Spirit of Texas Bancshares, Inc. (NASDAQ: STXB), the holding company for Spirit of Texas Bank, announced July 24 that it is acquiring through a series of mergers Chandler Bancorp Inc. and its subsidiary, Citizens State Bank of Tyler.
On July 24, 2019, Spirit entered into a definitive agreement to acquire Citizens, in a cash and stock transaction for total consideration value of approximately $65.6 million based on Spirit’s closing price of $22.10 per share on July 23, 2019.
The transaction is Spirit’s tenth acquisition since 2008 and will be the third acquisition since Spirit’s May 2018 initial public offering. As of June 30, 2019, Citizens, on a consolidated basis, reported total assets of $349.1 million, total deposits of $265.7 million, and total equity capital of $39.0 million. As a result of the transaction, Spirit will add seven full-service branches to Spirit of Texas Bank’s existing 29 locations. Spirit of Texas had two locations in Tarrant County, one in Fort Worth and another in Grapevine. The transaction is expected to close in the fourth quarter of 2019, subject to the satisfaction of customary closing conditions, including regulatory approvals.
“This transaction, which is expected to be immediately accretive to earnings per share, represents an exciting strategic and financial opportunity for us to expand our footprint into the East Texas region,” said Dean O. Bass, chairman and CEO of Spirit of Texas. “We believe that Citizens State Bank, a strong community bank with a shared commitment to providing exceptional customer service, will be a great partner to the Spirit franchise. Together, we will be better positioned to take advantage of organic growth and acquisition opportunities that will enable us to better serve our customers and further enhance shareholder value.”
Greg Kidd, Chairman of Chandler Bancorp and Citizens State Bank, will be joining the boards of directors of Spirit of Texas Bancshares and Spirit of Texas Bank.
Under the terms of the transaction, Spirit will issue 2,100,000 shares of its common stock and pay approximately $19.2 million in cash, subject to certain adjustments, to Kidd Partners Ltd., the sole shareholder of Chandler Bancorp. The board of directors of each company has unanimously approved the transaction, and the approval of Kidd Partners, Ltd., as the sole shareholder of Chandler Bancorp, has been obtained.
Upon completion of the transaction, David Monk, president and CEO of Citizens State Bank, will join Spirit of Texas Bank management.
Stephens Inc. served as exclusive financial advisor for, and rendered a fairness opinion to, Spirit and Hunton Andrews Kurth LLP served as legal counsel to Spirit. Hillworth LLC served as exclusive financial advisor for, and Fenimore, Kay, Harrison & Ford LLP served as legal counsel to, Citizens.