Two West Texas-based banks have announced upcoming million-dollar mergers with Houston-based Prosperity Bancshares.

Prosperity Bancshares, Inc. this week announced two acquisitions - First Bancshares of Texas, Inc. based in Midland, and Lone Star State Bancshares, Inc. based in Lubbock. The acquired banks include Lone Star Bank and FirstCapital Bank, which have locations across Texas.

Lone Star Bank's offices are in Lubbock, Brownfield, Midland, Odessa and Big Spring. The bank reported $1.3 billion in total assets, $933.5 million in total loans, and $1.174 billion in deposits as of June 30.

As part of the acquisition, Prosperity will issue 2,376,182 shares of its company stock and $64.1 million in cash for all outstanding shares of Lone Star's capital stock, depending of certain conditions and protentional adjustments. The total consideration is valued at $228.7 million, due to Prosperity's stock being valued at $69.27 on Oct. 7.

Related:Lubbock's top banks by deposits report shows unsteady increases since 2019

Lone Star's CEO Alan Lackey and Chief Lending Officer Melisa Roberts will join Prosperity as the West Texas Area President and Vice President. Other members of Lone Star's management will continue with leadership roles in the merger. The deal is expected to close in the first quarter of 2023, pending delays.

"We are excited to unite Lone Star’s diversity of revenue, assets, and commitment to excellent service in the communities we serve with the financial strength and regional footprint that Prosperity Bank offers to fortify our combined capabilities in the West Texas region," Lackey said.

FirstCapital has 16 offices through Midland, Lubbock, Amarillo, Wichita Falls, Burkburnett, Byers, Henrietta, Dallas, Horseshoe Bay, Marble Falls and Fredericksburg. The bank reported $2.121 billion in total assets, $1.589 billion in loans, and $1.781 billion in total deposits.

"We are thrilled that Ken and Don Cosby and the FirstCapital team are joining Prosperity,” said David Zalman, Senior Chairman and Chief Executive Officer of Prosperity. "The combination of our companies enables us to enter the desirable Wichita Falls and Amarillo markets and the Horseshoe Bay, Marble Falls and Fredericksburg markets in the high growth Central Texas area. The customers of FirstCapital will be able to use any of our locations acrossTexas and Oklahoma after operational integration."

Others are reading:Toot'n Totum to open nearly 20 Lubbock locations: Here's when, where and what's next

Prosperity will issue 3,583,370 shares of common stock, plus $93.4 million cash for all outstanding Frist Bancshares capital stock shares, subject to conditions and adjustments. The total consideration is valued at $341.6 million.

Jeremy Bishop, along with Ken, Brad and Greg Burgess will join Prosperity as regional presidents in West and Central Texas. Other members of FirstCapital's management will continue with leadership roles in the merger, which is estimated to be completed in the first quarter of 2023.

The mergers will expand Prosperity's net, which has 272 locations between Houston, The Woodlands, Corpus Chisti, Victoria, Dallas/Fort Worth, Austin, San Antonio, Lubbock, Midland, Odessa, Abilene, Bryan, College Station, and locations in Oklahoma.

Alana Edgin is a journalist covering Business News in Lubbock and the surrounding area. Send her a news tip at aedgin@lubbockonline.com.

This article originally appeared on Lubbock Avalanche-Journal: Prosperity Bank announces mergers with Lone Star State, FirstCapital