McKinney-based Independent Bank Group Inc., the holding company for Independent Bank, announced Aug. 22 it has entered into a definitive agreement to acquire Live Oak Financial Corp. and its subsidiary, Live Oak State Bank. Live Oak State Bank, a Texas state chartered bank, has one office located in the Swiss Avenue/Lakewood area east of downtown Dallas. The bank had total assets of $122.9 million, total deposits of $103.9 million and total equity capital of $13.9 million at June 30, 2013.
The merger has been approved by the boards of directors of both companies and is expected to close during the fourth quarter of 2013. Operational integration is anticipated to begin during the first quarter of 2014. David R. Brooks, chairman and CEO of Independent Bank Group, said the transaction is part of his company’s continuing expansion plan through the acquisition of quality banks that complement its existing locations. “The acquisition of Live Oak State Bank adds to our presence in the Dallas market. Live Oak is located near the Baylor Medical Center campus and has an established medical and professional loan portfolio. We plan to combine Live Oak’s existing presence with our own experience in providing banking services to the health care industry, further expanding this important market segment,” Brooks said in a news statement.
On July 19, Independent Bank Group (IBG) announced an agreement to acquire Collin Bank, a full-service commercial bank located in Plano. The Collin Bank acquisition will be IBG’s first since its initial public offering on April 8 that raised $87 million to support continued growth through strategic acquisitions. That merger also is expected to close during the fourth quarter of 2013, with operational integration anticipated to begin during the first quarter of 2014. Under the terms of the agreement with Live Oak Financial Corp., Independent Bank Group will pay aggregate cash consideration of $10 million and issue approximately 292,646 shares of IBG common stock, resulting in an aggregate transaction value of approximately $20 million. The number of shares of IBG common stock can be adjusted up or down if the volume weighted average price of the IBG common stock during the 20 trading days prior to closing is 10 percent more or 10 percent less than $34.18 per share, such that the maximum value of the IBG common stock at closing would be approximately $11 million and the minimum value of the IBG common stock would be approximately $9 million. The aggregate cash consideration can also be adjusted downward if the tangible book value of Live Oak Financial Corp. is less than $13 million at closing. Independent Bank Group anticipates that the acquisition will be accretive to earnings per share immediately and slightly dilutive to tangible book value at closing with the dilution earned back in less than two years. Independent Bank Group was advised in this transaction by Sandler + O’Neill Partners LP as financial adviser and Haynie Rake Repass & Lowry PC as legal counsel. Live Oak Financial Corp. was advised by Sheshunoff & Co Investment Banking LP as financial adviser and Hunton & Williams LLP as legal counsel.
Independent Bank Group operates 29 banking offices in 26 communities in two market regions located in the Dallas-Fort Worth metropolitan area and the greater Austin area. As of June 30, 2013, Independent Bank Group had total assets of $1.906 billion, total loans of $1.512 billion and total deposits of $1.485 billion. Independent Bank Group trades on the Nasdaq under the symbol “IBTX.”