Texas Capital Bancshares (NASDAQ: TCBI) and subsidiary Texas Capital Bank this week closed on what is believed to be the first use of a credit-risk transfer model by a regional bank to defray its exposure to mortgage holdings.
According to
The CRT model has traditionally been the domain of Fannie Mae and Freddie Mac securitizations that offload taxpayer risk behind guaranteed mortgages to private investors. In the past year, JPMorgan Chase has utilized
“This CRT is a notable transaction for Texas Capital Bank, and advances our proactive efforts to optimize our balance sheet,” said Rob C. Holmes, president and chief executive officer of Texas Capital Bank, in a statement. "In combination with our recently closed preferred stock capital raise, this initiative provides enhanced credit protection and significantly improves our regulatory capital ratios. As a result, Texas Capital Bank is better positioned to serve our Warehouse Lending clients through all market environments.”
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