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Prosperity Bancshares, Inc.® To Merge With American State Financial Corporation

Stocks in this article: PB

HOUSTON, Feb. 27, 2012 /PRNewswire/ -- Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank®, (collectively referred to as "Prosperity") announced today the signing of a definitive merger agreement with American State Financial Corporation and its wholly owned subsidiary American State Bank (collectively referred to as "ASB") whereby American State Bank will be merged with and into Prosperity Bank.  This is the fourth transaction announced by Prosperity within the past few months. 

American State Bank operates thirty-seven (37) banking offices in eighteen (18) counties across West Texas. As of December 31, 2011, ASB, on a consolidated basis, reported total assets of $3.08 billion, total loans of $1.21 billion and total deposits of $2.46 billion.

Under the terms of the definitive agreement, Prosperity will issue up to 8,525,000 shares of Prosperity common stock plus $178.5 million in cash for all outstanding shares of American State Financial Corporation capital stock, subject to certain conditions and potential adjustment.

W. R. Collier, Chairman and Chief Executive Officer of ASB will become a director of Prosperity Bancshares and serve the combined entity as Senior Chairman – West Texas Area.  Michael F. Epps, ASB's President, will become Chairman – West Texas Area and will be responsible for the day to day operations and management of all West Texas locations.  Tony Whitehead, ASB's Lubbock Division President, will become President – West Texas Area and will be responsible for credit approval in West Texas.  Additionally, all Lubbock area locations will continue to report to Mr. Whitehead.  Gary Galbraith, ASB's Abilene Division President, will continue to be responsible for all locations in the Abilene Region.  Mike Marshall, ASB's Midland/Odessa Division President, will continue to be responsible for all locations in the Midland/Odessa Region.  Finally, E. K. Hufstedler, ASB's Metroplex Division President, will continue to manage the former ASB locations in the DFW Metroplex.

In addition, Scott Collier, Mark Kirkpatrick, Van May and Don Pickering will be joining the Board of Directors of Prosperity Bank upon the completion of the merger.  Mr. Collier is in the construction business.  Mr. Kirkpatrick is a rancher and is also in the oil and gas business.  Mr. May is in agribusiness and Mr. Pickering is in manufacturing.

"We are very excited to be able to become partners with American State Bank.  Mr. Collier and his team have built a fantastic bank in West Texas and we believe our banks will fit together nicely," commented David Zalman, Chairman and Chief Executive Officer of Prosperity.  "The customers of American State Bank will be able to use any of our locations across the state of Texas after the merger. Following the merger, Prosperity will have two-hundred fifteen (215) banking centers across the state."

"Prosperity's conservative lending philosophy is a perfect fit for American State Bank and our combined size and geographic presence provide both organizations with entry into new markets that will allow for growth and diversification," said W.R. Collier, Chairman and Chief Executive Officer of ASB.  "For nearly 64 years ASB has offered community banking at its best and now with our partnership with Prosperity Bank, we will be able to continue the legacy of service that began in 1948." 

The merger has been approved by the Boards of Directors of both companies and is expected to close during the third quarter of 2012, although delays may occur.  The transaction is subject to certain conditions, including the approval by American State Financial's shareholders and customary regulatory approvals.  Operational integration is anticipated to begin during the third quarter of 2012.

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