A Texas banking company formed two years ago to acquire distressed or failed banks is buying its first healthy bank.

Cadence Bancorp Inc. in Houston announced Tuesday that it is acquiring the $1.6 billion-asset Encore Bancshares Inc. for $250 million in cash, or 2.4 times the seller's tangible book value.

The acquisition — the second sizable deal announced in Texas in the past week — would be the first for Cadence in its home state since it was established with roughly $1 billion of capital in 2010.

Initially known as Community Bancorp LLC, the company bought the ailing Cadence Financial Corp. of Starkville, Miss. http://www.americanbanker.com/issues/175_193/cadence-accepts-new-deal-1026727-1.html, early last year and followed up in April with the acquisition of the failed Superior Bank of Birmingham, Ala. Renamed Cadence Bancorp late last year, the company has more than 100 branches throughout the Southeast, but only one in Texas.

The deal for Encore would give Cadence a dozen branches, $1.1 billion of deposits and $1 billion of loans in and around Houston. In a news release, Cadence Chief Executive Paul B. Murphy, called Encore a "solid franchise with a strategically located branch network, experienced bankers and an enviable customer base."

He added that the deal could be the first of several for Cadence in the Houston market.

"With this transaction, Cadence is positioned as a major player in the valued Houston market, where we plan to continue to grow and expand," Murphy said.

At least one analyst had viewed Encore as a likely takeover target, though Encore's Chairman and CEO, James S. D'Agostino, told American Banker in early February that its plan was to remain independent and pursue organic growth.

In a Tuesday's news release, D'Agostino said that the merger with Cadence "is a very attractive opportunity for our shareholders, customers and bankers. Encore is a tremendous company, and we believe that the team at Cadence will only enhance what we have built."

Cadence said it would pay $20.62 for each of the Encore's $12.1 million shares, which represents a 38% premium over Encore's closing price Monday. Encore's shares rose 35.4% Tuesday to close at $20.19.

The sale is expected to close in the second half of the year.

The deal comes a week after another Houston banking company, Prosperity Bancshares Inc., announced it was buying American State Financial Inc. in Lubbock for $529 million. That deal would extend Prosperity's reach deep into west Texas.

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