LegacyTexas Financial Group in Plano has met its original purpose of becoming a big player in its home market.
That accomplishment, along with a fast-approaching regulatory threshold, has management of the $8.1 billion-asset company looking at whether to pursue bigger acquisitions or find a buyer.
"We intended to turn this into an $8 billion single-market franchise with size, scale and density," Kevin Hanigan, LegacyTexas' president and chief executive, said during the company's quarterly conference call on Wednesday. The company has also met its original objectives of reaching a 1.25% return on assets, excluding energy issues, along with an efficiency ratio below 50%. "We've hit all of those goals," Hanigan said.
"We've also said, when we did that, we were going to hit a crossroad of what do we do next?" Hanigan added. "Either the franchise is very valuable to somebody, and we can go down that path, or it seems we could do a merger of equals or do something to … get into the $12 million to $15 million range."
To that end, Hanigan said LegacyTexas could look to "leapfrog" the $10 billion-asset threshold, at which point it would have to contend with caps on interchange fees and mandatory stress testing, among other things.
Smaller deals are "not part of our strategy anymore," Hanigan said, noting that the company is adding nearly $500 million in assets each quarter on its own.
Hanigan said the company's board meets every August to discuss the future, and this year will be no different. Talks on consolidation will focus on mergers of equals or selling to someone "who wants to come to Texas," the CEO said.
"It's my job to create opportunities in both of those buckets to the maximize the value for our shareholders, and that's exactly what we intend to do," he added.
