In an effort to expand in the state of Oklahoma,
Prosperity Bancshares Inc.
), 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.
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PROSPERITY BCSH (PB): Free Stock Analysis
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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
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.
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.