South Plains Financial in Lubbock, Texas, has agreed to buy BOH Holdings in Houston.
The $4.8 billion-asset South Plains said in a press release that it will pay $105.9 million in stock for the parent of the $772 million-asset Bank of Houston. The deal, which is expected to close in the second quarter, priced BOH at 143% of its tangible common equity.
Bank of Houston has $633 million in loans and $629 million in deposits.
The deal is expected to be 11% accretive to South Plains’ 2027 earnings per share. It should take less than three years for South Plains to earn back an estimated 3.5% dilution to its tangible book value.
South Plains plans to cut about a quarter of BOH’s annual operating costs, or $4.6 million. It expects to incur about $13.8 million of merger-related expenses.
“Over the past year, we have been executing a strategy designed to accelerate the earnings power of City Bank by adding experienced lenders across our markets to drive organic loan growth while also exploring accretive M&A to expand our reach,” Curtis Griffith, South Plains’ chairman and CEO, said in the release.
The acquisition “is an important step in achieving our goal, given the impressive franchise they have built in the fast-growing Houston market, which will add scale to our existing operations while also bringing long-standing customer relationships to City Bank,” Griffith added.
Jim Stein, BOH’s chairman, president, and CEO, will join South Plains and continue leading his team in Houston. Stein will also join BOH’s board.
Raymond James and Hunton Andrews Kurth advised South Plains. Hillworth Bank Partners and Fenimore Kay Harrison advised BOH.