The Bank Slate


Business First in La. to expand in Dallas with Oakwood Bank deal

Business First Bancshares in Baton Rouge, La., has agreed to buy Oakwood Bancshares in Oakwood, Texas.

The $6.7 billion-asset Business First said in a press release that it will pay $85.7 million in stock for the $843 million-asset Oakwood. The deal, which is expected to close in the fourth quarter, priced Oakwood at 106% of its tangible book value.

Oakwood has six branches, $654 million loans and $732 million of deposits. When the deal closes, the percentage of Texas loans on Business First’s balance sheet will increase from 37.1% to 44.4%; the percentage of Texas deposits will increase from 19.3% to 30.6%. 

“Expansion in the Dallas market has been a successful focus of b1BANK for a number of years,” Jude Melville, Business First’s acting chairman, president and CEO, said in the release.

“We believe the proposed transaction with Oakwood is an effective and efficient way to deepen our customer, employee, and shareholder bases in what is arguably one of America’s strongest markets,” Melville added.

Roy Salley, Oakwood’s CEO, will join Business First as regional chairman of Dallas. William Hall, chairman of Oakwood Bancshares, will join Business First’s board.

Business First expects low-double-digit earnings per share accretion. It should take about two years to earn back any dilution to Business First’s tangible book value.

Business First plans to cut about 38% of Oakwood’s annual noninterest expense, or roughly $9.3 million. It expects to incur $14 million of pretax merger-related expenses.

Raymond James rendered a fairness opinion to Business First; Hunton Andrews Kurth served as legal counsel. Stephens and Norton Rose Fulbright US advised Oakwood.

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