A North Texas bank that has total reported assets of $9.3 billion completed a merger with a Houston-based financial holding company, expanding its reach.
LegacyTexas Financial Group Bank, the parent company of LegacyTexas Bank, agreed to merge with Prosperity Bancshares, Inc., the companies announced Monday.
LegacyTexas Bank is based in Plano. It operates 42 locations in 19 North Texas cities, including four in Fort Worth.
Following the merger, LegacyTexas stockholders will receive 0.5280 shares of Prosperity common stock and $6.28 cash for each LegacyTexas share. The total consideration is valued at about $2.1 billion.
The merger, which qualifies as a "reorganization," has been unanimously approved by the Board of Directors of Prosperity and unanimously approved by the independent directors of LegacyTexas, according to the agreement filed with the SEC, dated June 16.
The merger will move Prosperity from No. 20 to No. 6 by deposit market share in the Dallas-Fort Worth MSA overall, according to a presentation made by the company. It will be the No. 2 Texas-headquartered bank by deposit market share in the Dallas-Fort Worth MSA and the No. 1 bank by deposit market share in Collin County.
LegacyTexas offers services, including commercial banking, business banking, consumer banking and mortgage services.
Houston-based Prosperity Bank has 32 branches, primarily in Houston and Austin-San Antonio. It also has locations in West Texas and Oklahoma.
Kevin Hanigan, LegacyTexas president and CEO will now join Prosperity as the president and Chief Operating Officer of Prosperity Bank. LegacyTexas EVP and CFO Mays Davenport will be named the new EVP and Director of Corporate Strategy of Prosperity and Prosperity Bank.
Scott Almy, Tom Swiley, Chuck Eikenberg and Aaron Shelby will all hold senior management positions at Prosperity Bank.
"Through the second largest bank merger in the history of Texas, our combined companies create the second largest bank by deposits headquartered in Texas," Prosperity CEO and Chairman David Zalman said in a statement. "Together, our increased scale better positions us to invest in future opportunities and serve our customers."
LegacyTexas started operations more than 60 years ago. Zalman said the merger will now enhance the bank's presence in North Texas even more as the economy continues to diversify and grow.”
"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," Hanigan said in a statement. "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."
J.P. Morgan Securities LLC provided financial advice to LegacyTexas. Shapiro Bieging Barber Otteson LLP acted as its legal counsel.
Prosperity was represented by Keefe, Bruyette & Woods. While, Bracewell LLP was the legal counsel to Prosperity.
Subject to stockholder's, shareholder's and regulator's approval, the merger is expected to close in the fourth quarter of this year.
To view a presentation on the merger: