Prosperity Bancshares in Houston has agreed to buy American Bank Holding Co. in Corpus Christi, Texas.
The $38.8 billion-asset Prosperity said in a press release that it will pay $321.5 million in stock for the parent of the $2.5 billion-asset American Bank. The deal, which is expected to close by the first quarter, priced American at 226% of its tangible book value.
American has 18 branches, two loan production offices, $1.8 billion of loans, and $2.3 billion of deposits.
Stephen Raffaele, American’s president and CEO, will become South Texas and San Antonio area chairman at Prosperity, while Ben Wallace, the bank’s chairman, will serve as South Texas senior chairman. Raffaele and Patt Hawn Wallace, who chairs the holding company, will join Prosperity’s board.
“We have followed American Bank closely for more than two decades and have tremendous respect for the bank and for the people that have contributed to its success,” David Zalman, Prosperity’s senior chairman and CEO, said in the release.
“Our banks have a complementary footprint, and we are familiar with and remain committed to the communities that American Bank serves, including with both financial products and community support,” Zalman added.
The deal should be 2% accretive to Prosperity’s 2026 earnings per share. It should take three years for Prosperity to earn back an estimated 2.2% dilution to its tangible book value.
Prosperity plans to cut about 40% of American’s annual noninterest expenses. It expects to incur around $25 million of merger-related expenses.
American was advised by Stephens and Norton Rose Fulbright. Keefe, Bruyette & Woods and Wachtell, Lipton, Rosen & Katz advised Prosperity.