b1BANK to Acquire Oakwood Bank for $85.7MM

Business First Bancshares, the holding company for b1BANK, entered into a definitive agreement to acquire Oakwood Bancshares and its wholly-owned bank subsidiary, Oakwood Bank, in an all-stock transaction for total consideration value of approximately $85.7 million based on Business First’s closing price of $21.57 per share on April 22.

Once completed, it is expected that the acquisition would increase Business First’s consolidated total assets to approximately $7.4 billion, with more than $5.6 billion in consolidated total loans. As of Dec. 31, 2023, Oakwood Bank reported total assets of $843 million, total deposits of $732 million and total equity capital of $90.7 million. As a result of the proposed transaction, b1BANK will add four banking centers in Dallas, one banking center in Oakwood, TX, and one banking center in Snyder, TX. As a result of the proposed transaction, it is anticipated that b1BANK will increase the percentage of Texas loans in its portfolio from 37.1% to 44.4% and the percentage of Texas deposits in its portfolio 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, acting chairman, president and CEO of Business First, said. “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. Oakwood and b1 share similar community-oriented cultures and values and we look forward to the combination of our respective franchises strengthening our north Texas platform.”

“We are excited about the opportunity to bring Business First and Oakwood together,” Roy J. Salley, chairman and CEO of Oakwood Bank, said. “The transaction will accelerate our ability to grow within the Dallas market and creates an exciting opportunity for our shareholders and employees. The Oakwood board of directors believes Business First is well positioned and has significant upside opportunity through stock price appreciation.  The Business First platform will allow Oakwood to better serve its existing customers and communities, as well as expand into other product offerings. We admire the historical success of Jude Melville and the b1BANK team and look forward to working together.”

Under the terms of the proposed transaction, Business First will issue 3,973,469 shares of its common stock, subject to adjustment pursuant to the terms of the definitive agreement, and will pay cash in lieu of fractional shares, to the shareholders of Oakwood. Following the completion of the proposed transaction, former Oakwood shareholders will own approximately 13.5% of the combined company.

The boards of directors of Business First and Oakwood have each unanimously approved the proposed transaction. The directors and officers of Oakwood have entered into agreements with Business First pursuant to which they have agreed to vote their shares of Oakwood common stock in favor of the proposed transaction.

The proposed transaction is expected to close in Q4/24, subject to the satisfaction of customary closing conditions, including the receipt of regulatory approvals and the approval of Oakwood’s shareholders.

Upon completion of the proposed transaction, Salley will join b1BANK as regional chairman for Dallas. Additionally, upon completion of the proposed transaction, William G. Hall, chairman of Oakwood Bancshares, will be appointed to the boards of directors of Business First and b1BANK.

Raymond James & Associates rendered a fairness opinion to Business First, and Hunton Andrews Kurth served as legal counsel to Business First on this transaction. Stephens served as exclusive financial advisor for and rendered a fairness opinion to Oakwood, and Norton Rose Fulbright served as legal counsel to Oakwood.

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