Prosperity Bancshares, Inc., the parent company of Prosperity Bank, and Lone Star State Bancshares, Inc., the parent company of Lone Star State Bank of West Texas, headquartered in Lubbock, TX, jointly announced the signing of a definitive merger agreement pursuant to which Prosperity will acquire Lone Star and Lone Star Bank.
Lone Star Bank operates five banking offices in the West Texas area, including its main office in Lubbock, and one banking center in each of Brownfield, Midland, Odessa and Big Spring, TX. As of June 30, Lone Star, on a consolidated basis, reported total assets of $1.305 billion, total loans of $933.5 million and total deposits of $1.174 billion.
Under the terms of the definitive agreement, Prosperity will issue 2,376,182 shares of Prosperity common stock plus $64.1 million in cash for all outstanding shares of Lone Star capital stock, subject to certain conditions and potential adjustments. Based on Prosperity's closing price of $69.27 on October 7, 2022, the total consideration was valued at approximately $228.7 million.
Alan Lackey, Lone Star Chief Executive Officer, will join Prosperity Bank as West Texas Area President and Melisa Roberts, Lone Star Chief Lending Officer, will join Prosperity Bank as West Texas Area Vice President. Additional members of Lone Star management will maintain leadership roles in the combined organization.
"It has been a pleasure getting to know Alan and Melisa and the management team at Lone Star. We are very excited to have them join our organization," said David Zalman, Senior Chairman and Chief Executive Officer of Prosperity. "We continue to look for opportunities to enhance our presence in the West Texas area and Lone Star Bank's locations in Lubbock, Midland/Odessa, Big Spring and surrounding areas are an excellent fit for us. The customers of Lone Star will be able to use any of our locations across Texas and Oklahoma after operational integration."
"We are excited to unite Lone Star's diversity of revenue, assets, and commitment to excellent service in the communities we serve with the financial strength and regional footprint that Prosperity Bank offers to fortify our combined capabilities in the West Texas region stated Alan Lackey, Chief Executive Officer of Lone Star."
The merger has been unanimously approved by the Boards of Directors of both companies and is expected to close during the first quarter of 2023, although delays may occur. The transaction is subject to certain conditions, including the approval by Lone Star's shareholders and customary regulatory approvals.
Lone Star was advised by Stephens Inc., as financial advisor, and Fenimore Kay Harrison LLP, as legal counsel. Bracewell LLP served as legal counsel to Prosperity.
Prosperity Bancshares, Inc. is a $37.387 billion Houston, TX-based regional financial holding company providing personal banking services and investments to consumers and businesses throughout Texas and Oklahoma.
Prosperity currently operates 272 full-service banking locations: 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 62 in the Dallas/Fort Worth area; 22 in the East Texas area; 29 in the Central Texas area including Austin and San Antonio; 34 in the West Texas area including Lubbock, Midland-Odessa and Abilene; 16 in the Bryan/College Station area; 6 in the Central Oklahoma area; and 8 in the Tulsa, OK.