One of Gainesville’s oldest banks may no longer be known by its familiar three-letter abbreviation after the new year begins.

A merger was announced Wednesday via a press release that Houston-based Prosperity Bancshares, Inc., signed a “definitive agreement” to acquire Texas United Bancshares, Inc., and its subsidiary banks, which includes GNB Financial n.a.

GNB, located on California Street in downtown Gainesville and at several branches, has been known by a few names over its 73-year history — Gainesville National Bank, Guaranty National Bank and most recently by only its letters.

Each branch of GNB — including Gainesville’s — would be known as “Prosperity Bank” after the merger takes place, according to Charles Draper of GNB Financial, n.a.

“It’s the end of an era,” he said.

Draper said the changes are expected to take place in the first quarter of the next year — between January and February.

He said he could not comment on whether jobs at the bank would be lost or generated, or if accounts would be affected, as he only recently heard news of the merger.

He said the merger could result in a $6.5 to 7 billion volume for the new banking corporation, which would have about 130 branches across Texas.

In 2003, GNB, with seven full-service branches, joined Texas United Bancshares, Inc., which then owned State Bank, based in LaGrange, with 22 branches.

As of now, Texas United Bancshares, operates through four wholly-owned subsidiary banks, State Bank, GNB Financial, n.a., Gateway National Bank and Northwest Bank.

As of June 30, Texas United had total assets of $1.818 billion, loans of $1.255 billion, deposits of $1.323 billion and shareholders’ equity of $169.3 million (on a consolidated basis).

“We are very pleased to announce our merger agreement with Texas United Bancshares. We believe Texas United will be an excellent partner for us as we continue our growth and expansion across Texas,” said David Zalman, chairman and chief executive officer of Prosperity Bancshares, in the press release. “This merger significantly advances our goal to be recognized as a ‘true Texas franchise.’ We will have 131 locations within the area of the state’s greatest population and wealth concentration.”

Under the terms of the agreement, Prosperity plans to issue about 10,875,000 shares for all outstanding shares of Texas United common stock and all options to acquire Texas United common stock. The transaction values Texas United at about $357.1 million or $32.84 per share, based on Tuesday’s stock market prices.

The merger is subject to certain conditions, including approval by Texas United and Prosperity shareholders and the usual state regulatory agency approvals, the release said.

“Our partnership with Texas United significantly enhances our presence in the Dallas/Fort Worth Metroplex and in the fast growing north Austin area,” said Dan Rollins, president and chief operating officer of Prosperity Bancshares. “In addition, this marks our first entry into the Bryan/College Station area, a market that we have sought to enter.”

The release said it expects investments to the merged banking company to be “accretive” (profitable) within a year.

“We certainly think that partnering with Prosperity is an excellent opportunity for the customers, shareholders and employees of Texas United Bancshares. Prosperity is a proven organization committed to Texas banking and shares a similar operating philosophy. I am proud of what we have accomplished at Texas United, and look forward to continuing that success by combining forces with Prosperity,” said L. Don Stricklin, president and chief executive officer of Texas United.

Stricklin is expected to become a director of Prosperity Bancshares, Inc. and Prosperity Bank and to serve as vice chairman and executive vice president of Prosperity Bancshares, Inc. and as vice chairman of Prosperity Bank. He has served as president and chief executive officer and a director of Texas United and its subsidiary banks acquired by merger since 1996.

The new banking company, according to the release, is expected to have 42 banks in the Houston area, 29 in North Central Texas, 15 in the Corpus Christi area, 12 in the Austin vicinity, five between Bryan and College Station, two in East Texas and 26 in South and South Central Texas, “generally along the NAFTA highway.”

A prospectus is expected to be sent to each shareholder in Texas United Bancshares after the Prosperity Bancshares files the proper paperwork with the federal Securities Exchange Commission.

Propserity Bancshares is abbreviated “PRSP” on the NASDAQ stock market. The mailing address is: Prosperity Bancshares, Inc., Prosperity Bank Plaza, 4295 San Felipe, Houston, Texas 77027. The company may be reached by telephone at 1(281)269-7199.

On the Net:

Texas Bancshares: www.txui.com

Prosperity Bancshares: www.prosperitybanktx.com

GNB Financial, n.a..: www.gnbtx.com

Reporter Andy Hogue may be contacted at andyhoguegdr@ntin.net

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