Capital Purchase
Program and as a result of our
participation are subject to additional regulatory restrictions.
Severe weather, natural disasters, acts of war or terrorism and other external events could
significantly impact our business. Severe weather, natural disasters, acts of war or terrorism and
other adverse external events could have a significant impact on our ability to conduct business.
Such events could affect the stability of our deposit base, impair the ability of borrowers to
repay outstanding loans, impair the value of collateral securing loans, cause significant property
damage, result in loss of revenue and/or cause us to incur additional expenses. Periodically,
hurricanes have caused extensive flooding and destruction along the coastal areas of Texas,
including communities where we conduct business, and our operations in Houston have been disrupted
to a minor degree. While the impact of these hurricanes did not significantly affect us, other
severe weather or natural disasters, acts of war or terrorism or other adverse external events may
occur in the future. Although management has established disaster recovery policies and procedures,
the occurrence of any such event could have a material adverse effect on our business, which, in
turn, could have a material adverse effect on the our financial condition and results of
operations.
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Our management maintains significant control over us. Our current executive officers and
directors beneficially own slightly more than 7% of the outstanding shares of our common stock.
Accordingly, our current executive officers and directors are able to influence, to a significant
extent, the outcome of all matters required to be submitted to our stockholders for approval
(including decisions relating to the election of directors), the determination of day-to-day
corporate and management policies and other significant corporate activities.
There are substantial regulatory limitations on changes of control. With certain limited
exceptions, federal regulations prohibit a person or company or a group of persons deemed to be
acting in concert from, directly or indirectly, acquiring more than 10% (5% if the acquirer is a
bank holding company) of any class of our voting stock or obtaining the ability to control in any
manner the election of a majority of our directors or otherwise direct the management or policies
of our company without prior notice or application to and the approval of the Federal Reserve.
Accordingly, prospective investors need to be aware of and comply with these requirements, if
applicable, in connection with any purchase of shares of our common stock.
Anti-takeover provisions of our certificate of incorporation, bylaws and Delaware law may make
it more difficult for you to receive a change in control premium. Certain provisions of our
certificate of incorporation and bylaws could make a merger, tender offer or proxy contest more
difficult, even if such events were perceived by many of our stockholders as beneficial to their
interests. These provisions include advance notice for nominations of directors and stockholders
proposals, and authority to issue blank check preferred stock with such designations,
rights and preferences as may be determined from time to time by our board of directors. In
addition, as a Delaware corporation, we are subject to Section 203 of the Delaware General
Corporation Law which, in general, prevents an interested stockholder, defined generally as a
person owning 15% or more of a corporations outstanding voting stock, from engaging in a business
combination with our company for three years following the date that person became an interested
stockholder unless certain specified conditions are satisfied.
We are subject to claims and litigation pertaining to fiduciary responsibility, employment
practices and other general business matters litigation . From time to time, customers make claims
and take legal action pertaining to our performance of our fiduciary responsibilities. Whether
customer claims and legal action related to our performance of its fiduciary responsibilities are
founded or unfounded, if such claims and legal actions are not resolved in a manner favorable to us
they may result in significant financial liability and/or adversely affect the market perception of
us and our products and services as well as impact customer demand for those products and services.
In addition, employees can make claims related to our employment practices. If such claims or
legal actions are not resolved in a manner favorable to us they may result in significant financial
liability and/or adversely affect the market perception of us. Any financial liability or
reputation damage could have a material adverse effect on our business, which, in turn, could have
a material adverse effect on our financial condition and results of operations.
Our controls and procedures may fail or be circumvented. Management regularly reviews and
updates our internal controls, disclosure controls and procedures, and corporate governance
policies and procedures. Any system of controls, however well designed and operated, is based in
part on certain assumptions and can provide only reasonable, not absolute, assurances that the
objectives of the system are met. Any failure or circumvention of our controls and procedures or
failure to comply with regulations related to controls and procedures could have a material adverse
effect on our business, results of operations and financial condition.
New lines of business or new products and services may subject us to additional risks. From
time to time, we may develop and grow new lines of business or offer new products and services
within
7
existing lines of business. There are substantial risks and uncertainties associated with
these efforts, particularly in instances where the markets are not fully developed. In developing
and marketing new lines of business and/or new products and services we may invest significant time
and resources. Initial timetables for the introduction and development of new lines of business
and/or new products or services may not be achieved and price and profitability targets may not
prove feasible. External factors, such as compliance with regulations, competitive alternatives and
shifting market preferences, may also impact the successful implementation of a new line of
business or a new product or service. Furthermore, any new line of business and/or new product or
service could have a significant impact on the effectiveness of our system of internal controls.
Failure to successfully manage these risks in the development and implementation of new lines of
business or new products or services could have a material adverse
effect on our
business, results of operations and financial condition. All service offerings, including current
offerings and those which may be provided in the future may become more risky due to changes in
economic, competitive and market conditions beyond our control.
Risks Associated With Our Common Stock
Our stock price can be volatile. Stock price volatility may make it more difficult for you to
resell your common stock when you want and at prices you find attractive. Our stock price can
fluctuate significantly in response to a variety of factors including, among other things:
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actual or anticipated variations in quarterly results of operations; |
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recommendations by securities analysts; |
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operating and stock price performance of other companies that investors deem
comparable to us; |
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news reports relating to trends, concerns and other issues in the financial services
industry, including the failures of other financial institutions in the current
economic downturn; |
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perceptions in the marketplace regarding us and/or our competitors; |
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new technology used, or services offered, by competitors; |
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significant acquisitions or business combinations, strategic partnerships, joint
ventures or capital commitments by or involving us or our competitors; |
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failure to integrate acquisitions or realize anticipated benefits from acquisitions; |
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changes in government regulations; and |
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geopolitical conditions such as acts or threats of terrorism or military conflicts. |
General market fluctuations, industry factors and general economic and political conditions
and events, such as economic slowdowns or recessions, interest rate changes or credit loss trends,
could also cause our stock price to decrease regardless of operating
results as evidenced by the current volatility and disruption of
capital and credit markets.
The trading volume in our common stock is less than that of other larger financial services
companies. Although our common stock is traded on the
Nasdaq Global Select Market, the trading volume in our
common stock is less than that of other larger financial services companies. A public trading
market having the desired characteristics of depth, liquidity and orderliness depends on the
presence in the marketplace of willing buyers and sellers of our common stock at any given time.
This presence depends on the individual decisions of investors and general economic and market
conditions over which we have no control. Given the lower trading volume of our common stock,
significant sales of our common stock, or the expectation of these sales, could cause the our stock
price to fall.
An investment in our common stock is not an insured deposit. Our common stock is not a bank
deposit and, therefore, is not insured against loss by the FDIC, any other deposit insurance fund
or by any other public or private entity. Investment in our common stock is inherently risky for
the reasons
8
described in this Risk Factors section and elsewhere in this report and is subject to the
same market forces that affect the price of common stock in any company. As a result, if you
acquire our common stock, you may lose some or all of your investment.
The holders of our junior subordinated debentures have rights that are senior to those of our
shareholders. As of December 31, 2008, we had $113.4 million in junior subordinated debentures
outstanding that were issued to our statutory trusts. The trusts purchased the junior subordinated
debentures from us using the proceeds from the sale of trust preferred securities to third party
investors. Payments of the principal and interest on the trust preferred securities are
conditionally guaranteed by us to the extent not paid or made by each trust, provided the trust has
funds available for such obligations.
The junior subordinated debentures are senior to our shares of common stock and Series A
perpetual preferred stock. As a result, we must make payments on the junior subordinated debentures
(and the related trust preferred securities) before any dividends can
be paid on our common stock or preferred stock and, in the event of our bankruptcy, dissolution or liquidation, the holders of the
debentures must be satisfied before any distributions can be made to
our shareholders. If certain conditions are met, we have the right to defer interest payments on the junior
subordinated debentures (and the related trust preferred securities) at any time or from time to
time for a period not to exceed 20 consecutive quarters in a deferral period, during which time no
dividends may be paid to holders of our common stock or preferred
stock.
The holders of our Series A perpetual preferred stock have rights that are senior to those of
our common shareholders. In January 2009, we issued and sold
$75 million of our Series A perpetual preferred stock, which ranks senior to common stock in the payment of dividends and on liquidation. The
liquidation amount of the Series A perpetual preferred stock is $1,000 per share.
We do not currently pay dividends. Our ability to pay dividends is limited and we may be
unable to pay future dividends. We do not currently pay dividends on our common stock. Our ability
to pay dividends is limited by regulatory restrictions and the need to maintain sufficient
consolidated capital. The ability of our bank subsidiary, Texas Capital Bank, to pay dividends to
us is limited by its obligations to maintain sufficient capital and by other general restrictions
on its dividends that are applicable to our regulated bank subsidiary. If these regulatory
requirements are not met, our subsidiary bank will not be able to pay dividends to us, and we may
be unable to pay dividends on our common stock or preferred stock.
As a result of our participation in the Capital Purchase Program, we
may not pay dividends on our
common stock without the consent of Treasury
until the third anniversary of the date of the Series A
perpetual preferred stock, unless all of those
shares are redeemed or Treasury has transferred them to third
parties. Since we have never paid
dividends on our common stock, this would be considered an increase in dividends. Also, all accrued and
unpaid dividends on the Series A for all past dividend periods would have to be fully paid.
Risks Associated With Our Industry
The earnings of financial services companies are significantly affected by general business
and economic conditions. As a financial services company our operations and profitability are impacted by general business and
economic conditions in the United States and abroad. These conditions include short-term and
long-term interest rates, inflation, money supply, political issues, legislative and regulatory
changes, fluctuation in both debt and equity capital markets, broad trends in industry and finance
and the strength of the U.S. economy and the local economies in which we operate, all of which are
beyond our control. Deterioration in economic conditions could result in an increase in loan
delinquencies and non-performing assets, decreases in loan collateral values and a decrease in
demand for our products and services, among other
9
things, any of which could have a material adverse impact on our results of operation and
financial condition.
Financial services companies depend on the accuracy and completeness of information about
customers and counterparties. In deciding whether to extend credit or enter into other
transactions, we may rely on information furnished by or on behalf of customers and counterparties,
including financial statements, credit reports and other financial information. We may also rely on
representations of those customers, counterparties or other third parties, such as independent
auditors, as to the accuracy and completeness of that information. Reliance on inaccurate or
misleading financial statements, credit reports or other financial information could have a
material adverse impact on our business and, in turn, our results of operations and financial
condition.
We compete in an industry that continually experiences technological change, and we may have
fewer resources than many of our competitors to continue to invest in technological improvements.
The financial services industry is undergoing rapid technological changes, with frequent
introductions of new technology-driven products and services which our customers may require. Many
of our competitors have substantially greater resources to invest in technological improvements. We
may not be able to effectively implement new technology-driven products and services or be
successful in marketing these products and services to our customers.
Consumers and businesses may decide not to use banks to complete their financial transactions.
Technology and other changes are allowing parties to complete financial transactions that
historically have involved banks through alternative methods. The possibility of eliminating banks
as intermediaries could result in the loss of interest and fee income, as well as the loss of
customer deposits and the related income generated from those deposits. The loss of these revenue
streams and the lower cost deposits as a source of funds could have a material adverse effect on
our results of operations and financial condition.
USE OF PROCEEDS
We will not receive any proceeds from any sale of the securities by the selling
securityholders.
RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
The following table sets forth our consolidated ratios of earnings to fixed charges for all
periods subsequent to 2003 and to combined fixed charges and preferred share dividends for 2003.
For purposes of computing the ratios, earnings represent the sum of income from continuing
operations before taxes plus fixed charges and preferred share dividend requirements. Fixed
charges represent total interest expense, including and excluding interest on deposits. Preferred
share dividend requirements represent the amount of pre-tax income required to pay the dividends on
preferred shares. Before we issued the Series A perpetual preferred stock on January 16, 2009, we
had had no preferred shares outstanding since August 2003 and had not paid any dividends on
preferred shares since that time.
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Nine Months |
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Ended September 30, |
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Year Ended December 31, |
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2003 |
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Ratio of earnings to fixed
charges and preferred share
dividends: |
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Including interest on deposits |
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1.42x |
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1.32x |
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1.36x |
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1.61x |
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1.81x |
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1.34x |
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Excluding interest on deposits |
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2.52x |
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2.60x |
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3.03x |
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3.44x |
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3.18x |
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1.89x |
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DESCRIPTION OF SERIES A PERPETUAL PREFERRED STOCK
The following is a brief description of the terms of the Series A perpetual preferred stock
that may be resold by the selling securityholders. This summary does not purport to be complete in
all respects. This description is subject to and qualified in its entirety by reference to our
certificate of incorporation, as amended, including the certificate of designations with respect to
the Series A perpetual preferred stock, copies of which have been filed with the SEC and are also
available upon request from us.
General
Under our certificate of incorporation, as amended, we have authority to issue up to 10
million shares of preferred stock, par value $0.01 per share. Of such number of shares of
preferred stock authorized, 75,000 shares have been designated as Series A perpetual preferred
stock, all of which shares of Series A perpetual preferred stock were issued to the initial selling
securityholder in a transaction exempt from the registration requirements of the Securities Act.
No other shares of preferred stock are issued and outstanding as of the date hereof.
Dividends Payable On Shares of Series A Perpetual Preferred Stock
Holders of shares of Series A perpetual preferred stock are entitled to receive if, as and
when declared by our board of directors or a duly authorized committee of the board, out of assets
legally available for payment, cumulative cash dividends at a rate per annum of 5% per share on a
liquidation preference of $1,000 per share of Series A perpetual preferred stock with respect to
each dividend period from January 16, 2009 to, but excluding, February 15, 2014. From and after
February 15, 2014, holders of shares of Series A perpetual preferred stock are entitled to receive
cumulative cash dividends at a rate per annum of 9% per share on a liquidation preference of $1,000
per share of Series A perpetual preferred stock with respect to each dividend period thereafter.
Dividends are payable quarterly in arrears on each February 15, May 15, August 15 and November
15, each a dividend payment date, starting with February 15, 2009. If any dividend payment date is
not a business day, then the next business day will be the applicable dividend payment date, and no
additional dividends will accrue as a result of the applicable postponement of the dividend payment
date. Dividends payable during any dividend period are computed on the basis of a 360-day year
consisting of twelve 30-day months. Dividends payable with respect to the Series A perpetual
preferred stock are payable to holders of record of shares of Series A perpetual preferred stock on
the date that is 15 calendar days immediately preceding the applicable dividend payment date or
such other record date as the board of directors or any duly authorized committee of the board
determines, so long as such record date is not more than 60 nor less than 10 days prior to the
applicable dividend payment date.
If we determine not to pay any dividend or a full dividend with respect to the Series A
perpetual preferred stock, we are required to provide written notice to the holders of shares of
Series A perpetual preferred stock prior to the applicable dividend payment date.
We are subject to various regulatory policies and requirements relating to the payment of
dividends, including requirements to maintain adequate capital above regulatory minimums. The
Board of Governors of the Federal Reserve System, or the Federal Reserve Board, is authorized to
determine, under certain circumstances relating to the financial condition of a bank holding
company, such as us, that
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the payment of dividends would be an unsafe or unsound practice and to prohibit payment
thereof. In addition, we are subject to Delaware state laws relating to the payment of dividends.
We depend on dividends, distributions and other payments from our banking subsidiary, Texas
Capital Bank, to fund dividend payments on our common and preferred stock. Federal banking laws
limit the amount of dividends or other capital distributions that a national banking association,
such as Texas Capital Bank, may pay.
Priority of Dividends
With respect to the payment of dividends and the amounts to be paid upon liquidation, the
Series A perpetual preferred stock will rank:
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senior to our common stock and all other equity securities designated as ranking
junior to the Series A perpetual preferred stock; and |
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at least equally with all other equity securities designated as ranking on a parity
with the Series A perpetual preferred stock, or parity stock, with respect to the
payment of dividends and distribution of assets upon any liquidation, dissolution or
winding-up of TCBI. |
So long as any shares of Series A perpetual preferred stock remain outstanding, unless all
accrued and unpaid dividends for all prior dividend periods have been paid or are contemporaneously
declared and paid in full, no dividend whatsoever shall be paid or declared on TCBIs common stock
or other junior stock, other than a dividend payable solely in shares of common stock. We and our
subsidiaries also may not purchase, redeem or otherwise acquire for consideration any shares of our
common stock or other junior stock unless we have paid in full all accrued dividends on the Series
A perpetual preferred stock for all prior dividend periods, other than:
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purchases, redemptions or other acquisitions of our common stock or other junior
stock in connection with the administration of our employee benefit plans in the
ordinary course of business pursuant to a publicly announced repurchase plan up to the
increase in diluted shares outstanding resulting from the grant, vesting or exercise of
equity-based compensation; |
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purchases or other acquisitions by broker-dealer subsidiaries of TCBI solely for the
purpose of market-making, stabilization or customer facilitation transactions in junior
stock or parity stock in the ordinary course of its business; |
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purchases or other acquisitions by broker-dealer subsidiaries of TCBI for resale
pursuant to an offering by TCBI of our stock that is underwritten by the related
broker-dealer subsidiary; |
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any dividends or distributions of rights or junior stock in connection with any
shareholders rights plan or repurchases of rights pursuant to any shareholders rights
plan; |
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acquisition of record ownership of junior stock or parity stock for the beneficial
ownership of any other person who is not TCBI or a subsidiary of TCBI, including as
trustee or custodian; and |
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the exchange or conversion of junior stock for or into other junior stock or of
parity stock for or into other parity stock or junior stock but only to the extent that
such acquisition is required pursuant to binding contractual agreements entered into
before January 16, 2009 or any |
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subsequent agreement for the accelerated exercise, settlement or exchange thereof for
common stock. |
Until such time as the initial selling securityholder ceases to own any Series A perpetual
preferred stock, if we repurchase shares of Series A perpetual preferred stock from a holder other
than the initial selling securityholder, we must offer to repurchase a ratable portion of the
Series A perpetual preferred stock then held by the initial selling securityholder.
On any dividend payment date for which full dividends are not paid, or declared and funds set
aside therefor, on the Series A perpetual preferred stock and any other parity stock, all dividends
paid or declared for payment on that dividend payment date (or, with respect to parity stock with a
different dividend payment date, on the applicable dividend date therefor falling within the
dividend period and related to the dividend payment date for the Series A perpetual preferred
stock), with respect to the Series A perpetual preferred stock and any other parity stock shall be
declared ratably among the holders of any such shares who have the right to receive dividends, in
proportion to the respective amounts of the undeclared and unpaid dividends relating to the
dividend period.
Subject to the foregoing, such dividends (payable in cash, stock or otherwise) as may be
determined by our board of directors (or a duly authorized committee of the board) may be declared
and paid on our common stock and any other stock ranking equally with or junior to the Series A
perpetual preferred stock from time to time out of any funds legally available for such payment,
and the Series A perpetual preferred stock shall not be entitled to participate in any such
dividend.
Redemption
The Series A perpetual preferred stock may not be redeemed prior to February 15, 2012 unless
we have received aggregate gross proceeds from one or more qualified equity offerings (as described
below) equal to $18,750,000, which equals 25% of the aggregate liquidation amount of the Series A
perpetual preferred stock on the date of issuance. In such a case, we may redeem the Series A
perpetual preferred stock, subject to the approval of the Federal Reserve Board in whole or in
part, upon notice as described below, up to a maximum amount equal to the aggregate net cash
proceeds received by us from such qualified equity offerings. A qualified equity offering is a
sale and issuance for cash by us, to persons other than TCBI or its subsidiaries after January 16,
2009, of shares of perpetual preferred stock, common stock or a combination thereof, that in each
case qualify as tier 1 capital of TCBI at the time of issuance under the applicable risk-based
capital guidelines of the Federal Reserve Board. Qualified equity offerings do not include
issuances made in connection with acquisitions, issuances of trust preferred securities and
issuances of common stock and/or perpetual preferred stock made pursuant to agreements or
arrangements entered into, or pursuant to financing plans that were publicly announced, on or prior
to October 13, 2008.
After February 15, 2012, the Series A perpetual preferred stock may be redeemed at any time,
subject to the approval of the Federal Reserve Board, in whole or in part, subject to notice as
described below.
In any redemption, the redemption price is an amount equal to the per share liquidation amount
plus accrued and unpaid dividends to but excluding the date of redemption.
The Series A perpetual preferred stock will not be subject to any mandatory redemption,
sinking fund or similar provisions. Holders of shares of Series A perpetual preferred stock have
no right to require the redemption or repurchase of the Series A perpetual preferred stock.
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If fewer than all of the outstanding shares of Series A perpetual preferred stock are to be
redeemed, the shares to be redeemed will be selected either pro rata from the holders of record of
shares of Series A perpetual preferred stock in proportion to the number of shares held by those
holders or in such other manner as our board of directors, or a committee of the board of
directors, may determine to be fair and equitable.
We will mail notice of any redemption of Series A perpetual preferred stock by first class
mail, postage prepaid, addressed to the holders of record of the shares of Series A perpetual
preferred stock to be redeemed at their respective last addresses appearing on our books. This
mailing will be at least 30 days and not more than 60 days before the date fixed for redemption.
Any notice mailed or otherwise given as described in this paragraph will be conclusively presumed
to have been duly given, whether or not the holder receives the notice, and failure duly to give
the notice by mail or otherwise, or any defect in the notice or in the mailing or provision of the
notice, to any holder of Series A perpetual preferred stock designated for redemption will not
affect the redemption of any other Series A perpetual preferred stock. Each notice of redemption
will set forth the applicable redemption date, the redemption price, the place where shares of
Series A perpetual preferred stock are to be redeemed, and the number of shares of Series A
perpetual preferred stock to be redeemed (and, if less than all shares of Series A perpetual
preferred stock held by the applicable holder, the number of shares to be redeemed from the
holder).
Shares of Series A perpetual preferred stock that are redeemed, repurchased or otherwise
acquired by us will revert to authorized but unissued shares of our preferred stock.
Liquidation Rights
In the event that we voluntarily or involuntarily liquidate, dissolve or wind up our affairs,
holders of Series A perpetual preferred stock will be entitled to receive an amount per share,
referred to as the total liquidation amount, equal to the fixed liquidation preference of $1,000
per share, plus any accrued and unpaid dividends, whether or not declared, to the date of payment.
Holders of the Series A perpetual preferred stock will be entitled to receive the total liquidation
amount out of our assets that are available for distribution to shareholders, after payment or
provision for payment of our debts and other liabilities but before any distribution of assets is
made to holders of our common stock or any other shares ranking, as to that distribution, junior to
the Series A perpetual preferred stock.
If our assets are not sufficient to pay the total liquidation amount in full to all holders of
Series A perpetual preferred stock and all holders of any shares of outstanding parity stock, the
amounts paid to the holders of Series A perpetual preferred stock and other shares of parity stock
will be paid pro rata in accordance with the respective total liquidation amount for those holders.
If the total liquidation amount per share of Series A perpetual preferred stock has been paid in
full to all holders of Series A perpetual preferred stock and other shares of parity stock, the
holders of our common stock or any other shares ranking, as to such distribution, junior to the
Series A perpetual preferred stock will be entitled to receive all of our remaining assets
according to their respective rights and preferences.
For purposes of the liquidation rights, neither the sale, conveyance, exchange or transfer of
all or substantially all of our property and assets, nor the consolidation or merger by us with or
into any other corporation or by another corporation with or into us, will constitute a
liquidation, dissolution or winding-up of our affairs.
Voting Rights
Except as indicated below or otherwise required by law, the holders of Series A perpetual
preferred stock will not have any voting rights.
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Election of Two Directors upon Non-Payment of Dividends. If the dividends on the Series A
perpetual preferred stock have not been paid for an aggregate of six quarterly dividend periods or
more (whether or not consecutive), the authorized number of directors then constituting our board
of directors will be increased by two. Holders of Series A perpetual preferred stock, together
with the holders of any outstanding parity stock with like voting rights, referred to as voting
parity stock, voting as a single class, will be entitled to elect the two additional members of our
board of directors, referred to as the preferred stock directors, at the next annual meeting (or at
a special meeting called for the purpose of electing the preferred stock directors prior to the
next annual meeting) and at each subsequent annual meeting until all accrued and unpaid dividends
for all past dividend periods have been paid in full. Upon payment in full of all accrued and
unpaid dividends, the right to elect preferred stock directors will terminate, subject to revesting
in the event that dividends on the Series A perpetual preferred stock are not paid for an aggregate
of six quarterly dividend payments. The election of any preferred stock director is subject to the
qualification that the election would not cause us to violate the corporate governance requirement
of the Nasdaq Global Select Market (or any other exchange on which our securities may be listed)
that listed companies must have a majority of independent directors.
Upon the termination of the right of the holders of Series A perpetual preferred stock and
voting parity stock to vote for preferred stock directors, the individuals serving as preferred
stock directors will immediately cease to be qualified as directors, their term of office shall
terminate immediately and the number of authorized directors of TCBI will be reduced by the number
of preferred stock directors that the holders of Series A perpetual preferred stock and voting
parity stock had been entitled to elect. The holders of a majority of shares of Series A perpetual
preferred stock and voting parity stock, voting as a class, may remove any preferred stock
director, with or without cause, and the holders of a majority of the shares Series A perpetual
preferred stock and voting parity stock, voting as a class, may fill any vacancy created by the
removal of a preferred stock director. If the office of a preferred stock director becomes vacant
for any other reason, the remaining preferred stock director may choose a successor to fill such
vacancy for the remainder of the unexpired term.
Other Voting Rights. So long as any shares of Series A perpetual preferred stock are
outstanding, in addition to any other vote or consent of shareholders required by law or by our
certificate of incorporation, as amended, the vote or consent of the holders of at least 66 2/3% of
the shares of Series A perpetual preferred stock at the time outstanding, voting separately as a
single class, given in person or by proxy, either in writing without a meeting or by vote at any
meeting called for the purpose, shall be necessary for effecting or validating:
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any amendment or alteration of the certificate designations for the Series A
perpetual preferred stock or our certificate of incorporation, as amended, to authorize
or create or increase the authorized amount of, or any issuance of, any shares of, or
any securities convertible into or exchangeable or exercisable for shares of, any class
or series of capital stock ranking senior to the Series A perpetual preferred stock
with respect to payment of dividends and/or distribution of assets on any liquidation,
dissolution or winding up of TCBI; |
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any amendment, alteration or repeal of any provision of the certificate designations
for the Series A perpetual preferred stock or our certificate of incorporation, as
amended, so as to adversely affect the rights, preferences, privileges or voting powers
of the Series A perpetual preferred stock; or |
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any consummation of a binding share exchange or reclassification involving the
Series A perpetual preferred stock or of a merger or consolidation of TCBI with another
entity, unless the shares of Series A perpetual preferred stock remain outstanding
following any such transaction or, if TCBI is not the surviving entity, are converted
into or exchanged for |
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preference securities and such remaining outstanding shares of Series A perpetual
preferred stock or preference securities have rights, references, privileges and voting
powers that are not materially less favorable than the rights, preferences, privileges or
voting powers of the Series A perpetual preferred stock, taken as a whole. |
To the extent of the voting rights of the Series A perpetual preferred stock, each holder of
Series A perpetual preferred stock will have one vote for each $1,000 of liquidation preference to
which such holders shares of Series A perpetual preferred stock are entitled.
The foregoing voting provisions will not apply if, at or prior to the time when the vote or
consent would otherwise be required, all outstanding shares of Series A perpetual preferred stock
have been redeemed or called for redemption upon proper notice and sufficient funds have been set
aside by us for the benefit of the holders of Series A perpetual preferred stock to effect the
redemption.
DESCRIPTION OF WARRANT TO PURCHASE COMMON STOCK
The following is a brief description of the terms of the warrant that may be resold by the
selling securityholders. This summary does not purport to be complete in all respects. This
description is subject to and qualified in its entirety by reference to the warrant, a copy of
which has been filed with the SEC and is also available upon request from us.
Shares of Common Stock Subject to the Warrant
The warrant is initially exercisable for 758,086 shares of our common stock. If we complete
one or more qualified equity offerings on or prior to December 31, 2009 that result in our receipt
of aggregate gross proceeds of not less than $75 million, which is equal to 100% of the aggregate
liquidation preference of the Series A perpetual preferred stock, the number of shares of common
stock underlying the warrant then held by the selling securityholders will be reduced by 50% to
379,043 shares. The number of shares subject to the warrant are subject to the further adjustments
described below under the heading Adjustments to the Warrant.
Exercise of the Warrant
The initial exercise price applicable to the warrant is $14.84 per share of common stock for
which the warrant may be exercised. The warrant may be exercised at any time on or before January
16, 2019 by surrender of the warrant and a completed notice of exercise attached as an annex to the
warrant and the payment of the exercise price for the shares of common stock for which the warrant
is being exercised. The exercise price may be paid either by the withholding by TCBI of such
number of shares of common stock issuable upon exercise of the warrant equal to the value of the
aggregate exercise price of the warrant determined by reference to the market price of our common
stock on the trading day on which the warrant is exercised or, if agreed to by us and the
warrantholder, by the payment of cash equal to the aggregate exercise price. The exercise price
applicable to the warrant is subject to the further adjustments described below under the heading
"Adjustments to the Warrant.
Upon exercise of the warrant, certificates for the shares of common stock issuable upon
exercise will be issued to the warrantholder. We will not issue fractional shares upon any
exercise of the warrant. Instead, the warrantholder will be entitled to a cash payment equal to
the market price of our common stock on the last day preceding the exercise of the warrant (less
the pro-rated exercise price of the warrant) for any fractional shares that would have otherwise
been issuable upon exercise of the warrant. We will at all times reserve the aggregate number of
shares of our common stock for which the warrant
16
may be exercised. We have listed the shares of common stock issuable upon exercise of the
warrant with the Nasdaq Global Select Market.
Rights as a Shareholder
The warrantholder shall have no rights or privileges of the holders of our common stock,
including any voting rights, until (and then only to the extent) the warrant has been exercised.
Transferability
The initial selling securityholder may not transfer a portion of the warrant with respect to
more than 379,043 shares of common stock until the earlier of the date on which TCBI has received
aggregate gross proceeds from a qualified equity offering of at least $75 million and December 31,
2009. The warrant, and all rights under the warrant, are otherwise transferable.
Adjustments to the Warrant
Adjustments in Connection with Stock Splits, Subdivisions, Reclassifications and Combinations.
The number of shares for which the warrant may be exercised and the exercise price applicable to
the warrant will be proportionately adjusted in the event we pay dividends or make distributions of
our common stock, subdivide, combine or reclassify outstanding shares of our common stock.
Anti-dilution Adjustment. Until the earlier of January 16, 2012 and the date the initial
selling securityholder no longer holds the warrant (and other than in certain permitted
transactions described below), if we issue any shares of common stock (or securities convertible or
exercisable into common stock) for less than 90% of the market price of the common stock on the
last trading day prior to pricing such shares, then the number of shares of common stock into which
the warrant is exercisable and the exercise price will be adjusted. Permitted transactions include
issuances:
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as consideration for or to fund the acquisition of businesses and/or related assets; |
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in connection with employee benefit plans and compensation related arrangements in
the ordinary course and consistent with past practice approved by our board of
directors; |
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in connection with public or broadly marketed offerings and sales of common stock or
convertible securities for cash conducted by us or our affiliates pursuant to
registration under the Securities Act, or Rule 144A thereunder on a basis consistent
with capital-raising transactions by comparable financial institutions (but do not
include other private transactions); and |
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in connection with the exercise of preemptive rights on terms existing as of January
16, 2009. |
Other Distributions. If we declare any dividends or distributions other than our historical,
ordinary cash dividends, the exercise price of the warrant will be adjusted to reflect such
distribution.
Certain Repurchases. If we affect a pro rata repurchase of common stock both the number of
shares issuable upon exercise of the warrant and the exercise price will be adjusted.
Business Combinations. In the event of a merger, consolidation or similar transaction
involving TCBI and requiring shareholder approval, the warrantholders right to receive shares of
our common stock upon exercise of the warrant shall be converted into the right to exercise the
warrant for the
17
consideration that would have been payable to the warrantholder with respect to the shares of
common stock for which the warrant may be exercised, as if the warrant had been exercised prior to
such merger, consolidation or similar transaction.
DESCRIPTION OF COMMON STOCK
General
The following is a brief description of our common stock that may be resold by the selling
securityholders. This summary does not purport to be complete in all respects. This description
is subject to and qualified in its entirety by reference to our certificate of incorporation, as
amended, a copy of which has been filed with the SEC and is also available upon request from us.
We have 100,000,000 shares of authorized common stock, $0.01 par value per share, of which
30,972,269 shares were outstanding as of January 31, 2009.
Each holder of our common stock is entitled to one vote for each share held on all matters
with respect to which the holders of our common stock are entitled to vote. Our common stock has
no preemptive or conversion rights and is not subject to redemption. Holders of our common stock
are not entitled to cumulative voting in the election of directors. In the event of dissolution or
liquidation, after payment of all creditors, the holders of our common stock (subject to the prior
rights of the holders of any outstanding preferred stock) will be entitled to receive pro rata any
assets distributable to stockholders in respect of the number of shares held by them. The holders
of shares of our common stock are entitled to such dividends as our board of directors, in its
discretion, may declare out of funds legally available therefor subject to certain limitations
under the Delaware General Corporation Law, or DGCL. We have not paid dividends on our common
stock to date and we do not anticipate paying dividends in the near future. However, the payment
of dividends on our common stock would be subject to the prior rights of the holders of any
preferred stock including our Series A perpetual preferred stock. Payment of dividends on both our
common stock and any preferred stock, will be dependent upon, among other things, our earnings and
financial condition, our cash flow requirements and the prevailing economic and regulatory climate.
Our common stock is listed on the Nasdaq Global Select Market.
Anti-Takeover Provisions
Certain provisions included in our certificate of incorporation, as amended, our amended and
restated bylaws, as amended, as well as certain provisions of the DGCL and federal law, may
discourage or prevent potential acquisitions of control of us. These provisions are more fully set
forth in our Registration Statement on Form 10, as amended, which was filed with the SEC on August
24, 2000, and is incorporated by reference into this prospectus.
Restrictions on Ownership
The Bank Holding Company Act requires any bank holding company, as defined in the Bank
Holding Company Act, to obtain the approval of the Federal Reserve Board prior to the acquisition
of 5% or more of our common stock. Any person, other than a bank holding company, is required to
obtain prior approval of the Federal Reserve Board to acquire 10% or more of our common stock under
the Change in Bank Control Act. Any holder of 25% or more of our common stock, or a holder of 5%
or more if such holder otherwise exercises a controlling influence over us, is subject to
regulation as a bank holding company under the Bank Holding Company Act.
18
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Computershare Investor Services LLC.
PLAN OF DISTRIBUTION
The selling securityholders and their successors, including their transferees, may sell the
securities directly to purchasers or through underwriters, broker-dealers or agents, who may
receive compensation in the form of discounts, concessions or commissions from the selling
securityholders or the purchasers of the securities. These discounts, concessions or commissions
as to any particular underwriter, broker-dealer or agent may be in excess of those customary in the
types of transactions involved.
The securities may be sold in one or more transactions at fixed prices, at prevailing market
prices at the time of sale, at varying prices determined at the time of sale or at negotiated
prices. These sales may be affected in transactions, which may involve crosses or block
transactions:
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on any national securities exchange or quotation service on which the preferred
stock or the common stock may be listed or quoted at the time of sale, including, as of
the date of this prospectus, the Nasdaq Global Select Market in the case of the common
stock; |
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in the over-the-counter market; |
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in transactions otherwise than on these exchanges or services or in the
over-the-counter market; or |
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through the writing of options, whether the options are listed on an options
exchange or otherwise. |
In addition, any securities that qualify for sale pursuant to Rule 144 under the Securities
Act may be sold under Rule 144 rather than pursuant to this prospectus.
In connection with the sale of the securities or otherwise, the selling securityholders may
enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the
common stock issuable upon exercise of the warrant in the course of hedging the positions they
assume. The selling securityholders may also sell short the common stock issuable upon exercise of
the warrant and deliver common stock to close out short positions, or loan or pledge the Series A
perpetual preferred stock or the common stock issuable upon exercise of the warrant to
broker-dealers that in turn may sell these securities.
The aggregate proceeds to the selling securityholders from the sale of the securities will be
the purchase price of the securities less discounts and commissions, if any.
In effecting sales, broker-dealers or agents engaged by the selling securityholders may
arrange for other broker-dealers to participate. Broker-dealers or agents may receive commissions,
discounts or concessions from the selling securityholders in amounts to be negotiated immediately
prior to the sale.
In offering the securities covered by this prospectus, the selling securityholders and any
broker-dealers who execute sales for the selling securityholders may be deemed to be underwriters
within the meaning of Section 2(a)(11) of the Securities Act in connection with such sales. Any
profits realized by the selling securityholders and the compensation of any broker-dealer may be
deemed to be underwriting discounts and commissions. Selling securityholders who are
underwriters within the meaning of
19
Section 2(a)(11) of the Securities Act will be subject to the prospectus delivery requirements
of the Securities Act and may be subject to certain statutory and regulatory liabilities, including
liabilities imposed pursuant to Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under
the Securities Exchange Act of 1934, or the Exchange Act.
In order to comply with the securities laws of certain states, if applicable, the securities
must be sold in such jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states the securities may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
The anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of
securities pursuant to this prospectus and to the activities of the selling securityholders. In
addition, we will make copies of this prospectus available to the selling securityholders for the
purpose of satisfying the prospectus delivery requirements of the Securities Act, which may include
delivery through the facilities of the Nasdaq Global Select Market pursuant to Rule 153 under the
Securities Act.
At the time a particular offer of securities is made, if required, a prospectus supplement
will set forth the number and type of securities being offered and the terms of the offering,
including the name of any underwriter, dealer or agent, the purchase price paid by any underwriter,
any discount, commission and other item constituting compensation, any discount, commission or
concession allowed or reallowed or paid to any dealer, and the proposed selling price to the
public.
Neither the Series A perpetual preferred stock nor the warrant is listed on an exchange.
Unless requested by the initial selling securityholder, we do not intend to list the Series A
perpetual preferred stock on any exchange. We do not intend to list the warrant on any exchange.
No assurance can be given as to the liquidity of the trading market, if any, for the Series A
perpetual preferred stock.
We have agreed to indemnify the selling securityholders against certain liabilities, including
certain liabilities under the Securities Act. We have also agreed, among other things, to bear
substantially all expenses (other than certain expenses applicable to the sale of the securities
covered by this prospectus including, but not limited to, underwriting discounts and selling
commissions) in connection with the registration and qualification of the securities covered by
this prospectus.
SELLING SECURITYHOLDERS
On January 16, 2009, we issued the securities covered by this prospectus to the United States
Department of the Treasury, which is the initial selling securityholder under this prospectus, in a
transaction exempt from the registration requirements of the Securities Act. The initial selling
securityholder, or its successors, including transferees, may from time to time offer and sell,
pursuant to this prospectus or a supplement to this prospectus, any or all of the securities they
own. The securities to be offered under this prospectus for the account of the selling
securityholders are:
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75,000 shares of Series A perpetual preferred stock, representing beneficial
ownership of 100% of the shares of Series A perpetual preferred stock outstanding on
the date of this prospectus; |
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a warrant to purchase 758,086 shares of our common stock, representing beneficial
ownership of approximately 2.39% of our common stock as of January 31, 2009; and |
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758,086 shares of our common stock issuable upon exercise of the warrant, which shares, if issued, would represent ownership of approximately 2.45% of our common stock
as of January 31, 2009. |
For purposes of this prospectus, we have assumed that, after completion of the offering
covered by this prospectus, none of the securities covered by this prospectus will be held by the
selling securityholders.
Beneficial ownership is determined in accordance with the rules of the SEC and includes voting
or investment power with respect to the securities. To our knowledge, the initial selling
securityholder has sole voting and investment power with respect to the securities.
We do not know when or in what amounts the selling securityholders may offer the securities
for sale. The selling securityholders might not sell any or all of the securities offered by this
prospectus. Because the selling securityholders may offer all or some of the securities pursuant
to this offering, and because currently no sale of any of the securities is subject to any
agreements, arrangements or understandings, we cannot estimate the number of the securities that
will be held by the selling securityholders after completion of the offering.
Other than with respect to the acquisition of the securities, the initial selling
securityholder has not had a material relationship with us.
Information about the selling securityholders may change over time and changed information
will be set forth in supplements to this prospectus if and when necessary.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for us by Patton Boggs LLP.
EXPERTS
The consolidated financial statements of TCBI appearing in TCBIs Annual Report (Form 10-K)
for the year ended December 31, 2007 and the effectiveness of TCBIs internal control over
financial reporting as of December 31, 2007 have been audited by Ernst & Young LLP, independent
registered public accounting firm, as set forth in their reports thereon included therein, and
incorporated herein by reference. Such financial statements have been incorporated herein by
reference in reliance upon such reports given on the authority of such firm as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the
SEC. Our SEC filings are available to the public over the Internet at the SECs website at
http:/www.sec.gov. Copies of certain information filed by us with the SEC are also
available on our website at http:/www.texascapitalbank.com. Our website is not a part of
this prospectus. You may also read and copy any document we file at the SECs public reference
room, 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the operation of the public reference room.
The SEC allows us to incorporate by reference information we file with it, which means that
we can disclose important information to you by referring you to other documents. The information
incorporated by reference is considered to be a part of this prospectus, and information that we
file later
21
with the SEC will automatically update and supersede this information. In all cases, you
should rely on the later information over different information included in this prospectus.
We incorporate by reference the documents listed below and all future filings we make with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the
offering, except to the extent that any information contained in such filings is deemed furnished
in accordance with SEC rules, including, but not limited to, information furnished under Items 2.02
and 7.01 of any Current Report on Form 8-K including related exhibits:
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Our Annual Report on Form 10-K for the year ended December 31, 2007, filed on
February 26, 2008. |
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Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, filed on
May 2, 2008, our Quarterly Report on Form 10-Q for the quarter ended June 30, 2008,
filed on July 31, 2008, and our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2008, filed on October 30, 2008. |
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Our Current Reports on Form 8-K filed on January 17, 2008, April 11, 2008, April
18, 2008, July 18, 2008, September 8, 2008, October 23, 2008, November 18, 2008,
January 6, 2009 and January 16, 2009. |
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The description of our common stock contained in the Registration Statement on
Form 10 filed on August 24, 2000. |
We will provide to each person, including any beneficial owner, to whom a prospectus is
delivered, a copy of any or all of the documents or information that have been incorporated by
reference in this prospectus but not delivered with this prospectus. We will provide this at no
cost to the requestor upon written or telephonic request addressed to Texas Capital Bancshares,
Inc., 2000 McKinney Avenue, Suite 700, Dallas, Texas 75201, Attention: Myrna Vance (telephone:
214-932-6600).
You should rely only on the information contained or incorporated by reference in this prospectus.
We have not authorized anyone else to provide you with additional or different information.
22
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the various expenses to be incurred in connection with the sale
and distribution of the securities being registered hereby, all of which will be borne by TCBI
(except any underwriting discounts and commissions and expenses incurred by the selling
securityholders for brokerage, accounting, tax or legal services or any other expenses incurred by
the selling securityholders in disposing of the shares). All amounts shown are estimates except
the SEC registration fee.
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SEC Registration fee |
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$ |
3,391 |
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Legal fees and expenses |
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$ |
25,000 |
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Accounting fees and expenses |
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$ |
10,000 |
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Other |
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$ |
9,000 |
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Total Expenses |
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$ |
47,391 |
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Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law permits indemnification of officers,
directors, and other corporate agents under certain circumstances and subject to certain
limitations. Our certificate of incorporation and amended and restated bylaws provide that we
shall indemnify our directors, officers, employees, and agents to the full extent permitted by
Delaware law. The certificate of incorporation and amended and restated bylaws further provide
that we may indemnify directors, officers, employees, and agents in circumstances in which
indemnification is otherwise discretionary under Delaware law. In addition, we entered into
separate indemnification agreements with our directors and officers which would require us, among
other things, to indemnify them against certain liabilities which may arise by reason of their
status or service (other than liabilities arising from willful misconduct of a culpable nature) and
to maintain directors and officers liability insurance, if available on reasonable terms.
These indemnification provisions and the indemnification agreements that we have entered into
with our officers and directors may be sufficiently broad to permit indemnification of our officers
and directors for liabilities (including reimbursement of expenses incurred) arising under the
Securities Act of 1933, as amended.
We have a policy of directors and officers liability insurance that insures our directors
and officers against the cost of defense, settlement or payment of a judgment under certain
circumstances.
Item 16. Exhibits
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Exhibit |
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No. |
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Description |
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3.1
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Certificate of Designations (filed as Exhibit 3.1 to the
Registrants Current Report on Form 8-K filed on January 16, 2009
and incorporated herein by reference) |
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4.1
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Form of Certificate for the Fixed Rate Cumulative Perpetual
Preferred Stock, Series A, Par Value $0.01 per share (filed as
Exhibit 4.1 to the Registrants Current Report on Form 8-K filed
on January 16, 2009 and incorporated herein by reference) |
II-1
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Exhibit |
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No. |
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Description |
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4.2
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Letter Agreement, dated as of January 16, 2009, between the
Registrant and the United States Department of the Treasury (filed
as Exhibit 10.1 to the Registrants Current Report on Form 8-K
filed on January 16, 2009 and incorporated herein by reference) |
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4.3
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Warrant to Purchase Shares of Common Stock, dated January 16,
2009, to purchase shares of Common Stock of the Registrant (filed
as Exhibit 4.2 to the Registrants Current Report on Form 8-K
filed on January 16, 2009 and incorporated herein by reference) |
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5.1
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Opinion of Patton Boggs LLP |
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12.1
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Statement of ratios of earnings to fixed charges |
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23.1
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Consent of Ernst & Young LLP |
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23.2
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Consent of Patton Boggs LLP (included in Exhibit 5.1) |
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24.1
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Power of Attorney of certain officers and directors (located on
the signature page to the Registration Statement) |
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as
amended (the Securities Act of 1933);
(ii) to reflect in the prospectus any facts or events arising after the effective date of
this registration statement (or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the information set
forth in this registration statement. Notwithstanding the foregoing, any increase or
decrease in the volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate offering price set
forth in the Calculation of Registration Fee table in the effective registration
statement; and
(iii) to include any material information with respect to the plan of distribution not
previously disclosed in this registration statement or any material change to such
information in this registration statement;
provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) do not apply if the information
required to be included in a post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act), that are
incorporated by reference in this
II-2
registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that
is part of this registration statement.
(2) That, for the purposes of determining any liability under the Securities Act of 1933, each
post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at the time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any
purchaser:
(i) each prospectus filed by a registrant pursuant to Rule 424(b)(3) shall be deemed to be
part of the registration statement as of the date the filed prospectus was deemed part of
and included in the registration statement; and
(ii) each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as
part of a registration statement in reliance on Rule 430B relating to an offering made
pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information
required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and
included in the registration statement as of the earlier of the date such form of prospectus
is first used after effectiveness or the date of the first contract of sale of securities in
the offering described in the prospectus. As provided in Rule 430B, for liability purposes
of the issuer and any person that is at that date an underwriter, such date shall be deemed
to be a new effective date of the registration statement relating to the securities in the
registration statement to which that prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof. Provided,
however, that no statement made in a registration statement or prospectus that is part of
the registration statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to such effective
date, supersede or modify any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in any such document
immediately prior to such effective date.
(5) That, for the purpose of determining liability of a registrant under the Securities Act of
1933 to any purchaser in the initial distribution of the securities:
The undersigned registrant undertakes that in a primary offering of securities of the undersigned
registrant pursuant to this registration statement, regardless of the underwriting method used to
sell the securities to the purchaser, if the securities are offered or sold to such purchaser by
means of any of the following communications the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such purchaser:
(i) any preliminary prospectus or prospectus of the undersigned registrant relating to the
offering required to be filed pursuant to Rule 424;
(ii) any free writing prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned registrant;
II-3
(iii) the portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided by or on
behalf of the undersigned Registrant; and
(iv) any other communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
The undersigned registrant hereby undertakes that, for purposes of determining any liability under
the Securities Act of 1933, each filing of the registrants annual report pursuant to Section 13(a)
or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plans
annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in
this registration statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant pursuant to the
indemnification provisions described herein, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of
such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and
has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Dallas, State of Texas, on February 13, 2009.
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TEXAS CAPITAL BANCSHARES, INC.
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By: |
/s/ George F. Jones, Jr.
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George F. Jones, Jr. |
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President and Chief Executive Officer |
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below does hereby
constitute and appoint George F. Jones, Jr. and Peter B. Bartholow, or either of them, as his or
her true and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any and all capacities,
to sign this Registration Statement (including all pre-effective and post-effective amendments
thereto and all registration statements filed pursuant to Rule 462(b) which incorporate this
registration statement by reference), and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying and confirming that
all said attorneys-in-fact and agents, or their substitute or substitutes may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of Attorney as of the date
indicated.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed below by the following persons on behalf of the Registrant and in the
capacities indicated on February 13, 2009.
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Signature |
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Title |
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/s/ George F. Jones, Jr.
George F. Jones, Jr.
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President, Chief Executive Officer and
Director
(Principal Executive Officer) |
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/s/ Peter B. Bartholow
Peter B. Bartholow
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Chief Financial Officer and
Director
(Principal Financial Officer) |
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/s/ Julie Anderson
Julie Anderson
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Controller (Principal
Accounting Officer) |
|
|
|
/s/ James R. Holland, Jr.
James R. Holland, Jr.
|
|
Chairman of the Board and Director |
II-5
|
|
|
Signature |
|
Title |
|
|
|
/s/ Joseph M. Grant
Joseph M. Grant
|
|
Director |
|
|
|
/s/ Frederick B. Hegi, Jr.
Frederick B. Hegi, Jr.
|
|
Director |
|
|
|
/s/ Larry L. Helm
Larry L. Helm
|
|
Director |
|
|
|
/s/ Walter W. McAllister III
Walter W. McAllister III
|
|
Director |
|
|
|
/s/ Lee Roy Mitchell
Lee Roy Mitchell
|
|
Director |
|
|
|
/s/ Steven Rosenberg
Steven Rosenberg
|
|
Director |
|
|
|
|
|
Director |
|
|
|
/s/ Robert W. Stallings
Robert W. Stallings
|
|
Director |
|
|
|
/s/ Ian J. Turpin
Ian J. Turpin
|
|
Director |
II-6
EXHIBIT INDEX
|
|
|
Exhibit |
|
|
No. |
|
Description |
|
|
|
3.1
|
|
Certificate of Designations (filed as Exhibit 3.1 to the
Registrants Current Report on Form 8-K filed on January 16, 2009
and incorporated herein by reference) |
|
|
|
4.1
|
|
Form of Certificate for the Fixed Rate Cumulative Perpetual
Preferred Stock, Series A, Par Value $0.01 per share (filed as
Exhibit 4.1 to the Registrants Current Report on Form 8-K filed
on January 16, 2009 and incorporated herein by reference) |
|
|
|
4.2
|
|
Letter Agreement, dated as of January 16, 2009, between the
Registrant and the United States Department of the Treasury (filed
as Exhibit 10.1 to the Registrants Current Report on Form 8-K
filed on January 16, 2009 and incorporated herein by reference) |
|
|
|
4.3
|
|
Warrant to Purchase Shares of Common Stock, dated January 16,
2009, to purchase shares of Common Stock of the Registrant (filed
as Exhibit 4.2 to the Registrants Current Report on Form 8-K
filed on January 16, 2009 and incorporated herein by reference) |
|
|
|
5.1
|
|
Opinion of Patton Boggs LLP |
|
|
|
12.1
|
|
Statement of ratios of earnings to fixed charges |
|
|
|
23.1
|
|
Consent of Ernst & Young LLP |
|
|
|
23.2
|
|
Consent of Patton Boggs LLP (included in Exhibit 5.1) |
|
|
|
24.1
|
|
Power of Attorney of certain officers and directors (located on
the signature page to the Registration Statement) |
II-7