Origin Bancorp in Ruston, La., has agreed to buy BT Holdings in Quitman, Texas.
The $7.9 billion-asset Origin said in a press release Thursday that it will pay $313.5 million in stock for the $2 billion-asset parent of BTH Bank. The deal, which is expected to close in the second half of 2022, priced BT Holdings at 151% of its tangible book value.
“I am excited to bring our strong teams together and expand our Texas franchise,” Drake Mills, Origin’s chairman, president and CEO, said in the release.
“These two companies have been passionately committed to community banking for more than 100 years and are deeply rooted in the communities we serve,” Mills added. “I firmly believe that our cultural alignment and shared values provide an ideal combination to drive growth and long-term value for our employees, customers, communities and shareholders.”
BTH Bank has $1.3 billion of loans and $1.7 billion of deposits.
The deal should be 12.7% accretive to Origin’s 2023 earnings per share. It should take a little more than two years for Origin to earn back an expected 3.6% dilution to its tangible book value.
Origin plans to cut about 30% of BT Holdings’ annual noninterest expenses. The company expects to incur $18 million of merger-related expenses.
Origin, which is nearing $10 billion of assets because of the pending deal, said it stands to lose $5 million of annual interchange fees beginning during the second half of 2024.
Lori Sirman, BT Holdings’ president and vice chairman, and Jay Dyer, the bank’s executive vice president, will join Origin’s executive team. Two BT Holdings directors will join the Origin board.
Stephens and Fenimore Kay Harrison advised Origin. Piper Sandler and Norton Rose Fulbright US advised BT Holdings.