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Business First Bancshares, Inc., Announces Financial Results for Q3 2023
المصدر: Nasdaq GlobeNewswire / 26 أكتوبر 2023 16:01:39 America/New_York
BATON ROUGE, La., Oct. 26, 2023 (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, 2023, including net income available to common shareholders of $19.1 million, or $0.76 per diluted common share, increases of $0.7 million and $0.03, respectively, from the linked quarter, and increases of $5.3 million and $0.15, respectively, from the quarter ended September 30, 2022. On a non-GAAP basis, core net income for the quarter ended September 30, 2023, which excludes certain income and expenses, was $18.0 million, or $0.71 per diluted common share, increases of $0.2 million and $0.01, respectively, from the linked quarter, and an increase of $1.6 million and decrease of $0.01, respectively, from the quarter ended September 30, 2022.
“In the third quarter we again delivered solid fundamental shareholder-oriented operating performance,” said b1BANK President & CEO Jude Melville. “We increased per share tangible book value and per share core earnings by exercising cost discipline, protected our margin while strengthening our core deposit base, and continued maintaining excellent asset quality. We are pleased to be in position to increase our dividend for the fifth consecutive year, rewarding shareholders for sticking with us through uncertain times.”
On October 26, 2023, Business First’s board of directors declared a quarterly preferred dividend in the amount of $18.75 per share, which is the full quarterly dividend of 1.875% based on the per annum rate of 7.50%. Additionally, the board of directors declared a quarterly common dividend based upon financial performance for the third quarter in the amount of $0.14 per share, an increase of $0.02 compared to prior quarter. The preferred and common dividends will be paid on November 30, 2023, or as soon thereafter as practicable, to the shareholders of record as of November 15, 2023.
Quarterly Highlights
- Return on Assets and Equity. Return to common shareholders on average assets and common equity, each on an annualized basis, were 1.17% and 14.16%, respectively, for the quarter ended September 30, 2023, compared to 1.18% and 13.99%, respectively, for the linked quarter. Non-GAAP core return on average assets and common equity, each on an annualized basis, were 1.10% and 13.32%, respectively, for the quarter ended September 30, 2023, compared to 1.13% and 13.50%, respectively, for the linked quarter.
- Credit Quality. Credit performance remains strong from the linked quarter. The ratios of nonperforming loans compared to loans held for investment and nonperforming assets compared to total assets were 0.33% and 0.27%, respectively, at September 30, 2023, compared to 0.36% and 0.30% at June 30, 2023.
- Net Interest Margin. For the quarter ended September 30, 2023, net interest income totaled $55.3 million and net interest margin and net interest spread were 3.61% and 2.68%, respectively, compared to $53.3 million, 3.63% and 2.75% for the quarter ended June 30, 2023. Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $2.4 million) were 3.46% and 2.53%, respectively, for the quarter ended September 30, 2023, compared to 3.49% and 2.61% (excluding loan discount accretion of $2.1 million) for the quarter ended June 30, 2023. Compared to the linked quarter, net interest margin excluding loan discount accretion declined due to the cost of excess on-balance sheet liquidity.
- Deposits. Deposits increased $176.3 million or 3.52%, 13.95% annualized, for the quarter ended September 30, 2023, compared to the linked quarter. Excluding the $16.3 million of deposits transferred in connection with the sale of the Leesville Banking Center during the quarter, deposits increased $192.6 million or 3.84%, 15.24% annualized.
- Loans. Loans held for investment increased $21.5 million or 0.44%, 1.74% annualized, from the linked quarter.
Statement of Financial Condition
Loans
Loans held for investment increased $21.5 million or 0.44%, 1.74% annualized, from the linked quarter. Loan growth from the linked quarter was largely attributed to net growth in the commercial and industrial (C&I) portfolio of $23.2 million and in the residential real estate portfolio of $11.5 million, offset by a $10.2 million reduction in the construction and development (C&D) portfolio. Year-to-date loan growth through September 30, 2023, was $314.1 million, 6.82% or 9.12% annualized.
Based on unpaid principal balances, Texas-based loans represent approximately 37% of the overall loan portfolio as of September 30, 2023.
Credit Quality
The ratios of nonperforming loans compared to loans held for investment and nonperforming assets compared to total assets improved from 0.36% and 0.30%, respectively, at June 30, 2023, to 0.33% and 0.27% at September 30, 2023. The improvement was largely attributable to the resolution of two nonaccrual loans through current period charge-offs of $2.4 million. Both loans were previously assessed by management for credit losses and fully reserved. The reduction was offset by slight increases in nonaccrual relationships.
Securities
The securities portfolio decreased $28.1 million or 3.20%, from the linked quarter. The decrease was the impact of negative fair value adjustments, $16.4 million, and net security paydowns and maturities during the quarter. The securities portfolio, based on estimated fair value, represented 13.09% of total assets as of September 30, 2023.
Deposits
Deposits increased $176.3 million or 3.52%, 13.95% annualized, for the quarter ended September 30, 2023. The increase was primarily attributable to the $126.2 million growth in certificate of deposit (CD) portfolio. Excluding the $16.3 million of deposits transferred in connection with the sale of the Leesville Banking Center during the quarter, deposits increased $192.6 million or 3.84%, 15.24% annualized.
Noninterest-bearing deposits decreased $17.0 million or 1.19% and interest-bearing deposits increased $193.3 million or 5.39%, compared to the linked quarter. Transactional deposits, interest bearing deposits excluding CDs, increased $67.1 million, largely attributable to a $42.5 million increase in the financial institutions group’s (FIG) deposit portfolio.
Year-to-date deposit growth through September 30, 2023, was $370.4 million or 7.68%, or 10.27% annualized. Excluding brokered deposits of $250.4 million at December 31, 2022, and $460.4 million at September 30, 2023, and the $16.3 million of deposits transferred in connection with the Leesville banking center sale, deposit growth was $176.7 million or 3.87%, or 5.17% annualized through September 30, 2023.
Borrowings
Borrowings decreased $151.7 million, or 19.11%, from the linked quarter. Short-term Federal Home Loan Bank (FHLB) borrowings were replaced with interest bearing deposits. During the quarter, the bank extinguished the remaining $3.2 million balance of the $8.9 million subordinated debt redeemed on May 1, 2023. The extinguishment resulted in a $517,000 gain for the quarter ended September 30, 2023.
Shareholders’ Equity
Accumulated other comprehensive income (AOCI) decreased $12.9 million due to negative after-tax fair value adjustments in the securities portfolio. Book value per common share nonetheless increased to $21.01 at September 30, 2023, compared to $20.87 at June 30, 2023, due to continued earnings growth. On a non-GAAP basis, tangible book value per common share increased to $17.03 at September 30, 2023, compared to $16.87 at June 30, 2023.
Results of Operations
Net Interest Income
For the quarter ended June 30, 2023, net interest income totaled $55.3 million, compared to $53.3 million from the linked quarter. Loan and interest-earning asset yields of 6.84% and 6.10%, respectively, increased 30 basis points and 26 basis points, respectively, compared to 6.54% and 5.84% from the linked quarter. The increases were largely attributable to loan repricing and higher yields on new originations. Net interest margin and net interest spread were 3.61% and 2.68%, respectively, compared to 3.63% and 2.75%, respectively, for the linked quarter. The overall cost of funds, which include noninterest-bearing deposits, increased from 2.31% to 2.59% or 28 basis points, from the linked quarter due largely to higher cost deposits.
Non-GAAP net interest income (excluding loan discount accretion of $2.4 million) totaled $52.9 million for the quarter ended September 30, 2023, compared to $51.3 million (excluding loan discount accretion of $2.1 million) from the linked quarter. Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $2.4 million) were 3.46% and 2.53%, respectively, for the quarter ended September 30, 2023, compared to 3.49% and 2.61% (excluding loan discount accretion of $2.1 million) for the linked quarter. Excluding loan discount accretion, loan yields increased 28 basis points to 6.64% from 6.37% and interest earnings asset yields increased 24 basis points to 5.94% from 5.70%, compared to the linked quarter.
Provision for Credit Losses
During the quarter ended September 30, 2023, Business First recorded a provision for credit losses of $604,000, compared to $538,000 for the linked quarter. The current quarter’s reserve increased due to qualitative adjustments related to certain commercial real estate (CRE) portfolios and industry wide concerns about the CRE sector, partially offset by lower reserves for unfunded commitments due to declines in the related unfunded balances.
Other Income
For the quarter ended September 30, 2023, other income decreased $2.1 million or 17.35%, compared to the linked quarter. The net decrease was largely attributable to a $2.8 million decrease in equity investment income compared to the linked quarter, partially offset by a $932,000 gain on sale attributable to the Leesville Banking Center sale during the quarter.
Other Expenses
For the quarter ended September 30, 2023, other expenses decreased by $1.1 million, or 2.76%, compared to the linked quarter. The net decrease was largely attributable to a $1.0 million decrease in data processing charges, attributable to $508,000 of debit/credit card expense sharing incentives received, as well as $715,000 in additional data charges incurred during the linked quarter due to a billing error identified by our data processor which did not reoccur during the current quarter.
Return on Assets and Common Equity
Return to common shareholders on average assets and common equity, each on an annualized basis, were 1.17% and 14.16%, respectively, for the quarter ended September 30, 2023, compared to 1.18% and 13.99%, respectively, for the linked quarter. Non-GAAP return to common shareholders on average assets and common equity, each on an annualized basis, were 1.10% and 13.32%, respectively, for the quarter ended September 30, 2022, compared to 1.13% and 13.50%, respectively, for the linked quarter.
Conference Call and Webcast
Executive management will host a conference call and webcast to discuss results on Thursday, October 26, at 4:30 p.m. CDT. Interested parties may attend the call by dialing toll-free 1-800-715-9871 (North America only), conference ID 4515523, or asking for the Business First Bancshares conference call. The live webcast can be found at https://edge.media-server.com/mmc/p/87me6od9. The corresponding slide presentation can be accessed 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 $6.5 billion in assets, $6.0 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.
Business First Bancshares, Inc. Selected Financial Information (Unaudited) Three Months Ended September 30, June 30, September 30, (Dollars in thousands) 2023 2023 2022 Balance Sheet Ratios Loans (HFI) to Deposits 94.79 % 97.69 % 96.59 % Shareholders' Equity to Assets Ratio 9.31 % 9.31 % 8.75 % Loans Receivable Held for Investment (HFI) Commercial (1) $ 1,332,384 $ 1,309,222 $ 1,080,349 Real Estate: Commercial 2,128,855 2,132,044 2,014,237 Construction 708,835 719,080 636,869 Residential 686,921 675,462 647,936 Total Real Estate 3,524,611 3,526,586 3,299,042 Consumer and Other 63,278 62,929 50,509 Total Loans (Held for Investment) $ 4,920,273 $ 4,898,737 $ 4,429,900 Allowance for Loan Losses Balance, Beginning of Period $ 42,013 $ 41,830 $ 32,317 Charge-offs – Quarterly (2,423 ) (689 ) (667 ) Recoveries – Quarterly 685 104 278 Provision for Loan Losses – Quarterly 854 768 3,273 Balance, End of Period $ 41,129 $ 42,013 $ 35,201 Allowance for Loan Losses to Total Loans (HFI) 0.84 % 0.86 % 0.79 % Allowance for Credit Losses to Total Loans (HFI) (2) 0.90 % 0.93 % 0.81 % Net Charge-offs to Average Quarterly Total Loans 0.04 % 0.01 % 0.01 % Remaining Loan Purchase Discount $ 14,752 $ 17,171 $ 36,089 Nonperforming Assets Nonperforming Loans: Nonaccrual Loans (1) $ 16,029 $ 17,006 $ 9,843 Loans Past Due 90 Days or More (1) 247 468 1,121 Total Nonperforming Loans 16,276 17,474 10,964 Other Nonperforming Assets: Other Real Estate Owned 1,558 1,587 840 Other Nonperforming Assets - 29 180 Total Other Nonperforming Assets 1,558 1,616 1,020 Total Nonperforming Assets $ 17,834 $ 19,090 $ 11,984 Nonperforming Loans to Total Loans (HFI) 0.33 % 0.36 % 0.25 % Nonperforming Assets to Total Assets 0.27 % 0.30 % 0.21 % (1) 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 was currently accreting interest income over the expected life of the loans for the period ended September 30, 2022, in accordance with ASC 310-30. (2) Allowance for Credit Losses includes the Allowance for Loan Loss and Reserve for Unfunded Commitments. 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) 2023 2023 2022 2023 2022 Per Share Data Basic Earnings per Common Share $ 0.76 $ 0.73 $ 0.61 $ 2.04 $ 1.65 Diluted Earnings per Common Share 0.76 0.73 0.61 2.02 1.64 Dividends per Common Share 0.12 0.12 0.12 0.36 0.36 Book Value per Common Share 21.01 20.87 19.29 21.01 19.29 Average Common Shares Outstanding 25,111,548 25,101,683 22,468,939 25,064,856 21,990,273 Average Diluted Common Shares Outstanding 25,288,660 25,333,372 22,650,640 25,281,908 22,163,952 End of Period Common Shares Outstanding 25,344,168 25,344,168 22,605,136 25,344,168 22,605,136 Annualized Performance Ratios Return to Common Shareholders on Average Assets (1) 1.17 % 1.18 % 0.96 % 1.09 % 0.91 % Return to Common Shareholders on Average Common Equity (1) 14.16 % 13.99 % 12.37 % 13.00 % 10.87 % Net Interest Margin (1) 3.61 % 3.63 % 4.01 % 3.66 % 3.87 % Net Interest Spread (1) 2.68 % 2.75 % 3.65 % 2.79 % 3.62 % Efficiency Ratio (2) 59.23 % 60.76 % 66.47 % 61.04 % 67.48 % Total Quarterly/Year-to-Date Average Assets $ 6,474,935 $ 6,274,656 $ 5,702,312 $ 6,290,886 $ 5,331,352 Total Quarterly/Year-to-Date Average Common Equity 535,211 527,325 442,778 526,398 446,403 Other Expenses Salaries and Employee Benefits $ 22,487 $ 22,339 $ 21,906 $ 68,002 $ 63,017 Occupancy and Bank Premises 2,428 2,406 2,485 7,131 6,959 Depreciation and Amortization 1,690 1,720 1,850 5,120 5,153 Data Processing 2,024 3,035 2,155 6,544 6,157 FDIC Assessment Fees 779 1,092 839 2,804 2,243 Legal and Other Professional Fees 766 961 619 2,340 1,897 Advertising and Promotions 1,202 1,226 1,144 3,576 2,378 Utilities and Communications 758 720 833 2,199 2,434 Ad Valorem Shares Tax 965 965 813 2,895 2,438 Directors' Fees 278 270 288 817 702 Other Real Estate Owned Expenses and Write-Downs 14 39 133 183 182 Merger and Conversion-Related Expenses 2 68 3,244 173 4,670 Other 5,214 4,861 4,637 15,204 12,833 Total Other Expenses $ 38,607 $ 39,702 $ 40,946 $ 116,988 $ 111,063 Other Income Service Charges on Deposit Accounts $ 2,540 $ 2,413 $ 2,116 $ 7,234 $ 6,007 Loss on Sales of Securities - (61 ) (7 ) (62 ) (46 ) Debit Card and ATM Fee Income 1,581 1,646 1,667 4,797 4,825 Bank-Owned Life Insurance Income 604 547 561 1,675 1,405 Gain on Sales of Loans 321 494 264 1,426 515 Mortgage Origination Income 108 56 57 238 427 Fees and Brokerage Commission 1,933 1,791 1,620 5,537 5,204 Gain on Sales of Other Real Estate Owned 85 14 12 308 30 Gain (Loss) on Disposal of Other Assets (23 ) 14 1 (14 ) (716 ) Gain on Sale of Branch 932 - - 932 - Gain on Extinguishment of Debt 517 941 - 1,458 - Pass-Through Income (Loss) from Other Investments (11 ) 2,812 572 2,974 739 Other 1,296 1,291 1,252 3,726 2,642 Total Other Income $ 9,883 $ 11,958 $ 8,115 $ 30,229 $ 21,032 (1) Average outstanding balances are determined utilizing monthly averages and average yield/rate is calculated utilizing an Actual/365 day count convention. (2) 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) 2023 2023 2022 Assets Cash and Due From Banks $ 191,461 $ 180,972 $ 152,671 Federal Funds Sold 196,616 173,850 11,137 Securities Available for Sale, at Fair Values 849,704 877,774 884,960 Mortgage Loans Held for Sale 652 435 545 Loans and Lease Receivable 4,920,273 4,898,737 4,429,900 Allowance for Loan Losses (41,129 ) (42,013 ) (35,201 ) Net Loans and Lease Receivable 4,879,144 4,856,724 4,394,699 Premises and Equipment, Net 64,674 63,037 63,765 Accrued Interest Receivable 28,060 26,861 22,454 Other Equity Securities 32,591 34,824 39,390 Other Real Estate Owned 1,558 1,587 840 Cash Value of Life Insurance 95,906 95,302 88,743 Deferred Taxes, Net 34,660 31,553 36,691 Goodwill 88,391 88,543 88,543 Core Deposit and Customer Intangibles 12,418 12,993 14,567 Other Assets 12,946 10,194 7,686 Total Assets $ 6,488,781 $ 6,454,649 $ 5,806,691 Liabilities Deposits Noninterest-Bearing $ 1,412,406 $ 1,429,376 $ 1,613,310 Interest-Bearing 3,778,317 3,585,067 2,972,795 Total Deposits 5,190,723 5,014,443 4,586,105 Securities Sold Under Agreements to Repurchase 23,245 23,230 22,072 Federal Funds Purchased - - - Short-Term Borrowings 9 9 5,009 Bank Term Funding Program 300,000 300,000 - Federal Home Loan Bank Borrowings 214,184 362,162 534,059 Subordinated Debt 100,048 103,822 110,902 Subordinated Debt - Trust Preferred Securities 5,000 5,000 5,000 Accrued Interest Payable 11,188 7,666 1,023 Other Liabilities 40,018 37,349 34,519 Total Liabilities 5,884,415 5,853,681 5,298,689 Shareholders' Equity Preferred Stock 71,930 71,930 72,010 Common Stock 25,344 25,344 22,605 Additional Paid-In Capital 396,121 395,875 347,721 Retained Earnings 205,207 189,115 150,336 Accumulated Other Comprehensive Loss (94,236 ) (81,296 ) (84,670 ) Total Shareholders' Equity 604,366 600,968 508,002 Total Liabilities and Shareholders' Equity $ 6,488,781 $ 6,454,649 $ 5,806,691 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) 2023 2023 2022 2023 2022 Interest Income: Interest and Fees on Loans $ 84,575 $ 79,223 $ 58,846 $ 237,566 $ 148,668 Interest and Dividends on Securities 5,053 5,097 4,200 14,932 12,187 Interest on Federal Funds Sold and Due From Banks 3,694 1,528 427 6,164 754 Total Interest Income 93,322 85,848 63,473 258,662 161,609 Interest Expense: Interest on Deposits 30,110 23,680 6,286 72,718 11,106 Interest on Borrowings 7,918 8,842 3,707 24,575 6,986 Total Interest Expense 38,028 32,522 9,993 97,293 18,092 Net Interest Income 55,294 53,326 53,480 161,369 143,517 Provision for Credit Losses 604 538 3,273 4,364 7,835 Net Interest Income After Provision for Credit Losses 54,690 52,788 50,207 157,005 135,682 Other Income: Service Charges on Deposit Accounts 2,540 2,413 2,116 7,234 6,007 Loss on Sales of Securities - (61 ) (7 ) (62 ) (46 ) Gain on Sales of Loans 321 494 264 1,426 515 Other Income 7,022 9,112 5,742 21,631 14,556 Total Other Income 9,883 11,958 8,115 30,229 21,032 Other Expenses: Salaries and Employee Benefits 22,487 22,339 21,906 68,002 63,017 Occupancy and Equipment Expense 5,445 5,112 5,122 15,558 14,449 Merger and Conversion-Related Expense 2 68 3,244 173 4,670 Other Expenses 10,673 12,183 10,674 33,255 28,927 Total Other Expenses 38,607 39,702 40,946 116,988 111,063 Income Before Income Taxes 25,966 25,044 17,376 70,246 45,651 Provision for Income Taxes 5,511 5,305 3,576 15,027 9,363 Net Income 20,455 19,739 13,800 55,219 36,288 Preferred Stock Dividends (1,351 ) (1,350 ) - (4,051 ) - Net Income Available to Common Shareholders $ 19,104 $ 18,389 $ 13,800 $ 51,168 $ 36,288 Business First Bancshares, Inc. Consolidated Net Interest Margin (Unaudited) Three Months Ended September 30, 2023 June 30, 2023 September 30, 2022 Average Average Average Outstanding Interest Earned / Average Outstanding Interest Earned / Average Outstanding Interest Earned / Average (Dollars in thousands) Balance Interest Paid Yield / Rate Balance Interest Paid Yield / Rate Balance Interest Paid Yield / Rate Assets Interest-Earning Assets: Total Loans $ 4,906,917 $ 84,575 6.84 % $ 4,861,783 $ 79,223 6.54 % $ 4,281,137 $ 58,846 5.45 % Securities 885,792 5,053 2.26 % 916,421 5,097 2.23 % 951,479 4,200 1.75 % Interest-Bearing Deposit in Other Banks 278,420 3,694 5.26 % 117,086 1,528 5.23 % 54,730 427 3.10 % Total Interest-Earning Assets 6,071,129 93,322 6.10 % 5,895,290 85,848 5.84 % 5,287,346 63,473 4.76 % Allowance for Loan Losses (42,120 ) (42,010 ) (33,215 ) Noninterest-Earning Assets 445,926 421,376 448,181 Total Assets $ 6,474,935 $ 93,322 $ 6,274,656 $ 85,848 $ 5,702,312 $ 63,473 Liabilities and Shareholders' Equity Interest-Bearing Liabilities: Interest-Bearing Deposits $ 3,703,682 $ 30,110 3.23 % $ 3,405,221 $ 23,680 2.79 % $ 3,009,565 $ 6,286 0.83 % Subordinated Debt 100,400 1,363 5.39 % 108,619 1,251 4.62 % 110,953 1,332 4.76 % Subordinated Debt - Trust Preferred Securities 5,000 111 8.81 % 5,000 108 8.66 % 5,000 68 5.40 % Bank Term Funding Program 300,000 3,422 4.53 % 384,816 4,309 4.49 % - - 0.00 % Advances from Federal Home Loan Bank (FHLB) 284,930 2,875 4.00 % 298,324 3,038 4.08 % 396,267 2,194 2.20 % First National Bankers Bank Line of Credit - - 0.00 % - - 0.00 % 5,000 70 5.55 % Other Borrowings 23,542 147 2.48 % 22,109 136 2.47 % 22,381 43 0.76 % Total Interest-Bearing Liabilities 4,417,554 38,028 3.42 % 4,224,089 32,522 3.09 % 3,549,166 9,993 1.12 % Noninterest-Bearing Liabilities: Noninterest-Bearing Deposits $ 1,399,293 $ 1,410,983 $ 1,626,055 Other Liabilities 50,947 40,329 60,310 Total Noninterest-Bearing Liabilities 1,450,240 1,451,312 1,686,365 Shareholders' Equity: Common Shareholders' Equity 535,211 527,325 442,778 Preferred Equity 71,930 71,930 24,003 Total Shareholders' Equity 607,141 599,255 466,781 Total Liabilities and Shareholders' Equity $ 6,474,935 $ 6,274,656 $ 5,702,312 Net Interest Spread 2.68 % 2.75 % 3.65 % Net Interest Income $ 55,294 $ 53,326 $ 53,480 Net Interest Margin 3.61 % 3.63 % 4.01 % Overall Cost of Funds 2.59 % 2.31 % 0.77 % NOTE: Average outstanding balances are determined utilizing monthly averages and average yield/rate is calculated utilizing an Actual/365 day count convention. Business First Bancshares, Inc. Consolidated Net Interest Margin (Unaudited) Nine Months Ended September 30, 2023 September 30, 2022 Average Average Outstanding Interest Earned / Average Outstanding Interest Earned / Average (Dollars in thousands) Balance Interest Paid Yield / Rate Balance Interest Paid Yield / Rate Assets Interest-Earning Assets: Total Loans $ 4,829,537 $ 237,566 6.58 % $ 3,854,023 $ 148,668 5.16 % Securities 909,901 14,932 2.19 % 974,566 12,187 1.67 % Interest-Bearing Deposit in Other Banks 150,995 6,164 5.46 % 132,685 754 0.76 % Total Interest-Earning Assets 5,890,433 258,662 5.87 % 4,961,274 161,609 4.36 % Allowance for Loan Losses (41,888 ) (30,806 ) Noninterest-Earning Assets 442,341 400,884 Total Assets $ 6,290,886 $ 258,662 $ 5,331,352 $ 161,609 Liabilities and Shareholders' Equity Interest-Bearing Liabilities: Interest-Bearing Deposits $ 3,482,797 $ 72,718 2.79 % $ 2,958,005 $ 11,106 0.50 % Subordinated Debt 106,555 4,003 5.02 % 104,471 3,746 4.79 % Subordinated Debt - Trust Preferred Securities 5,000 317 8.48 % 5,000 163 4.36 % Bank Term Funding Program 238,274 8,111 4.55 % - - 0.00 % Advances from Federal Home Loan Bank (FHLB) 368,542 11,755 4.26 % 215,955 2,923 1.81 % First National Bankers Bank Line of Credit - - 0.00 % 2,778 91 4.38 % Other Borrowings 22,177 389 2.35 % 22,325 63 0.38 % Total Interest-Bearing Liabilities 4,223,345 97,293 3.08 % 3,308,534 18,092 0.73 % Noninterest-Bearing Liabilities: Noninterest-Bearing Deposits 1,427,821 1,530,748 Other Liabilities 41,392 37,666 Total Noninterest-Bearing Liabilities 1,469,213 1,568,414 Shareholders' Equity: Common Shareholders' Equity 526,398 446,403 Preferred Equity 71,930 8,001 Total Shareholders' Equity 598,328 454,404 Total Liabilities and Shareholders' Equity $ 6,290,886 $ 5,331,352 Net Interest Spread 2.79 % 3.62 % Net Interest Income $ 161,369 $ 143,517 Net Interest Margin 3.66 % 3.87 % Overall Cost of Funds 2.30 % 0.50 % NOTE: Average outstanding balances are determined utilizing monthly averages and average yield/rate is calculated utilizing an Actual/365 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) 2023 2023 2022 2023 2022 Interest Income: Interest income $ 93,322 $ 85,848 $ 63,473 $ 258,662 $ 161,609 Core interest income 93,322 85,848 63,473 258,662 161,609 Interest Expense: Interest expense 38,028 32,522 9,993 97,293 18,092 Core interest expense 38,028 32,522 9,993 97,293 18,092 Provision for Credit Losses:(b) Provision for credit losses 604 538 3,273 4,364 7,835 Core provision expense 604 538 3,273 4,364 7,835 Other Income: Other income 9,883 11,958 8,115 30,229 21,032 Losses on former bank premises and equipment - - - - 717 Losses on sale of securities - 61 7 62 46 Insurance reimbursement of storm expenditures - - (265 ) - (265 ) Gain on sale of branch (932 ) - - (932 ) - Gain on extinguishment of debt (517 ) (941 ) - (1,458 ) - Core other income 8,434 11,078 7,857 27,901 21,530 Other Expense: Other expense 38,607 39,702 40,946 116,988 111,063 Acquisition-related expenses (2) (2 ) (68 ) (3,521 ) (173 ) (5,040 ) Occupancy and bank premises - storm repair - - - - (501 ) Core other expense 38,605 39,634 37,425 116,815 105,522 Pre-Tax Income:(a) Pre-tax income 25,966 25,044 17,376 70,246 45,651 Losses on former bank premises and equipment - - - - 717 Losses on sale of securities - 61 7 62 46 Insurance reimbursement of storm expenditures - - (265 ) - (265 ) Gain on sale of branch (932 ) - - (932 ) - Gain on extinguishment of debt (517 ) (941 ) - (1,458 ) - Acquisition-related expenses (2) 2 68 3,521 173 5,040 Occupancy and bank premises - storm repair - - - - 501 Core pre-tax income 24,519 24,232 20,639 68,091 51,690 Provision for Income Taxes:(1) Provision for income taxes 5,511 5,305 3,576 15,027 9,363 Tax on losses on former bank premises and equipment - - - - 151 Tax on losses on sale of securities - 13 1 13 10 Tax on insurance reimbursement of storm expenditures - - (55 ) - (55 ) Tax on gain on sale of branch (197 ) - - (197 ) - Tax on gain on extinguishment of debt (109 ) (199 ) - (308 ) - Tax on acquisition-related expenses (2) - 14 739 20 913 Tax on occupancy and bank premises - storm repair - - - - 106 Core provision for income taxes 5,205 5,133 4,261 14,555 10,488 Preferred Dividends: Preferred dividends 1,351 1,350 - 4,051 - Core preferred dividends 1,351 1,350 - 4,051 - Net Income Available to Common Shareholders: Net income available to common shareholders 19,104 18,389 13,800 51,168 36,288 Losses on former bank premises and equipment, net of tax - - - - 566 Losses on sale of securities, net of tax - 48 6 49 36 Insurance reimbursement of storm expenditures, net of tax - - (210 ) - (210 ) Gain on sale of branch, net of tax (735 ) - - (735 ) - Gain on extinguishment of debt, net of tax (408 ) (742 ) - (1,150 ) - Acquisition-related expenses (2), net of tax 2 54 2,782 153 4,127 Occupancy and bank premises - storm repair, net of tax - - - - 395 Core net income available to common shareholders $ 17,963 $ 17,749 $ 16,378 $ 49,485 $ 41,202 Pre-tax, pre-provision earnings available to common shareholders (a+b) $ 26,570 $ 25,582 $ 20,649 $ 74,610 $ 53,486 Losses on former bank premises and equipment - - - - 717 Loss on sale of securities - 61 7 62 46 Insurance reimbursement of storm expenditures - - (265 ) - (265 ) Gain on sale of branch (932 ) - - (932 ) - Gain on extinguishment of debt (517 ) (941 ) - (1,458 ) - Acquisition-related expenses (2) 2 68 3,521 173 5,040 Occupancy and bank premises - storm repair - - - - 501 Core pre-tax, pre-provision earnings $ 25,123 $ 24,770 $ 23,912 $ 72,455 $ 59,525 Average Diluted Common Shares Outstanding 25,288,660 25,333,372 22,650,640 25,281,908 22,163,952 Diluted Earnings Per Common Share: Diluted earnings per common share $ 0.76 $ 0.73 $ 0.61 $ 2.02 $ 1.64 Losses on former bank premises and equipment, net of tax - - - - 0.02 Loss on sale of securities, net of tax - - - 0.00 - Insurance reimbursement of storm expenditures, net of tax - - (0.01 ) - (0.01 ) Gain on sale of branch, net of tax (0.03 ) - - (0.03 ) - Gain on extinguishment of debt, net of tax (0.02 ) (0.03 ) - (0.04 ) - Acquisition-related expenses (2), net of tax - - 0.12 0.01 0.19 Occupancy and bank premises -storm repair, net of tax - - - - 0.02 Core diluted earnings per common share $ 0.71 $ 0.70 $ 0.72 $ 1.96 $ 1.86 Pre-tax, pre-provision profit diluted earnings per common share $ 1.05 $ 1.01 $ 0.91 $ 2.95 $ 2.41 Losses on former bank premises and equipment - - - - 0.03 Loss on sale of securities - - - - - Insurance reimbursement of storm expenditures - - (0.01 ) - (0.01 ) Gain on sale of branch (0.04 ) - - (0.04 ) - Gain on extinguishment of debt (0.02 ) (0.04 ) - (0.06 ) - Acquisition-related expenses (2) - 0.01 0.16 0.01 0.23 Occupancy and bank premises - storm repair - - - - 0.03 Core pre-tax, pre-provision diluted earnings per common share $ 0.99 $ 0.98 $ 1.06 $ 2.86 $ 2.69 (1) Tax rates, exclusive of certain nondeductible merger-related expenses and goodwill, utilized were 21.129% for 2023 and 2022. 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) September 30, June 30, September 30, (Dollars in thousands, except per share data) 2023 2023 2022 Total Shareholders' (Common) Equity: Total shareholders' equity $ 604,366 $ 600,968 $ 508,002 Preferred stock (71,930 ) (71,930 ) (72,010 ) Total common shareholders' equity 532,436 529,038 435,992 Goodwill (88,391 ) (88,543 ) (88,543 ) Core deposit and customer intangible (12,418 ) (12,993 ) (14,567 ) Total tangible common equity $ 431,627 $ 427,502 $ 332,882 Total Assets: Total assets $ 6,488,781 $ 6,454,649 $ 5,806,691 Goodwill (88,391 ) (88,543 ) (88,543 ) Core deposit and customer intangible (12,418 ) (12,993 ) (14,567 ) Total tangible assets $ 6,387,972 $ 6,353,113 $ 5,703,581 Common shares outstanding 25,344,168 25,344,168 22,605,136 Book value per common share $ 21.01 $ 20.87 $ 19.29 Tangible book value per common share $ 17.03 $ 16.87 $ 14.73 Common equity to total assets 8.21 % 8.20 % 7.51 % Tangible common equity to tangible assets 6.76 % 6.73 % 5.84 % 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) 2023 2023 2022 2023 2022 Total Quarterly Average Assets $ 6,474,935 $ 6,274,656 $ 5,702,312 $ 6,290,886 $ 5,331,352 Total Quarterly Average Common Equity $ 535,211 $ 527,325 $ 442,778 $ 526,398 $ 446,403 Net Income Available to Common Shareholders: Net income available to common shareholders $ 19,104 $ 18,389 $ 13,800 $ 51,168 $ 36,288 Losses on former bank premises and equipment, net of tax - - - - 566 Losses on sale of securities, net of tax - 48 6 49 36 Insurance reimbursement of storm expenditures, net of tax - - (210 ) - (210 ) Gain on sale of branch, net of tax (735 ) - - (735 ) - Gain on extinguishment of debt, net of tax (408 ) (742 ) - (1,150 ) - Acquisition-related expenses, net of tax 2 54 2,782 153 4,127 Occupancy and bank premises - storm repair, net of tax - - - - 395 Core net income available to common shareholders $ 17,963 $ 17,749 $ 16,378 $ 49,485 $ 41,202 Return to common shareholders on average assets (annualized) (2) 1.17 % 1.18 % 0.96 % 1.09 % 0.91 % Core return on average assets (annualized) (2) 1.10 % 1.13 % 1.14 % 1.05 % 1.03 % Return to common shareholders on average common equity (annualized) (2) 14.16 % 13.99 % 12.37 % 13.00 % 10.87 % Core return on average common equity (annualized) (2) 13.32 % 13.50 % 14.68 % 12.57 % 12.34 % Interest Income: Interest income $ 93,322 $ 85,848 $ 63,473 $ 258,662 $ 161,609 Core interest income 93,322 85,848 63,473 258,662 161,609 Interest Expense: Interest expense 38,028 32,522 9,993 97,293 18,092 Core interest expense 38,028 32,522 9,993 97,293 18,092 Other Income: Other income 9,883 11,958 8,115 30,229 21,032 Losses on former bank premises and equipment - - - - 717 Loss on sale of securities - 61 7 62 46 Insurance reimbursement of storm expenditures - - (265 ) - (265 ) Gain on sale of branch (932 ) - - (932 ) - Gain on extinguishment of debt (517 ) (941 ) - (1,458 ) - Core other income 8,434 11,078 7,857 27,901 21,530 Other Expense: Other expense 38,607 39,702 40,946 116,988 111,063 Acquisition-related expenses (2 ) (68 ) (3,521 ) (173 ) (5,040 ) Occupancy and bank premises - storm repair - - - - (501 ) Core other expense $ 38,605 $ 39,634 $ 37,425 $ 116,815 $ 105,522 Efficiency Ratio: Other expense (a) $ 38,607 $ 39,702 $ 40,946 $ 116,988 $ 111,063 Core other expense (c) $ 38,605 $ 39,634 $ 37,425 $ 116,815 $ 105,522 Net interest and other income (1) (b) $ 65,177 $ 65,345 $ 61,602 $ 191,660 $ 164,595 Core net interest and other income (1) (d) $ 63,728 $ 64,404 $ 61,337 $ 189,270 $ 165,047 Efficiency ratio (a/b) 59.23 % 60.76 % 66.47 % 61.04 % 67.48 % Core efficiency ratio (c/d) 60.58 % 61.54 % 61.02 % 61.72 % 63.93 % Total Average Interest-Earnings Assets $ 6,071,129 $ 5,895,290 $ 5,287,346 $ 5,890,433 $ 4,961,274 Net Interest Income: Net interest income $ 55,294 $ 53,326 $ 53,480 $ 161,369 $ 143,517 Loan discount accretion (2,419 ) (2,059 ) (1,712 ) (7,390 ) (5,220 ) Net interest income excluding loan discount accretion $ 52,875 $ 51,267 $ 51,768 $ 153,979 $ 138,297 Net interest margin (2) 3.61 % 3.63 % 4.01 % 3.66 % 3.87 % Net interest margin excluding loan discount accretion (2) 3.46 % 3.49 % 3.88 % 3.49 % 3.73 % Net interest spread (2) 2.68 % 2.75 % 3.65 % 2.79 % 3.62 % Net interest spread excluding loan discount accretion (2) 2.53 % 2.61 % 3.52 % 2.62 % 3.48 % (1) Excludes gains/losses on sales of securities. (2) Calculated utilizing an Actual/365 day count convention. Misty Albrecht
b1BANK
225.286.7879
Misty.Albrecht@b1BANK.com