BATON ROUGE — Business First Bancshares, Inc., the holding company for Business First Bank, and Richland State Bancorp, Inc. have signed an agreement under which Business First will acquire Richland State and its wholly owned bank subsidiary, Richland State Bank.
On a pro forma basis as of March 31, 2018, the combined institution would be the 4th largest Louisiana-headquartered bank, with total assets of approximately $2 billion.
“Our team remains focused on our goal of becoming the region’s most influential business-focused community bank,” said Jude Melville, President and CEO of Business First. “This merger, in combination with our recent MBL Bank partnership in Minden, Louisiana, expands our presence along the I-20 corridor and provides diversification and balance to our business mix. The thing I’m most excited about, of course, is the opportunity to keep adding good people to the team. Richland State and its leadership team have a well-deserved reputation, and we look forward to working with them to serve their clients.”
Richland State Bank was founded in 1902 in Rayville, Louisiana. As of March 31, 2018, Richland State Bank reported $305.0 million in total assets, $188.7 million in total loans, $270.0 million in total deposits and $32.5 million in shareholders’ equity. Richland State Bank is the leading financial institution in Richland Parish and operates a total of seven branch locations in northern Louisiana. On a pro forma basis, the combined institution will have over 40% of its loans and deposits along the I-20 corridor in northern Louisiana and Dallas, Texas.
Following the completion of the transaction, Richland State’s President and CEO, Jerome Vascocu, will join Business First’s and Business First Bank’s board of directors and serve as Chairman of Business First Bank’s Northeast Louisiana Region. “Richland State Bank has a long and proud tradition of excellence,” said Mr. Vascocu. “As the banking industry rapidly evolves, we believe this partnership is a strong positive move forward for our franchise. We have forged friendships and working relationships with the Business First leadership team over the years, and are confident in their ability to meet the challenges inherent in this business on behalf of our customers, employees and shareholders. We are especially excited about expansion along the I-20 corridor, including Dallas. I am convinced that great things lie ahead for this partnership.”
Under the terms of the merger agreement, which has been approved by the board of each company, Richland State’s shareholders will receive cash consideration of approximately $10.6 million and 1,679,608 shares in Business First Bancshares stock, subject to certain conditions and potential adjustments set forth in the merger agreement. Based on Business First’s closing stock price of $23.92 on June 1, 2018, the transaction is valued at approximately $50.8 million in the aggregate. The merger agreement contains customary representations and warranties and covenants by Richland State and Business First, and is subject to customary closing conditions, including approval by Richland State’s shareholders and the receipt of customary regulatory approvals. The transaction is expected to close in the fourth quarter of 2018.
Stephens Inc. acted as financial advisor, and Fenimore, Kay, Harrison & Ford, LLP acted as legal advisor to Business First. National Capital, LLC acted as financial advisor and rendered a fairness opinion, and Kantrow Spaht Weaver & Blitzer (APLC) acted as legal advisor to Richland State.