Texas Community Bancshares has agreed to acquire The Banc of San Jacinto County Bancshares in an all-cash transaction valued at $9.5 million, subject to certain adjustments. The deal would also combine the companies’ banks, with Texas Community’s Broadstreet Bank remaining in place.
The boards of both companies have approved the agreement. The transaction still requires a vote by San Jacinto County Bancshares shareholders and regulatory approvals, among other conditions.
Key details
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Cash consideration: San Jacinto County Bancshares shareholders will receive a pro rata share of $9.5 million in cash for their shares. The total may be reduced dollar for dollar for certain tax distributions the company makes to shareholders before closing. Some of the consideration will be held back at closing in a fund for tax expenses.
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Funding: Texas Community expects to pay the consideration with cash on hand. Its obligation to complete the deal is not conditional on obtaining financing.
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Bank combination: San Jacinto County Bancshares will merge into Texas Community. Immediately afterward, its bank, The Bank of San Jacinto County, will merge into Broadstreet Bank, which will continue as the surviving bank.
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Leadership: Texas Community’s directors and officers will remain in their roles after the merger.
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Shareholder and regulatory approvals: The deal requires approval from holders of two-thirds of San Jacinto County Bancshares’ outstanding shares entitled to vote, as well as regulatory approvals and certain third-party consents. Other conditions include that dissenting shares represent less than 10% of the company’s outstanding shares and that neither company experiences a material adverse effect.
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Support from some shareholders: San Jacinto County Bancshares directors and executive officers who own shares, along with certain other shareholders, signed agreements to vote their shares in favor of the transaction.
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Timing and termination rights: The parties may terminate the agreement if the merger is not completed by February 28, 2027. That deadline automatically extends to May 31, 2027, if regulatory approval is the only remaining condition. Either side also has termination rights in certain circumstances, including failure to obtain shareholder approval or a final denial of required regulatory approval.
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Competing offers: San Jacinto County Bancshares has agreed not to solicit or negotiate competing acquisition proposals, subject to exceptions. If its board determines that a competing offer is superior, Texas Community has an opportunity to match it. San Jacinto County Bancshares may terminate the agreement to accept a superior proposal, but in specified circumstances it would owe Texas Community a $550,000 termination fee. The fee can also apply if the deal ends following certain breaches or board actions, or if a later acquisition follows a proposal made before termination.
Plain-English implications
The transaction would be a cash sale of San Jacinto County Bancshares, rather than a stock-for-stock combination: its shareholders would receive cash, while Texas Community’s leadership and banking subsidiary would remain in place. The deal’s completion depends on shareholder and regulatory approvals, and the agreement sets a limit on the level of shareholder dissent that can be accommodated.