In an attempt to expand its footprint in Texas,
Cullen/Frost Bankers, Inc.
) has signed a definitive merger agreement with WNB Bancshares,
Inc., under which the latter will merge into Cullen/Frost. This
marks the first bank acquisition for Cullen/Frost since 2006 when
it bought Fort Worth-based Summit Bancshares Inc. for about $360
The transaction will likely close in Jan 2014 and is subject to
certain regulatory approvals, such as that from the Federal
Reserve and the Texas Department of Banking, along with customary
closing conditions. On completion of the deal, WNB Banshares'
senior management, including board members will remain with
The cash and stock deal is valued at $220 million. Cullen/Frost
will issue 2 million shares, and fund the rest of the deal with
cash. The 2 million shares will be equal to the volume weighted
average price of the company's common shares during the 10
trading days prior to the deal's completion.
Further, the purchase price of $220 million can be revised
upwards or downwards, depending on WNB Bancshares' targeted book
equity value of $87 million during completion of the deal. At
present, the transaction is expected to contribute about 4% to
Cullen/Frost's 2014 earnings per share excluding restructuring
WNB Bancshares, which operates in the heart of The Permian Basin,
is a profitable acquisition for Cullen/Frost. The particular
region is the primary driver of Texas' booming oil and gas
business. The Permian Basin is responsible for about 14% of the
oil produced in the United States and 57% of the oil produced in
The merger will be strategically advantageous for both
Cullen/Frost and WNB Bancshares. It will enable Cullen/Frost to
reinforce its Texas franchise and enter the profitable Midland
and Odessa markets. For customers of WNB Bancshares, the merger
will facilitate access to Cullen/Frost's wide range of financial
products and services.
Cullen/Frost currently carries a Zacks Rank #3 (Hold). Some
better performing banks in the same sector include
Prosperity Bancshares Inc.
Glacier Bancorp Inc.
). All of them carry a Zacks Rank #1 (Strong Buy).
SIERRA BANCORP (BSRR): Free Stock Analysis
CULLEN FROST BK (CFR): Free Stock Analysis
GLACIER BANCORP (GBCI): Free Stock Analysis
PROSPERITY BCSH (PB): Free Stock Analysis
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