Business First Bancshares announces acquisition of Oakwood Bancshares
Business First Bancshares, Inc. (NASDAQ: BFST), the holding company for b1BANK, has entered into a definitive agreement to acquire Oakwood Bancshares, Inc., and its wholly-owned subsidiary, Oakwood Bank, in an all-stock transaction valued at approximately $85.7 million. This transaction, based on Business First’s closing share price of $21.57 on April 22, 2024, marks a significant expansion for Business First, particularly enhancing its footprint in the Texas banking sector.
Once completed, the acquisition is projected to increase Business First’s consolidated total assets to approximately $7.4 billion, with consolidated total loans exceeding $5.6 billion. As of the end of 2023, Oakwood Bank reported assets of $843 million, with total deposits of $732 million and equity capital of $90.7 million. The acquisition will notably expand b1BANK’s presence, adding six full-service banking centers across Dallas, Oakwood, and Snyder, Texas. This move is expected to increase the percentage of Texas loans in b1BANK’s portfolio from 37.1% to 44.4% and Texas deposits from 19.3% to 30.6%.
Jude Melville, acting chairman, president, and chief executive officer of Business First, emphasized the strategic importance of the Dallas market and shared optimism about the integration of Oakwood into their operations. “We believe the proposed transaction with Oakwood is an effective and efficient way to deepen our customer, employee, and shareholder bases in one of America’s strongest markets,” Melville stated.
Roy J. Salley, chairman and chief executive officer of Oakwood Bank, expressed enthusiasm about the opportunities this merger would bring, noting, “The transaction will accelerate our ability to grow within the Dallas market and creates an exciting opportunity for our shareholders and employees.”
Under the proposed terms, Business First will issue approximately 3,973,469 shares of its common stock and will pay cash in lieu of fractional shares to Oakwood shareholders, who will own about 13.5 percent of the combined company post-transaction. The transaction has received unanimous approval from the boards of directors of both companies and is expected to close in the fourth quarter of 2024, pending regulatory approvals and Oakwood shareholder consent.
Following the merger, Roy J. Salley will join b1BANK as regional chairman for Dallas, and William G. Hall, chairman of Oakwood Bancshares, will be appointed to the boards of directors of Business First and b1BANK.
Raymond James & Associates, Inc. provided a fairness opinion to Business First, with Hunton Andrews Kurth LLP serving as legal counsel. Stephens Inc. acted as the exclusive financial advisor and rendered a fairness opinion to Oakwood, with Norton Rose Fulbright US, LLP providing legal advice.
This acquisition represents a strategic alignment that will significantly enhance Business First’s service offerings and market reach, particularly in the Texas region, positioning the company for sustained growth and increased market share in the competitive banking industry.