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Business First Bancshares, Inc., Announces Financial Results For Q2 2021
ソース: Nasdaq GlobeNewswire / 26 7 2021 16:01:01 America/New_York
BATON ROUGE, La., July 26, 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 June 30, 2021, including net income of $17.4 million, or $0.84 per diluted share, an increase of $5.1 million and $0.25, respectively, from the prior quarter ended March 31, 2021. On a non-GAAP basis, core net income for the quarter ended June 30, 2021, which excludes certain income and expenses, was $18.7 million, or $0.90 per diluted share, an increase of $6.1 million and $0.29, respectively, from prior quarter ended March 31, 2021.
“Our second quarter results included a number of successes that bode well for our progress over the remainder of 2021,” said Jude Melville, president and CEO. “Business demand was strong, resulting in record loan growth. This growth was driven primarily by our Dallas region which now accounts for approximately 18% of our company’s credit exposure. We sold the bulk of our SBA PPP portfolio, enabling us to re-position our go-forward asset mix and enhance our capital levels. We continued to attract talented teammates, both lifting out a team of bankers in New Orleans and adding an LPO in Ruston. These actions on top of integration of the Smith Shellnut Wilson, LLC investment management group give me confidence that our company is well positioned to continue building off this quarter’s momentum.”
On July 22, 2021, Business First’s board of directors declared a quarterly dividend based upon financial performance for the second quarter in the amount of $0.12 per share, same as the prior quarter, to the common shareholders of record as of August 15, 2021. The dividend will be paid on August 31, 2021, or as soon thereafter as practicable.
Quarterly Highlights
- Smith Shellnut Wilson, LLC (SSW) Acquisition. On April 1, 2021, Business First completed its acquisition of SSW and has substantially integrated the business as of June 30, 2021.
- Loan Growth. Total loans held for investment at June 30, 2021, were $2.9 billion, a decrease of $187.1 million compared to March 31, 2021. The decrease was attributable to a net decrease in Small Business Administration (SBA) Paycheck Protection Program (PPP) loans within the commercial portfolio of $360.1 million, due to $116.5 million in forgiveness and a portfolio sale of $243.6 million in outstanding principal balance. Excluding the net decrease in SBA PPP loans, total loans held for investment increased for the quarter ended June 30, 2021, by 6.52%, or 26.06% annualized. The loan growth, excluding SBA PPP loans, was largely attributable to our Dallas, Tx. market.
- Small Business Administration (SBA) Paycheck Protection Program (PPP) Portfolio Sale. Business First sold the majority of its SBA PPP loan portfolio on June 28, 2021, with an outstanding principal balance of $243.6 million, at par, recognizing the remaining net deferred fees and costs as a $9.2 million pre-tax gain on sale. At June 30, 2021, Business First’s remaining SBA PPP loan portfolio had an outstanding balance of $25.7 million.
- New Loan Production Office (LPO) Activity. Business First opened a new LPO in Ruston, La. during the quarter ended June 30, 2021. Additionally, Business First hired five new producers during the quarter ended June 30, 2021, in the New Orleans market, with plans to open a new LPO in New Orleans/Metairie, La. in Q3 2021.
- Stock Repurchases. During the quarter ended June 30, 2021, Business First repurchased approximately 83,504 shares of its common stock at a weighted average cost of $23.03 per share, for a total cost of $1.9 million.
Financial Condition
June 30, 2021, Compared to March 31, 2021
Loans
Loans held for investment decreased $187.1 million, or 6.15% (24.60% annualized), for the quarter ended June 30, 2021. The decrease was attributable to a net decrease in SBA PPP loans within the commercial portfolio of $360.1 million due to $116.5 million in forgiveness and a portfolio sale of $243.6 million in outstanding principal balances. Year to date annualized loan growth was (9.12%), inclusive of SBA PPP loans. As of June 30, 2021, SBA PPP loans with an unpaid principal balance of $25.7 million remained outstanding.
Excluding the net decrease in SBA PPP loans, total loans held for investment increased for the quarter ended June 30, 2021, by 6.52%, or 26.06% annualized. Year to date annualized loan growth was 11.45% excluding SBA PPP loans.
Credit Quality
Nonperforming loans as a percentage of total loans held for investment decreased from 0.44% as of March 31, 2021, to 0.40% as of June 30, 2021. Nonperforming assets as a percentage of total assets decreased from 0.52% as of March 31, 2021, to 0.42% as of June 30, 2021. The decreases in nonperforming loans were partially attributable to charge-offs of $861,000. The decrease in nonperforming assets included the sale of three former banking centers which resulted in a $2.3 million balance decrease.
Total Shareholders’ Equity
Book value per common share was $20.78 at June 30, 2021, compared to $20.03 at March 31, 2021. On a non-GAAP basis, tangible book value per share was $17.24 at June 30, 2021, compared to $16.99 at March 31, 2021.
June 30, 2021, Compared to June 30, 2020
Loans
Total loans held for investment decreased by $139.9 million compared to June 30, 2020, or (4.67)%, primarily due to the forgiveness and portfolio sale of SBA PPP loans. Excluding SBA PPP loans, loans increased $229.7 million, or 8.84%.
Credit Quality
Nonperforming loans as a percentage of total loans held for investment increased from 0.39% as of June 30, 2020, to 0.40% as of June 30, 2021. Nonperforming assets as a percentage of total assets decreased from 0.49% as of June 30, 2020, to 0.42% as of June 30, 2021. The slight increase in the nonperforming loans as a percentage of total loans held for investment was due to the lower SBA PPP loan balance as of June 30, 2021, as nonperforming assets decreased $1.3 million since June 30, 2020.
Total Shareholders’ Equity
Book value per common share was $20.78 at June 30, 2021, compared to $18.69 at June 30, 2020. On a non-GAAP basis, tangible book value per share was $17.24 at June 30, 2021, compared to $15.59 at June 30, 2020, an increase of 10.58%.
Results of Operations
Second Quarter 2021 Compared to First Quarter 2021
Net Income and Diluted Earnings Per Share
For the quarter ended June 30, 2021, net income was $17.4 million, or $0.84 per diluted share, compared to net income of $12.3 million, or $0.59 per diluted share, for the quarter ended March 31, 2021. The increases, $5.1 million and $0.25, respectively, were largely attributable to the $10.0 million gain on sale of loans, primarily attributable to a $9.2 million gain recognized upon the sale of SBA PPP loans with an outstanding principal balance of $243.6 million, $1.5 million increase in Small Business Investment Company (SBIC) equity investment income and an increase of $873,000 in brokerage commissions due to the acquisition of SSW, offset by increases in other expenses of $4.1 million and taxes of $1.8 million.
On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended June 30, 2021, was $18.7 million, or $0.90 per diluted share, compared to core net income of $12.6 million, or $0.61 per diluted share, for the quarter ended March 31, 2021. Notable noncore events impacting earnings for the quarter ended June 30, 2021, included $938,000 in occupancy and bank premises expenses attributable to hurricane damage and a $540,000 loss on sales of former premises and equipment within other income, compared to $350,000 in occupancy and bank premises expenses attributable to hurricane damage for the quarter ended March 31, 2021.
Interest Income
For the quarter ended June 30, 2021, net interest income totaled $37.9 million and net interest margin and net interest spread were 3.87% and 3.68%, respectively, compared to $40.3 million, 4.23% and 4.06% for the quarter ended March 31, 2021. The average yield on the loan portfolio (excluding SBA PPP loans) was 5.13% for the quarter ended June 30, 2021, compared to 5.53% for the quarter ended March 31, 2021. The average yield on total interest-earning assets was 4.32% for the quarter ended June 30, 2021, compared to 4.65% for the quarter ended March 31, 2021. The reduction in interest income was largely attributable to lower discount accretion on the acquired loan portfolio, a $1.4 million decrease, and less yield on the SBA PPP portfolio due to lower forgiveness caused by the $243.6 million portfolio sale during the quarter, as well as increased interest expense due to the full impact of subordinated debt issued during 2021.
Net interest margin and net interest spread were negatively impacted for the quarter ended June 30, 2021, by $1.4 million less in loan discount accretion on the acquired loan portfolio, 15 basis points each, and $1.5 million less in SBA PPP origination fees, 16 basis points each, and an increase in the overall cost of funds (which includes noninterest-bearing deposits) due to the full impact of the 2021 subordinated debt issuances, six and seven basis points, respectively.
The average loan yield (excluding SBA PPP loans) was impacted by the origination of loans at lower rates than payoffs during the quarter, as well as lower loan discount accretion on the acquired loan portfolio.
Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $1.6 million) were 3.71% and 3.52%, respectively, for the quarter ended June 30, 2021, compared to 3.91% and 3.73% (excluding loan discount accretion of $3.1 million) for the quarter ended March 31, 2021.
Interest Expense
For the quarter ended June 30, 2021, overall cost of funds (which includes noninterest-bearing deposits) increased by four basis points, from 0.41% to 0.45%, compared to the quarter ended March 31, 2021. The increase in cost of funds was largely attributable to the increased expense associated with the issuances of subordinated debt in 2021.
Other Income
For the quarter ended June 30, 2021, other income was impacted by a $10.0 million increase in gain on sale of loans, primarily associated with the $9.2 million gain on the sale of the SBA PPP portfolio, an increase of income from SBIC investments of $1.5 million, and an increase in brokerage commissions of $873,000 as result of the SSW acquisition, compared to the quarter ended March 31, 2021.
Other Expenses
For the quarter ended June 30, 2021, other expenses were impacted by additional salaries and employee benefits of $1.8 million, partially attributed to annual merit increases, the addition of new employees, including SSW, and $488,000 in payroll taxes on restricted stock grants, $465,000 increases in both occupancy and bank premises, impacted by $938,000 in hurricane damage expense, and data processing, respectively. The other expense category also increased $1.1 million, impacted by $477,000 in reserves for unfunded commitments.
Provision for Loan Losses
During the quarter ended June 30, 2021, Business First recorded a provision for loan losses of $2.2 million, compared to $3.4 million for the quarter ended March 31, 2021. The decrease for the quarter ended June 30, 2021, was driven primarily by the additional reserves ($1.4 million) required on a single energy-related loan which was transferred to nonaccrual during the quarter ended March 31, 2021.
Return on Assets and Equity
Return on average assets and equity, each on an annualized basis, were 1.58% and 16.57%, respectively, for the quarter ended June 30, 2021, compared to 1.15% and 11.86%, respectively, for the quarter ended March 31, 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.
Second Quarter 2021 Compared to Second Quarter 2020
Net Income and Diluted Earnings Per Share
For the quarter ended June 30, 2021, net income was $17.4 million, or $0.84 per diluted share, compared to net income of $2.1 million, or $0.11 per diluted share, for the quarter ended June 30, 2020. The increases in net income and diluted earnings per share were largely attributable to the increases in net interest income related to the acquisition of Pedestal on May 1, 2020, origination of SBA PPP loans, lower costs of funds, and decrease in the provision for loan losses, as well as a $9.2 million gain on sale resulting from the SBA PPP loan portfolio within other income.
On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended June 30, 2021, was $18.7 million, or $0.90 per diluted share, compared to core net income of $7.4 million, or $0.41 per diluted share, for the quarter ended June 30, 2020. Notable noncore events impacting earnings for the quarter ended June 30, 2021, included $938,000 in occupancy and bank premises expenses attributable to hurricane damage and $540,000 losses on sales of former premises and equipment within other income, compared to $6.6 million in acquisition-related expenses incurred during the quarter ended June 30, 2020.
Interest Income
For the quarter ended June 30, 2021, net interest income totaled $37.9 million and net interest margin and net interest spread were 3.87% and 3.68%, respectively, compared to $30.9 million, 3.89% and 3.59% for the quarter ended June 30, 2020. The average yield on the loan portfolio (excluding SBA PPP loans) was 5.13% for the quarter ended June 30, 2021, compared to 5.61% for the quarter ended June 30, 2020. The increase in interest income was largely attributable to higher average balances in loans, due to the Pedestal acquisition and origination of SBA PPP loans, and increase in securities due to the increase in deposits and excess cash.
Average yield on total interest-earning assets, net interest margin, and net interest spread were negatively impacted for the quarter ended June 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 $1.6 million) were 3.71% and 3.52%, respectively, for the quarter ended June 30, 2021, compared to 3.71% and 3.41% (excluding loan discount accretion of $1.5 million) for the quarter ended June 30, 2020.
Interest Expense
For the quarter ended June 30, 2021, overall cost of funds (which includes noninterest-bearing deposits) decreased by 32 basis points, from 0.77% to 0.45%, compared to the quarter ended June 30, 2020. The decrease in cost of funds was primarily attributable to an overall reduction in interest rates on deposit offerings and reduction in FHLB advance balances, offset by an increase in subordinated debt balances.
Other Income
For the quarter ended June 30, 2021, the increase in other income was largely attributable to the gain on sale of loans of $10.0 million, generally attributable to the $9.2 million gain on the sale of the SBA PPP loan portfolio, as well as increases in debit card and ATM fee income, $818,000, and brokerage commissions, $1.2 million, compared to the quarter ended June 30, 2020.
Other Expenses
For the quarter ended June 30, 2021, the increase in other expense was largely attributable to the increase in occupancy and bank premises, data processing, and other expenses compared to the quarter ended June 30, 2020. Occupancy and bank premises expense was impacted by $938,000 in hurricane damage expenses for the quarter ended June 30, 2021, while data processing increased due to the volume from the Pedestal acquisition and organic growth. Other expenses increased due to increased consulting and business development costs and other miscellaneous expenses due to the expansion of Business First following the Pedestal acquisition on May 1, 2020, and various other items.
Provision for Loan Losses
During the quarter ended June 30, 2021, Business First recorded a provision for loan losses of $2.2 million compared to $5.4 million for the quarter ended June 30, 2020. The reserve for the quarter ended June 30, 2020, was impacted significantly 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 1.58% and 16.57%, respectively, for the quarter ended June 30, 2021, from 0.23% and 2.35%, respectively, for the quarter ended June 30, 2020. Both returns were positively impacted by higher net income for the quarter ended June 30, 2021.
About Business First Bancshares, Inc.
Business First Bancshares, Inc., through its banking subsidiary b1BANK operates 43 full-service Banking Centers and one Loan Production Office in markets across Louisiana and in the Dallas, Texas area. b1BANK provides commercial and personal banking, treasury management and wealth solutions services to small to midsize businesses and their owners and employees. Visit www.b1BANK.com for more information. Business First’s common stock is traded on the NASDAQ Global Select Market under the symbol “BFST.”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.Misty Albrecht
b1BANK
225.286.7879
Misty.Albrecht@b1BANK.comBusiness First Bancshares, Inc. Selected Financial Information (Unaudited) For the Quarter Ended June 30, March 31, June 30, (Dollars in thousands) 2021 2021 2020 Balance Sheet Ratios Loans (HFI) to Deposits 76.66 % 78.83 % 96.46 % Shareholders' Equity to Assets Ratio 9.97 % 9.38 % 12.88 % Loans Receivable Held for Investment Commercial (1) $ 660,691 $ 962,099 $ 1,026,596 Real Estate: Construction and Land 454,055 418,234 333,675 Farmland 77,133 52,861 57,498 1-4 Family Residential 459,037 460,907 495,827 Multi-Family Residential 89,796 77,390 59,213 Nonfarm Nonresidential 1,002,707 966,416 914,601 Total Real Estate 2,082,728 1,975,808 1,860,814 Consumer (1) 111,467 104,071 107,402 Total Loans (Held for Investment) $ 2,854,886 $ 3,041,978 $ 2,994,812 Allowance for Loan Losses Balance, Beginning of Period $ 25,251 $ 22,024 $ 13,319 Charge-offs – Quarterly (861 ) (309 ) (98 ) Recoveries – Quarterly 71 177 51 Provision for Loan Losses – Quarterly 2,241 3,359 5,443 Balance, End of Period $ 26,702 $ 25,251 $ 18,715 Allowance for Loan Losses to Total Loans (HFI) 0.94 % 0.83 % 0.62 % Net Charge-offs (Recoveries) to Average Total Loans 0.03 % -0.00 % 0.00 % Remaining Loan Purchase Discount $ 30,900 $ 32,517 $ 44,302 Nonperforming Assets Nonperforming Loans: Nonaccrual Loans (2) $ 10,568 $ 11,956 $ 11,433 Loans Past Due 90 Days or More (2) 893 1,479 317 Total Nonperforming Loans 11,461 13,435 11,750 Other Nonperforming Assets: Other Real Estate Owned 5,890 8,851 7,642 Other Nonperforming Assets: 665 623 179 Total Other Nonperforming Assets 6,555 9,474 7,821 Total Nonperforming Assets $ 18,016 $ 22,909 $ 19,571 Nonperforming Loans to Total Loans (HFI) 0.40 % 0.44 % 0.39 % Nonperforming Assets to Total Assets 0.42 % 0.52 % 0.49 % (1) Small Business Administration (SBA) Paycheck Protection Program (PPP) loans accounted for $25.7 million of the Commercial portfolio as of June 30, 2021. SBA PPP loans accounted for $385.8 million and $0.1 million of the Commercial and Consumer portfolios, respectively, as of March 31, 2021. SBA PPP loans accounted for $389.9 million and $5.5 million of the Commercial and Consumer portfolios, respectively, as of June 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 Six Months Ended June 30, March 31, June 30, June 30, June 30, (Dollars in thousands, except per share data) 2021 2021 2020 2021 2020 Per Share Data Basic Earnings per Common Share $ 0.84 $ 0.60 $ 0.11 $ 1.44 $ 0.42 Diluted Earnings per Common Share 0.84 0.59 0.11 1.43 0.42 Dividends per Common Share 0.12 0.10 0.10 0.22 0.20 Book Value per Common Share 20.78 20.03 18.69 20.78 18.69 Average Common Shares Outstanding 20,707,313 20,621,930 18,108,068 20,664,857 15,710,611 Average Diluted Shares Outstanding 20,827,786 20,738,013 18,121,958 20,783,135 15,776,376 End of Period Common Shares Outstanding 20,740,759 20,804,753 20,667,237 20,740,759 20,667,237 Annualized Performance Ratios Return on Average Assets 1.58 % 1.15 % 0.23 % 1.37 % 0.46 % Return on Average Equity 16.57 % 11.86 % 2.35 % 14.23 % 4.13 % Net Interest Margin 3.87 % 4.23 % 3.89 % 4.05 % 3.91 % Net Interest Spread 3.68 % 4.06 % 3.59 % 3.87 % 3.57 % Efficiency Ratio (1) 56.20 % 59.40 % 77.40 % 57.64 % 75.44 % Total Quarterly/Year-to-Date Average Assets $ 4,399,911 $ 4,276,430 $ 3,496,074 $ 4,338,170 $ 2,870,329 Total Quarterly/Year-to-Date Average Equity 420,640 415,896 349,634 418,267 317,486 Other Expenses Salaries and Employee Benefits $ 16,753 $ 14,926 $ 17,621 $ 31,679 $ 27,056 Occupancy and Bank Premises 2,276 1,811 1,370 4,087 2,430 Depreciation and Amortization 1,686 1,593 1,073 3,279 1,674 Data Processing 2,288 1,823 1,055 4,111 1,707 FDIC Assessment Fees 436 509 272 945 419 Legal and Other Professional Fees 905 741 543 1,646 937 Advertising and Promotions 624 477 334 1,101 640 Utilities and Communications 636 575 645 1,211 962 Ad Valorem Shares Tax 675 700 450 1,375 825 Directors' Fees 194 188 100 382 174 Other Real Estate Owned Expenses and Write-Downs 178 379 51 557 304 Merger and Conversion-Related Expenses 94 10 1,726 104 2,874 Other 4,371 3,231 2,557 7,602 4,438 Total Other Expenses $ 31,116 $ 26,963 $ 27,797 $ 58,079 $ 44,440 Other Income Service Charges on Deposit Accounts $ 1,683 $ 1,567 $ 1,163 $ 3,250 $ 2,094 Gain (Loss) on Sales of Securities (50 ) (5 ) - (55 ) 25 Debit card and ATM Fee Income 1,777 1,336 959 3,113 1,366 Bank-Owned Life Insurance Income 355 318 255 673 452 Gain (Loss) on Sales of Loans 10,042 (21 ) 7 10,021 184 Mortgage Origination Income 241 229 126 470 241 Brokerage Commission 1,416 543 236 1,959 256 Correspondent Bank Income 123 143 32 266 141 Participation Fee Income 240 247 46 487 113 Gain (Loss) on Sales of Other Real Estate Owned (575 ) 46 (19 ) (529 ) 132 Gain (Loss) on Disposal of Other Assets (9 ) 117 - 108 - Pass-through Income from SBIC Partnerships 1,602 53 1,624 1,655 2,004 Other 531 510 567 1,041 792 Total Other Income $ 17,376 $ 5,083 $ 4,996 $ 22,459 $ 7,800 (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) June 30, March 31, June 30, (Dollars in thousands) 2021 2021 2020 Assets Cash and Due From Banks $ 130,769 $ 355,257 $ 116,021 Federal Funds Sold 232,391 105,595 40,329 Securities Available for Sale, at Fair Values 882,802 721,224 583,118 Mortgage Loans Held for Sale 1,834 2,298 456 Loans and Lease Receivable 2,854,886 3,041,978 2,994,812 Allowance for Loan Losses (26,702 ) (25,251 ) (18,715 ) Net Loans and Lease Receivable 2,828,184 3,016,727 2,976,097 Premises and Equipment, Net 57,576 57,931 63,959 Accrued Interest Receivable 20,841 25,910 33,844 Other Equity Securities 14,043 12,584 18,681 Other Real Estate Owned 5,890 8,851 7,642 Cash Value of Life Insurance 60,703 60,348 44,542 Deferred Taxes, Net 4,652 5,536 6,858 Goodwill 60,062 53,753 53,649 Core Deposit and Customer Intangibles 13,271 9,406 10,389 Other Assets 10,941 8,166 5,553 Total Assets $ 4,323,959 $ 4,443,586 $ 3,961,138 Liabilities Deposits Noninterest-Bearing $ 1,175,624 $ 1,186,625 $ 985,537 Interest-Bearing 2,548,599 2,672,109 2,265,485 Total Deposits 3,724,223 3,858,734 3,251,022 Securities Sold Under Agreements to Repurchase 25,837 21,419 25,391 Short-Term Borrowings 20 20 6,145 Long-Term Borrowings - - 7,797 Payroll Protection Program Liquidity Facility - - 107,076 Subordinated Debt 81,427 77,500 25,000 Subordinated Debt - Trust Preferred Securities 5,000 5,000 5,000 Federal Home Loan Bank Borrowings 28,023 33,073 118,177 Accrued Interest Payable 1,938 1,941 3,920 Other Liabilities 26,485 29,198 25,274 Total Liabilities 3,892,953 4,026,885 3,574,802 Shareholders' Equity Common Stock 20,741 20,805 20,667 Additional Paid-In Capital 299,014 300,282 297,606 Retained Earnings 104,382 89,441 59,850 Accumulated Other Comprehensive Income 6,869 6,173 8,213 Total Shareholders' Equity 431,006 416,701 386,336 Total Liabilities and Shareholders' Equity $ 4,323,959 $ 4,443,586 $ 3,961,138 Business First Bancshares, Inc. Consolidated Statements of Income (Unaudited) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, (Dollars in thousands) 2021 2021 2020 2021 2020 Interest Income: Interest and Fees on Loans $ 39,135 $ 41,419 $ 34,636 $ 80,554 $ 58,779 Interest and Dividends on Securities 3,189 2,802 2,175 5,991 3,906 Interest on Federal Funds Sold and Due From Banks 27 41 80 68 222 Total Interest Income 42,351 44,262 36,891 86,613 62,907 Interest Expense: Interest on Deposits 3,235 3,243 4,795 6,478 9,481 Interest on Borrowings 1,171 718 1,177 1,889 2,296 Total Interest Expense 4,406 3,961 5,972 8,367 11,777 Net Interest Income 37,945 40,301 30,919 78,246 51,130 Provision for Loan Losses: 2,241 3,359 5,443 5,600 6,810 Net Interest Income After Provision for Loan Losses 35,704 36,942 25,476 72,646 44,320 Other Income: Service Charges on Deposit Accounts 1,683 1,567 1,163 3,250 2,094 Gain (Loss) on Sales of Securities (50 ) (5 ) - (55 ) 25 Gain (Loss) on Sales of Loans 10,042 (21 ) 7 10,021 184 Other Income 5,701 3,542 3,826 9,243 5,497 Total Other Income 17,376 5,083 4,996 22,459 7,800 Other Expenses: Salaries and Employee Benefits 16,753 14,926 17,621 31,679 27,056 Occupancy and Equipment Expense 4,264 3,717 2,888 7,981 4,779 Merger and Conversion-Related Expense 94 10 1,726 104 2,874 Other Expenses 10,005 8,310 5,562 18,315 9,731 Total Other Expenses 31,116 26,963 27,797 58,079 44,440 Income Before Income Taxes: 21,964 15,062 2,675 37,026 7,680 Provision for Income Taxes: 4,536 2,733 623 7,269 1,129 Net Income: $ 17,428 $ 12,329 $ 2,052 $ 29,757 $ 6,551 Business First Bancshares, Inc. Consolidated Net Interest Margin (Unaudited) Three Months Ended June 30, 2021 March 31, 2021 June 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) $ 2,814,593 $ 36,116 5.13 % $ 2,643,668 $ 36,538 5.53 % $ 2,304,438 $ 32,306 5.61 % SBA PPP Loans 242,015 3,019 4.99 % 374,958 $ 4,881 5.21 % 321,127 2,330 2.90 % Securities Available for Sale 801,268 3,189 1.59 % 691,476 2,802 1.62 % 481,422 2,175 1.81 % Interest-Bearing Deposit in Other Banks 62,693 27 0.17 % 101,233 41 0.16 % 69,169 80 0.46 % Total Interest-Earning Assets 3,920,569 42,351 4.32 % 3,811,335 44,262 4.65 % 3,176,156 36,891 4.65 % Allowance for Loan Losses (26,032 ) (22,709 ) (13,606 ) Noninterest-Earning Assets 505,374 487,804 333,524 Total Assets $ 4,399,911 $ 42,351 $ 4,276,430 $ 44,262 $ 3,496,074 $ 36,891 Liabilities and Shareholders' Equity Interest-Bearing Liabilities: Interest-Bearing Deposits $ 2,615,241 $ 3,235 0.49 % $ 2,584,263 $ 3,243 0.50 % $ 1,994,680 $ 4,795 0.96 % Subordinated Debt 81,427 1,015 4.99 % 28,450 459 6.45 % 25,000 422 6.75 % Subordinated Debt - Trust Preferred Securities 5,000 43 3.44 % 5,000 42 3.36 % 3,333 8 0.96 % Advances from Federal Home Loan Bank (FHLB) 32,887 108 1.31 % 37,022 111 1.20 % 129,441 526 1.63 % Paycheck Protection Program Liquidity Facility (PPPLF) - - 0.00 % - - 0.00 % 76,902 72 0.37 % Other Borrowings 24,909 5 0.08 % 31,696 106 1.34 % 32,975 149 1.81 % Total Interest-Bearing Liabilities 2,759,464 4,406 0.64 % 2,686,431 3,961 0.59 % 2,262,331 5,972 1.06 % Noninterest-Bearing Liabilities: Noninterest-Bearing Deposits $ 1,191,900 $ 1,146,950 $ 852,608 Other Liabilities 27,907 27,153 31,501 Total Noninterest-Bearing Liabilities 1,219,807 1,174,103 884,109 Shareholders' Equity: 420,640 415,896 349,634 Total Liabilities and Shareholders' Equity $ 4,399,911 $ 4,276,430 $ 3,496,074 Net Interest Spread 3.68 % 4.06 % 3.59 % Net Interest Income $ 37,945 $ 40,301 $ 30,919 Net Interest Margin 3.87 % 4.23 % 3.89 % Overall Cost of Funds 0.45 % 0.41 % 0.77 % 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) Six Months Ended June 30, 2021 June 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) $ 2,729,130 $ 72,654 5.32 % $ 2,022,312 $ 56,449 5.58 % SBA PPP Loans 308,487 7,900 5.12 % 160,564 2,330 2.90 % Securities Available for Sale 746,372 5,991 1.61 % 384,041 3,906 2.03 % Interest-Bearing Deposit in Other Banks 81,963 68 0.17 % 48,962 222 0.91 % Total Interest-Earning Assets 3,865,952 86,613 4.48 % 2,615,879 62,907 4.81 % Allowance for Loan Losses (24,371 ) (12,905 ) Noninterest-Earning Assets 496,589 267,355 Total Assets $ 4,338,170 $ 86,613 $ 2,870,329 $ 62,907 Liabilities and Shareholders' Equity Interest-Bearing Liabilities: Interest-Bearing Deposits $ 2,599,751 $ 6,478 0.50 % $ 1,668,446 $ 9,481 1.14 % Subordinated Debt 54,939 1,474 5.37 % 25,000 844 6.75 % Subordinated Debt - Trust Preferred Securities 5,000 85 3.40 % 1,667 8 0.96 % Advances from Federal Home Loan Bank (FHLB) 34,954 219 1.25 % 113,882 1,023 1.80 % Paycheck Protection Program Liquidity Facility (PPPLF) - - 0.00 % 38,451 72 0.37 % Other Borrowings 28,302 111 0.78 % 50,050 349 1.39 % Total Interest-Bearing Liabilities 2,722,946 8,367 0.61 % 1,897,496 11,777 1.24 % Noninterest-Bearing Liabilities: Noninterest-Bearing Deposits 1,169,425 629,321 Other Liabilities 27,532 26,026 Total Noninterest-Bearing Liabilities 1,196,957 655,347 Shareholders' Equity 418,267 317,486 Total Liabilities and Shareholders' Equity $ 4,338,170 $ 2,870,329 Net Interest Spread 3.87% 3.57% Net Interest Income $ 78,246 $ 51,130 Net Interest Margin 4.05% 3.91% Overall Cost of Funds 0.43% 0.93% 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 Six Months Ended June 30, March 31, June 30, June 30, June 30, (Dollars in thousands, except per share data) 2021 2021 2020 2021 2020 Interest Income: Interest income $ 42,351 $ 44,262 $ 36,891 $ 86,613 $ 62,907 Core interest income 42,351 44,262 36,891 86,613 62,907 Interest Expense: Interest expense 4,406 3,961 5,972 8,367 11,777 Core interest expense 4,406 3,961 5,972 8,367 11,777 Provision for Loan Losses: (b) Provision for loan losses 2,241 3,359 5,443 5,600 6,810 Core provision expense 2,241 3,359 5,443 5,600 6,810 Other Income: Other income 17,376 5,083 4,996 22,459 7,800 (Gains) 1osses on former bank premises and equipment 540 - - 540 (126 ) (Gains) 1osses on sale of securities 50 5 - 55 (25 ) Core other income 17,966 5,088 4,996 23,054 7,649 Other Expense: Other expense 31,116 26,963 27,797 58,079 44,440 Acquisition-related expenses (2) (94 ) (10 ) (6,573 ) (104 ) (7,785 ) Stock option exercises - excess taxes (founder's grants) - - - - (71 ) Occupancy and bank premises - hurricane repair (938 ) (350 ) - (1,288 ) - Core other expense 30,084 26,603 21,224 - 56,687 36,584 Pre-Tax Income: (a) Pre-tax income 21,964 15,062 2,675 37,026 7,680 (Gains) 1osses on former bank premises and equipment 540 - - 540 (126 ) (Gains) 1osses on sale of securities 50 5 - 55 (25 ) Acquisition-related expenses (2) 94 10 6,573 104 7,785 Stock option exercises - excess taxes (founder's grants) - - - - 71 Occupancy and bank premises - hurricane repair 938 350 - 1,288 - Core pre-tax income 23,586 15,427 9,248 39,013 15,385 Provision for Income Taxes: (1) Provision for income taxes 4,536 2,733 623 7,269 1,129 Tax on (gains) losses on former bank premises and equipment 113 - - 113 (26 ) Tax on (gains) losses on sale of securities 11 1 - 12 (5 ) Tax on acquisition-related expenses (2) 20 2 1,275 22 1,366 Tax on stock option exercises (founder's grants) - - - - 601 Tax on occupancy and bank premises - hurricane repair 197 74 - 271 - Core provision for income taxes 4,877 2,810 1,898 7,687 3,065 Net Income: Net income 17,428 12,329 2,052 29,757 6,551 (Gains) losses on former bank premises and equipment , net of tax 427 - - 427 (100 ) (Gains) losses on sale of securities, net of tax 39 4 - 43 (20 ) Acquisition-related expenses (2), net of tax 74 8 5,298 82 6,419 Stock option exercises, net of tax (founder's grants) - - - - (530 ) Occupancy and bank premises - hurricane repair, net of tax 741 277 - 1,018 - Core net income $ 18,709 $ 12,618 $ 7,350 $ 31,327 $ 12,320 Pre-tax, pre-provision earnings (a+b) $ 24,205 $ 18,421 $ 8,118 $ 42,626 $ 14,490 (Gains) losses on former bank premises and equipment 540 - - 540 (126 ) (Gains) losses on sale of securities 50 5 - 55 (25 ) Acquisition-related expenses (2) 94 10 6,573 104 7,785 Stock option exercises (founder's grants) - - - - 71 Occupancy and bank premises - hurricane repair 938 350 - 1,288 - Core pre-tax, pre-provision earnings $ 25,827 $ 18,786 $ 14,691 $ 44,613 $ 22,195 Average Diluted Shares Outstanding 20,827,786 20,738,013 18,121,958 20,783,135 15,776,376 Diluted Earnings Per Share: Diluted earnings per share $ 0.84 $ 0.59 $ 0.11 $ 1.43 $ 0.42 (Gains) losses on former bank premises and equipment , net of tax 0.02 - - 0.02 (0.01 ) (Gains) losses on sale of securities, net of tax 0.00 0.00 - 0.00 (0.00 ) Acquisition-related expenses (2), net of tax 0.00 0.00 0.30 0.00 0.40 Stock option exercises (founder's grants) - - - - (0.03 ) Occupancy and bank premises - hurricane repair, net of tax 0.04 0.02 - 0.06 - Core diluted earnings per share $ 0.90 $ 0.61 $ 0.41 $ 1.51 $ 0.78 Pre-tax, pre-provision profit diluted earnings per share $ 1.16 $ 0.89 $ 0.45 $ 2.05 $ 0.92 (Gains) losses on former bank premises and equipment 0.03 - - 0.03 (0.01 ) (Gains) losses on sale of securities 0.00 0.00 - 0.00 (0.00 ) Acquisition-related expenses (2) 0.00 0.00 0.36 0.01 0.50 Stock option exercises (founder's grants) - - - - 0.00 Occupancy and bank premises - hurricane repair 0.05 0.02 - 0.06 - Core pre-tax, pre-provision diluted earnings per share $ 1.24 $ 0.91 $ 0.81 $ 2.15 $ 1.41 (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 Six Months Ended June 30, March 31, June 30, June 30, June 30, (Dollars in thousands, except per share data) 2021 2021 2020 2021 2020 Total Quarterly/Year-to-Date Average Assets $ 4,399,911 $ 4,276,430 $ 3,496,074 $ 4,338,170 $ 2,870,329 Total Quarterly/Year-to-Date Average Equity $ 420,640 $ 415,896 $ 349,634 $ 418,267 $ 317,486 Net Income: Net income $ 17,428 $ 12,329 $ 2,052 $ 29,757 $ 6,551 (Gains) losses on former bank premises and equipment , net of tax 427 - - 427 (100 ) (Gains) losses on sale of securities, net of tax 39 4 - 43 (20 ) Acquisition-related expenses (2), net of tax 74 8 5,298 82 6,419 Stock option exercises, net of tax (founder's grants) - - - - (530 ) Occupancy and bank premises - hurricane repair, net of tax 741 277 - 1,018 - Core net income $ 18,709 $ 12,618 $ 7,350 $ 31,327 $ 12,320 Return on average assets 1.58 % 1.15 % 0.23 % 1.37 % 0.46 % Core return on average assets 1.70 % 1.18 % 0.84 % 1.44 % 0.86 % Return on equity 16.57 % 11.86 % 2.35 % 14.23 % 4.13 % Core return on average equity 17.79 % 12.14 % 8.41 % 14.98 % 7.76 % Interest Income: Interest income $ 42,351 $ 44,262 $ 36,891 $ 86,613 $ 62,907 Core interest income 42,351 44,262 36,891 86,613 62,907 Interest Expense: Interest expense 4,406 3,961 5,972 8,367 11,777 Core interest expense 4,406 3,961 5,972 8,367 11,777 Other Income: Other income 17,376 5,083 4,996 22,459 7,800 (Gains) losses on former bank premises and equipment 540 - - 540 (126 ) (Gains) losses on sale of securities 50 5 - 55 (25 ) Core other income 17,966 5,088 4,996 23,054 7,649 Other Expense: Other expense 31,116 26,963 27,797 58,079 44,440 Acquisition-related expenses (94 ) (10 ) (6,573 ) (104 ) (7,785 ) Stock option exercises - excess taxes (founder's grants) - - - - (71 ) Occupancy and bank premises - hurricane repair (938 ) (350 ) - (1,288 ) - Core other expense $ 30,084 $ 26,603 $ 21,224 $ 56,687 $ 36,584 Efficiency Ratio: Other expense (a) $ 31,116 $ 26,963 $ 27,797 $ 58,079 $ 44,440 Core other expense (c) $ 30,084 $ 26,603 $ 21,224 $ 56,687 $ 36,584 Net interest and other income (1) (b) $ 55,371 $ 45,389 $ 35,915 $ 100,760 $ 58,905 Core net interest and other income (1) (d) $ 55,911 $ 45,389 $ 35,915 $ 101,300 $ 58,779 Efficiency ratio (a/b) 56.20 % 59.40 % 77.40 % 57.64 % 75.44 % Core efficiency ratio (c/d) 53.81 % 58.61 % 59.10 % 55.96 % 62.24 % Total Average Interest-Earnings Assets $ 3,920,569 $ 3,811,335 $ 3,176,156 $ 3,865,952 $ 2,615,879 Net Interest Income: Net interest income $ 37,945 $ 40,301 $ 30,919 $ 78,246 $ 51,130 Loan discount accretion (1,617 ) (3,063 ) (1,465 ) (4,680 ) (1,755 ) Net interest income excluding loan discount accretion $ 36,328 $ 37,238 $ 29,454 $ 73,566 $ 49,375 Net interest margin (2) 3.87 % 4.23 % 3.89 % 4.05 % 3.91 % Net interest margin excluding loan discount accretion (2) 3.71 % 3.91 % 3.71 % 3.81 % 3.78 % Net interest spread 3.68 % 4.06 % 3.59 % 3.87 % 3.57 % Net interest spread excluding loan discount accretion 3.52 % 3.73 % 3.41 % 3.62 % 3.43 % (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) June 30, March 31, June 30, (Dollars in thousands, except per share data) 2021 2021 2020 Total Shareholders' (Common) Equity: Total shareholders' equity $ 431,006 $ 416,701 $ 386,336 Goodwill (60,062 ) (53,753 ) (53,649 ) Core deposit and customer intangible (13,271 ) (9,406 ) (10,389 ) Total tangible common equity $ 357,673 $ 353,542 $ 322,298 Total Assets: Total assets $ 4,323,959 $ 4,443,586 $ 3,961,138 Goodwill (60,062 ) (53,753 ) (53,649 ) Core deposit and customer intangible (13,271 ) (9,406 ) (10,389 ) Total tangible assets $ 4,250,626 $ 4,380,427 $ 3,897,100 Common shares outstanding 20,740,759 20,804,753 20,667,237 Book value per common share $ 20.78 $ 20.03 $ 18.69 Tangible book value per common share $ 17.24 $ 16.99 $ 15.59 Common equity to total assets 9.97 % 9.38 % 9.75 % Tangible common equity to tangible assets 8.41 % 8.07 % 8.27 % 