Texas Heritage Bancshares, Inc., parent company of Hondo National Bank, and Medina Community Bancshares, Inc., parent company of Community National Bank, this week jointly announced signing a definitive agreement to combine the two holding companies into Texas Heritage Bancshares.
The merger agreement was unanimously approved by the board of directors of both bank holding companies. As a result of the merger, Texas Heritage Bancshares will be reconstituted with new organizational and governance documents to reflect the combination.
The holding companies’ transaction is expected to close on or before Dec. 31, 2020. The planned merger of the subsidiary banks is expected within the following twelve months when the banking systems have been converted, rebranding of the combined banks has been determined, and the banks can assure a smooth, seamless and customer friendly transition to a single banking operation.
The holding companies’ deal will be an all-stock transaction with shareholders of Medina Community receiving 3.358 shares of stock of Texas Heritage for each share of stock they own. When the merger is completed, the companies will bring a total asset size in excess of $500 million and consist of nine branch locations in six counties north and west of San Antonio.
The transactions are subject to customary closing conditions, including the approval of appropriate regulatory authorities and the shareholders of each of both holding companies.
In commenting on the prospects of the merged operation, Jim Barden, chair of the board of Texas Heritage, said, “We are excited about this partnership which will enable us to more efficiently serve our customers, remain vital in an increasingly competitive financial marketplace and, very importantly, remain a locally owned and managed banking presence in the communities where we are located.”
Clay Binford, chair of the board of Medina Community added, “This is an important step for both organizations, our customers, employees, and our shareholders. The combination will bring economies of scale, enhance services for our customers, and provide more options and opportunities for our banking future.”
Piper Sandler & Co. served as financial advisor to Texas Heritage and provided a fairness opinion to its Board of Directors. Stinson LLP served as its legal counsel. Samco Capital Markets, Inc. served as financial advisor of Medina Community and provided a fairness opinion to its Board of Directors. Fenimore Kay Harrison Ford served as its legal counsel.
About Texas Heritage Bancshares, Inc. and Hondo National Bank:
Texas Heritage is the holding company for Hondo National Bank which had approximately $323 million in assets as of August 1, 2020. The bank is a commercial national bank focused on serving customers in the Texas counties of Medina, Bandera, Uvalde, Real, and Blanco where it operates its five branches which offer a diverse range of lending products including commercial, commercial real estate, construction, agricultural (farming and ranching), and consumer loans among other banking services. The bank traces its beginnings in Hondo to 1901, bringing 119 years of banking services to its customers.
About Medina Community Bancshares, Inc. and Community National Bank:
Medina Community is the holding company for Community National Bank which had approximately $243 million in assets as of August 1, 2020. The bank is a commercial national bank serving customers in Medina and Atascosa Counties and environs through its four branches located in the towns of Hondo, Castroville, Lytle and LaCoste. It offers a variety of loan products including commercial, commercial real estate, construction, agricultural (ranching and farming), as well as consumer loans along with its other traditional banking services. Community National Bank first opened for business in Hondo in 1981 and has expanded its reach and services through its four branches over the 39 years of its banking experience.
