The Federal Reserve has approved Winter Haven, Florida-based SouthState’s application to acquire McKinney, Texas-based Independent Bank Group, the central bank disclosed Friday.
The deal – one of the year’s richest banking combinations, at roughly $2 billion – will create the nation’s 46th-largest bank, with about $65.1 billion in assets and $52.9 billion in deposits, the Fed said Friday.
The combination is set to expand SouthState’s footprint in the Dallas/Fort Worth, Austin and Houston areas in Texas, and the Denver, Colorado Springs and Fort Collins areas in Colorado.
Once the deal closes, three Independent Bank Group directors will join the boards of both SouthState Corp. and the bank.
The approval means the deal likely will close along the banks’ estimated time frame. When announcing the combination in May, SouthState and Independent projected the transaction would finalize in the first quarter of 2025.
With Donald Trump’s pending return to the presidency, merger-and-acquisition approvals had been expected to “speed up markedly and the process will be more clearly delineated,” Piper Sandler analyst Mark Fitzgibbon said last month.
The Fed has given its blessing to two banking deals in less than 24 hours. The central bank late Thursday approved Canadian lender Scotiabank’s application to increase its stake in Cleveland-based KeyBank to up to 14.99%.
Merger review processes generally have taken longer during the Biden administration than during Trump’s first term, Brian Graham, a partner at financial services advisory and investing firm Klaros Group, said last month.
But this week’s approvals mark an uptick in Biden’s waning days. Robust bank M&A activity may continue, Fitzgibbon said, citing “tremendous pent-up demand.”
A combination between SouthState and Independent would not have a significantly adverse effect on competition or on the concentration of resources in any relevant banking market, the Justice Department found.
SouthState has said it has no plans to close any existing branches – either Independent’s or its own – as a result of the deal, the Fed’s order indicated Friday.
The Fed received just two comments against the acquisition, each expressing fair lending concerns. One commenter alleged that in 2023, SouthState Bank made fewer home loans to Black potential borrowers as compared to white ones – particularly in South Carolina, North Carolina, Florida, Georgia and Alabama.
A second commenter alleged that Independent engaged in redlining in southern Dallas from 2010 to 2020, and is failing to address the needs of low- to middle-income residents there. The commenter said from 2017 to 2023, Independent Bank made fewer home loans to Blacks than whites in Dallas County, Texas.
SouthState has said it was unable to confirm many of the statistics cited by the commenter, but said Home Mortgage Disclosure Act data do not reflect the full record of its home lending and refinancing activities.
As to the allegations against Independent, SouthState said most are based on outdated Community Reinvestment Act performance evaluations. Further, the Federal Deposit Insurance Corp. did not identify at Independent Bank any discriminatory or otherwise illegal credit practices, SouthState said, adding that Independent has submitted an application to open a branch in south Dallas in a ZIP code the commenter identifies as an area with a significant nonwhite population.
