After a lifetime of chanting "Hook 'Em Horns" at University of Texas games, David Zalman will have to learn to sing "Boomer Sooner," too.

Prosperity Bancshares (PB) in Houston, where Zalman serves as chief executive, has agreed to pay $194 million in cash and stock to acquire Coppermark Bancshares in Oklahoma City. The deal would be the acquisitive company's first foray outside of the Lone Star State - but it's a nearby leap that differs from the precrisis expansions into distant markets that hobbled many banks.

Expect more deals like it that give buyers the ability to enter new, but complementary markets, in the coming year, experts say. Though they lack the deep cost savings of an in-market pickup, they give buyers some growing room.

"Truthfully, we wouldn't go into Oklahoma for just one deal," says David Zalman, the chairman and chief executive of Prosperity. "We've said that any deal outside of Texas would have to have at least $1 billion in assets. This fits that. We are not saying we will grow it to $10 billion, but maybe $3 billion to $5 billion."

The cross-border combination makes a lot of sense in dealmaking and operational terms, analysts said.

It was a matter of time before the company looked to neighboring states for an opportunity. Prosperity has been a leading consolidator in its region, announcing six deals in the last two years including Coppermark, and competition in Texas is tough.

"They like to do larger deals, but in Texas larger deals are more expensive, there is more competition and while they have the currency, they are conservative," said Michael Rose, an analyst at Raymond James. "It was inevitable for them to leave Texas at some point."

Prosperity will issue as much as 3.26 million shares of stock and $60 million cash for Coppermark in a deal priced at 1.6% of tangible book value. That is a rich premium in national terms, but a bargain for Texas, where some banks have sold for more than twice their tangible book value.

The expected payoff is promising, says Jefferson Harralson, an analyst at KBW Inc.'s Keefe, Bruyette & Woods.

"It is more than OK," Harralson says, playing off the postal code of Oklahoma. "It is 4% accretive to earnings."

The deal for the $1.3 billion-asset Coppermark, which is set to close in the first quarter, would push Prosperity's assets to nearly $16 billion.

Coppermark is a good target, too, as a relatively healthy bank that still had reasons to sell.

Similar to many banks sorting their way through the economic malaise, Coppermark's loan book has been steadily shrinking for the last several years. At the end of the third quarter, loans totaled $874 million, compared to $985 million at the end of 2008.

"They are core funded, the margin has held in pretty good, [and] they make a nice return on assets. It is actually a pretty good bank, and they are not paying too much," says Brett Rabatin, an analyst at Sterne, Agee & Leach. "The challenge is just keeping the accretion from fading over time and reinvigorating the loan growth."

Coppermark's growth prospects are what prompted the sale, its top executive says.

"As a privately held bank, our currency was not as good as we would have liked it to be," says Thomas Legan, the president and CEO of Coppermark. "If we paired with a publicly traded company, we would have more access to capital for growth."

Prosperity plans to keep the current management team in place.

That was an important component of the deal, says C.K. Lee, a managing director at Commerce Street Capital, the Dallas investment bank that paired the companies.

"Most of the consolidation in Oklahoma has been led by the larger banks there buying their smaller country peers," Lee says. The lack of overlap between the companies "is what led them to an out-of-market acquirer. They are more apt to hold the team they've assembled together."

As more acquirers look for bolt-on deals, expect more management teams to stick around, says Christopher Marinac, an analyst at Fig Partners.

"I think it is incredibly important to keep that local leadership. It is an opportunistic move," Marinac says. "Zalman has a team of bankers who grow his investment there."

Zalman says he was impressed by the dedication of the management team who were all deeply interested in continuing on, rather than just cashing out.

"All of these people signed contracts and are committed to helping us grow," Zalman says.

There are more than 200 banks in Oklahoma with less than $500 million in assets which might be fertile ground for Prosperity, Rose says.

Though Oklahoma pales in comparison to Texas in terms of population and economic diversity, there are a lot of similarities. Both have relatively low unemployment levels and have several large oil and gas companies based there. The 200-mile stretch down Interstate 35 between Oklahoma City and Dallas is a well-traveled one.

"People talk about the Red River rivalry, but these states do complement each other. Both have a lot of small businesses that lend themselves to community banks," Lee says. "And there are a lot of Texans with Oklahoma roots and vice versa."

Coppermark realized the connectivity years ago. It has six branches in Oklahoma and three in Dallas.

"Dallas is the biggest market near us and we have many people here whose sons and daughters live there," Legan says.

Despite the deal, Legan says, don't expect him to give up his University of Oklahoma hat anytime soon.

"We are still going to root for the Sooners. For everything else, we'll be supporting Texas, but not when it comes to football," Legan says. "Or basketball."

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