Cullen/Frost Bankers (CFR) in San Antonio has agreed to buy WNB Bancshares (WNB) in Odessa, Texas for $220 million in stock and cash.

The $22.6 billion-asset Cullen/Frost plans to finance the purchase by issuing two million shares of common stock in addition to an amount of cash necessary to reach the agreed-upon price. Cullen/Frost stock closed at $71.98 a share on Tuesday.

The deal values WNB at more than two times tangible book value, according to an investor presentation. That is in line with recent Texas transactions but higher than most bank acquisition deals across the country have fetched lately.

The deal is expected to close in January, pending the approval of the Federal Reserve and the Texas Department of Banking.

Cullen/Frost, founded in 1868, has 137 branches in Texas. It would add WNB's eight West Texas branches and $1.4 billion in assets.

The merger would bring Cullen/Frost into the Midland and Odessa markets. The area "plays a big role in the Texas economy because it is a driver of the state's surging oil and gas business," Cullen/Frost Chairman and Chief Executive Dick Evans said in a press release. "Joining WNB with the Cullen/Frost team is a great way to increase our participation in the region, and we're proud to bring our 145 year-old franchise to this dynamic area."

WNB's senior management has agreed to remain with Cullen/Frost. Jack Wood, WNB's president, would join the Cullen/Frost Board.

Cullen/Frost was advised by Goldman Sachs and Sullivan & Cromwell. WNB was advised by Commerce Street Capital, Haynie Rake Repass & Lowry, and Atkins, Hollmann, Jones, Peacock, Lewis & Lyon.

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