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Veritex Holdings acquiring Liberty Bancshares

Fresh from the close of its Sovereign Bancshares Inc. acquisition, Veritex Holdings Inc. announced it is buying Liberty Bancshares Inc. and unit Liberty Bank.

Dallas-based Veritex will issue 1,450,000 common shares and pay approximately $25 million in cash to the shareholders of Fort Worth, Texas-based Liberty. The buyer has also commenced a common stock offering, the net proceeds of which will partially fund the merger. Stephens Inc. is the offering's sole book-running manager; Piper Jaffray & Co. is a co-manager.

On an aggregate basis, SNL calculates that the deal value is 139.3% of book, 194.2% of tangible book, and 20.0x earnings. The price is 16.33% of deposits and 13.86% of assets. The tangible book premium-to-core deposits ratio is 11.71%.

As of June 30, Liberty had $459.3 million in assets, $389.4 million in total deposits and $48.1 million in total equity capital. The combined company — taking into account the Sovereign acquisition — will have $3.0 billion in assets, $2.2 billion in loans and $2.4 billion in deposits.

Veritex Holdings will expand in Tarrant County, Texas, by five branches to be ranked No. 13 with a 1.39% share of approximately $36.66 billion in total market deposits.

The deal, still subject to regulatory and shareholder approvals, is expected to close in the 2017 fourth quarter or in the 2018 first quarter.

SNL valuations for bank and thrift targets in the Southwest region between August 1, 2016 and August 1, 2017, averaged 157.57% of book, 172.38% of tangible book and had a median of 20.29x last-12-month earnings, on an aggregate basis.

Stephens Inc. and Norton Rose Fulbright US LP, respectively, served as Veritex's financial adviser and legal counsel in the acquisition. For Liberty, it was Sheshunoff & Co. and Haynie Rake Repass & Klimko PC, with Performance Trust Capital Partners providing a fairness opinion.

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