In an effort to strategically expand in the Houston region, Prosperity Bancshares Inc. (PB - Free Report) declared the closure of its merger with Community National Bank. Community National Bank – the single-branch bank, located in Bellaire – had total assets of $180.6 million, total loans of $68.6 million and total deposits of $162.6 million as of June 30, 2012.
Prosperity has shuttered its existing branch in Bellaire, and with the closure of the deal will operate through the Community National Bank branch. Henceforth, Prosperity will operate a total of 59 branches across the Houston area.
The terms of the agreement entailed that Prosperity will issue 372,396 shares of its common stock and pay $11.4 million in cash for Community National’s outstanding capital stock. The CEO of Community Bank, Randy Dobbs, will serve as president of Prosperity’s Bellaire Banking Center, whereas John James, president of Community National Bank, will serve as Executive Vice-President.
Commerce Street Capital, LLC acted as financial advisor to Community National Bank, while Prosperity’s legal advisor was Bracewell & Guiliani LLP.
The clientele of community National Bank will continue to receive the efficient service that they are familiar with. Further, they will benefit from the personalized products and services of the 59 branches in the Greater Houston area.
Community National Bank, on its part, believes that the merger with Prosperity Bank will provide its costumers a more diverse range of products and maintain their custom of personalized banking. Further it will also enhance shareholders value as well as provide significant benefit to its customers and associates. Community National Bank is thrilled to be a part of a successful company whose values are driven by efficient customer service.
Prosperity Bank has been aggressive in its inorganic growth in the state of Texas over the past one year. According to Forbes, the Texas market is popularly believed to be one of the fastest-growing economies of the U.S.
In July, 2012, Prosperity acquired American State Financial Corporation in a cash-and-stock deal. Further, in April 2012, Prosperity completed the acquisition of The Bank Arlington in a stock deal. Similarly, in January 2012, Prosperity acquired Texas Bankers, Inc. Further, in December 2011, the company announced a definitive agreement to acquire East Texas Financial Services Inc. .
Amidst the sluggish economic recovery and uncertain regulatory environment, where most of the U.S. banks are struggling to maintain their profitability, Prosperity is better placed with its strong second quarter results. Further, its strategic acquisitions are expected to enhance its financials.
Prosperity currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.