WASHINGTON - The Federal Reserve Board approved on Tuesday the merger of two Houston banking companies and an application by a Japanese company to buy the U.S. subsidiaries of two other Japanese banking firms.

The Fed approved the $53 million merger of Prosperity Bancshares with Commercial Bancshares, whose units include Heritage Bank in Wharton. The combined company has more than $1.1 billion of assets. The Fed also approved the application of UFJ Holdings of Osaka, Japan, to become a bank holding company.

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