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Business First Bancshares, Inc., Announces Financial Results For Q2 2021

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.com


Business 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

%



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