Conroe-based Spirit of Texas Bancshares Inc., the holding company for Spirit of Texas Bank SSB, on Nov. 27 announced that it is expanding its footprint into the Beeville, San Antonio and Corpus Christi markets with its acquisition of First Beeville Financial Corporation and its bank subsidiary, The First National Bank of Beeville. Spirit entered into a definitive agreement to acquire Beeville, in a cash and stock transaction for total consideration value of approximately $63.7 million based on Spirit’s closing price of $19.81 per share on Nov. 26, 2018.
The transaction is Spirit’s ninth acquisition since 2008 and will be the second acquisition since the company’s May 2018 initial public offering. Once completed, the acquisition would increase Spirit’s assets to approximately $1.9 billion, with over $1.4 billion in total loans. As of September 30, 2018, Beeville, on a consolidated basis, reported total assets of $412 million, total deposits of $374 million, and total equity capital of $35.8 million. As a result of the transaction, Spirit will add three full-service branches and three loan production offices (LPOs). With the addition of the San Antonio-New Braunfels market, Spirit will have a presence in the three largest Texas MSAs.
Dean O. Bass, Spirit’s chairman and CEO, said the bank has been looking to expand operations in Sout Texas and that “this acquisition is a perfect fit for our culture and our future business plans in this region.”
Brian Schneider, chairman and president of Beeville will be joining Spirit’s management team.
“The Beeville family—our shareholders, Board of Directors and employees—are excited about becoming a part of a larger community bank and its wide range of products and services that will be available to Beeville customers,” he said. “ We strongly believe that our common cultures and deep commitment to customer service will enable us to continue our 128-year history of embracing technological advances, while adhering to our longstanding values.”
Under the terms of the transaction, Spirit will issue 1,579,268 shares of its common stock and pay $32.4 million in cash, subject to certain adjustments, to the shareholders of First Beeville Financial Corporation. The board of directors of each company has unanimously approved the transaction, and the directors of Beeville have entered into agreements with Spirit pursuant to which they have agreed to vote their shares of Beeville common stock in favor of the transaction. The transaction is expected to close in the second quarter of 2019.
Earlier this year, Spirit acquired Comanche National Bank for $55.9 million adding eight full-service banking locations in Comanche, Jack, Palo Pinto and Parker counties west of Tarrant County. Spirit currently has three full-service branches in Tarrant County.
Upon completion of the Beeville transaction, Brian Schneider, Chairman and President of Beeville, and Kent Fry, Executive Vice President and Chief Lending Officer of The First National Bank of Beeville, will join Spirit of Texas Bank management. Additionally, upon completion of the transaction, Allen C. Jones IV will be appointed to the Spirit Board of Directors, and Brannon Brooke and George G. Latcham will be appointed to the Spirit of Texas Bank Board of Directors.
Stephens served as exclusive financial advisor for, and rendered a fairness opinion to Spirit, and Hunton Andrews Kurth LLP served as legal counsel to Spirit. Sheshunoff & Co. served as exclusive financial advisor for, and rendered a fairness opinion to Beeville, and Fenimore, Kay, Harrison & Ford, LLP served as legal counsel to Beeville.