LegacyTexas Bank operates 42 locations in 19 North Texas cities in and around the Dallas-Fort Worth area. As of March 31, 2019, LegacyTexas, on a consolidated basis, reported total assets of $9.3 billion, total gross loans of $8.1 billion and total deposits of $7.1 billion.
Under the terms of the merger agreement, stockholders of LegacyTexas will receive 0.5280 shares of Prosperity common stock and $6.28 cash for each LegacyTexas share, subject to certain conditions. Based on Prosperity’s closing price of $67.24 on June 14, 2019, the total consideration was valued at approximately $2.1 billion, or approximately $41.78 per share.
Kevin Hanigan, LegacyTexas president and CEO, will join the Prosperity team as the president and chief operating officer of Prosperity and president of Prosperity Bank. Mays Davenport, LegacyTexas EVP and chief financial officer, will be named EVP and director of Corporate Strategy of Prosperity and Prosperity Bank. Scott Almy, Tom Swiley, Chuck Eikenberg and Aaron Shelby will also hold senior management positions at Prosperity Bank.
Upon completion of the merger, Kevin Hanigan, Bruce Hunt, and George Fisk, directors of LegacyTexas, will join the Board of Directors of Prosperity, while Davenport joins the bank’s board.
“I am very excited to announce the merger of LegacyTexas with Prosperity,” stated David Zalman, chairman and CEO of Prosperity. “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.”
“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,” said Hanigan. “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 has been unanimously approved by the Board of Directors of Prosperity and by the independent directors of LegacyTexas. The transaction is expected to close during the fourth quarter of 2019, subject to certain conditions, including the approval by LegacyTexas stockholders and Prosperity shareholders and customary regulatory approvals.
Keefe, Bruyette & Woods represented Prosperity and provided a fairness opinion to its Board of Directors, while Bracewell acted as its legal counsel. LegacyTexas was advised by J.P. Morgan Securities as financial advisor and Shapiro Bieging Barber Otteson, as legal counsel.
As of March 31, 2019, Prosperity Bancshares is a $22.4 billion Houston-based regional financial holding company. Formed in 1983 and operating under a community banking philosophy, Prosperity offers a variety of traditional loan and deposit products to its customers, which consist primarily of small and medium sized businesses and consumers.
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