Under the terms of the agreement, each share of BOH common stock was converted into the right to receive 0.1925 shares of SPFI common stock, with cash paid in lieu of fractional shares. Based on SPFI's closing price of $37.79 on November 28, 2025, the transaction was valued at approximately $105.9 million, or $7.27 per BOH common share. SPFI issued approximately 2.8 million shares (based on 14,334,219 BOH shares outstanding), with former BOH shareholders ending up owning approximately 14.5 percent of the combined company and SPFI shareholders retaining approximately 85.5 percent, according to SPFI's investor presentation. BOH stock appreciation rights and unexercised warrants were cashed out at closing rather than converted into SPFI equity. At signing of the earlier non-binding letter of intent on October 7, 2025, the same fixed 0.1925 exchange ratio had implied an aggregate value of approximately $111.1 million, based on SPFI's 20-day volume-weighted average price of $39.60 as of October 3, 2025, according to the merger proxy statement/prospectus (Form 424B3).
SPFI's investor presentation disclosed transaction valuation metrics of deal value to tangible common equity of 143 percent, a price to estimated 2027 earnings per share multiple of 6.8x, and a franchise premium to core deposits of 7.4 percent. As of September 30, 2025, BOH had approximately $772 million in consolidated assets, $633 million in gross loans and $629 million in consolidated deposits, with a return on average assets of 1.47 percent and a net interest margin of 3.75 percent for the 2025 year-to-date period, per the presentation. Pro forma for the transaction, the combined company was expected to have approximately $5.4 billion in assets, $3.8 billion in loans and $4.6 billion in deposits based on balance sheets as of September 30, 2025, with roughly 26 branches across Texas and the 11th-most deposits among Texas-headquartered banks in Houston.
SPFI disclosed expected pretax cost savings of approximately $4.6 million in 2027, equal to about 25 percent of BOH's non-interest expense base, with 75 percent of the savings expected to be realized in 2026 and 100 percent thereafter. The transaction assumptions also included a loan mark of $9.2 million (comprising a $7.6 million gross credit mark, equal to 1.20 percent of BOH's loans as of September 30, 2025, and a $1.6 million interest rate mark amortized over 5.0 years), a core deposit intangible of 1.50 percent of non-time deposits amortized on a sum-of-years-digits basis over 10 years, and pretax transaction expenses of $13.8 million. SPFI stated it did not expect to incur an additional mark related to Day-2 CECL accounting.
SPFI disclosed the transaction was expected to be approximately 11 percent accretive to its earnings per share in 2027 (the first full year of combined operations), with tangible book value dilution at closing of approximately 3.5 percent including loan rate marks (3.1 percent excluding rate marks) and a tangible book value earnback period of 2.9 years including rate marks (2.8 years excluding rate marks). The presentation also disclosed an estimated internal rate of return of approximately 30 percent based on a 10x terminal multiple, and pro forma regulatory capital ratios of approximately 10.2-10.3 percent tangible common equity, 11.9 percent leverage, 13.9 percent CET1 and 16.5 percent total capital.
Curtis Griffith, Chairman and CEO of South Plains, said the 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," adding that he believes "this combination will deliver substantial value to both South Plains' and BOH's shareholders which will make this a true win-win transaction." Jim Stein, Chairman, President and CEO of BOH, said the 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," citing the strength of South Plains' low-cost, community deposits and broader product portfolio. Cory Newsom, President of South Plains, said cultural and credit-culture compatibility between the two banks, confirmed through a deep dive into BOH's loan portfolio and underwriting, provided confidence in the deal's potential synergies.
The merger proxy statement/prospectus (Form 424B3) disclosed that BOH's board and management had periodically evaluated strategic alternatives, including continuing independently, pursuing acquisitions, or merging with another institution. In December 2024, BOH held informal discussions with an unnamed Texas-based public bank holding company ("Company A") about a possible combination, which ended in January 2025 when the parties determined there was insufficient interest to proceed. In late August 2025, a second Texas-based public bank holding company ("Company B") expressed interest, signed a confidentiality agreement with BOH on September 8, 2025, requested information and discussed an expected price range, but discontinued discussions shortly thereafter. BOH engaged Hillworth Bank Partners as exclusive financial advisor on August 18, 2025. Discussions with SPFI began in mid-September 2025, a non-binding letter of intent was signed October 7, 2025, and the definitive merger agreement was signed December 1, 2025, after SPFI's board received a fairness analysis from Raymond James and BOH's board received an oral (later written) fairness opinion from Hillworth, both delivered December 1, 2025.
Raymond James & Associates, Inc. served as financial advisor to South Plains and rendered a fairness opinion to its board of directors; Hunton Andrews Kurth LLP served as South Plains' legal advisor. Hillworth Bank Partners served as financial advisor to BOH and rendered a fairness opinion to its board of directors; Fenimore Kay Harrison LLP served as BOH's legal advisor.
Completion of the merger was subject to approval by BOH's shareholders (requiring at least two-thirds of outstanding BOH shares, voted at a special meeting held March 20, 2026), Nasdaq listing approval for the SPFI shares to be issued, receipt of required regulatory approvals, and effectiveness of SPFI's Form S-4 registration statement (filed January 30, 2026, amended February 13, 2026, and declared effective by the SEC on February 18, 2026). The merger agreement provided for a termination fee of $4,235,314 payable by BOH under certain circumstances, and allowed either party to terminate if the merger did not close by November 1, 2026 (subject to extension). Under the agreement, James D. Stein, BOH's Chairman, President and CEO, joined the boards of SPFI and City Bank following closing.
The merger closed effective April 1, 2026, with SPFI issuing approximately 2.8 million shares of common stock to former BOH shareholders, confirmed in a Form 8-K filed that day. Immediately following the merger, Bank of Houston merged into City Bank, with City Bank surviving. Mr. Stein was appointed to the SPFI board as a Class II director and to the City Bank board as a Class III director at closing.