Nearly six months after it was announced, Business First Bank’s acquisition of American Gateway Bank has yet to be finalized. Officials with both banks—who had hoped to finalize the merger by the end of last year—attribute the delay to the complex regulatory approval process and say while six months may seem like a long time for the deal to be consummated it’s not unusual.
“As business people we all want things to move at the speed of light but in banking things take a while and the wheels turn slow,” Business First Bank President and CEO Jude Melville says. “If you look at the typical bank acquisition or merger from announcement to close, the median acquisition takes about six months, so although it seems like it’s a long time it’s really not.”
It’s not clear how much longer the regulatory approval process will take. No less than three federal and state agencies must sign off on the deal; they include the Federal Reserve, Federal Deposit Insurance Corporation and Louisiana Office of Financial Institutions. Approval from the Securities and Exchange Commission also is needed because Business First has registered with the SEC, though the bank has no plans for a public offering at this time.
“There are a lot of moving parts all at once,” Melville says.
Melville concedes a group of Gateway shareholders is mounting a challenge to the acquisition and is attempting to buy shares of the Port Allen-based bank in order to try to block the sale. While he acknowledges the challenge is serious, Melville says it’s not slowing things down and he’s not worried about it ultimately derailing the deal.
“It’s a natural part of the process and we have a solid deal structure and a good case to make,” he says. “We feel confident. Their board has unanimously endorsed it and we’re positive about it.”
If and when the merger is finalized, it will bring together one of the youngest banking institutions in the area with one of the oldest to create what is expected to be the largest locally headquartered community bank. It also will bring together a leading business banking institution and one that has a long-established personal banking portfolio. The combined entity will operate under the Business First brand and include 16 branch locations, more than $1 billion in assets, $870 million in deposits, $700 million in loans and $100 million in equity. —Stephanie Riegel
