Business First Bancshares, Inc., Announces Financial Results for Q1 2021

Thursday, 22. April 2021 22:01

BATON ROUGE, La., April 22, 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 March 31, 2021, including net income of $12.3 million, or $0.59 per diluted share, a decrease of $1.5 million and $0.08, respectively, from prior quarter ended December 31, 2020. On a non-GAAP basis, core net income for the quarter ended March 31, 2021, which excludes certain income and expenses, was $12.6 million, or $0.61 per diluted share, a decrease of $1.5 million and $0.07, respectively, from prior quarter ended December 31, 2020.

“2021 has gotten off to a fast start for b1BANK,” said Jude Melville, president and CEO. “Growth in our earnings power reflects successful integration of the significant merger we conducted in 2020, the additions to our board speak to our credibility as active participants in our community, and continued strong asset quality and stable NIM demonstrate our focus on the health of our portfolio even during a time of significant expansion.  We’re especially excited about our acquisition of SSW and the capability that partnership gives us to more thoroughly serve our clients in the coming years.” 

On April 22, 2021, Business First’s board of directors declared a quarterly dividend based upon financial performance for the first quarter in the amount of $0.12 per share, an increase of $0.02 from the prior quarter, to the common shareholders of record as of May 15, 2021. The dividend will be paid on May 31, 2021, or as soon thereafter as practicable.

Quarterly Highlights

  • Smith Shellnut Wilson, LLC (SSW) Acquisition. On March 22, 2021, Business First, through b1BANK, entered into a definitive agreement to acquire SSW, a registered investment advisor with approximately $3.5 billion in assets under management, specializing in managing investment portfolios for corporations, foundations and individuals. The acquisition of SSW was subsequently completed on April 1, 2021.
  • Subordinated Debt Issuance. On March 26, 2021, Business First issued $52.5 million in aggregate principal amount of its 4.250% fixed-to-floating subordinated notes due 2031. The subordinated notes were issued to certain qualified institutional buyers and institutional accredited investors in a private placement transaction that was exempt from registration under the Securities Act of 1933, as amended.
  • Corporate Actions. Business First and b1BANK appointed John Ducrest, former Commissioner of the Louisiana Office of Financial Institutions (OFI) and immediate former Commissioner of Securities for the state of Louisiana, and Drew Brees, former quarterback of the New Orleans Saints, to their respective boards of directors during the quarter ended March 31, 2021.  
  • Small Business Administration (SBA) Paycheck Protection Program (PPP), Round 2. Business First has funded approximately 1,500 loans with an aggregate outstanding principal balance of $188.5 million under round 2 of the SBA PPP. Additionally, Business First will recognize approximately $8.6 million in fees associated with origination of these loans over their lives.
  • Net Interest Margin and Spread. Net interest margin decreased from 4.26% for the quarter ended December 31, 2020, to 4.23% for the quarter ended March 31, 2021, while net interest spread increased from 4.03% to 4.06% for the quarters ended December 31, 2020, and March 31, 2021, respectively. Excluding loan discount accretion, non-GAAP net interest margin and spread were 3.91% and 3.73%, respectively, for the quarter ended March 31, 2021, compared to 3.99% and 3.75% for the quarter ended December 31, 2020.

Financial Condition

March 31, 2021, Compared to December 31, 2020

Loans

Loans held for investment increased $50.6 million, or 1.69 % (6.77 % annualized), for the quarter ended March 31, 2021. The increase was largely attributable to a net increase in SBA PPP loans (round 2) within the commercial portfolio of $71.9 million. Excluding the net increase in SBA PPP loans, total loans held for investment declined for the quarter ended March 31, 2021, by (0.74) %, or (2.96) % annualized. As of March 31, 2021, SBA PPP loans with a principal balance of $385.9 million remain outstanding.   

Business First has not identified any unusual customer usage of unfunded commitments since the beginning of the COVID-19 pandemic in March 2020.

Credit Quality

Nonperforming loans as a percentage of total loans held for investment increased from 0.35% as of December 31, 2020, to 0.44% as of March 31, 2021. Nonperforming assets as a percentage of total assets increased from 0.48% as of December 31, 2020, to 0.52% as of March 31, 2021. The increase in both metrics was largely attributable to a single, energy-related loan with an outstanding balance of $1.9 million migrating to nonaccrual during the quarter ended March 31, 2021.  

Cash and Securities Available for Sale

Cash, including federal funds sold, and securities available for sale increased by $137.6 million and $80.6 million, respectively, from the quarter ended December 31, 2020. The increases were largely attributable to the subordinated debt issuance on March 26, 2021, (which increased cash by approximately $41.4 million after repaying existing Business First outstanding debt), SBA PPP forgiveness reimbursements ($118.1 million), and increased municipal deposits ($85.4 million) which occurred during the quarter ended March 31, 2021.

Subordinated Debt

On March 26, 2021, Business First successfully completed a private placement of $52.5 million in aggregate principal amount of its 4.250% fixed-to-floating subordinated notes due 2031, callable by Business First beginning March 2026. The notes qualify for Tier 2 capital treatment for Business First for regulatory capital purposes.

Total Shareholders’ Equity

Book value per common share was $20.03 at March 31, 2021, compared to $19.88 at December 31, 2020. On a non-GAAP basis, tangible book value per share was $16.99 at March 31, 2021, compared to $16.80 at December 31, 2020.   The increase was largely attributable to net income for the quarter less dividends distributed based on Q4 2020 performance.

March 31, 2021, Compared to March 31, 2020

Loans

Total loans held for investment increased by $1.3 billion compared to March 31, 2020, or 71.73%, due primarily to the acquisition of Pedestal and origination of SBA PPP loans.

Credit Quality

Nonperforming loans as a percentage of total loans held for investment decreased from 0.57% as of March 31, 2020, to 0.44% as of March 31, 2021. Nonperforming assets as a percentage of total assets decreased from 0.59% as of March 31, 2020, to 0.52% as of March 31, 2021. The decreases were largely attributable to an increase in overall total loans held for investment and total assets from the acquisition of Pedestal and SBA PPP activity.

Total Shareholders’ Equity

Book value per common share was $20.03 at March 31, 2021, compared to $21.58 at March 31, 2020. On a non-GAAP basis, tangible book value per share was $16.99 at March 31, 2021, compared to $17.38 at March 31, 2020. The decreases were attributable to the initial book value dilution caused by the acquisition of Pedestal during the quarter ended June 30, 2020.

Results of Operations

First Quarter 2021 Compared to Fourth Quarter 2020

Net Income and Diluted Earnings Per Share

For the quarter ended March 31, 2021, net income was $12.3 million, or $0.59 per diluted share, compared to net income of $13.8 million, or $0.67 per diluted share, for the quarter ended December 31, 2020. The decreases, $1.5 million and $0.08, respectively, were largely attributable to a reduction in gain on sale of loans, primarily attributable to the $4.4 million gain recognized from sales of loans originated under the Main Street Lending Program in the quarter ended December 31, 2020, offset by decreases in other expense due to extinguishment of Federal Home Loan Bank (FHLB) borrowings, of $2.4 million, and $842,000 in interest expense.

On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended March 31, 2021, was $12.6 million, or $0.61 per diluted share, compared to core net income of $14.1 million, or $0.68 per diluted share, for the quarter ended December 31, 2020. Notable noncore events impacting earnings for the quarter ended March 31, 2021, included the incurrence of $350,000 in occupancy and bank premises expenses attributable to hurricane damage, compared to the incurrence of $568,000 in acquisition-related expenses and $158,000 in gains attributed to former bank premises and equipment in other income for the quarter ended December 31, 2020.

Interest Income

For the quarter ended March 31, 2021, net interest income totaled $40.3 million and net interest margin and net interest spread were 4.23% and 4.06%, respectively, compared to $39.6 million, 4.26% and 4.03% for the quarter ended December 31, 2020. The average yield on the loan portfolio (excluding SBA PPP loans) was 5.53% for the quarter ended March 31, 2021, compared to 5.59% for the quarter ended December 31, 2020. The average yield on total interest-earning assets was 4.65% for the quarter ended March 31, 2021, compared to 4.78% for the quarter ended December 31, 2020. The reduction in interest income was largely attributable to less days and lower yields, $1.0 million less interest income attributable to non-SBA PPP loans, offset by additional accelerated recognition of SBA PPP net loan origination fees due to forgiveness, $0.7 million, for the quarter ended March 31, 2021.

Net interest margin and net interest spread were positively impacted for the quarter ended March 31, 2021, by an additional $496,000 in loan discount accretion, 5 and 6 basis points, respectively, and an additional $777,000 in SBA PPP origination fees, 8 and 9 basis points, respectively, and a reduction in the overall cost of funds (which includes noninterest-bearing deposits).

The average loan yield (excluding SBA PPP loans) was impacted by the origination of loans at lower rates than payoffs during the quarter.

Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $3.1 million) were 3.91% and 3.73%, respectively, for the quarter ended March 31, 2021, compared to 3.99% and 3.75% (excluding loan discount accretion of $2.6 million) for the quarter ended December 31, 2020.   

Interest Expense

For the quarter ended March 31, 2021, overall cost of funds (which includes noninterest-bearing deposits) decreased by 12 basis points, from 0.53% to 0.41%, compared to the quarter ended December 31, 2020. The decrease in cost of funds was largely attributable to the continuous repricing of maturing certificates of deposit, as well as the repricing of selected non-maturity deposits, and the impact of Business First’s extinguishment of certain FHLB borrowings in December 2020.

Other Income

For the quarter ended December 31, 2020, other income was impacted by a $4.4 million increase in gain on sale of loans primarily associated with the Main Street Lending Program, which accounted for the majority of the $4.5 million decrease in other income during the quarter ended March 31, 2021.

Other Expenses

For the quarter ended December 31, 2020, other expenses were impacted by a loss on early extinguishment of FHLB borrowings, resulting in a net loss of $2.4 million, which accounted for the majority of the $2.6 million decrease in other expense during the quarter ended March 31, 2021.

Provision for Loan Losses

During the quarter ended March 31, 2021, Business First recorded a provision for loan losses of $3.4 million, compared to $2.1 million for the quarter ended December 31, 2020. The increase for the quarter ended March 31, 2021, was driven primarily by the additional reserves ($1. 4 million) required on a $1.9 million energy-related loan which was transferred to nonaccrual during the quarter, as well as additional reserves necessary on acquired loans.

Return on Assets and Equity

Return on average assets and equity, each on an annualized basis, were 1.15% and 11.86%, respectively, for the quarter ended March 31, 2021, compared to 1.37% and 13.86%, respectively, for the quarter ended December 31, 2020. Both returns were negatively impacted by lower net income for the quarter ended March 31, 2021.

First Quarter 2021 Compared to First Quarter 2020

Net Income and Diluted Earnings Per Share

For the quarter ended March 31, 2021, net income was $12.3 million, or $0.59 per diluted share, compared to net income of $4.5 million, or $0.34 per diluted share, for the quarter ended March 31, 2020. The increases in net income and diluted earnings per share were largely attributable to the increases in net interest income and other income related to the acquisition of Pedestal on May 1, 2020, as well as the SBA PPP loans and lower costs of funds, offset by increases in the provision for loan losses and additional expenses associated with the acquisition of Pedestal.

On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended March 31, 2021, was $12.6 million, or $0.61 per diluted share, compared to core net income of $5.0 million, or $0.37 per diluted share, for the quarter ended March 31, 2020. Notable noncore events impacting earnings for the quarter ended March 31, 2021, included the incurrence of $350,000 in occupancy and bank premises expenses attributable to hurricane damage, compared to the incurrence of $126,000 in gains associated with the disposal of former bank premises and equipment in other income and $1.2 million in acquisition-related expenses during the quarter ended March 31, 2020.

Interest Income

For the quarter ended March 31, 2021, net interest income totaled $40.3 million and net interest margin and net interest spread were 4.23% and 4.06%, respectively, compared to compared to $20.2 million, 3.93% and 3.55% for the quarter ended March 31, 2020. The average yield on the loan portfolio (excluding SBA PPP loans) was 5.53% for the quarter ended March 31, 2021, compared to 5.55% for the quarter ended March 31, 2020. The average yield on the loan portfolio (excluding SBA PPP loans) was positively impacted for the quarter ended March 31, 2021, by an additional $2.8 million in loan discount accretion, which accounted for 42 basis points. The increase in interest income was largely attributable to higher average balances due to the Pedestal acquisition, origination of SBA PPP loans, and larger loan purchase discount accretion.

Average yield on total interest-earning assets, net interest margin, and net interest spread were impacted for the quarter ended March 31, 2021, by the federal funds rate cuts of 150 basis points, which occurred late in the first quarter of 2020, as well as the subsequent impacts of the COVID-19 pandemic on the yield curve.

Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $3.1 million) were 3.91% and 3.73%, respectively, for the quarter ended March 31, 2021, compared to 3.88% and 3.49% (excluding loan discount accretion of $290,000) for the quarter ended March 31, 2020.

Interest Expense

For the quarter ended March 31, 2021, overall cost of funds (which includes noninterest-bearing deposits) decreased by 79 basis points, from 1.20% to 0.41%, compared to the quarter ended March 31, 2020. The decrease in cost of funds was partially attributable to the accretion of deposit and FHLB premiums associated with the Pedestal acquisition, $715,000 or 8 basis points, and the strategic extinguishment of FHLB advances which occurred in the quarter ended December 31, 2020, but primarily attributable to an overall reduction in interest rates on deposit offerings and the lower-yielding deposit portfolio acquired from Pedestal.

Other Income

For the quarter ended March 31, 2021, the increase in other income was largely attributable to the acquisition of Pedestal during the quarter ended June 30, 2020, compared to the quarter ended March 31, 2020.

Other Expenses

For the quarter ended March 31, 2021, the increase in other expense was largely attributable to the acquisition of Pedestal during the quarter ended June 30, 2020, compared to the quarter ended March 31, 2020.

Provision for Loan Losses

During the quarter ended March 31, 2021, Business First recorded a provision for loan losses of $3.4 million compared to $1.4 million for the quarter ended March 31, 2020. The increase for the quarter ended March 31, 2021, was impacted by the additional reserves ($1.4 million) required on a $1.9 million energy-related loan which was transferred to nonaccrual during the quarter, as well as additional reserves necessary on acquired loans.

Return on Assets and Equity

Return on average assets and return on average equity, each on an annualized basis, were 1.15% and 11.86%, respectively, for the quarter ended March 31, 2021, from 0.80% and 6.31%, respectively, for the quarter ended March 31, 2020. Both returns were positively impacted by higher net income for the quarter ended March 31, 2021.

About Business First Bancshares, Inc.

Business First Bancshares, Inc., through its banking subsidiary b1BANK operates 43 banking centers 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”) intended to supplement, not substitute for, comparable GAAP measures. These 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.). 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.

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 the Company. 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)
    
 March 31,December 31,March 31,
(Dollars in thousands)202120202020
    
Balance Sheet Ratios      
       
Loans (HFI) to Deposits78.83%82.71%98.26%
Shareholders' Equity to Assets Ratio9.38%9.85%12.33%
       
Loans Receivable Held for Investment      
       
Commercial (1)$962,099 $886,325 $431,992 
Real Estate:      
Construction and Land                  418,234              403,065              260,836 
Farmland                    52,861                55,883                53,900 
1-4 Family Residential                  460,907              468,650              295,876 
Multi-Family Residential                    77,390                95,707                32,859 
Nonfarm Nonresidential                  966,416              971,603              623,114 
Total Real Estate               1,975,808           1,994,908           1,266,585 
Consumer (1)                  104,071              110,122                72,803 
Total Loans (Held for Investment)$3,041,978 $2,991,355 $1,771,380 
       
Allowance for Loan Losses      
       
Balance, Beginning of Period$22,024 $20,340 $12,124 
Charge-offs – Quarterly                        (309)                  (715)                  (194)
Recoveries – Quarterly                         177                     265                       22 
Provision for Loan Losses – Quarterly                      3,359                  2,134                  1,367 
Balance, End of Period$25,251 $22,024 $13,319 
       
Allowance for Loan Losses to Total Loans (HFI)0.83%0.74%0.75%
Net Charge-offs (Recoveries) to Average Total Loans0.00%0.01%0.01%
       
Remaining Loan Purchase Discount $32,517 $35,580 $3,246 
       
Nonperforming Assets      
       
Nonperforming Loans:      
Nonaccrual Loans (2)$11,956 $9,063 $9,301 
Loans Past Due 90 Days or More (2)                      1,479                  1,523                     834 
Total Nonperforming Loans                    13,435                10,586                10,135 
Other Nonperforming Assets:      
Other Real Estate Owned                      8,851                  9,051                  3,281 
Other Nonperforming Assets:                         623                     402                       11 
Total Other Nonperforming Assets                      9,474                  9,453                  3,292 
Total Nonperforming Assets$22,909 $20,039 $13,427 
       
Nonperforming Loans to Total Loans (HFI)0.44%0.35%0.57%
Nonperforming Assets to Total Assets0.52%0.48%0.59%
    
(1) Small Business Administration (SBA) Paycheck Protection Program (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 $313.9 million and $1.6 million of the Commercial and Consumer portfolios, respectively, as of December 31, 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
 March 31,December 31,March 31,
(Dollars in thousands, except per share data)202120202020
       
Per Share Data      
       
Basic Earnings per Common Share$                     0.60 $                   0.67 $                      0.34 
Diluted Earnings per Common Share                       0.59                      0.67 $                      0.34 
Dividends per Common Share                       0.10                      0.10                         0.10 
Book Value per Common Share                     20.03                    19.88                       21.58 
       
       
Average Common Shares Outstanding            20,621,930           20,590,239              13,313,154 
Average Diluted Shares Outstanding            20,738,013           20,726,648              13,367,276 
End of Period Common Shares Outstanding            20,804,753           20,621,437              13,067,987 
       
       
Annualized Performance Ratios      
       
Return on Average Assets1.15%1.37%0.80%
Return on Average Equity11.86%13.86%6.31%
Net Interest Margin4.23%4.26%3.93%
Net Interest Spread4.06%4.03%3.55%
Efficiency Ratio (1)59.40%60.27%72.39%
       
Total Quarterly/Year-to-Date Average Assets$            4,276,430 $          4,029,660 $             2,244,584 
Total Quarterly/Year-to-Date Average Equity                 415,896                399,332                   285,338 
       
Other Expenses      
       
Salaries and Employee Benefits$                 14,926 $               14,908 $                    9,435 
Occupancy and Bank Premises                     1,811                    1,525                       1,060 
Depreciation and Amortization                     1,593                    1,338                          601 
Data Processing                     1,823                    1,967                          652 
FDIC Assessment Fees                        509                       595                          147 
Legal and Other Professional Fees                        741                       626                          394 
Advertising and Promotions                        477                       645                          306 
Utilities and Communications                        575                       617                          317 
Ad Valorem Shares Tax                        700                       850                          375 
Directors' Fees                        188                       173                            74 
Other Real Estate Owned Expenses and Write-Downs                        379                       132                          253 
Merger and Conversion-Related Expenses                          10                       548                       1,148 
Other                     3,231                    5,678                       1,881 
Total Other Expenses$                 26,963 $               29,602 $                  16,643 
       
Other Income      
       
Service Charges on Deposit Accounts$                   1,567 $                 1,672 $                       931 
Gain (Loss) on Sales of Securities                          (5)                        15                            25 
Debit card and ATM Fee Income                     1,336                    1,555                          407 
Bank-Owned Life Insurance Income                        318                       251                          197 
Gain (Loss) on Sales of Loans                        (21)                   4,413                          177 
Mortgage Origination Income                        229                       208                          115 
Brokerage Commission                        543                       433                            20 
Correspondent Bank Income                        143                         49                          109 
Participation Fee Income                        247                       114                            68 
Gain on Sales of Other Real Estate Owned                          46                       199                          151 
Gain on Disposal of Other Assets                        117                         51                            14 
Pass-through Income from SBIC Partnerships                          53                       170                          380 
Other                        510                       417                          210 
 Total Other Income$                   5,083 $                 9,547 $                    2,804 
    
(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)
    
 March 31,December 31,March 31,
(Dollars in thousands)202120202020
       
Assets      
       
Cash and Due From Banks$            355,257 $            149,131 $              80,109 
Federal Funds Sold              105,595               174,152                 29,135 
Securities Available for Sale, at Fair Values              721,224               640,605               275,115 
Mortgage Loans Held for Sale                  2,298                      969                      868 
Loans and Lease Receivable           3,041,978            2,991,355            1,771,380 
Allowance for Loan Losses              (25,251)              (22,024)              (13,319)
Net Loans and Lease Receivable           3,016,727            2,969,331            1,758,061 
Premises and Equipment, Net                57,931                 58,593                 29,656 
Accrued Interest Receivable                25,910                 23,895                   7,724 
Other Equity Securities                12,584                 12,693                 11,721 
Other Real Estate Owned                  8,851                   9,051                   3,281 
Cash Value of Life Insurance                60,348                 45,030                 32,765 
Deferred Taxes, Net                  5,536                   5,858                   1,800 
Goodwill                53,753                 53,862                 48,495 
Core Deposit Intangible                   9,406                   9,734                   6,471 
Other Assets                  8,166                   7,456                   2,461 
       
Total Assets$         4,443,586 $         4,160,360 $         2,287,662 
       
       
Liabilities      
       
Deposits      
Noninterest-Bearing$         1,186,625 $         1,164,139 $            417,534 
Interest-Bearing           2,672,109            2,452,540            1,385,274 
Total Deposits           3,858,734            3,616,679            1,802,808 
       
Securities Sold Under Agreements to Repurchase                21,419                 21,825                 14,728 
Short-Term Borrowings                       20                   5,020                   5,000 
Long-Term Borrowings                         -                   6,000                           - 
Subordinated Debt                77,500                 25,000                 25,000 
Subordinated Debt - Trust Preferred Securities                  5,000                   5,000                           - 
Federal Home Loan Bank Borrowings                33,073                 43,145               138,000 
Accrued Interest Payable                  1,941                   2,499                   1,573 
Other Liabilities                29,198                 25,229                 18,523 
       
Total Liabilities           4,026,885            3,750,397            2,005,632 
       
Shareholders' Equity      
       
Common Stock                20,805                 20,621                 13,068 
Additional Paid-In Capital              300,282               299,540               206,966 
Retained Earnings                89,441                 79,174                 59,859 
Accumulated Other Comprehensive Income                  6,173                 10,628                   2,137 
       
Total Shareholders' Equity              416,701               409,963               282,030 
       
Total Liabilities and Shareholders' Equity$         4,443,586 $         4,160,360 $         2,287,662 


Business First Bancshares, Inc.
Consolidated Statements of Income
(Unaudited)
    
  Three Months Ended 
 March 31, December 31,March 31,
(Dollars in thousands)2021 20202020
     
Interest Income:    
Interest and Fees on Loans$              41,419 $            41,762$            24,143
Interest and Dividends on Securities                  2,802                 2,572                1,731
Interest on Federal Funds Sold and Due From Banks                       41                      53                   142
Total Interest Income                44,262               44,387              26,016
     
Interest Expense:    
Interest on Deposits                  3,243                 3,736                4,686
Interest on Borrowings                     718                 1,067                1,119
Total Interest Expense                  3,961                 4,803                5,805
     
Net Interest Income                40,301               39,584              20,211
     
Provision for Loan Losses:                  3,359                 2,134                1,367
     
Net Interest Income After Provision for Loan Losses                36,942               37,450              18,844
     
Other Income:    
Service Charges on Deposit Accounts                  1,567                 1,672                   931
Gain (Loss) on Sales of Securities                        (5)                     15                     25
Gain (Loss) on Sales of Loans                      (21)                4,413                   177
Other Income                  3,542                 3,447                1,671
Total Other Income                  5,083                 9,547                2,804
     
Other Expenses:    
Salaries and Employee Benefits                14,926               14,908                9,435
Occupancy and Equipment Expense                  3,717                 3,373                1,891
Merger and Conversion-Related Expense                       10                    548                1,148
Other Expenses                  8,310               10,773                4,169
Total Other Expenses                26,963               29,602              16,643
     
Income Before Income Taxes:                15,062               17,395                5,005
     
Provision for Income Taxes:                  2,733                 3,561                   506
     
Net Income:$              12,329 $            13,834$              4,499


Business First Bancshares, Inc.
Consolidated Net Interest Margin
(Unaudited)
 
 Three Months Ended
 March 31, 2021 December 31, 2020 March 31, 2020
 Average    Average    Average   
 OutstandingInterest Earned /Average OutstandingInterest Earned /Average OutstandingInterest Earned /Average
(Dollars in thousands)BalanceInterest PaidYield / Rate BalanceInterest PaidYield / Rate BalanceInterest PaidYield / Rate
                  
Assets                 
                  
Interest-Earning Assets:                 
Total Loans (Excluding SBA PPP)$           2,643,668 $                36,5385.53% $           2,685,093 $                37,5095.59% $           1,740,189 $                24,1435.55%
SBA PPP Loans                374,958                     4,8815.21%                 365,058 $                  4,2534.66%                             -                             -0.00%
Securities Available for Sale                691,476                     2,8021.62%                 603,192                     2,5721.71%                 286,660                     1,7312.42%
Interest-Bearing Deposit in Other Banks                101,233                          410.16%                   61,485                          530.34%                   28,754                        1421.98%
Total Interest-Earning Assets             3,811,335                   44,2624.65%              3,714,828                   44,3874.78%              2,055,603                   26,0165.06%
Allowance for Loan Losses                (22,709)                    (21,020)                    (12,203)   
Noninterest-Earning Assets                487,804                     335,852                     201,184    
Total Assets$           4,276,430 $                44,262   $           4,029,660 $                44,387   $           2,244,584 $                26,016  
                  
                  
Liabilities and Shareholders' Equity                 
                  
Interest-Bearing Liabilities:                 
Interest-Bearing Deposits$           2,584,263 $                  3,2430.50% $           2,313,511 $                  3,7360.65% $           1,342,213 $                  4,6861.40%
Subordinated Debt                  28,450                        4596.45%                   25,000                        4226.75%                   25,000                        4226.75%
Subordinated Debt - Trust Preferred Securities                    5,000                          423.36%                     5,000                          423.36%                             -                             -0.00%
Advances from Federal Home Loan Bank (FHLB)                  37,022                        1111.20%                 105,640                        4071.54%                   98,323                        4972.02%
Paycheck Protection Program Liquidity Facility (PPPLF)                            -                             -0.00%                   79,450                          700.35%                             -                             -0.00%
Other Borrowings                  31,696                        1061.34%                   37,605                        1261.34%                   67,125                        2001.19%
Total Interest-Bearing Liabilities             2,686,431                     3,9610.59%              2,566,206                     4,8030.75%              1,532,661                     5,8051.52%
                  
Noninterest-Bearing Liabilities:                 
Noninterest-Bearing Deposits$           1,146,950     $           1,033,593     $              406,035    
Other Liabilities                  27,153                       30,529                       20,550    
Total Noninterest-Bearing Liabilities             1,174,103                  1,064,122                     426,585    
Shareholders' Equity:                415,896                     399,332                     285,338    
Total Liabilities and Shareholders' Equity$           4,276,430     $           4,029,660     $           2,244,584    
                  
Net Interest Spread   4.06%    4.03%    3.55%
Net Interest Income  $                40,301     $                39,584     $                20,211  
Net Interest Margin   4.23%    4.26%    3.93%
                  
Overall Cost of Funds   0.41%    0.53%    1.20%
                  
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
 March 31,December 31,March 31,
(Dollars in thousands, except per share data)202120202020
       
Interest Income:      
Interest income$44,262 $44,387 $26,016 
Core interest income44,262 44,387 26,016 
Interest Expense:      
Interest expense3,961 4,803 5,805 
Core interest expense3,961 4,803 5,805 
Provision for Loan Losses: (b)      
Provision for loan losses3,359 2,134 1,367 
Core provision expense3,359 2,134 1,367 
Other Income:      
Other income5,083 9,547 2,804 
(Gains) 1osses on former bank premises and equipment - (158)(126)
(Gains) 1osses on sale of securities5 (15)(25)
Core other income5,088 9,374 2,653 
Other Expense:      
Other expense26,963 29,602 16,643 
Acquisition-related expenses (2)(10)(568)(1,212)
Stock option exercises - excess taxes (founder's grants)- - (71)
Occupancy and bank premises - hurricane repair(350)- - 
Core other expense26,603 29,034 15,360 
Pre-Tax  Income: (a)      
Pre-tax income15,062 17,395 5,005 
(Gains) 1osses on former bank premises and equipment - (158)(126)
(Gains) 1osses on sale of securities5 (15)(25)
Acquisition-related expenses (2)10 568 1,212 
Stock option exercises - excess taxes (founder's grants)- - 71 
Occupancy and bank premises - hurricane repair350 - - 
Core pre-tax income15,427 17,790 6,137 
Provision for Income Taxes: (1)      
Provision for income taxes2,733 3,561 506 
Tax on (gains) on former bank premises and equipment - (33)(26)
Tax on (gains) on sale of securities1 (3)(5)
Tax on acquisition-related expenses (2)2 120 91 
Tax on stock option exercises (founder's grants)- - 602 
Tax on occupancy and bank premises - hurricane repair74 - - 
Core provision for income taxes2,810 3,645 1,168 
Net Income:      
Net income12,329 13,834 4,499 
(Gains) losses on former bank premises and equipment , net of tax- (125)(100)
Losses (Gains) on sale of securities, net of tax4 (12)(20)
Acquisition-related expenses (2), net of tax8 448 1,121 
Stock option exercises, net of tax (founder's grants)- - (531)
Occupancy and bank premises - hurricane repair, net of tax277 - - 
Core net income$12,618 $14,145 $4,969 
       
Pre-tax, pre-provision earnings (a+b)$18,421 $19,529 $6,372 
(Gains) losses on former bank premises and equipment - (158)(126)
(Gains) losses on sale of securities5 (15)(25)
Acquisition-related expenses (2)10 568 1,212 
Stock option exercises (founder's grants)- - 71 
Occupancy and bank premises - hurricane repair350 - - 
Core pre-tax, pre-provision earnings$18,786 $19,924 $7,504 
       
Average Diluted Shares Outstanding20,738,013 20,726,648 13,367,276 
       
Diluted Earnings Per Share:      
Diluted earnings per share$0.59 $0.67 $0.34 
(Gains) losses on former bank premises and equipment , net of tax- (0.01)(0.01)
(Gains) losses on sale of securities, net of tax0.00 (0.00)(0.00)
Acquisition-related expenses (2), net of tax0.00 0.02 0.08 
Stock option exercises (founder's grants)- - (0.04)
Occupancy and bank premises - hurricane repair, net of tax0.02 - - 
Core diluted earnings per share$0.61 $0.68 $0.37 
       
Pre-tax, pre-provision profit diluted earnings per share$0.89 $0.94 $0.48 
(Gains) losses on former bank premises and equipment - (0.01)(0.01)
(Gains) losses on sale of securities0.00 (0.00)(0.00)
Acquisition-related expenses (2)0.00 0.03 0.09 
Stock option exercises (founder's grants)- - 0.01 
Occupancy and bank premises - hurricane repair0.02 - - 
Core pre-tax, pre-provision diluted earnings per share$0.91 $0.96 $0.56 
    
(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
 March 31,December 31,March 31,
(Dollars in thousands, except per share data)202120202020
       
       
Total Quarterly/Year-to-Date Average Assets$            4,276,430 $           4,029,660 $          2,244,584 
Total Quarterly/Year-to-Date Average Equity$               415,896 $              399,332 $             285,338 
       
Net Income:      
Net income$                 12,329 $                13,834 $                 4,499 
(Gains) losses on former bank premises and equipment , net of tax                             -                       (125)                    (100)
(Gains) losses on sale of securities, net of tax                            4                         (12)                      (20)
Acquisition-related expenses (2), net of tax                            8                        448                    1,121 
Stock option exercises, net of tax (founder's grants)                             -                             -                     (531)
Occupancy and bank premises - hurricane repair, net of tax                        277                             -                           - 
Core net income$                 12,618 $                14,145 $                 4,969 
       
Return on average assets1.15%1.37%0.80%
Core return on average assets1.18%1.40%0.89%
Return on equity 11.86%13.86%6.31%
Core return on average equity12.14%14.17%6.97%
       
Interest Income:      
Interest income$                 44,262 $                44,387 $               26,016 
Core interest income                   44,262                   44,387                  26,016 
Interest Expense:      
Interest expense                     3,961                     4,803                    5,805 
Core interest expense                     3,961                     4,803                    5,805 
Other Income:      
Other income                     5,083                     9,547                    2,804 
(Gains) losses on former bank premises and equipment                              -                       (158)                    (126)
(Gains) losses on sale of securities                            5                         (15)                      (25)
Core other income                     5,088                     9,374                    2,653 
Other Expense:      
Other expense                   26,963                   29,602                  16,643 
Acquisition-related expenses                         (10)                      (568)                 (1,212)
Stock option exercises - excess taxes (founder's grants)                             -                             -                       (71)
Occupancy and bank premises - hurricane repair                       (350)                            -                           - 
Core other expense$                 26,603 $                29,034 $               15,360 
       
Efficiency Ratio:      
Other expense (a)$                 26,963 $                29,602 $               16,643 
Core other expense (c)$                 26,603 $                29,034 $               15,360 
Net interest and other income (1) (b)$                 45,389 $                49,116 $               22,990 
Core net interest and other income (1) (d)$                 45,389 $                48,958 $               22,864 
Efficiency ratio (a/b)59.40%60.27%72.39%
Core efficiency ratio (c/d)58.61%59.30%67.18%
       
Total Average Interest-Earnings Assets$            3,811,335 $           3,714,828 $          2,055,603 
       
Net Interest Income:       
Net interest income$                 40,301 $                39,584 $               20,211 
Loan discount accretion                    (3,063)                   (2,567)                    (290)
Net interest income excluding loan discount accretion$                 37,238 $                37,017 $               19,921 
       
Net interest margin (2)4.23%4.26%3.93%
Net interest margin excluding loan discount accretion (2)3.91%3.99%3.88%
Net interest spread4.06%4.03%3.55%
Net interest spread excluding loan discount accretion3.73%3.75%3.49%
    
(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)
   
 March 31,December 31,March 31,
(Dollars in thousands, except per share data)202120202020
       
Total Shareholders' (Common) Equity:      
Total shareholders' equity$              416,701 $                409,963 $              282,030 
Goodwill                 (53,753)                  (53,862)                (48,495)
Core deposit intangible                   (9,406)                    (9,734)                  (6,471)
Total tangible common equity$              353,542 $                346,367 $              227,064 
       
       
Total Assets:      
Total assets$           4,443,586 $             4,160,360 $           2,287,662 
Goodwill                 (53,753)                  (53,862)                (48,495)
Core deposit intangible                   (9,406)                    (9,734)                  (6,471)
Total tangible assets$           4,380,427 $             4,096,764 $           2,232,696 
       
Common shares outstanding           20,804,753              20,621,437            13,067,987 
       
Book value per common share$                  20.03 $                    19.88 $                  21.58 
Tangible book value per common share$                  16.99 $                    16.80 $                  17.38 
Common equity to total assets9.38%9.85%12.33%
Tangible common equity to tangible assets8.07%8.45%10.17%

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