Business First Bancshares, Inc., Announces Financial Results for Q3 2020

BATON ROUGE, La., Oct. 22, 2020 (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 September 30, 2020, including net income of $9.6 million, or $0.46 per diluted share, increases of $4.1 million and $0.06, respectively, from the quarter ended September 30, 2019. On a non-GAAP basis, core net income for the quarter ended September 30, 2020, which excludes certain income and expenses, was $11.0 million, or $0.53 per diluted share, an increase of $4.7 million and increase of $0.07, respectively, from the quarter ended September 30, 2019.

“In our last earning report, I said the second quarter was simultaneously the most challenging, and in many ways, the most rewarding period we’ve experienced as a company,” said Jude Melville, president and CEO. “but I can now say that about the third quarter. In addition to weathering the ongoing health and related economic crises, our people were impacted over the past few weeks by landfall of not one but two hurricanes. Our performance in the quarter reflects a strength and resiliency that enables us to be there for our clients, and we are as committed as ever to continuing to be that stable resource in times of both plenty and need.”

On October 22, 2020, Business First’s board of directors declared a quarterly dividend based upon financial performance for the third quarter in the amount of $0.10 per share, same as the prior quarter, to the common shareholders of record as of November 15, 2020. The dividend will be paid on November 30, 2020, or as soon thereafter as practicable.

Also, on October 22, 2020, Business First’s board of directors terminated its existing stock repurchase program, which was set to expire December 13, 2020, and adopted a new stock repurchase program. Under the new repurchase program, Business First may repurchase shares of its common stock with an aggregate purchase price of up to $30,000,000 until the program’s expiration on December 31, 2021.

Quarterly Highlights

  • COVID-19 and Hurricane Related Matters. Business First proactively assisted, and continues to assist (when prudent), clients by deferring principal and/or interest payments. Business First had 245 loans and 290 loans with outstanding principal balances of $184.3 million and $85.0 million within the deferral periods related to the COVID-19 pandemic and Hurricane Laura, respectively, as of September 30, 2020. Of loans remaining in the deferral period, 167 qualifying loans to seasoned, highly rated customers with an outstanding balance of $149.4 million were strategically converted to interest only.

    Additionally, Business First has funded approximately 2,800 loans with an aggregate outstanding balance of $397.7 million as of September 30, 2020, under the Small Business Administration (SBA) Paycheck Protection Program (PPP).
  • Strong Loan Growth. Total loans held for investment at September 30, 2020, were $3.1 billion, an increase of $87.7 million compared to June 30, 2020. Net loan growth was 2.93%, or 11.71 % annualized, for the quarter ended September 30, 2020.
  • Stable Credit Quality. Ratios of nonperforming loans compared to loans held for investment and nonperforming assets compared to total assets remained stable from 0.39% and 0.49%, respectively, at June 30, 2020, to 0.32% and 0.54% at September 30, 2020.
  • Net Interest Margin and Spread. Net interest margin and spread increased from 3.89% and 3.59%, respectively, for the quarter ended June 30, 2020, to 4.06% and 3.81% for the quarter ended September 30, 2020. The increases were largely attributable to purchase accounting accretion (loans and deposits/borrowings), an additional day in the quarter, and repricing of time deposits upon maturity. Excluding loan discount accretion, net interest margin and spread were 3.81% and 3.56%, respectively, for the quarter ended September 30, 2020, compared to 3.71% and 3.41% for the quarter ended June 30, 2020.

Financial Condition

September 30, 2020, Compared to June 30, 2020

Loans

Total loans held for investment increased by $87.7 million compared to June 30, 2020. The increase was largely attributable to growth within the multi-family residential and nonfarm nonresidential commercial real estate portfolios. Net loan growth for the quarter ended September 30, 2020, was 2.93% for the quarter, or 11.71% annualized.

Business First’s unfunded commitments remained constant throughout the quarter ended September 30, 2020, after increasing during the quarter ended June 30, 2020, as a result of the acquisition of Pedestal. 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 decreased from 0.39% as of June 30, 2020, to 0.32% as of September 30, 2020. The decrease was partially attributable to net loan charge-offs which totaled $866,000, or three basis points, for the quarter ended September 30, 2020. Nonperforming assets as a percentage of total assets increased from 0.49% as of June 30, 2020, to 0.54% as of September 30, 2020. The increase was largely attributable to the transfer of former branches of Pedestal and b1BANK to other real estate owned, part of the strategic plan of the acquisition.

Total Shareholders Equity

Book value per common share was $19.26 at September 30, 2020, compared to $18.69 at June 30, 2020. On a non-GAAP basis, tangible book value per share was $16.18 at September 30, 2020, compared to $15.59 at June 30, 2020.

September 30, 2020, Compared to September 30, 2019

Loans

Total loans held for investment increased by $1.4 billion compared to September 30, 2019, or 81.89%, due primarily to the acquisition of Pedestal and origination of SBA PPP loans during the quarter ended June 30, 2020.

Credit Quality

Nonperforming loans as a percentage of total loans held for investment decreased from 0.70% as of September 30, 2019, to 0.32% as of September 30, 2020. Nonperforming assets as a percentage of total assets decreased from 0.64% as of September 30, 2019, to 0.54% as of September 30, 2020. The decreases were largely attributable to an increase in overall total loans held for investment and total assets from the acquisition of Pedestal during the quarter ended June 30, 2020, as well as a decrease in nonperforming loans, offset by an increase in other real estate owned.

Total Shareholders Equity

Book value per common share was $19.26 at September 30, 2020, compared to $21.12 at September 30, 2019. On a non-GAAP basis, tangible book value per share was $16.18 at September 30, 2020, compared to $16.96 at September 30, 2019. 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

Third Quarter 2020 Compared to Second Quarter 2020

Net Income and Diluted Earnings Per Share

For the quarter ended September 30, 2020, net income was $9.6 million, or $0.46 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 were largely attributable to an increase in net interest income (primarily due to a full quarter of a larger balance sheet after the Pedestal acquisition), a decrease in the provision for loan losses and lower acquisition-related expenses (which includes costs recorded within salaries and employee benefits attributed to acquisitions, such as severance, stay bonus, etc.), offset by a decrease in other income, largely attributable to a reduction in investment income from Small Business Investment Companies (SBIC).

On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended September 30, 2020, was $11.0 million, or $0.53 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 September 30, 2020, included the incurrence of $1.2 million in acquisition-related expenses and $635,000 in losses attributed to losses on former bank premises and equipment in other income, largely attributable to branches planned to be closed in contemplation of the Pedestal acquisition, compared to the incurrence of $6.6 million in acquisition-related expenses for the quarter ended June 30, 2020.

Interest Income

For the quarter ended September 30, 2020, net interest income totaled $36.9 million and net interest margin and net interest spread were 4.06% and 3.81%, 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 5.65% for the quarter ended September 30, 2020, compared to 5.61% for the quarter ended June 30, 2020. The average yield on total interest-earning assets was 4.67% for the quarter ended September 30, 2020, compared to 4.65% for the quarter ended June 30, 2020. The increase in interest income was largely attributable to higher average balances due to the Pedestal acquisition during the quarter ended June 30, 2020.

Net interest margin and net interest spread were positively impacted for the quarter ended September 30, 2020, by additional loan discount accretion, reduction in the overall cost of funds (which includes noninterest-bearing deposits) and an additional day in the quarter, offset by yield reductions in securities and SBA PPP loans.

The average loan yield (excluding SBA PPP loans) and total interest-earning assets was also impacted by additional loan discount and an additional day in the quarter.  

Net interest margin and net interest spread (excluding loan discount accretion of $2.3 million) were 3.81% and 3.56%, respectively, for the quarter ended September 30, 2020, 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 September 30, 2020, overall cost of funds (which includes noninterest-bearing deposits) decreased by 14 basis points, from 0.77% to 0.63%, compared to the quarter ended June 30, 2020. The decrease in cost of funds was largely attributable to the repricing of time deposits upon maturity.

Other Income

For the quarter ended September 30, 2020, other income was impacted by a reduction of $1.3 million in SBIC investment income, partially offset by $869,000 increases in both the service charges on deposit accounts and debit card and ATM fee income associated with a full quarterly impact of the Pedestal accounts, as well as an insurance settlement of $390,000 within other income related to a prior charged-off loan, compared to the quarter ended June 30, 2020.

Other Expense

For the quarter ended September 30, 2020, the decreases were largely attributed to reductions in salaries and employee benefits, $2.2 million, and merger and conversion-related expenses, $1.2 million, both of which resulted from elevated expenses during the quarter ended June 30, 2020, attributable to the Pedestal acquisition, partially offset by increases in various other categories which were mainly attributable to the full quarterly impact of the Pedestal acquisition, as well as an increase in our FDIC assessments, $322,000, due to increased deposits attributable to the Pedestal acquisition and SBA PPP loan program, compared to the quarter ended June 30, 2020.

Provision for Loan Losses

During the quarter ended September 30, 2020, Business First recorded a provision for loan losses of $2.5 million, compared to $5.4 million for the quarter ended June 30, 2020. The reserve for the quarter ended September 30, 2020, was impacted by net charge-offs of $866,000, new net loan production, and the continued impact of the qualitative factors related to COVID-19.   

Return on Assets and Equity

Return on average assets and equity, each on an annualized basis, were 0.98% and 9.85%, respectively, for the quarter ended September 30, 2020, compared to 0.23% and 2.35%, respectively, for the quarter ended June 30, 2020. Both returns were significantly impacted by additional provision for loan loss and acquisition-related expenses recorded during the quarter ended June 30, 2020.

Third Quarter 2020 Compared to Third Quarter 2019

Net Income and Diluted Earnings Per Share

For the quarter ended September 30, 2020, net income was $9.6 million, or $0.46 per diluted share, compared to net income of $5.5 million, or $0.40 per diluted share, for the quarter ended September 30, 2019. 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, offset by increases in the provision for loan losses associated with the COVID-19 pandemic in 2020 and additional expenses associated with the acquisition of Pedestal on May 1, 2020.

On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended September 30, 2020, was $11.0 million, or $0.53 per diluted share, compared to core net income of $6.3 million, or $0.46 per diluted share, for the quarter ended September 30, 2019. Notable noncore events impacting earnings for the quarter ended September 30, 2020, included the incurrence of $1.2 million in acquisition-related expenses and $635,000 in losses attributed to losses on former bank premises and equipment in other income, compared to the incurrence of $288,000 in acquisition-related expenses and $594,000 losses on former bank premises and equipment in other income for the quarter ended September 30, 2019.

Interest Income

For the quarter ended September 30, 2020, net interest income totaled $36.9 million and net interest margin and net interest spread were 4.06% and 3.81%, respectively, compared to $20.3 million, 4.10% and 3.66% for the quarter ended September 30, 2019. The average yield on the loan portfolio (excluding SBA PPP loans) was 5.65% for the quarter ended September 30, 2020, compared to 5.87% for the quarter ended September 30, 2019. The average yield on total interest-earning assets was 4.67% for the quarter ended September 30, 2020, compared to 5.32% for the quarter ended September 30, 2019.   The increase in interest income was largely attributable to higher average balances due to the Pedestal acquisition and origination of SBA PPP loans during 2020.

Average loan yield (excluding SBA PPP loans), average yield on total interest-earning assets, net interest margin, and net interest spread were impacted for the quarter ended September 30, 2020, by the federal funds rate cuts of 175 basis points, which occurred during the fourth quarter of 2019 through the first quarter of 2020. The average yield on total interest-earning assets was also impacted by the lower-yielding SBA PPP loans originated during the quarter ended June 30, 2020.

Net interest margin and net interest spread (excluding loan discount accretion of $2.3 million) were 3.81% and 3.56%, respectively, for the quarter ended September 30, 2020, compared to 3.99% and 3.55% (excluding loan discount accretion of $544,000) for the quarter ended September 30, 2019.

Interest Expense

For the quarter ended September 30, 2020, overall cost of funds (which includes noninterest-bearing deposits) decreased by 68 basis points, from 1.31% to 0.63%, compared to the quarter ended September 30, 2019. The decrease in cost of funds was partially attributable to the accretion of deposit and Federal Home Loan Bank (FHLB) premiums associated with the Pedestal acquisition, $796,000 or 11 basis points, but largely 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 September 30, 2020, the increase was largely attributable to the acquisition of Pedestal during the quarter ended June 30, 2020.

Other Expense

For the quarter ended September 30, 2020, the increase was largely attributable to the acquisition of Pedestal during the quarter ended June 30, 2020.

Provision for Loan Losses

During the quarter ended September 30, 2020, Business First recorded a provision for loan losses of $2.5 million compared to $479,000 for the quarter ended September 30, 2019. The reserve for the quarter ended September 30, 2020, was impacted by $866,000 in net charge-offs, higher net new loan growth and the impact of the COVID-19 pandemic on the qualitative factors within the allowance for loan and lease losses.

Return on Assets and Equity

Return on average assets and return on average equity, each on an annualized basis, were 0.98% and 9.85%, respectively, for the quarter ended September 30, 2020, from 1.02% and 7.93%, respectively, for the quarter ended September 30, 2019. Both returns were significantly impacted by the provision for loan loss and acquisition-related expenses recorded for the quarter ended September 30, 2020, in addition to a lower net interest margin for the quarter ended September 30, 2020.

About Business First Bancshares, Inc.

Business First Bancshares, Inc., through its banking subsidiary b1BANK, formerly known as Business First Bank, operates 42 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, impaired loan 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) 
     
 September 30,June 30,September 30, 
(Dollars in thousands) 2020 2020 2019 
     
Balance Sheet Ratios    
     
Loans (HFI) to Deposits 95.25%  92.12%  97.77%  
Shareholders' Equity to Assets Ratio 10.07%  9.75%  12.62%  
     
Loans Receivable Held for Investment    
     
Commercial (1)$1,015,173 $1,026,596 $415,163  
Real Estate:    
Construction and Land 334,100  333,675  220,524  
Farmland 56,567  57,498  45,809  
1-4 Family Residential 493,344  495,827  281,413  
Multi-Family Residential 99,901  59,213  31,448  
Nonfarm Nonresidential 970,197  914,601  620,427  
Total Real Estate 1,954,109  1,860,814  1,199,621  
Consumer (1) 113,192  107,402  79,943  
Total Loans [Held for Investment]$3,082,474 $2,994,812 $1,694,727  
     
Allowance for Loan Losses    
     
Balance, Beginning of Period$18,715 $13,319 $11,603  
Charge-offs – Quarterly (956) (98) (13) 
Recoveries – Quarterly 90  51  21  
Provision for Loan Losses – Quarterly 2,491  5,443  479  
Balance, End of Period$20,340 $18,715 $12,090  
     
Allowance for Loan Losses to Total Loans (HFI) 0.66%  0.62%  0.71%  
Net Charge-offs (Recoveries) to Average Total Loans 0.03%  0.00%  -0.00% 
     
Remaining Loan Purchase Discount$38,207 $44,302 $4,848  
     
Nonperforming Assets    
     
Nonperforming Loans:    
Nonaccrual Loans (2)$7,988 $11,433 $11,577  
Loans Past Due 90 Days or More (2) 1,986  317  277  
Total Nonperforming Loans 9,974  11,750  11,854  
Other Nonperforming Assets:    
Other Real Estate Owned 10,994  7,642  2,326  
Other Nonperforming Assets: 414
  179  5  
Total Other Nonperforming Assets 11,408  7,821  2,331  
Total Nonperforming Assets$21,382 $19,571 $14,185  
     
Nonperforming Loans to Total Loans (HFI) 0.32%  0.39%  0.70%  
Nonperforming Assets to Total Assets 0.54%  0.49%  0.64%  
     
(1) Small Business Adminstration SBA Paycheck Protection Program PPP loans accounted for $392.9 million and $4.8 million of the Commercial and Consumer portfolios, respectively, as of September 30, 2020. 
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 EndedNine Months Ended 
 September 30,June 30,September 30,September 30,September 30, 
(Dollars in thousands, except per share data) 2020 2020 2019 2020 2019 
       
Per Share Data      
       
Basic Earnings per Common Share$0.47 $0.11 $0.41 $0.93 $1.35  
Diluted Earnings per Common Share 0.46  0.11  0.40  0.93  1.32  
Dividends per Common Share 0.10  0.10  0.10  0.30  0.28  
Book Value per Common Share 19.26  18.69  21.12  19.26  21.12  
       
       
Average Common Shares Outstanding 20,613,481  18,108,068  13,315,351  17,356,830  13,321,566  
Average Diluted Shares Outstanding 20,704,444  18,121,958  13,669,370  17,409,821  13,675,585  
End of Period Common Shares Outstanding 20,667,237  20,667,237  13,274,823  20,667,237  13,274,823  
       
       
Annualized Performance Ratios      
       
Return on Average Assets 0.98%  0.23%  1.02%  0.67%  1.14%  
Return on Average Equity 9.85%  2.35%  7.93%  6.30%  8.88%  
Net Interest Margin 4.06%  3.89%  4.10%  3.97%  4.10%  
Net Interest Spread 3.81%  3.59%  3.66%  3.67%  3.68%  
Efficiency Ratio (1) 65.65%  77.40%  67.16%  71.42%  63.65%  
       
Total Quarterly/Year-to-Date Average Assets$3,933,631 $3,496,074 $2,156,759 $3,224,940 $2,111,717  
Total Quarterly/Year-to-Date Average Equity 390,209  349,634  278,028  341,904  270,380  
       
Other Expenses      
       
Salaries and Employee Benefits$15,430 $17,621 $8,793 $42,486 $26,101  
Occupancy and Bank Premises 1,394  1,370  1,230  3,824  3,412  
Depreciation and Amortization 1,322  1,073  645  2,996  1,906  
Data Processing 1,832  1,055  380  3,539  1,572  
FDIC Assessment Fees 594  272  (105) 1,013  293  
Legal and Other Professional Fees 555  543  346  1,492  1,017  
Advertising and Promotions 320  334  544  960  1,150  
Utilities and Communications 789  645  397  1,751  1,018  
Ad Valorem Shares Tax 673  450  345  1,498  1,035  
Directors' Fees 117  100  121  291  451  
Other Real Estate Owned Expenses and Write-Downs 171  51  19  475  118  
Merger and Conversion-Related Expenses 556  1,726  350  3,430  331  
Other 3,198  2,557  1,813  7,636  4,841  
Total Other Expenses$26,951 $27,797 $14,878 $71,391 $43,245  
       
Other Income      
       
Service Charges on Deposit Accounts$1,592 $1,163 $1,035 $3,686 $3,007  
Gain on Sales of Securities 95  -  26  120  84  
Debit card and ATM Fee Income 1,399  959  460  2,765  1,397  
Bank-Owned Life Insurance Income 237  255  175  689  517  
Gain on Sales of Loans -  7  24  184  115  
Mortgage Origination Income 123  126  120  364  308  
Brokerage Commission 281  236  15  537  58  
Correspondent Bank Income 45  32  118  186  343  
Rental Income 14  15  159  60  488  
Gain (loss) on Sale of Banking Center -  -  (12) -  581  
Gain (loss) on Sales of Other Real Estate Owned (104) (19) 78  28  27  
Loss on Disposal of Other Assets (627) -  (650) (627) (650) 
Pass-through Income from SBIC Partnerships 364  1,624  138  2,368  1,404  
Other 798  598  236  1,657  773  
Total Other Income$4,217 $4,996 $1,922 $12,017 $8,452  
       
(1) Noninterest expense (excluding provision for loan losses) divided by noninterest income plus net interest income less gain/loss on sales of securities. 


Business First Bancshares, Inc. 
Consolidated Balance Sheets 
(Unaudited) 
     
 September 30,June 30,September 30, 
(Dollars in thousands) 2020 2020 2019 
     
Assets    
     
Cash and Due From Banks$103,894 $116,021 $63,356  
Federal Funds Sold 8,395  40,329  43,705  
Securities Available for Sale, at Fair Values 547,535  583,118  288,231  
Mortgage Loans Held for Sale 671  456  256  
Loans and Lease Receivable 3,082,474  2,994,812  1,694,727  
Allowance for Loan Losses (20,340) (18,715) (12,090) 
Net Loans and Lease Receivable 3,062,134  2,976,097  1,682,637  
Premises and Equipment, Net 59,241  63,959  27,092  
Accrued Interest Receivable 25,622  33,844  7,513  
Other Equity Securities 15,641  18,681  12,697  
Other Real Estate Owned 10,994  7,642  2,326  
Cash Value of Life Insurance 44,779  44,542  32,398  
Deferred Taxes, Net 5,829  6,858  2,674  
Goodwill 53,627  53,649  48,333  
Core Deposit Intangible 10,061  10,389  6,916  
Other Assets 6,247  5,553  2,706  
     
Total Assets$3,954,670 $3,961,138 $2,220,840  
     
     
Liabilities    
     
Deposits:    
Noninterest-Bearing$945,485 $985,537 $406,146  
Interest-Bearing 2,290,776  2,265,485  1,327,244  
Total Deposits 3,236,261  3,251,022  1,733,390  
     
Securities Sold Under Agreements to Repurchase 24,604  25,391  31,037  
Short-Term Borrowings 5,033  6,145  -  
Long-Term Borrowings 6,000  7,797  -  
Paycheck Protection Program Liquidity Facility 107,076  107,076  -  
Subordinated Debt 25,000  25,000  25,000  
Subordinated Debt -Trust Preferred Securities 5,000  5,000  -  
Federal Home Loan Bank Borrowings 117,950  118,177  128,000  
Accrued Interest Payable 3,621  3,920  1,837  
Other Liabilities 26,039  25,274  21,236  
     
Total Liabilities 3,556,584  3,574,802  1,940,500  
     
Shareholders' Equity    
     
Common Stock 20,667  20,667  13,275  
Additional Paid-In Capital 299,762  297,606  212,104  
Retained Earnings 67,399  59,850  52,265  
Accumulated Other Comprehensive Income 10,258  8,213  2,696  
     
Total Shareholders' Equity 398,086  386,336  280,340  
     
Total Liabilities and Shareholders' Equity$3,954,670 $3,961,138 $2,220,840  


Business First Bancshares, Inc. 
Consolidated Statements of Income 
(Unaudited) 
        
  Three Months Ended Nine Months Ended 
 September 30,June 30,September 30, September 30,September 30, 
(Dollars in thousands)202020202019 20202019 
        
Interest Income:       
Interest and Fees on Loans$39,918$34,636$24,408 $98,697$70,701 
Interest and Dividends on Securities 2,474 2,175 1,783  6,380 5,486 
Interest on Federal Funds Sold and Due From Banks 69 80 129  291 616 
Total Interest Income 42,461 36,891 26,320  105,368 76,803 
        
Interest Expense:       
Interest on Deposits 4,345 4,795 5,050  13,826 14,845 
Interest on Borrowings 1,184 1,177 1,012  3,480 2,387 
Total Interest Expense 5,529 5,972 6,062  17,306 17,232 
        
Net Interest Income 36,932 30,919 20,258  88,062 59,571 
        
Provision for Loan Losses: 2,491 5,443 479  9,301 2,414 
        
Net Interest Income After Provision for Loan Losses 34,441 25,476 19,779  78,761 57,157 
        
Other Income:       
Service Charges on Deposit Accounts 1,592 1,163 1,035  3,686 3,007 
Gain on Sales of Securities 95 - 26  120 84 
Other Income 2,530 3,833 861  8,211 5,361 
Total Other Income 4,217 4,996 1,922  12,017 8,452 
        
Other Expenses:       
Salaries and Employee Benefits 15,430 17,621 8,793  42,486 26,101 
Occupancy and Equipment Expense 3,228 2,888 2,135  8,007 5,913 
Merger and Conversion-Related Expense 556 1,726 235  3,430 331 
Other Expenses 7,737 5,562 3,715  17,468 10,900 
Total Other Expenses 26,951 27,797 14,878  71,391 43,245 
        
Income Before Income Taxes: 11,707 2,675 6,823- 19,387 22,364 
        
Provision for Income Taxes: 2,098 623 1,312  3,227 4,351 
        
Net Income:$9,609$2,052$5,511 $16,160$18,013 


Business First Bancshares, Inc. 
Consolidated Net Interest Margin 
(Unaudited) 
             
             
 Three Months Ended 
 September 30, 2020 June 30, 2020 September 30, 2019 
 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)$2,638,417 $37,2505.65% $2,304,438 $32,3065.61% $1,664,283 $24,4085.87% 
SBA PPP Loans 399,366  2,6682.67%  321,127 $2,3302.90%  -  -0.00% 
Securities Available for Sale 564,630  2,4741.75%  481,422  2,1751.81%  297,121  1,7832.40% 
Interest-Bearing Deposit in Other Banks 33,970  690.81%  69,169  800.46%  16,070  1293.21% 
Total Interest-Earning Assets 3,636,383  42,4614.67%  3,176,156  36,8914.65%  1,977,474  26,3205.32% 
Allowance for Loan Losses (19,329)    (13,606)    (11,783)   
Noninterest-Earning Assets 316,577     333,524     191,068    
Total Assets$3,933,631 $42,461  $3,496,074 $36,891  $2,156,759 $26,320  
             
             
Liabilities and Shareholders' Equity            
             
Interest-Bearing Liabilities:            
Interest-Bearing Deposits$2,262,774 $4,3450.77% $1,994,680 $4,7950.96% $1,300,740 $5,0501.55% 
Subordinated Debt 25,000  4226.75%  25,000  4226.75%  25,000  4226.75% 
Subordinated Debt - Trust Preferred Securities 5,000  453.60%  3,333  344.08%  -  -0.00% 
Advances from Federal Home Loan Bank (FHLB) 122,592  5151.68%  129,441  5261.63%  105,588  5602.12% 
Paycheck Protection Program Liquidity Facility (PPPLF) 107,076  950.35%  76,902  720.37%  -  -0.00% 
Other Borrowings 35,437  1071.21%  32,975  1231.49%  23,718  300.51% 
Total Interest-Bearing Liabilities 2,557,879  5,5290.86%  2,262,331  5,9721.06%  1,455,046  6,0621.67% 
             
Noninterest-Bearing Liabilities:            
Noninterest-Bearing Deposits$957,090    $852,608     398,748    
Other Liabilities 28,453     31,501     24,937    
Total Noninterest-Bearing Liabilities 985,543     884,109     423,685    
Shareholders' Equity: 390,209     349,634     278,028    
Total Liabilities and Shareholders' Equity$3,933,631    $3,496,074    $2,156,759    
             
Net Interest Spread  3.81%   3.59%   3.66% 
Net Interest Income $36,932   $30,919   $20,258  
Net Interest Margin  4.06%   3.89%   4.10% 
             
Overall Cost of Funds  0.63%   0.77%   1.31% 
             
NOTE: Average outstanding balances are determined utilizing monthly averages and average yield/rate is calculated utilizing a 30/360 day count convention.     


Business First Bancshares, Inc. 
Consolidated Net Interest Margin 
(Unaudited) 
         
         
 Nine Months Ended 
 September 30, 2020 September 30, 2019 
 Average   Average   
 OutstandingInterest Earned /Average OutstandingInterest Earned /Average 
(Dollars in thousands)BalanceInterest PaidYield / Rate BalanceInterest PaidYield / Rate 
         
Assets        
         
Interest-Earning Assets:        
Total Loans (Excluding SBA PPP)$ 2,227,681$ 93,6995.61% $ 1,605,423$ 70,7015.87% 
SBA PPP Loans240,1644,9982.77% --0.00% 
Securities Available for Sale444,2376,3801.91% 303,3745,4862.41% 
Interest-Bearing Deposit in Other Banks43,9652910.88% 26,6216163.09% 
Total Interest-Earning Assets2,956,047105,3684.75% 1,935,41876,8035.29% 
Allowance for Loan Losses(15,046)   (11,625)   
Noninterest-Earning Assets283,939   187,924   
Total Assets$ 3,224,940$ 105,368  $ 2,111,717$ 76,803  
         
         
Liabilities and Shareholders' Equity        
         
Interest-Bearing Liabilities:        
Interest-Bearing Deposits$ 1,866,556$ 13,8260.99% $ 1,323,927$ 14,8451.50% 
Subordinated Debt25,0001,2666.75% 25,0001,2676.76% 
Subordinated Debt - Trust Preferred Securities2,778793.79% --0.00% 
Advances from Federal Home Loan Bank (FHLB)116,7851,5381.76% 59,9901,0652.37% 
Paycheck Protection Program Liquidity Facility (PPPLF)61,3261670.36% --0.00% 
Other Borrowings45,1794301.27% 16,863550.43% 
Total Interest-Bearing Liabilities2,117,62417,3061.09% 1,425,78017,2321.61% 
         
Noninterest-Bearing Liabilities:        
Noninterest-Bearing Deposits738,578   396,452   
Other Liabilities26,834   19,105   
Total Noninterest-Bearing Liabilities765,412   415,557   
Shareholders' Equity:341,904   270,380   
Total Liabilities and Shareholders' Equity$ 3,224,940   $ 2,111,717   
         
Net Interest Spread  3.66%   3.68% 
Net Interest Income $ 88,062   $ 59,571  
Net Interest Margin  3.97%   4.10% 
         
Overall Cost of Funds  0.81%   1.26% 
         
NOTE: Average outstanding balances are determined utilizing monthly averages and average yield/rate is calculated utilizing a 30/360 day count convention. 


Business First Bancshares, Inc. 
Non-GAAP Measures 
(Unaudited) 
        
 Three Months Ended Nine Months Ended 
 September 30,June 30,September 30, September 30,September 30, 
(Dollars in thousands, except per share data) 2020 2020 2019  2020 2019 
        
Interest Income:       
Interest income$42,461 $36,891 $26,320  $105,368 $76,803  
Core interest income 42,461  36,891  26,320   105,368  76,803  
Interest Expense:       
Interest expense 5,529  5,972  6,062   17,306  17,232  
Core interest expense 5,529  5,972  6,062   17,306  17,232  
Provision for Loan Losses: (b)       
Provision for loan losses 2,491  5,443  479   9,301  2,414  
Core provision expense 2,491  5,443  479   9,301  2,414  
Other Income:       
Other income 4,217  4,996  1,922   12,017  8,452  
Sale of impaired credit -  -  -   -  (91) 
(Gains) losses on former bank premises and equipment 635  -  594   509  594  
(Gains) on sale of securities (95) -  (26)  (120) (84) 
(Gains) on sale of banking center -  -  12   -  (581) 
Core other income 4,757  4,996  2,502   12,406  8,290  
Other Expense:       
Other expense 26,951  27,797  14,878   71,391  43,245  
Acquisition-related expenses (2) (1,206) (6,573) (288)  (8,991) (674) 
Stock option exercises - excess taxes -  -  -   (71) -  
Early lease termination -  -  (87)  -  (87) 
Core other expense 25,745  21,224  14,503   62,329  42,484  
Pre-Tax Income: (a)       
Pre-tax income 11,707  2,675  6,823   19,387  22,364  
Sale of impaired credit -  -  -   -  (91) 
(Gains) losses on former bank premises and equipment 635  -  594   509  594  
(Gains) on sale of securities (95) -  (26)  (120) (84) 
(Gains) losses on sale of banking center -  -  12   -  (581) 
Acquisition-related expenses (2) 1,206  6,573  288   8,991  674  
Stock option exercises - excess taxes -  -  -   71  -  
Early lease termination -  -  87   -  87  
Core pre-tax income 13,453  9,248  7,778   28,838  22,963  
Provision for Income Taxes: (1)       
Provision for income taxes 2,098  623  1,312   3,227  4,351  
Tax on sale of impaired credit -  -  -   -  (19) 
Tax on (gains) on former bank premises and equipment 133  -  125   107  125  
Tax on (gains) on sale of securities (20) -  (5)  (25) (18) 
Tax on sale of banking center -  -  3   -  (122) 
Tax on acquisition-related expenses (2) 241  1,275  60   1,607  135  
Tax on stock option exercises -  -  -   601  -  
Tax on early lease termination -  -  18   -  18  
Core provision for income taxes 2,452  1,898  1,513   5,517  4,470  
Net Income:       
Net income 9,609  2,052  5,511   16,160  18,013  
Sale of impaired credit, net of tax -  -  -   -  (72) 
(Gains) losses on former bank premises and equipment, net of tax 502  -  469   402  469  
(Gains) on sale of securities, net of tax (75) -  (21)  (95) (66) 
(Gains) losses on sale of banking center, net of tax -  -  9   -  (459) 
Acquisition-related expenses (2), net of tax 965  5,298  228   7,384  539  
Stock option exercises, net of tax -  -  -   (530) -  
Early lease termination, net of tax -  -  69   -  69  
Core net income$11,001 $7,350 $6,265  $23,321 $18,493  
        
Pre-tax, pre-provision earnings (a+b)$14,198 $8,118 $7,302  $28,688 $24,778  
Sale of impaired credit -  -  -   -  (91) 
(Gains) losses on former bank premises and equipment 635  -  594   509  594  
(Gains) on sale of securities (95) -  (26)  (120) (84) 
(Gains)/losses on sale of banking center -  -  12   -  (581) 
Acquisition-related expenses (2) 1,206  6,573  288   8,991  674  
Stock option exercises -  -  -   71  -  
Early lease termination   87    87  
Core pre-tax, pre-provision earnings$15,944 $14,691 $8,257  $38,139 $25,377  
        
Average Diluted Shares Outstanding 20,704,444  18,121,958  13,669,370   17,409,821  13,675,585  
        
Diluted Earnings Per Share:       
Diluted earnings per share$0.46 $0.11 $0.40  $0.93 $1.32  
Sale of impaired credit, net of tax -  -  -   -  (0.01) 
(Gains) losses on former bank premises and equipment , net of tax 0.02  -  0.03   0.02  0.03  
(Gains) on sale of securities, net of tax (0.00) -  (0.00)  (0.01) (0.01) 
(Gains) losses on sale of banking center -  -  0.00   -  (0.03) 
Acquisition-related expenses (2), net of tax 0.05  0.30  0.02   0.43  0.04  
Stock option exercises -  -  -   (0.03) -  
Early lease termination, net of tax -   0.01   -  0.01  
Core diluted earnings per share$0.53 $0.41 $0.46  $1.34 $1.35  
        
Pre-tax, pre-provision profit diluted earnings per share$0.69 $0.45 $0.53  $1.65 $1.81  
Sale of impaired credit -  -  -   -  (0.01) 
(Gains) losses on former bank premises and equipment 0.03  -  0.04   0.03  0.04  
(Gains) on sale of securities (0.01) -  (0.00)  (0.01) (0.01) 
(Gains) losses on sale of banking center   0.00   -  (0.04) 
Acquisition-related expenses (2) 0.06  0.36  0.02   0.52  0.05  
Stock option exercises -  -  -   0.00  -  
Early lease termination -   0.01   -  0.01  
Core pre-tax, pre-provision diluted earnings per share$0.77 $0.81 $0.60  $2.19 $1.86  
        
(1) Tax rates, exclusive of certain nondeductible merger-related expenses and goodwill, utilized were 21% for 2020 and 2019. These rates approximated the marginal tax rates.  
(2) Includes merger and conversion-related expenses and salary and employee benefits.     


Business First Bancshares, Inc. 
Non-GAAP Measures 
(Unaudited) 
        
 Three Months Ended Nine Months Ended 
 September 30,June 30,September 30, September 30,September 30, 
(Dollars in thousands, except per share data) 2020 2020 2019  2020 2019 
        
        
Total Quarterly/Year-to-Date Average Assets$3,933,631 $3,496,074 $2,156,759  $3,224,940 $2,111,717  
Total Quarterly/Year-to-Date Average Equity$390,209 $349,634 $278,028  $341,904 $270,380  
        
Net Income:       
Net income$9,609 $2,052 $5,511  $16,160 $18,013  
Sale of impaired credit, net of tax -  -  -   -  (72) 
(Gains) losses on former bank premises and equipment , net of tax 502  -  469   402  469  
(Gains) on sale of securities, net of tax (75) -  (21)  (95) (66) 
(Gains) losses on sale of banking center, net of tax -  -  9   -  (459) 
Acquisition-related expenses (2), net of tax 965  5,298  228   7,384  539  
Stock option exercises, net of tax -  -  -   (530) -  
Early lease termination, net of tax   69   -  69  
Core net income$11,001 $7,350 $6,265  $23,321 $18,493  
        
Return on average assets 0.98%  0.23%  1.02%   0.67%  1.14%  
Core return on average assets 1.12%  0.84%  1.16%   0.96%  1.17%  
Return on equity 9.85%  2.35%  7.93%   6.30%  8.88%  
Core return on average equity 11.28%  8.41%  9.01%   9.09%  9.12%  
        
Interest Income:       
Interest income$42,461 $36,891 $26,320  $105,368 $76,803  
Core interest income 42,461  36,891  26,320   105,368  76,803  
Interest Expense:       
Interest expense 5,529  5,972  6,062   17,306  17,232  
Core interest expense 5,529  5,972  6,062   17,306  17,232  
Other Income:       
Other income 4,217  4,996  1,922   12,017  8,452  
Sale of impaired credit -  -  -   -  (91) 
(Gains) losses on former bank premises and equipment 635  -  594   509  594  
(Gains) on sale of securities (95) -  (26)  (120) (84) 
(Gains) losses on sale of banking center -  -  12   -  (581) 
Core other income 4,757  4,996  2,502   12,406  8,290  
Other Expense:       
Other expense 26,951  27,797  14,878   71,391  43,245  
Acquisition-related expenses (1,206) (6,573) (288)  (8,991) (674) 
Stock option exercises - excess taxes -  -  -   (71) -  
Early lease termination   (87)  -  (87) 
Core other expense$25,745 $21,224 $14,503  $62,329 $42,484  
        
Efficiency Ratio:       
Other expense (a)$26,951 $27,797 $14,878  $71,391 $43,245  
Core other expense (c)$25,745 $21,224 $14,503  $62,329 $42,484  
Net interest and other income (1) (b)$41,054 $35,915 $22,154  $99,959 $67,939  
Core net interest and other income (1) (d)$41,689 $35,915 $22,760  $100,468 $67,861  
Efficiency ratio (a/b) 65.65%  77.40%  67.16%   71.42%  63.65%  
Core efficiency ratio (c/d) 61.75%  59.10%  63.72%   62.04%  62.60%  
        
Total Average Interest-Earnings Assets$3,636,383 $3,176,156 $1,977,474  $2,956,047 $1,935,418  
        
Net Interest Income:        
Net interest income$36,932 $30,919 $20,258   88,062 $59,571  
Loan discount accretion (2,270) (1,465) (544)  (4,025) (1,802) 
Net interest income excluding loan discount accretion$34,662 $29,454 $19,714  $84,037 $57,769  
        
Net interest margin (2) 4.06%  3.89%  4.10%   3.97%  4.10%  
Net interest margin excluding loan discount accretion (2) 3.81%  3.71%  3.99%   3.79%  3.98%  
Net interest spread 3.81%  3.59%  3.66%   3.66%  3.68%  
Net interest spread excluding loan discount accretion 3.56%  3.41%  3.55%   3.48%  3.56%  
        
(1) Excludes gains/losses on sales of securities.       
(2) Calculated utilizing a 30/360 day count convention.       


Business First Bancshares, Inc. 
Non-GAAP Measures 
(Unaudited) 
     
     
 September 30,June 30,September 30, 
(Dollars in thousands, except per share data) 2020 2020 2019 
     
Total Shareholders' (Common) Equity:    
Total shareholders' equity$398,086 $386,336 $280,340  
Goodwill (53,627) (53,649) (48,333) 
Core deposit intangible (10,061) (10,389) (6,916) 
Total tangible common equity$334,398 $322,298 $225,091  
     
     
Total Assets:    
Total assets$3,954,670 $3,961,138 $2,220,840  
Goodwill (53,627) (53,649) (48,333) 
Core deposit intangible (10,061) (10,389) (6,916) 
Total tangible assets$3,890,982 $3,897,100 $2,165,591  
     
Common shares outstanding 20,667,237  20,667,237  13,274,823  
     
Book value per common share$19.26 $18.69 $21.12  
Tangible book value per common share$16.18 $15.59 $16.96  
Common equity to total assets 10.07%  9.75%  12.62%  
Tangible common equity to tangible assets 8.59%  8.27%  10.39%  
     

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