Business First Bancshares, Inc., Announces Financial Results for Q1 2025

BATON ROUGE, La., April 24, 2025 (GLOBE NEWSWIRE) -- Business First Bancshares, Inc. (NASDAQ: BFST) (Business First), parent company of b1BANK, today announced its unaudited results for the quarter ended March 31, 2025. Business First reported net income available to common shareholders of $19.2 million or $0.65 per diluted common share, increases of $4.1 million and $0.14, respectively, compared to the linked quarter ended Dec. 31, 2024. On a non-GAAP basis, core net income for the quarter ended March 31, 2025, which excludes certain income and expenses, was $19.3 million or $0.65 per diluted common share, a decrease of $0.2 million and $0.01, from the linked quarter.

"We are excited to start the year off with solid earnings,” said Jude Melville, chairman, president and CEO of Business First Bancshares. "We increased our capital, our reserves, and our per share tangible book value at healthy rates, while demonstrating diversity of our revenue streams and growth of margins in our core spread business. We are also proud of our less tangible development, continuing to integrate our latest acquisition and implementing a number of technological initiatives including preparation for our core conversion in the second quarter, investments that will enable us to provide high quality and more efficient service for our client base into the future.”

On Thursday, April 24, 2025, 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 first quarter in the amount of $0.14 per share of common stock. The preferred and common dividends will be paid on May 31, 2025, or as soon thereafter as practicable, to the shareholders of record as of May 15, 2025.

Quarterly Highlights

• Solid Core Performance. Return to common shareholders on average assets, on an annualized basis, was 1.00% for the quarter ended March 31, 2025, or 1.01% on a non-GAAP basis, compared to 0.78% or 1.00% on a non-GAAP basis for the linked quarter.

• Net Interest Margin (NIM) Expansion. Net interest income totaled $66.0 million and net interest margin and net interest spread were 3.68% and 2.91%, respectively, compared to $65.7 million, 3.61% and 2.77% for the linked quarter. Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $0.8 million) were 3.64% and 2.86% for the quarter ended March 31, 2025, compared to 3.56% and 2.72% (excluding loan discount accretion of $1.0 million) for the linked quarter. The increases of 8 basis points (bps) and 14 bps were driven by a reduction in Business First's overall cost of funding.

• Noninterest Income Investments. Various noninterest income channels produced solid aggregate returns. Loan sales, mostly attributable to Small Business Administration (SBA) loans, produced income of $1.3 million, an increase of $1.0 million when compared to the linked quarter, along with continued consistent performance in the swap business with revenue of $739,000. Appreciation and income from our equity investments also produced income of $751,000 for the quarter.

• Capital Growth. Common equity to total assets increased from 9.26% to 9.69% compared to the linked quarter. Tangible common equity to tangible assets increased from 7.63% to 8.06%, 5.64% or 22.89% annualized, compared to the linked quarter. The increase was largely driven by quarterly earnings, which accounted for approximately 69.9%, or 32 bps. On a non-GAAP basis, tangible book value per common share increased from $19.92 at Dec. 31, 2024, to $20.84 at March 31, 2025, 4.62% or 18.73% annualized.

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Statement of Financial Condition

Loans

Loans held for investment were flat compared to the linked quarter with a decrease of $480,000 or .01%, .03% annualized. Real estate construction loans decreased $36.8 million from the linked quarter, compared to an increase of $49.8 million from the linked quarter in real estate residential loans, largely due to the conversion of multi- family construction to permanent financing. Based on unpaid principal balances, Texas- based loans represented approximately 41% of the overall loan portfolio as of March 31, 2025, no change from the linked quarter.

Credit Quality

Credit quality metrics regressed with isolated credit migration occurring during the quarter. The ratio of nonperforming loans compared to loans held for investment increased 27 bps to 0.69% at March 31, 2025, while the ratio of nonperforming assets compared to total assets increased 16 bps to 0.55% compared to the linked quarter.

The increase in loans past due 90 days and accruing is attributable to a single $4.6 million relationship. The increase in nonaccrual loans is largely attributable to two relationships with outstanding balances of $8.4 million for which Business First reserved a total of $2.3 million during the quarter.

Securities

The securities portfolio increased $27.0 million, or 3.02%, from the linked quarter, impacted by $12.9 million in positive fair value adjustments and the remainder of the increase was primarily attributed to purchases of mortgage-backed securities. The securities portfolio, based on estimated fair value, represented 11.83% of total assets as of March 31, 2025.

Deposits

Deposits decreased $53.1 million or 0.82%, 3.31% annualized, for the quarter ended March 31, 2025, compared to the linked quarter. Noninterest bearing deposits decreased $48.7 million, with the decline driven primarily by customer withdrawals as opposed to full account closures. New account openings continued in the quarter led by our Houston, Dallas, and Southwest Louisiana regions. Business First generated approximately $379.9 million from new deposit accounts during the quarter.

Borrowings

Borrowings decreased $49.2 million or 10.17%, from the linked quarter due primarily to a reduction in short-term Federal Home Loan Bank advances and a $7.0 million redemption of subordinated debt by Business First.

Shareholders' Equity

Shareholders' equity increased $26.8 million during the quarter ended March 31, 2025. Accumulated other comprehensive income (AOCI) increased $10.1 million or 16.12%, during the quarter due to positive after-tax fair value adjustments in the securities portfolio. Book value per common share increased to $25.51 at March 31, 2025, compared to $24.62 at Dec. 31, 2024 due to strong earnings and positive fair value adjustments attributable to the securities portfolio. On a non-GAAP basis, tangible book value per common share increased from $19.92 at Dec. 31, 2024, to $20.84 at March 31, 2025, 4.62% or 18.73% annualized.

Results of Operations

Net Interest Income

For the quarter ended March 31, 2025, net interest income totaled $66.0 million, compared to $65.7 million from the linked quarter. Loan and interest-earning asset yields of 6.99% and 6.35%, decreased 6 and 3 bps, respectively, compared to 7.05% and 6.38% from the linked quarter. However, net interest margin and net interest spread were 3.68% and 2.91% compared to 3.61% and 2.77% for the linked quarter. The overall cost of funds, which included noninterest-bearing deposits, declined 11 bps from 2.93% from the linked quarter to 2.82% for the quarter ended March 31, 2025, through continued management of deposit costs.

Non-GAAP net interest income (excluding loan discount accretion of $0.8 million) totaled $65.2 million for the quarter ended March 31, 2025, compared to $64.7 million (excluding loan discount accretion of $1.0 million) for the linked quarter. Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $0.8 million) were 3.64% and 2.86%, respectively, for the quarter ended March 31, 2025, compared to 3.56% and 2.72% (excluding loan discount accretion of $1.0 million) for the linked quarter. Excluding loan discount accretion, loan yields decreased 4 bps to 6.94% from 6.98%, and interest earnings asset yields decreased 3 bps to 6.30% from 6.33%, compared to the linked quarter.

Provision for Credit Losses

During the quarter ended March 31, 2025, Business First recorded a provision for credit losses of $2.8 million, compared to $6.7 million from the linked quarter. The linked quarter's reserve was primarily associated with the Oakwood acquisition on October 1, 2024. The current quarter's reserve was largely associated with $2.3 million in additional individual reserves for two commercial lending relationships, resulting in a 30.7% coverage ratio of their remaining book balances as of March 31, 2025.

Other Income

For the quarter ended March 31, 2025, other income increased $1.4 million or 11.55%, compared to the linked quarter. The net increase was largely attributable to a $1.0 million increase in gain on sales of loans, attributable to SBA sales, a $630,000 gain on extinguishment of debt related to an early redemption of $7.0 million in subordinated debt, and a $565,000 increase in pass-through income on equity investments, offset by a $549,000 reduction in swap fee income.

Other Expenses

For the quarter ended March 31, 2025, other expenses increased by $1.0 million or 2.03%, compared to the linked quarter. The increase was largely attributable to a $1.4 million increase in salaries and benefits, of which $430,000 were associated with acquisition-related expenses attributable to retention, severance, and stay payments, and the remainder largely associated with merit increases and annual reset in FICA taxes and bonus accruals.

Return on Assets and Common Equity

Return to common shareholders on average assets and common equity, each on an annualized basis, were 1.00% and 10.48% for the quarter ended March 31, 2025, compared to 0.78% and 8.23%, respectively, for the linked quarter. Non-GAAP return to common shareholders on average assets and common equity, each on an annualized basis, were 1.01% and 10.53% for the quarter ended March 31, 2025, compared to 1.00% and 10.58%, for the linked quarter.

Conference Call and Webcast

Executive management will host a conference call and webcast to discuss results on Thursday, April 24, 2025, at 4:00 p.m. Central Time. Interested parties may attend the call by dialing toll-free 1-800-715-9871 (North America only), conference ID 8825623, or asking for the Business First Bancshares conference call. The live webcast can be found at https://edge.media-server.com/mmc/p/ziae6qsd. On the day of the presentation, the corresponding slide presentation will be available to view on the b1BANK 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 $7.8 billion in assets, $7.1 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 Texas providing commercial and personal banking products and services. b1BANK is a 2024 Mastercard "Innovation Award” winner and multiyear winner of American Banker Magazine'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.