Third Coast Bancshares in Houston has agreed to buy Keystone Bancshares in Austin, Texas.
The $5.2 billion-asset Third Coast said in a press release that it will pay $123 million in cash and stock for the $1.1 billion-asset Keystone. The deal, which is expected to close in the first quarter, priced Keystone at 123% of its tangible book value.
Keystone has three branches and a loan-production office.
The acquisition “aligns with our strategy to strengthen our presence in the greater Austin market, perfectly complementing our Texas branch network,” Bart Caraway, Third Coast’s chairman, president and CEO, said in the release. “Keystone is a highly respected financial institution that shares our core values of exceptional customer service and building lasting relationships within the communities we serve.”
Two Keystone directors will join Third Coast’s board, including CEO Jeffrey Wilkinson.
Third Coast plans to cut a quarter of Keystone’s annual noninterest expenses. The company expects to incur $13 million of merger-related expenses.
It should take between one and two years for Third Coast to earn back an estimated 2.6% dilution to its tangible book value. The deal should be 7% accretive to Third Coast’s 2027 earnings per share, inclusive of cost savings.
Third Coast was advised by Raymond James and Norton Rose Fulbright US. Keystone was advised by Stephens and Fenimore Kay Harrison.