GlobeNewswire Inc | Jul 29, 2020 04:01PM EDT

July 29, 2020

BATON ROUGE, La., July 29, 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 June 30, 2020, including net income of $2.1 million, or $0.11 per diluted share, decreases of $4.8 million and $0.39, respectively, from the quarter ended June 30, 2019. On a non-GAAP basis, core net income for the quarter ended June 30, 2020, which excludes certain income and expenses, was $7.4 million, or $0.41 per diluted share, an increase of $748,000 and decrease of $0.07, respectively, from the quarter ended June 30, 2019. Both net income and diluted earnings per share were adversely impacted for the quarter ended June 30, 2020, by additional provision for loan losses associated with the sustained pressure on the general economy caused by the COVID-19 pandemic and acquisition-related expenses.

The second quarter was simultaneously the most challenging, and in many ways, the most rewarding period weve experienced as a company, said Jude Melville, president and CEO. We stood with our clients during an economic crisis, we consummated a transformative merger during a time of market crisis, and we took care of our people in the midst of a health crisis.I could not be prouder of our team. Well continue to do our part as our regions leading community bank as we recover together in the coming months.

On July 23, 2020, Business Firsts board of directors declared a quarterly dividend based upon financial performance for the second quarter in the amount of $0.10 per share, same as the prior quarter, to the common shareholders of record as of August 15, 2020. The dividend will be paid on August 31, 2020, or as soon thereafter as practicable.

Quarterly Highlights

-- Successful Acquisition and Conversion of Pedestal Bancshares Inc. Business First acquired Pedestal Bancshares Inc. (Pedestal), with approximately $1.4 billion in assets, $935.8 million in gross loans, and $1.2 billion in deposits, on May 1, 2020. The conversion of data processing was successfully completed during the weekend of May 23, 2020. -- COVID-19 Related Matters. Business First proactively assisted, and continues to assist, customers by deferring principal and/or interest payments on approximately 2,600 loans with an outstanding balance of $938.5 million as of June 30, 2020. Approximately $223.0 million of the deferrals were interest-only as of June 30, 2020. Additionally, Business First has funded approximately 2,800 loans with an aggregate outstanding balance of $395.4 million under the Small Business Administration (SBA) Paycheck Protection Program (PPP), of which $86.1 million were acquired in the Pedestal acquisition. Business First also recorded $5.4 million of provision expense, of which a significant portion was associated with the continued impact the COVID-19 pandemic caused on the general economy. -- Stable Credit Quality. Ratios of nonperforming loans compared to loans held for investment and nonperforming assets compared to total assets decreased from 0.57% and 0.59%, respectively, at March 31, 2020, to 0.39% and 0.49% at June 30, 2020. The decreases were attributable to the increased size of the loan portfolio, including SBA PPP loans, and total assets associated with the acquisition of Pedestal on May 1, 2020. -- Net Interest Margin and Spread. Net interest margin and spread were negatively impacted due to the full effect of the federal funds rate cuts of 150 basis points during the month of March and lower-yielding SBA PPP loans, offset by a reduction in cost of funds, increased loan discount, deposit premium, and Federal Home Loan Bank (FHLB) premium accretion, and a higher-yielding loan portfolio due to the Pedestal acquisition, compared to the quarter ended March 31, 2020. Net interest margin and net interest spread were 3.89% and 3.59%, respectively, for the quarter ended June 30, 2020, compared to 3.93% and 3.55% for the quarter ended March 31, 2020. Excluding loan discount accretion, net interest margin and spread were 3.71% and 3.41%, respectively, for the quarter ended June 30, 2020, compared to 3.88% and 3.49% for the quarter ended March 31, 2020. -- Loan Growth. Total loans held for investment at June 30, 2020, were $3.0 billion, an increase of $1.2 billion compared to March 31, 2020. Loan growth was significantly impacted by the acquisition of Pedestal and origination of SBA PPP loans. Net organic loan growth, excluding the Pedestal acquisition and SBA PPP originated loans, was 3.22% annualized for the quarter ended June 30, 2020.

Financial Condition

June 30, 2020, Compared to March 31, 2020

Loans

Total loans held for investment increased by $1.2 billion compared to March 31, 2020. The increase was largely attributable to the $893.3 million in net loans acquired from Pedestal, including $86.1 million of SBA PPP loans, and $309.3 million of SBA PPP loans originated by Business First. Excluding the Pedestal acquisition and SBA PPP originations, net organic loan growth was $20.8 million for the quarter ended June 30, 2020, or 3.22% annualized.

Consistent with the quarter ended March 31, 2020, Business Firsts unfunded commitments remained constant throughout the quarter ended June 30, 2020, excluding the increase attributable to the acquisition of Pedestal. Business First has not identified any unusual customer usage of unfunded commitments since the beginning of the COVID 19-panademic in March 2020.

Credit Quality

Nonperforming loans as a percentage of total loans held for investment decreased from 0.57% as of March 31, 2020, to 0.39% as of June 30, 2020. Nonperforming assets as a percentage of total assets decreased from 0.59% as of March 31, 2020, to 0.49% as of June 30, 2020. The decreases were 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.

Total Shareholders Equity

Book value per common share was $18.69 at June 30, 2020, compared to $21.58 at March 31, 2020. The decreases were attributable to the initial book value dilution caused by the acquisition of Pedestal during the quarter ended June 30, 2020.

June 30, 2020, Compared to June 30, 2019

Loans

Total loans held for investment increased by $1.4 billion compared to June 30, 2019, or 82.3%, 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 0.61% as of June 30, 2019, to 0.39% as of June 30, 2020. Nonperforming assets as a percentage of total assets decreased from 0.58% as of June 30, 2019, to 0.49% as of June 30, 2020. The decreases were 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.

Total Shareholders Equity

Book value per common share was $18.69 at June 30, 2020, compared to $20.77 at June 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

Second Quarter 2020 Compared to First Quarter 2020

Net Income and Diluted Earnings Per Share

For the quarter ended June 30, 2020, net income was $2.1 million, or $0.11 per diluted share, compared to net income of $4.5 million, or $0.34 per diluted share, for the quarter ended March 31, 2020. The decreases were largely attributable to the increase in the provision for loan losses, due to the COVID-19 pandemics sustained impact on the general economy, and increase in acquisition-related expenses, offset by increases in investment income from Small Business Investment Companies (SBICs) and interest income from SBA PPP loans.

On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended June 30, 2020, was $7.4 million, or $0.41 per diluted share, compared to core net income of $5.0 million, or $0.37 per diluted share, for the quarter ended March 31, 2020. Notable events impacting earnings for the quarter ended June 30, 2020, included the incurrence of $6.6 million in acquisition-related expenses, compared to the incurrence of $1.2 million in acquisition-related expenses for the quarter ended March 31, 2020, and $530,000 reduction in income tax expense due to stock option exercises.

Interest Income

For the quarter ended June 30, 2020, net interest income totaled $30.9 million and net interest margin and net interest spread were 3.89% and 3.59%, respectively, compared to $20.2 million, 3.93% and 3.55% for the quarter ended March 31, 2020. The average yield on the loan portfolio (excluding SBA PPP loans) was 5.61% for the quarter ended June 30, 2020, compared to 5.55% for the quarter ended March 31, 2020. The average yield on total interest-earning assets was 4.65% for the quarter ended June 30, 2020, compared to 5.06% for the quarter ended March 31, 2020.

Net interest margin and net interest spread were positively impacted for the quarter ended June 30, 2020, by additional loan discount, deposit premium, and FHLB premium accretion, an overall higher-yielding loan portfolio from the Pedestal acquisition, and reduction in the overall cost of funds (which includes noninterest-bearing deposits), offset by the full impact of the federal funds rate cuts of 150 basis points during March 2020. The average loan yield (excluding SBA PPP loans) was also impacted by the same factors, excluding the impact of deposit and FHLB premium accretion and cost of funds.

The average yield on total interest-earning assets was negatively impacted for the quarter ended June 30, 2020, due to lower-yielding SBA PPP loans which were originated during the quarter.

Net interest margin and net interest spread (excluding loan discount accretion of $1.5 million) were 3.71% and 3.41%, respectively, for the quarter ended June 30, 2020, compared to 3.88% and 3.49% (excluding loan discount accretion of $290,000) for the quarter ended March 31, 2020.

Interest Expense

For the quarter ended June 30, 2020, overall cost of funds (which includes noninterest-bearing deposits) decreased by 43 basis points, from 1.20% to 0.77%, compared to the quarter ended March 31, 2020. The decrease in cost of funds was partially attributable to the accretion of deposit premium and FHLB premium associated with the Pedestal acquisition ($551,000), 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 June 30, 2020, other income was impacted by an additional $1.2 million in SBIC investment income and additional increases in other categories largely attributable to the Pedestal acquisition, compared to the quarter ended March 31, 2020.

Other Expense

For the quarter ended June 30, 2020, the increases were largely attributable to the Pedestal acquisition, compared to the quarter ended March 31, 2020.

Provision for Loan Losses

During the quarter ended June 30, 2020, Business First recorded a provision for loan losses of $5.4 million, compared to $1.4 million for the quarter ended March 31, 2020. The reserve for the quarter ended June 30, 2020, was impacted significantly by the sustained impact on the general economy of the COVID-19 pandemic. The increase related to the COVID-19 pandemic was recorded through a qualitative adjustment.

Return on Assets and Equity

Return on average assets and equity, each on an annualized basis, were 0.23% and 2.35%, respectively, for the quarter ended June 30, 2020, compared to 0.80% and 6.31%, respectively, for the quarter ended March 31, 2020. Both returns were significantly impacted by the provision for loan loss and acquisition-related expenses recorded for the quarter ended June 30, 2020.

Second Quarter 2020 Compared to Second Quarter 2019

Net Income and Diluted Earnings Per Share

For the quarter ended June 30, 2020, net income was $2.1 million, or $0.11 per diluted share, compared to net income of $6.8 million, or $0.50 per diluted share, for the quarter ended June 30, 2020. The decreases in net income and diluted earnings per share were largely attributable to increased provision for loan losses and additional expenses associated with the acquisition of Pedestal on May 1, 2020, offset by increases in net interest income and other income related to the acquisition of Pedestal for the quarter ended June 30, 2020.

On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended June 30, 2020, was $7.4 million, or $0.41 per diluted share, compared to core net income of $6.6 million, or $0.48 per diluted share, for the quarter ended June 30, 2019. Notable events impacting earnings for the quarter ended June 30, 2020, included the incurrence of $6.6 million in acquisition-related expenses, compared to the incurrence of $436,000 in acquisition-related expenses and a $593,000 gain associated with the sale of a banking center for the quarter ended June 30, 2019.

Interest Income

For the quarter ended June 30, 2020, net interest income totaled $30.9 million and net interest margin and net interest spread were 3.89% and 3.59%, respectively, compared to $20.2 million, 4.19% and 3.75% for the quarter ended June 30, 2019. The average yield on the loan portfolio (excluding SBA PPP loans) was 5.61% for the quarter ended June 30, 2020, compared to 5.96% for the quarter ended June 30, 2019. The average yield on total interest-earning assets was 4.65% for the quarter ended June 30, 2020, compared to 5.37% for the quarter ended June 30, 2019.

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 June 30, 2020, by the federal funds rate cuts of 225 basis points which occurred throughout the second half of 2019 and 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 $1.5 million) were 3.71% and 3.41%, respectively, for the quarter ended June 30, 2020, compared to 4.02% and 3.58% (excluding loan discount accretion of $826,000) for the quarter ended June 30, 2019.

Interest Expense

For the quarter ended June 30, 2020, overall cost of funds (which includes noninterest-bearing deposits) decreased by 49 basis point, from 1.26% to 0.77%, compared to the quarter ended June 30, 2019. The decrease in cost of funds was partially attributable to the accretion of deposit and FHLB premiums associated with the Pedestal acquisition ($551,000), 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 June 30, 2020, the increase was largely attributable to the acquisition of Pedestal, partially offset by the $593,000 gain on sale of a banking center during the quarter ended June 30, 2019.

Other Expense

For the quarter ended June 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 June 30, 2020, Business First recorded a provision for loan losses of $5.4 million compared to $1.3 million for the quarter ended June 30, 2019. The reserve for the quarter ended June 30, 2020, was impacted significantly by the sustained impact on the general economy of the COVID-19 pandemic.

Return on Assets and Equity

Return on average assets and return on average equity, each on an annualized basis, were 0.23% and 2.35%, respectively, for the quarter ended June 30, 2020, from 1.30% and 10.13%, respectively, for the quarter ended June 30, 2019. Both returns were significantly impacted by the provision for loan loss and acquisition-related expenses recorded for the quarter ended June 30, 2020, in addition to a lower net interest margin for the quarter ended June 30, 2020.

About Business First Bancshares, Inc.

Business First Bancshares, Inc., through its banking subsidiary b1BANK, formerly known as Business First Bank, operates 48 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 Firsts 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 managements opinion, can distort period-to-period comparisons of Business Firsts 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 Companys 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 Firsts reports that are filed with the Securities and Exchange Commission (SEC) free of charge by using the SECs EDGAR service on the SECs 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.

Business First Bancshares, Inc. Selected Financial Information (Unaudited) June 30, March 31, June 30, (Dollars in thousands) 2020 2020 2019 Balance Sheet Ratios Loans (HFI) to Deposits 92.12% 98.26% 96.46% Shareholders' Equity to Assets 9.75% 12.33% 12.88% Ratio Loans Receivable Held for Investment Commercial (1) $ 1,026,596 $ 431,992 $ 411,256 Real Estate: Construction and Land 333,675 260,836 227,102 Farmland 57,498 53,900 47,245 1-4 Family Residential 495,827 295,876 278,610 Multi-Family Residential 59,213 32,859 38,698 Nonfarm Nonresidential 914,601 623,114 561,149 Total Real Estate 1,860,814 1,266,585 1,152,804 Consumer (1) 107,402 72,803 78,513 Total Loans $ 2,994,812 $ 1,771,380 $ 1,642,573 Allowance for Loan Losses Balance, Beginning of Period $ 13,319 $ 12,124 $ 11,818 Charge-offs ? Quarterly (98 ) (194 ) (1,565 ) Recoveries ? Quarterly 51 22 48 Provision for Loan Losses ? 5,443 1,367 1,302 QuarterlyBalance, End of Period $ 18,715 $ 13,319 $ 11,603 Allowance for Loan Losses to Total 0.62% 0.75% 0.71% Loans (HFI)Net Charge-offs (Recoveries) to 0.00% 0.01% 0.09% Average Total Loans Remaining Loan Purchase Discount $ 44,302 $ 3,246 $ 3,536 Nonperforming Assets Nonperforming Loans: Nonaccrual Loans (2) $ 11,433 $ 9,301 $ 9,363 Loans Past Due 90 Days or More (2) 317 834 727 Total Nonperforming Loans 11,750 10,135 10,090 Other Nonperforming Assets: Other Real Estate Owned 7,642 3,281 2,324 Other Nonperforming Assets 179 11 6 Total Other Nonperforming Assets 7,821 3,292 2,330 Total Nonperforming Assets $ 19,571 $ 13,427 $ 12,420 Nonperforming Loans to Total Loans 0.39% 0.57% 0.61% (HFI)Nonperforming Assets to Total 0.49% 0.59% 0.58% Assets (1) Small Business Administration "SBA" Paycheck Protection Program "PPP" loansaccounted for $389.9 millionand $5.5 million of the Commercial and Consumerportfolios, respectively, as of June 30, 2020. (2) Past due and nonaccrual loan amounts exclude acquired impaired loans, evenif contractually past due or ifthe Company does not expect to receive paymentin full, as the Company is currently accreting interest incomeover theexpected 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 inthousands, except 2020 2020 2019 2020 2019 per share data) Per Share Data Basic Earnings per $ 0.11 $ 0.34 $ 0.51 $ 0.42 $ 0.94 Common ShareDiluted Earnings 0.11 0.34 0.50 0.42 0.91 per Common ShareDividends per 0.10 0.10 0.10 0.20 0.18 Common ShareBook Value per 18.69 21.58 20.77 18.69 20.77 Common Share Average Common 18,108,068 13,313,154 13,361,482 15,710,611 13,324,725 Shares OutstandingAverage Diluted 18,121,958 13,367,276 13,740,937 15,776,376 13,704,180 Shares OutstandingEnd of PeriodCommon Shares 20,667,237 13,067,987 13,361,482 20,667,237 13,361,482 Outstanding Annualized Performance Ratios Return on Average 0.23% 0.80% 1.30% 0.46% 1.20% AssetsReturn on Average 2.35% 6.31% 10.13% 4.13% 9.38% EquityNet Interest 3.89% 3.93% 4.19% 3.91% 4.11% MarginNet Interest 3.59% 3.55% 3.75% 3.57% 3.69% SpreadEfficiency Ratio 77.40% 72.39% 59.85% 75.44% 61.96% (1) Total Quarterly/Year-to-Date $ 3,496,074 $ 2,244,584 $ 2,102,692 $ 2,870,329 $ 2,089,188 Average AssetsTotal Quarterly/Year-to-Date 349,634 285,338 $ 270,262 317,486 266,493 Average Equity Other Expenses Salaries and $ 17,621 $ 9,435 $ 8,756 $ 27,056 $ 17,308 Employee BenefitsOccupancy and Bank 1,370 1,060 1,079 2,430 2,182 PremisesDepreciation and 1,073 601 633 1,674 1,261 AmortizationData Processing 1,055 652 576 1,707 1,192 FDIC Assessment 272 147 248 419 398 FeesLegal and Other 543 394 353 937 671 Professional FeesAdvertising and 334 306 279 640 606 PromotionsUtilities and 645 317 323 962 621 CommunicationsAd Valorem Shares 450 375 345 825 690 TaxDirectors' Fees 100 74 125 174 330 Other Real EstateOwned Expenses and 51 253 72 304 99 Write-DownsMerger andConversion-Related 1,726 1,148 235 2,874 (19 ) ExpensesOther 2,557 1,881 1,553 4,438 3,028 Total Other $ 27,797 $ 16,643 $ 14,577 $ 44,440 $ 28,367 Expenses Other Income Service Charges on $ 1,163 $ 931 $ 1,034 2,094 $ 1,972 Deposit AccountsGain on Sales of - 25 58 25 58 SecuritiesDebit card and ATM 959 407 492 1,366 937 Fee IncomeBank-Owned Life 255 197 174 452 342 Insurance IncomeGain on Sales of 7 177 91 184 91 LoansMortgage 126 115 98 241 188 Origination IncomeBrokerage 236 20 9 256 43 CommissionCorrespondent Bank 32 109 17 141 225 IncomeRental Income 15 31 165 46 329 Gain on Sale of - - 593 - 593 Banking CenterGain (loss) onSales of Other (19 ) 151 5 132 (51 ) Real Estate OwnedPass-throughIncome from SBIC 1,624 380 1,266 2,004 1,266 PartnershipsOther 598 261 217 859 537 Total Other $ 4,996 $ 2,804 $ 4,219 $ 7,800 $ 6,530 Income (1) Noninterest expense (excluding provision for loan losses) divided bynoninterest income plus net interest income less gain/loss on sales ofsecurities.

Business First Bancshares, Inc. Consolidated Balance Sheets (Unaudited) June 30, March 31, June 30, (Dollars in thousands) 2020 2020 2019 Assets Cash and Due From Banks $ 116,021 $ 80,109 $ 64,043 Federal Funds Sold 40,329 29,135 20,809 Securities Available for 583,118 275,115 294,981 Sale, at Fair ValuesMortgage Loans Held for Sale 456 868 443 Loans and Lease Receivable 2,994,812 1,771,380 1,642,573 Allowance for Loan Losses (18,715 ) (13,319 ) (11,603 ) Net Loans and Lease 2,976,097 1,758,061 1,630,970 ReceivablePremises and Equipment, Net 63,959 29,656 27,577 Accrued Interest Receivable 33,844 7,724 7,957 Other Equity Securities 18,681 11,721 11,717 Other Real Estate Owned 7,642 3,281 2,324 Cash Value of Life Insurance 44,542 32,765 32,223 Deferred Taxes, Net 6,858 1,800 2,527 Goodwill 53,649 48,495 48,503 Core Deposit Intangible 10,389 6,471 7,139 Other Assets 5,553 2,461 2,395 Total Assets $ 3,961,138 $ 2,287,662 $ 2,153,608 Liabilities Deposits: Noninterest-Bearing $ 985,537 $ 417,534 $ 394,848 Interest-Bearing 2,265,485 1,385,274 1,308,054 Total Deposits 3,251,022 1,802,808 1,702,902 Securities Sold Under 25,391 14,728 16,096 Agreements to RepurchaseShort-Term Borrowings 6,145 5,000 - Long-Term Borrowings 7,797 - - Payroll Protection Program 107,076 - - Liquidity FacilitySubordinated Debt 25,000 25,000 25,000 Trust Preferred Securities 5,000 - - Federal Home Loan Bank 118,177 138,000 108,000 BorrowingsAccrued Interest Payable 3,920 1,573 1,924 Other Liabilities 25,274 18,523 22,217 Total Liabilities 3,574,802 2,005,632 1,876,139 Shareholders' Equity Common Stock 20,667 13,068 13,361 Additional Paid-In Capital 297,606 206,966 213,823 Retained Earnings 59,850 59,859 48,087 Accumulated Other 8,213 2,137 2,198 Comprehensive Income Total Shareholders' Equity 386,336 282,030 277,469 Total Liabilities and $ 3,961,138 $ 2,287,662 $ 2,153,608 Shareholders' Equity

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 2020 2020 2019 2020 2019 thousands) Interest Income: Interest and Fees on $ 34,636 $ 24,143 $ 23,870 $ 58,779 $ 46,293 LoansInterest andDividends on 2,175 1,731 1,829 3,906 3,703 SecuritiesInterest on FederalFunds Sold and Due 80 142 197 222 487 From BanksTotal Interest 36,891 26,016 25,896 62,907 50,483 Income Interest Expense: Interest on Deposits 4,795 4,686 5,038 9,481 9,795 Interest on 1,177 1,119 665 2,296 1,375 BorrowingsTotal Interest 5,972 5,805 5,703 11,777 11,170 Expense Net Interest Income 30,919 20,211 20,193 51,130 39,313 Provision for Loan 5,443 1,367 1,302 6,810 1,935 Losses Net Interest IncomeAfter Provision for 25,476 18,844 18,891 44,320 37,378 Loan Losses Other Income: Service Charges on 1,163 931 1,034 2,094 1,972 Deposit AccountsGain on Sales of - 25 58 25 58 SecuritiesOther Income 3,833 1,848 3,127 5,681 4,500 Total Other Income 4,996 2,804 4,219 7,800 6,530 Other Expenses: Salaries and 17,621 9,435 8,756 27,056 17,308 Employee BenefitsOccupancy and 2,888 1,891 1,884 4,779 3,778 Equipment ExpenseMerger andConversion-Related 1,726 1,148 235 2,874 (19 ) ExpenseOther Expenses 5,562 4,169 3,702 9,731 7,300 Total Other Expenses 27,797 16,643 14,577 44,440 28,367 Income Before Income 2,675 5,005 8,533 7,680 15,541 Taxes Provision for Income 623 506 1,690 1,129 3,039 Taxes Net Income $ 2,052 $ 4,499 $ 6,843 $ 6,551 $ 12,502

Business First Bancshares, Inc. Consolidated Net Interest Margin (Unaudited) Three Months Ended June 30, 2020 March 31, 2020 June 30, 2019 Average Average Average Outstanding Interest Average Outstanding Interest Average Outstanding Interest Average Earned / Earned / Earned /(Dollars in Balance Interest Yield / Balance Interest Yield / Balance Interest Yield / thousands) Paid Rate Paid Rate Paid Rate Assets Interest-Earning Assets:Total Loans $ 2,304,438 $ 32,306 5.61% $ 1,740,189 $ 24,143 5.55% $ 1,602,087 $ 23,870 5.96% (Excluding SBA PPP)SBA PPP Loans 321,127 2,330 2.90% - $ - 0.00% - - 0.00% Securities 481,422 2,175 1.81% 286,660 1,731 2.42% 303,232 1,829 2.41% Available for SaleInterest-BearingDeposit in Other 69,169 80 0.46% 28,754 142 1.98% 23,716 197 3.32% BanksTotalInterest-Earning 3,176,156 36,891 4.65% 2,055,603 26,016 5.06% 1,929,035 25,896 5.37% AssetsAllowance for Loan (13,606 ) (12,203 ) (11,702 ) LossesNoninterest-Earning 333,524 201,184 185,359 AssetsTotal Assets $ 3,496,074 $ 36,891 $ 2,244,584 $ 26,016 $ 2,102,692 $ 25,896 Liabilities andShareholders' Equity Interest-Bearing Liabilities:Interest-Bearing $ 1,994,680 $ 4,795 0.96% $ 1,342,213 $ 4,686 1.40% $ 1,335,630 $ 5,038 1.51% DepositsSubordinated Debt 25,000 422 6.75% 25,000 422 6.75% 25,000 429 6.86% Advances fromFederal Home Loan 129,441 526 1.63% 98,323 497 2.02% 36,856 224 2.43% Bank ("FHLB")Payroll ProtectionProgram Liquidity 76,902 72 0.37% - - 0.00% - - 0.00% Facility ("PPPLF")Other Borrowings 36,308 157 1.73% 67,125 200 1.19% 14,390 12 0.33% TotalInterest-Bearing 2,262,331 5,972 1.06% 1,532,661 5,805 1.52% 1,411,876 5,703 1.62% Liabilities Noninterest-Bearing Liabilities:Noninterest-Bearing $ 852,608 $ 406,035 $ 396,793 DepositsOther Liabilities 31,501 20,550 23,761 TotalNoninterest-Bearing 884,109 426,585 420,554 LiabilitiesShareholders' 349,634 285,338 270,262 EquityTotal Liabilitiesand Shareholders' $ 3,496,074 $ 2,244,584 $ 2,102,692 Equity Net Interest Spread 3.59% 3.55% 3.75% Net Interest Income $ 30,919 $ 20,211 $ 20,193 Net Interest Margin 3.89% 3.93% 4.19% Overall Cost of 0.77% 1.20% 1.26% Funds 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, 2020 June 30, 2019 Average Average Outstanding Interest Average Outstanding Interest Average Earned / Earned /(Dollars in Balance Interest Yield / Balance Interest Yield / thousands) Paid Rate Paid Rate Assets Interest-Earning Assets:Total Loans $ 2,022,313 $ 56,449 5.58% $ 1,575,988 $ 46,293 5.87% (Excluding SBA PPP)SBA PPP Loans 160,564 2,330 2.90% - - 0.00% Securities 384,041 3,906 2.03% 306,501 3,703 2.42% Available for SaleInterest-BearingDeposit in Other 48,962 222 0.91% 31,897 487 3.05% BanksTotalInterest-Earning 2,615,879 62,907 4.81% 1,914,386 50,483 5.27% AssetsAllowance for Loan (12,905) (11,546) LossesNoninterest-Earning 267,355 186,348 AssetsTotal Assets $ 2,870,329 $ 62,907 $ 2,089,188 $ 50,483 Liabilities andShareholders' Equity Interest-Bearing Liabilities:Interest-Bearing $ 1,668,446 $ 9,481 1.14% $ 1,335,522 $ 9,795 1.47% DepositsSubordinated Debt 25,000 844 6.75% 25,000 845 6.76% Advances fromFederal Home Loan 113,882 1,023 1.80% 37,191 505 2.72% Bank ("FHLB")Payroll ProtectionProgram Liquidity 38,451 72 0.37% - - 0.00% Facility ("PPPLF")Other Borrowings 51,717 357 1.38% 13,436 25 0.37% TotalInterest-Bearing 1,897,496 11,777 1.24% 1,411,149 11,170 1.58% Liabilities Noninterest-Bearing Liabilities:Noninterest-Bearing 629,321 395,304 DepositsOther Liabilities 26,026 16,242 TotalNoninterest-Bearing 655,347 411,546 LiabilitiesShareholders' 317,486 266,493 EquityTotal Liabilitiesand Shareholders' $ 2,870,329 $ 2,089,188 Equity Net Interest Spread 3.57% 3.69% Net Interest Income $ 51,130 $ 39,313 Net Interest Margin 3.91% 4.11% Overall Cost of 0.93% 1.24% Funds 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 inthousands, except 2020 2020 2019 2020 2019 per share data) Interest Income: Interest income $ 36,891 $ 26,016 $ 25,896 $ 62,907 $ 50,483 Core interest 36,891 26,016 25,896 62,907 50,483 incomeInterest Expense: Interest expense 5,972 5,805 5,703 11,777 11,170 Core interest 5,972 5,805 5,703 11,777 11,170 expenseProvision for Loan Losses: (b)Provision for loan 5,443 1,367 1,302 6,810 1,935 lossesCore provision 5,443 1,367 1,302 6,810 1,935 expenseOther Income: Other income 4,996 2,804 4,219 7,800 6,530 Sale of impaired - - (91 ) - (91 ) credit(Gains) losses onformer bank - (126 ) - (126 ) - premises andequipment(Gains) on sale of - (25 ) (58 ) (25 ) (58 ) securities(Gains) on sale of - - (593 ) - (593 ) banking centerCore other income 4,996 2,653 3,477 7,649 5,788 Other Expense: Other expense 27,797 16,643 14,577 44,440 28,367 Acquisition-related (6,573 ) (1,212 ) (436 ) (7,785 ) (386 ) expenses (2)Stock optionexercises - excess - (71 ) - (71 ) - taxesCore other expense 21,224 15,360 14,141 36,584 27,981 Pre-Tax Income: (a) Pre-tax income 2,675 5,005 8,533 7,680 15,541 Sale of impaired - - (91 ) - (91 ) credit(Gains) losses onformer bank - (126 ) - (126 ) - premises andequipment(Gains) on sale of - (25 ) (58 ) (25 ) (58 ) securities(Gains) on sale of - - (593 ) - (593 ) banking centerAcquisition-related 6,573 1,212 436 7,785 386 expenses (2)Stock optionexercises - excess - 71 - 71 - taxesCore pre-tax income 9,248 6,137 8,227 15,385 15,185 Provision for Income Taxes: (1)Provision for 623 506 1,690 1,129 3,039 income taxesTax on sale of - - (19 ) - (19 ) impaired creditTax on (gains) onformer bank - (26 ) - (26 ) - premises andequipmentTax on (gains) on - (5 ) (12 ) (5 ) (12 ) sale of securitiesTax on sale of - - (125 ) - (125 ) banking centerTax onacquisition-related 1,275 91 91 1,366 75 expenses (2)Tax on stock option - 601 - 601 - exercisesCore provision for 1,898 1,167 1,625 3,065 2,958 income taxesNet Income: Net income 2,052 4,499 6,843 6,551 12,502 Sale of impaired - - (72 ) - (72 ) credit, net of tax(Gains) losses onformer bankpremises and - (100 ) - (100 ) - equipment , net oftax(Gains) on sale ofsecurities, net of - (20 ) (46 ) (20 ) (46 ) tax(Gains) on sale ofbanking center, net - - (468 ) - (468 ) of taxAcquisition-relatedexpenses (2), net 5,298 1,121 345 6,419 311 of taxStock optionexercises, net of - (530 ) - (530 ) - taxCore net income $ 7,350 $ 4,970 $ 6,602 $ 12,320 $ 12,227 Pre-tax,pre-provision $ 8,118 $ 6,372 $ 9,835 $ 14,490 $ 17,476 earnings (a+b)Sale of impaired - - (91 ) - (91 ) credit(Gains) losses onformer bank - (126 ) - (126 ) - premises andequipment(Gains) on sale of - (25 ) (58 ) (25 ) (58 ) securities(Gains) on sale of - - (593 ) - (593 ) banking centerAcquisition-related 6,573 1,212 436 7,785 386 expenses (2)Stock option - 71 - 71 - exercisesCore pre-tax,pre-provision $ 14,691 $ 7,504 $ 9,529 $ 22,195 $ 17,120 earnings Average Diluted 18,121,958 13,367,276 13,740,937 15,776,376 13,704,180 Shares Outstanding Diluted Earnings Per Share:Diluted earnings $ 0.11 $ 0.34 $ 0.50 $ 0.42 $ 0.91 per shareSale of impaired - - (0.01 ) - (0.01 ) credit, net of tax(Gains) losses onformer bankpremises and - (0.01 ) - (0.01 ) - equipment , net oftax(Gains) on sale ofsecurities, net of - (0.00 ) (0.00 ) (0.00 ) (0.00 ) tax(Gains) on sale of - - (0.04 ) - (0.03 ) banking centerAcquisition-relatedexpenses (2), net 0.30 0.08 0.03 0.40 0.02 of taxStock option - (0.04 ) - (0.03 ) - exercisesCore diluted $ 0.41 $ 0.37 $ 0.48 $ 0.78 $ 0.89 earnings per share Pre-tax,pre-provision $ 0.45 $ 0.48 $ 0.72 $ 0.92 $ 1.28 profit dilutedearnings per shareSale of impaired - - (0.01 ) - (0.01 ) credit(Gains) losses onformer bank - (0.01 ) - (0.01 ) - premises andequipment(Gains) on sale of - (0.00 ) (0.00 ) (0.00 ) (0.00 ) securities(Gains) on sale of - (0.05 ) - (0.05 ) banking centerAcquisition-related 0.36 0.09 0.03 0.50 0.03 expenses (2)Stock option - 0.00 - 0.00 - exercisesCore pre-tax,pre-provision $ 0.81 $ 0.56 $ 0.69 $ 1.41 $ 1.25 diluted earningsper share (1) Tax rates, exclusive of certain nondeductible merger-related expenses and goodwill, utilized were 21% for 2020 and 2019. These rates approximatedthe 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 inthousands, except 2020 2020 2019 2020 2019 per share data) Total Quarterly/Year-to-Date $ 3,496,074 $ 2,244,584 $ 2,102,692 $ 2,870,329 $ 2,089,188 Average AssetsTotal Quarterly/Year-to-Date $ 349,634 $ 285,338 $ 270,262 $ 317,486 $ 266,493 Average Equity Net Income: Net income $ 2,052 $ 4,499 $ 6,843 $ 6,551 $ 12,502 Sale of impaired - - (72 ) - (72 ) credit, net of tax(Gains) losses onformer bankpremises and - (100 ) - (100 ) - equipment , net oftax(Gains) on sale ofsecurities, net of - (20 ) (46 ) (20 ) (46 ) tax(Gains) on sale ofbanking center, net - - (468 ) - (468 ) of taxAcquisition-relatedexpenses (2), net 5,298 1,121 345 6,419 311 of taxStock optionexercises, net of - (530 ) - (530 ) - taxCore net income $ 7,350 $ 4,970 $ 6,602 $ 12,320 $ 12,227 Return on average 0.23% 0.80% 1.30% 0.46% 1.20% assetsCore return on 0.84% 0.89% 1.26% 0.86% 1.17% average assetsReturn on equity 2.35% 6.31% 10.13% 4.13% 9.38% Core return on 8.41% 6.97% 9.77% 7.76% 9.18% average equity Interest Income: Interest income $ 36,891 $ 26,016 $ 25,896 $ 62,907 $ 50,483 Core interest 36,891 26,016 25,896 62,907 50,483 incomeInterest Expense: Interest expense 5,972 5,805 5,703 11,777 11,170 Core interest 5,972 5,805 5,703 11,777 11,170 expenseOther Income: Other income 4,996 2,804 4,219 7,800 6,530 Sale of impaired - - (91 ) - (91 ) credit(Gains) losses onformer bank - (126 ) - (126 ) - premises andequipment(Gains) on sale of - (25 ) (58 ) (25 ) (58 ) securities(Gains) on sale of - - (593 ) - (593 ) banking centerCore other income 4,996 2,653 3,477 7,649 5,788 Other Expense: Other expense 27,797 16,643 14,577 44,440 28,367 Acquisition-related (6,573 ) (1,212 ) (436 ) (7,785 ) (386 ) expensesStock optionexercises - excess - (71 ) - (71 ) - taxesCore other expense $ 21,224 $ 15,360 $ 14,141 $ 36,584 $ 27,981 Efficiency Ratio: Other expense (a) $ 27,797 $ 16,643 $ 14,577 $ 44,440 $ 28,367 Core other expense $ 21,224 $ 15,360 $ 14,141 $ 36,584 $ 27,981 (c)Net interest andother income (1) $ 35,915 $ 22,990 $ 24,354 $ 58,905 $ 45,785 (b)Core net interestand other income $ 35,915 $ 22,864 $ 23,670 $ 58,779 $ 45,101 (1) (d)Efficiency ratio (a 77.40% 72.39% 59.85% 75.44% 61.96% /b)Core efficiency 59.10% 67.18% 59.74% 62.24% 62.04% ratio (c/d) Total AverageInterest-Earnings $ 3,176,156 $ 2,055,603 $ 1,929,035 $ 2,615,879 $ 1,914,386 Assets Net Interest Income:Net interest income $ 30,919 $ 20,211 $ 20,193 51,130 $ 39,313 Loan discount (1,465 ) (290 ) (826 ) (1,755 ) (1,258 ) accretionNet interest incomeexcluding loan $ 29,454 $ 19,921 $ 19,367 $ 49,375 $ 38,055 discount accretion Net interest margin 3.89% 3.93% 4.19% 3.91% 4.11% (2)Net interest marginexcluding loan 3.71% 3.88% 4.02% 3.78% 3.98% discount accretion(2)Net interest spread 3.59% 3.55% 3.75% 3.57% 3.69% Net interest spreadexcluding loan 3.41% 3.49% 3.58% 3.43% 3.56% discount accretion (1) Excludes gains/losses on sales of securities.(2) Calculatedutilizing a 30/360 day countconvention.

Business First Bancshares, Inc. Non-GAAP Measures (Unaudited) June 30, March 31, June 30, (Dollars in thousands, 2020 2020 2019 except per share data) Total Shareholders' (Common) Equity:Total shareholders' $ 386,336 $ 282,030 $ 277,469 equityGoodwill (53,649 ) (48,495 ) (48,503 ) Core deposit intangible (10,389 ) (6,471 ) (7,139 ) Total tangible common $ 322,298 $ 227,064 $ 221,827 equity Total Assets: Total assets $ 3,961,138 $ 2,287,662 $ 2,153,608 Goodwill (53,649 ) (48,495 ) (48,503 ) Core deposit intangible (10,389 ) (6,471 ) (7,139 ) Total tangible assets $ 3,897,100 $ 2,232,696 $ 2,097,966 Common shares outstanding 20,667,237 13,067,987 13,361,482 Book value per common $ 18.69 $ 21.58 $ 20.77 shareTangible book value per $ 15.59 $ 17.38 $ 16.60 common shareCommon equity to total 9.75% 12.33% 12.88% assetsTangible common equity to 8.27% 10.17% 10.57% tangible assets

Misty Albrecht

b1BANK225.286.7879Misty.Albrecht@b1BANK.com