In an effort to expand in the state of Oklahoma, Prosperity Bancshares Inc. (PB), signed a definitive merger deal with Coppermark Bancshares, Inc. and the latter’s fully-owned subsidiary Coppermark Bank. Under the terms of the deal, Coppermark Bank will be combined with Prosperity Bank in Oklahoma City, Oklahoma.
According to the agreement, Prosperity will issue 3,258,845 shares of its common stock and pay $60.0 million in cash for Coppermark’s outstanding capital stock, subject to some conditions and adjustments. The acquisition is anticipated to be completed during the first quarter of 2013.
The deal has already been approved by the board of directors of both companies. However, the agreement is subject to certain customary closing conditions, including the consent of Coppermark's shareholders and regulatory approval. The integration of these companies is expected to commence in the second quarter of 2013.
After the completion of the merger, Russell E. Swarts, the present Chairman of Coppermark will serve as the Senior Chairman of the combined entity in the Central Oklahoma Region. Thomas Legan, the current President of Coppermark, will be the Chairman of the office at Central Oklahoma Region and will be accountable for the daily operations and management of all Oklahoma branches.
Moreover, Jacque Fiegel, currently the Chief Operating Officer at Coppermark, will become the President of Central Oklahoma Region and will be in-charge for retail and business banking operations of all Oklahoma branches. In addition, he will also be accountable for certain other operational issues of the combined organization.
Further, lending in Oklahoma will be looked after by Jeff Russell, Coppermark's President of the Oklahoma Market and Chief Credit Officer who will also take up the role of President at Central Oklahoma Region.
Management at Prosperity was thrilled to be associated with Coppermark, a successful company with values driven by efficient customer service. Coppermark, on its part, was delighted to join a strong banking institution like Prosperity. The company hopes to combine their steady track record to help Prosperity grow in the Oklahoma region.
Prosperity has been aggressively growing inorganically over the past one year. In October this year, it acquired Community National Bank in a cash-and-stock deal. In July, it purchased American State Financial Corporation in a cash-and-stock deal. Previously, in April, it completed the acquisition of The Bank Arlington in a stock deal. Similarly, in January, it had acquired Texas Bankers, Inc. Back in December 2011, the company had announced a definitive agreement to acquire East Texas Financial Services Inc. (FFBT).
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 #2 Rank, which translates into a short-term Buy rating. We believe opportunistic acquisitions will lead to an improvement in efficiency and add to the company’s competitive edge, which might lead to upward estimate revisions. This, in turn, could cause an improvement in the Zacks Rank.
More From Zacks.com
- Mergers, Acquisitions & Takeovers