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Prosperity Bancshares in Houston has agreed to buy American Bank Holding Corp. in a $322 million deal that would bolster its footprint in South and Central Texas.
The all-stock transaction, slated to close at the end of 2025 or start of 2026, will grow Prosperity’s presence across the region, especially in Corpus Christi, where American is headquartered, and San Antonio, the third-largest metropolitan area in the Lone Star state.
The $39 billion-asset Prosperity has completed a dozen acquisitions since 2012. It now operates more than 280 branches across Texas and Oklahoma.
David Zalman, Prosperity’s senior chairman and CEO, said in a prepared statement Friday that his bank has “followed American Bank closely for more than two decades.”
“Our banks have a complementary footprint, and we are familiar with and remain committed to the communities that American Bank serves, including with both financial products and community support,” Zalman said.
American Bank, a $2.5 billion-asset institution, has 20 offices in South and Central Texas.
The South Texas-based bank’s CEO and president, Stephen Raffaele, will join Prosperity as South Texas and San Antonio area chairman, while American’s chairman, Ben Wallace, will become South Texas senior chairman at Prosperity. Raffaele and another American leader, Patt Hawn Wallace, will also join Prosperity’s board of directors.
The combined company will have about $41 billion of assets, $23.8 billion of loans and $30.3 billion of deposits. Prosperity estimates tangible book value per share dilution of 2.2% with a three-year earnback period, along with earnings per share accretion of 3.8% in 2027.
The acquisition will come with one-time, pre-tax expenses of about $25 million.
American Bank struggled to keep a lid on deposit costs in 2024, according to its annual report to shareholders for that year. The community bank’s cost of funds grew from 1.16% in 2023 to 1.78% in 2024, as the interest the bank paid on deposits grew by 73% in a year.
“Looking out at the banking horizon, we expect another year of uncertainty, with shifting economic forecasts, rapidly advancing technologies, and potential regulatory changes from a new administration in Washington, D.C.,” American Bank wrote in its 2024 report.
The bank warned of interest rate uncertainty and volatile global markets, but added that “uncertainty creates opportunity.”
After the deal is completed, the combined bank will have a cost of funds of 1.4%, Prosperity estimated.
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Prosperity projects the merger will save 40% of American’s 2025 projected noninterest expense base, with 50% of the savings to be achieved in 2026.
“By joining forces with Prosperity, we will continue our journey of service and success, but with all the advantages of the strength and wherewithal of a combined larger and premier banking institution,” American Bank’s Raffaele said in a Friday prepared statement.
Prosperity’s two most recent acquisitions,
“The kind of density and scale we are building with these” deals “really starts to create something special,” Cullen Zalman, executive vice president of banking and corporate activities at Prosperity, told American Banker when the deals were announced in 2022.
Prosperity’s announcement is the latest evidence of an
As of July 8,