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Business First Bancshares, Inc. Announces Financial Results for Q2 2023

2023-07-27 16:02 ET - News Release

BATON ROUGE, La., July 27, 2023 (GLOBE NEWSWIRE) -- Business First Bancshares, Inc. (Nasdaq: BFST) (Business First), parent company of b1BANK, today announced its unaudited results for the quarter ended June 30, 2023, including net income available to common shareholders of $18.4 million, or $0.73 per diluted common share, increases of $4.7 million and $0.19, respectively, from the linked quarter, and increases of $4.6 million and $0.12, respectively, from the quarter ended June 30, 2022. On a non-GAAP basis, core net income for the quarter ended June 30, 2023, which excludes certain income and expenses, was $17.7 million, or $0.70 per diluted common share, increases of $4.0 million and $0.15, respectively, from the linked quarter, and increases of $3.2 million and $0.06, respectively, from the quarter ended June 30, 2022.

“In the second quarter we focused successfully on delivering fundamental shareholder-oriented performance,” said b1BANK President & CEO Jude Melville. “The period was marked by measured growth, increased ROE, stable credit quality, and increases in both linked quarter and year-over-year per share tangible book value and earnings. We have been busy blocking and tackling, and we’re seeing that effort pay off.”

On July 27, 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 second quarter in the amount of $0.12 per share, same as the prior quarter. The preferred and common dividends will be paid on August 31, 2023, or as soon thereafter as practicable, to the shareholders of record as of August 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 1.18% and 13.99%, respectively, for the quarter ended June 30, 2023, compared to 0.91% and 10.73%, respectively, for the linked quarter. Non-GAAP core return on average assets and common equity, each on an annualized basis, were 1.13% and 13.50%, respectively, for the quarter ended June 30, 2023, compared to 0.91% and 10.81%, 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 0.36% and 0.30%, respectively, at June 30, 2023, compared to 0.36% and 0.29% at March 31, 2023.
  • Net Interest Margin.   For the quarter ended June 30, 2023, net interest income totaled $53.3 million and net interest margin and net interest spread were 3.63% and 2.75%, respectively, compared to $52.7 million, 3.75% and 2.96% for the quarter ended March 31, 2023. Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $2.1 million) were 3.49% and 2.51%, respectively, for the quarter ended June 30, 2023, compared to 3.54% and 2.75% (excluding loan discount accretion of $2.9 million) for the quarter ended March 31, 2023. Compared to the linked quarter, net interest margin excluding loan discount accretion declined five basis points.      
  • Deposits. Deposits increased $208.3 million or 4.33%, 17.38% annualized, for the quarter ended June 30, 2023, compared to the linked quarter. The increase was impacted by $211.2 million in additional brokered deposits. Excluding brokered deposits, non-brokered deposits remained stable with a decrease of $2.9 million or 0.06%, 0.26% annualized. Branch deposits (which excludes mainly financial institutions group (FIG), brokered, and listed certificates of deposits) increased $1.9 million compared to the linked quarter.
  • Loans. Loans held for investment increased $95.7 million or 1.99%, 7.99% annualized, from the linked quarter. Year-to-date loan growth through June 30, 2023, was $292.6 million, 6.35% or 12.81% annualized. Loan growth for the second quarter was largely driven by net growth in the commercial and industrial (C&I) and commercial real estate portfolios, offset by reductions in the construction and development (C&D) portfolio.

Statement of Financial Condition

Loans

Loans held for investment increased $95.7 million or 1.99%, 7.99% annualized, from the linked quarter. Loan growth from the linked quarter was largely attributed to originations in the C&I, $69.9 million, and commercial real estate, $76.5 million, portfolios, offset by a $68.6 million reduction in the C&D portfolio. Year-to-date loan growth through June 30, 2023, was $292.6 million, 6.35%, or 12.81% annualized.

The Dallas Fort Worth region produced 59.07% of net loan growth from the linked quarter based on unpaid principal balance, while the North Louisiana and Greater New Orleans regions produced 28.16% and 12.06%, respectively. Based on unpaid principal balances, Texas-based loans represent approximately 37% of the overall loan portfolio as of June 30, 2023.

Credit Quality

The ratios of nonperforming loans compared to loans held for investment and nonperforming assets compared to total assets remained stable from 0.36% and 0.29%, respectively, at March 31, 2023, to 0.36% and 0.30% at June 30, 2023.

Securities

The securities portfolio decreased $26.2 million or 2.90%, from the linked quarter. The decrease was the net impact of negative fair value adjustments, $14.9 million, and net security paydowns and maturities during the quarter. The securities portfolio, based on estimated fair value, represented 13.60% of total assets as of June 30, 2023.

Deposits

Deposits increased $208.3 million or 4.33%, 17.38% annualized, for the quarter ended June 30, 2023. The increase was primarily attributable to the $211.2 million growth in brokered deposits. Excluding the increase in brokered deposits, non brokered deposits remained stable with a decrease of $2.9 million or 0.06%, 0.26% annualized. Year-to-date deposit growth through June 30, 2023, was $194.1 million, 4.03% or 8.12% annualized. Excluding brokered deposits, year-to-date deposits decreased $17.1 million, 0.37% or 0.75% annualized through June 30, 2023, which includes a $40.9 million reduction in FIG deposits.

Noninterest-bearing deposits decreased $46.4 million or 3.14% and interest-bearing deposits increased $254.7 million or 7.65%, compared to the linked quarter. The net growth in interest-bearing deposits was attributable to growth in the certificate of deposit (CD) portfolio of $282.3 million compared to a decrease in transactional accounts of $27.6 million. Brokered deposits accounted for $211.2 million of the $282.3 million increase in the CD portfolio.

As of June 30, 2023, Business First held approximately 104,285 deposit accounts with an average balance of approximately $48,085, of which $1.9 billion or 38.12% were estimated to be uninsured by the FDIC. The average deposit balance excluding brokered deposits was $43,672 per account. Excluding public funds, which are secured by securities or Federal Home Loan Bank (FHLB) letters of credit, the unsecured deposit total was approximately $1.5 billion or 29.26% of total deposits.

Borrowings

Borrowings decreased $57.8 million, or 6.78%, from the linked quarter, these borrowings were replaced with lower cost brokered deposits. Business First repaid $10.0 million in Bank Term Funding Program (BTFP) borrowings and $33.0 million of Federal Home Loan Bank (FHLB) borrowings, which were largely short term. On May 1, 2023, Business First redeemed an $8.9 million tranche of outstanding subordinated debt, of which $5.7 million was extinguished as of June 30, 2023. This resulted in a $941,000 gain on extinguishment of debt.

Shareholders’ Equity

Accumulated other comprehensive income (AOCI) decreased $13.3 million due to negative after-tax fair value changes in the securities portfolio. Book value per common share nonetheless still increased to $20.87 at June 30, 2023, compared to $20.77 at March 31, 2023, due to strong second quarter earnings. On a non-GAAP basis, tangible book value per common share increased to $16.87 at June 30, 2023, compared to $16.73 at March 31, 2023.

Results of Operations

Net Interest Income

For the quarter ended June 30, 2023, net interest income totaled $53.3 million, compared to $52.7 million from the linked quarter. Loan and interest-earning asset yields of 6.54% and 5.84%, respectively, increased 20 basis points and 19 basis points, respectively, compared to 6.34% and 5.65% 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 3.63% and 2.75%, respectively, compared to 3.75% and 2.96%, respectively, for the linked quarter. Interest income for the quarter ended March 31, 2023, included $853,000 of additional loan discount accretion due to a large, acquired loan payoff and accelerated accretion from the purchased impaired portfolio. Overall cost of funds, which include noninterest-bearing deposits, increased from 1.97% to 2.31% or 34 basis points, from the linked quarter due largely to higher cost deposits.

Non-GAAP net interest income (excluding loan discount accretion of $2.1 million) totaled $51.3 million for the quarter ended June 30, 2023, compared to $49.8 million (excluding loan discount accretion of $2.9 million) from the linked quarter. Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $2.1 million) were 3.49% and 2.51%, respectively, for the quarter ended June 30, 2023, compared to 3.54% and 2.75% (excluding loan discount accretion of $2.9 million) for the linked quarter. Excluding loan discount accretion, loan yields increased 28 basis points from 6.09% to 6.37% and interest earnings asset yields increased 36 basis points from 5.44% to 5.70%, compared to the linked quarter.

Provision for Credit Losses

During the quarter ended June 30, 2023, Business First recorded a provision for credit losses of $538,000, compared to $3.2 million for the linked quarter. The current quarter reserve was impacted by loan growth in loan portfolios with lower estimated loss rates and lower reserves for unfunded commitments due to lower unfunded balances. The provision for credit losses for the quarter ended March 31, 2023, included the resolution of an acquired impaired lending relationship in March 2023, which resulted in a charge-off of $1.9 million.

Other Income

For the quarter ended June 30, 2023, other income increased $3.6 million or 42.56%, compared to the linked quarter. The net increase was largely attributable to a $2.6 million increase in equity investment income and a $941,000 gain on extinguishment of debt.

Other Expenses

For the quarter ended June 30, 2023, other expenses increased by $1.0 million, or 2.65%, compared to the linked quarter. The net increase was largely attributable to a $1.6 million increase in data processing charges, offset by a reduction of $837,000 in salary and employee benefits. The increase in data processing costs was partially attributable to $453,000 of rebates received during the first quarter and $715,000 in charges paid in the second quarter attributed to an error identified by our data processor in their billing system.

Return on Assets and Common Equity

Return to common shareholders on average assets and common equity, each on an annualized basis, were 1.18% and 13.99%, respectively, for the quarter ended June 30, 2023, compared to 0.91% and 10.73%, respectively, for the linked quarter. Non-GAAP return to common shareholders on average assets and common equity, each on an annualized basis, were 1.13% and 13.50%, respectively, for the quarter ended June 30, 2022, compared to 0.91% and 10.81%, respectively, for the linked quarter.

Conference Call and Webcast

Executive management will host a conference call and webcast to discuss results on Thursday, July 27, 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 6772868, or asking for the Business First Bancshares conference call. The live webcast can be found at https://edge.media-server.com/mmc/p/gm8qhso3. 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, $6.4 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)
 Three Months Ended
 June 30,March 31,June 30,
(Dollars in thousands) 2023  2023  2022 
    
Balance Sheet Ratios   
    
Loans (HFI) to Deposits 97.69% 99.94% 88.31%
Shareholders' Equity to Assets Ratio 9.31% 9.50% 8.05%
    
Loans Receivable Held for Investment (HFI)   
    
Commercial (1)$1,309,222 $1,239,333 $1,019,997 
Real Estate:   
Commercial 2,132,044  2,055,500  1,780,414 
Construction 719,080  787,634  642,260 
Residential 675,462  659,967  619,648 
Total Real Estate 3,526,586  3,503,101  3,042,322 
Consumer and Other 62,929  60,626  51,407 
Total Loans (Held for Investment)$4,898,737 $4,803,060 $4,113,726 
    
Allowance for Credit Losses   
    
Balance, Beginning of Period$41,830 $38,178 $29,245 
CECL Adoption/Implementation -  2,660  - 
Charge-offs – Quarterly (689) (2,278) (99)
Recoveries – Quarterly 104  103  226 
Provision for Loan Losses – Quarterly 768  3,167  2,945 
Balance, End of Period$42,013 $41,830 $32,317 
    
Allowance for Loan Losses to Total Loans (HFI) 0.86% 0.87% 0.79%
Allowance for Credit Losses to Total Loans (HFI) (2) 0.93% 0.95% 0.80%
Net Charge-offs (Recoveries) to Average Quarterly Total Loans 0.01% 0.05% -0.00%
    
Remaining Loan Purchase Discount$17,171 $19,234 $37,903 
    
Nonperforming Assets   
    
Nonperforming Loans:   
Nonaccrual Loans (1)$17,006 $16,952 $16,777 
Loans Past Due 90 Days or More (1) 468  127  324 
Total Nonperforming Loans 17,474  17,079  17,101 
Other Nonperforming Assets:   
Other Real Estate Owned 1,587  1,365  990 
Other Nonperforming Assets 29  57  84 
Total Other Nonperforming Assets 1,616  1,422  1,074 
Total Nonperforming Assets$19,090 $18,501 $18,175 
    
Nonperforming Loans to Total Loans (HFI) 0.36% 0.36% 0.42%
Nonperforming Assets to Total Assets 0.30% 0.29% 0.33%
    
(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 June 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 Six Months Ended 
 June 30,March 31,June 30, June 30,June 30, 
(Dollars in thousands, except per share data) 2023  2023  2022   2023  2022  
        
Per Share Data       
        
Basic Earnings per Common Share$0.73 $0.55 $0.61  $1.28 $1.03  
Diluted Earnings per Common Share$0.73  0.54  0.61  $1.27  1.03  
Dividends per Common Share 0.12  0.12  0.12   0.24  0.24  
Book Value per Common Share 20.87  20.77  19.73   20.87  19.73  
        
        
Average Common Shares Outstanding 25,101,683  24,979,955  22,459,603   25,041,124  21,746,793  
Average Diluted Common Shares Outstanding 25,333,372  25,222,308  22,656,174   25,278,145  21,916,641  
End of Period Common Shares Outstanding 25,344,168  25,319,520  22,579,451   25,344,168  22,579,451  
        
        
Annualized Performance Ratios       
        
Return to Common Shareholders on Average Assets (1) 1.18% 0.91% 1.03%  1.04% 0.88% 
Return to Common Shareholders on Average Common Equity (1) 13.99% 10.73% 12.25%  12.39% 10.12% 
Net Interest Margin (1) 3.63% 3.75% 3.99%  3.69% 3.78% 
Net Interest Spread (1) 2.75% 2.96% 3.81%  2.85% 3.61% 
Efficiency Ratio (2) 60.76% 63.27% 64.32%  61.97% 68.08% 
        
Total Quarterly/Year-to-Date Average Assets$6,274,656 $6,123,063 $5,371,639  $6,198,860 $5,145,872  
Total Quarterly/Year-to-Date Average Common Equity 527,325  516,659  450,431   521,992  448,216  
        
Other Expenses       
        
Salaries and Employee Benefits$22,339 $23,176 $21,408  $45,515 $41,111  
Occupancy and Bank Premises 2,406  2,297  2,422   4,703  4,474  
Depreciation and Amortization 1,720  1,710  1,734   3,430  3,303  
Data Processing 3,035  1,485  1,886   4,520  4,002  
FDIC Assessment Fees 1,092  933  661   2,025  1,404  
Legal and Other Professional Fees 961  613  735   1,574  1,278  
Advertising and Promotions 1,226  1,148  703   2,374  1,234  
Utilities and Communications 720  721  822   1,441  1,601  
Ad Valorem Shares Tax 965  965  812   1,930  1,625  
Directors' Fees 270  269  212   539  414  
Other Real Estate Owned Expenses and Write-Downs 39  130  35   169  49  
Merger and Conversion-Related Expenses 68  103  615   171  1,426  
Other 4,861  5,129  4,352   9,990  8,196  
Total Other Expenses$39,702 $38,679 $36,397  $78,381 $70,117  
        
Other Income       
        
Service Charges on Deposit Accounts$2,413 $2,281 $2,086  $4,694 $3,891  
Loss on Sales of Securities (61) (1) (8)  (62) (39) 
Debit Card and ATM Fee Income 1,646  1,570  1,657   3,216  3,158  
Bank-Owned Life Insurance Income 547  524  475   1,071  844  
Gain on Sales of Loans 494  611  186   1,105  251  
Mortgage Origination Income 56  74  161   130  370  
Fees and Brokerage Commission 1,791  1,813  1,749   3,604  3,584  
Gain on Sales of Other Real Estate Owned 14  209  10   223  18  
Gain (Loss) on Disposal of Other Assets 14  (5) -   9  (717) 
Pass-Through Income from Other Investments 2,812  173  52   2,985  167  
Gain on Extinguishement of Debt 941  -  -   941  -  
Other 1,291  1,139  653   2,430  1,390  
 Total Other Income$11,958 $8,388 $7,021  $20,346 $12,917  
        
(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)
    
 June 30,March 31,June 30,
(Dollars in thousands) 2023  2023  2022 
    
Assets   
    
Cash and Due From Banks$180,972 $159,767 $154,694 
Federal Funds Sold 173,850  104,250  10,817 
Securities Available for Sale, at Fair Values 877,774  903,945  934,676 
Mortgage Loans Held for Sale 435  423  170 
Loans and Lease Receivable 4,898,737  4,803,060  4,113,726 
Allowance for Loan Losses (42,013) (41,830) (32,317)
Net Loans and Lease Receivable 4,856,724  4,761,230  4,081,409 
Premises and Equipment, Net 63,037  64,065  64,307 
Accrued Interest Receivable 26,861  25,446  22,142 
Other Equity Securities 34,824  36,739  30,302 
Other Real Estate Owned 1,587  1,365  990 
Cash Value of Life Insurance 95,302  94,755  88,370 
Deferred Taxes, Net 31,553  28,680  29,576 
Goodwill 88,543  88,543  88,842 
Core Deposit and Customer Intangibles 12,993  13,517  15,093 
Other Assets 10,194  7,256  8,995 
    
Total Assets$6,454,649 $6,289,981 $5,530,383 
    
    
Liabilities   
    
Deposits   
Noninterest-Bearing$1,429,376 $1,475,782 $1,698,114 
Interest-Bearing 3,585,067  3,330,396  2,960,049 
Total Deposits 5,014,443  4,806,178  4,658,163 
    
Securities Sold Under Agreements to Repurchase 23,230  16,669  18,477 
Federal Funds Purchased -  14,622  - 
Short-Term Borrowings 9  9  5,020 
Bank Term Funding Program 300,000  310,000  - 
Federal Home Loan Bank Borrowings 362,162  395,134  254,011 
Subordinated Debt 103,822  110,596  111,055 
Subordinated Debt - Trust Preferred Securities 5,000  5,000  5,000 
Accrued Interest Payable 7,666  3,513  708 
Other Liabilities 37,349  30,570  32,490 
    
Total Liabilities 5,853,681  5,692,291  5,084,924 
    
Shareholders' Equity   
    
Preferred Stock 71,930  71,930  - 
Common Stock 25,344  25,320  22,579 
Additional Paid-In Capital 395,875  394,677  346,382 
Retained Earnings 189,115  173,761  139,232 
Accumulated Other Comprehensive Loss (81,296) (67,998) (62,734)
    
Total Shareholders' Equity 600,968  597,690  445,459 
    
Total Liabilities and Shareholders' Equity$6,454,649 $6,289,981 $5,530,383 
    



Business First Bancshares, Inc.
Consolidated Statements of Income
(Unaudited)
       
 Three Months Ended Six Months Ended
 June 30,March 31,June 30, June 30,June 30,
(Dollars in thousands) 2023  2023  2022   2023  2022 
       
Interest Income:      
Interest and Fees on Loans$79,223 $73,768 $49,639  $152,991 $89,822 
Interest and Dividends on Securities 5,097  4,782  4,143   9,879  7,987 
Interest on Federal Funds Sold and Due From Banks 1,528  942  232   2,470  327 
Total Interest Income 85,848  79,492  54,014   165,340  98,136 
       
Interest Expense:      
Interest on Deposits 23,680  18,928  2,557   42,608  4,820 
Interest on Borrowings 8,842  7,815  1,895   16,657  3,279 
Total Interest Expense 32,522  26,743  4,452   59,265  8,099 
       
Net Interest Income 53,326  52,749  49,562   106,075  90,037 
       
Provision for Credit Losses 538  3,222  2,945   3,760  4,562 
       
Net Interest Income After Provision for Credit Losses 52,788  49,527  46,617   102,315  85,475 
       
Other Income:      
Service Charges on Deposit Accounts 2,413  2,281  2,086   4,694  3,891 
Loss on Sales of Securities (61) (1) (8)  (62) (39)
Gain on Sales of Loans 494  611  186   1,105  251 
Other Income 9,112  5,497  4,757   14,609  8,814 
Total Other Income 11,958  8,388  7,021   20,346  12,917 
       
Other Expenses:      
Salaries and Employee Benefits 22,339  23,176  21,408   45,515  41,111 
Occupancy and Equipment Expense 5,112  5,001  4,914   10,113  9,327 
Merger and Conversion-Related Expense 68  103  615   171  1,426 
Other Expenses 12,183  10,399  9,460   22,582  18,253 
Total Other Expenses 39,702  38,679  36,397   78,381  70,117 
       
Income Before Income Taxes 25,044  19,236  17,241   44,280  28,275 
       
Provision for Income Taxes 5,305  4,211  3,484   9,516  5,787 
       
Net Income 19,739  15,025  13,757   34,764  22,488 
       
Preferred Stock Dividends (1,350) (1,350) -   (2,700) - 
       
Net Income Available to Common Shareholders$18,389 $13,675 $13,757  $32,064 $22,488 
       



Business First Bancshares, Inc. 
Consolidated Net Interest Margin 
(Unaudited) 
             
 Three Months Ended 
 June 30, 2023 March 31, 2023 June 30, 2022 
(Dollars in thousands)Average
Outstanding
Balance
Interest Earned /
Interest Paid
Average
Yield / Rate
 Average
Outstanding
Balance
Interest Earned /
Interest Paid
Average
Yield / Rate
 Average
Outstanding
Balance
Interest Earned /
Interest Paid
Average
Yield / Rate
 
             
Assets            
             
Interest-Earning Assets:            
Total Loans$4,861,783 $79,2236.54% $4,719,906 $73,7686.34% $3,894,899 $49,6395.11% 
Securities 916,421  5,0972.23%  927,491  4,7822.09%  966,960  4,1431.72% 
Interest-Bearing Deposit in Other Banks 117,086  1,5285.23%  57,478  9426.65%  122,175  2320.76% 
Total Interest-Earning Assets 5,895,290  85,8485.84%  5,704,875  79,4925.65%  4,984,034  54,0144.35% 
Allowance for Loan Losses (42,010)    (41,533)    (29,945)   
Noninterest-Earning Assets 421,376     459,721     417,550    
Total Assets$6,274,656 $85,848  $6,123,063 $79,492  $5,371,639 $54,014  
             
             
Liabilities and Shareholders' Equity            
             
Interest-Bearing Liabilities:            
Interest-Bearing Deposits$3,405,221 $23,6802.79% $3,339,493 $18,9282.30% $2,981,613 $2,5570.34% 
Subordinated Debt 108,619  1,2514.62%  110,647  1,3895.09%  111,107  1,3004.69% 
Subordinated Debt - Trust Preferred Securities 5,000  1088.66%  5,000  987.95%  5,000  524.17% 
Bank Term Funding Program 384,816  4,3094.49%  34,444  3804.47%  -  -0.00% 
Advances from Federal Home Loan Bank (FHLB) 298,324  3,0384.08%  517,934  5,8424.57%  171,224  5061.19% 
First National Bankers Bank Line of Credit -  -0.00%  -  -0.00%  3,333  212.53% 
Other Borrowings 22,109  1362.47%  20,895  1062.06%  24,927  160.26% 
Total Interest-Bearing Liabilities 4,224,089  32,5223.09%  4,028,413  26,7432.69%  3,297,204  4,4520.54% 
             
Noninterest-Bearing Liabilities:            
Noninterest-Bearing Deposits$1,410,983    $1,473,186    $1,596,174    
Other Liabilities 40,329     32,875     27,830    
Total Noninterest-Bearing Liabilities 1,451,312     1,506,061     1,624,004    
Shareholders' Equity:            
Common Shareholders' Equity 527,325     516,659     450,431    
Preferred Equity 71,930     71,930     -    
Total Shareholders' Equity 599,255     588,589     450,431    
Total Liabilities and Shareholders' Equity$6,274,656    $6,123,063    $5,371,639    
             
Net Interest Spread  2.75%   2.96%   3.81% 
Net Interest Income $53,326   $52,749   $49,562  
Net Interest Margin  3.63%   3.75%   3.99% 
             
Overall Cost of Funds  2.31%` 1.97%   0.36% 
             
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)  
          
          
 Six Months Ended  
 June 30, 2023 June 30, 2022  
(Dollars in thousands)Average
Outstanding
Balance
Interest Earned /
Interest Paid

Average
Yield / Rate
 Average
Outstanding
Balance
Interest Earned /
Interest Paid
Average
Yield / Rate
  
          
Assets         
          
Interest-Earning Assets:         
Total Loans$4,790,843 $152,9916.44% $3,640,470 $89,8224.98%  
Securities 921,958  9,8792.16%  986,107  7,9871.63%  
Interest-Bearing Deposit in Other Banks 87,282  2,4705.71%  171,662  3270.38%  
Total Interest-Earning Assets 5,800,083  165,3405.75%  4,798,239  98,1364.12%  
Allowance for Loan Losses (41,772)    (29,602)    
Noninterest-Earning Assets 440,549     377,235     
Total Assets$6,198,860 $165,340  $5,145,872 $98,136   
          
          
Liabilities and Shareholders' Equity         
          
Interest-Bearing Liabilities:         
Interest-Bearing Deposits$3,372,358 $42,6082.55% $2,932,228 $4,8200.33%  
Subordinated Debt 109,634  2,6404.86%  101,231  2,4154.81%  
Subordinated Debt - Trust Preferred Securities 5,000  2068.31%  5,000  943.79%  
Bank Term Funding Program 207,411  4,6894.56%  -  -0.00%  
Advances from Federal Home Loan Bank (FHLB) 410,348  8,8804.36%  125,800  7291.17%  
First National Bankers Bank Line of Credit -  -0.00%  1,667  212.54%  
Other Borrowings 21,502  2422.27%  22,297  200.18%  
Total Interest-Bearing Liabilities 4,126,253  59,2652.90%  3,188,223  8,0990.51%  
          
Noninterest-Bearing Liabilities:         
Noninterest-Bearing Deposits 1,442,084     1,483,095     
Other Liabilities 36,601     26,338     
Total Noninterest-Bearing Liabilities 1,478,685     1,509,433     
Shareholders' Equity:         
    Common Shareholders' Equity 521,992     448,216     
    Preferred Equity 71,930     -     
Total Shareholders' Equity 593,922     448,216     
    Total Liabilities and Shareholders' Equity$6,198,860    $5,145,872     
          
Net Interest Spread  2.85%   3.61%  
Net Interest Income $106,075   $90,037   
Net Interest Margin  3.69%   3.78%  
          
Overall Cost of Funds  2.15%   0.35%  
          
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 Six Months Ended 
 June 30,March 31,June 30, June 30,June 30, 
(Dollars in thousands, except per share data) 2023  2023  2022   2023  2022  
        
Interest Income:       
Interest income$85,848 $79,492 $54,014  $165,340 $98,136  
Core interest income 85,848  79,492  54,014   165,340  98,136  
Interest Expense:       
Interest expense 32,522  26,743  4,452   59,265  8,099  
Core interest expense 32,522  26,743  4,452   59,265  8,099  
Provision for Credit Losses: (b)       
Provision for credit losses 538  3,222  2,945   3,760  4,562  
Core provision expense 538  3,222  2,945   3,760  4,562  
Other Income:       
Other income 11,958  8,388  7,021   20,346  12,917  
Losses on former bank premises and equipment -  -  -   -  717  
Losses on sale of securities 61  1  8   62  39  
Gain on extinguishment of debt (941) -  -   (941) -  
Core other income 11,078  8,389  7,029   19,467  13,673  
Other Expense:       
Other expense 39,702  38,679  36,397   78,381  70,117  
Acquisition-related expenses (2) (68) (103) (708)  (171) (1,519) 
Occupancy and bank premises - storm repair -  -  (270)  -  (501) 
Core other expense 39,634  38,576  35,419   78,210  68,097  
Pre-Tax Income: (a)       
Pre-tax income 25,044  19,236  17,241   44,280  28,275  
Losses on former bank premises and equipment -  -  -   -  717  
Losses on sale of securities 61  1  8   62  39  
Gain on extinguishment of debt (941) -  -   (941) -  
Acquisition-related expenses (2) 68  103  708   171  1,519  
Occupancy and bank premises - storm repair -  -  270   -  501  
Core pre-tax income 24,232  19,340  18,227   43,572  31,051  
Provision for Income Taxes: (1)       
Provision for income taxes 5,305  4,211  3,484   9,516  5,787  
Tax on losses on former bank premises and equipment -  -  -   -  151  
Tax on losses on sale of securities 13  -  2   13  9  
Gain on extinguishment of debt (199) -  -   (199) -  
Tax on acquisition-related expenses (2) 14  6  126   20  174  
Tax on occupancy and bank premises - storm repair -  -  57   -  106  
Core provision for income taxes 5,133  4,217  3,669   9,350  6,227  
Preferred Dividends:       
Preferred dividends 1,350  1,350  -   2,700  -  
Core preferred dividends 1,350  1,350  -   2,700  -  
Net Income Available to Common Shareholders:       
Net income available to common shareholders 18,389  13,675  13,757   32,064  22,488  
Losses on former bank premises and equipment, net of tax -  -  -   -  566  
Losses on sale of securities, net of tax 48  1  6   49  30  
Gain on extinguishment of debt, net of tax (742) -  -   (742) -  
Acquisition-related expenses (2), net of tax 54  97  582   151  1,345  
Occupancy and bank premises - storm repair, net of tax -  -  213   -  395  
Core net income available to common shareholders$17,749 $13,773 $14,558  $31,522 $24,824  
        
Pre-tax, pre-provision earnings available to common shareholders (a+b)$25,582 $22,458 $20,186  $48,040 $32,837  
Losses on former bank premises and equipment -  -  -   -  717  
Loss on sale of securities 61  1  8   62  39  
Gain on extinguishment of debt (941) -  -   (941) -  
Acquisition-related expenses (2) 68  103  708   171  1,519  
Occupancy and bank premises - storm repair -  -  270   -  501  
Core pre-tax, pre-provision earnings$24,770 $22,562 $21,172  $47,332 $35,613  
        
Average Diluted Common Shares Outstanding 25,333,372  25,222,308  22,656,174   25,278,145  21,916,641  
        
Diluted Earnings Per Common Share:       
Diluted earnings per common share$0.73 $0.54 $0.61  $1.27 $1.03  
Losses on former bank premises and equipment, net of tax -  -  -   -  0.03  
Loss on sale of securities, net of tax -  -  -   -  -  
Gain on extinguishment of debt, net of tax (0.03) -  -   (0.03) -  
Acquisition-related expenses (2), net of tax 0.00  0.01  0.02   0.01  0.06  
Occupancy and bank premises -storm repair, net of tax -  -  0.01   -  0.02  
Core diluted earnings per common share$0.70 $0.55 $0.64  $1.25 $1.14  
        
Pre-tax, pre-provision profit diluted earnings per common share$1.01 $0.89 $0.89  $1.90 $1.50  
Losses on former bank premises and equipment -  -  -   -  0.03  
Loss on sale of securities -  -  -   -  -  
Gain on extinguishment of debt (0.04) -  -   (0.04) -  
Acquisition-related expenses (2) 0.01  -  0.03   0.01  0.07  
Occupancy and bank premises - storm repair -  -  0.01   -  0.02  
Core pre-tax, pre-provision diluted earnings per common share$0.98 $0.89 $0.93  $1.87 $1.62  
        
(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) 
     
     
 June 30,March 31,June 30, 
(Dollars in thousands, except per share data) 2023  2023  2022  
     
Total Shareholders' (Common) Equity:    
Total shareholders' equity$600,968 $597,690 $445,459  
Preferred stock (71,930) (71,930) -  
Total common shareholders' equity 529,038  525,760  445,459  
Goodwill (88,543) (88,543) (88,842) 
Core deposit and customer intangible (12,993) (13,517) (15,093) 
Total tangible common equity$427,502 $423,700 $341,524  
     
     
Total Assets:    
Total assets$6,454,649 $6,289,981 $5,530,383  
Goodwill (88,543) (88,543) (88,842) 
Core deposit and customer intangible (12,993) (13,517) (15,093) 
Total tangible assets$6,353,113 $6,187,921 $5,426,448  
     
Common shares outstanding 25,344,168  25,319,520  22,579,451  
     
Book value per common share$20.87 $20.77 $19.73  
Tangible book value per common share$16.87 $16.73 $15.13  
Common equity to total assets 8.20% 8.36% 8.05% 
Tangible common equity to tangible assets 6.73% 6.85% 6.29% 
     



Business First Bancshares, Inc. 
Non-GAAP Measures 
(Unaudited) 
        
 Three Months Ended Six Months Ended 
 June 30,March 31,June 30, June 30,June 30, 
(Dollars in thousands, except per share data) 2023  2023  2022   2023  2022  
        
        
Total Quarterly Average Assets$6,274,656 $6,123,063 $5,371,639  $6,198,860 $5,145,872  
Total Quarterly Average Common Equity$527,325 $516,659 $450,431  $521,992 $448,216  
        
Net Income Available to Common Shareholders:       
Net income available to common shareholders$18,389 $13,675 $13,757  $32,064 $22,488  
Losses on former bank premises and equipment, net of tax -  -  -   -  566  
Losses on sale of securities, net of tax 48  1  6   49  30  
Gain on extinguishment of debt (742) -  -   (742) -  
Acquisition-related expenses, net of tax 54  97  582   151  1,345  
Occupancy and bank premises - storm repair, net of tax -  -  213   -  395  
Core net income available to common shareholders$17,749 $13,773 $14,558  $31,522 $24,824  
        
Return to common shareholders on average assets (annualized) (2) 1.18% 0.91% 1.03%  1.04% 0.88% 
Core return on average assets (annualized) (2) 1.13% 0.91% 1.09%  1.03% 0.97% 
Return to common shareholders on average common equity (annualized) (2) 13.99% 10.73% 12.25%  12.39% 10.12% 
Core return on average common equity (annualized) (2) 13.50% 10.81% 12.96%  12.18% 11.17% 
        
Interest Income:       
Interest income$85,848 $79,492 $54,014  $165,340 $98,136  
Core interest income 85,848  79,492  54,014   165,340  98,136  
Interest Expense:       
Interest expense 32,522  26,743  4,452   59,265  8,099  
Core interest expense 32,522  26,743  4,452   59,265  8,099  
Other Income:       
Other income 11,958  8,388  7,021   20,346  12,917  
Losses on former bank premises and equipment -  -  -   -  717  
Loss on sale of securities 61  1  8   62  39  
Gain on extinguishment of debt (941) -  -   (941) -  
Core other income 11,078  8,389  7,029   19,467  13,673  
Other Expense:       
Other expense 39,702  38,679  36,397   78,381  70,117  
Acquisition-related expenses (68) (103) (708)  (171) (1,519) 
Occupancy and bank premises - storm repair -  -  (270)  -  (501) 
Core other expense$39,634 $38,576 $35,419  $78,210 $68,097  
        
Efficiency Ratio:       
Other expense (a)$39,702 $38,679 $36,397  $78,381 $70,117  
Core other expense (c)$39,634 $38,576 $35,419  $78,210 $68,097  
Net interest and other income (1) (b)$65,345 $61,138 $56,591  $126,483 $102,993  
Core net interest and other income (1) (d)$64,404 $61,138 $56,591  $125,542 $103,710  
Efficiency ratio (a/b) 60.76% 63.27% 64.32%  61.97% 68.08% 
Core efficiency ratio (c/d) 61.54% 63.10% 62.59%  62.30% 65.66% 
        
Total Average Interest-Earnings Assets$5,895,290 $5,704,875 $4,984,034  $5,800,083 $4,798,239  
        
Net Interest Income:        
Net interest income$53,326 $52,749 $49,562  $106,075 $90,037  
Loan discount accretion (2,059) (2,912) (2,588)  (4,971) (3,508) 
Net interest income excluding loan discount accretion$51,267 $49,837 $46,974  $101,104 $86,529  
        
Net interest margin (2) 3.63% 3.75% 3.99%  3.69% 3.78% 
Net interest margin excluding loan discount accretion (2) 3.49% 3.54% 3.78%  3.52% 3.64% 
Net interest spread (2) 2.75% 2.96% 3.81%  2.85% 3.61% 
Net interest spread excluding loan discount accretion (2) 2.51% 2.75% 3.60%  2.63% 3.46% 
        
(1) Excludes gains/losses on sales of securities. 
(2) Calculated utilizing an Actual/365 day count convention. 
        

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