Prosperity Bancshares, the holding company of Prosperity Bank, has agreed to acquire Texas-based bank holding company LegacyTexas Financial Group (LTXB), the owner of LegacyTexas Bank, for about $2.1bn (£1.68bn).
Image: LegacyTexas Bank to merge with Prosperity Bank. Photo: courtesy of Billy Hathorn at en.wikipedia.
Based in Plano, LegacyTexas Bank is a commercially oriented community bank, which has 42 banking offices across 19 North Texas cities, in and around the Dallas-Fort Worth region.
On a consolidated basis, the community bank had $9.3bn (£7.43bn) in total assets, total gross loans of $8.1bn (£6.47bn), and $7.1bn (£5.67bn) in total deposits, as of 31 March 2019.
Prosperity Bank is a community bank based in Houston, which provides a range of traditional loan and deposit products to mainly small and medium sized businesses and consumers.
Currently, the bank operates 242 full-service banking locations, which are mostly located across Texas. Prosperity Bank has 14 banking locations in Oklahoma as well.
As of 31 March 2019, Prosperity Bank’s parent company Prosperity Bancshares was valued at $22.4bn (£17.88bn).
Prosperity Bancshares chairman and CEO David Zalman said: “Through the second largest bank merger in the history of Texas, our combined companies create the second largest bank by deposits headquartered in Texas.
“Together, our increased scale better positions us to invest in future opportunities and serve our customers. LegacyTexas has been serving the North Texas area for more than 60 years and we believe that our banks are complementary and provide many opportunities for continued growth.
“This is a rare opportunity to significantly enhance our presence in the Dallas/Fort Worth MSA, a market with a diverse economy that is continually attracting investment and has a growing population.”
As per the terms of the cash-cum-stock merger, LegacyTexas will be issued 0.5280 shares of Prosperity Bancshares’ common stock along with $6.28 (£5.01) in cash per share. The transaction values each share of LegacyTexas at about $41.78 (£33.36).
LegacyTexas president and CEO Kevin Hanigan said: “We believe that Prosperity, one of the most successful banking franchises in Texas, with a strong core deposit base and a focus on relationship banking, is a perfect fit for LegacyTexas.
“We are very proud of our ability to serve the North Texas area and look forward to having our team and shareholders participate in the continued growth of our combined franchise.”
The merger, which will be subject to approvals from shareholders of the two companies, regulatory approvals and certain conditions, is expected to be wrapped up during the fourth quarter of 2019.
On the transaction, Prosperity was advised by Keefe, Bruyette & Woods, a Stifel Company, as financial advisor, and Bracewell served as legal counsel, while LegacyTexas was advised by J.P. Morgan Securities as financial advisor, and Shapiro Bieging Barber Otteson served as legal counsel.