Spirit of Texas Bancshares (Spirit), the parent of Spirit of Texas Bank, has agreed to acquire Texas-based Chandler Bancorp and its subsidiary Citizens State Bank in a cash-stock deal worth around $65.6m.

Citizens provides personal and commercial banking services. The bank managed $349.1m in assets at the end of June 2019.

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The acquisition of Citizens will increase Spirit of Texas Bank’s existing branch count of 29 by seven.

As per the agreed terms, Spirit will issue 2,100,000 shares of its common stock and make around $19.2m in cash payment to Chandler shareholder Kidd Partners.

The deal has been already cleared by the two companies’ boards.

It is now pending regulatory approval, with deal closure anticipated in the final quarter of this year.

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As part of the deal, Citizens president and CEO David Monk will become a member of the Spirit of Texas Bank management.

Chandler and Citizens chairman Greg Kidd will have a seat on the Spirit board.

Spirit chairman and CEO Dean Bass said: “This transaction, which is expected to be immediately accretive to earnings per share, represents an exciting strategic and financial opportunity for us to expand our footprint into the East Texas region.

“We believe that Citizens State Bank, a strong community bank with a shared commitment to providing exceptional customer service, will be a great partner to the Spirit franchise.

“Together, we will be better positioned to take advantage of organic growth and acquisition opportunities that will enable us to better serve our customers and further enhance shareholder value.”