First Guaranty Bancshares in Hammond, Louisiana, said Monday that it has agreed to acquire Houston-based Lone Star Bank to expand its footprint in fast-growing Texas.
The acquisition would fold the $151 million-asset Lone Star into First Guaranty Bank, which currently operates 36 branches in Louisiana, Texas, Kentucky and West Virginia. The combined organization would have $3.2 billion of assets, $2.8 billion of deposits and $2.5 billion of loans.
Lone Star, a privately owned community bank founded in 2006, has four locations in Texas — two in Houston, one in Sealy and one in Columbus, according to its website.
"First Guaranty Bank's philosophy and goal is to have a strong presence in the communities we serve and to be a strong contributor to the communities," First Guaranty President and CEO Alton Lewis said in a press release. "We look forward to spreading this philosophy in the Houston market."
First Guaranty did not say when it expects the transaction to close. Lone Star will pay a $1 million termination fee to First Guaranty if the deal is called off under certain circumstances.
The value of the all-stock deal was not disclosed. First Guaranty said it will issue shares of its common stock to the selling bank's shareholders with an aggregate value of 1.5 times of Lone Star's tangible book value at the end of the month prior to the closing date.
The announcement of the proposed deal comes about a year after First Guaranty said it had
The plan to acquire Lone Star has already been approved by the boards of directors of both banks, First Guaranty said in the press release. Upon completion of the acquisition, one member of the Lone Star board will join First Guaranty's board, the bank said.
G. Ortega Law, Pickery & Cotogno, Bradley Arant Boult Cummings and Phelps Dunbar provided legal counsel First Guaranty, while Lone Star received legal advice from Hunton Andrews Kurth and financial advice from Performance Trust Capital Partners.
