The cash-and-stock deal, first announced in October 2022, was initially expected to close in the first quarter of 2023. It was ultimately finalized on Monday.

The acquisition of Lone Star was part of a two-pronged M&A play to expand in West Texas. Prosperity, which started this year with $38.5 billion of assets, announced in late 2022 it would pay $341.6 million for First Bancshares of Texas in Midland, which had 16 branches and assets of $2.1 billion at the time, and $228.7 million for Lone Star State, which had nine branches and $1.3 billion of assets.

Prosperity closed the First Bancshares deal last May. But the Lone Star transaction got held up in the regulatory approval process. The buyer provided few details about the delay over the past year, save to say there was a challenge tied to one of Lone Star branches.

That noted, regulators over the past two years ramped up scrutiny of acquisitions following guidance from President Biden to do so after years of consolidation across the banking sector and other industries. Several deals were delayed in the wake of that change, slowing down the overall pace of bank M&A.

Banks announced 99 M&A transactions in 2023 and 157 in the previous year. Both were down notably from the 202 bank combinations inked in 2021, according to S&P Global Market Intelligence tallies. 

The two deals in West Texas marked Prosperity's first acquisitions this decade. It had acquired 10 banks in the decade leading up to the 2020 pandemic; the latest was its 2019 purchase of LegacyTexas Financial Group in Plano for about $2 billion.