EX-99.1 2 ex_584917.htm EXHIBIT 99.1 ex_584917.htm

Exhibit 99.1

 

logo.jpg

500 Laurel Street

Baton Rouge, LA 70801

Phone: 877.614.7600 
 
 

FOR IMMEDIATE RELEASE

October 26, 2023

Misty Albrecht

b1BANK

225.286.7879

Misty.Albrecht@b1BANK.com

 

 

BUSINESS FIRST BANCSHARES, INC., ANNOUNCES FINANCIAL RESULTS FOR Q3 2023

 

Baton Rouge, La. (October 26, 2023) – 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.

 

2
 

 

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.

 

3
 

 

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.

 

4
 

 

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.

 

5
 

 

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.

 

6
 

 

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.

 

7
 

 

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.

 

8
 

 

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.

 

9
 

 

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  

 

10
 

 

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  

 

11
 

 

Business First Bancshares, Inc.

Consolidated Net Interest Margin

(Unaudited)

 

   

Three Months Ended

  
   

September 30, 2023

    

June 30, 2023

    

September 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

   $ 4,906,917     $ 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.

 

12
 

 

Business First Bancshares, Inc.

Consolidated Net Interest Margin

(Unaudited)

 

   

Nine Months Ended

  
   

September 30, 2023

    

September 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

   $ 4,829,537     $ 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.

 

13
 

 

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.

 

14
 

 

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 %

 

15
 

 

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.

 

16