South Plains Financial Strikes Deal with Houston-Based Bank
South Plains Financial, a Lubbock, Texas-based institution, has reached an agreement to acquire BOH Holdings, a community bank based in Houston. This move significantly enhances South Plains’ presence in Houston, the largest city in Texas. The bank’s analysts speculate that South Plains may return to the mergers and acquisitions (M&A) market soon.
The Acquisition Deal
South Plains, the parent company of City Bank, has agreed to a stock purchase deal worth $105.1 million to acquire the $772 million-asset BOH Holdings and its subsidiary, Bank of Houston. The merged entity will operate two branches and hold $643 million of deposits in Houston, thus becoming the 11th largest Texas-headquartered bank in the city. This acquisition will give South Plains a stronger foothold in a city that is home to a rapidly growing population of 7.8 million people. According to the Greater Houston Partnership, the population of the Houston metropolitan area is projected to grow by 7.8% between 2025 and 2031.
Expected Benefits of the Merger
South Plains Chairman and CEO Curtis Griffith sees the acquisition as a positive move for the bank. He stated that the deal will “add scale to our existing operations while also bringing longstanding customer relationships to City Bank.” BOH Chairman and CEO Jim Stein also expressed his optimism about the merger, stating, “This partnership provides needed resources to help accelerate our combined growth, which we believe will drive value for our shareholders that we could not have achieved on our own.” Stein’s statement underscores the potential of the merger to generate increased shareholder value through accelerated growth.
Financial Performance and Future Prospects
As per the Federal Deposit Insurance Corp., BOH reported loans amounting to $628.8 million on Sept. 30, an increase of 4% from the same time in 2024. BOH’s net income for the first nine months of 2025 was $8.2 million, reflecting a year-over-year increase of 42%. However, South Plains’ loan growth remained stagnant in the year ending Sept. 30, 2025.
Stephen Scouten, a Piper Sandler analyst who covers South Plains, described the acquisition as a low-risk, reasonably priced deal that enhances the bank’s potential for loan growth. Scouten expects the transaction to result in a tangible book value dilution of 3.5%. However, earnings accretion in 2027, the first full year of operations for the merged entity, is projected to be close to 11%. South Plains is also forecasting cost savings equal to 25% of BOH’s operating expenses, which totaled $3.8 million in 2024.
M&A in the Banking Industry
Prior to this agreement, South Plains last engaged in a deal in 2019 when it acquired West Texas State Bank in Odessa, a $429 million-asset bank, for $76 million in cash. Scouten believes South Plains could return to the M&A market in the medium-term, potentially looking at other modestly sized acquisitions.
Indeed, South Plains has been pursuing a strategy of hiring bankers to boost organic growth while also seeking M&A opportunities. Curtis Griffith hinted at the possibility of a deal during a conference call in October. He stated, “We continue to engage in discussions with potential target banks in our core markets that we believe have the potential to fit our conservative nature and overall culture.”
The banking industry has been quite active in the M&A market in 2025, with 169 merger transactions reported through the end of November for a total volume of $46.1 billion. The deal volume for the entire year of 2024 amounted to only $16.5 billion, according to Laurie Havener Hunsicker, senior analyst at the Chicago-based Seaport Research Partners.
Source: American Banker
