GlobeNewswire Inc | Jul 26, 2021 04:01PM EDT

July 26, 2021

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 companys 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 quarters momentum.

On July 22, 2021, Business Firsts 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 Firsts 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.comfor more information. Business Firsts common stock is traded on the NASDAQ Global Select Market under the symbol BFST.

Non-GAAP Financial MeasuresThis 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 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, 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 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 StatementsCertain 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 InformationFor 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.govor 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 Albrechtb1BANK225.286.7879Misty.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 0.94 % 0.83 % 0.62 %Loans (HFI)Net Charge-offs (Recoveries) to 0.03 % -0.00 % 0.00 %Average Total Loans 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 0.40 % 0.44 % 0.39 %(HFI)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 theCommercialand Consumer portfolios, respectively, as of March 31, 2021.SBA PPPloans accounted for $389.9 million and $5.5 million of the CommercialandConsumer portfolios, 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 2021 2021 2020 2021 2020per share data) Per Share Data Basic Earnings per $ 0.84 $ 0.60 $ 0.11 $ 1.44 $ 0.42 Common ShareDiluted Earnings 0.84 0.59 0.11 1.43 0.42 per Common ShareDividends per 0.12 0.10 0.10 0.22 0.20 Common ShareBook Value per 20.78 20.03 18.69 20.78 18.69 Common Share Average Common 20,707,313 20,621,930 18,108,068 20,664,857 15,710,611 Shares OutstandingAverage Diluted 20,827,786 20,738,013 18,121,958 20,783,135 15,776,376 Shares OutstandingEnd of PeriodCommon Shares 20,740,759 20,804,753 20,667,237 20,740,759 20,667,237 Outstanding Annualized Performance Ratios Return on Average 1.58 % 1.15 % 0.23 % 1.37 % 0.46 %AssetsReturn on Average 16.57 % 11.86 % 2.35 % 14.23 % 4.13 %EquityNet Interest 3.87 % 4.23 % 3.89 % 4.05 % 3.91 %MarginNet Interest 3.68 % 4.06 % 3.59 % 3.87 % 3.57 %SpreadEfficiency Ratio 56.20 % 59.40 % 77.40 % 57.64 % 75.44 %(1) Total Quarterly/Year-to-Date $ 4,399,911 $ 4,276,430 $ 3,496,074 $ 4,338,170 $ 2,870,329 Average AssetsTotal Quarterly/Year-to-Date 420,640 415,896 349,634 418,267 317,486 Average Equity Other Expenses Salaries and $ 16,753 $ 14,926 $ 17,621 $ 31,679 $ 27,056 Employee BenefitsOccupancy and Bank 2,276 1,811 1,370 4,087 2,430 PremisesDepreciation and 1,686 1,593 1,073 3,279 1,674 AmortizationData Processing 2,288 1,823 1,055 4,111 1,707 FDIC Assessment 436 509 272 945 419 FeesLegal and Other 905 741 543 1,646 937 Professional FeesAdvertising and 624 477 334 1,101 640 PromotionsUtilities and 636 575 645 1,211 962 CommunicationsAd Valorem Shares 675 700 450 1,375 825 TaxDirectors' Fees 194 188 100 382 174 Other Real EstateOwned Expenses and 178 379 51 557 304 Write-DownsMerger andConversion-Related 94 10 1,726 104 2,874 ExpensesOther 4,371 3,231 2,557 7,602 4,438 Total Other $ 31,116 $ 26,963 $ 27,797 $ 58,079 $ 44,440 Expenses Other Income Service Charges on $ 1,683 $ 1,567 $ 1,163 $ 3,250 $ 2,094 Deposit AccountsGain (Loss) onSales of (50 ) (5 ) - (55 ) 25 SecuritiesDebit card and ATM 1,777 1,336 959 3,113 1,366 Fee IncomeBank-Owned Life 355 318 255 673 452 Insurance IncomeGain (Loss) on 10,042 (21 ) 7 10,021 184 Sales of LoansMortgage 241 229 126 470 241 Origination IncomeBrokerage 1,416 543 236 1,959 256 CommissionCorrespondent Bank 123 143 32 266 141 IncomeParticipation Fee 240 247 46 487 113 IncomeGain (Loss) onSales of Other (575 ) 46 (19 ) (529 ) 132 Real Estate OwnedGain (Loss) onDisposal of Other (9 ) 117 - 108 - AssetsPass-throughIncome from SBIC 1,602 53 1,624 1,655 2,004 PartnershipsOther 531 510 567 1,041 792 Total Other $ 17,376 $ 5,083 $ 4,996 $ 22,459 $ 7,800 Income ^(1) Non-GAAP: Noninterest expense (excluding provision for loan losses)divided by noninterest income plus net interestincome 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, 882,802 721,224 583,118 at Fair ValuesMortgage 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 13,271 9,406 10,389 IntangiblesOther 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 25,837 21,419 25,391 Agreements to RepurchaseShort-Term Borrowings 20 20 6,145 Long-Term Borrowings - - 7,797 Payroll Protection Program - - 107,076 Liquidity FacilitySubordinated Debt 81,427 77,500 25,000 Subordinated Debt - Trust 5,000 5,000 5,000 Preferred SecuritiesFederal Home Loan Bank 28,023 33,073 118,177 BorrowingsAccrued 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 6,869 6,173 8,213 Income Total Shareholders' Equity 431,006 416,701 386,336 Total Liabilities and $ 4,323,959 $ 4,443,586 $ 3,961,138 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 2021 2021 2020 2021 2020thousands) Interest Income: Interest and Fees $ 39,135 $ 41,419 $ 34,636 $ 80,554 $ 58,779on LoansInterest andDividends on 3,189 2,802 2,175 5,991 3,906SecuritiesInterest onFederal Funds Sold 27 41 80 68 222and Due From BanksTotal Interest 42,351 44,262 36,891 86,613 62,907Income Interest Expense: Interest on 3,235 3,243 4,795 6,478 9,481DepositsInterest on 1,171 718 1,177 1,889 2,296BorrowingsTotal Interest 4,406 3,961 5,972 8,367 11,777Expense Net Interest 37,945 40,301 30,919 78,246 51,130Income Provision for Loan 2,241 3,359 5,443 5,600 6,810Losses: Net InterestIncome After 35,704 36,942 25,476 72,646 44,320Provision for LoanLosses Other Income: Service Charges on 1,683 1,567 1,163 3,250 2,094Deposit AccountsGain (Loss) onSales of (50 ) (5 ) - (55 ) 25SecuritiesGain (Loss) on 10,042 (21 ) 7 10,021 184Sales of LoansOther Income 5,701 3,542 3,826 9,243 5,497Total Other Income 17,376 5,083 4,996 22,459 7,800 Other Expenses: Salaries and 16,753 14,926 17,621 31,679 27,056Employee BenefitsOccupancy and 4,264 3,717 2,888 7,981 4,779Equipment ExpenseMerger andConversion-Related 94 10 1,726 104 2,874ExpenseOther Expenses 10,005 8,310 5,562 18,315 9,731Total Other 31,116 26,963 27,797 58,079 44,440Expenses Income Before 21,964 15,062 2,675 37,026 7,680Income Taxes: Provision for 4,536 2,733 623 7,269 1,129Income Taxes: 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 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 $ 2,814,593 $ 36,116 5.13 % $ 2,643,668 $ 36,538 5.53 % $ 2,304,438 $ 32,306 5.61 %(Excluding SBA PPP)SBA PPP Loans 242,015 3,019 4.99 % 374,958 $ 4,881 5.21 % 321,127 2,330 2.90 %Securities 801,268 3,189 1.59 % 691,476 2,802 1.62 % 481,422 2,175 1.81 %Available for SaleInterest-BearingDeposit in Other 62,693 27 0.17 % 101,233 41 0.16 % 69,169 80 0.46 %BanksTotalInterest-Earning 3,920,569 42,351 4.32 % 3,811,335 44,262 4.65 % 3,176,156 36,891 4.65 %AssetsAllowance for Loan (26,032 ) (22,709 ) (13,606 ) LossesNoninterest-Earning 505,374 487,804 333,524 AssetsTotal Assets $ 4,399,911 $ 42,351 $ 4,276,430 $ 44,262 $ 3,496,074 $ 36,891 Liabilities andShareholders' Equity Interest-Bearing Liabilities:Interest-Bearing $ 2,615,241 $ 3,235 0.49 % $ 2,584,263 $ 3,243 0.50 % $ 1,994,680 $ 4,795 0.96 %DepositsSubordinated Debt 81,427 1,015 4.99 % 28,450 459 6.45 % 25,000 422 6.75 %Subordinated Debt -Trust Preferred 5,000 43 3.44 % 5,000 42 3.36 % 3,333 8 0.96 %SecuritiesAdvances fromFederal Home Loan 32,887 108 1.31 % 37,022 111 1.20 % 129,441 526 1.63 %Bank (FHLB)Paycheck ProtectionProgram Liquidity - - 0.00 % - - 0.00 % 76,902 72 0.37 %Facility (PPPLF)Other Borrowings 24,909 5 0.08 % 31,696 106 1.34 % 32,975 149 1.81 %TotalInterest-Bearing 2,759,464 4,406 0.64 % 2,686,431 3,961 0.59 % 2,262,331 5,972 1.06 %Liabilities Noninterest-Bearing Liabilities:Noninterest-Bearing $ 1,191,900 $ 1,146,950 $ 852,608 DepositsOther Liabilities 27,907 27,153 31,501 TotalNoninterest-Bearing 1,219,807 1,174,103 884,109 LiabilitiesShareholders' 420,640 415,896 349,634 Equity:Total Liabilitiesand Shareholders' $ 4,399,911 $ 4,276,430 $ 3,496,074 Equity 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 0.45 % 0.41 % 0.77 %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, 2021 June 30, 2020 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 $ 2,729,130 $ 72,654 5.32 % $ 2,022,312 $ 56,449 5.58 %(Excluding SBA PPP)SBA PPP Loans 308,487 7,900 5.12 % 160,564 2,330 2.90 %Securities 746,372 5,991 1.61 % 384,041 3,906 2.03 %Available for SaleInterest-BearingDeposit in Other 81,963 68 0.17 % 48,962 222 0.91 %BanksTotalInterest-Earning 3,865,952 86,613 4.48 % 2,615,879 62,907 4.81 %AssetsAllowance for Loan (24,371 ) (12,905 ) LossesNoninterest-Earning 496,589 267,355 AssetsTotal Assets $ 4,338,170 $ 86,613 $ 2,870,329 $ 62,907 Liabilities andShareholders' Equity Interest-Bearing Liabilities:Interest-Bearing $ 2,599,751 $ 6,478 0.50 % $ 1,668,446 $ 9,481 1.14 %DepositsSubordinated Debt 54,939 1,474 5.37 % 25,000 844 6.75 %Subordinated Debt -Trust Preferred 5,000 85 3.40 % 1,667 8 0.96 %SecuritiesAdvances fromFederal Home Loan 34,954 219 1.25 % 113,882 1,023 1.80 %Bank (FHLB)Paycheck ProtectionProgram Liquidity - - 0.00 % 38,451 72 0.37 %Facility (PPPLF)Other Borrowings 28,302 111 0.78 % 50,050 349 1.39 %TotalInterest-Bearing 2,722,946 8,367 0.61 % 1,897,496 11,777 1.24 %Liabilities Noninterest-Bearing Liabilities:Noninterest-Bearing 1,169,425 629,321 DepositsOther Liabilities 27,532 26,026 TotalNoninterest-Bearing 1,196,957 655,347 LiabilitiesShareholders' 418,267 317,486 EquityTotal Liabilitiesand Shareholders' $ 4,338,170 $ 2,870,329 Equity Net Interest Spread 3.87% 3.57% Net Interest Income $ 78,246 $ 51,130 Net Interest Margin 4.05% 3.91% Overall Cost of 0.43% 0.93% Funds NOTE: Average outstanding balances are determined utilizing monthly averagesand 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, 2021 2021 2020 2021 2020 except per share data) 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 2,241 3,359 5,443 5,600 6,810 loan lossesCore provision 2,241 3,359 5,443 5,600 6,810 expenseOther Income: Other income 17,376 5,083 4,996 22,459 7,800 (Gains) 1osses onformer bank premises 540 - - 540 (126 )and equipment(Gains) 1osses on sale 50 5 - 55 (25 )of securitiesCore other 17,966 5,088 4,996 23,054 7,649 incomeOther Expense: Other expense 31,116 26,963 27,797 58,079 44,440 Acquisition-related (94 ) (10 ) (6,573 ) (104 ) (7,785 )expenses (2)Stock option exercises- excess taxes - - - - (71 )(founder's grants)Occupancy andbank premises - (938 ) (350 ) - (1,288 ) - hurricane repairCore other 30,084 26,603 21,224 - 56,687 36,584 expensePre-Tax Income: (a) Pre-tax income 21,964 15,062 2,675 37,026 7,680 (Gains) 1osses onformer bank premises 540 - - 540 (126 )and equipment(Gains) 1osses on sale 50 5 - 55 (25 )of securitiesAcquisition-related 94 10 6,573 104 7,785 expenses (2)Stock option exercises- excess taxes - - - - 71 (founder's grants)Occupancy andbank premises - 938 350 - 1,288 - hurricane repairCore pre-tax 23,586 15,427 9,248 39,013 15,385 incomeProvision for Income Taxes: (1)Provision for 4,536 2,733 623 7,269 1,129 income taxesTax on (gains)losses on former bank 113 - - 113 (26 )premises and equipmentTax on (gains) losses 11 1 - 12 (5 )on sale of securitiesTax onacquisition-related 20 2 1,275 22 1,366 expenses (2)Tax on stockoption exercises - - - - 601 (founder's grants)Tax on occupancyand bank premises - 197 74 - 271 - hurricane repairCore provision 4,877 2,810 1,898 7,687 3,065 for income taxesNet Income: Net income 17,428 12,329 2,052 29,757 6,551 (Gains) losses onformer bank premises 427 - - 427 (100 )and equipment , net oftax(Gains) losses on saleof securities, net of 39 4 - 43 (20 )taxAcquisition-relatedexpenses (2), net of 74 8 5,298 82 6,419 taxStock option exercises,net of tax (founder's - - - - (530 )grants)Occupancy and bankpremises - hurricane 741 277 - 1,018 - repair, net of taxCore net income $ 18,709 $ 12,618 $ 7,350 $ 31,327 $ 12,320 Pre-tax, pre-provision $ 24,205 $ 18,421 $ 8,118 $ 42,626 $ 14,490 earnings (a+b)(Gains) losses onformer bank premises 540 - - 540 (126 )and equipment(Gains) losses on sale 50 5 - 55 (25 )of securitiesAcquisition-related 94 10 6,573 104 7,785 expenses (2)Stock option exercises - - - - 71 (founder's grants)Occupancy and bankpremises - hurricane 938 350 - 1,288 - repairCore pre-tax, $ 25,827 $ 18,786 $ 14,691 $ 44,613 $ 22,195 pre-provision earnings AverageDiluted Shares 20,827,786 20,738,013 18,121,958 20,783,135 15,776,376 Outstanding Diluted Earnings Per Share:Diluted earnings $ 0.84 $ 0.59 $ 0.11 $ 1.43 $ 0.42 per share(Gains) losses onformer bank premises 0.02 - - 0.02 (0.01 )and equipment , net oftax(Gains) losses on saleof securities, net of 0.00 0.00 - 0.00 (0.00 )taxAcquisition-relatedexpenses (2), net of 0.00 0.00 0.30 0.00 0.40 taxStock option exercises - - - - (0.03 )(founder's grants)Occupancy and bankpremises - hurricane 0.04 0.02 - 0.06 - repair, net of taxCore diluted $ 0.90 $ 0.61 $ 0.41 $ 1.51 $ 0.78 earnings per share Pre-tax,pre-provision profit $ 1.16 $ 0.89 $ 0.45 $ 2.05 $ 0.92 diluted earnings pershare(Gains) losses onformer bank premises 0.03 - - 0.03 (0.01 )and equipment(Gains) losses on sale 0.00 0.00 - 0.00 (0.00 )of securitiesAcquisition-related 0.00 0.00 0.36 0.01 0.50 expenses (2)Stock option exercises - - - - 0.00 (founder's grants)Occupancy and bankpremises - hurricane 0.05 0.02 - 0.06 - repairCore pre-tax,pre-provision diluted $ 1.24 $ 0.91 $ 0.81 $ 2.15 $ 1.41 earnings per share (1) Tax rates, exclusive of certain nondeductible merger-related expenses andgoodwill, utilized were 21% for 2021 and 2020. These rates approximatedthemarginal 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, 2021 2021 2020 2021 2020 except per share data) TotalQuarterly/Year-to-Date $ 4,399,911 $ 4,276,430 $ 3,496,074 $ 4,338,170 $ 2,870,329 Average AssetsTotalQuarterly/Year-to-Date $ 420,640 $ 415,896 $ 349,634 $ 418,267 $ 317,486 Average Equity Net Income: Net income $ 17,428 $ 12,329 $ 2,052 $ 29,757 $ 6,551 (Gains) losses on formerbank premises and 427 - - 427 (100 )equipment , net of tax(Gains) losses on saleof securities, net of 39 4 - 43 (20 )taxAcquisition-related 74 8 5,298 82 6,419 expenses (2), net of taxStock option exercises,net of tax (founder's - - - - (530 )grants)Occupancy and bankpremises - hurricane 741 277 - 1,018 - repair, net of taxCore net income $ 18,709 $ 12,618 $ 7,350 $ 31,327 $ 12,320 Return 1.58 % 1.15 % 0.23 % 1.37 % 0.46 %on average assetsCore 1.70 % 1.18 % 0.84 % 1.44 % 0.86 %return on average assetsReturn 16.57 % 11.86 % 2.35 % 14.23 % 4.13 %on equityCore 17.79 % 12.14 % 8.41 % 14.98 % 7.76 %return on average equity 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 formerbank premises and 540 - - 540 (126 )equipment(Gains) losses on sale 50 5 - 55 (25 )of securitiesCore other 17,966 5,088 4,996 23,054 7,649 incomeOther Expense: Other expense 31,116 26,963 27,797 58,079 44,440 Acquisition-related (94 ) (10 ) (6,573 ) (104 ) (7,785 )expensesStock option exercises -excess taxes (founder's - - - - (71 )grants)Occupancy and bankpremises - hurricane (938 ) (350 ) - (1,288 ) - repairCore 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 $ 55,371 $ 45,389 $ 35,915 $ 100,760 $ 58,905 income (1) (b)Core net interest and $ 55,911 $ 45,389 $ 35,915 $ 101,300 $ 58,779 other income (1) (d)Efficiency ratio (a/b) 56.20 % 59.40 % 77.40 % 57.64 % 75.44 %Core efficiency ratio (c 53.81 % 58.61 % 59.10 % 55.96 % 62.24 %/d) TotalAverage $ 3,920,569 $ 3,811,335 $ 3,176,156 $ 3,865,952 $ 2,615,879 Interest-Earnings Assets Net Interest Income: Net $ 37,945 $ 40,301 $ 30,919 $ 78,246 $ 51,130 interest incomeLoan (1,617 ) (3,063 ) (1,465 ) (4,680 ) (1,755 )discount accretionNetinterest income $ 36,328 $ 37,238 $ 29,454 $ 73,566 $ 49,375 excluding loan discountaccretion Net interest margin (2) 3.87 % 4.23 % 3.89 % 4.05 % 3.91 %Net interest marginexcluding loan discount 3.71 % 3.91 % 3.71 % 3.81 % 3.78 %accretion (2)Net 3.68 % 4.06 % 3.59 % 3.87 % 3.57 %interest spreadNetinterest spread 3.52 % 3.73 % 3.41 % 3.62 % 3.43 %excluding loan discountaccretion (1) Excludes gains/losses on sales of securities.(2) Calculated utilizinga 30/360 day count convention.

Business First Bancshares, Inc.Non-GAAP Measures(Unaudited) June 30, March 31, June 30,(Dollars in thousands, 2021 2021 2020 except per share data) Total Shareholders' (Common) Equity:Total $ 431,006 $ 416,701 $ 386,336 shareholders' equityGoodwill (60,062 ) (53,753 ) (53,649 )Core deposit and customer (13,271 ) (9,406 ) (10,389 )intangibleTotal tangible common $ 357,673 $ 353,542 $ 322,298 equity Total Assets: Total $ 4,323,959 $ 4,443,586 $ 3,961,138 assetsGoodwill (60,062 ) (53,753 ) (53,649 )Core deposit and customer (13,271 ) (9,406 ) (10,389 )intangibleTotal 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 $ 17.24 $ 16.99 $ 15.59 common shareCommon equity to total 9.97 % 9.38 % 9.75 %assetsTangible common equity to 8.41 % 8.07 % 8.27 %tangible assets