Wichita Falls, Texas-based Wichita Falls Bancshares Inc. agreed to acquire Chico, Texas-based Chico Bancorp Inc. and its unit, First State Bank.

Financial terms of the deal were not disclosed in the news release. The transaction is expected to close in the first quarter of 2020.

S&P Global Market Intelligence valuations for bank and thrift targets in the Southwest region between Dec. 17, 2018, and Dec. 17, 2019, averaged 173.31% of book and 182.68% of tangible book and had a median of 15.94x last-12-months earnings, on an aggregate basis.

Ratios would be based on Chico Bancorp's June 30, 2019, small parent equity and last 12-month net income of $18.5 million for Wichita Falls and $1.19 million for Chico Bank.

Wichita Falls will enter Wise County, Texas with four branches, which will be ranked third with a 14.7% share of approximately $1.02 billion in total market deposits. It is the parent company of First National Bank, which had $529.8 million in assets as of Sept. 30, according to S&P Global Market Intelligence data. First State Bank had assets of $185.0 million as of the same date.

John Gosser of Griffin Financial Group LLC served as financial adviser and Robert Flowers of Fenimore Kay Harrison Ford LLP acted as legal adviser to Wichita Falls Bancshares. Hillworth LLC served as financial adviser and Larry Temple acted as legal adviser to Chico Bancorp.

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