Happy Bancshares expanding operations in West Texas with acquisition

Happy Bancshares in Amarillo, Texas, has agreed to buy a community bank about two hours south that has been family-run for close to a century.

The deal for the $56 million-asset First National Bank of Tahoka, which is just south of Lubbock, will boost Happy’s assets to $5.6 billion. The Hegi family has owned First National, which specializes in agricultural lending, for 91 years.

First National Bank of Tahoka Chairman Frederick Hegi Jr. said in a press release that “it was very important to turn the ownership over to an organization who also has deep West Texas roots and is actively involved in the agricultural industry.”

Agricultural banks and their farming and ranching clients have had a challenging few years because of low commodity prices and trade difficulties. They have been buoyed by billions of dollars in support from the federal government.

Moving into the area is a “fantastic opportunity,” Happy CEO Mikel Williamson said in the same release. Happy State will have 61 locations in 45 Texas cities with the deal, which is expected to close in the first quarter of 2021. The price was not disclosed.

Hegi is a major player in the Dallas finance industry and founded the local private equity firm Wingate Partners.

The deal is part of a steady stream of bank mergers in Texas as much of the industry in the state has consolidated.

There were 386 banks in Texas as of June 30, down from 400 a year earlier and 419 in 2018, according to the Texas Department of Banking.

Happy "and its leadership have a great respect for the industry and demonstrate a strong desire to support local schools, hospitals, farmers and small businesses,” Hegi said.

The deal comes on the heels of Happy's late October agreement to buy the $014.1 million-asset Muleshoe Bancshares in Muleshoe, Texas.

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M&A Texas Agriculture industry Ag lending Community banking
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