- Key insight: Texas Capital failed once to win shareholder support to redomicile from Delaware to Texas, but its management team plans to try again.
- What's at stake: If the regional bank succeeds, it will join a list of public companies that have moved their state of incorporation from Delaware to Texas, where recent changes to corporate law have made it a more attractive state to do business.
- Forward look: Texas Capital will re-engage with shareholders this year in hopes that it can convince them that reincorporating in Texas is in shareholders' best interests.
Texas Capital Bancshares plans to again seek shareholder approval to change its state of incorporation from Delaware to Texas — a switch that numerous public companies have made to take advantage of the perceived more favorable legal and tax climate in the Lone Star State.
Three months after the Dallas bank's proposal to redomicile in Texas failed to win majority shareholder support, its management team remains undeterred, according to CEO Rob Holmes. He blames the results on proxy-advisory firms, which recommended that shareholders vote against the proposal, arguing that it would weaken shareholder rights.
Holmes maintains that a move to Texas would be in the best interests of the bank's shareholders. The benefits of being governed by the state of Texas instead of Delaware include cost savings, a change in business courts, a stronger alignment between the bank's legal framework and its Texas-centric operations and the potential for fewer "frivolous lawsuits," he said Tuesday.
The $33.9 billion-asset bank plans to re-engage with shareholders this year, and then to bring another proposal to the table, Holmes said. If the second proposal succeeds, Texas Capital will join a growing list of public companies, including Tesla, Dell Technologies and the crypto exchange Coinbase, that have recently chosen to leave Delaware and reincorporate in Texas.
Other banks and public companies are likely watching to see how the situation unfolds at Texas Capital, but regardless of what happens, others will try to make the switch, one attorney said.
For his part, Holmes told American Banker that "there is not one drawback" to changing the place of incorporation. "I cannot think of one reason why we shouldn't be incorporated in the state of Texas," he said.
Not everyone agrees. Earlier this year, two of the largest proxy advisory firms, Glass Lewis and Institutional Shareholders Services, laid out their rationale for a "no" vote. The two firms cited a variety of reasons, but they boiled down to the argument that reincorporation would limit shareholder rights.
Texas Capital's proposal received about 45% support during the bank's annual meeting in April. About 18.2 million shares voted in favor of redomiciling, but more than 22 million voted against the proposal, according to a regulatory filing. More than 30,000 shares abstained from voting.
Read more:
The top-performing banks with $2B to $10B of assets in 2025 How Block's using its license to threaten traditional bank lending Will banks get in on the prediction market gold rush ?Jack Henry is using Google AI to defend 7,400 institutions
During the bank's second-quarter earnings call last week, in response to an analyst's question about the status of the reincorporation effort, Holmes said the bank's institutional investors, which outnumber retail investors, listened to "irresponsible, uninformed proxy advisors."
"I'll go on the record and say it: it's a problem, and they have too much power," Holmes said on the call.
An ISS spokesperson said Tuesday in an email that "ISS provides independent and apolitical research and recommendations" that respond to criteria selected by institutional investors.
"Clients determine these criteria by choosing from a wide array of voting guidelines, including ISS' benchmark policy, which is developed with input from investors and public comment," the spokesperson said. "And it is they who ultimately decide how to vote on proxy matters."
Glass Lewis declined to comment on Holmes' remarks.
A shift away from Delaware
Texas Capital's board of directors first discussed the idea of changing its state of incorporation during a July 2025 meeting, according to its most recent proxy statement. That was two months after its home state made certain corporate-law amendments to promote a friendlier business environment. The board took no action at the time, but subsequently continued to analyze the pros and cons. This February, it voted in favor of pursuing reincorporation in Texas.
The process of changing a corporation's state of incorporation from Delaware to places like Texas or Nevada has been dubbed "DExit." For years, Delaware has been the preferred jurisdiction for incorporations of public companies, due to what has been perceived to be a friendlier, more predictable corporate environment. There are currently two million-plus businesses that have made Delaware their legal home, according to the state's website.
The reforms in Texas, which took effect in May 2025, included amendments to the Texas Business Organizations Code. One such change was the codification of the business judgment rule for publicly-traded Texas corporations. The codification would give Texas Capital and its shareholders "greater certainty about how courts will review board decisions, replacing open‑ended standards with clear rules that discourage hindsight attacks on good faith judgments made in a dynamic, complex and highly regulated banking environment," the bank wrote as part of its shareholder proposal.
The amendments, which generally aim to minimize litigation risk, also require shareholders to own a minimum number of shares for a minimum period of time in order to initiate litigation against the bank. Further, the state has established the Texas Business Court, which specializes in business disputes and aims to reduce delays while providing consistency.
In its proxy statement, Texas Capital said redomiciling will save the bank $200,000 a year, as it will no longer have to pay Delaware franchise taxes. It will still pay Texas franchise taxes, but those won't increase, it says.
Glass Lewis and ISS both argued that switching away from Delaware would negatively impact shareholder rights.
In its report, ISS wrote that "it will become substantially more difficult for shareholders to file a derivative suit or to establish that a director or officer has violated fiduciary duties." It also said that "a combination of a board's greater flexibility in Texas to consider the interests of constituencies other than shareholders and the greater hurdles to challenging a board's actions in court could leave shareholders with little recourse in the event the board rejects a value-maximizing transaction or takes other steps that diminish shareholder value."
The instances of "DExit" are accelerating, according to Byron Egan, a partner at the law firm Jackson Walker in Dallas. In a May 2026 article for The Texas Lawbook, Egan wrote that Texas is enticing because of the newly formed business court, the amended Texas Business Organizations Code and the favorable state tax structure.
Part of the state's strategy is to attract public company stock listings on the new Texas Stock Exchange, Egan wrote. In an interview Tuesday, Egan said the fact that Texas Capital's proposal to switch its state of incorporation did not win shareholder approval the first time around is an "aberration." He pointed to Texas Capital's large share of institutional investors, and said that Texas Capital should not be taken as a marker for how other banks with similar reincorporation-related aspirations will fare.
EXXON Mobil's recent proposal to redomicile in Texas "got through pretty easily," Egan said. In fact, the energy company's proposal passed with 71% support, according to a securities filing.
Holmes said Texas Capital has had no discussions with the proxy advisory firms, either before the proposal was voted upon or after. He said that conversations with shareholders about the company's desire to redomicile will determine whether the bank holds a special meeting to vote on a second proposal or waits until next year's annual meeting.
"We're going to do what we always do," Holmes said. "We will continue to engage with our shareholders and talk to them about why this makes sense for Texas Capital Bank … and get feedback on different pressure points."
