Prosperity Bancshares Inc.
) entered into a definitive agreement with F&M Bancorporation
Inc. ('FMBC') to acquire the latter's wing F&M Bank &
Trust Company. The merger, as approved by the board of directors
of both the companies, is expected to close by first-quarter
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In order to fund this merger, Prosperity Bancshares will issue
3.3 million shares of its common stock and use $47.0 million in
cash. Moreover, the deal still awaits approvals from regulatory
bodies as well as FMBC's shareholders.
J.P.Morgan Securities LLC, a division of
JPMorgan Chase & Co.
), acted as financial advisor for the deal.
With the recent announcement, Prosperity Bancshares intends to
expand in the economically attractive Tulsa market and utilize
F&M Bank's 68 years of banking experience there. Further, it
plans to capitalize on F&M Bank's attractive core deposit
base as well as commercial and industrial lending portfolios.
Acquisitions remain a vital part of Prosperity Bancshares' growth
strategy. Over the years, the company has grown through acquiring
a number of banks and branches. Following four major deals in
2012, the company completed the merger of East Texas Financial
Services Inc. in Jan 2013 as well as the merger of Coppermark
Bancshares, Inc and the latter's fully-owned subsidiary
Coppermark Bank in Apr 2013.
Further, in Jul 2013, Prosperity signed a definitive merger deal
with Victoria, Texas-based FVNB Corp. and its fully owned
subsidiary, First Victoria National Bank. According to the
agreement, First Victoria National Bank (comprising 34 banking
branches) will merge with Prosperity Bank after completion of the
transaction. The deal is expected to close by this year end.
Such deals have not only increased the company's geographical
footprint, but also boosted its existing market presence. With
the ongoing consolidation in the banking sector, we believe that
Prosperity Bancshares will continue to capitalize on promising
opportunities and drive inorganic growth to enhance shareholder
Prosperity Bancshares currently carries a Zacks Rank #1 (Strong
Buy). Apart from Prosperity Bancshares, other banks worth
First Interstate Bancsystem Inc.
). Both the stocks carry a Zacks Rank #1 (Strong Buy).