January 22, 2014
Mr. Gus Rodriguez
Accounting Branch Chief
United States Securities and Exchange Commission
Division of Corporation Finance
110 F Street N
Washington, D.C. 20549
| Re: | Texas Capital Bancshares, Inc. (“TCBI”) |
Form 10-K for the Fiscal Year Ended December 31, 2012
Filed February 21, 2013
Form 10-Q for the Period Ended June 30, 2013
Filed July 29, 2013
File No. 001-34657
Dear Mr. Rodriguez:
This correspondence is written to confirm to you that after further evaluation of the issues raised in your comment letters dated September 5, 2013, and October 23, 2013, we consulted with the Office of the Chief Accountant. After that consultation we determined that the above reports reflect an error (the “Error”) in the application of generally accepted accounting principles (“GAAP”) to the classification of legal interests in mortgage loans (“Mortgage Interests”) purchased in the mortgage warehouse finance business of our subsidiary, Texas Capital Bank (the “Bank”) which resulted in the Mortgage Interests being reflected on our consolidated balance sheets and statements of cash flows as “held for sale” rather than “held for investment.” We also evaluated the impact on the indicated reports of changes in the Bank’s risk-based capital ratios that resulted from changes in the risk weights assigned to the Mortgage Interests under regulatory guidance issued in April 2013, as reflected in amended Call Reports of the Bank for December 31, 2012 and 2011, and a Form 8-K filed by TCBI dated August 14, 2013 (the “Capital Ratio Changes”).
Based upon the considerations set forth in ASC 250-10-S99, which incorporates Staff Accounting Bulletins Nos. 99,Assessing Materiality (SAB 99) and 108,Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (SAB 108), we have determined that the indicated conditions, considered individually and in combination, (i) do not materially misstate the referenced financial statements, taken as a whole, (ii) did not result from material weaknesses in TCBI’s internal controls over financial reporting and (iii) do not signify that TCBI’s disclosure controls were ineffective.
Securities and Exchange Commission
January 22, 2014
Page 2
Correction of the Error and the Capital Ratio Changes will be made in TCBI’s future filings with the Commission.
We appreciate the staff’s thoughtful analysis of the issues relating to the appropriate accounting presentation of our mortgage finance business and related developments.
This will acknowledge that (i) TCBI is responsible for the adequacy and accuracy of the disclosures in the above referenced filings; (ii) staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the referenced filings; and (iii) TCBI may not assert staff comments as a defense in any proceeding initiated by the Commission.
Please do not hesitate to contact me by telephone at 214-932-6778 or by email atpeter.bartholow@texascapitalbank.com. You may also contact our counsel, Michael W. Tankersley of Bracewell & Giuliani LLP at 214-758-1092 or by email atmike.tankersley@bgllp.com.
Respectfully submitted,
| /s/ Peter B. Bartholow |
Peter B. Bartholow Chief Financial Officer |
| Cc: | Marc Thomas, Accounting Branch, Division of Corporation Finance |
www.texascapitalbank.com
2000 McKinney Ave., Ste. 700 Dallas, TX 75201
P 214.932.6600 F 214.932.6604