Texas Capital Bancshares of Dallas has agreed to sell its mortgage servicing assets to PHH Mortgage.
Texas Capital, with assets of $ 40.1 billion, said in a press release on Wednesday that the sale includes MSRs for mortgages valued at approximately $ 14 billion. Texas Capital said it was selling the portfolio for a "modest premium".
The deal is expected to close in the second quarter.
PHH, an entity of Ocwen Financial, is committed to recruiting "many" Texas Capital correspondents.
Texas Capital said the sale will give it greater capital flexibility and "better align resources and investments with key, high-growth opportunities for long-term value creation." The company said it will continue to allocate resources for its mortgage financing, mortgage storage and specialty loan businesses.
The sale "is another important step in optimizing our balance sheet, implementing improved discipline and reducing risk at Texas Capital," said Rob Holmes, President and CEO of the company, in the press release.
"In the past few weeks we have taken important steps to strengthen our financial position and focus more on our key growth drivers," added Holmes.
Texas Capital announced in a presentation that the closure of its correspondent lending business will free up $ 70 million annually for redeployment elsewhere. The company said some of the funds could be used to hire bankers and improve existing platforms.
Alston & Bird and Simpson Thacher & Bartlett advised Texas Capital.
Separately, Texas Capital reported that first quarter earnings were up 20% from the previous quarter to $ 71.9 million. The results included a reserve release of $ 6 million.