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

Rhea-AI Summary

Business First Bancshares, Inc. (NASDAQ: BFST) reported a strong second quarter 2021, with a net income of $17.4 million ($0.84 per diluted share), an increase of $5.1 million from Q1 2021. Core net income rose to $18.7 million ($0.90 per diluted share). Record loan growth was achieved, driven by the Dallas market, despite a $187.1 million decrease in total loans due to the sale of SBA PPP loans. Nonperforming loans decreased to 0.40%. The company declared a dividend of $0.12 per share, consistent with the previous quarter.

Positive

• Net income increased to $17.4 million ($0.84 per diluted share), up from $12.3 million ($0.59) in Q1 2021.
• Core net income rose to $18.7 million ($0.90 per diluted share), up from $12.6 million ($0.61) in Q1 2021.
• Record loan growth in the Dallas region, contributing to a 6.52% increase in loans (annualized 26.06%) excluding SBA PPP loans.
• Reduction in nonperforming loans to 0.40%, down from 0.44% in Q1 2021.

Negative

• Total loans held for investment decreased by $187.1 million (6.15%) due to SBA PPP loan forgiveness and sales.
• Overall net interest income fell to $37.9 million, down from $40.3 million in Q1 2021.
• Increased other expenses by $4.1 million, affecting overall profitability.

BATON ROUGE, La., July 26, 2021 (GLOBE NEWSWIRE) -- Business First Bancshares, Inc. (NASDAQ: BFST) (Business First), parent company of b1BANK, Baton Rouge, Louisiana, today announced its unaudited results for the quarter ended June 30, 2021, including net income of $17.4 million, or $0.84 per diluted share, an increase of $5.1 million and $0.25, respectively, from the prior quarter ended March 31, 2021. On a non-GAAP basis, core net income for the quarter ended June 30, 2021, which excludes certain income and expenses, was $18.7 million, or $0.90 per diluted share, an increase of $6.1 million and $0.29, respectively, from prior quarter ended March 31, 2021.

“Our second quarter results included a number of successes that bode well for our progress over the remainder of 2021,” said Jude Melville, president and CEO. “Business demand was strong, resulting in record loan growth.  This growth was driven primarily by our Dallas region which now accounts for approximately 18% of our company’s credit exposure. We sold the bulk of our SBA PPP portfolio, enabling us to re-position our go-forward asset mix and enhance our capital levels.  We continued to attract talented teammates, both lifting out a team of bankers in New Orleans and adding an LPO in Ruston.  These actions on top of integration of the Smith Shellnut Wilson, LLC investment management group give me confidence that our company is well positioned to continue building off this quarter’s momentum.”

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

Quarterly Highlights

• Smith Shellnut Wilson, LLC (SSW) Acquisition. On April 1, 2021, Business First completed its acquisition of SSW and has substantially integrated the business as of June 30, 2021.
• Loan Growth. Total loans held for investment at June 30, 2021, were $2.9 billion, a decrease of $187.1 million compared to March 31, 2021. The decrease was attributable to a net decrease in Small Business Administration (SBA) Paycheck Protection Program (PPP) loans within the commercial portfolio of $360.1 million, due to $116.5 million in forgiveness and a portfolio sale of $243.6 million in outstanding principal balance. Excluding the net decrease in SBA PPP loans, total loans held for investment increased for the quarter ended June 30, 2021, by 6.52%, or 26.06% annualized. The loan growth, excluding SBA PPP loans, was largely attributable to our Dallas, Tx. market.
• Small Business Administration (SBA) Paycheck Protection Program (PPP) Portfolio Sale. Business First sold the majority of its SBA PPP loan portfolio on June 28, 2021, with an outstanding principal balance of $243.6 million, at par, recognizing the remaining net deferred fees and costs as a $9.2 million pre-tax gain on sale. At June 30, 2021, Business First’s remaining SBA PPP loan portfolio had an outstanding balance of $25.7 million.
• New Loan Production Office (LPO) Activity. Business First opened a new LPO in Ruston, La. during the quarter ended June 30, 2021. Additionally, Business First hired five new producers during the quarter ended June 30, 2021, in the New Orleans market, with plans to open a new LPO in New Orleans/Metairie, La. in Q3 2021.  
• Stock Repurchases. During the quarter ended June 30, 2021, Business First repurchased approximately 83,504 shares of its common stock at a weighted average cost of $23.03 per share, for a total cost of $1.9 million.
  

Financial Condition

June 30, 2021, Compared to March 31, 2021

Loans

Loans held for investment decreased $187.1 million, or 6.15% (24.60% annualized), for the quarter ended June 30, 2021. The decrease was attributable to a net decrease in SBA PPP loans within the commercial portfolio of $360.1 million due to $116.5 million in forgiveness and a portfolio sale of $243.6 million in outstanding principal balances. Year to date annualized loan growth was (9.12%), inclusive of SBA PPP loans. As of June 30, 2021, SBA PPP loans with an unpaid principal balance of $25.7 million remained outstanding.   

Excluding the net decrease in SBA PPP loans, total loans held for investment increased for the quarter ended June 30, 2021, by 6.52%, or 26.06% annualized. Year to date annualized loan growth was 11.45% excluding SBA PPP loans.

Credit Quality

Nonperforming loans as a percentage of total loans held for investment decreased from 0.44% as of March 31, 2021, to 0.40% as of June 30, 2021. Nonperforming assets as a percentage of total assets decreased from 0.52% as of March 31, 2021, to 0.42% as of June 30, 2021. The decreases in nonperforming loans were partially attributable to charge-offs of $861,000. The decrease in nonperforming assets included the sale of three former banking centers which resulted in a $2.3 million balance decrease.

Total Shareholders’ Equity

Book value per common share was $20.78 at June 30, 2021, compared to $20.03 at March 31, 2021. On a non-GAAP basis, tangible book value per share was $17.24 at June 30, 2021, compared to $16.99 at March 31, 2021.  

June 30, 2021, Compared to June 30, 2020

Loans

Total loans held for investment decreased by $139.9 million compared to June 30, 2020, or (4.67)%, primarily due to the forgiveness and portfolio sale of SBA PPP loans. Excluding SBA PPP loans, loans increased $229.7 million, or 8.84%.

Credit Quality

Nonperforming loans as a percentage of total loans held for investment increased from 0.39% as of June 30, 2020, to 0.40% as of June 30, 2021. Nonperforming assets as a percentage of total assets decreased from 0.49% as of June 30, 2020, to 0.42% as of June 30, 2021. The slight increase in the nonperforming loans as a percentage of total loans held for investment was due to the lower SBA PPP loan balance as of June 30, 2021, as nonperforming assets decreased $1.3 million since June 30, 2020.

Total Shareholders’ Equity

Book value per common share was $20.78 at June 30, 2021, compared to $18.69 at June 30, 2020. On a non-GAAP basis, tangible book value per share was $17.24 at June 30, 2021, compared to $15.59 at June 30, 2020, an increase of 10.58%.

Results of Operations

Second Quarter 2021 Compared to First Quarter 2021

Net Income and Diluted Earnings Per Share

For the quarter ended June 30, 2021, net income was $17.4 million, or $0.84 per diluted share, compared to net income of $12.3 million, or $0.59 per diluted share, for the quarter ended March 31, 2021. The increases, $5.1 million and $0.25, respectively, were largely attributable to the $10.0 million gain on sale of loans, primarily attributable to a $9.2 million gain recognized upon the sale of SBA PPP loans with an outstanding principal balance of $243.6 million, $1.5 million increase in Small Business Investment Company (SBIC) equity investment income and an increase of $873,000 in brokerage commissions due to the acquisition of SSW, offset by increases in other expenses of $4.1 million and taxes of $1.8 million.

On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended June 30, 2021, was $18.7 million, or $0.90 per diluted share, compared to core net income of $12.6 million, or $0.61 per diluted share, for the quarter ended March 31, 2021. Notable noncore events impacting earnings for the quarter ended June 30, 2021, included $938,000 in occupancy and bank premises expenses attributable to hurricane damage and a $540,000 loss on sales of former premises and equipment within other income, compared to $350,000 in occupancy and bank premises expenses attributable to hurricane damage for the quarter ended March 31, 2021.

Interest Income

For the quarter ended June 30, 2021, net interest income totaled $37.9 million and net interest margin and net interest spread were 3.87% and 3.68%, respectively, compared to $40.3 million, 4.23% and 4.06% for the quarter ended March 31, 2021. The average yield on the loan portfolio (excluding SBA PPP loans) was 5.13% for the quarter ended June 30, 2021, compared to 5.53% for the quarter ended March 31, 2021. The average yield on total interest-earning assets was 4.32% for the quarter ended June 30, 2021, compared to 4.65% for the quarter ended March 31, 2021. The reduction in interest income was largely attributable to lower discount accretion on the acquired loan portfolio, a $1.4 million decrease, and less yield on the SBA PPP portfolio due to lower forgiveness caused by the $243.6 million portfolio sale during the quarter, as well as increased interest expense due to the full impact of subordinated debt issued during 2021.

Net interest margin and net interest spread were negatively impacted for the quarter ended June 30, 2021, by $1.4 million less in loan discount accretion on the acquired loan portfolio, 15 basis points each, and $1.5 million less in SBA PPP origination fees, 16 basis points each, and an increase in the overall cost of funds (which includes noninterest-bearing deposits) due to the full impact of the 2021 subordinated debt issuances, six and seven basis points, respectively.  

The average loan yield (excluding SBA PPP loans) was impacted by the origination of loans at lower rates than payoffs during the quarter, as well as lower loan discount accretion on the acquired loan portfolio.

Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $1.6 million) were 3.71% and 3.52%, respectively, for the quarter ended June 30, 2021, compared to 3.91% and 3.73% (excluding loan discount accretion of $3.1 million) for the quarter ended March 31, 2021.   

Interest Expense

For the quarter ended June 30, 2021, overall cost of funds (which includes noninterest-bearing deposits) increased by four basis points, from 0.41% to 0.45%, compared to the quarter ended March 31, 2021. The increase in cost of funds was largely attributable to the increased expense associated with the issuances of subordinated debt in 2021.

Other Income

For the quarter ended June 30, 2021, other income was impacted by a $10.0 million increase in gain on sale of loans, primarily associated with the $9.2 million gain on the sale of the SBA PPP portfolio, an increase of income from SBIC investments of $1.5 million, and an increase in brokerage commissions of $873,000 as result of the SSW acquisition, compared to the quarter ended March 31, 2021.

Other Expenses

For the quarter ended June 30, 2021, other expenses were impacted by additional salaries and employee benefits of $1.8 million, partially attributed to annual merit increases, the addition of new employees, including SSW, and $488,000 in payroll taxes on restricted stock grants, $465,000 increases in both occupancy and bank premises, impacted by $938,000 in hurricane damage expense, and data processing, respectively. The other expense category also increased $1.1 million, impacted by $477,000 in reserves for unfunded commitments.

Provision for Loan Losses

During the quarter ended June 30, 2021, Business First recorded a provision for loan losses of $2.2 million, compared to $3.4 million for the quarter ended March 31, 2021. The decrease for the quarter ended June 30, 2021, was driven primarily by the additional reserves ($1.4 million) required on a single energy-related loan which was transferred to nonaccrual during the quarter ended March 31, 2021.

Return on Assets and Equity

Return on average assets and equity, each on an annualized basis, were 1.58% and 16.57%, respectively, for the quarter ended June 30, 2021, compared to 1.15% and 11.86%, respectively, for the quarter ended March 31, 2021. Both returns were impacted by higher net income for the quarter ended June 30, 2021, mainly attributable to the gain on sale of the SBA PPP portfolio.

Second Quarter 2021 Compared to Second Quarter 2020

Net Income and Diluted Earnings Per Share

For the quarter ended June 30, 2021, net income was $17.4 million, or $0.84 per diluted share, compared to net income of $2.1 million, or $0.11 per diluted share, for the quarter ended June 30, 2020. The increases in net income and diluted earnings per share were largely attributable to the increases in net interest income related to the acquisition of Pedestal on May 1, 2020, origination of SBA PPP loans, lower costs of funds, and decrease in the provision for loan losses, as well as a $9.2 million gain on sale resulting from the SBA PPP loan portfolio within other income.

On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended June 30, 2021, was $18.7 million, or $0.90 per diluted share, compared to core net income of $7.4 million, or $0.41 per diluted share, for the quarter ended June 30, 2020. Notable noncore events impacting earnings for the quarter ended June 30, 2021, included $938,000 in occupancy and bank premises expenses attributable to hurricane damage and $540,000 losses on sales of former premises and equipment within other income, compared to $6.6 million in acquisition-related expenses incurred during the quarter ended June 30, 2020.

Interest Income

For the quarter ended June 30, 2021, net interest income totaled $37.9 million and net interest margin and net interest spread were 3.87% and 3.68%, respectively, compared to $30.9 million, 3.89% and 3.59% for the quarter ended June 30, 2020. The average yield on the loan portfolio (excluding SBA PPP loans) was 5.13% for the quarter ended June 30, 2021, compared to 5.61% for the quarter ended June 30, 2020. The increase in interest income was largely attributable to higher average balances in loans, due to the Pedestal acquisition and origination of SBA PPP loans, and increase in securities due to the increase in deposits and excess cash.

Average yield on total interest-earning assets, net interest margin, and net interest spread were negatively impacted for the quarter ended June 30, 2021, by lower yielding loans and securities, offset partially by lower deposit and borrowing costs.

Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $1.6 million) were 3.71% and 3.52%, respectively, for the quarter ended June 30, 2021, compared to 3.71% and 3.41% (excluding loan discount accretion of $1.5 million) for the quarter ended June 30, 2020.

Interest Expense

For the quarter ended June 30, 2021, overall cost of funds (which includes noninterest-bearing deposits) decreased by 32 basis points, from 0.77% to 0.45%, compared to the quarter ended June 30, 2020. The decrease in cost of funds was primarily attributable to an overall reduction in interest rates on deposit offerings and reduction in FHLB advance balances, offset by an increase in subordinated debt balances.

Other Income

For the quarter ended June 30, 2021, the increase in other income was largely attributable to the gain on sale of loans of $10.0 million, generally attributable to the $9.2 million gain on the sale of the SBA PPP loan portfolio, as well as increases in debit card and ATM fee income, $818,000, and brokerage commissions, $1.2 million, compared to the quarter ended June 30, 2020.

Other Expenses

For the quarter ended June 30, 2021, the increase in other expense was largely attributable to the increase in occupancy and bank premises, data processing, and other expenses compared to the quarter ended June 30, 2020. Occupancy and bank premises expense was impacted by $938,000 in hurricane damage expenses for the quarter ended June 30, 2021, while data processing increased due to the volume from the Pedestal acquisition and organic growth. Other expenses increased due to increased consulting and business development costs and other miscellaneous expenses due to the expansion of Business First following the Pedestal acquisition on May 1, 2020, and various other items.

Provision for Loan Losses

During the quarter ended June 30, 2021, Business First recorded a provision for loan losses of $2.2 million compared to $5.4 million for the quarter ended June 30, 2020. The reserve for the quarter ended June 30, 2020, was impacted significantly by the estimated impact on the general economy of the COVID-19 pandemic at the time.

Return on Assets and Equity

Return on average assets and return on average equity, each on an annualized basis, were 1.58% and 16.57%, respectively, for the quarter ended June 30, 2021, from 0.23% and 2.35%, respectively, for the quarter ended June 30, 2020. Both returns were positively impacted by higher net income for the quarter ended June 30, 2021.

About Business First Bancshares, Inc.
Business First Bancshares, Inc., through its banking subsidiary b1BANK operates 43 full-service Banking Centers and one Loan Production Office in markets across Louisiana and in the Dallas, Texas area. b1BANK provides commercial and personal banking, treasury management and wealth solutions services to small to midsize businesses and their owners and employees. Visit www.b1BANK.com for more information. Business First’s common stock is traded on the NASDAQ Global Select Market under the symbol “BFST.”

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

Special Note Regarding Forward-Looking Statements
Certain statements contained in this release may not be based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “may,” “might,” “will,” “would,” “could,” or “intend.” We caution you not to place undue reliance on the forward-looking statements contained in this news release, in that actual results could differ materially from those indicated in such forward-looking statements as a result of a variety of factors, including those factors specified in our Annual Report on Form 10-K and other public filings. Actual results will also be significantly impacted by the effects of the ongoing COVID-19 pandemic, including, among other effects: the impact of the public health crisis; the extent and duration of closures of businesses, including our branches, vendors and customers; the operation of financial markets; employment levels; market liquidity; the impact of various actions taken in response by the U.S. federal government, the Federal Reserve, other banking regulators, state and local governments; the adequacy of our allowance for loan losses in relation to potential losses in our loan portfolio; and the impact that all of these factors have on our borrowers, other customers, vendors and counterparties. We undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release.

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

Misty Albrecht
b1BANK
225.286.7879
Misty.Albrecht@b1BANK.com 

Business First Bancshares, Inc.
Selected Financial Information
(Unaudited)
	For the Quarter Ended
	June 30,			March 31,			June 30,
(Dollars in thousands)		2021			2021			2020
Balance Sheet Ratios
Loans (HFI) to Deposits		76.66	%		78.83	%		96.46	%
Shareholders' Equity to Assets Ratio		9.97	%		9.38	%		12.88	%
Loans Receivable Held for Investment
Commercial (1)	$	660,691		$	962,099		$	1,026,596
Real Estate:
Construction and Land		454,055			418,234			333,675
Farmland		77,133			52,861			57,498
1-4 Family Residential		459,037			460,907			495,827
Multi-Family Residential		89,796			77,390			59,213
Nonfarm Nonresidential		1,002,707			966,416			914,601
Total Real Estate		2,082,728			1,975,808			1,860,814
Consumer (1)		111,467			104,071			107,402
Total Loans (Held for Investment)	$	2,854,886		$	3,041,978		$	2,994,812
Allowance for Loan Losses
Balance, Beginning of Period	$	25,251		$	22,024		$	13,319
Charge-offs – Quarterly		(861	)		(309	)		(98	)
Recoveries – Quarterly		71			177			51
Provision for Loan Losses – Quarterly		2,241			3,359			5,443
Balance, End of Period	$	26,702		$	25,251		$	18,715
Allowance for Loan Losses to Total Loans (HFI)		0.94	%		0.83	%		0.62	%
Net Charge-offs (Recoveries) to Average Total Loans		0.03	%		-0.00	%		0.00	%
Remaining Loan Purchase Discount	$	30,900		$	32,517		$	44,302
Nonperforming Assets
Nonperforming Loans:
Nonaccrual Loans (2)	$	10,568		$	11,956		$	11,433
Loans Past Due 90 Days or More (2)		893			1,479			317
Total Nonperforming Loans		11,461			13,435			11,750
Other Nonperforming Assets:
Other Real Estate Owned		5,890			8,851			7,642
Other Nonperforming Assets:		665			623			179
Total Other Nonperforming Assets		6,555			9,474			7,821
Total Nonperforming Assets	$	18,016		$	22,909		$	19,571
Nonperforming Loans to Total Loans (HFI)		0.40	%		0.44	%		0.39	%
Nonperforming Assets to Total Assets		0.42	%		0.52	%		0.49	%
(1) Small Business Administration (SBA) Paycheck Protection Program (PPP) loans accounted for $25.7 million of the Commercial portfolio as of June 30, 2021. SBA PPP loans accounted for $385.8 million and $0.1 million of the Commercial and Consumer portfolios, respectively, as of March 31, 2021. SBA PPP loans accounted for $389.9 million and $5.5 million of the Commercial and Consumer portfolios, respectively, as of June 30, 2020.
(2) Past due and nonaccrual loan amounts exclude acquired impaired loans, even if contractually past due or if the Company does not expect to receive payment in full, as the Company is currently accreting interest income over the expected life of the loans.

Business First Bancshares, Inc.
Selected Financial Information
(Unaudited)
	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
(Dollars in thousands, except per share data)	2021			2021			2020			2021			2020
Per Share Data
Basic Earnings per Common Share	$	0.84		$	0.60		$	0.11		$	1.44		$	0.42
Diluted Earnings per Common Share		0.84			0.59			0.11			1.43			0.42
Dividends per Common Share		0.12			0.10			0.10			0.22			0.20
Book Value per Common Share		20.78			20.03			18.69			20.78			18.69
Average Common Shares Outstanding		20,707,313			20,621,930			18,108,068			20,664,857			15,710,611
Average Diluted Shares Outstanding		20,827,786			20,738,013			18,121,958			20,783,135			15,776,376
End of Period Common Shares Outstanding		20,740,759			20,804,753			20,667,237			20,740,759			20,667,237
Annualized Performance Ratios
Return on Average Assets		1.58	%		1.15	%		0.23	%		1.37	%		0.46	%
Return on Average Equity		16.57	%		11.86	%		2.35	%		14.23	%		4.13	%
Net Interest Margin		3.87	%		4.23	%		3.89	%		4.05	%		3.91	%
Net Interest Spread		3.68	%		4.06	%		3.59	%		3.87	%		3.57	%
Efficiency Ratio (1)		56.20	%		59.40	%		77.40	%		57.64	%		75.44	%
Total Quarterly/Year-to-Date Average Assets	$	4,399,911		$	4,276,430		$	3,496,074		$	4,338,170		$	2,870,329
Total Quarterly/Year-to-Date Average Equity		420,640			415,896			349,634			418,267			317,486
Other Expenses
Salaries and Employee Benefits	$	16,753		$	14,926		$	17,621		$	31,679		$	27,056
Occupancy and Bank Premises		2,276			1,811			1,370			4,087			2,430
Depreciation and Amortization		1,686			1,593			1,073			3,279			1,674
Data Processing		2,288			1,823			1,055			4,111			1,707
FDIC Assessment Fees		436			509			272			945			419
Legal and Other Professional Fees		905			741			543			1,646			937
Advertising and Promotions		624			477			334			1,101			640
Utilities and Communications		636			575			645			1,211			962
Ad Valorem Shares Tax		675			700			450			1,375			825
Directors' Fees		194			188			100			382			174
Other Real Estate Owned Expenses and Write-Downs		178			379			51			557			304
Merger and Conversion-Related Expenses		94			10			1,726			104			2,874
Other		4,371			3,231			2,557			7,602			4,438
Total Other Expenses	$	31,116		$	26,963		$	27,797		$	58,079		$	44,440
Other Income
Service Charges on Deposit Accounts	$	1,683		$	1,567		$	1,163		$	3,250		$	2,094
Gain (Loss) on Sales of Securities		(50	)		(5	)		-			(55	)		25
Debit card and ATM Fee Income		1,777			1,336			959			3,113			1,366
Bank-Owned Life Insurance Income		355			318			255			673			452
Gain (Loss) on Sales of Loans		10,042			(21	)		7			10,021			184
Mortgage Origination Income		241			229			126			470			241
Brokerage Commission		1,416			543			236			1,959			256
Correspondent Bank Income		123			143			32			266			141
Participation Fee Income		240			247			46			487			113
Gain (Loss) on Sales of Other Real Estate Owned		(575	)		46			(19	)		(529	)		132
Gain (Loss) on Disposal of Other Assets		(9	)		117			-			108			-
Pass-through Income from SBIC Partnerships		1,602			53			1,624			1,655			2,004
Other		531			510			567			1,041			792
Total Other Income	$	17,376		$	5,083		$	4,996		$	22,459		$	7,800
(1) Non-GAAP: Noninterest expense (excluding provision for loan losses) divided by noninterest income plus net interest income less gain/loss on sales of securities.

Business First Bancshares, Inc.
Consolidated Balance Sheets
(Unaudited)
	June 30,			March 31,			June 30,
(Dollars in thousands)		2021			2021			2020
Assets
Cash and Due From Banks	$	130,769		$	355,257		$	116,021
Federal Funds Sold		232,391			105,595			40,329
Securities Available for Sale, at Fair Values		882,802			721,224			583,118
Mortgage Loans Held for Sale		1,834			2,298			456
Loans and Lease Receivable		2,854,886			3,041,978			2,994,812
Allowance for Loan Losses		(26,702	)		(25,251	)		(18,715	)
Net Loans and Lease Receivable		2,828,184			3,016,727			2,976,097
Premises and Equipment, Net		57,576			57,931			63,959
Accrued Interest Receivable		20,841			25,910			33,844
Other Equity Securities		14,043			12,584			18,681
Other Real Estate Owned		5,890			8,851			7,642
Cash Value of Life Insurance		60,703			60,348			44,542
Deferred Taxes, Net		4,652			5,536			6,858
Goodwill		60,062			53,753			53,649
Core Deposit and Customer Intangibles		13,271			9,406			10,389
Other Assets		10,941			8,166			5,553
Total Assets	$	4,323,959		$	4,443,586		$	3,961,138
Liabilities
Deposits
Noninterest-Bearing	$	1,175,624		$	1,186,625		$	985,537
Interest-Bearing		2,548,599			2,672,109			2,265,485
Total Deposits		3,724,223			3,858,734			3,251,022
Securities Sold Under Agreements to Repurchase		25,837			21,419			25,391
Short-Term Borrowings		20			20			6,145
Long-Term Borrowings		-			-			7,797
Payroll Protection Program Liquidity Facility		-			-			107,076
Subordinated Debt		81,427			77,500			25,000
Subordinated Debt - Trust Preferred Securities		5,000			5,000			5,000
Federal Home Loan Bank Borrowings		28,023			33,073			118,177
Accrued Interest Payable		1,938			1,941			3,920
Other Liabilities		26,485			29,198			25,274
Total Liabilities		3,892,953			4,026,885			3,574,802
Shareholders' Equity
Common Stock		20,741			20,805			20,667
Additional Paid-In Capital		299,014			300,282			297,606
Retained Earnings		104,382			89,441			59,850
Accumulated Other Comprehensive Income		6,869			6,173			8,213
Total Shareholders' Equity		431,006			416,701			386,336
Total Liabilities and Shareholders' Equity	$	4,323,959		$	4,443,586		$	3,961,138

Business First Bancshares, Inc.
Consolidated Statements of Income
(Unaudited)
				Three Months Ended						Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
(Dollars in thousands)	2021			2021			2020			2021			2020
Interest Income:
Interest and Fees on Loans	$	39,135		$	41,419		$	34,636		$	80,554		$	58,779
Interest and Dividends on Securities		3,189			2,802			2,175			5,991			3,906
Interest on Federal Funds Sold and Due From Banks		27			41			80			68			222
Total Interest Income		42,351			44,262			36,891			86,613			62,907
Interest Expense:
Interest on Deposits		3,235			3,243			4,795			6,478			9,481
Interest on Borrowings		1,171			718			1,177			1,889			2,296
Total Interest Expense		4,406			3,961			5,972			8,367			11,777
Net Interest Income		37,945			40,301			30,919			78,246			51,130
Provision for Loan Losses:		2,241			3,359			5,443			5,600			6,810
Net Interest Income After Provision for Loan Losses		35,704			36,942			25,476			72,646			44,320
Other Income:
Service Charges on Deposit Accounts		1,683			1,567			1,163			3,250			2,094
Gain (Loss) on Sales of Securities		(50	)		(5	)		-			(55	)		25
Gain (Loss) on Sales of Loans		10,042			(21	)		7			10,021			184
Other Income		5,701			3,542			3,826			9,243			5,497
Total Other Income		17,376			5,083			4,996			22,459			7,800
Other Expenses:
Salaries and Employee Benefits		16,753			14,926			17,621			31,679			27,056
Occupancy and Equipment Expense		4,264			3,717			2,888			7,981			4,779
Merger and Conversion-Related Expense		94			10			1,726			104			2,874
Other Expenses		10,005			8,310			5,562			18,315			9,731
Total Other Expenses		31,116			26,963			27,797			58,079			44,440
Income Before Income Taxes:		21,964			15,062			2,675			37,026			7,680
Provision for Income Taxes:		4,536			2,733			623			7,269			1,129
Net Income:	$	17,428		$	12,329		$	2,052		$	29,757		$	6,551

Business First Bancshares, Inc.
Consolidated Net Interest Margin
(Unaudited)
	Three Months Ended
	June 30, 2021								March 31, 2021								June 30, 2020
	Average								Average								Average
	Outstanding			Interest Earned /		Average			Outstanding			Interest Earned /		Average			Outstanding			Interest Earned /		Average
(Dollars in thousands)	Balance			Interest Paid		Yield / Rate			Balance			Interest Paid		Yield / Rate			Balance			Interest Paid		Yield / Rate
Assets
Interest-Earning Assets:
Total Loans (Excluding SBA PPP)	$	2,814,593		$	36,116	5.13	%		$	2,643,668		$	36,538	5.53	%		$	2,304,438		$	32,306	5.61	%
SBA PPP Loans		242,015			3,019	4.99	%			374,958		$	4,881	5.21	%			321,127			2,330	2.90	%
Securities Available for Sale		801,268			3,189	1.59	%			691,476			2,802	1.62	%			481,422			2,175	1.81	%
Interest-Bearing Deposit in Other Banks		62,693			27	0.17	%			101,233			41	0.16	%			69,169			80	0.46	%
Total Interest-Earning Assets		3,920,569			42,351	4.32	%			3,811,335			44,262	4.65	%			3,176,156			36,891	4.65	%
Allowance for Loan Losses		(26,032	)							(22,709	)							(13,606	)
Noninterest-Earning Assets		505,374								487,804								333,524
Total Assets	$	4,399,911		$	42,351				$	4,276,430		$	44,262				$	3,496,074		$	36,891
Liabilities and Shareholders' Equity
Interest-Bearing Liabilities:
Interest-Bearing Deposits	$	2,615,241		$	3,235	0.49	%		$	2,584,263		$	3,243	0.50	%		$	1,994,680		$	4,795	0.96	%
Subordinated Debt		81,427			1,015	4.99	%			28,450			459	6.45	%			25,000			422	6.75	%
Subordinated Debt - Trust Preferred Securities		5,000			43	3.44	%			5,000			42	3.36	%			3,333			8	0.96	%
Advances from Federal Home Loan Bank (FHLB)		32,887			108	1.31	%			37,022			111	1.20	%			129,441			526	1.63	%
Paycheck Protection Program Liquidity Facility (PPPLF)		-			-	0.00	%			-			-	0.00	%			76,902			72	0.37	%
Other Borrowings		24,909			5	0.08	%			31,696			106	1.34	%			32,975			149	1.81	%
Total Interest-Bearing Liabilities		2,759,464			4,406	0.64	%			2,686,431			3,961	0.59	%			2,262,331			5,972	1.06	%
Noninterest-Bearing Liabilities:
Noninterest-Bearing Deposits	$	1,191,900							$	1,146,950							$	852,608
Other Liabilities		27,907								27,153								31,501
Total Noninterest-Bearing Liabilities		1,219,807								1,174,103								884,109
Shareholders' Equity:		420,640								415,896								349,634
Total Liabilities and Shareholders' Equity	$	4,399,911							$	4,276,430							$	3,496,074
Net Interest Spread						3.68	%							4.06	%							3.59	%
Net Interest Income				$	37,945							$	40,301							$	30,919
Net Interest Margin						3.87	%							4.23	%							3.89	%
Overall Cost of Funds						0.45	%							0.41	%							0.77	%
NOTE: Average outstanding balances are determined utilizing monthly averages and average yield/rate is calculated utilizing a 30/360 day count convention.

Business First Bancshares, Inc.
Consolidated Net Interest Margin
(Unaudited)
	Six Months Ended
	June 30, 2021								June 30, 2020
	Average								Average
	Outstanding			Interest Earned /		Average			Outstanding			Interest Earned /		Average
(Dollars in thousands)	Balance			Interest Paid		Yield / Rate			Balance			Interest Paid		Yield / Rate
Assets
Interest-Earning Assets:
Total Loans (Excluding SBA PPP)	$	2,729,130		$	72,654	5.32	%		$	2,022,312		$	56,449	5.58	%
SBA PPP Loans	308,487			7,900		5.12	%		160,564			2,330		2.90	%
Securities Available for Sale	746,372			5,991		1.61	%		384,041			3,906		2.03	%
Interest-Bearing Deposit in Other Banks	81,963			68		0.17	%		48,962			222		0.91	%
Total Interest-Earning Assets	3,865,952			86,613		4.48	%		2,615,879			62,907		4.81	%
Allowance for Loan Losses	(24,371		)						(12,905		)
Noninterest-Earning Assets	496,589								267,355
Total Assets	$	4,338,170		$	86,613				$	2,870,329		$	62,907
Liabilities and Shareholders' Equity
Interest-Bearing Liabilities:
Interest-Bearing Deposits	$	2,599,751		$	6,478	0.50	%		$	1,668,446		$	9,481	1.14	%
Subordinated Debt	54,939			1,474		5.37	%		25,000			844		6.75	%
Subordinated Debt - Trust Preferred Securities	5,000			85		3.40	%		1,667			8		0.96	%
Advances from Federal Home Loan Bank (FHLB)	34,954			219		1.25	%		113,882			1,023		1.80	%
Paycheck Protection Program Liquidity Facility (PPPLF)	-			-		0.00	%		38,451			72		0.37	%
Other Borrowings	28,302			111		0.78	%		50,050			349		1.39	%
Total Interest-Bearing Liabilities	2,722,946			8,367		0.61	%		1,897,496			11,777		1.24	%
Noninterest-Bearing Liabilities:
Noninterest-Bearing Deposits	1,169,425								629,321
Other Liabilities	27,532								26,026
Total Noninterest-Bearing Liabilities	1,196,957								655,347
Shareholders' Equity	418,267								317,486
Total Liabilities and Shareholders' Equity	$	4,338,170							$	2,870,329
Net Interest Spread						3.87%								3.57%
Net Interest Income				$	78,246							$	51,130
Net Interest Margin						4.05%								3.91%
Overall Cost of Funds						0.43%								0.93%
NOTE: Average outstanding balances are determined utilizing monthly averages and average yield/rate is calculated utilizing a 30/360 day count convention.

Business First Bancshares, Inc.
Non-GAAP Measures
(Unaudited)
	Three Months Ended											Six Months Ended
	June 30,			March 31,			June 30,					June 30,			June 30,
(Dollars in thousands, except per share data)		2021			2021			2020					2021			2020
Interest Income:
Interest income	$	42,351		$	44,262		$	36,891				$	86,613		$	62,907
Core interest income		42,351			44,262			36,891					86,613			62,907
Interest Expense:
Interest expense		4,406			3,961			5,972					8,367			11,777
Core interest expense		4,406			3,961			5,972					8,367			11,777
Provision for Loan Losses: (b)
Provision for loan losses		2,241			3,359			5,443					5,600			6,810
Core provision expense		2,241			3,359			5,443					5,600			6,810
Other Income:
Other income		17,376			5,083			4,996					22,459			7,800
(Gains) 1osses on former bank premises and equipment		540			-			-					540			(126	)
(Gains) 1osses on sale of securities		50			5			-					55			(25	)
Core other income		17,966			5,088			4,996					23,054			7,649
Other Expense:
Other expense		31,116			26,963			27,797					58,079			44,440
Acquisition-related expenses (2)		(94	)		(10	)		(6,573	)				(104	)		(7,785	)
Stock option exercises - excess taxes (founder's grants)		-			-			-					-			(71	)
Occupancy and bank premises - hurricane repair		(938	)		(350	)		-					(1,288	)		-
Core other expense		30,084			26,603			21,224			-		56,687			36,584
Pre-Tax Income: (a)
Pre-tax income		21,964			15,062			2,675					37,026			7,680
(Gains) 1osses on former bank premises and equipment		540			-			-					540			(126	)
(Gains) 1osses on sale of securities		50			5			-					55			(25	)
Acquisition-related expenses (2)		94			10			6,573					104			7,785
Stock option exercises - excess taxes (founder's grants)		-			-			-					-			71
Occupancy and bank premises - hurricane repair		938			350			-					1,288			-
Core pre-tax income		23,586			15,427			9,248					39,013			15,385
Provision for Income Taxes: (1)
Provision for income taxes		4,536			2,733			623					7,269			1,129
Tax on (gains) losses on former bank premises and equipment		113			-			-					113			(26	)
Tax on (gains) losses on sale of securities		11			1			-					12			(5	)
Tax on acquisition-related expenses (2)		20			2			1,275					22			1,366
Tax on stock option exercises (founder's grants)		-			-			-					-			601
Tax on occupancy and bank premises - hurricane repair		197			74			-					271			-
Core provision for income taxes		4,877			2,810			1,898					7,687			3,065
Net Income:
Net income		17,428			12,329			2,052					29,757			6,551
(Gains) losses on former bank premises and equipment , net of tax		427			-			-					427			(100	)
(Gains) losses on sale of securities, net of tax		39			4			-					43			(20	)
Acquisition-related expenses (2), net of tax		74			8			5,298					82			6,419
Stock option exercises, net of tax (founder's grants)		-			-			-					-			(530	)
Occupancy and bank premises - hurricane repair, net of tax		741			277			-					1,018			-
Core net income	$	18,709		$	12,618		$	7,350				$	31,327		$	12,320
Pre-tax, pre-provision earnings (a+b)	$	24,205		$	18,421		$	8,118				$	42,626		$	14,490
(Gains) losses on former bank premises and equipment		540			-			-					540			(126	)
(Gains) losses on sale of securities		50			5			-					55			(25	)
Acquisition-related expenses (2)		94			10			6,573					104			7,785
Stock option exercises (founder's grants)		-			-			-					-			71
Occupancy and bank premises - hurricane repair		938			350			-					1,288			-
Core pre-tax, pre-provision earnings	$	25,827		$	18,786		$	14,691				$	44,613		$	22,195
Average Diluted Shares Outstanding		20,827,786			20,738,013			18,121,958					20,783,135			15,776,376
Diluted Earnings Per Share:
Diluted earnings per share	$	0.84		$	0.59		$	0.11				$	1.43		$	0.42
(Gains) losses on former bank premises and equipment , net of tax		0.02			-			-					0.02			(0.01	)
(Gains) losses on sale of securities, net of tax		0.00			0.00			-					0.00			(0.00	)
Acquisition-related expenses (2), net of tax		0.00			0.00			0.30					0.00			0.40
Stock option exercises (founder's grants)		-			-			-					-			(0.03	)
Occupancy and bank premises - hurricane repair, net of tax		0.04			0.02			-					0.06			-
Core diluted earnings per share	$	0.90		$	0.61		$	0.41				$	1.51		$	0.78
Pre-tax, pre-provision profit diluted earnings per share	$	1.16		$	0.89		$	0.45				$	2.05		$	0.92
(Gains) losses on former bank premises and equipment		0.03			-			-					0.03			(0.01	)
(Gains) losses on sale of securities		0.00			0.00			-					0.00			(0.00	)
Acquisition-related expenses (2)		0.00			0.00			0.36					0.01			0.50
Stock option exercises (founder's grants)		-			-			-					-			0.00
Occupancy and bank premises - hurricane repair		0.05			0.02			-					0.06			-
Core pre-tax, pre-provision diluted earnings per share	$	1.24		$	0.91		$	0.81				$	2.15		$	1.41
(1) Tax rates, exclusive of certain nondeductible merger-related expenses and goodwill, utilized were 21% for 2021 and 2020. These rates approximated the marginal tax rates.
(2) Includes merger and conversion-related expenses and salary and employee benefits.

Business First Bancshares, Inc.
Non-GAAP Measures
(Unaudited)
	Three Months Ended											Six Months Ended
	June 30,			March 31,			June 30,					June 30,			June 30,
(Dollars in thousands, except per share data)		2021			2021			2020					2021			2020
Total Quarterly/Year-to-Date Average Assets	$	4,399,911		$	4,276,430		$	3,496,074				$	4,338,170		$	2,870,329
Total Quarterly/Year-to-Date Average Equity	$	420,640		$	415,896		$	349,634				$	418,267		$	317,486
Net Income:
Net income	$	17,428		$	12,329		$	2,052				$	29,757		$	6,551
(Gains) losses on former bank premises and equipment , net of tax		427			-			-					427			(100	)
(Gains) losses on sale of securities, net of tax		39			4			-					43			(20	)
Acquisition-related expenses (2), net of tax		74			8			5,298					82			6,419
Stock option exercises, net of tax (founder's grants)		-			-			-					-			(530	)
Occupancy and bank premises - hurricane repair, net of tax		741			277			-					1,018			-
Core net income	$	18,709		$	12,618		$	7,350				$	31,327		$	12,320
Return on average assets		1.58	%		1.15	%		0.23	%				1.37	%		0.46	%
Core return on average assets		1.70	%		1.18	%		0.84	%				1.44	%		0.86	%
Return on equity		16.57	%		11.86	%		2.35	%				14.23	%		4.13	%
Core return on average equity		17.79	%		12.14	%		8.41	%				14.98	%		7.76	%
Interest Income:
Interest income	$	42,351		$	44,262		$	36,891				$	86,613		$	62,907
Core interest income		42,351			44,262			36,891					86,613			62,907
Interest Expense:
Interest expense		4,406			3,961			5,972					8,367			11,777
Core interest expense		4,406			3,961			5,972					8,367			11,777
Other Income:
Other income		17,376			5,083			4,996					22,459			7,800
(Gains) losses on former bank premises and equipment		540			-			-					540			(126	)
(Gains) losses on sale of securities		50			5			-					55			(25	)
Core other income		17,966			5,088			4,996					23,054			7,649
Other Expense:
Other expense		31,116			26,963			27,797					58,079			44,440
Acquisition-related expenses		(94	)		(10	)		(6,573	)				(104	)		(7,785	)
Stock option exercises - excess taxes (founder's grants)		-			-			-					-			(71	)
Occupancy and bank premises - hurricane repair		(938	)		(350	)		-					(1,288	)		-
Core other expense	$	30,084		$	26,603		$	21,224				$	56,687		$	36,584
Efficiency Ratio:
Other expense (a)	$	31,116		$	26,963		$	27,797				$	58,079		$	44,440
Core other expense (c)	$	30,084		$	26,603		$	21,224				$	56,687		$	36,584
Net interest and other income (1) (b)	$	55,371		$	45,389		$	35,915				$	100,760		$	58,905
Core net interest and other income (1) (d)	$	55,911		$	45,389		$	35,915				$	101,300		$	58,779
Efficiency ratio (a/b)		56.20	%		59.40	%		77.40	%				57.64	%		75.44	%
Core efficiency ratio (c/d)		53.81	%		58.61	%		59.10	%				55.96	%		62.24	%
Total Average Interest-Earnings Assets	$	3,920,569		$	3,811,335		$	3,176,156				$	3,865,952		$	2,615,879
Net Interest Income:
Net interest income	$	37,945		$	40,301		$	30,919				$	78,246		$	51,130
Loan discount accretion		(1,617	)		(3,063	)		(1,465	)				(4,680	)		(1,755	)
Net interest income excluding loan discount accretion	$	36,328		$	37,238		$	29,454				$	73,566		$	49,375
Net interest margin (2)		3.87	%		4.23	%		3.89	%				4.05	%		3.91	%
Net interest margin excluding loan discount accretion (2)		3.71	%		3.91	%		3.71	%				3.81	%		3.78	%
Net interest spread		3.68	%		4.06	%		3.59	%				3.87	%		3.57	%
Net interest spread excluding loan discount accretion		3.52	%		3.73	%		3.41	%				3.62	%		3.43	%
(1) Excludes gains/losses on sales of securities.
(2) Calculated utilizing a 30/360 day count convention.

Business First Bancshares, Inc.
Non-GAAP Measures
(Unaudited)
	June 30,			March 31,			June 30,
(Dollars in thousands, except per share data)		2021			2021			2020
Total Shareholders' (Common) Equity:
Total shareholders' equity	$	431,006		$	416,701		$	386,336
Goodwill		(60,062	)		(53,753	)		(53,649	)
Core deposit and customer intangible		(13,271	)		(9,406	)		(10,389	)
Total tangible common equity	$	357,673		$	353,542		$	322,298
Total Assets:
Total assets	$	4,323,959		$	4,443,586		$	3,961,138
Goodwill		(60,062	)		(53,753	)		(53,649	)
Core deposit and customer intangible		(13,271	)		(9,406	)		(10,389	)
Total tangible assets	$	4,250,626		$	4,380,427		$	3,897,100
Common shares outstanding		20,740,759			20,804,753			20,667,237
Book value per common share	$	20.78		$	20.03		$	18.69
Tangible book value per common share	$	17.24		$	16.99		$	15.59
Common equity to total assets		9.97	%		9.38	%		9.75	%
Tangible common equity to tangible assets		8.41	%		8.07	%		8.27	%

 

FAQ

What were Business First Bancshares net earnings for Q2 2021?

Business First Bancshares reported net earnings of $17.4 million for the second quarter of 2021.

How much did Business First Bancshares earn per share in Q2 2021?

The company earned $0.84 per diluted share in the second quarter of 2021.

What was the loan growth rate for Business First Bancshares in Q2 2021?

Excluding SBA PPP loans, total loans grew by 6.52%, an annualized growth rate of 26.06%.

What dividend did Business First Bancshares declare for Q2 2021?

The board declared a quarterly dividend of $0.12 per share.

What is the status of nonperforming loans for Business First Bancshares?

Nonperforming loans decreased to 0.40% of total loans held for investment.