Hammond, La.-based First Guaranty Bancshares Inc. and its unit, First Guaranty Bank, announced the acquisition of Houston-based Lone Star Bank in an all-stock transaction.
First Guaranty Bank has 36 banking facilities primarily located in Louisiana, Texas, Kentucky and West Virginia, and Lone Star Bank has four branches in Texas.
After the completion of the transaction, the combined company will have about $3.2 billion in total assets, $2.5 billion in total loans and $2.8 billion in total deposits, according to a news release.
Under the terms of the companies' merger agreement, First Guaranty Bancshares will issue shares of its common stock with an assumed value of $23.67 per share on the closing date of the transaction to the shareholders of Lone Star Bank with an aggregate value equal to 1.5 times Lone Star Bank's tangible book value as of the month end before the closing date, subject to certain adjustments. Outstanding options to purchase Lone Star Bank's common stock will be cashed out.
S&P Global Market Intelligence valuations for bank and thrift targets in the Southwest region between Jan. 6, 2022, and Jan. 6, 2023, averaged 161.28% of book and 171.21% of tangible book and had a median of 13.99x last-12-months earnings, on an aggregate basis.
With the completion of the deal, First Guaranty Bancshares will enter Harris County, Texas, with two branches to be ranked No. 58 with a 0.03% share of about $399.77 billion in total market deposits, will enter Austin County, Texas, with one branch to be ranked eighth with a 0.39% share of roughly $1.95 billion in total market deposits, and will enter Colorado County, Texas, with one branch to be ranked seventh with a 0.81% share of approximately $812.9 million in total market deposits, according to Market Intelligence data.
The agreement contains certain termination rights for both First Guaranty Bancshares and Lone Star Bank. A termination fee of $1.0 million will be paid by Lone Star Bank to First Guaranty Bancshares upon the termination of the agreement under certain specified circumstances.
G. Ortega Law PLLC, Pickering & Cotogno LLC, Bradley Arant Boult Cummings LLP and Phelps Dunbar LLP provided legal counsel to First Guaranty Bancshares. Performance Trust Capital Partners LLC served as financial adviser and Hunton Andrews Kurth LLP served as legal adviser to Lone Star Bank.
To use S&P Capital IQ Pro's branch analytics tools to compare market overlap, click here. To create custom maps, click here.
