An all-stock transaction is a deal where one company acquires another using only its own shares instead of cash or other assets. For investors, this means exchanging ownership stakes rather than cash, which can affect the value and control of the companies involved. It often signals a focus on growth and can influence the stock prices of both companies.
P/TBVfinancial
P/TBV, or price-to-tangible book value, is a financial ratio that compares a company's stock price to its tangible assets, such as buildings, equipment, and inventory, excluding intangible assets like patents or goodwill. It helps investors assess whether a stock is overvalued or undervalued based on the company's physical assets. A lower P/TBV may suggest the stock is cheaper relative to the company's tangible worth, offering insight into its potential value.
pro formafinancial
Pro forma refers to financial information that is prepared based on estimates or adjustments to show what a company's results might look like under certain scenarios, such as new projects or acquisitions. It helps investors understand the potential impact of future events by providing a clear, hypothetical view of financial performance, much like a weather forecast shows possible future conditions.
CET1regulatory
CET1, or Common Equity Tier 1, is a measure of a bank's core financial strength, representing its most reliable and high-quality capital, primarily made up of shareholders' equity like common stock. It acts like a financial safety buffer, helping the bank absorb losses and stay stable during economic downturns. For investors, a strong CET1 ratio indicates a bank's resilience and overall health.
credit markfinancial
A credit mark is a record or indicator that reflects a person’s or organization’s history of borrowing and repaying money. It helps lenders assess how trustworthy they are when considering new loans, much like a report card shows a student’s performance. For investors, credit marks provide insight into the borrower’s financial reliability, influencing decisions about lending or investing money.
interest rate markfinancial
An interest rate mark is the difference between the interest rate a borrower pays and the interest rate a lender receives when dealing with a financial agreement. It reflects the profit or margin made by financial institutions for providing the service. For investors, understanding this mark helps gauge the profitability and risk involved in lending or borrowing activities.
NIB depositsfinancial
Nib deposits are funds or assets that a financial institution receives from a customer, often as part of an account setup or ongoing transactions. They represent the customer's money held by the bank or financial firm, which can be used for various purposes like loans or investments. For investors, understanding nib deposits is important because they reflect the level of customer trust and the financial institution’s ability to generate stable funding.
NEW YORK--(BUSINESS WIRE)--
On December 1, 2025, Lubbock, Texas-based South Plains Financial, Inc. (NASDAQ: SPFI) (“South Plains” or “the company”), parent of City Bank, announced its entrance into a definitive merger agreement with Houston, Texas-based BOH Holdings, Inc. (“BOH”), the parent company of Bank of Houston. The all-stock transaction, valued at approximately $106 million (P/TBV 1.4x), is expected to close between 1Q26 and 2Q26, subject to customary and shareholder approvals. Under the agreement, Jim Stein, Chairman, President, and Chief Executive Officer of BOH, will join the company and continue leading his team in Houston, along with being appointed to the board of directors of South Plains and City Bank.
KBRA views the proposed acquisition as strategically well-aligned with South Plains’ ongoing effort to build a scaled, relationship-focused franchise across high-growth Texas markets driving organic loan growth. The combination meaningfully expands the company’s presence and commercial and private banking relationships in the Houston MSA – one of the fastest-growing major markets in the U.S. – and positions SPFI to capitalize on recent competitive disruptions. From a financial standpoint, the acquisition is expected to add approximately $772 million in assets to the company's balance sheet, with pro forma $5.4 billion in total assets, $3.8 billion in loans, and $4.6 billion in deposits. Financial projections include strong profitability metrics, in part, due to expected cost savings of roughly 25% of BOH’s operating base, with the combined company estimating 100% of the savings to be recognized in 2027. Pro forma capital ratios—including ~10.2% TCE and ~13.9% CET1 at closing—remain solidly within a range appropriate for the company’s current rating category in our view. Overall, we believe that the proposed acquisition complements SPFI’s growth strategy, and while there is an inherent level of integration risk involved with any bank M&A transaction, such risk is somewhat mitigated by management's previous M&A integration experience.
Culturally, the transaction appears low-risk, with both organizations operating community-banking models focused on relationship lending and disciplined credit management. The pro forma loan portfolio is not expected to change materially as both institutions have complementary loan mixes, with commercial loans remaining the largest component at 66% of total loans, followed by residential mortgage and consumer loans at 20% and 15% of loans, respectively. KBRA views the due diligence process to be conservative, as South Plains conducted a review of the loan portfolio (65% of loans) - completed by internal and external teams including all watch and classified loans - and expects to record a gross credit mark of $7.6 million (1.2% of BOH’s loans) and an interest rate mark of $1.6 million amortized over 5 years. With respect to deposit mix, pro forma deposit costs are expected to remain contained at 2.21% with NIB deposits representing 27% of total deposits. BOH contributes a high-quality deposit base and profitable loan portfolio, enhancing SPFI’s earnings durability and enabling deeper penetration of commercial and private banking opportunities within Houston and surrounding counties. Overall, in our view, the acquisition would strengthen South Plains’ strategic positioning in Texas, enhance long-term profitability through scale and synergies, and provide meaningful franchise benefits with limited execution risk.
KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.
