DALLAS, Dec. 14, 2016 (GLOBE NEWSWIRE) -- Veritex Holdings, Inc. (NASDAQ:VBTX), the parent holding company for Veritex Community Bank, today announced that it has entered into a definitive agreement to merge with Dallas-based Sovereign Bancshares, Inc. and its wholly-owned subsidiary Sovereign Bank.

Sovereign Bancshares, through Sovereign Bank, operates ten full service banking locations in Texas. As of September 30, 2016, Sovereign Bancshares, on a consolidated basis, reported total assets of $1.1 billion, total deposits of $858.6 million, and total equity capital of $118.4 million. As of September 30, 2016, the combined company would have combined assets of $2.4 billion, combined loans of $1.8 billion and combined deposits of $1.9 billion.

Veritex Holdings Chairman and Chief Executive Officer C. Malcolm Holland stated, “The merger with Sovereign Bank is a transformative event in the growth of Veritex Community Bank. Upon completion of the transaction, Veritex Community Bank will be one of the ten largest banks headquartered in Dallas-Fort Worth.”

Thomas J. Mastor, the Chief Executive Officer of Sovereign Bancshares, said, “We are excited to combine with an organization that shares our dedication to customer service and quality community banking and, when combined, we will complement each other tremendously. We believe our team’s experience and expertise will meaningfully contribute to serving the shareholders, customers, employees and communities of both institutions.”

“This merger will double our asset size as well as our number of locations. It significantly expands our presence in the Dallas metropolitan area and marks our entry into the Austin, Fort Worth and Houston communities,” Holland continued. “We are not just getting bigger, we’re getting better. Sovereign Bank is a great bank; they have a quality management team as well as talented and dedicated employees. Most importantly they, like Veritex, are community focused. We look forward to Sovereign’s clients, shareholders, and employees becoming part of the Veritex family.”

Under the terms of the merger agreement, Veritex will issue 5,117,647 shares of its common stock and pay approximately $58.0 million in cash to existing shareholders of Sovereign Bancshares, subject to certain conditions and potential adjustments as described in the merger agreement. In connection with the transaction, two representatives of Sovereign Bancshares’ board of directors will join the Veritex board of directors. The merger agreement contains customary representations and warranties and covenants by Veritex and Sovereign Bancshares. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals and approval of the merger agreement by the shareholders of Sovereign Bancshares and the issuance of shares by the shareholders of Veritex Holdings. The transaction is expected to close during the second quarter of 2017.

Veritex was advised in this transaction by Stephens Inc., as financial advisor, and Norton Rose Fulbright US LP as legal counsel. Sovereign Bancshares was advised by Sandler + O’Neill Partners, L.P., as financial advisor, and Fenimore, Kay, Harrison & Ford, LLP as legal counsel.

In addition to the information contained within this announcement, an Investor Presentation has been posted on Veritex Community Bank’s website (www.veritexbank.com) containing additional information regarding this transaction.

About Veritex Holdings, Inc.
Headquartered in Dallas, Texas, Veritex Holdings is a bank holding company that conducts banking activities through its wholly-owned subsidiary, Veritex Community Bank, with locations throughout the Dallas metropolitan area. Veritex Community Bank is a Texas state chartered bank regulated by the Texas Department of Banking and the Board of Governors of the Federal Reserve System. For more information, visit www.veritexbank.com.

About Sovereign Bancshares, Inc.
Founded in 2004, Sovereign Bancshares is a bank holding company that provides financial services including a wide range of depository services, commercial and industrial lending, SBA loans, specialized lending for the energy industry, private banking, real estate lending and treasury management services through its wholly-owned subsidiary Sovereign Bank. Sovereign Bank currently serves its customers through seven branch locations in the Dallas - Fort Worth Metroplex, two Austin branches and one Houston location.