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Business First Bancshares, Inc., Announces Financial Results for Q3 2023

2023-10-26 16:02 ET - News Release

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)202320232022
    
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)202320232022 20232022
       
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)202320232022
    
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)202320232022 20232022
       
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  
 OutstandingInterest Earned /Average OutstandingInterest Earned /Average OutstandingInterest Earned /Average
(Dollars in thousands)BalanceInterest PaidYield / Rate BalanceInterest PaidYield / Rate BalanceInterest PaidYield / 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  
 OutstandingInterest Earned /Average OutstandingInterest Earned /Average
(Dollars in thousands)BalanceInterest PaidYield / Rate BalanceInterest PaidYield / 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)202320232022 20232022
       
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)202320232022
    
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)202320232022 20232022
       
       
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


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