Prosperity in Houston to Buy Coppermark for $194M, Enter Oklahoma

Prosperity Bancshares (PB) in Houston has agreed to buy Coppermark Bancshares in Oklahoma City, Okla., for $193.9 million in cash and stock.

The deal would expand Prosperity outside Texas for the first time. Coppermark is No. 6 in deposits in the Oklahoma City metro area.

Prosperity could pursue more deals in markets surrounding Oklahoma City and throughout the state, the $13.7 billion-asset company said in a presentation posted on its website along with the announcement Monday.

This is the sixth deal announced by Prosperity within the last 15 months. It recently completed its purchase of Community National Bank in Bellaire, Texas.

Coppermark Bank, which would be merged into Prosperity Bank, has six branches in Oklahoma City and surrounding areas and three in the Dallas area. It had $1.3 billion of assets, $874 million of loans and $1.2 billion of deposits as of Sept. 30.

Under the agreement, Propensity would issue up to almost 3.3 million shares of Prosperity common stock plus $60 million in cash for all outstanding shares of Coppermark Bancshares capital stock.

The merger price is 1.58 times tangible book value and 13 times 2012 earnings estimates, the presentation said. The deal also includes a termination fee of $8.5 million.

Russell E. Swarts, the chairman of Coppermark, would serve as senior chairman of the central Oklahoma region for the combined company. Thomas Legan, Coppermark's president, would become chairman of the central Oklahoma region and would be responsible for the day-to-day operations and management of all Oklahoma locations.

Jacque Fiegel, Coppermark's chief operating officer, would become co-president of the region and would be responsible for retail and business banking functions in Oklahoma and certain operational matters for the combined company. Jeff Russell, Coppermark's president of the Oklahoma market and chief credit officer, would also be co-president of the central Oklahoma region and would be responsible for lending in Oklahoma.

The deal is expected to close in the first quarter.

Coppermark was advised by Commerce Street Capital as financial advisor and Fenimore, Kay, Harrison & Ford and Cheek & Falcone as legal counsel. Bracewell & Giuliani was legal counsel to Prosperity.