Prosperity Bancshares, the holding company of Prosperity Bank, has signed an agreement to acquire First Bancshares of Texas, the parent company of FirstCapital Bank of Texas, for a total consideration of around $341.6m.
Under the terms of the agreement, Prosperity will issue 3,583,370 shares, in addition to $93.4m cash, in exchange for all outstanding shares of First Bancshares.
The transaction has been unanimously approved by the Boards of Directors of both companies.
It is expected to close during the first quarter of 2023, subject to certain conditions, including the approval by First Bancshares’ shareholders and customary regulatory approvals.
As part of the deal, Ken Burgess, Brad Burgess, Greg Burgess and Jeremy Bishop from First Bancshares will be appointed as regional presidents at Prosperity Bank.
The newly appointed regional presidents will take charge of specific geographic markets in the West Texas and Central Texas areas.
Prosperity senior chairman and chief executive officer David Zalman said: “We are thrilled that Ken and Don Cosby and the FirstCapital team are joining Prosperity.
“The combination of our companies enables us to enter the desirable Wichita Falls and Amarillo markets and the Horseshoe Bay, Marble Falls and Fredericksburg markets in the high-growth Central Texas area.
“The customers of FirstCapital will be able to use any of our locations across Texas and Oklahoma after operational integration.”
FirstCapital Bank operates 16 banking locations in six different markets in West, North and Central Texas, with the main office in Midland.
Its offices are located in Midland, Lubbock, Amarillo, Wichita Falls, Burkburnett, Byers, Henrietta, Dallas, Horseshoe Bay, Marble Falls and Fredericksburg, Texas.
First Bancshares has total assets of $2.121bn, total loans of $1.589bn and total deposits of $1.781bn, as of 30 June 2022.
Stephens served as a financial advisor and Fenimore Kay Harrison as legal counsel to First Bancshares, on this transaction, while Bracewell served as legal counsel to Prosperity.
In a separate development, Prosperity has signed agreements to acquire Lone Star State Bancshares, the holding company of Lone Star State Bank of West Texas, in a cash and stock transaction valued at $228.7m.
Under the terms of the agreement, Prosperity will issue 2,376,182 shares of its common stock, along with $64.1m cash in exchange for all outstanding shares of Lone Star.
Lone Star Bank operates five banking offices in the West Texas area, in Brownfield, Midland, Odessa and Big Spring, Texas.
The company had total assets worth $1.305 billion, total loans of $933.5m and total deposits of $1.174bn, as of 30 June 2022.
