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Business First Bancshares, Inc., Announces Financial Results for Q2 2022
Source: Nasdaq GlobeNewswire / 26 Jul 2022 16:01:01 America/New_York
BATON ROUGE, La., July 26, 2022 (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, 2022, including net income of $13.8 million or $0.61 per diluted share, increases of $5.0 million and $0.20, respectively, from the quarter ended March 31, 2022. On a non-GAAP basis, core net income for the quarter ended June 30, 2022, which excludes certain income and expenses, was $14.6 million or $0.64 per diluted share, increases of $4.3 million and $0.15, respectively, from the quarter ended March 31, 2022.
”Our second quarter results demonstrate strengthening returns on investments our team has made over the past few years,” said Jude Melville, president and CEO. “Strong and diversified organic growth across our footprint, positive momentum towards integration of our recent Houston partnership, and a continued prioritized focus on asset quality combined to produce record levels of performance and profitability. We are monitoring developments in the broader economy but feel confident we are well positioned to continue executing on our strategic plan while also supporting our clients and partners as they do the same.”
On July 26, 2022, 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, 2022. The dividend will be paid on August 31, 2022, or as soon thereafter as practicable.
Quarterly Highlights
- Strong Loan Growth. Total loans held for investment at June 30, 2022, were $4.1 billion, an increase of $365.2 million compared to March 31, 2022, or 9.74% for the quarter. Based on unpaid principal balances, 37.1% of loan growth for the quarter ended June 30, 2022, was attributable to our Dallas, Texas market, 29.0% to the New Orleans market, and 26.4% to the northern Louisiana market (largely attributable to agricultural lending). As of June 30, 2022, approximately 32% of Business First’s loan portfolio resides in Texas based on unpaid principal balances.
- Expansion of Net Interest Margin. For the quarter ended June 30, 2022, net interest income totaled $49.6 million and net interest margin and net interest spread were 3.98% and 3.79%, respectively, compared to $40.5 million, 3.51% and 3.35% for the quarter ended March 31, 2022. Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $2.6 million) were 3.77% and 3.59%, respectively, for the quarter ended June 30, 2022, compared to 3.43% and 3.27% (excluding loan discount accretion of $920,000) for the quarter ended March 31, 2022. Non-GAAP net interest margin and spread rose due to the recent increase in interest rates.
- Solid Return on Assets and Equity. Return on average assets and equity, each on an annualized basis, were 1.02% and 12.22%, respectively, for the quarter ended June 30, 2022, compared to 0.71% and 7.83%, respectively, for the quarter ended March 31, 2022.
- Overall Credit Quality Remains Stable. Ratios of nonperforming loans compared to loans held for investment and nonperforming assets compared to total assets increased from 0.29% and 0.23%, respectively, at March 31, 2022, to 0.42% and 0.33% at June 30, 2022. This change is largely due to a to a single nonfarm nonresidential commercial loan with an outstanding balance of $6.3 million being transferred to nonaccrual at the beginning of the second quarter. This occurred because of a delay in the hurricane-related insurance settlement process. The insurance proceeds were received in July 2022 and the loan was repaid in full. This loan negatively impacted our nonperforming loans to total loans held for investment ratio by 16 basis points and our nonperforming assets to total assets ratio by 12 basis points.
Financial Condition
June 30, 2022, Compared to March 31, 2022
Loans
Loans held for investment increased $365.2 million or 9.74% for the quarter ended June 30, 2022.
Credit Quality
Nonperforming loans as a percentage of total loans held for investment increased from 0.29% as of March 31, 2022, to 0.42% as of June 30, 2022. Nonperforming assets as a percentage of total assets increased from 0.23% as of March 31, 2022, to 0.33% as of June 30, 2022. The increases were largely attributable to a single nonfarm nonresidential commercial loan with an outstanding balance of $6.3 million, which was paid in full in July 2022.
Total Shareholders’ Equity
Book value per common share was $19.73 at June 30, 2022, compared to $20.25 at March 31, 2022. The decrease was largely attributable to the $23.0 million decrease in accumulated other comprehensive income (loss) related to unrealized losses on Business First’s available for sale investment portfolio.
On a non-GAAP basis, tangible book value per share was $15.13 at June 30, 2022, compared to $15.57 at March 31, 2022.
June 30, 2022, Compared to June 30, 2021
Loans
Total loans held for investment increased by $1.3 billion or 44.09% compared to June 30, 2021. Excluding loans acquired from Texas Citizens on March 1, 2022, loans increased $912.5 million or 31.96%.
Credit Quality
Nonperforming loans as a percentage of total loans held for investment increased from 0.40% as of June 30, 2021, to 0.42% as of June 30, 2022, largely due to the increase in nonaccrual loans, attributable to a single nonfarm nonresidential commercial loan with an outstanding balance of $6.3 million, which was paid in full in July 2022. Nonperforming assets as a percentage of total assets decreased from 0.42% as of June 30, 2021, to 0.33% as of June 30, 2022, largely due to the increase in total assets.
Total Shareholders’ Equity
Book value per common share was $19.73 at June 30, 2022, compared to $20.78 at June 30, 2021. On a non-GAAP basis, tangible book value per share was $15.13 at June 30, 2022, compared to $17.24 at June 30, 2021. Tangible book value per share was negatively impacted by a decrease in accumulated other comprehensive income (loss) of $69.6 million attributable to fair value adjustments on Business First’s available for sale investment portfolio.
Results of Operations
Second Quarter 2022 Compared to First Quarter 2022
Net Income and Diluted Earnings Per Share
For the quarter ended June 30, 2022, net income was $13.8 million, or $0.61 per diluted share, compared to net income of $8.7 million or $0.41 per diluted share, for the quarter ended March 31, 2022, increases of $5.0 million and $0.20, respectively. The increases were largely attributable to an increase in net interest income of $9.1 million (partially attributable to a full quarter of the Texas Citizens acquisition), offset by increases of $1.3 million in provision for loan losses and $2.7 million in other expenses.
On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended June 30, 2022, was $14.6 million or $0.64 per diluted share, compared to core net income of $10.3 million or $0.49 per diluted share, for the quarter ended March 31, 2022. Notable noncore events impacting earnings for the quarter ended June 30, 2022, included $708,000 of acquisition-related expenses, and $270,000 of expenses attributable to storm repairs, compared to $717,000 losses in disposals of former bank premises and equipment in other income, $811,000 of expenses attributable to acquisition-related expenses, and $231,000 of expenses attributable to storm repairs, for the quarter ended March 31, 2022.
Interest Income
For the quarter ended June 30, 2022, net interest income totaled $49.6 million and net interest margin and net interest spread were 3.98% and 3.79%, respectively, compared to $40.5 million, 3.51% and 3.35% for the quarter ended March 31, 2022. The average yield on total interest-earning assets was 4.33% for the quarter ended June 30, 2022, compared to 3.83% for the quarter ended March 31, 2022. The average yield on the loan portfolio (excluding Small Business Administration (SBA) Paycheck Protection Program (PPP) loans) was 5.10% for the quarter ended June 30, 2022, compared to 4.75% for the quarter ended March 31, 2022. The increases were largely attributable to loan growth and interest rate increases, as well as an increase of $1.7 million in loan discount accretion for the quarter ended June 30, 2022.
Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $2.6 million) were 3.77% and 3.59%, respectively, for the quarter ended June 30, 2022, compared to 3.43% and 3.27% (excluding loan discount accretion of $920,000) for the quarter ended March 31, 2022.
Interest Expense
For the quarter ended June 30, 2022, overall cost of funds (which includes noninterest-bearing deposits) increased by three basis points, from 0.33% to 0.36%, compared to the quarter ended March 31, 2022, due to increased rates and growth on interest-bearing deposits.
Other Income
For the quarter ended June 30, 2022, other income increased by $1.1 million compared to the quarter ended March 31, 2022. The increase was largely attributable to a $717,000 loss on disposal of other assets which occurred during the quarter ended March 31, 2022.
Other Expenses
For the quarter ended June 30, 2022, other expense increased by $2.7 million compared to the quarter ended March 31, 2022. The increase was largely attributable to increases in salaries and benefits of $1.7 million, mostly due to excess bonus payments of $463,000 and $1.1 million in salaries of two additional months of increased headcount as a result of the Texas Citizens acquisition compared to the quarter ended March 31, 2022.
Provision for Loan Losses
During the quarter ended June 30, 2022, Business First recorded a provision for loan losses of $2.9 million, compared to $1.6 million for the quarter ended March 31, 2022. The reserve for the quarter ended June 30, 2022, was driven primarily by new loan growth.
Return on Assets and Equity
Return on average assets and equity, each on an annualized basis, were 1.02% and 12.22%, respectively, for the quarter ended June 30, 2022, compared to 0.71% and 7.83%, respectively, for the quarter ended March 31, 2022.
Second Quarter 2022 Compared to Second Quarter 2021
Net Income and Diluted Earnings Per Share
For the quarter ended June 30, 2022, net income was $13.8 million or $0.61 per diluted share, compared to net income of $17.4 million or $0.84 per diluted share, for the quarter ended June 30, 2021. Although net interest income increased by $11.6 million (partially attributed to the larger balance sheet resulting from the Texas Citizens acquisition and the inclusion of only two months of the larger balance sheet as a result of the Pedestal transaction on May 1, 2021), this was offset by the $10.0 million gain on sale during the quarter ended June 30, 2021 (mainly attributable to the SBA PPP portfolio loan sale) and the $4.7 million increase in salaries and benefits, during the quarter ended June 30, 2022 (largely attributable to the acquisition of Texas Citizens on March 1, 2022, and additional staffing, mostly production, over the past year).
On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended June 30, 2022, was $14.6 million or $0.64 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 June 30, 2022, included $708,000 of expenses attributable to acquisition-related expenses, and $270,000 of expenses attributable to storm repairs, compared to $938,000 in occupancy and bank premises expenses attributable to storm damage and $540,000 losses on sales of former premises and equipment within other income for the quarter ended June 30, 2021.
Interest Income
For the quarter ended June 30, 2022, net interest income totaled $49.6 million and net interest margin and net interest spread were 3.98% and 3.79%, respectively, compared to $37.9 million, 3.87% and 3.68% for the quarter ended June 30, 2021. The average yield on the loan portfolio (excluding SBA PPP loans) was 5.10% for the quarter ended June 30, 2022, compared to 5.13% for the quarter ended June 30, 2021. The quarter ended June 30, 2022, included additional loan discount accretion of $1.0 million, while the quarter ended June 30, 2021, included $3.0 million additional interest income related to SBA PPP loans.
Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $2.6 million) were 3.77% and 3.59%, respectively, for the quarter ended June 30, 2022, 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 June 30, 2022, overall cost of funds (which includes noninterest-bearing deposits) decreased by nine basis points, from 0.45% to 0.36%, compared to the quarter ended June 30, 2021. The decrease in cost of funds was primarily attributable to an overall reduction in interest rates on deposit offerings and increase in noninterest-bearing deposits, offset by an increase associated with higher average subordinated debt balances.
Other Income
For the quarter ended June 30, 2022, the decrease in other income of $10.1 million, compared to the quarter ended June 30, 2021, was attributable to the $10.0 million gain on sale, largely related to the SBA PPP loan portfolio sale which occurred during the quarter ended June 30, 2021.
Other Expenses
For the quarter ended June 30, 2022, the increase in other expense of $5.5 million compared to the quarter ended March 31, 2021 was largely attributable to the $4.7 million increase in salaries and benefits mainly associated with the acquisition of Texas Citizens on March 1, 2022, and additional production staffing which occurred over the past year.
Provision for Loan Losses
During the quarter ended June 30, 2022, Business First recorded a provision for loan losses of $2.9 million compared to $2.2 million for the quarter ended June 30, 2021. The reserve for the quarter ended June 30, 2021, was affected by the impact of the COVID-19 pandemic on the qualitative factors at the time, while the reserve for the quarter ended June 30, 2022, was impacted due to new loan growth.
Return on Assets and Equity
Return on average assets and return on average equity, each on an annualized basis, were 1.02% and 12.22%, respectively, for the quarter ended June 30, 2022, from 1.58% and 16.57%, respectively, for the quarter ended June 30, 2021.
About Business First Bancshares, Inc.
Business First Bancshares, Inc., (Nasdaq: BFST) through its banking subsidiary b1BANK, has $5.5 billion in assets, $6.2 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 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 “core” measures include realized and unrealized gains/losses on former bank premises and equipment, investment sales, acquisition-related expenses (including, but not limited to, legal costs, system conversion costs, severance and retention payments, etc.). “Tangible” measures adjust common equity by subtracting goodwill, core deposit intangibles, and customer intangibles, net of accumulated amortization. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of Business First’s core business. These non-GAAP disclosures are not necessarily comparable to non-GAAP measures that may be presented by other companies. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided at the end of the tables below.
Special Note Regarding Forward-Looking Statements
Certain statements contained in this release may not be based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “may,” “might,” “will,” “would,” “could,” or “intend.” We caution you not to place undue reliance on the forward-looking statements contained in this news release, in that actual results could differ materially from those indicated in such forward-looking statements as a result of a variety of factors, including those factors specified in our Annual Report on Form 10-K and other public filings. We undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release.
Additional Information
For additional information about Business First, you may obtain Business First’s reports that are filed with the Securities and Exchange Commission (SEC) free of charge by using the SEC’s EDGAR service on the SEC’s website at www.SEC.gov or by contacting the SEC for further information at 1-800-SEC-0330. Alternatively, these documents can be obtained free of charge from Business First by directing a request to: Business First Bancshares, Inc., 500 Laurel Street, Suite 101, Baton Rouge, Louisiana 70801, Attention: Corporate Secretary.
No Offer or Solicitation
This release does not constitute or form part of any offer to sell, or a solicitation of an offer to purchase, any securities of Business First. There will be no sale of securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
Business First Bancshares, Inc. Selected Financial Information (Unaudited) For the Quarter Ended June 30, March 31, June 30, (Dollars in thousands) 2022 2022 2021 Balance Sheet Ratios Loans (HFI) to Deposits 88.31 % 80.48 % 76.66 % Shareholders' Equity to Assets Ratio 8.05 % 8.52 % 9.97 % Loans Receivable Held for Investment (HFI) Commercial (1) $ 949,631 $ 817,093 $ 660,691 Real Estate: Construction and Land 642,260 581,661 454,055 Farmland 174,723 149,270 77,133 1-4 Family Residential 521,747 485,067 459,037 Multi-Family Residential 97,901 109,773 89,796 Nonfarm Nonresidential 1,605,691 1,481,046 1,002,707 Total Real Estate 3,042,322 2,806,817 2,082,728 Consumer and Other 121,773 124,588 111,467 Total Loans (Held for Investment) $ 4,113,726 $ 3,748,498 $ 2,854,886 Allowance for Loan Losses Balance, Beginning of Period $ 29,245 $ 29,112 $ 25,251 Charge-offs – Quarterly (99 ) (1,668 ) (861 ) Recoveries – Quarterly 226 184 71 Provision for Loan Losses – Quarterly 2,945 1,617 2,241 Balance, End of Period $ 32,317 $ 29,245 $ 26,702 Allowance for Loan Losses to Total Loans (HFI) 0.79 % 0.78 % 0.94 % Net Charge-offs to Average Total Loans 0.00 % 0.04 % 0.03 % Remaining Loan Purchase Discount $ 37,903 $ 40,623 $ 30,900 Nonperforming Assets Nonperforming Loans: Nonaccrual Loans (2) $ 16,777 $ 10,784 $ 10,568 Loans Past Due 90 Days or More (2) 324 26 893 Total Nonperforming Loans 17,101 10,810 11,461 Other Nonperforming Assets: Other Real Estate Owned 990 1,369 5,890 Other Nonperforming Assets 84 84 665 Total Other Nonperforming Assets 1,074 1,453 6,555 Total Nonperforming Assets $ 18,175 $ 12,263 $ 18,016 Nonperforming Loans to Total Loans (HFI) 0.42 % 0.29 % 0.40 % Nonperforming Assets to Total Assets 0.33 % 0.23 % 0.42 % (1) Small Business Administration (SBA) Paycheck Protection Program (PPP) loans accounted for $3.2 million of the commercial portfolio as of June 30, 2022. SBA PPP loans accounted for $6.0 million of the commercial portfolio as of March 31, 2022. SBA PPP loans accounted for $25.7 million of the commercial portfolio as of June 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 Six Months Ended June 30, March 31, June 30, June 30, June 30, (Dollars in thousands, except per share data) 2022 2022 2021 2022 2021 Per Share Data Basic Earnings per Common Share $ 0.61 $ 0.42 $ 0.84 $ 1.03 $ 1.44 Diluted Earnings per Common Share 0.61 0.41 0.84 1.03 1.43 Dividends per Common Share 0.12 0.12 0.12 0.24 0.22 Book Value per Common Share 19.73 20.25 20.78 19.73 20.78 Average Common Shares Outstanding 22,459,603 21,019,716 20,707,313 21,746,793 20,664,857 Average Diluted Shares Outstanding 22,656,174 21,162,482 20,827,786 21,916,641 20,783,135 End of Period Common Shares Outstanding 22,579,451 22,564,607 20,740,759 22,579,451 20,740,759 Annualized Performance Ratios Return on Average Assets 1.02 % 0.71 % 1.58 % 0.87 % 1.37 % Return on Average Equity 12.22 % 7.83 % 16.57 % 10.03 % 14.23 % Net Interest Margin 3.98 % 3.51 % 3.87 % 3.75 % 4.05 % Net Interest Spread 3.79 % 3.35 % 3.68 % 3.58 % 3.87 % Efficiency Ratio (1) 64.32 % 72.67 % 56.03 % 68.08 % 57.45 % Total Quarterly Average Assets $ 5,371,639 $ 4,920,105 $ 4,399,911 $ 5,145,872 $ 4,338,170 Total Quarterly Average Equity 450,431 446,003 420,640 448,216 418,267 Other Expenses Salaries and Employee Benefits $ 21,408 $ 19,703 $ 16,753 $ 41,111 $ 31,679 Occupancy and Bank Premises 2,422 2,052 2,276 4,474 4,087 Depreciation and Amortization 1,734 1,569 1,475 3,303 2,833 Data Processing 1,886 2,116 2,288 4,002 4,111 FDIC Assessment Fees 661 743 436 1,404 945 Legal and Other Professional Fees 735 543 905 1,278 1,646 Advertising and Promotions 703 531 624 1,234 1,101 Utilities and Communications 822 779 636 1,601 1,211 Ad Valorem Shares Tax 812 813 675 1,625 1,375 Directors' Fees 212 202 194 414 382 Other Real Estate Owned Expenses and Write-Downs 35 14 178 49 557 Merger and Conversion-Related Expenses 615 811 94 1,426 104 Other 4,352 3,844 4,371 8,196 7,602 Total Other Expenses $ 36,397 $ 33,720 $ 30,905 $ 70,117 $ 57,633 Other Income Service Charges on Deposit Accounts $ 2,086 $ 1,805 $ 1,683 $ 3,891 $ 3,250 Losses on Sales of Securities (8 ) (31 ) (50 ) (39 ) (55 ) Debit Card and ATM Fee Income 1,657 1,501 1,777 3,158 3,113 Bank-Owned Life Insurance Income 475 369 355 844 673 Gain on Sales of Loans 186 65 10,042 251 10,021 Mortgage Origination Income 161 209 241 370 470 Fees and Brokerage Commission 1,749 1,835 1,416 3,584 1,959 Gain (Loss) on Sales of Other Real Estate Owned 10 8 (575 ) 18 (529 ) Gain (Loss) on Disposal of Other Assets - (717 ) (9 ) (717 ) 108 Pass-Through Income from SBIC Partnerships 52 115 1,602 167 1,655 Other 653 737 683 1,390 1,348 Total Other Income $ 7,021 $ 5,896 $ 17,165 $ 12,917 $ 22,013 (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) 2022 2022 2021 Assets Cash and Due From Banks $ 154,694 $ 282,074 $ 130,769 Federal Funds Sold 10,817 67,822 232,391 Securities Available for Sale, at Fair Values 934,676 961,358 882,802 Loans Held for Sale - 13,559 - Mortgage Loans Held for Sale 170 1,354 1,834 Loans and Lease Receivable 4,113,726 3,748,498 2,854,886 Allowance for Loan Losses (32,317 ) (29,245 ) (26,702 ) Net Loans and Lease Receivable 4,081,409 3,719,253 2,828,184 Premises and Equipment, Net 64,307 63,003 57,576 Accrued Interest Receivable 22,142 20,146 20,841 Other Equity Securities 30,302 23,034 14,043 Other Real Estate Owned 990 1,369 5,890 Cash Value of Life Insurance 88,370 72,896 60,703 Deferred Taxes, Net 29,576 23,040 4,652 Goodwill 88,842 89,911 60,062 Core Deposit and Customer Intangibles 15,093 15,617 13,271 Other Assets 8,995 7,799 10,941 Total Assets $ 5,530,383 $ 5,362,235 $ 4,323,959 Liabilities Deposits Noninterest-Bearing $ 1,698,114 $ 1,544,197 $ 1,175,624 Interest-Bearing 2,960,049 3,113,541 2,548,599 Total Deposits 4,658,163 4,657,738 3,724,223 Securities Sold Under Agreements to Repurchase 18,477 23,345 25,837 Short-Term Borrowings 5,020 20 20 Subordinated Debt 111,055 111,209 81,427 Subordinated Debt - Trust Preferred Securities 5,000 5,000 5,000 Federal Home Loan Bank Borrowings 254,011 79,957 28,023 Accrued Interest Payable 708 895 1,938 Other Liabilities 32,490 27,234 26,485 Total Liabilities 5,084,924 4,905,398 3,892,953 Shareholders' Equity Common Stock 22,579 22,565 20,741 Additional Paid-In Capital 346,382 345,858 299,014 Retained Earnings 139,232 128,168 104,382 Accumulated Other Comprehensive Income (Loss) (62,734 ) (39,754 ) 6,869 Total Shareholders' Equity 445,459 456,837 431,006 Total Liabilities and Shareholders' Equity $ 5,530,383 $ 5,362,235 $ 4,323,959 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) 2022 2022 2021 2022 2021 Interest Income: Interest and Fees on Loans $ 49,639 $ 40,183 $ 39,135 $ 89,822 $ 80,554 Interest and Dividends on Securities 4,143 3,844 3,189 7,987 5,991 Interest on Federal Funds Sold and Due From Banks 232 95 27 327 68 Total Interest Income 54,014 44,122 42,351 98,136 86,613 Interest Expense: Interest on Deposits 2,557 2,263 3,235 4,820 6,478 Interest on Borrowings 1,895 1,384 1,171 3,279 1,889 Total Interest Expense 4,452 3,647 4,406 8,099 8,367 Net Interest Income 49,562 40,475 37,945 90,037 78,246 Provision for Loan Losses: 2,945 1,617 2,241 4,562 5,600 Net Interest Income After Provision for Loan Losses 46,617 38,858 35,704 85,475 72,646 Other Income: Service Charges on Deposit Accounts 2,086 1,805 1,683 3,891 3,250 Gain (Loss) on Sales of Securities (8 ) (31 ) (50 ) (39 ) (55 ) Gain on Sales of Loans 186 65 10,042 251 10,021 Other Income 4,757 4,057 5,490 8,814 8,797 Total Other Income 7,021 5,896 17,165 12,917 22,013 Other Expenses: Salaries and Employee Benefits 21,408 19,703 16,753 41,111 31,679 Occupancy and Equipment Expense 4,914 4,413 4,264 9,327 7,981 Merger and Conversion-Related Expense 615 811 94 1,426 104 Other Expenses 9,460 8,793 9,794 18,253 17,869 Total Other Expenses 36,397 33,720 30,905 70,117 57,633 Income Before Income Taxes: 17,241 11,034 21,964 28,275 37,026 Provision for Income Taxes: 3,484 2,303 4,536 5,787 7,269 Net Income: $ 13,757 $ 8,731 $ 17,428 $ 22,488 $ 29,757 Business First Bancshares, Inc. Consolidated Net Interest Margin (Unaudited) Three Months Ended June 30, 2022 March 31, 2022 June 30, 2021 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) $ 3,890,470 $ 49,628 5.10 % $ 3,382,325 $ 40,174 4.75 % $ 2,814,593 $ 36,116 5.13 % SBA PPP Loans 4,429 11 1.00 % 3,725 9 1.00 % 242,015 3,019 4.99 % Securities 966,960 4,143 1.71 % 1,005,252 3,844 1.53 % 801,268 3,189 1.59 % Interest-Bearing Deposit in Other Banks 122,175 232 0.76 % 221,148 95 0.17 % 62,693 27 0.17 % Total Interest-Earning Assets 4,984,034 54,014 4.33 % 4,612,450 44,122 3.83 % 3,920,569 42,351 4.32 % Allowance for Loan Losses (29,945 ) (29,260 ) (26,032 ) Noninterest-Earning Assets 417,550 336,915 505,374 Total Assets $ 5,371,639 $ 54,014 $ 4,920,105 $ 44,122 $ 4,399,911 $ 42,351 Liabilities and Shareholders' Equity Interest-Bearing Liabilities: Interest-Bearing Deposits $ 2,981,613 $ 2,557 0.34 % $ 2,882,838 $ 2,263 0.31 % $ 2,615,241 $ 3,235 0.49 % Subordinated Debt 111,107 1,300 4.68 % 91,354 1,115 4.88 % 81,427 1,015 4.99 % Subordinated Debt - Trust Preferred Securities 5,000 52 4.16 % 5,000 42 3.36 % 5,000 43 3.44 % Advances from Federal Home Loan Bank (FHLB) 171,224 506 1.18 % 80,375 223 1.11 % 32,887 108 1.31 % Other Borrowings 28,260 37 0.52 % 19,666 4 0.08 % 24,909 5 0.08 % Total Interest-Bearing Liabilities 3,297,204 4,452 0.54 % 3,079,233 3,647 0.47 % 2,759,464 4,406 0.64 % Noninterest-Bearing Liabilities: Noninterest-Bearing Deposits $ 1,596,174 $ 1,370,015 $ 1,191,900 Other Liabilities 27,830 24,854 27,907 Total Noninterest-Bearing Liabilities 1,624,004 1,394,869 1,219,807 Shareholders' Equity 450,431 446,003 420,640 Total Liabilities and Shareholders' Equity $ 5,371,639 $ 4,920,105 $ 4,399,911 Net Interest Spread 3.79 % 3.35 % 3.68 % Net Interest Income $ 49,562 $ 40,475 $ 37,945 Net Interest Margin 3.98 % 3.51 % 3.87 % Overall Cost of Funds 0.36 % ` 0.33 % 0.45 % 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, 2022 June 30, 2021 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) $ 3,636,393 $ 89,802 4.94 % $ 2,729,130 $ 72,654 5.32 % SBA PPP Loans 4,077 20 1.00 % 308,487 7,900 5.12 % Securities 986,107 7,987 1.62 % 746,372 5,991 1.61 % Interest-Bearing Deposit in Other Banks 171,662 327 0.38 % 81,963 68 0.17 % Total Interest-Earning Assets 4,798,239 98,136 4.09 % 3,865,952 86,613 4.48 % Allowance for Loan Losses (29,602) (24,371) Noninterest-Earning Assets 377,235 496,589 Total Assets $ 5,145,872 $ 98,136 $ 4,338,170 $ 86,613 Liabilities and Shareholders' Equity Interest-Bearing Liabilities: Interest-Bearing Deposits $ 2,932,228 $ 4,820 0.33 % $ 2,599,751 $ 6,478 0.50 % Subordinated Debt 101,231 2,415 4.77 % 54,939 1,474 5.37 % Subordinated Debt - Trust Preferred Securities 5,000 94 3.76 % 5,000 85 3.40 % Advances from Federal Home Loan Bank (FHLB) 125,800 729 1.16 % 34,954 219 1.25 % Other Borrowings 23,964 41 0.34 % 28,302 111 0.78 % Total Interest-Bearing Liabilities 3,188,223 8,099 0.51 % 2,722,946 8,367 0.61 % Noninterest-Bearing Liabilities: Noninterest-Bearing Deposits 1,483,095 1,169,425 Other Liabilities 26,338 27,532 Total Noninterest-Bearing Liabilities 1,509,433 1,196,957 Shareholders' Equity 448,216 418,267 Total Liabilities and Shareholders' Equity $ 5,145,872 $ 4,338,170 Net Interest Spread 3.58 % 3.87 % Net Interest Income $ 90,037 $ 78,246 Net Interest Margin 3.75 % 4.05 % Overall Cost of Funds 0.35 % 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 Six Months Ended June 30, March 31, June 30, June 30, June 30, (Dollars in thousands, except per share data) 2022 2022 2021 2022 2021 Interest Income: Interest income $ 54,014 $ 44,122 $ 42,351 $ 98,136 $ 86,613 Core interest income 54,014 44,122 42,351 98,136 86,613 Interest Expense: Interest expense 4,452 3,647 4,406 8,099 8,367 Core interest expense 4,452 3,647 4,406 8,099 8,367 Provision for Loan Losses: (b) Provision for loan losses 2,945 1,617 2,241 4,562 5,600 Core provision expense 2,945 1,617 2,241 4,562 5,600 Other Income: Other income 7,021 5,896 17,165 12,917 22,013 Losses on former bank premises and equipment - 717 540 717 540 Losses on sale of securities 8 31 50 39 55 Core other income 7,029 6,644 17,755 13,673 22,608 Other Expense: Other expense 36,397 33,720 30,905 70,117 57,633 Acquisition-related expenses (2) (708 ) (811 ) (94 ) (1,519 ) (104 ) Occupancy and bank premises - storm repair (270 ) (231 ) (938 ) (501 ) (1,288 ) Core other expense 35,419 32,678 29,873 68,097 56,241 Pre-Tax Income: (a) Pre-tax income 17,241 11,034 21,964 28,275 37,026 Losses on former bank premises and equipment - 717 540 717 540 Losses on sale of securities 8 31 50 39 55 Acquisition-related expenses (2) 708 811 94 1,519 104 Occupancy and bank premises - storm repair 270 231 938 501 1,288 Core pre-tax income 18,227 12,824 23,586 31,051 39,013 Provision for Income Taxes: (1) Provision for income taxes 3,484 2,303 4,536 5,787 7,269 Tax on losses on former bank premises and equipment - 151 113 151 113 Tax on losses on sale of securities 2 7 11 9 12 Tax on acquisition-related expenses (2) 126 48 20 174 22 Tax on occupancy and bank premises - storm repair 57 49 197 106 271 Core provision for income taxes 3,669 2,558 4,877 6,227 7,687 Net Income: Net income 13,757 8,731 17,428 22,488 29,757 Losses on former bank premises and equipment, net of tax - 566 427 566 427 Losses on sale of securities, net of tax 6 24 39 30 43 Acquisition-related expenses (2), net of tax 582 763 74 1,345 82 Occupancy and bank premises - storm repair, net of tax 213 182 741 395 1,018 Core net income $ 14,558 $ 10,266 $ 18,709 $ 24,824 $ 31,327 Pre-tax, pre-provision earnings (a+b) $ 20,186 $ 12,651 $ 24,205 $ 32,837 42,626 Losses on former bank premises and equipment - 717 540 717 540 Losses on sale of securities 8 31 50 39 55 Acquisition-related expenses (2) 708 811 94 1,519 104 Occupancy and bank premises - storm repair 270 231 938 501 1,288 Core pre-tax, pre-provision earnings $ 21,172 $ 14,441 $ 25,827 $ 35,613 $ 44,613 Average Diluted Shares Outstanding 22,656,174 21,162,482 20,827,786 21,916,641 20,783,135 Diluted Earnings Per Share: Diluted earnings per share $ 0.61 $ 0.41 $ 0.84 $ 1.03 $ 1.43 Losses on former bank premises and equipment, net of tax - 0.03 0.02 0.03 0.02 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 0.02 0.04 0.00 0.06 0.00 Occupancy and bank premises -storm repair, net of tax 0.01 0.01 0.04 0.02 0.06 Core diluted earnings per share $ 0.64 $ 0.49 $ 0.90 $ 1.14 $ 1.51 Pre-tax, pre-provision profit diluted earnings per share $ 0.89 $ 0.60 $ 1.16 $ 1.50 $ 2.05 Losses on former bank premises and equipment - 0.03 0.03 0.03 0.03 Losses on sale of securities 0.00 0.00 0.00 0.00 0.00 Acquisition-related expenses (2) 0.03 0.04 0.00 0.07 0.01 Occupancy and bank premises - storm repair 0.01 0.01 0.05 0.02 0.06 Core pre-tax, pre-provision diluted earnings per share $ 0.93 $ 0.68 $ 1.24 $ 1.62 $ 2.15 (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 Six Months Ended June 30, March 31, June 30, June 30, June 30, (Dollars in thousands, except per share data) 2022 2022 2021 2022 2021 Total Quarterly Average Assets $ 5,371,639 $ 4,920,105 $ 4,399,911 $ 5,145,872 $ 4,338,170 Total Quarterly Average Equity $ 450,431 $ 446,003 $ 420,640 $ 448,216 $ 418,267 Net Income: Net income $ 13,757 $ 8,731 $ 17,428 $ 22,488 $ 29,757 Losses on former bank premises and equipment, net of tax - 566 427 566 427 Losses on sale of securities, net of tax 6 24 39 30 43 Acquisition-related expenses, net of tax 582 763 74 1,345 82 Occupancy and bank premises - storm repair, net of tax 213 182 741 395 1,018 Core net income $ 14,558 $ 10,266 $ 18,709 $ 24,824 $ 31,327 Return on average assets 1.02 % 0.71 % 1.58 % 0.87 % 1.37 % Core return on average assets 1.08 % 0.83 % 1.70 % 0.96 % 1.44 % Return on equity 12.22 % 7.83 % 16.57 % 10.03 % 14.23 % Core return on average equity 12.93 % 9.21 % 17.79 % 11.08 % 14.98 % Interest Income: Interest income $ 54,014 $ 44,122 $ 42,351 $ 98,136 $ 86,613 Core interest income 54,014 44,122 42,351 98,136 86,613 Interest Expense: Interest expense 4,452 3,647 4,406 8,099 8,367 Core interest expense 4,452 3,647 4,406 8,099 8,367 Other Income: Other income 7,021 5,896 17,165 12,917 22,013 Losses on former bank premises and equipment - 717 540 717 540 Losses on sale of securities 8 31 50 39 55 Core other income 7,029 6,644 17,755 13,673 22,608 Other Expense: Other expense 36,397 33,720 30,905 70,117 57,633 Acquisition-related expenses (708 ) (811 ) (94 ) (1,519 ) (104 ) Occupancy and bank premises - storm repair (270 ) (231 ) (938 ) (501 ) (1,288 ) Core other expense $ 35,419 $ 32,678 $ 29,873 $ 68,097 $ 56,241 Efficiency Ratio: Other expense (a) $ 36,397 $ 33,720 $ 30,905 $ 70,117 $ 57,633 Core other expense (c) $ 35,419 $ 32,678 $ 29,873 $ 68,097 $ 56,241 Net interest and other income (1) (b) $ 56,591 $ 46,402 $ 55,160 $ 102,993 $ 100,314 Core net interest and other income (1) (d) $ 56,591 $ 47,119 $ 55,700 $ 103,710 $ 100,854 Efficiency ratio (a/b) 64.32 % 72.67 % 56.03 % 68.08 % 57.45 % Core efficiency ratio (c/d) 62.59 % 69.35 % 53.63 % 65.66 % 55.76 % Total Average Interest-Earnings Assets $ 4,984,034 $ 4,612,450 $ 3,920,569 $ 4,798,239 $ 3,865,952 Net Interest Income: Net interest income $ 49,562 $ 40,475 $ 37,945 $ 90,037 $ 78,246 Loan discount accretion (2,588 ) (920 ) (1,617 ) (3,508 ) (4,680 ) Net interest income excluding loan discount accretion $ 46,974 $ 39,555 $ 36,328 $ 86,529 $ 73,566 Net interest margin (2) 3.98 % 3.51 % 3.87 % 3.75 % 4.05 % Net interest margin excluding loan discount accretion (2) 3.77 % 3.43 % 3.71 % 3.61 % 3.81 % Net interest spread 3.79 % 3.35 % 3.68 % 3.58 % 3.87 % Net interest spread excluding loan discount accretion 3.59 % 3.27 % 3.52 % 3.44 % 3.62 % (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) 2022 2022 2021 Total Shareholders' (Common) Equity: Total shareholders' equity $ 445,459 $ 456,837 $ 431,006 Goodwill (88,842 ) (89,911 ) (60,062 ) Core deposit and customer intangible (15,093 ) (15,617 ) (13,271 ) Total tangible common equity $ 341,524 $ 351,309 $ 357,673 Total Assets: Total assets $ 5,530,383 $ 5,362,235 $ 4,323,959 Goodwill (88,842 ) (89,911 ) (60,062 ) Core deposit and customer intangible (15,093 ) (15,617 ) (13,271 ) Total tangible assets $ 5,426,448 $ 5,256,707 $ 4,250,626 Common shares outstanding 22,579,451 22,564,607 20,740,759 Book value per common share $ 19.73 $ 20.25 $ 20.78 Tangible book value per common share $ 15.13 $ 15.57 $ 17.24 Common equity to total assets 8.05 % 8.52 % 9.97 % Tangible common equity to tangible assets 6.29 % 6.68 % 8.41 % Misty Albrecht
b1BANK
225.286.7879
Misty.Albrecht@b1BANK.com