Southside Bancshares in Tyler, Texas, has agreed to buy Diboll State Bancshares in Texas.
The $5.7 billion-asset Southside said in a press release Monday that it will pay $218.8 million in cash and stock for the $1 billion-asset parent of First Bank & Trust East Texas. The deal, which is expected to close in the fourth quarter, values Diboll State at 228% of its tangible book value.
“This merger is an excellent growth opportunity to further expand our footprint in the dynamic east Texas market, complementing our presence in north Texas and Austin,” Lee Gibson, Southside’s president and CEO, said in the release.
Diboll State’s executive management team would remain in place after the merger, with President and CEO Jay Shands to become a regional president.
Southside said it expects the transaction to be 5.4% accretive to its 2018 earnings per share. It should take less than four years to earn back any dilution to Southside's tangible book value.
Southside was advised by Keefe, Bruyette & Woods and Alston & Bird. Diboll State was advised by Hovde Group and Fenimore, Kay, Harrison & Ford.