8-K: South Plains Financial Acquires BOH Holdings for $105.9M

South Plains Financial, Inc. announced a definitive merger agreement to acquire BOH Holdings, Inc. in an all-stock transaction valued at approximately $105.9 million, expanding its presence in the Houston market.

Summary

• South Plains Financial, Inc. (SPFI) and BOH Holdings, Inc. (BOH) entered into an Agreement and Plan of Reorganization on December 1, 2025, for SPFI to acquire BOH.
• The acquisition is an all-stock transaction with an aggregate value of approximately $105.9 million, based on SPFI's closing price of $37.79 on November 28, 2025.
• Each share of BOH common stock will be converted into the right to receive 0.1925 shares of SPFI common stock, subject to adjustment, plus cash in lieu of fractional shares.
• BOH warrants and stock appreciation rights (SARs) will be converted into cash consideration from SPFI.
• Immediately following the merger, Bank of Houston (BOH's wholly-owned subsidiary) will merge with and into City Bank (SPFI's wholly-owned subsidiary).
• The pro forma combined company, based on September 30, 2025, figures, will have approximately $5.4 billion in assets, $3.8 billion in loans, and $4.6 billion in deposits.
• The transaction is expected to be 11% accretive to SPFI's earnings per share in 2027 and has an attractive tangible book value per share earnback of less than 3.0 years.
• Former BOH shareholders are expected to own approximately 14.5% of the combined company.
• The boards of directors of both SPFI and BOH have unanimously approved the transaction.
• The merger is expected to close during the second quarter of 2026, subject to customary closing conditions, including regulatory and BOH shareholder approvals.

Sentiment

Score: 8

Explanation: The filing announces a strategic acquisition with strong financial projections, including significant EPS accretion and a quick TBV earnback. Management expresses high confidence in cultural fit and market expansion, indicating a very positive outlook for the combined entity.

Positives

• Expected to be 11% accretive to SPFI's earnings per share in 2027 (first full year of combined operations).
• Attractive tangible book value per share earnback of less than 3.0 years.
• Deepens SPFI's footprint in the high-growth Houston market, providing important scale in one of the fastest-growing MSAs in the country.
• Strengthens community banking presence with aligned culture and leadership, enhancing the opportunity to capitalize on recent market disruption.
• Creates a more balanced, diversified Texas franchise, expanding SPFI's commercial and private banking relationships across Houston and surrounding counties.
• Drives improved profitability metrics and enhances long-term shareholder value.
• Well-structured transaction providing attractive valuation and low execution risk.
• Provides leadership depth to support continued expansion across high-growth markets, with BOH CEO Jim Stein joining SPFI and City Bank boards.
• Strong cultural compatibility ensuring smooth integration and sustained franchise momentum, based on thorough due diligence of BOH's team, culture, loan portfolio, and underwriting processes.

Risks

• The expected impact of the proposed transaction on the combined entities' operations, financial condition, and financial results may not materialize as anticipated.
• The businesses of South Plains and BOH may not be combined successfully, or such combination may take longer to accomplish than expected.
• Cost savings from the proposed transaction may not be fully realized or may take longer to realize than expected.
• Operating costs, customer loss, and business disruption following the proposed transaction, including adverse effects on relationships with employees, may be greater than expected.
• Regulatory approvals of the proposed transaction may not be obtained, or adverse conditions may be imposed in connection with regulatory approvals.
• BOH shareholders may not approve the proposed transaction.
• A decline in general economic conditions could adversely affect credit quality and loan originations for both South Plains and BOH.
• Slower economic growth rates or potential recession in the United States and South Plains and BOH's market areas.
• Impacts related to or resulting from uncertainty in the banking industry as a whole.
• Increased competition for deposits in market areas among traditional and nontraditional financial services companies, and related changes in deposit customer behavior.
• The impact of changes in market interest rates, whether due to a continuation of the elevated interest rate environment or further reductions in interest rates and a resulting decline in net interest income.
• Lingering inflationary pressures, and the risk of the resurgence of elevated levels of inflation, in the United States and South Plains and BOH's market areas.
• Uncertain impacts of ongoing quantitative tightening and current and future monetary policies of the Board of Governors of the Federal Reserve System.
• Changes in unemployment rates, customer spending, borrowing, and savings habits in the United States and market areas.
• Declines in commercial real estate values and prices.
• A deterioration of the credit rating for U.S. long-term sovereign debt or the impact of uncertain or changing political conditions, including federal government shutdowns and uncertainty regarding United States fiscal debt, deficit and budget matters.
• Cyber incidents or other failures, disruptions, or breaches of operational or security systems or infrastructure, or those of third-party vendors or service providers, including as a result of cyber-attacks.
• Severe weather, natural disasters, acts of war or terrorism, geopolitical instability, or other external events.
• The impacts of tariffs, sanctions, and other trade policies of the United States and its global trading counterparts and the resulting impact on South Plains and its customers.
• Changes in non-interest expenditures or in the anticipated benefits of such expenditures.
• Risks related to the development, implementation, use, and management of emerging technologies, including artificial intelligence and machine learning.
• Potential costs related to the impacts of climate change.
• Current or future litigation, regulatory examinations, or other legal and/or regulatory actions.
• Changes in applicable laws and regulations.

Future Outlook

The proposed transaction is expected to be 11% accretive to SPFI's earnings per share in 2027, with an attractive tangible book value per share earnback of less than 3.0 years. The combined company anticipates having approximately $5.4 billion in assets, $3.8 billion in loans, and $4.6 billion in deposits, strengthening its position as a leading Texas community bank with 26 branches and enhancing its geographic footprint in the high-growth Houston market. Management believes there is further opportunity to grow City Bank, leveraging investments in infrastructure and technology platforms for efficient scaling.

Management Comments

• Curtis Griffith (SPFI Chairman & CEO): "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. Our proposed acquisition of BOH 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. I believe this combination will deliver substantial value to both South Plains and BOHs shareholders which will make this a true win-win transaction. I also believe there is more opportunity ahead to further grow City Bank. I have often spoken to our ability to execute acquisitions given the investments that we have made across the Companys infrastructure and technology platforms that positions South Plains to efficiently scale our operations as we continue to expand across our markets."
• Jim Stein (BOH Chairman, President & CEO): "We are very excited to join with Curtis, Cory Newsom and the entire City Bank team. Houston is a dynamic community banking market, and 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. The strength of South Plains low cost, community deposits as well as their more expansive product portfolio is very attractive to us and should enable us to deepen our existing client relationships while also pursuing new relationships. I am also excited for our employees given the unique focus that City Bank places on their employees, the benefits they provide, and the great work environment that they have cultivated."
• Cory Newsom (SPFI President): "We have always said that the culture and values of an acquisition partner is critical to our decision-making process to ensure minimal dislocation through the integration while positioning us for long term success. A key factor in our decision to acquire BOH was their team, which is truly impressive, and their culture, which is very similar to ours. BOH also has a high bar for hiring, consistent with what we demand, that provides confidence that our two teams will work together well and which should minimize disruption as we integrate BOH into our operations. We also performed a thorough, deep dive into BOHs loan portfolio and underwriting processes and found a credit culture that resembled ours. This provides real confidence in the potential synergy and success of this acquisition."

Industry Context

This acquisition positions South Plains Financial to capitalize on the high-growth Houston market, a dynamic community banking environment. The pro forma company will become the 11th largest Texas-headquartered bank in Houston by deposits, enhancing its ability to compete and expand in a region experiencing significant market disruption and growth, including being a top relocation destination and home to numerous Fortune 500 companies. The transaction aligns with a strategy to accelerate earnings power through M&A and organic loan growth, leveraging existing infrastructure and technology platforms for efficient scaling.

Comparison to Industry Standards

• The pro forma company will have the 11th most deposits of a Texas-headquartered bank in Houston, indicating a significant market presence.
• The transaction provides important scale in Houston, identified as one of the fastest-growing MSAs in the country.
• BOH was ranked as the #15 Community Bank in Houston by deposits prior to the merger.
• Houston is recognized as the #1 Fastest Growing United States County (U.S. Census 2024 via Houston Business Journal), highlighting the strategic value of market expansion.
• Houston is a Top Relocation Destination in the United States (Penske Truck Rental 2024 via Houston Chronicle), suggesting strong demographic and economic tailwinds.
• Houston is the #2 Most Diverse Major U.S. City (WalletHub via CultureMap 2025) and the #2 U.S. Metro Home to Fortune 500 Companies (Fortune 2023 via Houston Chronicle), indicating a robust and varied economic base for banking operations.

Management Changes

Corporate Governance

Legal Proceedings

• Completion of the Merger is subject to the absence of any injunction, order, or legal restraint prohibiting its consummation.
• No proceedings are pending or, to SPFI's knowledge, threatened against SPFI or any of its Subsidiaries that could reasonably be expected to result in a Material Adverse Effect on SPFI or question the validity of any action taken or to be taken in connection with this Agreement.
• No proceedings are pending or, to BOH's knowledge, threatened, against BOH or Bank of Houston that would reasonably be expected to have a Material Adverse Effect or challenge the validity of the transactions.
• Neither BOH nor Bank of Houston is subject to any cease-and-desist or other order issued by, or is a party to any written agreement, consent agreement, or memorandum of understanding with, any Governmental Body that restricts its business or relates to its capital adequacy, credit policies, dividend policies, management, business, or operations.

Related Party Transactions

• There is no material relationship between SPFI and BOH aside from the transactions contemplated by the Reorganization Agreement.
• BOH has no outstanding amounts payable to or receivable from, or advances by BOH or Bank of Houston to, and neither BOH nor Bank of Houston is otherwise a creditor or debtor to, any director, executive officer, five percent (5%) or greater shareholder, or other Affiliate of BOH or Bank of Houston, other than part of the normal and customary terms of such persons employment or service as a director with BOH or Bank of Houston and other than deposits held by Bank of Houston in the Ordinary Course of Business.
• All agreements between BOH and any of its Affiliates comply in all material respects, to the extent applicable, with Sections 23A and 23B of the Federal Reserve Act and the Federal Reserve Board's Regulation W (12 C.F.R. Part 223).

Stakeholder Impact

• Shareholders (SPFI): Expected to benefit from 11% EPS accretion in 2027 and a tangible book value earnback of less than 3 years, enhancing long-term shareholder value.
• Shareholders (BOH): Will receive SPFI common stock, representing approximately 14.5% ownership in the combined company, with an implied value of $7.27 per common share.
• Employees (BOH): Key employees will be subject to retention agreements, and BOH employees who remain with SPFI will participate in SPFI's benefit plans with credit for prior service. Severance payments are outlined for involuntary terminations (not for cause) within 12 months post-conversion.
• Customers: Expected to benefit from an expanded product portfolio and continued relationship-based client service from the combined entity, particularly in the Houston market.
• Community: The acquisition deepens SPFI's commitment to the Houston market, strengthening the community banking presence in a high-growth region.

Next Steps

• BOH shareholders must approve the Reorganization Agreement and the transactions contemplated thereby.
• SPFI will file a Registration Statement on Form S-4 with the SEC, which must be declared effective under the Securities Act.
• SPFI will file all necessary documents to have the shares of SPFI Common Stock issued in the Merger listed on Nasdaq.
• All required governmental and regulatory consents and approvals must be received.
• The Merger is expected to close during the second quarter of 2026.
• Immediately following the Merger, Bank of Houston will merge with and into City Bank.
• James D. Stein, BOH's Chairman, President, and CEO, will be appointed to the boards of directors of SPFI and City Bank effective at or immediately following the Merger's effective time.
• SPFI will nominate James D. Stein for election by SPFI shareholders at the 2027 annual meeting.
• The core system conversion of Bank of Houston to City Bank's data processing system is anticipated to occur on May 8, 2026.

Key Dates

Recommendation

The acquisition is strategically sound, expanding South Plains Financial's presence in a high-growth market and creating a more diversified franchise. The projected 11% EPS accretion in 2027 and a tangible book value earnback of less than 3 years indicate a financially compelling transaction. The strong cultural alignment and retention of key BOH leadership further de-risk the integration process, suggesting a positive long-term outlook for SPFI shareholders.

Keywords

Bank Acquisition, Merger, Financial Services, Community Banking, Houston Market, Texas Banking, SPFI, BOH Holdings, City Bank, Bank of Houston, Earnings Accretion, Tangible Book Value, Market Expansion, Financial Integration