Comprehensive M&A data with integrated detailed company information

Prosperity acquires LegacyTexas in Texas’ second-largest bank merger
Posted on Monday, 17 June 2019 13:40
Prosperity Bancshares is taking LegacyTexas Financial private in a cash and stock deal worth USD 2.10 billion that will create the second-largest Texas-headquartered bank by deposits, with USD 22.40 billion in Texas.

At USD 41.78 apiece, the proposal is a 9.3 per cent premium to the last unaffected closing price, 12.1x expected consensus estimate average earnings per share of USD 3.44 for 2020 and represents a multiple of 2.1x tangible book value.

LegacyTexas is the holding company for LegacyTexas Bank, a commercially oriented community bank based in Plano, Texas which operates 42 locations in 19 cities in and around the Dallas/Fort Worth metropolitan statistical area (MSA).

As of 31st March 2019, LegacyTexas, on a consolidated basis, reported total assets of USD 9.35 billion, total gross loans of USD 8.05 billion and total deposits of USD 7.08 billion.

The group had net profit of USD 29.00 million, return on average assets of 1.3 per cent, and an efficiency ratio of 48.6 per cent.

It had tangible common equity to tangible assets of 10.3 per cent, common equity tier 1 of 10.9 per cent, a tier 1 leverage ratio of 10.9 per cent and a total risk-based capital ratio of 13.3 per cent.

Prosperity by contrast is a USD 22.40 billion, Houston, Texas-based regional financial holding company formed in 1983 and which operates across the state and Oklahoma via 242 full-service banking locations.

The company has completed 27 mergers and acquisitions since 2000, including the USD 77.00 million purchase of Tradition Bancshares in 2006, though this latest takeover will be the largest by value.

It will expand Prosperity’s presence in strategically key markets to hold a pro forma 3.0 per cent share of the deposit market in the Dallas/Fort Worth MSA, which is the fourth-largest in the US by population.

The acquisition is the second-biggest merger targeting a Texas-based bank on record, according to Zephyr, the M&A database published by Bureau van Dijk.

© Zephus Ltd