News Summary
Prosperity Bancshares, Inc. has announced its agreement to acquire American Bank Holding Corporation in a significant all-stock deal. This merger, valued at $321.5 million, is set to enhance Prosperity’s presence in South and Central Texas, while retaining American Bank’s leadership team for a smooth transition. With American Bank’s strong financial standing and commitment to community banking, this acquisition promises to boost Prosperity’s operations and service offerings across Texas. The merger is expected to close in late 2025 or early 2026, pending necessary approvals.
Texas – Prosperity Bancshares, Inc. has entered into an agreement to acquire American Bank Holding Corporation in an all-stock deal valued at approximately $321.5 million. This marks Prosperity’s first acquisition following prior delays related to other acquisitions in West Texas.
The deal, which is contingent upon shareholder and regulatory approvals, is expected to close in late 2025 or early 2026. Prosperity will distribute 4,439,981 shares of its common stock for all outstanding common shares of American Bank, which operates 18 banking offices and two loan production offices across South and Central Texas, including prominent locations in Corpus Christi, San Antonio, Austin, and Victoria.
As of March 31, 2025, American Bank reported significant financial metrics, including total assets of $2.5 billion, total loans reaching $1.8 billion, and total deposits of $2.3 billion. The acquisition aims to enhance Prosperity’s presence in South Texas and improve operations in Central Texas, especially where rapid demographic growth is anticipated.
Following the merger, Stephen Raffaele, the CEO of American Bank, will assume the role of South Texas and San Antonio Area Chairman at Prosperity Bank. Ben Wallace, currently serving as Chairman of American Bank, will take on the position of South Texas Senior Chairman of Prosperity Bank. Along with these leadership transitions, several key management personnel from American Bank will retain their roles in the newly integrated organization. Both Raffaele and Wallace are expected to join Prosperity Bank’s Board of Directors following the completion of the merger.
With this acquisition, Prosperity anticipates an increase in its asset base by approximately 5.2%. The merger is also projected to generate annual cost synergies estimated between $25 million to $30 million. This strategic move is consistent with Prosperity’s commitment to relationship banking, aligning well with the community-focused approach of American Bank, which has a history spanning over 50 years.
The emergence of the I-35 corridor, connecting San Antonio and Austin, is a crucial aspect of the merger’s strategy. The area is projected to experience demographic growth, with population estimates likely to rise from 5 million to 7 million residents by 2030. This growth is anticipated to provide a fertile ground for financial institutions aiming to expand services. By acquiring American Bank, Prosperity Bank hopes to leverage its extensive branch network across Texas and Oklahoma to offer enhanced banking services to the customers of American Bank.
In light of the growing consolidation trend within the banking industry, this acquisition is a strategic maneuver for Prosperity Bank to continue its expansion and adaptation to the evolving landscape. Both companies’ Boards of Directors have approved the transaction unanimously, setting the stage for potentially monumental changes within the Texas banking sector.
American Bank is receiving advisory support from Stephens Inc. as its financial advisor and Norton Rose Fulbright as legal counsel. Prosperity Bancshares is advised by Keefe, Bruyette & Woods as its financial advisor, with legal counsel provided by Wachtell, Lipton, Rosen & Katz.
The merger signifies a remarkable strategic initiative as Prosperity Bancshares aims to bolster its footprint in one of the fastest-growing regions in Texas while enhancing service offerings to its customers and ensuring a community-oriented banking experience.
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