U.S. regional bank Prosperity to buy peer LegacyTexas for $2.1 billion

(Reuters) - U.S. regional bank Prosperity Bancshares Inc said on Monday it would buy Plano, Texas-based peer LegacyTexas Financial Group Inc for $2.1 billion, creating the second-biggest bank by deposits in the state. LegacyTexas shareholders will receive 0.528 Prosperity shares, and $6.28 in cash for each share held, representing a deal value of $41.78 per share, a premium of 9.3% based on the closing price of LegacyTexas on Friday.

Reuters June 18, 2019 05:05:50 IST
U.S. regional bank Prosperity to buy peer LegacyTexas for $2.1 billion

US regional bank Prosperity to buy peer LegacyTexas for 21 billion

(Reuters) - U.S. regional bank Prosperity Bancshares Inc said on Monday it would buy Plano, Texas-based peer LegacyTexas Financial Group Inc for $2.1 billion, creating the second-biggest bank by deposits in the state.

LegacyTexas shareholders will receive 0.528 Prosperity shares, and $6.28 in cash for each share held, representing a deal value of $41.78 per share, a premium of 9.3% based on the closing price of LegacyTexas on Friday.

The deal is also expected to strengthen Houston, Texas-based Prosperity's foothold in North Texas cities as well as in and around the Dallas-Fort Worth area.

As of March 31, 2019, LegacyTexas held assets worth more than $9 billion, total loans of $8.1 billion and total deposits of $7.1 billion, while Prosperity held $22.35 billion in assets and $17.2 billion in deposits.

Dealmaking in the banking sector has been rising ever since U.S. President Donald Trump lowered corporate taxes and eased financial regulations on regional banks.

M&A activity in the sector had languished after the 2007-2009 financial crisis, as stricter rules were imposed on lenders with more than $50 billion in assets and regulators barred banks with compliance issues from expanding.

But a cut in corporate taxes in December 2017 and easing of stringent capital requirements in the following year have freed up capital, reviving dealmaking in the banking sector.

Earlier this year, U.S. regional lender BB&T Corp bought rival SunTrust Banks for about $28 billion in stock, marking the first big bank merger since the 2007-2009 crisis.

With more financial easing on the horizon, Wall Street analysts have said they remain optimistic about more consolidation in the banking sector, especially between super-regional banks.

The deal between Prosperity and LegacyTexas is expected to close in the fourth quarter.

Kevin Hanigan, chief executive of LegacyTexas, will join Prosperity as its chief operating officer, the companies said http://pdf.reuters.com/htmlnews/htmlnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20190617:nPn8SyNCga.

Prosperity's financial adviser in the deal was Keefe, Bruyette & Woods, while J.P. Morgan Securities LLC acted as financial adviser for LegacyTexas.

(Reporting by Aparajita Saxena and Bharath Manjesh in Bengaluru; Editing by James Emmanuel)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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