Texas United Bancshares (NASDAQ:TXUI)
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Texas United Bancshares and Gateway National Bank Announce Merger
Agreement
LA GRANGE, Texas, May 2 /PRNewswire-FirstCall/ -- Texas United Bancshares,
Inc. (NASDAQ:TXUI) and Gateway Holding Company, Inc. ("Gateway"), parent of
Gateway National Bank of Dallas, announced today the signing of a definitive
agreement providing for the merger of Gateway into Texas United.
Under the terms of the merger agreement, shareholders of Gateway will receive,
for each share of Gateway common stock they own, a number of shares of Texas
United common stock with an aggregate market value equal to $35.48, plus $15.20
in cash. The market value of the Texas United common stock will be based on
the average trading price of the Texas United common stock for the 20
consecutive trading days ending on and including the tenth trading day
preceding the closing date.
The transaction is expected to be accretive to earnings in the fourth quarter
of 2006.
MERGER RATIONALE:
* Strategically located in the high growth Dallas/Fort Worth market
* Attractive core deposit franchise
* Significant anticipated earnings improvement given Gateway's asset
sensitive balance sheet
TRANSACTION SUMMARY:
* Total consideration: $41.0 million
* Price/book: 3.29x
* Price/tangible book: 3.29x
* Price/2004 earnings: 36.84x
* Price/2005 annualized earnings: 29.90x
* Price/assets: 19.76%
* Deposit premium: 15.85%
Gateway National Bank has operated in the Dallas area since 1982 and currently
has 6 Dallas area locations -- Dallas, Frisco, Frisco West, Mesquite, Balch
Springs and Carrolton.
At March 31, 2005, Gateway had, on a consolidated basis, total assets of $207
million and deposits of $180 million. On a pro forma basis as of March 31,
2005, the merger would increase Texas United's assets to approximately $1.4
billion with 33 full-service banking centers, 20 in greater central and south
central Texas and 13 in the Dallas/Fort Worth metroplex.
Consistent with Texas United's decentralized model and emphasis on relationship
banking, Gateway National Bank will continue to operate as a separate
subsidiary of Texas United, retaining its name and board of directors, with the
addition of L. Don Stricklin, Ervan Zouzalik and Riley C. Peveto as directors
of Gateway National Bank. In addition, Joe L. Halpain and Joseph A. Hargis,
Sr., each a director of Gateway and Gateway National Bank, will become
directors of Texas United upon consummation of the merger and W. Gene Payne,
President and CEO of Gateway, will become an advisory director of Texas United.
L. Don Stricklin, President and CEO of Texas United, commented, "The Gateway
merger represents a continuation of our strategy to expand into high- growth
suburban markets in major metropolitan areas of Texas. Gateway blends well
with our community banking philosophy and focus on customer relationships and
has a solid reputation in the small to medium-sized business market, which fits
nicely with our lending culture."
W. Gene Payne, President and CEO of Gateway and Gateway National Bank, added,
"We are pleased by the opportunities this merger will present to expand on the
strong base we have established in the Dallas area. The merger with Texas
United will provide a wider array of product offerings, capital for additional
branch expansion and liquidity for our shareholders. We believe our employees,
our customers and our shareholders will benefit from the synergies created in
this merger."
The merger is expected to be completed in the fourth quarter of 2005, subject
to customary closing conditions, including regulatory approval, approval by the
shareholders of both Gateway and Texas United and other conditions set forth in
the merger agreement.
ABOUT TEXAS UNITED
Texas United Bancshares, Inc. is a registered financial holding company listed
on the Nasdaq National Market under the symbol "TXUI". Texas United operates
through two wholly-owned subsidiary banks, State Bank and GNB Financial, n.a.,
and offers a complete range of banking services through 20 full-service State
Bank banking centers located in the greater central and south central Texas
areas and seven full-service GNB Financial banking centers located in Cooke,
Denton and Ellis counties in Texas. In addition, State Bank has 18 mortgage
loan production offices located in Houston, San Antonio and Austin through the
Bank and its wholly-owned subsidiary, Community Home Loan, Inc.
In connection with the proposed merger of Gateway into Texas United, Texas
United will file with the Securities and Exchange Commission a registration
statement on Form S-4 to register the shares of Texas United's common stock to
be issued to the shareholders of Gateway. The registration statement will
include a joint proxy statement/prospectus which will be sent to the
shareholders of Gateway and the shareholders of Texas United seeking their
approval of the proposed transaction.
WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT ON
FORM S-4 AND THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE
REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IN CONNECTION WITH THE PROPOSED
TRANSACTION, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT TEXAS UNITED,
GATEWAY AND THE PROPOSED TRANSACTION. Investors and security holders may
obtain free copies of these documents through the website maintained by the
Securities and Exchange Commission at http://www.sec.gov/ . Free copies of the
joint proxy statement/prospectus may also be obtained by directing a request by
telephone or mail to Texas United Bancshares, Inc., 202 West Colorado St., La
Grange, Texas 78945, Attn: Investor Relations. Texas United's telephone number
is (979) 968-8451.
The directors, executive officers, and certain other members of management of
Texas United and Gateway may be soliciting proxies in favor of the merger from
the companies' respective shareholders. For information about Texas United's
directors, executive officers and members of management, shareholders are asked
to refer to the most recent proxy statement issued by Texas United, which is
available on its web site and at the address provided in the preceding
paragraph.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK FACTORS
This release, other written materials, and statements management may make, may
contain certain forward-looking statements regarding Texas United's prospective
performance and strategies within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. Texas United intends such forward-looking statements to be
covered by the safe harbor provisions for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995, and is including this
statement for purposes of said safe harbor provisions.
Forward-looking statements are based on certain assumptions and describe future
plans, strategies, and expectations of Texas United. Texas United's ability to
predict results or the actual effects of its plans and strategies is inherently
uncertain. Accordingly, actual results may differ materially from anticipated
results.
The following factors, among others, could cause the actual results of the
merger to differ materially from the expectations stated in this release: the
ability of the companies to obtain the required shareholder or regulatory
approvals for the merger; the ability of the companies to consummate the
merger; the ability of Texas United to raise the funds necessary to complete
the merger; the ability to successfully integrate the companies following the
merger; a materially adverse change in the financial condition of either
company; the ability to fully realize the expected cost savings and revenues or
the ability to realize them on a timely basis; a change in general business and
economic conditions; changes in the interest rate environment, deposit flows,
loan demand, real estate values, and competition; changes in accounting
principles, policies or guidelines; changes in legislation and regulation; and
other economic, competitive, governmental, regulatory, geopolitical, and
technological factors affecting the companies' operations, pricing, and
services.
All written or oral forward-looking statements are expressly qualified in their
entirety by these cautionary statements. Please also read the additional risks
and factors described from time to time in Texas United's reports and
registration statements filed with the Securities and Exchange Commission.
Texas United undertakes no obligation to update these forward- looking
statements to reflect events or circumstances that occur after the date on
which such statements were made.
DATASOURCE: Texas United Bancshares, Inc.; Gateway Holding Company, Inc.
CONTACT: Don Stricklin, Chief Executive Officer of Texas United
Bancshares, Inc., +1-979-968-7214