In an effort to expand its presence in North Texas, Houston-based Prosperity Bancshares Inc., the parent of Prosperity Bank, is acquiring Dallas’ LegacyTexas Financial Group, parent of LegacyTexas Bank, for $2.1 billion in cash and stock.
Bracewell counseled Prosperity with a team led by partners Will Anderson and Jason Jean in Houston.
Others working on the deal were partners Joshua T. McNulty, Rebecca L. Baker, Scott C. Sanders, Michele J. Alexander, Aaron P. Roffwarg, Timothy A. Wilkins and Bryan S. Dumesnil. They were supported by associates Benjamin J. Martin, Daniel W. Areshenko, Shannon Baldwin and Ryan Davis.
Prosperity’s in-house counsel on the deal included senior executive VP and general counsel Charlotte Rasche, senior VP and associate general counsel Annette Tripp and senior VP and legal counsel Jessica Lee Freedson, all of whom are former Bracewell lawyers.
Shapiro Bieging Barber Otteson represented LegacyTexas with the lead attorneys based out of its Denver office, including Christian Otteson, another Bracewell alum.
Stifel unit Keefe, Bruyette & Woods provided a fairness opinion to Prosperity’s board while J.P. Morgan Securities provided financial advice to LegacyTexas.
LegacyTexas stockholders will receive 0.5280 shares of Prosperity common stock and $6.28 in cash for each of their shares, or $41.78 per share, a 9.3% premium over where the stock was trading on Friday.
Prosperity chairman and CEO David Zalman said in a statement that the deal is the second largest bank merger in Texas’ history and will create the second largest bank by deposits headquartered in the state.
“Together, our increased scale better positions us to invest in future opportunities and serve our customers,” he said.
Bank mergers have picked up across the country since the Trump Administration cut taxes and eased regulations and Texas hasn’t been an exception.
Last year Independent Bank Group bought Guaranty Bancorp for $1 billion after picking up Integrity Bancshares for $164 million the year before. And on Jan. 1 of this year, Dallas-based Veritex Holdings closed its purchase of Houston-based Green Bancorp.
Other banks headquartered in Texas include Cullen/Frost Bankers, Texas Capital BancShares, CBTX Inc. (holding company for CommunityBank of Texas), First Financial Bankshares, Guaranty Bancshares, Independent Bank Group, International Bancshares and Southside Bancshares.
LegacyTexas operates 42 locations in 19 North Texas cities in and around the Dallas-Fort Worth area. As of March 31, it had assets of $9.3 billion, gross loans of $8.1 billion and deposits of $7.1 billion.
Kevin Hanigan, LegacyTexas’ president and CEO, will join Prosperity as the president and COO of Prosperity Bancshares and president of Prosperity Bank. Mays Davenport, LegacyTexas’ executive VP and CFO, will be named executive VP and director of corporate strategy of Prosperity Bancshares and Prosperity Bank.
Others at LegacyTexas who will hold senior management positions at Prosperity include executive VP and COO Scott Almy; executive VP and chief lending officer Tom Swiley; executive VP’s Chuck Eikenberg and Aaron Shelby.
Once the merger is completed, Hanigan and fellow LegacyTexas directors Bruce Hunt and George Fisk will join Prosperity’s board. Davenport also will join Prosperity Bank’s board.
Prosperity’s Zalman said LegacyTexas has been serving the North Texas area for more than 60 years and that the two banks are complementary and provide 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,” he said.
Hanigan said Prosperity’s strong core deposit base and focus on relationship banking is a “perfect fit” for LegacyTexas.
The merger has to clear the stockholders of both companies and regulators but is expected to close in the fourth quarter.