Business First Bancshares, the holding company for b1BANK, and Texas Citizens Bancorp signed a definitive agreement under which Business First will acquire Texas Citizens Bancorp and its wholly-owned bank subsidiary, Texas Citizens Bank. Following the completed transaction, the combined institution is expected to have total consolidated assets of approximately $4.9 billion.
“We have experienced success diversifying our geographic exposure over the past few years. This partnership with Texas Citizens Bank, by moving us a little farther down I-10 into the Houston market, is an opportunity for us to accelerate our transition into a regional institution,” Jude Melville, president and CEO of Business First, said. “Both of our companies are focused on serving similar clienteles in similar ways, in particular small businesses, and we anticipate a relatively seamless integration of operational systems and, more importantly, cultural approaches. We look forward to using our combined strength to benefit both existing and new clients throughout one of the country’s most potential-filled regions.”
As of Sept. 30, Business First had total assets of $4.4 billion, total loans of $3.1 billion, total deposits of $3.8 billion and total shareholders’ equity of $430.2 million compared with Texas Citizens’ estimated $516.9 million in total assets, $365.7 million in total loans, $452 million in total deposits and $34.6 million in common shareholders’ equity. Texas Citizens Bank, which was founded in 2006, is headquartered and has six branches in the Houston area.
Duncan Stewart, chairman and CEO of Texas Citizens Bank, will join b1BANK and will serve as chairman of the Houston region, leading business development efforts.
“Texas Citizens Bank has been successful in serving Houston area owner-managed businesses since our inception,” Stewart said. “The significant efforts of our team toward strengthening our institution have resulted in the OCC recently lifting the formal agreement. We believe that our partnership with b1BANK will further strengthen the bank by enhancing our customer experience and our long-term contributions to the local community.”
Mike Cornett, president of Texas Citizens Bank, will also join the b1BANK team as vice chair in Houston. Don Hingle, who is currently executive vice president and director of market expansion for b1BANK, will relocate to Houston as regional president in Houston. Hingle has 39 years of banking experience and has spent the last 12 with b1BANK, serving in various capacities, including market president, regional president and chief credit officer.
Under the terms of the merger agreement, which was unanimously approved by the boards of each company, Texas Citizens shareholders will receive 0.7038 shares of Business First stock for each share of Texas Citizens common stock they own (with cash paid in lieu of fractional shares), or approximately 2.1 million shares of Business First’s common stock. Following the completion of the transaction, former Texas Citizens shareholders will own approximately 9.7% of the combined company.
Based on Business First’s closing stock price of $25.30 as of Oct. 19, the transaction is valued at approximately $52.9 million in the aggregate. The merger agreement contains customary representations, warranties and covenants by Texas Citizens and Business First and is subject to customary closing conditions, including approval by Texas Citizens shareholders and the receipt of customary regulatory approvals. The transaction is expected to close during Q1/22.
Stephens acted as financial advisor to Business First and Fenimore Kay Harrison acted as its legal advisor. Piper Sandler acted as financial advisor to Texas Citizens and Bracewell acted as its legal advisor.
