Humble’s Plains State Bank is buying First National Bank of Lake Jackson
Downtown Humble. Photo: DanielCD at English Wikipedia, CC BY-SA 3.0, via Wikimedia Commons.
Another Houston-area community bank is about to disappear into a larger one. Humble-based Plains State Bank has agreed to buy First National Bank of Lake Jackson, a Brazoria County lender that has been around since 1963, in an all-cash deal expected to close in December.
Plains Acquisition Corp., the bank’s holding company, announced the agreement on Oct. 21 to acquire Austin Colony Inc., which owns First National Bank of Lake Jackson, according to Bankers Digest. The purchase price wasn’t disclosed. The Houston Business Journal noted that the Lake Jackson bank is the latest Houston-area institution to be acquired.
Once the deal closes, First National, a national bank, will merge into Plains State Bank, which holds a Texas state charter. The combined company is expected to have about $1 billion in assets, eight branches and one loan production office.
Who’s buying
Plains State Bank has an unusual history for a Houston lender. It was founded in 1957 in Plains, a small town in Yoakum County on the West Texas border with New Mexico. In 2008, chairman and CEO Milan Saunders formed Plains Acquisition Corp. and put together a group of investors to buy the bank, then moved its charter and headquarters to Humble. Today it has about $850 million in assets, five branches in the Houston area, one in West Texas and a loan production office in San Antonio, according to the company’s third-quarter shareholder newsletter.
The bank describes itself as focused on small businesses, with business lending and treasury management as its main lines. Lori Hilman is its president and chief operating officer.
First National Bank of Lake Jackson is smaller, with about $200 million in assets and offices in Lake Jackson and Brazoria. For Plains, the deal is a way into Brazoria County, a growing part of the region anchored by the Freeport port and the petrochemical plants along the coast, and a way to diversify where its deposits come from.
What customers should expect
The banks have told regulators that all existing branches of both are expected to stay open after the merger. Plains State Bank has applied to the FDIC for approval, and a public notice of the application set a Nov. 21 deadline for comments. Written comments go to the FDIC regional director in Dallas, where the nonconfidential parts of the application are available for inspection. The Texas Department of Banking also has to sign off.
For depositors at the Lake Jackson bank, the practical changes usually come after closing: new account numbers or checks, a switch in online banking, and a new name on the building. Banks typically send letters well before any systems conversion. FDIC deposit insurance carries over, though customers who hold large balances at both banks should know that deposits at the two will count as one bank for insurance limits once they merge, after a six-month grace period.
The quarter behind the deal
Plains was candid with shareholders about its own numbers. In its Q3 2026 newsletter the bank said past-due and nonaccrual loans had increased, that new nonaccrual loans had cut into quarterly interest income, and that year-to-date earnings were trailing 2025. Most of the troubled loans are secured by real estate, and the bank said it has set aside reserves for them and remains very well capitalized. It also said loan growth picked up in the third quarter and that it has cut back on brokered deposits.
Buying a bank with a long-standing local deposit base is one way to replace more expensive funding, and that fits the pattern behind many community bank mergers in Texas over the past few years. Smaller banks face rising technology and compliance costs, and owners of family or closely held institutions often decide that selling to a regional neighbor is easier than keeping up alone.
Plains was advised by Hovde Group and Harris Law Firm. Austin Colony worked with Performance Trust Capital Partners and Hunton Andrews Kurth.
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