BATON ROUGE, La., Oct. 26, 2022 (GLOBE NEWSWIRE) -- Business First Bancshares, Inc. (NASDAQ: BFST) (Business First), parent company of b1BANK, today announced its unaudited results for the quarter ended September 30, 2022, including net income of $13.8 million, or $0.61 per diluted share, no change from the quarter ended June 30, 2022. On a non-GAAP basis, core net income for the quarter ended September 30, 2022, which excludes certain income and expenses, was $16.4 million, or $0.72 per diluted share, increases of $1.8 million and $0.08, respectively, from the quarter ended June 30, 2022.

” Our third quarter results attest to the potential of a team working in concert over time,” said Jude Melville, president and CEO. “We continue to exhibit strong loan growth across our footprint while benefiting from historically positive asset quality. In addition to improved core operational profitability, we successfully added depth to our equity base, strengthening our balance sheet positioning as we prepare for the challenges and opportunities the next few quarters may hold.”

On October 26, 2022, 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, 2022. The dividend will be paid on November 30, 2022, or as soon thereafter as practicable.

Quarterly Highlights

• Strong Loan Growth. Total loans held for investment at September 30, 2022, were $4.4 billion, an increase of $316.2 million compared to June 30, 2022, or 7.69% for the quarter. Based on unpaid principal balances, 48.4% of loan growth for the quarter ended September 30, 2022, was attributable to our Dallas market, 23.3% to the Northern Louisiana market, 12.2% to the Baton Rouge market, and 11.5% to the Houston market. As of September 30, 2022, approximately 34% of Business First’s loan portfolio resides in Texas based on unpaid principal balances.
• Expansion of Net Interest Margin. For the quarter ended September 30, 2022, net interest income totaled $53.5 million and net interest margin and net interest spread were 4.05% and 3.67%, respectively, compared to $49.6 million, 3.98% and 3.79% for the quarter ended June 30, 2022. Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $1.7 million) were 3.92% and 3.54%, respectively, for the quarter ended September 30, 2022, compared to 3.77% and 3.59% (excluding loan discount accretion of $2.6 million) for the quarter ended June 30, 2022. Net interest margin rose due to continued increase in interest rates and loan growth, as well as $650,000 associated with a nonaccrual loan that was paid in full during the quarter, while the spread declined due to the increased cost of funding associated with the short-term yield curve.
• Solid Return on Assets and Equity. Return on average assets and common equity, each on an annualized basis, were 0.97% and 12.47%, respectively, for the quarter ended September 30, 2022, compared to 1.02% and 12.22%, respectively, for the quarter ended June 30, 2022. Non-GAAP return on average assets and common equity, each on an annualized basis, were 1.15% and 14.80%, respectively, for the quarter ended September 30, 2022, compared to 1.08% and 12.93%, respectively, for the quarter ended June 30, 2022.
• Overall Credit Quality Remains Stable. Ratios of nonperforming loans compared to loans held for investment and nonperforming assets compared to total assets decreased from 0.42% and 0.33%, respectively, at June 30, 2022, to 0.25% and 0.21% at September 30, 2022. The reduction was largely due to a single nonfarm nonresidential commercial loan with an outstanding balance of $6.3 million being repaid in full during July 2022.
• Preferred Stock Issuance. Business First completed a private placement of $72.0 million of 7.50% fixed-to-floating rate non-cumulative perpetual preferred stock on September 1, 2022.
  
  

Financial Condition

September 30, 2022, Compared to June 30, 2022

Loans

Loans held for investment increased $316.2 million or 7.69%, 30.74% annualized, for the quarter ended September 30, 2022.
Credit Quality

Nonperforming loans as a percentage of total loans held for investment decreased from 0.42% as of June 30, 2022, to 0.25% as of September 30, 2022. Nonperforming assets as a percentage of total assets decreased from 0.33% as of June 30, 2022, to 0.21% as of September 30, 2022. The decreases were largely attributable to a single nonfarm nonresidential commercial loan with an outstanding balance of $6.3 million being paid in full in July 2022.

Total Shareholders’ Equity

Book value per common share was $19.29 at September 30, 2022, compared to $19.73 at June 30, 2022. The decrease was largely attributable to the $21.9 million increase in accumulated other comprehensive losses related to unrealized losses on Business First’s available for sale investment portfolio.

On a non-GAAP basis, tangible book value per share was $14.73 at September 30, 2022, compared to $15.13 at June 30, 2022.

September 30, 2022, Compared to September 30, 2021

Loans

Total loans held for investment increased by $1.4 billion, or 44.47%, compared to September 30, 2021. Excluding loans acquired from Texas Citizens on March 1, 2022, loans increased $1.0 billion, or 33.08%.

Credit Quality

Nonperforming loans as a percentage of total loans held for investment decreased from 0.45% as of September 30, 2021, to 0.25% as of September 30, 2022. Nonperforming assets as a percentage of total assets decreased from 0.37% as of September 30, 2021, to 0.21% as of September 30, 2022. Both ratio decreases were largely attributable to the increase in total loans and assets, as well as a $2.8 million decrease in nonaccrual loans.

Total Shareholders’ Equity

Book value per common share was $19.29 at September 30, 2022, compared to $21.11 at September 30, 2021. On a non-GAAP basis, tangible book value per share was $14.73 at September 30, 2022, compared to $17.53 at September 30, 2021. The decreases were largely attributable to the $90.4 million increase in the accumulated other comprehensive losses associated with the available for sale portfolio, which was driven by the change in the broader interest rate and economic environment.

Results of Operations

Third Quarter 2022 Compared to Second Quarter 2022

Net Income and Diluted Earnings Per Share

For the quarter ended September 30, 2022, and June 30, 2022, net income was $13.8 million, or $0.61 per diluted share. Net interest income increased by $3.9 million due to loan growth and interest rate increases, but was offset by $4.5 million in increased noninterest expense, largely attributable to increases of $2.6 million of merger and conversation-related expenses, $498,000 in salaries and employee benefits, and $441,000 in advertising and promotions during the quarter ended September 30, 2022.

On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended September 30, 2022, was $16.4 million, or $0.72 per diluted share, compared to core net income of $14.6 million, or $0.64 per diluted share, for the quarter ended June 30, 2022. Notable noncore events impacting earnings for the quarter ended September 30, 2022, included $265,000 attributable to insurance reimbursements of storm expenses in other income and $3.5 million in acquisition-related expenses, compared to $708,000 of acquisition-related expenses and $270,000 of expenses attributable to storm repairs for the quarter ended June 30, 2022.

Interest Income

For the quarter ended September 30, 2022, net interest income totaled $53.5 million and net interest margin and net interest spread were 4.05% and 3.67%, respectively, compared to $49.6 million, 3.98% and 3.79% for the quarter ended June 30, 2022. The average yield on total interest-earning assets was 4.80% for the quarter ended September 30, 2022, compared to 4.33% for the quarter ended June 30, 2022. The average yield on the loan portfolio (excluding Small Business Administration (SBA) Paycheck Protection Program (PPP) loans) was 5.50% for the quarter ended September 30, 2022, compared to 5.10% for the quarter ended June 30, 2022. The quarter ended June 30, 2022, included additional loan discount accretion of $876,000, while the quarter ended September 30, 2022, included additional interest income of approximately $650,000 associated with a nonaccrual loan that was paid in full during the quarter.

Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $1.7 million) were 3.92% and 3.54%, respectively, for the quarter ended September 30, 2022, compared to 3.77% and 3.59% (excluding loan discount accretion of $2.6 million) for the quarter ended June 30, 2022. The additional interest income of approximately $650,000 associated with the nonaccrual loan that was paid off during the quarter accounted for approximately 5 bps of net interest margin.

Interest Expense

For the quarter ended September 30, 2022, overall cost of funds (which includes noninterest-bearing deposits) increased by 41 basis points, from 0.36% to 0.77%, compared to the quarter ended June 30, 2022, due to continued rate increases and growth in borrowings.

Other Income

For the quarter ended September 30, 2022, other income increased by $1.1 million compared to the quarter ended June 30, 2022. The increase was largely attributable to a $520,000 increase in equity investment income and a $265,000 reimbursement for storm expenditures from insurance, which occurred during the quarter ended September 30, 2022.

Other Expenses

For the quarter ended September 30, 2022, other expense increased by $4.5 million compared to the quarter ended June 30, 2022. The increase was largely attributable to a $2.6 million increase in merger and conversion-related expenses, $498,000 increase in salaries and employee benefits, and $441,000 increase in advertising and promotions, related to increased media spend and production costs, during the quarter ended September 30, 2022.

Provision for Loan Losses

During the quarter ended September 30, 2022, Business First recorded a provision for loan losses of $3.3 million, compared to $2.9 million for the quarter ended June 30, 2022. The reserves for both quarters ended September 30, 2022, and June 30, 2022, were driven primarily by new loan growth.

Return on Assets and Equity

Return on average assets and common equity, each on an annualized basis, were 0.97% and 12.47%, respectively, for the quarter ended September 30, 2022, compared to 1.02% and 12.22%, respectively, for the quarter ended June 30, 2022.

Third Quarter 2022 Compared to Third Quarter 2021

Net Income and Diluted Earnings Per Share

For the quarter ended September 30, 2022, net income was $13.8 million or $0.61 per diluted share, compared to net income of $10.3 million or $0.50 per diluted share, for the quarter ended September 30, 2021. Net interest income increased by $16.2 million (attributed to the larger balance sheet resulting from the Texas Citizens acquisition, as well as strong organic growth and recent increase in interest rates during the past six months), partially offset by a $2.1 million increase in provision for loan loss due to loan growth, $5.1 million increase in salaries and employee benefits (largely attributable to the acquisition of Texas Citizens and additional staffing, mostly loan production), and $3.1 million in merger and conversion-related expenses attributable to the Texas Citizens acquisition, during the quarter ended September 30, 2022.

On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended September 30, 2022, was $16.4 million or $0.72 per diluted share, compared to core net income of $10.9 million or $0.53 per diluted share, for the quarter ended September 30, 2021. Notable noncore events impacting earnings for the quarter ended September 30, 2022, included $265,000 attributable to insurance reimbursements of storm expenses in other income and $3.5 million in acquisition-related expenses, compared to $211,000 in occupancy and bank premises expenses attributable to storm 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 during the quarter ended September 30, 2021.

Interest Income

For the quarter ended September 30, 2022, net interest income totaled $53.5 million and net interest margin and net interest spread were 4.05% and 3.67%, respectively, compared to $37.3 million, 3.71% and 3.51% for the quarter ended September 30, 2021. The average yield on total interest-earning assets was 4.80% for the quarter ended September 30, 2022, compared to 4.14% for the quarter ended September 30, 2021. The average yield on the loan portfolio (excluding SBA PPP loans) was 5.50% for the quarter ended September 30, 2022, compared to 5.11% for the quarter ended September 30, 2021.

Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $1.7 million) were 3.92% and 3.54%, respectively, for the quarter ended September 30, 2022, compared to 3.56% and 3.36% (excluding loan discount accretion of $1.5 million) for the quarter ended September 30, 2021.

Interest Expense

For the quarter ended September 30, 2022, overall cost of funds (which includes noninterest-bearing deposits) increased by 33 basis points, from 0.44% to 0.77%, compared to the quarter ended September 30, 2021. The increase in cost of funds was primarily attributable to an overall increase in interest rates on deposit offerings and higher average subordinated debt balances and Federal Home Loan Bank (FHLB) borrowings.

Other Income

For the quarter ended September 30, 2022, the increase in other income of $2.0 million, compared to the quarter ended September 30, 2021, was largely attributable to the $558,000 loss on other real estate owned (OREO) recorded during the quarter ended September 30, 2021, increase on service charges of $353,000 due to the acquisition of Texas Citizens on March 1, 2022, and organic deposit growth, and increase of $285,000 in fees and brokerage commission due to the increase in assets under management.

Other Expenses

For the quarter ended September 30, 2022, the increase in other expense of $11.6 million compared to the quarter ended September 30, 2021, was largely attributable to the $5.1 million increase in salaries and employee benefits associated with the acquisition of Texas Citizens on March 1, 2022, and additional loan production staffing which occurred over the past year, and $3.1 million in merger and conversion-related expenses associated with the acquisition of Texas Citizens.

Provision for Loan Losses

During the quarter ended September 30, 2022, Business First recorded a provision for loan losses of $3.3 million compared to $1.1 million for the quarter ended September 30, 2021.

Return on Assets and Equity

Return on average assets and return on average common equity, each on an annualized basis, were 0.97% and 12.47%, respectively, for the quarter ended September 30, 2022, from 0.95% and 9.47%, respectively, for the quarter ended September 30, 2021.

Conference Call and Webcast

Executive management will host a conference call and webcast to discuss results on Thursday, October 27, 2022, at 2:00 p.m. CDT. Interested parties may attend the call by dialing toll-free 1-800-715-9871 (North America only), conference ID 3389208, or asking for the Business First Bancshares conference call. The live webcast can be found at https://edge.media-server.com/mmc/p/yawh3a5g. The corresponding slide presentation can be assessed 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 $5.8 billion in assets, $6.3 billion in assets under management through b1BANK’s affiliate Smith Shellnut Wilson, LLC (SSW) (excludes $0.9 billion of b1BANK assets managed by SSW) and operates Banking Centers and Loan Production Offices in markets across Louisiana and the Dallas and Houston, Texas areas, providing commercial and personal banking products and services. Commercial banking services include commercial loans and letters of credit, working capital lines and equipment financing, and treasury management services. b1BANK was awarded #1 Best-In-State Bank, Louisiana, by Forbes and Statista, and is a multiyear winner of American Banker’s “Best Banks to Work For.” Visit b1BANK.com for more information.

Non-GAAP Financial Measures

This press release includes certain non-GAAP financial measures (e.g., referenced as “core” or “tangible”) intended to supplement, not substitute for, comparable GAAP measures. “Core” measures typically adjust income available to common shareholders for certain significant activities or transactions that, in management’s opinion, can distort period-to-period comparisons of Business First’s performance. Transactions that are typically excluded from non-GAAP “core” measures include realized and unrealized gains/losses on former bank premises and equipment, investment sales, acquisition-related expenses (including, but not limited to, legal costs, system conversion costs, severance and retention payments, etc.). “Tangible” measures adjust common equity by subtracting goodwill, core deposit intangibles, and customer intangibles, net of accumulated amortization. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of Business First’s core business. These non-GAAP disclosures are not necessarily comparable to non-GAAP measures that may be presented by other companies. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided at the end of the tables below.

Special Note Regarding Forward-Looking Statements

Certain statements contained in this release may not be based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “may,” “might,” “will,” “would,” “could,” or “intend.” We caution you not to place undue reliance on the forward-looking statements contained in this news release, in that actual results could differ materially from those indicated in such forward-looking statements as a result of a variety of factors, including those factors specified in our Annual Report on Form 10-K and other public filings. We undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release.

Additional Information

For additional information about Business First, you may obtain Business First’s reports that are filed with the Securities and Exchange Commission (SEC) free of charge by using the SEC’s EDGAR service on the SEC’s website at www.SEC.gov or by contacting the SEC for further information at 1-800-SEC-0330. Alternatively, these documents can be obtained free of charge from Business First by directing a request to: Business First Bancshares, Inc., 500 Laurel Street, Suite 101, Baton Rouge, Louisiana 70801, Attention: Corporate Secretary.

No Offer or Solicitation

This release does not constitute or form part of any offer to sell, or a solicitation of an offer to purchase, any securities of Business First. There will be no sale of securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Misty Albrecht
b1BANK
225.286.7879
Misty.Albrecht@b1BANK.com

Business First Bancshares, Inc.
Selected Financial Information
(Unaudited)
	For the Quarter Ended
	September 30,			June 30,			September 30,
(Dollars in thousands)	2022			2022			2021
Balance Sheet Ratios
Loans (HFI) to Deposits		96.59	%		88.31	%		81.37	%
Shareholders' Equity to Assets Ratio		8.75	%		8.05	%		9.77	%
Loans Receivable Held for Investment (HFI)
Commercial (1)	$	1,012,778		$	949,631		$	723,077
Real Estate:
Construction and Land		636,869			642,260			464,808
Farmland		190,829			174,723			85,898
1-4 Family Residential		545,880			521,747			464,462
Multi-Family Residential		102,056			97,901			107,551
Nonfarm Nonresidential		1,823,408			1,605,691			1,111,771
Total Real Estate		3,299,042			3,042,322			2,234,490
Consumer and Other		118,080			121,773			108,669
Total Loans (Held for Investment)	$	4,429,900		$	4,113,726		$	3,066,236
Allowance for Loan Losses
Balance, Beginning of Period	$	32,317		$	29,245		$	26,702
Charge-offs – Quarterly		(667	)		(99	)		(81	)
Recoveries – Quarterly		278			226			378
Provision for Loan Losses – Quarterly		3,273			2,945			1,147
Balance, End of Period	$	35,201		$	32,317		$	28,146
Allowance for Loan Losses to Total Loans (HFI)		0.79	%		0.79	%		0.92	%
Net Charge-offs (Recoveries) to Average Quarterly Total Loans		0.01	%		0.00	%		-0.01	%
Remaining Loan Purchase Discount	$	36,089		$	37,903		$	29,390
Nonperforming Assets
Nonperforming Loans:
Nonaccrual Loans (2)	$	9,843		$	16,777		$	12,622
Loans Past Due 90 Days or More (2)		1,121			324			1,030
Total Nonperforming Loans		10,964			17,101			13,652
Other Nonperforming Assets:
Other Real Estate Owned		840			990			2,152
Other Nonperforming Assets		180			84			675
Total Other Nonperforming Assets		1,020			1,074			2,827
Total Nonperforming Assets	$	11,984		$	18,175		$	16,479
Nonperforming Loans to Total Loans (HFI)		0.25	%		0.42	%		0.45	%
Nonperforming Assets to Total Assets		0.21	%		0.33	%		0.37	%
(1) Small Business Administration (SBA) Paycheck Protection Program (PPP) loans accounted for $3.0 million of the commercial portfolio as of September 30, 2022.
SBA PPP loans accounted for $3.2 million of the commercial portfolio as of June 30, 2022.
SBA PPP loans accounted for $9.7 million of the commercial portfolio as of September 30, 2021.
(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)	2022			2022			2021				2022			2021
Per Share Data
Basic Earnings per Common Share	$	0.61		$	0.61		$	0.51			$	1.65		$	1.95
Diluted Earnings per Common Share		0.61			0.61			0.50				1.64			1.94
Dividends per Common Share		0.12			0.12			0.12				0.36			0.34
Book Value per Common Share		22.47			19.73			21.11				22.47			21.11
Average Common Shares Outstanding		22,468,939			22,459,603			20,384,879				21,990,273			20,570,506
Average Diluted Shares Outstanding		22,650,640			22,656,174			20,513,838				22,163,952			20,692,344
End of Period Common Shares Outstanding		22,605,136			22,579,451			20,383,504				22,605,136			20,383,504
Annualized Performance Ratios
Return on Average Assets		0.97	%		1.02	%		0.95	%			0.91	%		1.23	%
Return on Average Common Equity		12.47	%		12.22	%		9.47	%			10.84	%		12.60	%
Net Interest Margin		4.05	%		3.98	%		3.71	%			3.86	%		3.93	%
Net Interest Spread		3.67	%		3.79	%		3.51	%			3.61	%		3.75	%
Efficiency Ratio (1)		66.47	%		64.32	%		67.56	%			67.48	%		60.50	%
Total Quarterly Average Assets	$	5,702,312		$	5,371,639		$	4,353,885			$	5,331,352		$	4,343,407
Total Quarterly Average Common Equity		442,778			450,431			435,400				446,403			423,977
Other Expenses
Salaries and Employee Benefits	$	21,906		$	21,408		$	16,791			$	63,017		$	48,470
Occupancy and Bank Premises		2,485			2,422			1,629				6,959			5,716
Depreciation and Amortization		1,850			1,734			1,483				5,153			4,316
Data Processing		2,155			1,886			1,994				6,157			6,105
FDIC Assessment Fees		839			661			581				2,243			1,526
Legal and Other Professional Fees		619			735			553				1,897			2,199
Advertising and Promotions		1,144			703			612				2,378			1,713
Utilities and Communications		833			822			678				2,434			1,889
Ad Valorem Shares Tax		813			812			675				2,438			2,050
Directors' Fees		288			212			201				702			583
Other Real Estate Owned Expenses and Write-Downs		133			35			103				182			660
Merger and Conversion-Related Expenses		3,244			615			145				4,670			249
Other		4,637			4,352			3,885				12,833			11,487
Total Other Expenses	$	40,946		$	36,397		$	29,330			$	111,063		$	86,963
Other Income
Service Charges on Deposit Accounts	$	2,116		$	2,086		$	1,763			$	6,007		$	5,013
Losses on Sales of Securities		(7	)		(8	)		(11	)			(46	)		(66	)
Debit Card and ATM Fee Income		1,667			1,657			1,532				4,825			4,645
Bank-Owned Life Insurance Income		561			475			356				1,405			1,029
Gain on Sales of Loans		264			186			93				515			10,114
Mortgage Origination Income		57			161			227				427			697
Fees and Brokerage Commission		1,620			1,749			1,335				5,204			3,294
Gain (Loss) on Sales of Other Real Estate Owned		12			10			(558	)			30			(1,087	)
Gain (Loss) on Disposal of Other Assets		1			-			14				(716	)		122
Pass-Through Income from Other Investments		572			52			398				739			2,053
Other		1,252			653			962				2,642			2,310
Total Other Income	$	8,115		$	7,021		$	6,111			$	21,032		$	28,124
(1) 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)	2022			2022			2021
Assets
Cash and Due From Banks	$	152,671		$	154,694		$	81,361
Federal Funds Sold		11,137			10,817			4,646
Securities Available for Sale, at Fair Values		884,960			934,676			1,034,491
Mortgage Loans Held for Sale		545			170			1,498
Loans and Lease Receivable		4,429,900			4,113,726			3,066,236
Allowance for Loan Losses		(35,201	)		(32,317	)		(28,146	)
Net Loans and Lease Receivable		4,394,699			4,081,409			3,038,090
Premises and Equipment, Net		63,765			64,307			56,611
Accrued Interest Receivable		22,454			22,142			19,025
Other Equity Securities		39,390			30,302			15,259
Other Real Estate Owned		840			990			2,152
Cash Value of Life Insurance		88,743			88,370			59,085
Deferred Taxes, Net		36,691			29,576			5,618
Goodwill		88,543			88,842			60,062
Core Deposit and Customer Intangibles		14,567			15,093			12,835
Other Assets		7,686			8,995			14,484
Total Assets	$	5,806,691		$	5,530,383		$	4,405,217
Liabilities
Deposits
Noninterest-Bearing	$	1,613,310		$	1,698,114		$	1,201,791
Interest-Bearing		2,972,795			2,960,049			2,566,330
Total Deposits		4,586,105			4,658,163			3,768,121
Securities Sold Under Agreements to Repurchase		22,072			18,477			27,195
Fed Funds Purchased		-			-			16,087
Short-Term Borrowings		5,009			5,020			20
Subordinated Debt		110,902			111,055			81,427
Subordinated Debt - Trust Preferred Securities		5,000			5,000			5,000
Federal Home Loan Bank Borrowings		534,059			254,011			48,002
Accrued Interest Payable		1,023			708			1,835
Other Liabilities		34,519			32,490			27,309
Total Liabilities		5,298,689			5,084,924			3,974,996
Shareholders' Equity
Preferred Stock		72,010			-			-
Common Stock		22,605			22,579			20,384
Additional Paid-In Capital		347,721			346,382			291,847
Retained Earnings		150,336			139,232			112,243
Accumulated Other Comprehensive Income (Loss)		(84,670	)		(62,734	)		5,747
Total Shareholders' Equity		508,002			445,459			430,221
Total Liabilities and Shareholders' Equity	$	5,806,691		$	5,530,383		$	4,405,217

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)	2022			2022			2021				2022			2021
Interest Income:
Interest and Fees on Loans	$	58,846		$	49,639		$	37,900			$	148,668		$	118,454
Interest and Dividends on Securities		4,200			4,143			3,598				12,187			9,616
Interest on Federal Funds Sold and Due From Banks		427			232			36				754			77
Total Interest Income		63,473			54,014			41,534				161,609			128,147
Interest Expense:
Interest on Deposits		6,286			2,557			3,060				11,106			9,538
Interest on Borrowings		3,707			1,895			1,180				6,986			3,069
Total Interest Expense		9,993			4,452			4,240				18,092			12,607
Net Interest Income		53,480			49,562			37,294				143,517			115,540
Provision for Loan Losses:		3,273			2,945			1,147				7,835			6,747
Net Interest Income After Provision for Loan Losses		50,207			46,617			36,147				135,682			108,793
Other Income:
Service Charges on Deposit Accounts		2,116			2,086			1,763				6,007			5,013
(Loss) on Sales of Securities		(7	)		(8	)		(11	)			(46	)		(66	)
Gain on Sales of Loans		264			186			93				515			10,114
Other Income		5,742			4,757			4,266				14,556			13,063
Total Other Income		8,115			7,021			6,111				21,032			28,124
Other Expenses:
Salaries and Employee Benefits		21,906			21,408			16,791				63,017			48,470
Occupancy and Equipment Expense		5,122			4,914			3,912				14,449			11,893
Merger and Conversion-Related Expense		3,244			615			145				4,670			249
Other Expenses		10,674			9,460			8,482				28,927			26,351
Total Other Expenses		40,946			36,397			29,330				111,063			86,963
Income Before Income Taxes:		17,376			17,241			12,928				45,651			49,954
Provision for Income Taxes:		3,576			3,484			2,617				9,363			9,886
Net Income:	$	13,800		$	13,757		$	10,311			$	36,288		$	40,068

Business First Bancshares, Inc.
Consolidated Net Interest Margin
(Unaudited)
	Three Months Ended
	September 30, 2022									June 30, 2022									September 30, 2021
(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 (Excluding SBA PPP)	$	4,278,184		$	58,839		5.50	%		$	3,890,470		$	49,628		5.10	%		$	2,948,491		$	37,666		5.11	%
SBA PPP Loans		2,953			7		1.00	%			4,429			11		1.00	%			10,150			234		9.24	%
Securities		951,479			4,200		1.77	%			966,960			4,143		1.71	%			946,950			3,598		1.52	%
Interest-Bearing Deposit in Other Banks		54,730			427		3.12	%			122,175			232		0.76	%			110,472			36		0.13	%
Total Interest-Earning Assets		5,287,346			63,473		4.80	%			4,984,034			54,014		4.33	%			4,016,063			41,534		4.14	%
Allowance for Loan Losses		(33,215	)								(29,945	)								(27,409	)
Noninterest-Earning Assets		448,181									417,550									365,231
Total Assets	$	5,702,312		$	63,473					$	5,371,639		$	54,014					$	4,353,885		$	41,534
Liabilities and Shareholders' Equity
Interest-Bearing Liabilities:
Interest-Bearing Deposits	$	3,009,565		$	6,286		0.84	%		$	2,981,613		$	2,557		0.34	%		$	2,566,766		$	3,060		0.48	%
Subordinated Debt		110,953			1,332		4.80	%			111,107			1,300		4.68	%			81,427			1,026		5.04	%
Subordinated Debt - Trust Preferred Securities		5,000			68		5.44	%			5,000			52		4.16	%			5,000			42		3.36	%
Advances from Federal Home Loan Bank (FHLB)		396,267			2,194		2.21	%			171,224			506		1.18	%			36,015			106		1.18	%
First National Bankers Bank Line of Credit		5,000			70		5.60	%			3,333			21		2.52	%			-			-		0.00	%
Other Borrowings		22,381			43		0.77	%			24,927			16		0.26	%			26,350			6		0.09	%
Total Interest-Bearing Liabilities		3,549,166			9,993		1.13	%			3,297,204			4,452		0.54	%			2,715,558			4,240		0.62	%
Noninterest-Bearing Liabilities:
Noninterest-Bearing Deposits	$	1,626,055								$	1,596,174								$	1,172,752
Other Liabilities		60,310									27,830									30,175
Total Noninterest-Bearing Liabilities		1,686,365									1,624,004									1,202,927
Shareholders' Equity:
Common Shareholders' Equity		442,778									450,431									435,400
Preferred Equity		24,003									-									-
Total Shareholder's Equity		466,781									450,431									435,400
Total Liabilities and Shareholders' Equity	$	5,702,312								$	5,371,639								$	4,353,885
Net Interest Spread							3.67	%								3.79	%								3.51	%
Net Interest Income				$	53,480								$	49,562								$	37,294
Net Interest Margin							4.05	%								3.98	%								3.71	%
Overall Cost of Funds							0.77	%								0.36	%								0.44	%
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, 2022								September 30, 2021
(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 (Excluding SBA PPP)	$	3,850,321		$	148,640		5.15%		$	2,802,246		$	110,320		5.25%
SBA PPP Loans		3,702			28		1.00%			209,041			8,134		5.19%
Securities		974,566			12,187		1.67%			813,231			9,616		1.58%
Interest-Bearing Deposit in Other Banks		132,685			754		0.76%			91,466			77		0.11%
Total Interest-Earning Assets		4,961,274			161,609		4.34%			3,915,984			128,147		4.36%
Allowance for Loan Losses		(30,806	)							(25,383	)
Noninterest-Earning Assets		400,884								452,806
Total Assets	$	5,331,352		$	161,609				$	4,343,407		$	128,147
Liabilities and Shareholders' Equity
Interest-Bearing Liabilities:
Interest-Bearing Deposits	$	2,958,005		$	11,106		0.50%		$	2,588,756		$	9,538		0.49%
Subordinated Debt		104,471			3,746		4.78%			63,768			2,499		5.23%
Subordinated Debt - Trust Preferred Securities		5,000			163		4.35%			5,000			127		3.39%
Advances from Federal Home Loan Bank (FHLB)		215,955			2,923		1.80%			35,309			325		1.23%
First National Bankers Bank Line of Credit		2,778			91		4.37%			-			-		0.00%
Other Borrowings		22,325			63		0.38%			27,651			118		0.57%
Total Interest-Bearing Liabilities		3,308,534			18,092		0.73%			2,720,484			12,607		0.62%
Noninterest-Bearing Liabilities:
Noninterest-Bearing Deposits		1,530,748								1,170,534
Other Liabilities		37,666								28,412
Total Noninterest-Bearing Liabilities		1,568,414								1,198,946
Shareholders' Equity:
Common Shareholders' Equity		446,403								423,977
Preferred Equity		8,001								-
Total Shareholder's Equity		454,404								423,977
Total Liabilities and Shareholders' Equity	$	5,331,352							$	4,343,407
Net Interest Spread							3.61%								3.75%
Net Interest Income				$	143,517							$	115,540
Net Interest Margin							3.86%								3.93%
Overall Cost of Funds							0.50%								0.43%
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)	2022			2022			2021				2022			2021
Interest Income:
Interest income	$	63,473		$	54,014		$	41,534			$	161,609		$	128,147
Core interest income		63,473			54,014			41,534				161,609			128,147
Interest Expense:
Interest expense		9,993			4,452			4,240				18,092			12,607
Core interest expense		9,993			4,452			4,240				18,092			12,607
Provision for Loan Losses:(b)
Provision for loan losses		3,273			2,945			1,147				7,835			6,747
Core provision expense		3,273			2,945			1,147				7,835			6,747
Other Income:
Other income		8,115			7,021			6,111				21,032			28,124
Losses on former bank premises and equipment		-			-			392				717			932
Losses on sale of securities		7			8			11				46			66
Insurance reimbursement of storm expenditures		(265	)		-			-				(265	)		-
Core other income		7,857			7,029			6,514				21,530			29,122
Other Expense:
Other expense		40,946			36,397			29,330				111,063			86,963
Acquisition-related expenses (2)		(3,521	)		(708	)		(145	)			(5,040	)		(249	)
Occupancy and bank premises - storm repair		-			(270	)		(211	)			(501	)		(1,499	)
Core other expense		37,425			35,419			28,974				105,522			85,215
Pre-Tax Income:(a)
Pre-tax income		17,376			17,241			12,928				45,651			49,954
Losses on former bank premises and equipment		-			-			392				717			932
Losses on sale of securities		7			8			11				46			66
Acquisition-related expenses (2)		3,521			708			145				5,040			249
Occupancy and bank premises - storm repair		-			270			211				501			1,499
Insurance reimbursment of storm expenditures		(265	)		-			-				(265	)		-
Core pre-tax income		20,639			18,227			13,687				51,690			52,700
Provision for Income Taxes:(1)
Provision for income taxes		3,576			3,484			2,617				9,363			9,886
Tax on losses on former bank premises and equipment		-			-			82				151			195
Tax on losses on sale of securities		1			2			2				10			14
Tax on acquisition-related expenses (2)		739			126			24				913			46
Tax on occupancy and bank premises - storm repair		-			57			44				106			314
Tax on insurance reimbursement of storm expenditures		(55	)		-			-				(55	)		-
Core provision for income taxes		4,261			3,669			2,769				10,488			10,455
Net Income:
Net income		13,800			13,757			10,311				36,288			40,068
Losses on former bank premises and equipment, net of tax		-			-			310				566			737
Losses on sale of securities, net of tax		6			6			9				36			52
Acquisition-related expenses (2), net of tax		2,782			582			121				4,127			203
Occupancy and bank premises - storm repair, net of tax		-			213			167				395			1,185
Insurance reimbursement of storm expenditures, net of tax		(210	)		-			-				(210	)		-
Core net income	$	16,378		$	14,558		$	10,918			$	41,202		$	42,245
Pre-tax, pre-provision earnings (a+b)	$	20,649		$	20,186		$	14,075			$	53,486		$	56,701
Losses on former bank premises and equipment		-			-			392				717			932
Losses on sale of securities		7			8			11				46			66
Acquisition-related expenses (2)		3,521			708			145				5,040			249
Occupancy and bank premises - storm repair		-			270			211				501			1,499
Insurance reimbursement of storm expenditures		(265	)		-			-				(265	)		-
Core pre-tax, pre-provision earnings	$	23,912		$	21,172		$	14,834			$	59,525		$	59,447
Average Diluted Shares Outstanding		22,650,640			22,656,174			20,513,838				22,163,952			20,692,344
Diluted Earnings Per Share:
Diluted earnings per share	$	0.61		$	0.61		$	0.50			$	1.64		$	1.94
Losses on former bank premises and equipment, net of tax		-			-			0.01				0.02			0.04
Losses on sale of securities, net of tax		0.00			0.00			0.00				0.00			0.00
Acquisition-related expenses (2), net of tax		0.12			0.02			0.01				0.19			0.01
Occupancy and bank premises -storm repair, net of tax		-			0.01			0.01				0.02			0.06
Insurance reimbursement of storm expenditures, net of tax		(0.01	)		-			-				(0.01	)		-
Core diluted earnings per share	$	0.72		$	0.64		$	0.53			$	1.86		$	2.05
Pre-tax, pre-provision profit diluted earnings per share	$	0.91		$	0.89		$	0.69			$	2.41		$	2.74
Losses on former bank premises and equipment		-			-			0.01				0.03			0.05
Losses on sale of securities		0.00			0.00			0.00				0.00			0.00
Acquisition-related expenses (2)		0.16			0.03			0.01				0.23			0.01
Occupancy and bank premises - storm repair		-			0.01			0.01				0.03			0.07
Insurance reimbursement of storm expenditures		(0.01	)		-			-				(0.01	)		-
Core pre-tax, pre-provision diluted earnings per share	$	1.06		$	0.93		$	0.72			$	2.69		$	2.87
(1) Tax rates, exclusive of certain nondeductible merger-related expenses and goodwill, utilized were 21.00% for 2022 and 2021. 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)	2022			2022			2021				2022			2021
Total Quarterly Average Assets	$	5,702,312		$	5,371,639		$	4,353,885			$	5,331,352		$	4,343,407
Total Quarterly Average Common Equity	$	442,778		$	450,431		$	435,400			$	446,403		$	423,977
Net Income:
Net income	$	13,800		$	13,757		$	10,311			$	36,288		$	40,068
Losses on former bank premises and equipment, net of tax		-			-			310				566			737
Losses on sale of securities, net of tax		6			6			9				36			52
Acquisition-related expenses, net of tax		2,782			582			121				4,127			203
Occupancy and bank premises - storm repair, net of tax		-			213			167				395			1,185
Insurance reimbursement of storm expenditures, net of tax		(210	)		-			-				(210	)		-
Core net income	$	16,378		$	14,558		$	10,918			$	41,202		$	42,245
Return on average assets		0.97	%		1.02	%		0.95	%			0.91	%		1.23	%
Core return on average assets		1.15	%		1.08	%		1.00	%			1.03	%		1.30	%
Return on common equity		12.47	%		12.22	%		9.47	%			10.84	%		12.60	%
Core return on average common equity		14.80	%		12.93	%		10.03	%			12.31	%		13.29	%
Interest Income:
Interest income	$	63,473		$	54,014		$	41,534			$	161,609		$	128,147
Core interest income		63,473			54,014			41,534				161,609			128,147
Interest Expense:
Interest expense		9,993			4,452			4,240				18,092			12,607
Core interest expense		9,993			4,452			4,240				18,092			12,607
Other Income:
Other income		8,115			7,021			6,111				21,032			28,124
Losses on former bank premises and equipment		-			-			392				717			932
Losses on sale of securities		7			8			11				46			66
Insurance reimbursement of storm expenditures		(265	)		-			-				(265	)
Core other income		7,857			7,029			6,514				21,530			29,122
Other Expense:
Other expense		40,946			36,397			29,330				111,063			86,963
Acquisition-related expenses		(3,521	)		(708	)		(145	)			(5,040	)		(249	)
Occupancy and bank premises - storm repair		-			(270	)		(211	)			(501	)		(1,499	)
Core other expense	$	37,425		$	35,419		$	28,974			$	105,522		$	85,215
Efficiency Ratio:
Other expense (a)	$	40,946		$	36,397		$	29,330			$	111,063		$	86,963
Core other expense (c)	$	37,425		$	35,419		$	28,974			$	105,522		$	85,215
Net interest and other income (1) (b)	$	61,602		$	56,591		$	43,416			$	164,595		$	143,730
Core net interest and other income (1) (d)	$	61,337		$	56,591		$	43,808			$	165,047		$	144,662
Efficiency ratio (a/b)		66.47	%		64.32	%		67.56	%			67.48	%		60.50	%
Core efficiency ratio (c/d)		61.02	%		62.59	%		66.14	%			63.93	%		58.91	%
Total Average Interest-Earnings Assets	$	5,287,346		$	4,984,034		$	4,016,063			$	4,961,274		$	3,915,984
Net Interest Income:
Net interest income	$	53,480		$	49,562		$	37,294			$	143,517		$	115,540
Loan discount accretion		(1,712	)		(2,588	)		(1,511	)			(5,220	)		(6,191	)
Net interest income excluding loan discount accretion	$	51,768		$	46,974		$	35,783			$	138,297		$	109,349
Net interest margin (2)		4.05	%		3.98	%		3.71	%			3.86	%		3.93	%
Net interest margin excluding loan discount accretion (2)		3.92	%		3.77	%		3.56	%			3.72	%		3.72	%
Net interest spread		3.67	%		3.79	%		3.51	%			3.61	%		3.75	%
Net interest spread excluding loan discount accretion		3.54	%		3.59	%		3.36	%			3.47	%		3.53	%
(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)	2022			2022			2021
Total Shareholders' (Common) Equity:
Total shareholders' equity	$	508,002		$	445,459		$	430,221
Preferred stock		(72,010	)		-			-
Total common shareholders' equity		435,992			445,459			430,221
Goodwill		(88,543	)		(88,842	)		(60,062	)
Core deposit and customer intangible		(14,567	)		(15,093	)		(12,835	)
Total tangible common equity	$	332,882		$	341,524		$	357,324
Total Assets:
Total assets	$	5,806,691		$	5,530,383		$	4,405,217
Goodwill		(88,543	)		(88,842	)		(60,062	)
Core deposit and customer intangible		(14,567	)		(15,093	)		(12,835	)
Total tangible assets	$	5,703,581		$	5,426,448		$	4,332,320
Common shares outstanding		22,605,136			22,579,451			20,383,504
Book value per common share	$	19.29		$	19.73		$	21.11
Tangible book value per common share	$	14.73		$	15.13		$	17.53
Common equity to total assets		7.51	%		8.05	%		9.77	%
Tangible common equity to tangible assets		5.84	%		6.29	%		8.25	%

 

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