First Financial Bankshares (FFIN) in Abilene, Texas, has agreed to buy Orange Savings Bank in Orange, Texas.
First Financial will pay $56 million in cash and stock for a bank that will help it expand in southeastern Texas. The $4.4 billion-asset company should complete the acquisition in the second quarter.
First Financial will pay a price equal to 123% of Orange's book value, or about 12.5 times the bank's earnings, F. Scott Dueser, First Financial's chairman, president and chief executive, said. Orange Savings Bank has $443 million in assets and $296 million in loans.
Orange will take on the First Financial brand when the deal is completed, though its management will remain in place. "That's how we do things. If you buy good banks, why would you want to screw them up?" Dueser said.
Orange Savings has six branches in southeast Texas and along the Gulf Coast, a region in which First Financial currently has no offices.
"What we like is that it's a totally different economy from what is in our footprint. It's provides excellent diversity for us," Dueser said. "Orange is a very well-run bank that has the number-one market share in its market, and the acquisition fits very well with our overall strategy."
First Financial has 11 banks, all based in Texas, with 55 branches, according to the Federal Deposit Insurance Corp.