SEC Company Response from Business First Bancshares, Inc. (BFST) (CIK 0001624322) (BFST) — Feb 5, 2015
Business First Bancshares, Inc. (BFST) (CIK 0001624322)
Date: Feb. 5, 2015 · CIK: 0001624322 · Accession: 0001193125-15-035614
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-200112
Letter
Securities and Exchange Commission Re: Business First Bancshares, Inc. Amendment No. 1 to Registration Statement on Form S-4 Filed November 12, 2014 File No. 333-200112
Dear Mr. Schiffman:
On behalf of Business First Bancshares, Inc. (the “Company”), enclosed please find a copy of Amendment No. 2 to the Company’s Registration Statement on Form S-4 (the “Revised S-4”), as submitted to the Securities and Exchange Commission (“Commission”) on the date hereof, marked to show changes to Amendment No. 1 to the Registration Statement that was filed on January 13, 2015.
General
1. We acknowledge your response to comment 1 of our letter to you dated December 8, 2014. Please supplementally provide us with the following information:
•
noting the statement in the last sentence of second paragraph of the first page of both the “Pro Forma Overview” and the “Fairness Opinion Presentation” by Sandler O’Neill that “the printed presentation is incomplete without the oral or video presentation that supplements it” please provide us with transcripts of any oral and/or video presentation that was made by Sandler O’Neill to any member of the Board; and
•
the third party report of the review of Business First Bank’s loan portfolio to which you refer in the second full paragraph on page 57.
In response to the Staff’s comment, the Company advises the Staff that there is no transcript or video of the oral presentation that supplemented the Pro Forma Overview or the Fairness Opinion Presentation that were given by Sandler O’Neill (the “Merger Presentations”) to the
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board of directors of American Gateway Financial Corporation (“AGFC”). The Company has consulted with AGFC and Sandler O’Neill regarding the content of the oral portions of the Merger Presentations and AGFC and Sandler O’Neill have confirmed that the substance of the oral portions did not contain any material nonpublic information about either company that was not contained in the accompanying slide presentations which have been provided supplementally to the SEC.
In response to the Staff’s comment, the third party report of the review of Business First Bank’s loan portfolio is being submitted supplementally under separate cover.
2. We acknowledge your response to comment 1 of our letter to you dated December 8, 2014. Please disclose the projections contained in the “Pro Forma Overview” and “Fairness Opinion Presentation’ by Sandler O’Neill that were “based on each respective management team’s budget for 2014 and projected thereafter based on each respective management team’s guidance.” Please disclose the assumptions on which the valuations were based.
In response to the Staff’s comment, the Company has revised its disclosure in the Revised S-4 under the subheading, “Opinion of Sandler O’Neill & Partners, L.P.,” to include the projections that were contained in the “Pro Forma Overview” and “Fairness Opinion Presentation” by Sandler O’Neill. The Company has updated its disclosure in this same section to include the assumptions used in the disclosed projections.
3. We acknowledge your response to comment 2 of our letter to you dated December 8, 2014. Please revise the registration statement to disclose all material nonpublic information regarding Business First Bancshares that was disclosed, directly or indirectly, to American Gateway Financial Corporation Inc. Please supplementally provide us with all material nonpublic information regarding American Gateway Financial Corporation Inc. that was disclosed, directly or indirectly, to Business First Bancshares, and/or its representatives and/or financial advisors including, but not limited to, the “confidential information memorandum regarding AGFC” to which you refer on pages 56 and 57.
In response to the Staff’s comment, the referenced “confidential information memorandum regarding AGFC,” dated July 2013 and certain other contracts, agreements and third-party reports that the parties deem to be material, but which have been disclosed in the Revised S-4, are being submitted supplementally under separate cover. With respect to the referenced confidential information memorandum, the parties have reviewed the document to confirm that it does not contain any material nonpublic information that is not otherwise disclosed or updated in the Revised S-4. AGFC, the Company and their respective financial advisors have confirmed to us that, other than information that is disclosed in the registration
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statement (as revised pursuant to this amendment), there is no material nonpublic information regarding either the Company or AGFC that was disclosed, either directly or indirectly to the other.
4. We acknowledge your response to comment 3 of our letter to you dated December 8, 2014. Please revise the section entitled “Business First’s Reasons for the Merger” on page 60 to explain the reasons that the Board did not obtain a fairness opinion.
In response to the Staff’s comment, the Company has updated its disclosure in the Revised S-4 under the section entitled, “Business First’s Reasons for the Merger,” to explain the reasons why the board of directors of the Company did not obtain a fairness opinion. In deciding not to obtain a fairness opinion the Company’s board of directors considered the following factors: (i) that a formal fairness opinion is not required under applicable law; (ii) the cost to the Company associated with obtaining a fairness opinion; and (iii) the Company’s consultation with its financial advisor regarding the terms of the proposed merger. Although the Company did not obtain a formal, written opinion, its board of directors’ determination that the terms of the proposed merger are fair to the Company’s shareholders was made in consultation with its financial advisor.
Summary, The Merger Consideration, page 6
5. We acknowledge your response to comment 8 of our letter to you dated December 8, 2014. Please revise the first full paragraph on page 7 to disclose the Tangible Equity Capital of each company as of the most recent date. Please revise the second to last paragraph to explain how the consideration is “subject to adjustment.”
In response to the Staff’s comment, the Company has updated its disclosure in the Revised S-4 under the section entitled, “Summary—The Merger Consideration,” to disclose the Tangible Equity Capital of each company as of January 31, 2015. This is the most recent date prior to the date of this filing that the Company was able to obtain the financial information needed to calculate the approximate merger consideration. The Company has also disclosed in this section the unaudited Tangible Equity Capital of each of the Company and AGFC as of January 31, 2015.
Summary, Material U.S. Federal Income Tax Consequences, page 8
6. Please acknowledge receipt of a tax opinion and provide a cross reference to it.
In response to the Staff’s comment, the Company has updated its disclosure in the section of the proxy statement/prospectus in the Revised S-4 entitled, “Summary—Material U.S. Federal Income Tax Consequences” to disclose that, in connection with the filing of the Registration
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Statement, Fenimore, Kay, Harrison & Ford LLP has rendered its tax opinion to the Company and AGFC addressing the U.S. federal income tax consequences of the merger as described in the proxy statement/prospectus. A reference was included to the opinion that is included as Exhibit 8.1 to the Registration Statement.
Summary, Some of the Directors and Officers of AGFC Have Financial Interests in the Merger that are Different from Your Interests, page 14
7. We acknowledge your response to comment 11 of our letter to you dated December 8, 2014. Please disclose any arrangements or understandings for any member of the AGFC Board of Directors to serve on the Board of Business First. Please disclose the aggregate amount of cash and stock and the percentage of the total consideration to be paid to directors and officers of AGFC.
In response to the Staff’s comment, the Company has updated its disclosure in the section of the proxy statement/prospectus in the Revised S-4 entitled, “Summary—Some of the Directors and Officers of AGFC Have Financial Interests in the Merger that are Different from Your Interests” in the Revised S-4 to clarify that there are no arrangements or understandings pursuant to which any member of the board of directors or management of AGFC or American Gateway Bank is to be appointed to the board of directors of the Company or Business First Bank in connection with the proposed merger. The Company has further revised this section to disclose the aggregate amount of cash and stock, and the percentage of total consideration to be paid to directors and executive officers of AGFC based upon the beneficial ownership of those individuals as of January 31, 2015. The percentage of the merger consideration expected to be received by those individuals is proportionate to the percentage of their respective beneficial ownership in AGFC.
Unaudited Pro Forma Combined Consolidated Financial Information, page 21
8. Please revise these financial statements to ascribe the par value of the Business First Bancshares common stock to be issued in the acquisition to the common stock line item in the pro forma balance sheet. It appears that, currently, all the value is ascribed to the surplus line item.
In response to the Staff’s comment, the Company has revised its disclosure under the heading, “Unaudited Pro Forma Combined Consolidated Financial Information” in the Revised S-4 to ascribe the par value of the Company common stock to be issued in the acquisition to the common stock line item in the pro forma balance sheet.
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9. Please refer to the response to comment 12. We note the revisions made in response to that comment; however, we also note that you continue to present pro forma combined information for the periods ended September 30, 2014 and December 31, 2013 that appears to actually be historical combined information. Please revise to delete the columns that present this information. Alternatively, please revise to label it as historical combined information and not as pro forma combined information.
In response to the Staff’s comment, the Company has revised its disclosure under the heading, “Unaudited Pro Forma Combined Consolidated Financial Information” to delete the above-referenced column from its pro forma combined income statement for the periods ending September 30, 2014 and December 31, 2013.
10. Please refer to the response to comment 13 and address the following:
•
Please revise to delete the presentation of pro forma combined EPS as that measure is not contemplated by US GAAP.
•
Please revise to present diluted EPS on a historical and pro forma basis in these financial statements. We note that Business First Bancshares presents diluted EPS in its historical financial statements that are included in the registration statement. Provide footnote disclosure that reconciles the number of shares used to calculate pro forma basic and diluted EPS.
In response to the Staff’s comment, the Company has revised its disclosure under the heading, “Unaudited Pro Forma Combined Consolidated Financial Information” in the Revised S-4 to delete the presentation of pro forma combined earnings per share (“EPS”). The Company has also updated the disclosure to present diluted EPS on a historical and pro forma basis and to include footnote disclosures to reconcile the number of shares used to calculate pro forma basic and diluted EPS.
Background of the Merger, page 55
11. Please revise this section to provide more detail regarding other options considered by the Board of AGFC as follows:
•
revise the first paragraph on page 56 to identify the “various strategic options” to which you refer;
•
revise the second paragraph on page 56 to identify the “potential strategic alternatives available” to which you refer;
•
revise the last paragraph on page 56 to explain the reasons why you contacted Business First; and
•
revise the first paragraph on page 57 to disclose your contacts with “another financial institution” that had made an indication of interest to you at the same time as Business First.
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In response to the Staff’s comment, the Company has revised its disclosure under the subheading, “Background of the Merger” in the Revised S-4 as follows:
•
The discussion has been revised to identify the various strategic options considered by AGFC’s board of directors. Such strategic options have included expanding organically, raising additional capital through offerings or equity or debt securities, and merging with another financial institution.
•
The referenced disclosure regarding alternatives considered by AGFC’s board of directors in February 2013 has been updated to clarify that the board considered the possibilities of raising additional capital or a sale of American Gateway Bank.
•
The referenced disclosure relating to communications between AGFC and the Company in December 2013 has been updated to clarify that the Company contacted AGFC at that time.
•
The referenced disclosure relating to the indication of interest received by AGFC from another financial institution in December 2013 has been updated to disclose AGFC’s contacts with that institution.
12. Please revise this section to provide more detail regarding negotiations of the merger as follows:
•
revise the first full paragraph on page 57 to quantify the aggregate value of the cash and stock indication of interest of February 7;
•
revise the second full paragraph on page 57 to quantify the aggregate value of the cash and stock indication of interest of February 21;
•
revise the third full paragraph on page 57 to identify the “potential strategic alternatives” to which you refer; and
•
revise the fourth full paragraph on page 57 to provide detailed summary of the negotiations over the material terms of the agreement and ancillary documents to which you refer.
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In response to the Staff’s comment, the Company has revised its disclosure under the subheading, “Background of the Merger” in the Revised S-4 as follows:
•
The referenced disclosure regarding the aggregate value of the cash and stock indication of interest on February 7, 2014 has been updated to provide that, based upon the December 31, 2013 unaudited financial statements of the Company then available to the AGFC board of directors, the AGFC board, after consultation with its financial advisor, estimated the aggregate value of this indication of interest to be $43.4 million.
•
The referenced disclosure regarding the aggregate value of the cash and stock indication of interest on February 28, 2014 has been updated to provide that, based upon the December 31, 2013 unaudited financial statements of the Company then available to the AGFC board of directors, the AGFC board, after consultation with its financial advisor, estimated the aggregate value of this indication of interest to be $44.8 million.
•
The referenced disclosure has been revised to clarify that AGFC authorized the engagement of legal counsel as it explored the p
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CORRESP 1 filename1.htm Response Letter 812 SAN ANTONIO STREET SUITE 600 AUSTIN, TEXAS 78701 TEL 512 • 583 • 5900 FAX 512 • 583 • 5940 LOWELL W. HARRISON DIRECT DIAL: 512 • 583 • 5905 EMAIL:lharrison@fkhpartners.com STEPHANIE E. KALAHURKA DIRECT DIAL: 816 • 292 • 8141 EMAIL:skalahurka@fkhpartners.com February 5, 2015 Via Federal Express Todd K. Schiffman Assistant Director Securities and Exchange Commission Washington, D.C. 20549 Re: Business First Bancshares, Inc. Amendment No. 1 to Registration Statement on Form S-4 Filed November 12, 2014 File No. 333-200112 Dear Mr. Schiffman: On behalf of Business First Bancshares, Inc. (the “Company”), enclosed please find a copy of Amendment No. 2 to the Company’s Registration Statement on Form S-4 (the “Revised S-4”), as submitted to the Securities and Exchange Commission (“Commission”) on the date hereof, marked to show changes to Amendment No. 1 to the Registration Statement that was filed on January 13, 2015. General 1. We acknowledge your response to comment 1 of our letter to you dated December 8, 2014. Please supplementally provide us with the following information: • noting the statement in the last sentence of second paragraph of the first page of both the “Pro Forma Overview” and the “Fairness Opinion Presentation” by Sandler O’Neill that “the printed presentation is incomplete without the oral or video presentation that supplements it” please provide us with transcripts of any oral and/or video presentation that was made by Sandler O’Neill to any member of the Board; and • the third party report of the review of Business First Bank’s loan portfolio to which you refer in the second full paragraph on page 57. In response to the Staff’s comment, the Company advises the Staff that there is no transcript or video of the oral presentation that supplemented the Pro Forma Overview or the Fairness Opinion Presentation that were given by Sandler O’Neill (the “Merger Presentations”) to the Securities and Exchange Commission February 5, 2015 Page 2 board of directors of American Gateway Financial Corporation (“AGFC”). The Company has consulted with AGFC and Sandler O’Neill regarding the content of the oral portions of the Merger Presentations and AGFC and Sandler O’Neill have confirmed that the substance of the oral portions did not contain any material nonpublic information about either company that was not contained in the accompanying slide presentations which have been provided supplementally to the SEC. In response to the Staff’s comment, the third party report of the review of Business First Bank’s loan portfolio is being submitted supplementally under separate cover. 2. We acknowledge your response to comment 1 of our letter to you dated December 8, 2014. Please disclose the projections contained in the “Pro Forma Overview” and “Fairness Opinion Presentation’ by Sandler O’Neill that were “based on each respective management team’s budget for 2014 and projected thereafter based on each respective management team’s guidance.” Please disclose the assumptions on which the valuations were based. In response to the Staff’s comment, the Company has revised its disclosure in the Revised S-4 under the subheading, “Opinion of Sandler O’Neill & Partners, L.P.,” to include the projections that were contained in the “Pro Forma Overview” and “Fairness Opinion Presentation” by Sandler O’Neill. The Company has updated its disclosure in this same section to include the assumptions used in the disclosed projections. 3. We acknowledge your response to comment 2 of our letter to you dated December 8, 2014. Please revise the registration statement to disclose all material nonpublic information regarding Business First Bancshares that was disclosed, directly or indirectly, to American Gateway Financial Corporation Inc. Please supplementally provide us with all material nonpublic information regarding American Gateway Financial Corporation Inc. that was disclosed, directly or indirectly, to Business First Bancshares, and/or its representatives and/or financial advisors including, but not limited to, the “confidential information memorandum regarding AGFC” to which you refer on pages 56 and 57. In response to the Staff’s comment, the referenced “confidential information memorandum regarding AGFC,” dated July 2013 and certain other contracts, agreements and third-party reports that the parties deem to be material, but which have been disclosed in the Revised S-4, are being submitted supplementally under separate cover. With respect to the referenced confidential information memorandum, the parties have reviewed the document to confirm that it does not contain any material nonpublic information that is not otherwise disclosed or updated in the Revised S-4. AGFC, the Company and their respective financial advisors have confirmed to us that, other than information that is disclosed in the registration Securities and Exchange Commission February 5, 2015 Page 3 statement (as revised pursuant to this amendment), there is no material nonpublic information regarding either the Company or AGFC that was disclosed, either directly or indirectly to the other. 4. We acknowledge your response to comment 3 of our letter to you dated December 8, 2014. Please revise the section entitled “Business First’s Reasons for the Merger” on page 60 to explain the reasons that the Board did not obtain a fairness opinion. In response to the Staff’s comment, the Company has updated its disclosure in the Revised S-4 under the section entitled, “Business First’s Reasons for the Merger,” to explain the reasons why the board of directors of the Company did not obtain a fairness opinion. In deciding not to obtain a fairness opinion the Company’s board of directors considered the following factors: (i) that a formal fairness opinion is not required under applicable law; (ii) the cost to the Company associated with obtaining a fairness opinion; and (iii) the Company’s consultation with its financial advisor regarding the terms of the proposed merger. Although the Company did not obtain a formal, written opinion, its board of directors’ determination that the terms of the proposed merger are fair to the Company’s shareholders was made in consultation with its financial advisor. Summary, The Merger Consideration, page 6 5. We acknowledge your response to comment 8 of our letter to you dated December 8, 2014. Please revise the first full paragraph on page 7 to disclose the Tangible Equity Capital of each company as of the most recent date. Please revise the second to last paragraph to explain how the consideration is “subject to adjustment.” In response to the Staff’s comment, the Company has updated its disclosure in the Revised S-4 under the section entitled, “Summary—The Merger Consideration,” to disclose the Tangible Equity Capital of each company as of January 31, 2015. This is the most recent date prior to the date of this filing that the Company was able to obtain the financial information needed to calculate the approximate merger consideration. The Company has also disclosed in this section the unaudited Tangible Equity Capital of each of the Company and AGFC as of January 31, 2015. Summary, Material U.S. Federal Income Tax Consequences, page 8 6. Please acknowledge receipt of a tax opinion and provide a cross reference to it. In response to the Staff’s comment, the Company has updated its disclosure in the section of the proxy statement/prospectus in the Revised S-4 entitled, “Summary—Material U.S. Federal Income Tax Consequences” to disclose that, in connection with the filing of the Registration Securities and Exchange Commission February 5, 2015 Page 4 Statement, Fenimore, Kay, Harrison & Ford LLP has rendered its tax opinion to the Company and AGFC addressing the U.S. federal income tax consequences of the merger as described in the proxy statement/prospectus. A reference was included to the opinion that is included as Exhibit 8.1 to the Registration Statement. Summary, Some of the Directors and Officers of AGFC Have Financial Interests in the Merger that are Different from Your Interests, page 14 7. We acknowledge your response to comment 11 of our letter to you dated December 8, 2014. Please disclose any arrangements or understandings for any member of the AGFC Board of Directors to serve on the Board of Business First. Please disclose the aggregate amount of cash and stock and the percentage of the total consideration to be paid to directors and officers of AGFC. In response to the Staff’s comment, the Company has updated its disclosure in the section of the proxy statement/prospectus in the Revised S-4 entitled, “Summary—Some of the Directors and Officers of AGFC Have Financial Interests in the Merger that are Different from Your Interests” in the Revised S-4 to clarify that there are no arrangements or understandings pursuant to which any member of the board of directors or management of AGFC or American Gateway Bank is to be appointed to the board of directors of the Company or Business First Bank in connection with the proposed merger. The Company has further revised this section to disclose the aggregate amount of cash and stock, and the percentage of total consideration to be paid to directors and executive officers of AGFC based upon the beneficial ownership of those individuals as of January 31, 2015. The percentage of the merger consideration expected to be received by those individuals is proportionate to the percentage of their respective beneficial ownership in AGFC. Unaudited Pro Forma Combined Consolidated Financial Information, page 21 8. Please revise these financial statements to ascribe the par value of the Business First Bancshares common stock to be issued in the acquisition to the common stock line item in the pro forma balance sheet. It appears that, currently, all the value is ascribed to the surplus line item. In response to the Staff’s comment, the Company has revised its disclosure under the heading, “Unaudited Pro Forma Combined Consolidated Financial Information” in the Revised S-4 to ascribe the par value of the Company common stock to be issued in the acquisition to the common stock line item in the pro forma balance sheet. Securities and Exchange Commission February 5, 2015 Page 5 9. Please refer to the response to comment 12. We note the revisions made in response to that comment; however, we also note that you continue to present pro forma combined information for the periods ended September 30, 2014 and December 31, 2013 that appears to actually be historical combined information. Please revise to delete the columns that present this information. Alternatively, please revise to label it as historical combined information and not as pro forma combined information. In response to the Staff’s comment, the Company has revised its disclosure under the heading, “Unaudited Pro Forma Combined Consolidated Financial Information” to delete the above-referenced column from its pro forma combined income statement for the periods ending September 30, 2014 and December 31, 2013. 10. Please refer to the response to comment 13 and address the following: • Please revise to delete the presentation of pro forma combined EPS as that measure is not contemplated by US GAAP. • Please revise to present diluted EPS on a historical and pro forma basis in these financial statements. We note that Business First Bancshares presents diluted EPS in its historical financial statements that are included in the registration statement. Provide footnote disclosure that reconciles the number of shares used to calculate pro forma basic and diluted EPS. In response to the Staff’s comment, the Company has revised its disclosure under the heading, “Unaudited Pro Forma Combined Consolidated Financial Information” in the Revised S-4 to delete the presentation of pro forma combined earnings per share (“EPS”). The Company has also updated the disclosure to present diluted EPS on a historical and pro forma basis and to include footnote disclosures to reconcile the number of shares used to calculate pro forma basic and diluted EPS. Background of the Merger, page 55 11. Please revise this section to provide more detail regarding other options considered by the Board of AGFC as follows: • revise the first paragraph on page 56 to identify the “various strategic options” to which you refer; • revise the second paragraph on page 56 to identify the “potential strategic alternatives available” to which you refer; • revise the last paragraph on page 56 to explain the reasons why you contacted Business First; and • revise the first paragraph on page 57 to disclose your contacts with “another financial institution” that had made an indication of interest to you at the same time as Business First. Securities and Exchange Commission February 5, 2015 Page 6 In response to the Staff’s comment, the Company has revised its disclosure under the subheading, “Background of the Merger” in the Revised S-4 as follows: • The discussion has been revised to identify the various strategic options considered by AGFC’s board of directors. Such strategic options have included expanding organically, raising additional capital through offerings or equity or debt securities, and merging with another financial institution. • The referenced disclosure regarding alternatives considered by AGFC’s board of directors in February 2013 has been updated to clarify that the board considered the possibilities of raising additional capital or a sale of American Gateway Bank. • The referenced disclosure relating to communications between AGFC and the Company in December 2013 has been updated to clarify that the Company contacted AGFC at that time. • The referenced disclosure relating to the indication of interest received by AGFC from another financial institution in December 2013 has been updated to disclose AGFC’s contacts with that institution. 12. Please revise this section to provide more detail regarding negotiations of the merger as follows: • revise the first full paragraph on page 57 to quantify the aggregate value of the cash and stock indication of interest of February 7; • revise the second full paragraph on page 57 to quantify the aggregate value of the cash and stock indication of interest of February 21; • revise the third full paragraph on page 57 to identify the “potential strategic alternatives” to which you refer; and • revise the fourth full paragraph on page 57 to provide detailed summary of the negotiations over the material terms of the agreement and ancillary documents to which you refer. Securities and Exchange Commission February 5, 2015 Page 7 In response to the Staff’s comment, the Company has revised its disclosure under the subheading, “Background of the Merger” in the Revised S-4 as follows: • The referenced disclosure regarding the aggregate value of the cash and stock indication of interest on February 7, 2014 has been updated to provide that, based upon the December 31, 2013 unaudited financial statements of the Company then available to the AGFC board of directors, the AGFC board, after consultation with its financial advisor, estimated the aggregate value of this indication of interest to be $43.4 million. • The referenced disclosure regarding the aggregate value of the cash and stock indication of interest on February 28, 2014 has been updated to provide that, based upon the December 31, 2013 unaudited financial statements of the Company then available to the AGFC board of directors, the AGFC board, after consultation with its financial advisor, estimated the aggregate value of this indication of interest to be $44.8 million. • The referenced disclosure has been revised to clarify that AGFC authorized the engagement of legal counsel as it explored the p