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Prosperity's agreement to pay $529 million for American State Financial is one of the priciest deals since Comerica agreed to buy Sterling Bancshares more than a year ago, but the reaction to it is much more positive than it was to Comerica's deal.
February 27
FVNB Corporation in Victoria, Texas, is expanding into the Austin and San Antonio markets with a deal to acquire the $270 million-asset First State Bank in New Braunfels.
The deal, announced Thursday, would be FVNB's first since 2005 and it would boost the buyer's assets to above $2 billion. It would also combine two of the state's oldest banks; FVNB's First Victoria Bank was founded in 1867 and is the oldest independent bank based in Texas while First State's roots date to 1895.
News of the deal was first reported by the Austin Business Journal.
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FVNB did not disclose its purchase price, but it is worth noting that First State is one of the state's top-performing community banks. First State earned $4.5 million in 2011 and its 16.28% return on equity at Dec. 31, was well above the industry for banks in its asset class, according to Federal Deposit Insurance Corp. comparison data.
M. Russell Marshall, FVNB's president and chief executive, said in a news release that First State has a "well-earned reputation" for delivering quality customer service. "We have been looking for expansion opportunities that complement our existing customer base and geographic strategy and match our company's culture and philosophy, so First State Bank is a great fit for us," Marshall said in a news release.
First Victoria has 27 branches across south central Texas and First State, a unit of Capitol Bankshares, has five branches in Comal and Bastrop counties. First State's branches will be converted into First Victoria branches when the deal closes and several of First State's top executives, including CEO Barry Williams, will join First Victoria as heads of various divisions.
Also, First State's chairman, Yerger Hill 3rd, is expected to join FVNB's board of directors. The sale is expected to close later this quarter.
