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Business First Bancshares, Inc., Announces Financial Results for Q3 2021

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  • BFST

BATON ROUGE, La., Oct. 21, 2021 (GLOBE NEWSWIRE) -- Business First Bancshares, Inc. (NASDAQ: BFST) (Business First), parent company of b1BANK, Baton Rouge, Louisiana, today announced its unaudited results for the quarter ended September 30, 2021, including net income of $10.3 million, or $0.50 per diluted share, a decrease of $7.1 million and $0.34, respectively, from the prior quarter ended June 30, 2021. On a non-GAAP basis, core net income for the quarter ended September 30, 2021, which excludes certain income and expenses, was $10.9 million, or $0.53 per diluted share, a decrease of $7.8 million and $0.37, respectively, from prior quarter ended June 30, 2021. The decrease was primarily attributable to the gain on sale recognized from the SBA PPP loan portfolio sale during the quarter ended June 30, 2021.

“The investments we’ve made over the past few years continued to pay off in the third quarter,” said Jude Melville, president and CEO. “Record and diversified organic loan growth, success recruiting and retaining in a competitive jobs market and establishment of a new partnership with Texas Citizens Bank in Houston all illustrate the consistent strengthening of our brand and capacity to deliver for our partners in the region. Thank you to all of our employees and clients for sticking with us during Hurricane Ida and its aftermath. While we pray this will be the last major weather event to hit our footprint for some time to come, I am once again thankful to be part of such a resilient and supportive team.”

On October 20, 2021, Business First’s board of directors declared a quarterly dividend based upon financial performance for the third quarter in the amount of $0.12 per share, same as the prior quarter, to the common shareholders of record as of November 15, 2021. The dividend will be paid on November 30, 2021, or as soon thereafter as practicable.

Quarterly Highlights

  • Loan Growth. Total loans held for investment at September 30, 2021, were $3.1 billion, an increase of $211.4 million compared to June 30, 2021, or 7.40% for the quarter and 29.61% annualized. Excluding the decrease in Small Business Administration (SBA) Paycheck Protection Program (PPP) loans, total loans held for investment increased for the quarter ended September 30, 2021, by 8.04%, or 32.15% annualized. Loan growth in Dallas, Tx (36.0%), greater New Orleans (28.5%), and the Baton Rouge/capital region (23.3%) markets accounted for approximately 87.9% of quarterly loan growth.

  • New Loan Production Office (LPO) Activity. Business First opened an LPO in New Orleans/Metairie, La. (i.e., greater New Orleans area).

  • Stock Repurchases. During the quarter ended September 30, 2021, Business First repurchased approximately 360,000 shares of its common stock at a weighted average price of $23.18 per share (including commissions), for a total cost of $8.4 million.

  • Efficiency Initiatives. Business First regularly evaluates its branch network in search of optimization opportunities and closed two branches recently, one in Minden, La, during Q3 2021, and a second by sale in Oak Grove, La, on October 1, 2021. Additionally, 11 interactive teller machines (ITMs) with fully functional video call centers, providing extended client hours, were launched during Q3 2021.

  • Texas Citizens Bancorp, Inc. Acquisition. On October 20, 2021, Business First executed a definitive agreement to acquire Texas Citizens Bancshares, Inc. (“TCBI”), the parent bank holding company for Texas Citizens Bank, National Association, based in Pasadena, Texas. As of September 30, 2021, TCBI had consolidated total assets of $516.9 million, loans of $365.7 million, and deposits of $452.0 million.

Financial Condition

September 30, 2021, Compared to June 30, 2021

Loans

Loans held for investment increased $211.4 million, or 7.40% (29.61% annualized), for the quarter ended September 30, 2021. The increase was largely attributable to loan originations in our commercial and nonfarm, nonresidential real estate portfolios which were $62.4 million and $109.1 million, respectively. Year to date annualized loan growth was 3.34%, inclusive of SBA PPP loans. As of September 30, 2021, SBA PPP loans with an unpaid principal balance of $9.7 million remained outstanding, compared to $25.7 million as of June 30, 2021.

Excluding the net decrease in SBA PPP loans, total loans held for investment increased for the quarter ended September 30, 2021, by 8.04%, or 32.15% annualized. Year to date annualized loan growth was 18.97% excluding SBA PPP loans.

Credit Quality

Nonperforming loans as a percentage of total loans held for investment increased from 0.40% as of June 30, 2021, to 0.45% as of September 30, 2021. Nonperforming assets as a percentage of total assets decreased from 0.42% as of June 30, 2021, to 0.37% as of September 30, 2021. The increase in the nonperforming loans ratio was largely attributable to $2.1 million increase in nonaccrual loans, mainly related to a single $1.5 million (commercial) loan.

Total Shareholders’ Equity

Book value per common share was $21.11 at September 30, 2021, compared to $20.78 at June 30, 2021. On a non-GAAP basis, tangible book value per share was $17.53 at September 30, 2021, compared to $17.24 at June 30, 2021.

September 30, 2021, Compared to September 30, 2020

Loans

Total loans held for investment decreased by $16.2 million compared to September 30, 2020, or (0.53) %, primarily due to the forgiveness and portfolio sale of SBA PPP loans. Excluding SBA PPP loans, loans increased $371.8 million, or 13.85%.

Credit Quality

Nonperforming loans as a percentage of total loans held for investment increased from 0.32% as of September 30, 2020, to 0.45% as of September 30, 2021. Nonperforming assets as a percentage of total assets decreased from 0.54% as of September 30, 2020, to 0.37% as of September 30, 2021. The increase in the nonperforming ratio was largely attributable to an increase in nonaccrual loans.

Total Shareholders’ Equity

Book value per common share was $21.11 at September 30, 2021, compared to $19.26 at September 30, 2020. On a non-GAAP basis, tangible book value per share was $17.53 at September 30, 2021, compared to $16.18 at September 30, 2020, an increase of 8.34%.

Results of Operations

Third Quarter 2021 Compared to Second Quarter 2021

Net Income and Diluted Earnings Per Share

For the quarter ended September 30, 2021, net income was $10.3 million, or $0.50 per diluted share, compared to net income of $17.4 million, or $0.84 per diluted share, for the quarter ended June 30, 2021. The decrease, $7.1 million and $0.34, respectively, was largely attributable to the $10.0 million gain on sale of loans recognized in the period ended June 30, 2021. The gain primarily related to a $9.2 million gain recognized upon the sale of SBA PPP loans with an outstanding principal balance of $243.6 million.

On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended September 30, 2021, was $10.9 million, or $0.53 per diluted share, compared to core net income of $18.7 million, or $0.90 per diluted share, for the quarter ended June 30, 2021. Notable noncore events impacting earnings for the quarter ended September 30, 2021, included $211,000 in occupancy and bank premises expenses attributable to hurricane damages (primarily related to Ida, 2021), $145,000 in acquisition-related expenses and $392,000 in losses on sales of former premises and equipment within other income, compared to $938,000 in occupancy and bank premises expenses attributable to hurricane damage (related to Hurricanes Laura/Delta, 2020, but resolved in the current year) and a $540,000 loss on sales of former premises and equipment within other income, for the quarter ended June 30, 2021.

Interest Income

For the quarter ended September 30, 2021, net interest income totaled $37.3 million and net interest margin and net interest spread were 3.71% and 3.51%, respectively, compared to $37.9 million, 3.87% and 3.68% for the quarter ended June 30, 2021. The average yield on total interest-earning assets was 4.14% for the quarter ended September 30, 2021, compared to 4.32% for the quarter ended June 30, 2021. Net interest margin and net interest spread were largely impacted for the quarter ended September 30, 2021, by $2.2 million less in SBA PPP origination fees, or (22) basis points for each. The reduction in interest income was largely attributable to lower SBA PPP portfolio interest and fee income due to the $243.6 million portfolio sale during the quarter ended June 30, 2021, partially offset by interest and fee income due to loan growth and an additional day in the third quarter. The average yield on the loan portfolio (excluding SBA PPP loans) was 5.11% for the quarter ended September 30, 2021, compared to 5.13% for the quarter ended June 30, 2021.

Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $1.5 million) were 3.56% and 3.36%, respectively, for the quarter ended September 30, 2021, compared to 3.71% and 3.52% (excluding loan discount accretion of $1.6 million) for the quarter ended June 30, 2021.

Interest Expense

For the quarter ended September 30, 2021, overall cost of funds (which includes noninterest-bearing deposits) decreased by one basis point, from 0.45% to 0.44%, compared to the quarter ended June 30, 2021.

Other Income

For the quarter ended September 30, 2021, other income was lower by $11.0 million. The reduction was primarily due to a $9.9 million gain on sale of loans recognized in the period ended June 30, 2021. Additionally, there was a reduction of Small Business Investment Company (SBIC) investment income of $1.2 million compared to the quarter ended June 30, 2021.

Other Expenses

For the quarter ended September 30, 2021, other expenses were lower by $1.5 million. The reduction was largely attributed to lower reserve for unfunded commitments, $586,000, and hurricane-related expenses within occupancy and bank premises, $765,000.

Provision for Loan Losses

During the quarter ended September 30, 2021, Business First recorded a provision for loan losses of $1.1 million, compared to $2.2 million for the quarter ended June 30, 2021. The decrease for the quarter ended September 30, 2021, was driven primarily by the improvement in the qualitative factors (attributed to the general economy and energy sector), offset by reserves for new loan growth.

Return on Assets and Equity

Return on average assets and equity, each on an annualized basis, were 0.95% and 9.47%, respectively, for the quarter ended September 30, 2021, compared to 1.58% and 16.57%, respectively, for the quarter ended June 30, 2021. Both returns were impacted by higher net income for the quarter ended June 30, 2021, mainly attributable to the gain on sale of the SBA PPP portfolio.

Third Quarter 2021 Compared to Third Quarter 2020

Net Income and Diluted Earnings Per Share

For the quarter ended September 30, 2021, net income was $10.3 million, or $0.50 per diluted share, compared to net income of $9.6 million, or $0.46 per diluted share, for the quarter ended September 30, 2020. The increases in net income and diluted earnings per share were largely attributable to a decrease in the provision for loan losses of $1.1 million, as increases in other income were largely offset with increases in other expenses.

On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended September 30, 2021, was $10.9 million, or $0.53 per diluted share, compared to core net income of $11.0 million, or $0.53 per diluted share, for the quarter ended September 30, 2020. Notable noncore events impacting earnings for the quarter ended September 30, 2021, included $211,000 in occupancy and bank premises expenses attributable to hurricane damages (primarily related to Ida, 2021), $145,000 in acquisition-related expenses and $392,000 in losses on sales of former premises and equipment within other income, compared to $635,000 in losses on sales of former premises and equipment within other income and $1.2 million in acquisition-related expenses incurred during the quarter ended September 30, 2020.

Interest Income

For the quarter ended September 30, 2021, net interest income totaled $37.3 million and net interest margin and net interest spread were 3.71% and 3.51%, respectively, compared to $36.9 million, 4.06% and 3.81% for the quarter ended September 30, 2020. The average yield on the loan portfolio (excluding SBA PPP loans) was 5.11% for the quarter ended September 30, 2021, compared to 5.65% for the quarter ended September 30, 2020. The increase in interest income was largely attributable to higher average balances in loans and securities, attributable to organic loan and deposit growth, offset by lower yielding new loans and securities.

Average yield on total interest-earning assets, net interest margin, and net interest spread were negatively impacted for the quarter ended September 30, 2021, by lower yielding loans and securities, offset partially by lower deposit and borrowing costs.

Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $1.5 million) were 3.56% and 3.36%, respectively, for the quarter ended September 30, 2021, compared to 3.81% and 3.56% (excluding loan discount accretion of $2.3 million) for the quarter ended September 30, 2020.

Interest Expense

For the quarter ended September 30, 2021, overall cost of funds (which includes noninterest-bearing deposits) decreased by 19 basis points, from 0.63% to 0.44%, compared to the quarter ended September 30, 2020. The decrease in cost of funds was primarily attributable to an overall reduction in interest rates on deposit offerings and reduction in Federal Home Loan Bank (FHLB) advance balances, offset by an increase in subordinated debt balances.

Other Income

For the quarter ended September 30, 2021, the increase in other income, $2.1 million, was largely attributable to the $1.1 million increase in fees and brokerage commission, related to the Smith Shellnut Wilson, LLC. (SSW) acquisition which occurred in Q2 2021, as well as modest increases in gain on disposal of other assets, $641,000, debit card and ATM fee income, $133,000, and service charges, $171,000, partially offset by more losses on the sale of other real estate owned, $(454,000), compared to the quarter ended September 30, 2020.

Other Expenses

For the quarter ended September 30, 2021, the increase in other expense, $2.6 million, was largely attributable to the increase in salary and employee benefits, $1.4 million, as well as more modest increases in various other expenses, $687,000, depreciation and amortization, $398,000, advertising and promotions, $292,000, and occupancy and bank premises, $235,000, partially offset by a reduction in merger and conversion-related expenses, $(411,000), compared to the quarter ended September 30, 2020.

Provision for Loan Losses

During the quarter ended September 30, 2021, Business First recorded a provision for loan losses of $1.1 million compared to $2.5 million for the quarter ended September 30, 2020. The reserve for the quarter ended September 30, 2020, was impacted by the estimated impact on the general economy of the COVID-19 pandemic at the time.

Return on Assets and Equity

Return on average assets and return on average equity, each on an annualized basis, were 0.95% and 9.47%, respectively, for the quarter ended September 30, 2021, from 0.98% and 9.85%, respectively, for the quarter ended September 30, 2020.

About Business First Bancshares, Inc.

Business First Bancshares, Inc., (Nasdaq: BFST) through its banking subsidiary b1BANK, has $4.4 billion in assets, $4.7 billion in assets under management through b1BANK’s affiliate Smith Shellnut Wilson, LLC (SSW) (excludes $1.0 billion of b1BANK assets managed by SSW) and operates Banking Centers and Loan Production Offices in markets across Louisiana and the Dallas, Texas area, 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 three-time recipient of Baton Rouge Business Report’s “Best Places to Work in Baton Rouge.” 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 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 the Company’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. Actual results will also be significantly impacted by the effects of the ongoing COVID-19 pandemic, including, among other effects: the impact of the public health crisis; the extent and duration of closures of businesses, including our branches, vendors and customers; the operation of financial markets; employment levels; market liquidity; the impact of various actions taken in response by the U.S. federal government, the Federal Reserve, other banking regulators, state and local governments; the adequacy of our allowance for loan losses in relation to potential losses in our loan portfolio; and the impact that all of these factors have on our borrowers, other customers, vendors and counterparties. 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 on 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.

This report does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the merger. No offer of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act of 1933, as amended, and no offer to sell or solicitation of an offer to buy shall be made in any jurisdiction in which such offer or solicitation would be unlawful.

In connection with the merger, Business First will file with the SEC a registration statement on Form S-4 (the “Registration Statement”) that will include a proxy statement of TCBI and a prospectus of Business First (the “Proxy Statement-Prospectus”), and Business First may file with the SEC other relevant documents concerning the merger. The definitive Proxy Statement-Prospectus will be mailed to the shareholders of TCBI. SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT-PROSPECTUS REGARDING THE PROPOSED TRANSACTION CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BY BUSINESS FIRST, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Free copies of the Proxy Statement-Prospectus, as well as other filings containing information about Business First, may be obtained at the SEC’s Internet site (http://www.sec.gov), when they are filed by Business First. You will also be able to obtain these documents, when they are filed, free of charge, from Business First at www.b1bank.com. Copies of the Proxy Statement-Prospectus can also be obtained, when it becomes available, free of charge, by directing a request to Business First Bancshares, Inc., 500 Laurel Street, Suite 101, Baton Rouge, LA 70801, Attention: Corporate Secretary, Telephone: 225-248-7600 or to Texas Citizens Bancshares, Inc., 4949 Fairmont Parkway, Pasadena, TX 77505, Attention: Chairman and Chief Executive Officer, Telephone: 713-948-5727.

Participants in the Solicitation

Business First, Texas Citizens Bancshares, Inc. (TCBI) and certain of their directors, executive officers and employees may be deemed to be participants in the solicitation of proxies from the shareholders of TCBI in connection with the merger. Information about Business First’s directors and executive officers is available in its proxy statement for its 2021 annual meeting of shareholders, which was filed with the SEC on April 15, 2021. Information regarding all of the persons who may, under the rules of the SEC, be deemed participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Proxy Statement-Prospectus pertaining to the merger and other relevant materials to be filed with the SEC when they become available. Free copies of these documents may be obtained as described in the preceding paragraph.


Business First Bancshares, Inc.

Selected Financial Information

(Unaudited)

For the Quarter Ended

September 30,

June 30,

September 30,

(Dollars in thousands)

2021

2021

2020

Balance Sheet Ratios

Loans (HFI) to Deposits

81.37

%

76.66

%

95.25

%

Shareholders' Equity to Assets Ratio

9.77

%

9.97

%

10.07

%

Loans Receivable Held for Investment

Commercial (1)

$

723,077

$

660,691

$

1,015,173

Real Estate:

Construction and Land

464,808

454,055

334,100

Farmland

85,898

77,133

56,567

1-4 Family Residential

464,462

459,037

493,344

Multi-Family Residential

107,551

89,796

99,901

Nonfarm Nonresidential

1,111,771

1,002,707

970,197

Total Real Estate

2,234,490

2,082,728

1,954,109

Consumer and Other (1)

108,669

111,467

113,192

Total Loans (Held for Investment)

$

3,066,236

$

2,854,886

$

3,082,474

Allowance for Loan Losses

Balance, Beginning of Period

$

26,702

$

25,251

$

18,715

Charge-offs – Quarterly

(81

)

(861

)

(956

)

Recoveries – Quarterly

378

71

90

Provision for Loan Losses – Quarterly

1,147

2,241

2,491

Balance, End of Period

$

28,146

$

26,702

$

20,340

Allowance for Loan Losses to Total Loans (HFI)

0.92

%

0.94

%

0.66

%

Net Charge-offs (Recoveries) to Average Total Loans

-0.01

%

0.03

%

0.03

%

Remaining Loan Purchase Discount

$

29,390

$

30,900

$

38,207

Nonperforming Assets

Nonperforming Loans:

Nonaccrual Loans (2)

$

12,622

$

10,568

$

7,988

Loans Past Due 90 Days or More (2)

1,030

893

1,986

Total Nonperforming Loans

13,652

11,461

9,974

Other Nonperforming Assets:

Other Real Estate Owned

2,152

5,890

10,994

Other Nonperforming Assets:

675

665

414

Total Other Nonperforming Assets

2,827

6,555

11,408

Total Nonperforming Assets

$

16,479

$

18,016

$

21,382

Nonperforming Loans to Total Loans (HFI)

0.45

%

0.40

%

0.32

%

Nonperforming Assets to Total Assets

0.37

%

0.42

%

0.54

%

(1) Small Business Administration (SBA) Paycheck Protection Program (PPP) loans accounted for $9.7 million

of the commercial portfolio as of September 30, 2021.

SBA PPP loans accounted for $25.7 million of the commercial portfolio as of June 30, 2021.

SBA PPP loans accounted for $392.9 million and $4.8 million of the commercial

and consumer portfolios, respectively, as of September 30, 2020.

(2) Past due and nonaccrual loan amounts exclude acquired impaired loans, even if contractually past due or if

the Company does not expect to receive payment in full, as the Company is currently accreting interest income

over the expected life of the loans.


Business First Bancshares, Inc.

Selected Financial Information

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

(Dollars in thousands, except per share data)

2021

2021

2020

2021

2020

Per Share Data

Basic Earnings per Common Share

$

0.51

$

0.84

$

0.47

$

1.95

$

0.93

Diluted Earnings per Common Share

0.50

0.84

0.46

1.94

0.93

Dividends per Common Share

0.12

0.12

0.10

0.34

0.30

Book Value per Common Share

21.11

20.78

19.26

21.11

19.26

Average Common Shares Outstanding

20,384,879

20,707,313

20,613,481

20,570,506

17,356,830

Average Diluted Shares Outstanding

20,513,838

20,827,786

20,704,444

20,692,344

17,409,821

End of Period Common Shares Outstanding

20,383,504

20,740,759

20,667,237

20,383,504

20,667,237

Annualized Performance Ratios

Return on Average Assets

0.95

%

1.58

%

0.98

%

1.23

%

0.67

%

Return on Average Equity

9.47

%

16.57

%

9.85

%

12.60

%

6.30

%

Net Interest Margin

3.71

%

3.87

%

4.06

%

3.93

%

3.97

%

Net Interest Spread

3.51

%

3.68

%

3.81

%

3.75

%

3.66

%

Efficiency Ratio (1)

67.73

%

56.20

%

65.65

%

60.69

%

71.42

%

Total Quarterly/Year-to-Date Average Assets

$

4,353,885

$

4,399,911

$

3,933,631

$

4,343,407

$

3,224,940

Total Quarterly/Year-to-Date Average Equity

435,400

420,640

390,209

423,977

341,904

Other Expenses

Salaries and Employee Benefits

$

16,791

$

16,753

$

15,430

$

48,470

$

42,486

Occupancy and Bank Premises

1,629

2,276

1,394

5,716

3,824

Depreciation and Amortization

1,720

1,686

1,322

4,999

2,996

Data Processing

1,994

2,288

1,832

6,105

3,539

FDIC Assessment Fees

581

436

594

1,526

1,013

Legal and Other Professional Fees

553

905

555

2,199

1,492

Advertising and Promotions

612

624

320

1,713

960

Utilities and Communications

678

636

789

1,889

1,751

Ad Valorem Shares Tax

675

675

673

2,050

1,498

Directors' Fees

201

194

117

583

291

Other Real Estate Owned Expenses and Write-Downs

103

178

171

660

475

Merger and Conversion-Related Expenses

145

94

556

249

3,430

Other

3,885

4,371

3,198

11,487

7,636

Total Other Expenses

$

29,567

$

31,116

$

26,951

$

87,646

$

71,391

Other Income

Service Charges on Deposit Accounts

$

1,763

$

1,683

$

1,592

$

5,013

$

3,686

Gain (Loss) on Sales of Securities

(11

)

(50

)

95

(66

)

120

Debit card and ATM Fee Income

1,532

1,777

1,399

4,645

2,765

Bank-Owned Life Insurance Income

356

355

237

1,029

689

Gain (Loss) on Sales of Loans

93

10,042

-

10,114

184

Mortgage Origination Income

227

241

123

697

364

Fees and Brokerage Commission

1,335

1,416

281

3,294

537

Correspondent Bank Income

10

123

45

276

186

Participation Fee Income

250

240

136

737

182

Gain (Loss) on Sales of Other Real Estate Owned

(558

)

(575

)

(104

)

(1,087

)

28

Gain (Loss) on Disposal of Other Assets

14

(9

)

(627

)

122

(627

)

Pass-through Income from SBIC Partnerships

405

1,602

364

2,060

2,368

Other

932

531

676

1,973

1,535

Total Other Income

$

6,348

$

17,376

$

4,217

$

28,807

$

12,017

(1) Non-GAAP: 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)

2021

2021

2020

Assets

Cash and Due From Banks

$

81,361

$

130,769

$

103,894

Federal Funds Sold

4,646

232,391

8,395

Securities Available for Sale, at Fair Values

1,034,491

882,802

547,535

Mortgage Loans Held for Sale

1,498

1,834

671

Loans and Lease Receivable

3,066,236

2,854,886

3,082,474

Allowance for Loan Losses

(28,146

)

(26,702

)

(20,340

)

Net Loans and Lease Receivable

3,038,090

2,828,184

3,062,134

Premises and Equipment, Net

56,611

57,576

59,241

Accrued Interest Receivable

19,025

20,841

25,622

Other Equity Securities

15,259

14,043

15,641

Other Real Estate Owned

2,152

5,890

10,994

Cash Value of Life Insurance

59,085

60,703

44,779

Deferred Taxes, Net

5,618

4,652

5,829

Goodwill

60,062

60,062

53,627

Core Deposit and Customer Intangibles

12,835

13,271

10,061

Other Assets

14,484

10,941

6,247

Total Assets

$

4,405,217

$

4,323,959

$

3,954,670

Liabilities

Deposits

Noninterest-Bearing

$

1,201,791

$

1,175,624

$

945,485

Interest-Bearing

2,566,330

2,548,599

2,290,776

Total Deposits

3,768,121

3,724,223

3,236,261

Securities Sold Under Agreements to Repurchase

27,195

25,837

24,604

Fed Funds Purchased

16,087

-

-

Short-Term Borrowings

20

20

5,033

Long-Term Borrowings

-

-

6,000

Payroll Protection Program Liquidity Facility

-

-

107,076

Subordinated Debt

81,427

81,427

25,000

Subordinated Debt - Trust Preferred Securities

5,000

5,000

5,000

Federal Home Loan Bank Borrowings

48,002

28,023

117,950

Accrued Interest Payable

1,835

1,938

3,621

Other Liabilities

27,309

26,485

26,039

Total Liabilities

3,974,996

3,892,953

3,556,584

Shareholders' Equity

Common Stock

20,384

20,741

20,667

Additional Paid-In Capital

291,847

299,014

299,762

Retained Earnings

112,243

104,382

67,399

Accumulated Other Comprehensive Income

5,747

6,869

10,258

Total Shareholders' Equity

430,221

431,006

398,086

Total Liabilities and Shareholders' Equity

$

4,405,217

$

4,323,959

$

3,954,670


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)

2021

2021

2020

2021

2020

Interest Income:

Interest and Fees on Loans

$

37,900

$

39,135

$

39,918

$

118,454

$

98,697

Interest and Dividends on Securities

3,598

3,189

2,474

9,616

6,380

Interest on Federal Funds Sold and Due From Banks

36

27

69

77

291

Total Interest Income

41,534

42,351

42,461

128,147

105,368

Interest Expense:

Interest on Deposits

3,060

3,235

4,345

9,538

13,826

Interest on Borrowings

1,180

1,171

1,184

3,069

3,480

Total Interest Expense

4,240

4,406

5,529

12,607

17,306

Net Interest Income

37,294

37,945

36,932

115,540

88,062

Provision for Loan Losses:

1,147

2,241

2,491

6,747

9,301

Net Interest Income After Provision for Loan Losses

36,147

35,704

34,441

108,793

78,761

Other Income:

Service Charges on Deposit Accounts

1,763

1,683

1,592

5,013

3,686

Gain (Loss) on Sales of Securities

(11

)

(50

)

95

(66

)

120

Gain (Loss) on Sales of Loans

93

10,042

-

10,114

184

Other Income

4,503

5,701

2,530

13,746

8,027

Total Other Income

6,348

17,376

4,217

28,807

12,017

Other Expenses:

Salaries and Employee Benefits

16,791

16,753

15,430

48,470

42,486

Occupancy and Equipment Expense

3,912

4,264

3,228

11,893

8,007

Merger and Conversion-Related Expense

145

94

556

249

3,430

Other Expenses

8,719

10,005

7,737

27,034

17,468

Total Other Expenses

29,567

31,116

26,951

87,646

71,391

Income Before Income Taxes:

12,928

21,964

11,707

49,954

19,387

Provision for Income Taxes:

2,617

4,536

2,098

9,886

3,227

Net Income:

$

10,311

$

17,428

$

9,609

$

40,068

$

16,160


Business First Bancshares, Inc.

Consolidated Net Interest Margin

(Unaudited)

Three Months Ended

September 30, 2021

June 30, 2021

September 30, 2020

Average

Average

Average

Outstanding

Interest Earned /

Average

Outstanding

Interest Earned /

Average

Outstanding

Interest Earned /

Average

(Dollars in thousands)

Balance

Interest Paid

Yield / Rate

Balance

Interest Paid

Yield / Rate

Balance

Interest Paid

Yield / Rate

Assets

Interest-Earning Assets:

Total Loans (Excluding SBA PPP)

$

2,948,491

$

37,666

5.11

%

$

2,814,593

$

36,116

5.13

%

$

2,638,417

$

37,250

5.65

%

SBA PPP Loans

10,150

234

9.24

%

242,015

$

3,019

4.99

%

399,366

2,668

2.67

%

Securities Available for Sale

946,950

3,598

1.52

%

801,268

3,189

1.59

%

564,630

2,474

1.75

%

Interest-Bearing Deposit in Other Banks

110,472

36

0.13

%

62,693

27

0.17

%

33,970

69

0.81

%

Total Interest-Earning Assets

4,016,063

41,534

4.14

%

3,920,569

42,351

4.32

%

3,636,383

42,461

4.67

%

Allowance for Loan Losses

(27,409

)

(26,032

)

(19,329

)

Noninterest-Earning Assets

365,231

505,374

316,577

Total Assets

$

4,353,885

$

41,534

$

4,399,911

$

42,351

$

3,933,631

$

42,461

Liabilities and Shareholders' Equity

Interest-Bearing Liabilities:

Interest-Bearing Deposits

$

2,566,766

$

3,060

0.48

%

$

2,615,241

$

3,235

0.49

%

$

2,262,774

$

4,345

0.77

%

Subordinated Debt

81,427

1,026

5.04

%

81,427

1,015

4.99

%

25,000

422

6.75

%

Subordinated Debt - Trust Preferred Securities

5,000

42

3.36

%

5,000

43

3.44

%

5,000

45

3.60

%

Advances from Federal Home Loan Bank (FHLB)

36,015

106

1.18

%

32,887

108

1.31

%

122,592

515

1.68

%

Paycheck Protection Program Liquidity Facility (PPPLF)

-

-

0.00

%

-

-

0.00

%

107,076

95

0.35

%

Other Borrowings

26,350

6

0.09

%

24,909

5

0.08

%

35,437

107

1.21

%

Total Interest-Bearing Liabilities

2,715,558

4,240

0.62

%

2,759,464

4,406

0.64

%

2,557,879

5,529

0.86

%

Noninterest-Bearing Liabilities:

Noninterest-Bearing Deposits

$

1,172,752

$

1,191,900

$

957,090

Other Liabilities

30,175

27,907

28,453

Total Noninterest-Bearing Liabilities

1,202,927

1,219,807

985,543

Shareholders' Equity:

435,400

420,640

390,209

Total Liabilities and Shareholders' Equity

$

4,353,885

$

4,399,911

$

3,933,631

Net Interest Spread

3.51

%

3.68

%

3.81

%

Net Interest Income

$

37,294

$

37,945

$

36,932

Net Interest Margin

3.71

%

3.87

%

4.06

%

Overall Cost of Funds

0.44

%

0.45

%

0.63

%

NOTE: Average outstanding balances are determined utilizing monthly averages and average yield/rate is calculated utilizing a 30/360 day count convention.


Business First Bancshares, Inc.

Consolidated Net Interest Margin

(Unaudited)

Nine Months Ended

September 30, 2021

September 30, 2020

Average

Average

Outstanding

Interest Earned /

Average

Outstanding

Interest Earned /

Average

(Dollars in thousands)

Balance

Interest Paid

Yield / Rate

Balance

Interest Paid

Yield / Rate

Assets

Interest-Earning Assets:

Total Loans (Excluding SBA PPP)

$ 2,802,246

$ 110,320

5.25%

$ 2,227,681

$ 93,699

5.61%

SBA PPP Loans

209,041

8,134

5.19%

240,164

4,998

2.77%

Securities Available for Sale

813,231

9,616

1.58%

444,237

6,380

1.91%

Interest-Bearing Deposit in Other Banks

91,466

77

0.11%

43,965

291

0.88%

Total Interest-Earning Assets

3,915,984

128,147

4.36%

2,956,047

105,368

4.75%

Allowance for Loan Losses

(25,383)

(15,046)

Noninterest-Earning Assets

452,806

283,939

Total Assets

$ 4,343,407

$ 128,147

$ 3,224,940

$ 105,368

Liabilities and Shareholders' Equity

Interest-Bearing Liabilities:

Interest-Bearing Deposits

$ 2,588,756

$ 9,538

0.49%

$ 1,866,556

$ 13,826

0.99%

Subordinated Debt

63,768

2,499

5.23%

25,000

1,266

6.75%

Subordinated Debt - Trust Preferred Securities

5,000

127

3.39%

2,778

79

3.79%

Advances from Federal Home Loan Bank (FHLB)

35,309

325

1.23%

116,785

1,538

1.76%

Paycheck Protection Program Liquidity Facility (PPPLF)

-

-

0.00%

61,326

167

0.36%

Other Borrowings

27,651

118

0.57%

45,179

430

1.27%

Total Interest-Bearing Liabilities

2,720,484

12,607

0.62%

2,117,624

17,306

1.09%

Noninterest-Bearing Liabilities:

Noninterest-Bearing Deposits

1,170,534

738,578

Other Liabilities

28,412

26,834

Total Noninterest-Bearing Liabilities

1,198,946

765,412

Shareholders' Equity

423,977

341,904

Total Liabilities and Shareholders' Equity

$ 4,343,407

$ 3,224,940

Net Interest Spread

3.75%

3.66%

Net Interest Income

$ 115,540

$ 88,062

Net Interest Margin

3.93%

3.97%

Overall Cost of Funds

0.43%

0.81%

NOTE: Average outstanding balances are determined utilizing monthly averages and average yield/rate is calculated utilizing a 30/360 day count convention.


Business First Bancshares, Inc.

Non-GAAP Measures

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

(Dollars in thousands, except per share data)

2021

2021

2020

2021

2020

Interest Income:

Interest income

$

41,534

$

42,351

$

42,461

$

128,147

$

105,368

Core interest income

41,534

42,351

42,461

128,147

105,368

Interest Expense:

Interest expense

4,240

4,406

5,529

12,607

17,306

Core interest expense

4,240

4,406

5,529

12,607

17,306

Provision for Loan Losses: (b)

Provision for loan losses

1,147

2,241

2,491

6,747

9,301

Core provision expense

1,147

2,241

2,491

6,747

9,301

Other Income:

Other income

6,348

17,376

4,217

28,807

12,017

(Gains) 1osses on former bank premises and equipment

392

540

635

932

509

(Gains) 1osses on sale of securities

11

50

(95

)

66

(120

)

Core other income

6,751

17,966

4,757

29,805

12,406

Other Expense:

Other expense

29,567

31,116

26,951

87,646

71,391

Acquisition-related expenses (2)

(145

)

(94

)

(1,206

)

(249

)

(8,991

)

Stock option exercises - excess taxes (founder's grants)

-

-

-

-

(71

)

Occupancy and bank premises - hurricane repair

(211

)

(938

)

-

(1,499

)

-

Core other expense

29,211

30,084

25,745

-

85,898

62,329

Pre-Tax Income: (a)

Pre-tax income

12,928

21,964

11,707

49,954

19,387

(Gains) 1osses on former bank premises and equipment

392

540

635

932

509

(Gains) 1osses on sale of securities

11

50

(95

)

66

(120

)

Acquisition-related expenses (2)

145

94

1,206

249

8,991

Stock option exercises - excess taxes (founder's grants)

-

-

-

-

71

Occupancy and bank premises - hurricane repair

211

938

-

1,499

-

Core pre-tax income

13,687

23,586

13,453

52,700

28,838

Provision for Income Taxes: (1)

Provision for income taxes

2,617

4,536

2,098

9,886

3,227

Tax on (gains) losses on former bank premises and equipment

82

113

133

195

107

Tax on (gains) losses on sale of securities

2

11

(20

)

14

(25

)

Tax on acquisition-related expenses (2)

24

20

241

46

1,607

Tax on stock option exercises (founder's grants)

-

-

-

-

601

Tax on occupancy and bank premises - hurricane repair

44

197

-

314

-

Core provision for income taxes

2,769

4,877

2,452

10,455

5,517

Net Income:

Net income

10,311

17,428

9,609

40,068

16,160

(Gains) losses on former bank premises and equipment , net of tax

310

427

502

737

402

(Gains) losses on sale of securities, net of tax

9

39

(75

)

52

(95

)

Acquisition-related expenses (2), net of tax

121

74

965

203

7,384

Stock option exercises, net of tax (founder's grants)

-

-

-

-

(530

)

Occupancy and bank premises - hurricane repair, net of tax

167

741

-

1,185

-

Core net income

$

10,918

$

18,709

$

11,001

$

42,245

$

23,321

Pre-tax, pre-provision earnings (a+b)

$

14,075

$

24,205

$

14,198

$

56,701

$

28,688

(Gains) losses on former bank premises and equipment

392

540

635

932

509

(Gains) losses on sale of securities

11

50

(95

)

66

(120

)

Acquisition-related expenses (2)

145

94

1,206

249

8,991

Stock option exercises (founder's grants)

-

-

-

-

71

Occupancy and bank premises - hurricane repair

211

938

-

1,499

-

Core pre-tax, pre-provision earnings

$

14,834

$

25,827

$

15,944

$

59,447

$

38,139

Average Diluted Shares Outstanding

20,513,838

20,827,786

20,704,444

20,692,344

17,409,821

Diluted Earnings Per Share:

Diluted earnings per share

$

0.50

$

0.84

$

0.46

$

1.94

$

0.93

(Gains) losses on former bank premises and equipment , net of tax

0.01

0.02

0.02

0.04

0.02

(Gains) losses on sale of securities, net of tax

0.00

0.00

(0.00

)

0.00

(0.01

)

Acquisition-related expenses (2), net of tax

0.01

0.00

0.05

0.01

0.43

Stock option exercises (founder's grants)

-

-

-

-

(0.03

)

Occupancy and bank premises - hurricane repair, net of tax

0.01

0.04

-

0.06

-

Core diluted earnings per share

$

0.53

$

0.90

$

0.53

$

2.05

$

1.34

Pre-tax, pre-provision profit diluted earnings per share

$

0.69

$

1.16

$

0.69

$

2.74

$

1.65

(Gains) losses on former bank premises and equipment

0.01

0.03

0.03

0.05

0.03

(Gains) losses on sale of securities

0.00

0.00

(0.01

)

0.00

(0.01

)

Acquisition-related expenses (2)

0.01

0.00

0.06

0.01

0.52

Stock option exercises (founder's grants)

-

-

-

-

0.00

Occupancy and bank premises - hurricane repair

0.01

0.05

-

0.07

-

Core pre-tax, pre-provision diluted earnings per share

$

0.72

$

1.24

$

0.77

$

2.87

$

2.19

(1) Tax rates, exclusive of certain nondeductible merger-related expenses and goodwill, utilized were 21% for 2021 and 2020. These rates approximated

the marginal tax rates.

(2) Includes merger and conversion-related expenses and salary and employee benefits.


Business First Bancshares, Inc.

Non-GAAP Measures

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

(Dollars in thousands, except per share data)

2021

2021

2020

2021

2020

Total Quarterly/Year-to-Date Average Assets

$

4,353,885

$

4,399,911

$

3,933,631

$

4,343,407

$

3,224,940

Total Quarterly/Year-to-Date Average Equity

$

435,400

$

420,640

$

390,209

$

423,977

$

341,904

Net Income:

Net income

$

10,311

$

17,428

$

9,609

$

40,068

$

16,160

(Gains) losses on former bank premises and equipment , net of tax

310

427

502

737

402

(Gains) losses on sale of securities, net of tax

9

39

(75

)

52

(95

)

Acquisition-related expenses (2), net of tax

121

74

965

203

7,384

Stock option exercises, net of tax (founder's grants)

-

-

-

-

(530

)

Occupancy and bank premises - hurricane repair, net of tax

167

741

-

1,185

-

Core net income

$

10,918

$

18,709

$

11,001

$

42,245

$

23,321

Return on average assets

0.95

%

1.58

%

0.98

%

1.23

%

0.67

%

Core return on average assets

1.00

%

1.70

%

1.12

%

1.30

%

0.96

%

Return on equity

9.47

%

16.57

%

9.85

%

12.60

%

6.30

%

Core return on average equity

10.03

%

17.79

%

11.28

%

13.29

%

9.09

%

Interest Income:

Interest income

$

41,534

$

42,351

$

42,461

$

128,147

$

105,368

Core interest income

41,534

42,351

42,461

128,147

105,368

Interest Expense:

Interest expense

4,240

4,406

5,529

12,607

17,306

Core interest expense

4,240

4,406

5,529

12,607

17,306

Other Income:

Other income

6,348

17,376

4,217

28,807

12,017

(Gains) losses on former bank premises and equipment

392

540

635

932

509

(Gains) losses on sale of securities

11

50

(95

)

66

(120

)

Core other income

6,751

17,966

4,757

29,805

12,406

Other Expense:

Other expense

29,567

31,116

26,951

87,646

71,391

Acquisition-related expenses

(145

)

(94

)

(1,206

)

(249

)

(8,991

)

Stock option exercises - excess taxes (founder's grants)

-

-

-

-

(71

)

Occupancy and bank premises - hurricane repair

(211

)

(938

)

-

(1,499

)

-

Core other expense

$

29,211

$

30,084

$

25,745

$

85,898

$

62,329

Efficiency Ratio:

Other expense (a)

$

29,567

$

31,116

$

26,951

$

87,646

$

71,391

Core other expense (c)

$

29,211

$

30,084

$

25,745

$

85,898

$

62,329

Net interest and other income (1) (b)

$

43,653

$

55,371

$

41,054

$

144,413

$

99,959

Core net interest and other income (1) (d)

$

44,045

$

55,911

$

41,689

$

145,345

$

100,468

Efficiency ratio (a/b)

67.73

%

56.20

%

65.65

%

60.69

%

71.42

%

Core efficiency ratio (c/d)

66.32

%

53.81

%

61.75

%

59.10

%

62.04

%

Total Average Interest-Earnings Assets

$

4,016,063

$

3,920,569

$

3,636,383

$

3,915,984

$

2,956,047

Net Interest Income:

Net interest income

$

37,294

$

37,945

$

36,932

$

115,540

$

88,062

Loan discount accretion

(1,511

)

(1,617

)

(2,270

)

(6,191

)

(4,025

)

Net interest income excluding loan discount accretion

$

35,783

$

36,328

$

34,662

$

109,349

$

84,037

Net interest margin (2)

3.71

%

3.87

%

4.06

%

3.93

%

3.97

%

Net interest margin excluding loan discount accretion (2)

3.56

%

3.71

%

3.81

%

3.72

%

3.79

%

Net interest spread

3.51

%

3.68

%

3.81

%

3.75

%

3.66

%

Net interest spread excluding loan discount accretion

3.36

%

3.52

%

3.56

%

3.53

%

3.48

%

(1) Excludes gains/losses on sales of securities.

(2) Calculated utilizing a 30/360 day count convention.


Business First Bancshares, Inc.

Non-GAAP Measures

(Unaudited)

September 30,

June 30,

September 30,

(Dollars in thousands, except per share data)

2021

2021

2020

Total Shareholders' (Common) Equity:

Total shareholders' equity

$

430,221

$

431,006

$

398,086

Goodwill

(60,062

)

(60,062

)

(53,627

)

Core deposit and customer intangible

(12,835

)

(13,271

)

(10,061

)

Total tangible common equity

$

357,324

$

357,673

$

334,398

Total Assets:

Total assets

$

4,405,217

$

4,323,959

$

3,954,670

Goodwill

(60,062

)

(60,062

)

(53,627

)

Core deposit and customer intangible

(12,835

)

(13,271

)

(10,061

)

Total tangible assets

$

4,332,320

$

4,250,626

$

3,890,982

Common shares outstanding

20,383,504

20,740,759

20,667,237

Book value per common share

$

21.11

$

20.78

$

19.26

Tangible book value per common share

$

17.53

$

17.24

$

16.18

Common equity to total assets

9.77

%

9.97

%

10.07

%

Tangible common equity to tangible assets

8.25

%

8.41

%

8.59

%

Misty Albrecht
b1BANK
225.286.7879
Misty.Albrecht@b1BANK.com