The Texification of Jefferson Savings Bancorp gathered steam last week as the St. Louis thrift signed an agreement for its fifth acquisition in the Lone Star State.
Jefferson now has more than a third of its assets in the Lone Star State. After its two pending acquisitions there are completed the holding company will have $1.3 billion in assets in Missouri and Texas, up from $770 million two years ago when it started buying north Texas thrifts.
"We've found that especially the Dallas metroplex is a very strong loan market," said Paul Milano, the thrift's chief financial officer. "While the loan and deposit market in St. Louis is very competitive, we're finding an abundant supply of loans in the Dallas area."
The acquisition of L&B Financial Inc., a Sulphur Springs savings bank holding company with $144 million of assets, is part of a strategy begun in 1994 by Jefferson chairman David V. McCay to buy into the fragmented Texas market.
"I think at first the Texas strategy caused everyone to wonder a bit," said Joseph A. Stieven, an analyst at Stifel, Nicolaus & Co. in St. Louis. "But from what we've seen the returns have been quite good. Dave McCay has made believers out of a lot of people around here."
L&B senior vice president Linda Galligher said the 100-year-old savings bank, a residential mortgage lender, was approached by Jefferson and "is very pleased to be on board.
"We liked their operations and how we fit into their strategy," she said. "We expect very few changes in how we do business."
Jefferson will pay $18.50 a share for L&B stock, adjusted for earnings and dividends through the end of the month immediately preceding the closing, for a total price of about $29 million.
L&B owns Loan and Building State Savings Bank. The transaction, subject to the approval of regulators and L&B shareholders, is expected to be completed during the first quarter of 1997.
The acquisition, coupled with Jefferson's pending deal for Texas Heritage Savings Association, Rowlett, will finish out a crescent-shaped string of 21 branches heading east and north out of Dallas. By comparison, Jefferson has 10 locations in the St. Louis area.
Mr. Milano said Jefferson is still interested in buying institutions in north Texas, but "our focus has turned more toward commercial banks."