Cullen/Frost Bankers To Buy WNB Bancshares

(RTTNews) - Cullen/Frost Bankers, Inc. (CFR) and WNB Bancshares, Inc. said Tuesday that they have signed a definitive merger agreement that provides for the merger of WNB into Cullen/Frost.

The agreement has been approved by the Boards of Directors of both companies.

Under the terms of the agreement, Cullen/Frost will issue two million shares of Cullen/Frost common stock and an amount of cash necessary to bring the aggregate consideration to $220 million. The two million shares will be valued at the volume weighted average price of the Cullen/Frost common stock during the 10 trading days shortly prior to closing. The $220 million purchase price can be adjusted up or down based on a targeted book equity value of WNB of $87 million at closing.

The deal is currently expected to be about 4% accretive to Cullen/Frost's 2014 earnings per share before one-time restructuring charges.

The deal is expected to close in January 2014 upon the satisfaction of customary closing conditions, including the approvals of the Federal Reserve and the Texas Department of Banking.

WNB Bancshares operates eight branches through its subsidiary, Western National Bank, mainly in the Midland and Odessa areas of West Texas, with $1.4 billion in assets, $1.2 billion in deposits and $656 million in loans as of June 30, 2013. WNB was chartered in 1977 and is owned primarily by the Wood Family.

Cullen/Frost and WNB expect that the merger will have many strategic benefits for both companies: it will allow Cullen/Frost to strengthen its Texas-focused franchise and enter the attractive Midland and Odessa markets while giving the customers of WNB access to Cullen/Frost's wide array of financial products and services. WNB's senior management has agreed to remain with Cullen/Frost. Jack Wood, WNB's president, will join the Cullen/Frost Board.