Business First Bancshares Inc. has inked a cash-and-stock deal to acquire American Gateway Financial Corp., combining two Baton Rouge banks into a financial institution with $1 billion in assets and 16 locations.

The price details were not disclosed. The two firms are the parent companies of Business First Bank and American Gateway Bank. The combined company will operate under the Business First brand. This fall, Business First will also register with the U.S. Securities and Exchange Commission.

“Technically, it means we’ll be going public, but we won’t be publicly traded,” Chief Executive Officer Jude Melville said. “We’re not at that (initial public offering) point. We won’t have a ticker symbol.”

What Business First will have is all the financial reporting burdens and costs, as well as the regulatory scrutiny that accompany running a publicly traded company. But Business First won’t be registering the stock yet.

At some point, the company will be ready to go public, Melville said. But Business First plans to do that on its own time frame.

For now, Business First is focused on being not only the state’s best business bank but also Louisiana’s “most impactful” community bank. The American Gateway acquisition is the next step toward that goal.

Melville said he expects a minimal number of workers will be affected by the acquisition.

“I can’t ever say zero. That would be a promise you can’t keep as a CEO, but I see limited impact to the employee base,” Melville said.

There is no overlap among the banks’ branches. The back offices, where layoffs typically occur after mergers, will be taking on more responsibilities because registering with the SEC will require a new level of requirements from a reporting and accounting standpoint.

The two banks have been discussing a deal for about six months. The deal will allow Business First to continue its growth, using American Gateway’s deposits to back commercial loans in the surging Baton Rouge region.

Business First’s loan business has grown rapidly, but the bank has felt some pressure to build up its deposits to fund those loans, Melville said. Business First’s loan-to-deposit ratio is in the 90 percent range, while Gateway’s is around 50 percent.

“They have these good, solid, healthy core deposits that they’ve built up over decades. We think that both institutions will win if we put it on the street in terms of commercial loans,” Melville said.

American Gateway has 10 Baton Rouge-area banking centers: five in East Baton Rouge Parish, three in West Baton Rouge Parish and one each in Livingston and Ascension parishes. Business First has one banking center each in Baton Rouge, Shreveport/Bossier City, Lake Charles, Lafayette and Covington. The bank also has a loan production office in Houma.

“We felt like our breadth and our footprint combined with the depth of their footprint made for a pretty powerful combination,” Melville said.

The merged institution is expected to be the largest community bank headquartered in Baton Rouge as measured by deposits. Business First will become one of a handful of community banks with statewide coverage.

Don Ayres, president and CEO of American Gateway, will serve as a consultant following the acquisition.

Business First and American Gateway plan to close the transaction during the fourth quarter. The deal must be approved by Gateway shareholders, as well as state and federal regulators.

The acquisition announcement comes roughly 18 months after American Gateway emerged from a federal-and-state order to shed foreclosed properties and $35 million in problem loans.

The Federal Deposit Insurance Corp. and Louisiana Office of Financial Institutions placed American Gateway under the consent order in December 2011. The bank, like many other businesses, suffered from the impacts of the Great Recession. American Gateway had worked with customers to avoid foreclosing on several properties, but regulators wanted to accelerate the process.

Melville said while Gateway stumbled a bit during the recession, the bank had made significant improvement since then. Gateway, like everyone else, has been helped by improvements in the economy.

“That’s one of the reasons we feel good about the investment,” Melville said. “The Baton Rouge economy and the south Louisiana economy look like they’re poised for a multiple year run here, and we want to be a part of that.”

Follow Ted Griggs on Twitter @tedgriggsbr.