Veritex, Green Bancorp to merge
Veritex Holdings (VBTX) and Green Bancorp (GNBC) jointly announced the entry into a definitive agreement pursuant to which Green and Green Bank, N.A. will merge with and into Veritex and Veritex Community Bank, respectively.
The transaction will create a leading Texas community bank, with 43 branches across Texas, ranking as the tenth largest Texas-based banking institution by deposit market share.
The combined franchise would have approximately $7.5B in assets, $5.6B in loans and $5.9B in deposits, based on the companies’ balance sheets as of June 30, 2018.
Under the terms of the merger agreement, upon completion of the merger, shareholders of Green will receive 0.79 shares of Veritex common stock for each share of Green common stock, valuing the transaction at approximately $1B, or $25.89 per Green share, based on the closing share price of Veritex of $32.77 on July 23, 2018.
Legacy Veritex and Green shareholders will collectively own approximately 45% and 55% of the combined company, respectively.
Upon completion of the merger, C. Malcolm Holland, current Chairman and Chief Executive Officer of Veritex, will continue to serve as Chairman and Chief Executive Officer of the combined company.
Terry Earley, current Chief Financial Officer of Green, will serve as Chief Financial Officer of the combined company, and Geoffrey Greenwade, current President of Green, will serve as the Houston President of the combined company.
The board of directors of the combined company will consist of nine members, six from Veritex’s current board of directors and three from Green’s current board of directors.
Veritex expects this acquisition to be approximately 25% accretive to earnings per common share, excluding one-time charges.
The transaction is expected to produce approximately 12.0% tangible book value per share dilution at closing with an earnback period of approximately 2.8 years.
The merger agreement has been unanimously approved by the board of directors of both Veritex and Green.
The merger agreement contains customary representations and warranties and covenants by Veritex and Green. Closing is subject to customary approvals by regulatory authorities and the shareholders of both Veritex and Green, and is expected to occur in the first quarter of 2019.
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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.