Prosperity Bancshares Inc., the parent company of Prosperity Bank, and LegacyTexas Financial Group Inc., the parent company of LegacyTexas Bank, announced a definitive merger agreement pursuant to which LegacyTexas will merge with El Campo-based Prosperity. LegacyTexas Bank, based in Plano, operates 42 locations in 19 north Texas cities in and around the Dallas-Fort Worth area. As of March 31, 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, 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 a president and chief operating officer of Prosperity and president of Prosperity Bank; and Mays Davenport, LegacyTexas executive vice president and chief financial officer, will be named executive vice president and director of corporate strategy of Prosperity and Prosperity Bank. Scott Almy, Tom Swiley, Chuck Eikenburg and Aaron Shelby will hold senior management positions at Prosperity Bank.
In addition, upon completion of the merger, Hanigan, Bruce Hunt and George Fisk, directors of LegacyTexas, will join the board of directors of Prosperity, and Davenport will join the board of directors of Prosperity Bank.
“I am very excited to announce the merger of LegacyTexas with Prosperity,” said David Zalman, chair 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. 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,” Zalman continued. “Kevin, Mays, Scott, Tom, Chuck and Aaron have extensive experience, and we are looking forward to them joining our team and continuing to take Prosperity to the next level.”
“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,” commented 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 unanimously approved by the independent directors of LegacyTexas and is expected to close during the fourth quarter of 2019.