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Business First Bancshares, Inc., Announces Financial Results for Q3 2022
المصدر: Nasdaq GlobeNewswire / 26 أكتوبر 2022 15:01:01 America/Chicago
BATON ROUGE, La., Oct. 26, 2022 (GLOBE NEWSWIRE) -- Business First Bancshares, Inc. (NASDAQ: BFST) (Business First), parent company of b1BANK, today announced its unaudited results for the quarter ended September 30, 2022, including net income of $13.8 million, or $0.61 per diluted share, no change from the quarter ended June 30, 2022. On a non-GAAP basis, core net income for the quarter ended September 30, 2022, which excludes certain income and expenses, was $16.4 million, or $0.72 per diluted share, increases of $1.8 million and $0.08, respectively, from the quarter ended June 30, 2022.
” Our third quarter results attest to the potential of a team working in concert over time,” said Jude Melville, president and CEO. “We continue to exhibit strong loan growth across our footprint while benefiting from historically positive asset quality. In addition to improved core operational profitability, we successfully added depth to our equity base, strengthening our balance sheet positioning as we prepare for the challenges and opportunities the next few quarters may hold.”
On October 26, 2022, Business First’s board of directors declared a quarterly dividend based upon financial performance for the third quarter in the amount of $0.12 per share, same as the prior quarter, to the common shareholders of record as of November 15, 2022. The dividend will be paid on November 30, 2022, or as soon thereafter as practicable.
Quarterly Highlights
- Strong Loan Growth. Total loans held for investment at September 30, 2022, were $4.4 billion, an increase of $316.2 million compared to June 30, 2022, or 7.69% for the quarter. Based on unpaid principal balances, 48.4% of loan growth for the quarter ended September 30, 2022, was attributable to our Dallas market, 23.3% to the Northern Louisiana market, 12.2% to the Baton Rouge market, and 11.5% to the Houston market. As of September 30, 2022, approximately 34% of Business First’s loan portfolio resides in Texas based on unpaid principal balances.
- Expansion of Net Interest Margin. For the quarter ended September 30, 2022, net interest income totaled $53.5 million and net interest margin and net interest spread were 4.05% and 3.67%, respectively, compared to $49.6 million, 3.98% and 3.79% for the quarter ended June 30, 2022. Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $1.7 million) were 3.92% and 3.54%, respectively, for the quarter ended September 30, 2022, compared to 3.77% and 3.59% (excluding loan discount accretion of $2.6 million) for the quarter ended June 30, 2022. Net interest margin rose due to continued increase in interest rates and loan growth, as well as $650,000 associated with a nonaccrual loan that was paid in full during the quarter, while the spread declined due to the increased cost of funding associated with the short-term yield curve.
- Solid Return on Assets and Equity. Return on average assets and common equity, each on an annualized basis, were 0.97% and 12.47%, respectively, for the quarter ended September 30, 2022, compared to 1.02% and 12.22%, respectively, for the quarter ended June 30, 2022. Non-GAAP return on average assets and common equity, each on an annualized basis, were 1.15% and 14.80%, respectively, for the quarter ended September 30, 2022, compared to 1.08% and 12.93%, respectively, for the quarter ended June 30, 2022.
- Overall Credit Quality Remains Stable. Ratios of nonperforming loans compared to loans held for investment and nonperforming assets compared to total assets decreased from 0.42% and 0.33%, respectively, at June 30, 2022, to 0.25% and 0.21% at September 30, 2022. The reduction was largely due to a single nonfarm nonresidential commercial loan with an outstanding balance of $6.3 million being repaid in full during July 2022.
- Preferred Stock Issuance. Business First completed a private placement of $72.0 million of 7.50% fixed-to-floating rate non-cumulative perpetual preferred stock on September 1, 2022.
Financial Condition
September 30, 2022, Compared to June 30, 2022
Loans
Loans held for investment increased $316.2 million or 7.69%, 30.74% annualized, for the quarter ended September 30, 2022.
Credit QualityNonperforming loans as a percentage of total loans held for investment decreased from 0.42% as of June 30, 2022, to 0.25% as of September 30, 2022. Nonperforming assets as a percentage of total assets decreased from 0.33% as of June 30, 2022, to 0.21% as of September 30, 2022. The decreases were largely attributable to a single nonfarm nonresidential commercial loan with an outstanding balance of $6.3 million being paid in full in July 2022.
Total Shareholders’ Equity
Book value per common share was $19.29 at September 30, 2022, compared to $19.73 at June 30, 2022. The decrease was largely attributable to the $21.9 million increase in accumulated other comprehensive losses related to unrealized losses on Business First’s available for sale investment portfolio.
On a non-GAAP basis, tangible book value per share was $14.73 at September 30, 2022, compared to $15.13 at June 30, 2022.
September 30, 2022, Compared to September 30, 2021
Loans
Total loans held for investment increased by $1.4 billion, or 44.47%, compared to September 30, 2021. Excluding loans acquired from Texas Citizens on March 1, 2022, loans increased $1.0 billion, or 33.08%.
Credit Quality
Nonperforming loans as a percentage of total loans held for investment decreased from 0.45% as of September 30, 2021, to 0.25% as of September 30, 2022. Nonperforming assets as a percentage of total assets decreased from 0.37% as of September 30, 2021, to 0.21% as of September 30, 2022. Both ratio decreases were largely attributable to the increase in total loans and assets, as well as a $2.8 million decrease in nonaccrual loans.
Total Shareholders’ Equity
Book value per common share was $19.29 at September 30, 2022, compared to $21.11 at September 30, 2021. On a non-GAAP basis, tangible book value per share was $14.73 at September 30, 2022, compared to $17.53 at September 30, 2021. The decreases were largely attributable to the $90.4 million increase in the accumulated other comprehensive losses associated with the available for sale portfolio, which was driven by the change in the broader interest rate and economic environment.
Results of Operations
Third Quarter 2022 Compared to Second Quarter 2022
Net Income and Diluted Earnings Per Share
For the quarter ended September 30, 2022, and June 30, 2022, net income was $13.8 million, or $0.61 per diluted share. Net interest income increased by $3.9 million due to loan growth and interest rate increases, but was offset by $4.5 million in increased noninterest expense, largely attributable to increases of $2.6 million of merger and conversation-related expenses, $498,000 in salaries and employee benefits, and $441,000 in advertising and promotions during the quarter ended September 30, 2022.
On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended September 30, 2022, was $16.4 million, or $0.72 per diluted share, compared to core net income of $14.6 million, or $0.64 per diluted share, for the quarter ended June 30, 2022. Notable noncore events impacting earnings for the quarter ended September 30, 2022, included $265,000 attributable to insurance reimbursements of storm expenses in other income and $3.5 million in acquisition-related expenses, compared to $708,000 of acquisition-related expenses and $270,000 of expenses attributable to storm repairs for the quarter ended June 30, 2022.
Interest Income
For the quarter ended September 30, 2022, net interest income totaled $53.5 million and net interest margin and net interest spread were 4.05% and 3.67%, respectively, compared to $49.6 million, 3.98% and 3.79% for the quarter ended June 30, 2022. The average yield on total interest-earning assets was 4.80% for the quarter ended September 30, 2022, compared to 4.33% for the quarter ended June 30, 2022. The average yield on the loan portfolio (excluding Small Business Administration (SBA) Paycheck Protection Program (PPP) loans) was 5.50% for the quarter ended September 30, 2022, compared to 5.10% for the quarter ended June 30, 2022. The quarter ended June 30, 2022, included additional loan discount accretion of $876,000, while the quarter ended September 30, 2022, included additional interest income of approximately $650,000 associated with a nonaccrual loan that was paid in full during the quarter.
Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $1.7 million) were 3.92% and 3.54%, respectively, for the quarter ended September 30, 2022, compared to 3.77% and 3.59% (excluding loan discount accretion of $2.6 million) for the quarter ended June 30, 2022. The additional interest income of approximately $650,000 associated with the nonaccrual loan that was paid off during the quarter accounted for approximately 5 bps of net interest margin.
Interest Expense
For the quarter ended September 30, 2022, overall cost of funds (which includes noninterest-bearing deposits) increased by 41 basis points, from 0.36% to 0.77%, compared to the quarter ended June 30, 2022, due to continued rate increases and growth in borrowings.
Other Income
For the quarter ended September 30, 2022, other income increased by $1.1 million compared to the quarter ended June 30, 2022. The increase was largely attributable to a $520,000 increase in equity investment income and a $265,000 reimbursement for storm expenditures from insurance, which occurred during the quarter ended September 30, 2022.
Other Expenses
For the quarter ended September 30, 2022, other expense increased by $4.5 million compared to the quarter ended June 30, 2022. The increase was largely attributable to a $2.6 million increase in merger and conversion-related expenses, $498,000 increase in salaries and employee benefits, and $441,000 increase in advertising and promotions, related to increased media spend and production costs, during the quarter ended September 30, 2022.
Provision for Loan Losses
During the quarter ended September 30, 2022, Business First recorded a provision for loan losses of $3.3 million, compared to $2.9 million for the quarter ended June 30, 2022. The reserves for both quarters ended September 30, 2022, and June 30, 2022, were driven primarily by new loan growth.
Return on Assets and Equity
Return on average assets and common equity, each on an annualized basis, were 0.97% and 12.47%, respectively, for the quarter ended September 30, 2022, compared to 1.02% and 12.22%, respectively, for the quarter ended June 30, 2022.
Third Quarter 2022 Compared to Third Quarter 2021
Net Income and Diluted Earnings Per Share
For the quarter ended September 30, 2022, net income was $13.8 million or $0.61 per diluted share, compared to net income of $10.3 million or $0.50 per diluted share, for the quarter ended September 30, 2021. Net interest income increased by $16.2 million (attributed to the larger balance sheet resulting from the Texas Citizens acquisition, as well as strong organic growth and recent increase in interest rates during the past six months), partially offset by a $2.1 million increase in provision for loan loss due to loan growth, $5.1 million increase in salaries and employee benefits (largely attributable to the acquisition of Texas Citizens and additional staffing, mostly loan production), and $3.1 million in merger and conversion-related expenses attributable to the Texas Citizens acquisition, during the quarter ended September 30, 2022.
On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended September 30, 2022, was $16.4 million or $0.72 per diluted share, compared to core net income of $10.9 million or $0.53 per diluted share, for the quarter ended September 30, 2021. Notable noncore events impacting earnings for the quarter ended September 30, 2022, included $265,000 attributable to insurance reimbursements of storm expenses in other income and $3.5 million in acquisition-related expenses, compared to $211,000 in occupancy and bank premises expenses attributable to storm damages (primarily related to Ida, 2021), $145,000 in acquisition-related expenses and $392,000 in losses on sales of former premises and equipment within other income during the quarter ended September 30, 2021.
Interest Income
For the quarter ended September 30, 2022, net interest income totaled $53.5 million and net interest margin and net interest spread were 4.05% and 3.67%, respectively, compared to $37.3 million, 3.71% and 3.51% for the quarter ended September 30, 2021. The average yield on total interest-earning assets was 4.80% for the quarter ended September 30, 2022, compared to 4.14% for the quarter ended September 30, 2021. The average yield on the loan portfolio (excluding SBA PPP loans) was 5.50% for the quarter ended September 30, 2022, compared to 5.11% for the quarter ended September 30, 2021.
Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $1.7 million) were 3.92% and 3.54%, respectively, for the quarter ended September 30, 2022, compared to 3.56% and 3.36% (excluding loan discount accretion of $1.5 million) for the quarter ended September 30, 2021.
Interest Expense
For the quarter ended September 30, 2022, overall cost of funds (which includes noninterest-bearing deposits) increased by 33 basis points, from 0.44% to 0.77%, compared to the quarter ended September 30, 2021. The increase in cost of funds was primarily attributable to an overall increase in interest rates on deposit offerings and higher average subordinated debt balances and Federal Home Loan Bank (FHLB) borrowings.
Other Income
For the quarter ended September 30, 2022, the increase in other income of $2.0 million, compared to the quarter ended September 30, 2021, was largely attributable to the $558,000 loss on other real estate owned (OREO) recorded during the quarter ended September 30, 2021, increase on service charges of $353,000 due to the acquisition of Texas Citizens on March 1, 2022, and organic deposit growth, and increase of $285,000 in fees and brokerage commission due to the increase in assets under management.
Other Expenses
For the quarter ended September 30, 2022, the increase in other expense of $11.6 million compared to the quarter ended September 30, 2021, was largely attributable to the $5.1 million increase in salaries and employee benefits associated with the acquisition of Texas Citizens on March 1, 2022, and additional loan production staffing which occurred over the past year, and $3.1 million in merger and conversion-related expenses associated with the acquisition of Texas Citizens.
Provision for Loan Losses
During the quarter ended September 30, 2022, Business First recorded a provision for loan losses of $3.3 million compared to $1.1 million for the quarter ended September 30, 2021.
Return on Assets and Equity
Return on average assets and return on average common equity, each on an annualized basis, were 0.97% and 12.47%, respectively, for the quarter ended September 30, 2022, from 0.95% and 9.47%, respectively, for the quarter ended September 30, 2021.
Conference Call and Webcast
Executive management will host a conference call and webcast to discuss results on Thursday, October 27, 2022, at 2:00 p.m. CDT. Interested parties may attend the call by dialing toll-free 1-800-715-9871 (North America only), conference ID 3389208, or asking for the Business First Bancshares conference call. The live webcast can be found at https://edge.media-server.com/mmc/p/yawh3a5g. The corresponding slide presentation can be assessed the day of the presentation on b1BANK’s website at https://www.b1bank.com/shareholder-info.
About Business First Bancshares, Inc.
Business First Bancshares, Inc., (Nasdaq: BFST) through its banking subsidiary b1BANK, has $5.8 billion in assets, $6.3 billion in assets under management through b1BANK’s affiliate Smith Shellnut Wilson, LLC (SSW) (excludes $0.9 billion of b1BANK assets managed by SSW) and operates Banking Centers and Loan Production Offices in markets across Louisiana and the Dallas and Houston, Texas areas, providing commercial and personal banking products and services. Commercial banking services include commercial loans and letters of credit, working capital lines and equipment financing, and treasury management services. b1BANK was awarded #1 Best-In-State Bank, Louisiana, by Forbes and Statista, and is a multiyear winner of American Banker’s “Best Banks to Work For.” Visit b1BANK.com for more information.
Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures (e.g., referenced as “core” or “tangible”) intended to supplement, not substitute for, comparable GAAP measures. “Core” measures typically adjust income available to common shareholders for certain significant activities or transactions that, in management’s opinion, can distort period-to-period comparisons of Business First’s performance. Transactions that are typically excluded from non-GAAP “core” measures include realized and unrealized gains/losses on former bank premises and equipment, investment sales, acquisition-related expenses (including, but not limited to, legal costs, system conversion costs, severance and retention payments, etc.). “Tangible” measures adjust common equity by subtracting goodwill, core deposit intangibles, and customer intangibles, net of accumulated amortization. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of Business First’s core business. These non-GAAP disclosures are not necessarily comparable to non-GAAP measures that may be presented by other companies. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided at the end of the tables below.
Special Note Regarding Forward-Looking Statements
Certain statements contained in this release may not be based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “may,” “might,” “will,” “would,” “could,” or “intend.” We caution you not to place undue reliance on the forward-looking statements contained in this news release, in that actual results could differ materially from those indicated in such forward-looking statements as a result of a variety of factors, including those factors specified in our Annual Report on Form 10-K and other public filings. We undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release.
Additional Information
For additional information about Business First, you may obtain Business First’s reports that are filed with the Securities and Exchange Commission (SEC) free of charge by using the SEC’s EDGAR service on the SEC’s website at www.SEC.gov or by contacting the SEC for further information at 1-800-SEC-0330. Alternatively, these documents can be obtained free of charge from Business First by directing a request to: Business First Bancshares, Inc., 500 Laurel Street, Suite 101, Baton Rouge, Louisiana 70801, Attention: Corporate Secretary.
No Offer or Solicitation
This release does not constitute or form part of any offer to sell, or a solicitation of an offer to purchase, any securities of Business First. There will be no sale of securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
Misty Albrecht
b1BANK
225.286.7879
Misty.Albrecht@b1BANK.com
Business First Bancshares, Inc. Selected Financial Information (Unaudited) For the Quarter Ended September 30, June 30, September 30, (Dollars in thousands) 2022 2022 2021 Balance Sheet Ratios Loans (HFI) to Deposits 96.59 % 88.31 % 81.37 % Shareholders' Equity to Assets Ratio 8.75 % 8.05 % 9.77 % Loans Receivable Held for Investment (HFI) Commercial (1) $ 1,012,778 $ 949,631 $ 723,077 Real Estate: Construction and Land 636,869 642,260 464,808 Farmland 190,829 174,723 85,898 1-4 Family Residential 545,880 521,747 464,462 Multi-Family Residential 102,056 97,901 107,551 Nonfarm Nonresidential 1,823,408 1,605,691 1,111,771 Total Real Estate 3,299,042 3,042,322 2,234,490 Consumer and Other 118,080 121,773 108,669 Total Loans (Held for Investment) $ 4,429,900 $ 4,113,726 $ 3,066,236 Allowance for Loan Losses Balance, Beginning of Period $ 32,317 $ 29,245 $ 26,702 Charge-offs – Quarterly (667 ) (99 ) (81 ) Recoveries – Quarterly 278 226 378 Provision for Loan Losses – Quarterly 3,273 2,945 1,147 Balance, End of Period $ 35,201 $ 32,317 $ 28,146 Allowance for Loan Losses to Total Loans (HFI) 0.79 % 0.79 % 0.92 % Net Charge-offs (Recoveries) to Average Quarterly Total Loans 0.01 % 0.00 % -0.01 % Remaining Loan Purchase Discount $ 36,089 $ 37,903 $ 29,390 Nonperforming Assets Nonperforming Loans: Nonaccrual Loans (2) $ 9,843 $ 16,777 $ 12,622 Loans Past Due 90 Days or More (2) 1,121 324 1,030 Total Nonperforming Loans 10,964 17,101 13,652 Other Nonperforming Assets: Other Real Estate Owned 840 990 2,152 Other Nonperforming Assets 180 84 675 Total Other Nonperforming Assets 1,020 1,074 2,827 Total Nonperforming Assets $ 11,984 $ 18,175 $ 16,479 Nonperforming Loans to Total Loans (HFI) 0.25 % 0.42 % 0.45 % Nonperforming Assets to Total Assets 0.21 % 0.33 % 0.37 % (1) Small Business Administration (SBA) Paycheck Protection Program (PPP) loans accounted for $3.0 million of the commercial portfolio as of September 30, 2022. SBA PPP loans accounted for $3.2 million of the commercial portfolio as of June 30, 2022. SBA PPP loans accounted for $9.7 million of the commercial portfolio as of September 30, 2021. (2) Past due and nonaccrual loan amounts exclude acquired impaired loans, even if contractually past due or if the Company does not expect to receive payment in full, as the Company is currently accreting interest income over the expected life of the loans. Business First Bancshares, Inc. Selected Financial Information (Unaudited) Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, (Dollars in thousands, except per share data) 2022 2022 2021 2022 2021 Per Share Data Basic Earnings per Common Share $ 0.61 $ 0.61 $ 0.51 $ 1.65 $ 1.95 Diluted Earnings per Common Share 0.61 0.61 0.50 1.64 1.94 Dividends per Common Share 0.12 0.12 0.12 0.36 0.34 Book Value per Common Share 22.47 19.73 21.11 22.47 21.11 Average Common Shares Outstanding 22,468,939 22,459,603 20,384,879 21,990,273 20,570,506 Average Diluted Shares Outstanding 22,650,640 22,656,174 20,513,838 22,163,952 20,692,344 End of Period Common Shares Outstanding 22,605,136 22,579,451 20,383,504 22,605,136 20,383,504 Annualized Performance Ratios Return on Average Assets 0.97 % 1.02 % 0.95 % 0.91 % 1.23 % Return on Average Common Equity 12.47 % 12.22 % 9.47 % 10.84 % 12.60 % Net Interest Margin 4.05 % 3.98 % 3.71 % 3.86 % 3.93 % Net Interest Spread 3.67 % 3.79 % 3.51 % 3.61 % 3.75 % Efficiency Ratio (1) 66.47 % 64.32 % 67.56 % 67.48 % 60.50 % Total Quarterly Average Assets $ 5,702,312 $ 5,371,639 $ 4,353,885 $ 5,331,352 $ 4,343,407 Total Quarterly Average Common Equity 442,778 450,431 435,400 446,403 423,977 Other Expenses Salaries and Employee Benefits $ 21,906 $ 21,408 $ 16,791 $ 63,017 $ 48,470 Occupancy and Bank Premises 2,485 2,422 1,629 6,959 5,716 Depreciation and Amortization 1,850 1,734 1,483 5,153 4,316 Data Processing 2,155 1,886 1,994 6,157 6,105 FDIC Assessment Fees 839 661 581 2,243 1,526 Legal and Other Professional Fees 619 735 553 1,897 2,199 Advertising and Promotions 1,144 703 612 2,378 1,713 Utilities and Communications 833 822 678 2,434 1,889 Ad Valorem Shares Tax 813 812 675 2,438 2,050 Directors' Fees 288 212 201 702 583 Other Real Estate Owned Expenses and Write-Downs 133 35 103 182 660 Merger and Conversion-Related Expenses 3,244 615 145 4,670 249 Other 4,637 4,352 3,885 12,833 11,487 Total Other Expenses $ 40,946 $ 36,397 $ 29,330 $ 111,063 $ 86,963 Other Income Service Charges on Deposit Accounts $ 2,116 $ 2,086 $ 1,763 $ 6,007 $ 5,013 Losses on Sales of Securities (7 ) (8 ) (11 ) (46 ) (66 ) Debit Card and ATM Fee Income 1,667 1,657 1,532 4,825 4,645 Bank-Owned Life Insurance Income 561 475 356 1,405 1,029 Gain on Sales of Loans 264 186 93 515 10,114 Mortgage Origination Income 57 161 227 427 697 Fees and Brokerage Commission 1,620 1,749 1,335 5,204 3,294 Gain (Loss) on Sales of Other Real Estate Owned 12 10 (558 ) 30 (1,087 ) Gain (Loss) on Disposal of Other Assets 1 - 14 (716 ) 122 Pass-Through Income from Other Investments 572 52 398 739 2,053 Other 1,252 653 962 2,642 2,310 Total Other Income $ 8,115 $ 7,021 $ 6,111 $ 21,032 $ 28,124 (1) Noninterest expense (excluding provision for loan losses) divided by noninterest income plus net interest income less gain/loss on sales of securities. Business First Bancshares, Inc. Consolidated Balance Sheets (Unaudited) September 30, June 30, September 30, (Dollars in thousands) 2022 2022 2021 Assets Cash and Due From Banks $ 152,671 $ 154,694 $ 81,361 Federal Funds Sold 11,137 10,817 4,646 Securities Available for Sale, at Fair Values 884,960 934,676 1,034,491 Mortgage Loans Held for Sale 545 170 1,498 Loans and Lease Receivable 4,429,900 4,113,726 3,066,236 Allowance for Loan Losses (35,201 ) (32,317 ) (28,146 ) Net Loans and Lease Receivable 4,394,699 4,081,409 3,038,090 Premises and Equipment, Net 63,765 64,307 56,611 Accrued Interest Receivable 22,454 22,142 19,025 Other Equity Securities 39,390 30,302 15,259 Other Real Estate Owned 840 990 2,152 Cash Value of Life Insurance 88,743 88,370 59,085 Deferred Taxes, Net 36,691 29,576 5,618 Goodwill 88,543 88,842 60,062 Core Deposit and Customer Intangibles 14,567 15,093 12,835 Other Assets 7,686 8,995 14,484 Total Assets $ 5,806,691 $ 5,530,383 $ 4,405,217 Liabilities Deposits Noninterest-Bearing $ 1,613,310 $ 1,698,114 $ 1,201,791 Interest-Bearing 2,972,795 2,960,049 2,566,330 Total Deposits 4,586,105 4,658,163 3,768,121 Securities Sold Under Agreements to Repurchase 22,072 18,477 27,195 Fed Funds Purchased - - 16,087 Short-Term Borrowings 5,009 5,020 20 Subordinated Debt 110,902 111,055 81,427 Subordinated Debt - Trust Preferred Securities 5,000 5,000 5,000 Federal Home Loan Bank Borrowings 534,059 254,011 48,002 Accrued Interest Payable 1,023 708 1,835 Other Liabilities 34,519 32,490 27,309 Total Liabilities 5,298,689 5,084,924 3,974,996 Shareholders' Equity Preferred Stock 72,010 - - Common Stock 22,605 22,579 20,384 Additional Paid-In Capital 347,721 346,382 291,847 Retained Earnings 150,336 139,232 112,243 Accumulated Other Comprehensive Income (Loss) (84,670 ) (62,734 ) 5,747 Total Shareholders' Equity 508,002 445,459 430,221 Total Liabilities and Shareholders' Equity $ 5,806,691 $ 5,530,383 $ 4,405,217 Business First Bancshares, Inc. Consolidated Statements of Income (Unaudited) Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, (Dollars in thousands) 2022 2022 2021 2022 2021 Interest Income: Interest and Fees on Loans $ 58,846 $ 49,639 $ 37,900 $ 148,668 $ 118,454 Interest and Dividends on Securities 4,200 4,143 3,598 12,187 9,616 Interest on Federal Funds Sold and Due From Banks 427 232 36 754 77 Total Interest Income 63,473 54,014 41,534 161,609 128,147 Interest Expense: Interest on Deposits 6,286 2,557 3,060 11,106 9,538 Interest on Borrowings 3,707 1,895 1,180 6,986 3,069 Total Interest Expense 9,993 4,452 4,240 18,092 12,607 Net Interest Income 53,480 49,562 37,294 143,517 115,540 Provision for Loan Losses: 3,273 2,945 1,147 7,835 6,747 Net Interest Income After Provision for Loan Losses 50,207 46,617 36,147 135,682 108,793 Other Income: Service Charges on Deposit Accounts 2,116 2,086 1,763 6,007 5,013 (Loss) on Sales of Securities (7 ) (8 ) (11 ) (46 ) (66 ) Gain on Sales of Loans 264 186 93 515 10,114 Other Income 5,742 4,757 4,266 14,556 13,063 Total Other Income 8,115 7,021 6,111 21,032 28,124 Other Expenses: Salaries and Employee Benefits 21,906 21,408 16,791 63,017 48,470 Occupancy and Equipment Expense 5,122 4,914 3,912 14,449 11,893 Merger and Conversion-Related Expense 3,244 615 145 4,670 249 Other Expenses 10,674 9,460 8,482 28,927 26,351 Total Other Expenses 40,946 36,397 29,330 111,063 86,963 Income Before Income Taxes: 17,376 17,241 12,928 45,651 49,954 Provision for Income Taxes: 3,576 3,484 2,617 9,363 9,886 Net Income: $ 13,800 $ 13,757 $ 10,311 $ 36,288 $ 40,068 Business First Bancshares, Inc. Consolidated Net Interest Margin (Unaudited) Three Months Ended September 30, 2022 June 30, 2022 September 30, 2021 (Dollars in thousands) Average
Outstanding
BalanceInterest Earned /
Interest PaidAverage
Yield / RateAverage
Outstanding
BalanceInterest Earned /
Interest PaidAverage
Yield / RateAverage
Outstanding
BalanceInterest Earned /
Interest PaidAverage
Yield / RateAssets Interest-Earning Assets: Total Loans (Excluding SBA PPP) $ 4,278,184 $ 58,839 5.50 % $ 3,890,470 $ 49,628 5.10 % $ 2,948,491 $ 37,666 5.11 % SBA PPP Loans 2,953 7 1.00 % 4,429 11 1.00 % 10,150 234 9.24 % Securities 951,479 4,200 1.77 % 966,960 4,143 1.71 % 946,950 3,598 1.52 % Interest-Bearing Deposit in Other Banks 54,730 427 3.12 % 122,175 232 0.76 % 110,472 36 0.13 % Total Interest-Earning Assets 5,287,346 63,473 4.80 % 4,984,034 54,014 4.33 % 4,016,063 41,534 4.14 % Allowance for Loan Losses (33,215 ) (29,945 ) (27,409 ) Noninterest-Earning Assets 448,181 417,550 365,231 Total Assets $ 5,702,312 $ 63,473 $ 5,371,639 $ 54,014 $ 4,353,885 $ 41,534 Liabilities and Shareholders' Equity Interest-Bearing Liabilities: Interest-Bearing Deposits $ 3,009,565 $ 6,286 0.84 % $ 2,981,613 $ 2,557 0.34 % $ 2,566,766 $ 3,060 0.48 % Subordinated Debt 110,953 1,332 4.80 % 111,107 1,300 4.68 % 81,427 1,026 5.04 % Subordinated Debt - Trust Preferred Securities 5,000 68 5.44 % 5,000 52 4.16 % 5,000 42 3.36 % Advances from Federal Home Loan Bank (FHLB) 396,267 2,194 2.21 % 171,224 506 1.18 % 36,015 106 1.18 % First National Bankers Bank Line of Credit 5,000 70 5.60 % 3,333 21 2.52 % - - 0.00 % Other Borrowings 22,381 43 0.77 % 24,927 16 0.26 % 26,350 6 0.09 % Total Interest-Bearing Liabilities 3,549,166 9,993 1.13 % 3,297,204 4,452 0.54 % 2,715,558 4,240 0.62 % Noninterest-Bearing Liabilities: Noninterest-Bearing Deposits $ 1,626,055 $ 1,596,174 $ 1,172,752 Other Liabilities 60,310 27,830 30,175 Total Noninterest-Bearing Liabilities 1,686,365 1,624,004 1,202,927 Shareholders' Equity: Common Shareholders' Equity 442,778 450,431 435,400 Preferred Equity 24,003 - - Total Shareholder's Equity 466,781 450,431 435,400 Total Liabilities and Shareholders' Equity $ 5,702,312 $ 5,371,639 $ 4,353,885 Net Interest Spread 3.67 % 3.79 % 3.51 % Net Interest Income $ 53,480 $ 49,562 $ 37,294 Net Interest Margin 4.05 % 3.98 % 3.71 % Overall Cost of Funds 0.77 % 0.36 % 0.44 % NOTE: Average outstanding balances are determined utilizing monthly averages and average yield/rate is calculated utilizing a 30/360 day count convention. Business First Bancshares, Inc. Consolidated Net Interest Margin (Unaudited) Nine Months Ended September 30, 2022 September 30, 2021 (Dollars in thousands) Average
Outstanding
BalanceInterest Earned /
Interest PaidAverage
Yield / RateAverage
Outstanding
BalanceInterest Earned /
Interest PaidAverage
Yield / RateAssets Interest-Earning Assets: Total Loans (Excluding SBA PPP) $ 3,850,321 $ 148,640 5.15% $ 2,802,246 $ 110,320 5.25% SBA PPP Loans 3,702 28 1.00% 209,041 8,134 5.19% Securities 974,566 12,187 1.67% 813,231 9,616 1.58% Interest-Bearing Deposit in Other Banks 132,685 754 0.76% 91,466 77 0.11% Total Interest-Earning Assets 4,961,274 161,609 4.34% 3,915,984 128,147 4.36% Allowance for Loan Losses (30,806 ) (25,383 ) Noninterest-Earning Assets 400,884 452,806 Total Assets $ 5,331,352 $ 161,609 $ 4,343,407 $ 128,147 Liabilities and Shareholders' Equity Interest-Bearing Liabilities: Interest-Bearing Deposits $ 2,958,005 $ 11,106 0.50% $ 2,588,756 $ 9,538 0.49% Subordinated Debt 104,471 3,746 4.78% 63,768 2,499 5.23% Subordinated Debt - Trust Preferred Securities 5,000 163 4.35% 5,000 127 3.39% Advances from Federal Home Loan Bank (FHLB) 215,955 2,923 1.80% 35,309 325 1.23% First National Bankers Bank Line of Credit 2,778 91 4.37% - - 0.00% Other Borrowings 22,325 63 0.38% 27,651 118 0.57% Total Interest-Bearing Liabilities 3,308,534 18,092 0.73% 2,720,484 12,607 0.62% Noninterest-Bearing Liabilities: Noninterest-Bearing Deposits 1,530,748 1,170,534 Other Liabilities 37,666 28,412 Total Noninterest-Bearing Liabilities 1,568,414 1,198,946 Shareholders' Equity: Common Shareholders' Equity 446,403 423,977 Preferred Equity 8,001 - Total Shareholder's Equity 454,404 423,977 Total Liabilities and Shareholders' Equity $ 5,331,352 $ 4,343,407 Net Interest Spread 3.61% 3.75% Net Interest Income $ 143,517 $ 115,540 Net Interest Margin 3.86% 3.93% Overall Cost of Funds 0.50% 0.43% NOTE: Average outstanding balances are determined utilizing monthly averages and average yield/rate is calculated utilizing a 30/360 day count convention. Business First Bancshares, Inc. Non-GAAP Measures (Unaudited) Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, (Dollars in thousands, except per share data) 2022 2022 2021 2022 2021 Interest Income: Interest income $ 63,473 $ 54,014 $ 41,534 $ 161,609 $ 128,147 Core interest income 63,473 54,014 41,534 161,609 128,147 Interest Expense: Interest expense 9,993 4,452 4,240 18,092 12,607 Core interest expense 9,993 4,452 4,240 18,092 12,607 Provision for Loan Losses:(b) Provision for loan losses 3,273 2,945 1,147 7,835 6,747 Core provision expense 3,273 2,945 1,147 7,835 6,747 Other Income: Other income 8,115 7,021 6,111 21,032 28,124 Losses on former bank premises and equipment - - 392 717 932 Losses on sale of securities 7 8 11 46 66 Insurance reimbursement of storm expenditures (265 ) - - (265 ) - Core other income 7,857 7,029 6,514 21,530 29,122 Other Expense: Other expense 40,946 36,397 29,330 111,063 86,963 Acquisition-related expenses (2) (3,521 ) (708 ) (145 ) (5,040 ) (249 ) Occupancy and bank premises - storm repair - (270 ) (211 ) (501 ) (1,499 ) Core other expense 37,425 35,419 28,974 105,522 85,215 Pre-Tax Income:(a) Pre-tax income 17,376 17,241 12,928 45,651 49,954 Losses on former bank premises and equipment - - 392 717 932 Losses on sale of securities 7 8 11 46 66 Acquisition-related expenses (2) 3,521 708 145 5,040 249 Occupancy and bank premises - storm repair - 270 211 501 1,499 Insurance reimbursment of storm expenditures (265 ) - - (265 ) - Core pre-tax income 20,639 18,227 13,687 51,690 52,700 Provision for Income Taxes:(1) Provision for income taxes 3,576 3,484 2,617 9,363 9,886 Tax on losses on former bank premises and equipment - - 82 151 195 Tax on losses on sale of securities 1 2 2 10 14 Tax on acquisition-related expenses (2) 739 126 24 913 46 Tax on occupancy and bank premises - storm repair - 57 44 106 314 Tax on insurance reimbursement of storm expenditures (55 ) - - (55 ) - Core provision for income taxes 4,261 3,669 2,769 10,488 10,455 Net Income: Net income 13,800 13,757 10,311 36,288 40,068 Losses on former bank premises and equipment, net of tax - - 310 566 737 Losses on sale of securities, net of tax 6 6 9 36 52 Acquisition-related expenses (2), net of tax 2,782 582 121 4,127 203 Occupancy and bank premises - storm repair, net of tax - 213 167 395 1,185 Insurance reimbursement of storm expenditures, net of tax (210 ) - - (210 ) - Core net income $ 16,378 $ 14,558 $ 10,918 $ 41,202 $ 42,245 Pre-tax, pre-provision earnings (a+b) $ 20,649 $ 20,186 $ 14,075 $ 53,486 $ 56,701 Losses on former bank premises and equipment - - 392 717 932 Losses on sale of securities 7 8 11 46 66 Acquisition-related expenses (2) 3,521 708 145 5,040 249 Occupancy and bank premises - storm repair - 270 211 501 1,499 Insurance reimbursement of storm expenditures (265 ) - - (265 ) - Core pre-tax, pre-provision earnings $ 23,912 $ 21,172 $ 14,834 $ 59,525 $ 59,447 Average Diluted Shares Outstanding 22,650,640 22,656,174 20,513,838 22,163,952 20,692,344 Diluted Earnings Per Share: Diluted earnings per share $ 0.61 $ 0.61 $ 0.50 $ 1.64 $ 1.94 Losses on former bank premises and equipment, net of tax - - 0.01 0.02 0.04 Losses on sale of securities, net of tax 0.00 0.00 0.00 0.00 0.00 Acquisition-related expenses (2), net of tax 0.12 0.02 0.01 0.19 0.01 Occupancy and bank premises -storm repair, net of tax - 0.01 0.01 0.02 0.06 Insurance reimbursement of storm expenditures, net of tax (0.01 ) - - (0.01 ) - Core diluted earnings per share $ 0.72 $ 0.64 $ 0.53 $ 1.86 $ 2.05 Pre-tax, pre-provision profit diluted earnings per share $ 0.91 $ 0.89 $ 0.69 $ 2.41 $ 2.74 Losses on former bank premises and equipment - - 0.01 0.03 0.05 Losses on sale of securities 0.00 0.00 0.00 0.00 0.00 Acquisition-related expenses (2) 0.16 0.03 0.01 0.23 0.01 Occupancy and bank premises - storm repair - 0.01 0.01 0.03 0.07 Insurance reimbursement of storm expenditures (0.01 ) - - (0.01 ) - Core pre-tax, pre-provision diluted earnings per share $ 1.06 $ 0.93 $ 0.72 $ 2.69 $ 2.87 (1) Tax rates, exclusive of certain nondeductible merger-related expenses and goodwill, utilized were 21.00% for 2022 and 2021. These rates approximated the marginal tax rates. (2) Includes merger and conversion-related expenses and salary and employee benefits. Business First Bancshares, Inc. Non-GAAP Measures (Unaudited) Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, (Dollars in thousands, except per share data) 2022 2022 2021 2022 2021 Total Quarterly Average Assets $ 5,702,312 $ 5,371,639 $ 4,353,885 $ 5,331,352 $ 4,343,407 Total Quarterly Average Common Equity $ 442,778 $ 450,431 $ 435,400 $ 446,403 $ 423,977 Net Income: Net income $ 13,800 $ 13,757 $ 10,311 $ 36,288 $ 40,068 Losses on former bank premises and equipment, net of tax - - 310 566 737 Losses on sale of securities, net of tax 6 6 9 36 52 Acquisition-related expenses, net of tax 2,782 582 121 4,127 203 Occupancy and bank premises - storm repair, net of tax - 213 167 395 1,185 Insurance reimbursement of storm expenditures, net of tax (210 ) - - (210 ) - Core net income $ 16,378 $ 14,558 $ 10,918 $ 41,202 $ 42,245 Return on average assets 0.97 % 1.02 % 0.95 % 0.91 % 1.23 % Core return on average assets 1.15 % 1.08 % 1.00 % 1.03 % 1.30 % Return on common equity 12.47 % 12.22 % 9.47 % 10.84 % 12.60 % Core return on average common equity 14.80 % 12.93 % 10.03 % 12.31 % 13.29 % Interest Income: Interest income $ 63,473 $ 54,014 $ 41,534 $ 161,609 $ 128,147 Core interest income 63,473 54,014 41,534 161,609 128,147 Interest Expense: Interest expense 9,993 4,452 4,240 18,092 12,607 Core interest expense 9,993 4,452 4,240 18,092 12,607 Other Income: Other income 8,115 7,021 6,111 21,032 28,124 Losses on former bank premises and equipment - - 392 717 932 Losses on sale of securities 7 8 11 46 66 Insurance reimbursement of storm expenditures (265 ) - - (265 ) Core other income 7,857 7,029 6,514 21,530 29,122 Other Expense: Other expense 40,946 36,397 29,330 111,063 86,963 Acquisition-related expenses (3,521 ) (708 ) (145 ) (5,040 ) (249 ) Occupancy and bank premises - storm repair - (270 ) (211 ) (501 ) (1,499 ) Core other expense $ 37,425 $ 35,419 $ 28,974 $ 105,522 $ 85,215 Efficiency Ratio: Other expense (a) $ 40,946 $ 36,397 $ 29,330 $ 111,063 $ 86,963 Core other expense (c) $ 37,425 $ 35,419 $ 28,974 $ 105,522 $ 85,215 Net interest and other income (1) (b) $ 61,602 $ 56,591 $ 43,416 $ 164,595 $ 143,730 Core net interest and other income (1) (d) $ 61,337 $ 56,591 $ 43,808 $ 165,047 $ 144,662 Efficiency ratio (a/b) 66.47 % 64.32 % 67.56 % 67.48 % 60.50 % Core efficiency ratio (c/d) 61.02 % 62.59 % 66.14 % 63.93 % 58.91 % Total Average Interest-Earnings Assets $ 5,287,346 $ 4,984,034 $ 4,016,063 $ 4,961,274 $ 3,915,984 Net Interest Income: Net interest income $ 53,480 $ 49,562 $ 37,294 $ 143,517 $ 115,540 Loan discount accretion (1,712 ) (2,588 ) (1,511 ) (5,220 ) (6,191 ) Net interest income excluding loan discount accretion $ 51,768 $ 46,974 $ 35,783 $ 138,297 $ 109,349 Net interest margin (2) 4.05 % 3.98 % 3.71 % 3.86 % 3.93 % Net interest margin excluding loan discount accretion (2) 3.92 % 3.77 % 3.56 % 3.72 % 3.72 % Net interest spread 3.67 % 3.79 % 3.51 % 3.61 % 3.75 % Net interest spread excluding loan discount accretion 3.54 % 3.59 % 3.36 % 3.47 % 3.53 % (1) Excludes gains/losses on sales of securities. (2) Calculated utilizing a 30/360 day count convention. Business First Bancshares, Inc. Non-GAAP Measures (Unaudited) September 30, June 30, September 30, (Dollars in thousands, except per share data) 2022 2022 2021 Total Shareholders' (Common) Equity: Total shareholders' equity $ 508,002 $ 445,459 $ 430,221 Preferred stock (72,010 ) - - Total common shareholders' equity 435,992 445,459 430,221 Goodwill (88,543 ) (88,842 ) (60,062 ) Core deposit and customer intangible (14,567 ) (15,093 ) (12,835 ) Total tangible common equity $ 332,882 $ 341,524 $ 357,324 Total Assets: Total assets $ 5,806,691 $ 5,530,383 $ 4,405,217 Goodwill (88,543 ) (88,842 ) (60,062 ) Core deposit and customer intangible (14,567 ) (15,093 ) (12,835 ) Total tangible assets $ 5,703,581 $ 5,426,448 $ 4,332,320 Common shares outstanding 22,605,136 22,579,451 20,383,504 Book value per common share $ 19.29 $ 19.73 $ 21.11 Tangible book value per common share $ 14.73 $ 15.13 $ 17.53 Common equity to total assets 7.51 % 8.05 % 9.77 % Tangible common equity to tangible assets 5.84 % 6.29 % 8.25 % 
