BFST Business First Bancshares Inc

Business First Bancshares, Inc. (Nasdaq: BFST) (Business First), parent company of b1BANK, today announced its unaudited results for the quarter ended June 30, 2023, including net income available to common shareholders of $18.4 million, or $0.73 per diluted common share, increases of $4.7 million and $0.19, respectively, from the linked quarter, and increases of $4.6 million and $0.12, respectively, from the quarter ended June 30, 2022. On a non-GAAP basis, core net income for the quarter ended June 30, 2023, which excludes certain income and expenses, was $17.7 million, or $0.70 per diluted common share, increases of $4.0 million and $0.15, respectively, from the linked quarter, and increases of $3.2 million and $0.06, respectively, from the quarter ended June 30, 2022.

“In the second quarter we focused successfully on delivering fundamental shareholder-oriented performance,” said b1BANK President & CEO Jude Melville. “The period was marked by measured growth, increased ROE, stable credit quality, and increases in both linked quarter and year-over-year per share tangible book value and earnings. We have been busy blocking and tackling, and we’re seeing that effort pay off.”

On July 27, 2023, Business First’s board of directors declared a quarterly preferred dividend in the amount of $18.75 per share, which is the full quarterly dividend of 1.875% based on the per annum rate of 7.50%. Additionally, the board of directors declared a quarterly common dividend based upon financial performance for the second quarter in the amount of $0.12 per share, same as the prior quarter. The preferred and common dividends will be paid on August 31, 2023, or as soon thereafter as practicable, to the shareholders of record as of August 15, 2023.

Quarterly Highlights

• Return on Assets and Equity. Return to common shareholders on average assets and common equity, each on an annualized basis, were 1.18% and 13.99%, respectively, for the quarter ended June 30, 2023, compared to 0.91% and 10.73%, respectively, for the linked quarter. Non-GAAP core return on average assets and common equity, each on an annualized basis, were 1.13% and 13.50%, respectively, for the quarter ended June 30, 2023, compared to 0.91% and 10.81%, respectively, for the linked quarter.
• Credit Quality. Credit performance remains strong from the linked quarter. The ratios of nonperforming loans compared to loans held for investment and nonperforming assets compared to total assets were 0.36% and 0.30%, respectively, at June 30, 2023, compared to 0.36% and 0.29% at March 31, 2023.
• Net Interest Margin.   For the quarter ended June 30, 2023, net interest income totaled $53.3 million and net interest margin and net interest spread were 3.63% and 2.75%, respectively, compared to $52.7 million, 3.75% and 2.96% for the quarter ended March 31, 2023. Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $2.1 million) were 3.49% and 2.51%, respectively, for the quarter ended June 30, 2023, compared to 3.54% and 2.75% (excluding loan discount accretion of $2.9 million) for the quarter ended March 31, 2023. Compared to the linked quarter, net interest margin excluding loan discount accretion declined five basis points.      
• Deposits. Deposits increased $208.3 million or 4.33%, 17.38% annualized, for the quarter ended June 30, 2023, compared to the linked quarter. The increase was impacted by $211.2 million in additional brokered deposits. Excluding brokered deposits, non-brokered deposits remained stable with a decrease of $2.9 million or 0.06%, 0.26% annualized. Branch deposits (which excludes mainly financial institutions group (FIG), brokered, and listed certificates of deposits) increased $1.9 million compared to the linked quarter.
• Loans. Loans held for investment increased $95.7 million or 1.99%, 7.99% annualized, from the linked quarter. Year-to-date loan growth through June 30, 2023, was $292.6 million, 6.35% or 12.81% annualized. Loan growth for the second quarter was largely driven by net growth in the commercial and industrial (C&I) and commercial real estate portfolios, offset by reductions in the construction and development (C&D) portfolio.

Statement of Financial Condition

Loans

Loans held for investment increased $95.7 million or 1.99%, 7.99% annualized, from the linked quarter. Loan growth from the linked quarter was largely attributed to originations in the C&I, $69.9 million, and commercial real estate, $76.5 million, portfolios, offset by a $68.6 million reduction in the C&D portfolio. Year-to-date loan growth through June 30, 2023, was $292.6 million, 6.35%, or 12.81% annualized.

The Dallas Fort Worth region produced 59.07% of net loan growth from the linked quarter based on unpaid principal balance, while the North Louisiana and Greater New Orleans regions produced 28.16% and 12.06%, respectively. Based on unpaid principal balances, Texas-based loans represent approximately 37% of the overall loan portfolio as of June 30, 2023.

Credit Quality

The ratios of nonperforming loans compared to loans held for investment and nonperforming assets compared to total assets remained stable from 0.36% and 0.29%, respectively, at March 31, 2023, to 0.36% and 0.30% at June 30, 2023.

Securities

The securities portfolio decreased $26.2 million or 2.90%, from the linked quarter. The decrease was the net impact of negative fair value adjustments, $14.9 million, and net security paydowns and maturities during the quarter. The securities portfolio, based on estimated fair value, represented 13.60% of total assets as of June 30, 2023.

Deposits

Deposits increased $208.3 million or 4.33%, 17.38% annualized, for the quarter ended June 30, 2023. The increase was primarily attributable to the $211.2 million growth in brokered deposits. Excluding the increase in brokered deposits, non brokered deposits remained stable with a decrease of $2.9 million or 0.06%, 0.26% annualized. Year-to-date deposit growth through June 30, 2023, was $194.1 million, 4.03% or 8.12% annualized. Excluding brokered deposits, year-to-date deposits decreased $17.1 million, 0.37% or 0.75% annualized through June 30, 2023, which includes a $40.9 million reduction in FIG deposits.

Noninterest-bearing deposits decreased $46.4 million or 3.14% and interest-bearing deposits increased $254.7 million or 7.65%, compared to the linked quarter. The net growth in interest-bearing deposits was attributable to growth in the certificate of deposit (CD) portfolio of $282.3 million compared to a decrease in transactional accounts of $27.6 million. Brokered deposits accounted for $211.2 million of the $282.3 million increase in the CD portfolio.

As of June 30, 2023, Business First held approximately 104,285 deposit accounts with an average balance of approximately $48,085, of which $1.9 billion or 38.12% were estimated to be uninsured by the FDIC. The average deposit balance excluding brokered deposits was $43,672 per account. Excluding public funds, which are secured by securities or Federal Home Loan Bank (FHLB) letters of credit, the unsecured deposit total was approximately $1.5 billion or 29.26% of total deposits.

Borrowings

Borrowings decreased $57.8 million, or 6.78%, from the linked quarter, these borrowings were replaced with lower cost brokered deposits. Business First repaid $10.0 million in Bank Term Funding Program (BTFP) borrowings and $33.0 million of Federal Home Loan Bank (FHLB) borrowings, which were largely short term. On May 1, 2023, Business First redeemed an $8.9 million tranche of outstanding subordinated debt, of which $5.7 million was extinguished as of June 30, 2023. This resulted in a $941,000 gain on extinguishment of debt.

Shareholders’ Equity

Accumulated other comprehensive income (AOCI) decreased $13.3 million due to negative after-tax fair value changes in the securities portfolio. Book value per common share nonetheless still increased to $20.87 at June 30, 2023, compared to $20.77 at March 31, 2023, due to strong second quarter earnings. On a non-GAAP basis, tangible book value per common share increased to $16.87 at June 30, 2023, compared to $16.73 at March 31, 2023.

Results of Operations

Net Interest Income

For the quarter ended June 30, 2023, net interest income totaled $53.3 million, compared to $52.7 million from the linked quarter. Loan and interest-earning asset yields of 6.54% and 5.84%, respectively, increased 20 basis points and 19 basis points, respectively, compared to 6.34% and 5.65% from the linked quarter. The increases were largely attributable to loan repricing and higher yields on new originations. Net interest margin and net interest spread were 3.63% and 2.75%, respectively, compared to 3.75% and 2.96%, respectively, for the linked quarter. Interest income for the quarter ended March 31, 2023, included $853,000 of additional loan discount accretion due to a large, acquired loan payoff and accelerated accretion from the purchased impaired portfolio. Overall cost of funds, which include noninterest-bearing deposits, increased from 1.97% to 2.31% or 34 basis points, from the linked quarter due largely to higher cost deposits.

Non-GAAP net interest income (excluding loan discount accretion of $2.1 million) totaled $51.3 million for the quarter ended June 30, 2023, compared to $49.8 million (excluding loan discount accretion of $2.9 million) from the linked quarter. Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $2.1 million) were 3.49% and 2.51%, respectively, for the quarter ended June 30, 2023, compared to 3.54% and 2.75% (excluding loan discount accretion of $2.9 million) for the linked quarter. Excluding loan discount accretion, loan yields increased 28 basis points from 6.09% to 6.37% and interest earnings asset yields increased 36 basis points from 5.44% to 5.70%, compared to the linked quarter.

Provision for Credit Losses

During the quarter ended June 30, 2023, Business First recorded a provision for credit losses of $538,000, compared to $3.2 million for the linked quarter. The current quarter reserve was impacted by loan growth in loan portfolios with lower estimated loss rates and lower reserves for unfunded commitments due to lower unfunded balances. The provision for credit losses for the quarter ended March 31, 2023, included the resolution of an acquired impaired lending relationship in March 2023, which resulted in a charge-off of $1.9 million.

Other Income

For the quarter ended June 30, 2023, other income increased $3.6 million or 42.56%, compared to the linked quarter. The net increase was largely attributable to a $2.6 million increase in equity investment income and a $941,000 gain on extinguishment of debt.

Other Expenses

For the quarter ended June 30, 2023, other expenses increased by $1.0 million, or 2.65%, compared to the linked quarter. The net increase was largely attributable to a $1.6 million increase in data processing charges, offset by a reduction of $837,000 in salary and employee benefits. The increase in data processing costs was partially attributable to $453,000 of rebates received during the first quarter and $715,000 in charges paid in the second quarter attributed to an error identified by our data processor in their billing system.

Return on Assets and Common Equity

Return to common shareholders on average assets and common equity, each on an annualized basis, were 1.18% and 13.99%, respectively, for the quarter ended June 30, 2023, compared to 0.91% and 10.73%, respectively, for the linked quarter. Non-GAAP return to common shareholders on average assets and common equity, each on an annualized basis, were 1.13% and 13.50%, respectively, for the quarter ended June 30, 2022, compared to 0.91% and 10.81%, respectively, for the linked quarter.

Conference Call and Webcast

Executive management will host a conference call and webcast to discuss results on Thursday, July 27, at 4:30 p.m. CDT. Interested parties may attend the call by dialing toll-free 1-800-715-9871 (North America only), conference ID 6772868, or asking for the Business First Bancshares conference call. The live webcast can be found at https://edge.media-server.com/mmc/p/gm8qhso3. The corresponding slide presentation can be accessed the day of the presentation on b1BANK’s website at https://www.b1bank.com/shareholder-info. 

About Business First Bancshares, Inc.

Business First Bancshares, Inc., (Nasdaq: BFST) through its banking subsidiary b1BANK, has $6.5 billion in assets, $6.4 billion in assets under management through b1BANK’s affiliate Smith Shellnut Wilson, LLC (SSW) (excludes $0.9 billion of b1BANK assets managed by SSW) and operates Banking Centers and Loan Production Offices in markets across Louisiana and the Dallas and Houston, Texas areas, providing commercial and personal banking products and services. Commercial banking services include commercial loans and letters of credit, working capital lines and equipment financing, and treasury management services. b1BANK was awarded #1 Best-In-State Bank, Louisiana, by Forbes and Statista, and is a multiyear winner of American Banker’s “Best Banks to Work For.” Visit b1BANK.com for more information.

Non-GAAP Financial Measures

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

Special Note Regarding Forward-Looking Statements

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

Additional Information

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

No Offer or Solicitation

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

Misty Albrechtb1BANK225.286.7879Misty.Albrecht@b1BANK.com

Business First Bancshares, Inc.
Selected Financial Information
(Unaudited)
	Three Months Ended
	June 30,			March 31,			June 30,
(Dollars in thousands)		2023			2023			2022
Balance Sheet Ratios
Loans (HFI) to Deposits		97.69	%		99.94	%		88.31	%
Shareholders' Equity to Assets Ratio		9.31	%		9.50	%		8.05	%
Loans Receivable Held for Investment (HFI)
Commercial (1)	$	1,309,222		$	1,239,333		$	1,019,997
Real Estate:
Commercial		2,132,044			2,055,500			1,780,414
Construction		719,080			787,634			642,260
Residential		675,462			659,967			619,648
Total Real Estate		3,526,586			3,503,101			3,042,322
Consumer and Other		62,929			60,626			51,407
Total Loans (Held for Investment)	$	4,898,737		$	4,803,060		$	4,113,726
Allowance for Credit Losses
Balance, Beginning of Period	$	41,830		$	38,178		$	29,245
CECL Adoption/Implementation		-			2,660			-
Charge-offs – Quarterly		(689	)		(2,278	)		(99	)
Recoveries – Quarterly		104			103			226
Provision for Loan Losses – Quarterly		768			3,167			2,945
Balance, End of Period	$	42,013		$	41,830		$	32,317
Allowance for Loan Losses to Total Loans (HFI)		0.86	%		0.87	%		0.79	%
Allowance for Credit Losses to Total Loans (HFI) (2)		0.93	%		0.95	%		0.80	%
Net Charge-offs (Recoveries) to Average Quarterly Total Loans		0.01	%		0.05	%		-0.00	%
Remaining Loan Purchase Discount	$	17,171		$	19,234		$	37,903
Nonperforming Assets
Nonperforming Loans:
Nonaccrual Loans (1)	$	17,006		$	16,952		$	16,777
Loans Past Due 90 Days or More (1)		468			127			324
Total Nonperforming Loans		17,474			17,079			17,101
Other Nonperforming Assets:
Other Real Estate Owned		1,587			1,365			990
Other Nonperforming Assets		29			57			84
Total Other Nonperforming Assets		1,616			1,422			1,074
Total Nonperforming Assets	$	19,090		$	18,501		$	18,175
Nonperforming Loans to Total Loans (HFI)		0.36	%		0.36	%		0.42	%
Nonperforming Assets to Total Assets		0.30	%		0.29	%		0.33	%
(1) 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 was currently accreting interest income over the expected life of the loans for the period ended June 30, 2022, in accordance with ASC 310-30.
(2) Allowance for Credit Losses includes the Allowance for Loan Loss and Reserve for Unfunded Commitments.

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)		2023			2023			2022				2023			2022
Per Share Data
Basic Earnings per Common Share	$	0.73		$	0.55		$	0.61			$	1.28		$	1.03
Diluted Earnings per Common Share	$	0.73			0.54			0.61			$	1.27			1.03
Dividends per Common Share		0.12			0.12			0.12				0.24			0.24
Book Value per Common Share		20.87			20.77			19.73				20.87			19.73
Average Common Shares Outstanding		25,101,683			24,979,955			22,459,603				25,041,124			21,746,793
Average Diluted Common Shares Outstanding		25,333,372			25,222,308			22,656,174				25,278,145			21,916,641
End of Period Common Shares Outstanding		25,344,168			25,319,520			22,579,451				25,344,168			22,579,451
Annualized Performance Ratios
Return to Common Shareholders on Average Assets (1)		1.18	%		0.91	%		1.03	%			1.04	%		0.88	%
Return to Common Shareholders on Average Common Equity (1)		13.99	%		10.73	%		12.25	%			12.39	%		10.12	%
Net Interest Margin (1)		3.63	%		3.75	%		3.99	%			3.69	%		3.78	%
Net Interest Spread (1)		2.75	%		2.96	%		3.81	%			2.85	%		3.61	%
Efficiency Ratio (2)		60.76	%		63.27	%		64.32	%			61.97	%		68.08	%
Total Quarterly/Year-to-Date Average Assets	$	6,274,656		$	6,123,063		$	5,371,639			$	6,198,860		$	5,145,872
Total Quarterly/Year-to-Date Average Common Equity		527,325			516,659			450,431				521,992			448,216
Other Expenses
Salaries and Employee Benefits	$	22,339		$	23,176		$	21,408			$	45,515		$	41,111
Occupancy and Bank Premises		2,406			2,297			2,422				4,703			4,474
Depreciation and Amortization		1,720			1,710			1,734				3,430			3,303
Data Processing		3,035			1,485			1,886				4,520			4,002
FDIC Assessment Fees		1,092			933			661				2,025			1,404
Legal and Other Professional Fees		961			613			735				1,574			1,278
Advertising and Promotions		1,226			1,148			703				2,374			1,234
Utilities and Communications		720			721			822				1,441			1,601
Ad Valorem Shares Tax		965			965			812				1,930			1,625
Directors' Fees		270			269			212				539			414
Other Real Estate Owned Expenses and Write-Downs		39			130			35				169			49
Merger and Conversion-Related Expenses		68			103			615				171			1,426
Other		4,861			5,129			4,352				9,990			8,196
Total Other Expenses	$	39,702		$	38,679		$	36,397			$	78,381		$	70,117
Other Income
Service Charges on Deposit Accounts	$	2,413		$	2,281		$	2,086			$	4,694		$	3,891
Loss on Sales of Securities		(61	)		(1	)		(8	)			(62	)		(39	)
Debit Card and ATM Fee Income		1,646			1,570			1,657				3,216			3,158
Bank-Owned Life Insurance Income		547			524			475				1,071			844
Gain on Sales of Loans		494			611			186				1,105			251
Mortgage Origination Income		56			74			161				130			370
Fees and Brokerage Commission		1,791			1,813			1,749				3,604			3,584
Gain on Sales of Other Real Estate Owned		14			209			10				223			18
Gain (Loss) on Disposal of Other Assets		14			(5	)		-				9			(717	)
Pass-Through Income from Other Investments		2,812			173			52				2,985			167
Gain on Extinguishement of Debt		941			-			-				941			-
Other		1,291			1,139			653				2,430			1,390
Total Other Income	$	11,958		$	8,388		$	7,021			$	20,346		$	12,917
(1) Average outstanding balances are determined utilizing monthly averages and average yield/rate is calculated utilizing an Actual/365 day count convention.
(2) 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)		2023			2023			2022
Assets
Cash and Due From Banks	$	180,972		$	159,767		$	154,694
Federal Funds Sold		173,850			104,250			10,817
Securities Available for Sale, at Fair Values		877,774			903,945			934,676
Mortgage Loans Held for Sale		435			423			170
Loans and Lease Receivable		4,898,737			4,803,060			4,113,726
Allowance for Loan Losses		(42,013	)		(41,830	)		(32,317	)
Net Loans and Lease Receivable		4,856,724			4,761,230			4,081,409
Premises and Equipment, Net		63,037			64,065			64,307
Accrued Interest Receivable		26,861			25,446			22,142
Other Equity Securities		34,824			36,739			30,302
Other Real Estate Owned		1,587			1,365			990
Cash Value of Life Insurance		95,302			94,755			88,370
Deferred Taxes, Net		31,553			28,680			29,576
Goodwill		88,543			88,543			88,842
Core Deposit and Customer Intangibles		12,993			13,517			15,093
Other Assets		10,194			7,256			8,995
Total Assets	$	6,454,649		$	6,289,981		$	5,530,383
Liabilities
Deposits
Noninterest-Bearing	$	1,429,376		$	1,475,782		$	1,698,114
Interest-Bearing		3,585,067			3,330,396			2,960,049
Total Deposits		5,014,443			4,806,178			4,658,163
Securities Sold Under Agreements to Repurchase		23,230			16,669			18,477
Federal Funds Purchased		-			14,622			-
Short-Term Borrowings		9			9			5,020
Bank Term Funding Program		300,000			310,000			-
Federal Home Loan Bank Borrowings		362,162			395,134			254,011
Subordinated Debt		103,822			110,596			111,055
Subordinated Debt - Trust Preferred Securities		5,000			5,000			5,000
Accrued Interest Payable		7,666			3,513			708
Other Liabilities		37,349			30,570			32,490
Total Liabilities		5,853,681			5,692,291			5,084,924
Shareholders' Equity
Preferred Stock		71,930			71,930			-
Common Stock		25,344			25,320			22,579
Additional Paid-In Capital		395,875			394,677			346,382
Retained Earnings		189,115			173,761			139,232
Accumulated Other Comprehensive Loss		(81,296	)		(67,998	)		(62,734	)
Total Shareholders' Equity		600,968			597,690			445,459
Total Liabilities and Shareholders' Equity	$	6,454,649		$	6,289,981		$	5,530,383

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)		2023			2023			2022				2023			2022
Interest Income:
Interest and Fees on Loans	$	79,223		$	73,768		$	49,639			$	152,991		$	89,822
Interest and Dividends on Securities		5,097			4,782			4,143				9,879			7,987
Interest on Federal Funds Sold and Due From Banks		1,528			942			232				2,470			327
Total Interest Income		85,848			79,492			54,014				165,340			98,136
Interest Expense:
Interest on Deposits		23,680			18,928			2,557				42,608			4,820
Interest on Borrowings		8,842			7,815			1,895				16,657			3,279
Total Interest Expense		32,522			26,743			4,452				59,265			8,099
Net Interest Income		53,326			52,749			49,562				106,075			90,037
Provision for Credit Losses		538			3,222			2,945				3,760			4,562
Net Interest Income After Provision for Credit Losses		52,788			49,527			46,617				102,315			85,475
Other Income:
Service Charges on Deposit Accounts		2,413			2,281			2,086				4,694			3,891
Loss on Sales of Securities		(61	)		(1	)		(8	)			(62	)		(39	)
Gain on Sales of Loans		494			611			186				1,105			251
Other Income		9,112			5,497			4,757				14,609			8,814
Total Other Income		11,958			8,388			7,021				20,346			12,917
Other Expenses:
Salaries and Employee Benefits		22,339			23,176			21,408				45,515			41,111
Occupancy and Equipment Expense		5,112			5,001			4,914				10,113			9,327
Merger and Conversion-Related Expense		68			103			615				171			1,426
Other Expenses		12,183			10,399			9,460				22,582			18,253
Total Other Expenses		39,702			38,679			36,397				78,381			70,117
Income Before Income Taxes		25,044			19,236			17,241				44,280			28,275
Provision for Income Taxes		5,305			4,211			3,484				9,516			5,787
Net Income		19,739			15,025			13,757				34,764			22,488
Preferred Stock Dividends		(1,350	)		(1,350	)		-				(2,700	)		-
Net Income Available to Common Shareholders	$	18,389		$	13,675		$	13,757			$	32,064		$	22,488

Business First Bancshares, Inc.
Consolidated Net Interest Margin
(Unaudited)
	Three Months Ended
	June 30, 2023								March 31, 2023								June 30, 2022
(Dollars in thousands)	AverageOutstandingBalance			Interest Earned /Interest Paid		AverageYield / Rate			AverageOutstandingBalance			Interest Earned /Interest Paid		AverageYield / Rate			AverageOutstandingBalance			Interest Earned /Interest Paid		AverageYield / Rate
Assets
Interest-Earning Assets:
Total Loans	$	4,861,783		$	79,223	6.54	%		$	4,719,906		$	73,768	6.34	%		$	3,894,899		$	49,639	5.11	%
Securities		916,421			5,097	2.23	%			927,491			4,782	2.09	%			966,960			4,143	1.72	%
Interest-Bearing Deposit in Other Banks		117,086			1,528	5.23	%			57,478			942	6.65	%			122,175			232	0.76	%
Total Interest-Earning Assets		5,895,290			85,848	5.84	%			5,704,875			79,492	5.65	%			4,984,034			54,014	4.35	%
Allowance for Loan Losses		(42,010	)							(41,533	)							(29,945	)
Noninterest-Earning Assets		421,376								459,721								417,550
Total Assets	$	6,274,656		$	85,848				$	6,123,063		$	79,492				$	5,371,639		$	54,014
Liabilities and Shareholders' Equity
Interest-Bearing Liabilities:
Interest-Bearing Deposits	$	3,405,221		$	23,680	2.79	%		$	3,339,493		$	18,928	2.30	%		$	2,981,613		$	2,557	0.34	%
Subordinated Debt		108,619			1,251	4.62	%			110,647			1,389	5.09	%			111,107			1,300	4.69	%
Subordinated Debt - Trust Preferred Securities		5,000			108	8.66	%			5,000			98	7.95	%			5,000			52	4.17	%
Bank Term Funding Program		384,816			4,309	4.49	%			34,444			380	4.47	%			-			-	0.00	%
Advances from Federal Home Loan Bank (FHLB)		298,324			3,038	4.08	%			517,934			5,842	4.57	%			171,224			506	1.19	%
First National Bankers Bank Line of Credit		-			-	0.00	%			-			-	0.00	%			3,333			21	2.53	%
Other Borrowings		22,109			136	2.47	%			20,895			106	2.06	%			24,927			16	0.26	%
Total Interest-Bearing Liabilities		4,224,089			32,522	3.09	%			4,028,413			26,743	2.69	%			3,297,204			4,452	0.54	%
Noninterest-Bearing Liabilities:
Noninterest-Bearing Deposits	$	1,410,983							$	1,473,186							$	1,596,174
Other Liabilities		40,329								32,875								27,830
Total Noninterest-Bearing Liabilities		1,451,312								1,506,061								1,624,004
Shareholders' Equity:
Common Shareholders' Equity		527,325								516,659								450,431
Preferred Equity		71,930								71,930								-
Total Shareholders' Equity		599,255								588,589								450,431
Total Liabilities and Shareholders' Equity	$	6,274,656							$	6,123,063							$	5,371,639
Net Interest Spread						2.75	%							2.96	%							3.81	%
Net Interest Income				$	53,326							$	52,749							$	49,562
Net Interest Margin						3.63	%							3.75	%							3.99	%
Overall Cost of Funds						2.31	%	`						1.97	%							0.36	%
NOTE: Average outstanding balances are determined utilizing monthly averages and average yield/rate is calculated utilizing an Actual/365 day count convention.

Business First Bancshares, Inc.
Consolidated Net Interest Margin
(Unaudited)
	Six Months Ended
	June 30, 2023								June 30, 2022
(Dollars in thousands)	AverageOutstandingBalance			Interest Earned /Interest Paid		Average Yield / Rate			AverageOutstandingBalance			Interest Earned /Interest Paid		Average Yield / Rate
Assets
Interest-Earning Assets:
Total Loans	$	4,790,843		$	152,991	6.44	%		$	3,640,470		$	89,822	4.98	%
Securities		921,958			9,879	2.16	%			986,107			7,987	1.63	%
Interest-Bearing Deposit in Other Banks		87,282			2,470	5.71	%			171,662			327	0.38	%
Total Interest-Earning Assets		5,800,083			165,340	5.75	%			4,798,239			98,136	4.12	%
Allowance for Loan Losses		(41,772	)							(29,602	)
Noninterest-Earning Assets		440,549								377,235
Total Assets	$	6,198,860		$	165,340				$	5,145,872		$	98,136
Liabilities and Shareholders' Equity
Interest-Bearing Liabilities:
Interest-Bearing Deposits	$	3,372,358		$	42,608	2.55	%		$	2,932,228		$	4,820	0.33	%
Subordinated Debt		109,634			2,640	4.86	%			101,231			2,415	4.81	%
Subordinated Debt - Trust Preferred Securities		5,000			206	8.31	%			5,000			94	3.79	%
Bank Term Funding Program		207,411			4,689	4.56	%			-			-	0.00	%
Advances from Federal Home Loan Bank (FHLB)		410,348			8,880	4.36	%			125,800			729	1.17	%
First National Bankers Bank Line of Credit		-			-	0.00	%			1,667			21	2.54	%
Other Borrowings		21,502			242	2.27	%			22,297			20	0.18	%
Total Interest-Bearing Liabilities		4,126,253			59,265	2.90	%			3,188,223			8,099	0.51	%
Noninterest-Bearing Liabilities:
Noninterest-Bearing Deposits		1,442,084								1,483,095
Other Liabilities		36,601								26,338
Total Noninterest-Bearing Liabilities		1,478,685								1,509,433
Shareholders' Equity:
Common Shareholders' Equity		521,992								448,216
Preferred Equity		71,930								-
Total Shareholders' Equity		593,922								448,216
Total Liabilities and Shareholders' Equity	$	6,198,860							$	5,145,872
Net Interest Spread						2.85	%							3.61	%
Net Interest Income				$	106,075							$	90,037
Net Interest Margin						3.69	%							3.78	%
Overall Cost of Funds						2.15	%							0.35	%
NOTE: Average outstanding balances are determined utilizing monthly averages and average yield/rate is calculated utilizing an Actual/365 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)		2023			2023			2022				2023			2022
Interest Income:
Interest income	$	85,848		$	79,492		$	54,014			$	165,340		$	98,136
Core interest income		85,848			79,492			54,014				165,340			98,136
Interest Expense:
Interest expense		32,522			26,743			4,452				59,265			8,099
Core interest expense		32,522			26,743			4,452				59,265			8,099
Provision for Credit Losses: (b)
Provision for credit losses		538			3,222			2,945				3,760			4,562
Core provision expense		538			3,222			2,945				3,760			4,562
Other Income:
Other income		11,958			8,388			7,021				20,346			12,917
Losses on former bank premises and equipment		-			-			-				-			717
Losses on sale of securities		61			1			8				62			39
Gain on extinguishment of debt		(941	)		-			-				(941	)		-
Core other income		11,078			8,389			7,029				19,467			13,673
Other Expense:
Other expense		39,702			38,679			36,397				78,381			70,117
Acquisition-related expenses (2)		(68	)		(103	)		(708	)			(171	)		(1,519	)
Occupancy and bank premises - storm repair		-			-			(270	)			-			(501	)
Core other expense		39,634			38,576			35,419				78,210			68,097
Pre-Tax Income: (a)
Pre-tax income		25,044			19,236			17,241				44,280			28,275
Losses on former bank premises and equipment		-			-			-				-			717
Losses on sale of securities		61			1			8				62			39
Gain on extinguishment of debt		(941	)		-			-				(941	)		-
Acquisition-related expenses (2)		68			103			708				171			1,519
Occupancy and bank premises - storm repair		-			-			270				-			501
Core pre-tax income		24,232			19,340			18,227				43,572			31,051
Provision for Income Taxes: (1)
Provision for income taxes		5,305			4,211			3,484				9,516			5,787
Tax on losses on former bank premises and equipment		-			-			-				-			151
Tax on losses on sale of securities		13			-			2				13			9
Gain on extinguishment of debt		(199	)		-			-				(199	)		-
Tax on acquisition-related expenses (2)		14			6			126				20			174
Tax on occupancy and bank premises - storm repair		-			-			57				-			106
Core provision for income taxes		5,133			4,217			3,669				9,350			6,227
Preferred Dividends:
Preferred dividends		1,350			1,350			-				2,700			-
Core preferred dividends		1,350			1,350			-				2,700			-
Net Income Available to Common Shareholders:
Net income available to common shareholders		18,389			13,675			13,757				32,064			22,488
Losses on former bank premises and equipment, net of tax		-			-			-				-			566
Losses on sale of securities, net of tax		48			1			6				49			30
Gain on extinguishment of debt, net of tax		(742	)		-			-				(742	)		-
Acquisition-related expenses (2), net of tax		54			97			582				151			1,345
Occupancy and bank premises - storm repair, net of tax		-			-			213				-			395
Core net income available to common shareholders	$	17,749		$	13,773		$	14,558			$	31,522		$	24,824
Pre-tax, pre-provision earnings available to common shareholders (a+b)	$	25,582		$	22,458		$	20,186			$	48,040		$	32,837
Losses on former bank premises and equipment		-			-			-				-			717
Loss on sale of securities		61			1			8				62			39
Gain on extinguishment of debt		(941	)		-			-				(941	)		-
Acquisition-related expenses (2)		68			103			708				171			1,519
Occupancy and bank premises - storm repair		-			-			270				-			501
Core pre-tax, pre-provision earnings	$	24,770		$	22,562		$	21,172			$	47,332		$	35,613
Average Diluted Common Shares Outstanding		25,333,372			25,222,308			22,656,174				25,278,145			21,916,641
Diluted Earnings Per Common Share:
Diluted earnings per common share	$	0.73		$	0.54		$	0.61			$	1.27		$	1.03
Losses on former bank premises and equipment, net of tax		-			-			-				-			0.03
Loss on sale of securities, net of tax		-			-			-				-			-
Gain on extinguishment of debt, net of tax		(0.03	)		-			-				(0.03	)		-
Acquisition-related expenses (2), net of tax		0.00			0.01			0.02				0.01			0.06
Occupancy and bank premises -storm repair, net of tax		-			-			0.01				-			0.02
Core diluted earnings per common share	$	0.70		$	0.55		$	0.64			$	1.25		$	1.14
Pre-tax, pre-provision profit diluted earnings per common share	$	1.01		$	0.89		$	0.89			$	1.90		$	1.50
Losses on former bank premises and equipment		-			-			-				-			0.03
Loss on sale of securities		-			-			-				-			-
Gain on extinguishment of debt		(0.04	)		-			-				(0.04	)		-
Acquisition-related expenses (2)		0.01			-			0.03				0.01			0.07
Occupancy and bank premises - storm repair		-			-			0.01				-			0.02
Core pre-tax, pre-provision diluted earnings per common share	$	0.98		$	0.89		$	0.93			$	1.87		$	1.62
(1) Tax rates, exclusive of certain nondeductible merger-related expenses and goodwill, utilized were 21.129% for 2023 and 2022. 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)
	June 30,			March 31,			June 30,
(Dollars in thousands, except per share data)		2023			2023			2022
Total Shareholders' (Common) Equity:
Total shareholders' equity	$	600,968		$	597,690		$	445,459
Preferred stock		(71,930	)		(71,930	)		-
Total common shareholders' equity		529,038			525,760			445,459
Goodwill		(88,543	)		(88,543	)		(88,842	)
Core deposit and customer intangible		(12,993	)		(13,517	)		(15,093	)
Total tangible common equity	$	427,502		$	423,700		$	341,524
Total Assets:
Total assets	$	6,454,649		$	6,289,981		$	5,530,383
Goodwill		(88,543	)		(88,543	)		(88,842	)
Core deposit and customer intangible		(12,993	)		(13,517	)		(15,093	)
Total tangible assets	$	6,353,113		$	6,187,921		$	5,426,448
Common shares outstanding		25,344,168			25,319,520			22,579,451
Book value per common share	$	20.87		$	20.77		$	19.73
Tangible book value per common share	$	16.87		$	16.73		$	15.13
Common equity to total assets		8.20	%		8.36	%		8.05	%
Tangible common equity to tangible assets		6.73	%		6.85	%		6.29	%

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)		2023			2023			2022				2023			2022
Total Quarterly Average Assets	$	6,274,656		$	6,123,063		$	5,371,639			$	6,198,860		$	5,145,872
Total Quarterly Average Common Equity	$	527,325		$	516,659		$	450,431			$	521,992		$	448,216
Net Income Available to Common Shareholders:
Net income available to common shareholders	$	18,389		$	13,675		$	13,757			$	32,064		$	22,488
Losses on former bank premises and equipment, net of tax		-			-			-				-			566
Losses on sale of securities, net of tax		48			1			6				49			30
Gain on extinguishment of debt		(742	)		-			-				(742	)		-
Acquisition-related expenses, net of tax		54			97			582				151			1,345
Occupancy and bank premises - storm repair, net of tax		-			-			213				-			395
Core net income available to common shareholders	$	17,749		$	13,773		$	14,558			$	31,522		$	24,824
Return to common shareholders on average assets (annualized) (2)		1.18	%		0.91	%		1.03	%			1.04	%		0.88	%
Core return on average assets (annualized) (2)		1.13	%		0.91	%		1.09	%			1.03	%		0.97	%
Return to common shareholders on average common equity (annualized) (2)		13.99	%		10.73	%		12.25	%			12.39	%		10.12	%
Core return on average common equity (annualized) (2)		13.50	%		10.81	%		12.96	%			12.18	%		11.17	%
Interest Income:
Interest income	$	85,848		$	79,492		$	54,014			$	165,340		$	98,136
Core interest income		85,848			79,492			54,014				165,340			98,136
Interest Expense:
Interest expense		32,522			26,743			4,452				59,265			8,099
Core interest expense		32,522			26,743			4,452				59,265			8,099
Other Income:
Other income		11,958			8,388			7,021				20,346			12,917
Losses on former bank premises and equipment		-			-			-				-			717
Loss on sale of securities		61			1			8				62			39
Gain on extinguishment of debt		(941	)		-			-				(941	)		-
Core other income		11,078			8,389			7,029				19,467			13,673
Other Expense:
Other expense		39,702			38,679			36,397				78,381			70,117
Acquisition-related expenses		(68	)		(103	)		(708	)			(171	)		(1,519	)
Occupancy and bank premises - storm repair		-			-			(270	)			-			(501	)
Core other expense	$	39,634		$	38,576		$	35,419			$	78,210		$	68,097
Efficiency Ratio:
Other expense (a)	$	39,702		$	38,679		$	36,397			$	78,381		$	70,117
Core other expense (c)	$	39,634		$	38,576		$	35,419			$	78,210		$	68,097
Net interest and other income (1) (b)	$	65,345		$	61,138		$	56,591			$	126,483		$	102,993
Core net interest and other income (1) (d)	$	64,404		$	61,138		$	56,591			$	125,542		$	103,710
Efficiency ratio (a/b)		60.76	%		63.27	%		64.32	%			61.97	%		68.08	%
Core efficiency ratio (c/d)		61.54	%		63.10	%		62.59	%			62.30	%		65.66	%
Total Average Interest-Earnings Assets	$	5,895,290		$	5,704,875		$	4,984,034			$	5,800,083		$	4,798,239
Net Interest Income:
Net interest income	$	53,326		$	52,749		$	49,562			$	106,075		$	90,037
Loan discount accretion		(2,059	)		(2,912	)		(2,588	)			(4,971	)		(3,508	)
Net interest income excluding loan discount accretion	$	51,267		$	49,837		$	46,974			$	101,104		$	86,529
Net interest margin (2)		3.63	%		3.75	%		3.99	%			3.69	%		3.78	%
Net interest margin excluding loan discount accretion (2)		3.49	%		3.54	%		3.78	%			3.52	%		3.64	%
Net interest spread (2)		2.75	%		2.96	%		3.81	%			2.85	%		3.61	%
Net interest spread excluding loan discount accretion (2)		2.51	%		2.75	%		3.60	%			2.63	%		3.46	%
(1) Excludes gains/losses on sales of securities.
(2) Calculated utilizing an Actual/365 day count convention.