South Plains Financial Seals BOH Merger, Creating Texas Banking Powerhouse

LUBBOCK, TX – April 01, 2026 – South Plains Financial, Inc. (NASDAQ:SPFI), the holding company for City Bank, announced today the successful completion of its merger with BOH Holdings, Inc. The deal, which became effective April 1, solidifies City Bank’s position as a formidable independent bank in the highly competitive Texas market. The transaction also includes the full integration of BOH’s subsidiary, Bank of Houston, which has been merged into City Bank, with City Bank as the surviving entity.

This strategic move significantly bolsters South Plains Financial's balance sheet, incorporating BOH's reported $744 million in total assets, $624 million in loans, and $603 million in deposits as of year-end 2025. The completion of the merger marks a pivotal moment for the Lubbock-based institution, dramatically expanding its scale and deepening its presence in key metropolitan areas across the state.

A Strategic Push into the Houston Market

The merger is the culmination of a carefully planned strategic initiative aimed at significant market expansion, particularly within the dynamic and fast-growing Houston metropolitan area. The all-stock transaction, valued at approximately $105.9 million at the time of its announcement, was designed to leverage BOH's established franchise and deep-rooted customer relationships in Houston to accelerate South Plains' growth trajectory.

This acquisition is not just about adding assets; it's a deliberate step toward building a comprehensive, state-wide banking franchise. City Bank already has a strong presence in West Texas, Dallas, El Paso, the Permian Basin, and College Station. The integration of Bank of Houston provides a critical anchor in one of the nation's most vibrant economic hubs, fulfilling a long-term strategic objective. The move is widely seen as a reflection of a broader consolidation trend within the Texas banking sector, where strong economic fundamentals have made the state a primary battleground for M&A activity. As competition for deposits intensifies and the need for significant technology investment grows, regional and community banks are increasingly looking to mergers to achieve the scale necessary to compete effectively.

Financially, the deal is structured to deliver substantial value to shareholders. Projections indicate the merger will be approximately 11% accretive to South Plains Financial's earnings per share by 2027. Furthermore, the company anticipates a tangible book value per share earnback period of less than three years, an attractive metric that underscores the financial soundness of the acquisition.

Forging a Larger Financial Footprint

The combination of the two entities creates a regional banking powerhouse with a significantly larger financial footprint. Based on pro forma financials from late 2025, the newly expanded South Plains Financial now commands approximately $5.4 billion in total assets, $3.8 billion in loans, and $4.6 billion in deposits. This enhanced scale provides the institution with greater lending capacity and a more robust deposit base, strengthening its competitive position against both larger national players and other independent banks.

With the addition of Bank of Houston's operations, the combined company is projected to hold the 11th most deposits of any Texas-headquartered bank in the Houston market. While this represents a major step forward, it also signals that there is ample room for continued growth and market share capture within the city. The merger provides the platform and resources needed for this next phase of expansion.

This strategic growth is built upon a foundation of consistent financial health. Prior to the merger, South Plains Financial had demonstrated solid performance, including a 17.8% growth in earnings over the past year and a strong net margin of 28.41%. This history of profitability and prudent management provides a stable base from which to integrate the new operations and realize planned synergies.

The Impact on Customers and Communities

For the customers of the former Bank of Houston, the merger signals a transition into the City Bank ecosystem. As the surviving bank, City Bank will now serve these customers, who are expected to gain access to a more expansive portfolio of financial products and services. This includes a wider range of commercial and retail banking solutions, as well as sophisticated investment, trust, and mortgage services that are hallmarks of City Bank's offerings. The combined branch network now totals 26 locations across Texas and New Mexico, offering greater convenience and access for a broader customer base.

To ensure a smooth transition and maintain continuity, South Plains has integrated key leadership from BOH Holdings. James D. Stein, the former Chairman, President, and CEO of BOH, has been appointed to the boards of both South Plains Financial and City Bank. He will also take on the crucial role of Houston Market President, signing a two-year employment agreement to guide the bank’s strategy in the region. This move is a clear signal of the company's commitment to retaining local expertise and preserving the community-focused banking relationships that Bank of Houston was known for.

Investor Confidence and Market Outlook

The market has responded favorably to South Plains Financial's strategic direction and financial discipline. The company's stock (SPFI) has been a solid performer, climbing 28% over the past year. While some analysts maintain a "Hold" rating, they acknowledge the significant benefits of the merger and the company's strong position in the Texas market, with some setting a price target of $48, suggesting considerable upside potential. The stock's valuation is considered fair, reflecting both its current performance and the anticipated growth from the acquisition.

Investor confidence is further buoyed by the company's robust fundamentals. South Plains Financial boasts strong credit quality, a healthy CET1 ratio of 14.45%, and a track record of rewarding shareholders, having increased its dividend for seven consecutive years. The company's financial health is underscored by a top-tier Piotroski F-Score of 9, indicating a highly sound financial position, while a low Beneish M-Score suggests a low probability of earnings manipulation. With institutional ownership at 42.18% and insider ownership at 9.49%, those closest to the company have demonstrated significant faith in its long-term prospects.

Looking ahead, the successful completion of the merger, which received all necessary regulatory approvals in an efficient timeframe, positions South Plains Financial for its next chapter of growth. Management is targeting an acceleration in loan growth into the mid-to-high single digits for 2026, driven by the expanded market presence and enhanced service capabilities of the combined entity.