Houston-based Prosperity Bancshares has inked a deal to purchase the parent company of Tulsa-based F&M Bank & Trust Co. for $244 million in cash and stock.
The deal includes $47 million in cash and about 3.3 million shares of Prosperity stock valued at $196 million.
F&M Bank operates 13 bank offices in Oklahoma and Texas, 10 in the Tulsa area and three in Dallas. It had more than $2.43 billion in assets at the end of June.
With its merger with Prosperity, the combined bank will be the seventh-largest in Oklahoma, controlling about 3.9 percent of state-based deposits, said David Zalman, Prosperity Bancshares chairman and CEO, during a conference call Thursday.
This will be the second Oklahoma acquisition in the span of a year for Prosperity Bancshares, the parent company of Prosperity Bank.
Prosperity completed its acquisition of Oklahoma City-based Coppermark Bank last spring in a cash-and-stock transaction valued about $194 million.
Together with the Coppermark merger, the deal to acquire F&M will boost Prosperity Bank's presence in Oklahoma, Zalman said.
“It fit our needs to really expand — we always said we wouldn't go to the Oklahoma market to just do one deal,” Zalman said. “This will give us a presence in both major cities.”
F&M had been weighing the cost of going public versus merging with another bank, Zalman said.
“The bottom line was, F&M was trying to make a decision if they wanted to do an IPO (initial public offering of stock) and go public or if they wanted to team up with someone,” Zalman said. “We felt like these guys were someone we wanted to be with and build our franchise.”
Anthony Davis, chairman and CEO of F&M, will continue at the newly merged bank as chairman of the Tulsa area and Turtle Creek banking center.
“The combination created by our two companies will enable us to better serve our clients through an expanded suite of products and services coupled with exceptional customer service,” Davis said.
Eric Davis, president of F&M will serve as vice chairman for the Tulsa and Turtle Creek areas.
Jeff Pickryl, president of F&M Bank, will become president of the Tulsa and Turtle Creek area and will be in charge of lending at those locations.
Prosperity said it has extended numerous individual employment agreements to members of the production staff, including existing loan officers and several managers and supervisory personnel.
Pending regulatory approval, Prosperity expects the merger with F&M to be complete in the first quarter of 2014. Prosperity Bancshares' shareholders also must approve the merger.