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CST: 22/11/2019 10:45:35   

Business First Bancshares, Inc., Announces Financial Results for Q3 2019

29 Days ago

BATON ROUGE, La., Oct. 23, 2019 (GLOBE NEWSWIRE) -- Business First Bancshares, Inc. (NASDAQ: BFST) (Business First), parent company of Business First Bank, Baton Rouge, Louisiana, today announced its unaudited results for the quarter ended September 30, 2019, including quarterly net income of $5.5 million, or $0.40 per diluted share, increases of $1.6 million and $0.07, respectively, from the quarter ended September 30, 2018. Core net income, which excludes noncore income and expenses, was $6.3 million, or $0.46 per diluted share, which reflects increases of $1.8 million and $0.09, respectively, from the quarter ended September 30, 2018. 

“I am pleased with our company’s performance for the quarter as we continue to successfully navigate our way through the uncertainties of the current interest rate environment,” said Jude Melville, president and CEO. “In addition to maintaining a healthy net interest margin despite multiple reductions in the federal funds rate over the course of the quarter, we booked double-digit annualized loan growth and, most importantly, maintained sound credit quality.”

On October 17, 2019, Business First’s board of directors declared a quarterly dividend based upon financial performance for the quarter in the amount of $0.10 per share, same as the prior quarter, to the common shareholders of record as of November 15, 2019. The dividend will be paid on November 30, 2019, or as soon thereafter as practicable.

Quarterly Highlights

  • Continued, Strong Loan Growth. Total loans held for investment at September 30, 2019 were $1.7 billion, an increase of $52.2 million compared to June 30, 2019. Annualized loan growth for the quarter ended September 30, 2019, was 12.7%, compared to 14.2% loan growth for the quarter ended June 30, 2019, and 14.5% year to date.
  • Mitigated Net Interest Margin and Spread Impact. Net interest margin and spread were negatively impacted compared to prior quarter due to two 25 basis points federal funds rate cuts for the quarter ended September 30, 2019, one at the end of July and one in mid-September. Net interest margin and net interest spread were 4.10% and 3.66%, respectively, for the quarter ended September 30, 2019 compared to 4.19% and 3.75% for the quarter ended June 30, 2019. Excluding loan discount accretion, net interest margin and spread were 3.99% and 3.55%, respectively, for the quarter ended September 30, 2019, compared to 4.02% and 3.58% for the quarter ended June 30, 2019. 
  • Sound Credit Quality.  Ratios of nonperforming loans compared to loans held for investment and nonperforming assets compared to total assets increased from 0.61% and 0.58%, respectively, at June 30, 2019, to 0.70% and 0.64% at September 30, 2019. The increases were largely attributable to the classification of a $1.5 million credit relationship to nonaccrual status.
  • Stock Repurchase Program.  During the quarter ended September 30, 2019, Business First spent $2.6 million to repurchase 110,846 shares at an average price of $23.00 per share under its previously announced stock repurchase program. Under the terms of the stock repurchase program, Business First is authorized to spend an additional $12.4 million to repurchase shares through December 2020.
  • Richland State Bank Conversion.  Business First successfully completed the data processing conversion of Richland State Bank on July 22, 2019.

Financial Condition

September 30, 2019, Compared to June 30, 2019

Balance Sheet

As of September 30, 2019, Business First had total assets of $2.2 billion, total loans of $1.7 billion, total deposits of $1.7 billion and total shareholders’ equity of $280.3 million, compared to $2.2 billion, $1.6 billion, $1.7 billion and $277.5 million, respectively, as of June 30, 2019.

Total loans held for investment increased by $52.2 million compared to June 30, 2019, or 12.7% annualized, for the quarter ended September 30, 2019, with most of the growth originating within the nonfarm nonresidential commercial real estate portfolio.

Book value per common share was $21.12 at September 30, 2019, compared to $20.77 at June 30, 2019. Tangible book value per common share was $16.96 at September 30, 2019, compared to $16.60 at June 30, 2019. 

Credit Quality

Nonperforming loans as a percentage of total loans held for investment increased from 0.61% as of June 30, 2019, to 0.70% as of September 30, 2019. Nonperforming assets as a percentage of total assets increased from 0.58% as of June 30, 2019, to 0.64% as of September 30, 2019. The increase was largely attributable to the classification of a $1.5 million credit relationship to nonaccrual status.

September 30, 2019, Compared to September 30, 2018

Balance Sheet

As of September 30, 2019, Business First had total assets of $2.2 billion, total loans of $1.7 billion, total deposits of $1.7 billion and total shareholders’ equity of $280.3 million, compared to $1.7 billion, $1.3 billion, $1.4 billion and $213.0 million, respectively, as of September 30, 2018. The balance sheet increases were attributable to organic growth and to the fourth quarter 2018 acquisition of Richland State Bank.

Book value per common share was $21.12 at September 30, 2019, compared to $18.46 at September 30, 2018. Tangible book value per common share was $16.96 at September 30, 2019, compared to $15.30 at September 30, 2018.

Credit Quality

Nonperforming loans as a percentage of total loans held for investment decreased from 0.89% as of September 30, 2018, to 0.70% as of September 30, 2019. Nonperforming assets as a percentage of total assets decreased from 0.80% as of September 30, 2018, to 0.64% as of September 30, 2019. The decreases were mainly attributable to improved credit quality in relation to the size of the loan portfolio and total assets of Business First.

Results of Operations

Third Quarter 2019 Compared to Second Quarter 2019

Net Income and Diluted Earnings Per Share

For the quarter ended September 30, 2019, net income was $5.5 million, or $0.40 per diluted share, compared to net income of $6.8 million, or $0.50 per diluted share, for the quarter ended June 30, 2019.

Core net income, which excludes noncore income and expenses, for the quarter ended September 30, 2019, was $6.3 million, or $0.46 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 noncore events impacting earnings for the quarter ended September 30, 2019 included the incurrence of $594,000 in losses associated with the disposal of former bank premises and equipment in noninterest income and $288,000 associated with acquisition-related expenses in noninterest expense, compared to noninterest expenses of $436,000 associated with acquisition-related expenses and noninterest income of $593,000 related to gains from the sale of a banking center for the quarter ended June 30, 2019.

Return on Assets and Equity

Return on average assets and equity, each on an annualized basis, decreased to 1.02% and 7.93%, respectively, for the quarter ended September 30, 2019, compared to 1.30% and 10.13%, respectively, for the quarter ended June 30, 2019.  The decreases were largely attributable to the $1.3 million Small Business Investment Company “SBIC” investment income and $593,000 banking center gain on sale recognized for the quarter ended June 30, 2019, and $594,000 in losses on disposal of former bank premises and equipment recognized for the quarter ended September 30, 2019, offset by a reduction in the provision for loan losses of $823,000 for the quarter ended September 30, 2019 compared to the quarter ended June 30, 2019.

As adjusted, core return on average assets and core return on average equity, each on an annualized basis, were 1.16% and 9.01%, respectively, for the quarter ended September 30, 2019, compared to 1.26% and 9.77%, respectively, for the quarter ended June 30, 2019.  

Interest Income

For the quarter ended September 30, 2019, net interest income totaled $20.3 million and net interest margin and net interest spread were 4.10% and 3.66%, respectively, compared to $20.2 million, 4.19% and 3.75% for the quarter ended June 30, 2019.  The decrease in net interest margin was largely attributable to lower loan discount accretion and lower yielding loans due to the two 25 basis points federal funds rate cuts, offset by an additional calendar day for the quarter ended September 30, 2019.

Net interest margin and net interest spread (excluding loan discount accretion of $544,000) were 3.99% and 3.55%, respectively, for the quarter ended September 30, 2019, compared to 4.02% and 3.58% (excluding loan discount accretion of $826,000) for the quarter ended June 30, 2019. The ratios were negatively impacted by lower yielding loans due to the two 25 basis points federal funds rate cuts, offset by an additional calendar day for the quarter ended September 30, 2019.

The average yield on the loan portfolio was 5.87% for the quarter ended September 30, 2019, compared to 5.96% for the quarter ended June 30, 2019. The average yield on total interest-earning assets was 5.32% for the quarter ended September 30, 2019, compared to 5.37% for the quarter ended June 30, 2019.

Business First anticipates continued pressure on net interest margin in future periods based on the current yield curve.

Interest Expense

For the quarter ended September 30, 2019, overall cost of funds (which includes noninterest-bearing deposits) increased by five basis points compared to the quarter ended June 30, 2019. 

Provision for Loan Losses

During the quarter ended September 30, 2019, Business First recorded a provision for loan losses of $479,000, compared to $1.3 million for the quarter ended June 30, 2019. The reserve for the quarter ended June 30, 2019 was negatively impacted by the charge-off of the remaining balance of a single, previously identified, impaired loan.

Third Quarter 2019 Compared to Third Quarter 2018

Net Income and Diluted Earnings Per Share

For the quarter ended September 30, 2019, net income was $5.5 million, or $0.40 per diluted share, compared to net income of $3.9 million, or $0.33 per diluted share, for the quarter ended September 30, 2018. The increase in net income and diluted earnings per share resulted from the overall growth and efficiency of Business First over the past 12 months, mainly attributable to growth in net interest income and partially offset by increases in noninterest expenses. Both the growth in net interest income and increase in noninterest expenses were impacted for the quarter ended September 30, 2019, by the acquisition of Richland State Bank which occurred in the fourth quarter of 2018.

Core net income, which excludes noncore income and expenses, for the quarter ended September 30, 2019, was $6.3 million, or $0.46 per diluted share, compared to core net income of $4.4 million, or $0.37 per diluted share, for the quarter ended September 30, 2018. Notable noncore events impacting earnings for the quarter ended September 30, 2019 included the incurrence of $594,000 in losses associated with the disposal of former bank premises and equipment in noninterest income and $288,000 associated with acquisition-related expenses in noninterest expense, compared to noninterest expenses of $509,000 associated with acquisition-related expenses and $139,000 of losses associated with the disposal of former bank premises and equipment in noninterest income for the quarter ended September 30, 2018.

Return on Assets and Equity

Return on average assets and return on average equity, each on an annualized basis, increased to 1.02% and 7.93%, respectively, for the quarter ended September 30, 2019, from 0.94% and 7.37%, respectively, for the quarter ended September 30, 2018.  

As adjusted, core return on average assets and core return on average equity, each on an annualized basis, were 1.16% and 9.01%, respectively, for the quarter ended September 30, 2019, compared to 1.06% and 8.37%, respectively, for the quarter ended September 30, 2018.  

Interest Income

For the quarter ended September 30, 2019, net interest income totaled $20.3 million and net interest margin and net interest spread were 4.10% and 3.66%, respectively, compared to $15.6 million, 4.05% and 3.70% for the quarter ended September 30, 2018.

Net interest margin and net interest spread (excluding loan discount accretion of $544,000) were 3.99% and 3.55%, respectively, for the quarter ended September 30, 2019, compared to 3.98% and 3.63% (excluding loan discount accretion of $268,000) for the quarter ended September 30, 2018. 

The average yield on the loan portfolio was 5.87% for the quarter ended September 30, 2019, compared to 5.65% for the quarter ended September 30, 2018. The average
yield on total interest-earning assets was 5.32% for the quarter ended September 30, 2019, compared to 5.01% for the quarter ended September 30, 2018.

Interest Expense

For the quarter ended September 30, 2019, overall cost of funds (which includes noninterest-bearing deposits) increased by 29 basis points compared to the quarter ended September 30, 2018. The increase was largely attributable to an overall increase in interest rates over the past 12 months and the issuance of subordinated debt in December 2018.

Provision for Loan Losses

During the quarter ended September 30, 2019, Business First recorded a provision for loan losses of $479,000, compared to $503,000 for the quarter ended September 30, 2018.  

About Business First Bancshares, Inc.

Business First Bancshares, Inc., through its banking subsidiary Business First Bank, operates in 25 banking centers in markets across Louisiana and in Dallas, Texas. Business First Bank 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. These measures typically adjust income available to common shareholders for certain significant activities or transactions that, in management’s opinion, can distort period-to-period comparisons of Business First’s performance. Transactions that are typically excluded from non-GAAP measures include realized and unrealized gains/losses on former bank premises and equipment, investment sales, impaired loan sales, acquisition-related expenses (including, but not limited to, legal costs, system conversion costs, severance and retention payments, etc.). Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core business. These non-GAAP disclosures are not necessarily comparable to non-GAAP measures that may be presented by other companies. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided at the end of the tables below.

Special Note Regarding Forward-Looking Statements

Certain statements contained in this release may not be based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “may,” “might,” “will,” “would,” “could” or “intend.” We caution you not to place undue reliance on the forward-looking statements contained in this news release, in that actual results could differ materially from those indicated in such forward-looking statements as a result of a variety of factors. 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, or SEC, free of charge by using the SEC’s EDGAR service on the SEC’s website at www.sec.gov or by contacting the SEC for further information at 1-800-SEC-0330. Alternatively, these documents can be obtained free of charge from Business First by directing a request to: Business First Bancshares, Inc., 500 Laurel Street, Suite 101, Baton Rouge, Louisiana 70801, Attention: Corporate Secretary.

No Offer or Solicitation

This release does not constitute or form part of any offer to sell, or a solicitation of an offer to purchase, any securities of the Company. There will be no sale of securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Business First Bancshares, Inc.
Selected Financial Information
(Unaudited)
           
  September 30, June 30, March 31, December 31, September 30,
(Dollars in thousands) 2019 2019 2019 2018 2018
           
Balance Sheet Ratios          
           
Loans (HFI) to Deposits   97.77 %   96.46 %   90.93 %   88.15 %   95.86 %
Shareholders' Equity to Assets Ratio   12.62 %   12.88 %   12.81 %   12.41 %   12.69 %
           
           
Loans Receivable Held for Investment          
           
Commercial $ 415,163   $ 411,256   $ 389,855   $ 363,640   $ 317,889  
Real Estate:          
Construction and Land   220,524     227,102     211,888     211,054     196,404  
Farmland   45,809     47,245     44,066     45,989     26,882  
1-4 Family Residential   281,413     278,610     275,610     270,583     234,690  
Multi-Family Residential   31,448     38,698     39,548     39,273     22,109  
Nonfarm Nonresidential   620,427     561,149     550,103     518,660     432,306  
Total Real Estate   1,199,621     1,152,804     1,121,215     1,085,559     912,391  
Consumer   79,943     78,513     75,112     79,270     67,679  
Total Loans $ 1,694,727   $ 1,642,573   $ 1,586,182   $ 1,528,469   $ 1,297,959  
           
           
Allowance for Loan Losses          
           
Balance, Beginning of Period $ 11,603   $ 11,818   $ 11,220   $ 10,273   $ 9,756  
Charge-offs – Quarterly   (13 )   (1,565 )   (57 )   (19 )   (33 )
Recoveries – Quarterly   21     48     22     27     47  
Provision for Loan Losses – Quarterly   479     1,302     633     939     503  
Balance, End of Period $ 12,090   $ 11,603   $ 11,818   $ 11,220   $ 10,273  
           
Allowance for Loan Losses to Total Loans (HFI)   0.71 %   0.71 %   0.75 %   0.73 %   0.79 %
Net Charge-offs (Recoveries) to Average Total Loans   0.00 %   0.09 %   0.00 %   -0.00 %   0.00 %
           
           
Nonperforming Assets          
           
Nonperforming Loans:          
Nonaccrual Loans $ 11,577   $ 9,363   $ 13,183   $ 11,691   $ 11,341  
Loans Past Due 90 Days or More   277     727     77     1,876     256  
Total Nonperforming Loans   11,854     10,090     13,260     13,567     11,597  
Other Nonperforming Assets:          
Other Real Estate Owned   2,326     2,324     1,683     1,909     1,824  
Other Nonperforming Assets   5     6     11     11     11  
Total Other Nonperforming Assets   2,331     2,330     1,694     1,920     1,835  
Total Nonperforming Assets $ 14,185   $ 12,420   $ 14,954   $ 15,487   $ 13,432  
           
Nonperforming Loans to Total Loans (HFI)   0.70 %   0.61 %   0.84 %   0.89 %   0.89 %
Nonperforming Assets to Total Assets   0.64 %   0.58 %   0.71 %   0.74 %   0.80 %
           


Business First Bancshares, Inc.
Selected Financial Information
(Unaudited)
                 
  Quarter Ended   Nine Months Ended
  September 30, June 30, March 31, December 31, September 30,   September 30, September 30,
(Dollars in thousands, except per share data) 2019 2019 2019 2018 2018   2019 2018
                 
Per Share Data                
                 
Basic Earnings per Common Share $ 0.41   $ 0.51   $ 0.43   $ 0.28   $ 0.34     $ 1.35   $ 0.99  
Diluted Earnings per Common Share   0.40     0.50     0.41     0.28     0.33       1.32     0.95  
Dividends per Common Share   0.10     0.10     0.08     0.08     0.08       0.28     0.22  
Book Value per Common Share   21.12     20.77     20.14     19.68     18.46       21.12     18.46  
Tangible Book Value per Common Share (Non-GAAP)   16.96     16.60     15.86     15.34     15.30       16.96     15.30  
                 
                 
Average Common Shares Outstanding   13,315,351     13,361,482     13,287,560     12,099,659     11,533,374       13,321,566     10,795,989  
Average Diluted Shares Outstanding   13,669,370     13,740,937     13,653,125     12,521,017     11,993,734       13,675,585     11,256,349  
End of Period Common Shares Outstanding   13,274,823     13,361,482     13,361,482     13,213,280     11,533,721       13,274,823     11,533,721  
                 
                 
Annualized Performance Ratios                
                 
Return on Average Assets   1.02 %   1.30 %   1.09 %   0.75 %   0.94 %     1.14 %   0.87 %
Return on Average Equity   7.93 %   10.13 %   8.62 %   6.03 %   7.37 %     8.88 %   7.45 %
Net Interest Margin   4.10 %   4.19 %   4.01 %   4.07 %   4.05 %     4.10 %   4.00 %
Net Interest Spread   3.66 %   3.75 %   3.61 %   3.70 %   3.70 %     3.68 %   3.72 %
Efficiency Ratio (1)   67.16 %   59.85 %   64.35 %   73.51 %   69.08 %     63.65 %   71.11 %
                 
                 
Other Operating Expenses                
                 
Salaries and Employee Benefits $ 8,793   $ 8,756   $ 8,552   $ 7,444   $ 7,190     $ 26,101   $ 20,418  
Occupancy and Bank Premises   1,230     1,079     1,103     877     914       3,412     2,632  
Depreciation and Amortization   645     633     628     484     417       1,906     1,246  
Data Processing   380     576     616     397     395       1,572     1,160  
FDIC Assessment Fees   (105 )   248     150     276     221       293     945  
Legal and Other Professional Fees   346     353     318     456     328       1,017     1,239  
Advertising and Promotions   544     279     327     422     290       1,150     817  
Utilities and Communications   397     323     298     238     294       1,018     835  
Ad Valorem Shares Tax   345     345     345     170     321       1,035     965  
Directors' Fees   121     125     205     92     93       451     344  
Other Real Estate Owned Expenses and Write-Downs   19     72     27     -     -       118     9  
Merger and Conversion-Related Expenses   350     235     (254 )   1,959     138       331     1,065  
Other   1,813     1,553     1,475     1,594     1,269       4,841     4,164  
Total Other Expenses $ 14,878   $ 14,577   $ 13,790   $ 14,409   $ 11,870     $ 43,245   $ 35,839  
                 
(1) Noninterest expense (excluding provision for loan losses) divided by noninterest income plus net interest income less gain/loss on sales of securities.  
                 


Business First Bancshares, Inc.
Consolidated Balance Sheets
(Unaudited)
           
  September 30, June 30, March 31, December 31, September 30,
(Dollars in thousands) 2019 2019 2019 2018 2018
           
Assets          
           
Cash and Due From Banks $ 63,356   $ 64,043   $ 52,606   $ 96,072   $ 45,941  
Federal Funds Sold   43,705     20,809     30,093     41,836     5,934  
Securities Available for Sale, at Fair Values   288,231     294,981     304,122     309,516     243,585  
Mortgage Loans Held for Sale   256     443     753     58     280  
Loans and Lease Receivable   1,694,727     1,642,573     1,586,182     1,528,469     1,297,959  
Allowance for Loan Losses   (12,090 )   (11,603 )   (11,818 )   (11,220 )   (10,273 )
Net Loans and Lease Receivable   1,682,637     1,630,970     1,574,364     1,517,249     1,287,686  
Premises and Equipment, Net   27,092     27,577     27,014     15,114     10,022  
Accrued Interest Receivable   7,513     7,957     7,054     8,223     5,188  
Other Equity Securities   12,697     11,717     8,508     9,282     10,339  
Other Real Estate Owned   2,326     2,324     1,683     1,909     1,824  
Cash Value of Life Insurance   32,398     32,223     32,050     31,882     24,442  
Deferred Taxes, Net   2,674     2,527     3,077     3,848     4,359  
Goodwill   48,333     48,503     49,534     49,488     32,427  
Core Deposit Intangible   6,916     7,139     7,655     7,885     4,103  
Other Assets   2,706     2,395     2,887     2,534     2,065  
           
Total Assets $ 2,220,840   $ 2,153,608   $ 2,101,400   $ 2,094,896   $ 1,678,195  
           
           
Liabilities          
           
Deposits:          
Noninterest-Bearing $ 406,146   $ 394,848   $ 396,775   $ 382,354   $ 311,170  
Interest-Bearing   1,327,244     1,308,054     1,347,608     1,351,580     1,042,901  
Total Deposits   1,733,390     1,702,902     1,744,383     1,733,934     1,354,071  
           
Securities Sold Under Agreements to Repurchase   31,037     16,096     11,070     12,229     14,310  
Short-Term Borrowings   -     -     -     -     862  
Long-Term Borrowings   -     -     -     -     2,400  
Subordinated Debt   25,000     25,000     25,000     25,000     -  
Federal Home Loan Bank Borrowings   128,000     108,000     30,000     55,000     85,000  
Accrued Interest Payable   1,837     1,924     2,039     1,374     1,336  
Other Liabilities   21,236     22,217     19,764     7,301     7,255  
           
Total Liabilities   1,940,500     1,876,139     1,832,256     1,834,838     1,465,234  
           
Shareholders' Equity          
           
Common Stock   13,275     13,361     13,361     13,213     11,534  
Additional Paid-In Capital   212,104     213,823     213,537     212,332     171,345  
Retained Earnings   52,265     48,087     42,576     37,982     35,460  
Accumulated Other Comprehensive Loss   2,696     2,198     (330 )   (3,469 )   (5,378 )
           
Total Shareholders' Equity   280,340     277,469     269,144     260,058     212,961  
           
Total Liabilities and Shareholders' Equity $ 2,220,840   $ 2,153,608   $ 2,101,400   $ 2,094,896   $ 1,678,195  
           


Business First Bancshares, Inc.
Consolidated Statements of Income
(Unaudited)
                 
  Quarter Ended   Nine Months Ended
  September 30,   June 30,   March 31,   December 31,   September 30,   September 30,   September 30,
(Dollars in thousands) 2019   2019   2019   2018   2018   2019   2018
                                         
Interest Income:                                        
Interest and Fees on Loans $ 24,408   $ 23,870   $ 22,423   $ 19,778   $ 17,777   $ 70,701   $ 50,002
Interest and Dividends on Securities   1,783     1,829     1,874     1,611     1,386     5,486     4,223
Interest on Federal Funds Sold and Due From Banks   129     197     290     164     162     616     417
Total Interest Income   26,320     25,896     24,587     21,553     19,325     76,803     54,642
                                         
Interest Expense:                                        
Interest on Deposits   5,050     5,038     4,757     3,853     3,127     14,845     7,980
Interest on Borrowings   1,012     665     710     583     562     2,387     1,550
Total Interest Expense   6,062     5,703     5,467     4,436     3,689     17,232     9,530
                                         
Net Interest Income   20,258     20,193     19,120     17,117     15,636     59,571     45,112
                                         
Provision for Loan Losses   479     1,302     633     939     503     2,414     1,451
                                         
Net Interest Income After Provision for Loan Losses   19,779     18,891     18,487     16,178     15,133     57,157     43,661
                                         
Other Income:                                        
Service Charges on Deposit Accounts   1,035     1,034     938     869     695     3,007     1,941
Gain (Loss) on Sales of Securities   26     58     -     7     -     84     -
Other Income   861     3,127     1,373     1,615     852     5,361     3,347
Total Other Income   1,922     4,219     2,311     2,491     1,547     8,452     5,288
                                         
Other Expenses:                                        
Salaries and Employee Benefits   8,793     8,756     8,552     7,444     7,190     26,101     20,418
Occupancy and Equipment Expense   2,135     1,884     1,894     1,523     1,522     5,913     4,342
Other Expenses   3,950     3,937     3,344     5,442     3,158     11,231     11,079
Total Other Expenses   14,878     14,577     13,790     14,409     11,870     43,245     35,839
                                         
Income Before Income Taxes   6,823     8,533     7,008     4,260     4,810     22,364     13,110
                                         
Provision for Income Taxes   1,312     1,690     1,349     815     910     4,351     2,464
                                         
Net Income $ 5,511   $ 6,843   $ 5,659   $ 3,445   $ 3,900   $ 18,013   $ 10,646
                 


Business First Bancshares, Inc.
Consolidated Net Interest Margin
(Unaudited)
                       
                       
  Quarter Ended
  September 30, 2019   June 30, 2019   September 30, 2018
  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 $ 1,664,283   $ 24,408 5.87 %   $ 1,602,087   $ 23,870 5.96 %   $ 1,258,060   $ 17,777 5.65 %
Securities Available for Sale   297,121     1,783 2.40 %     303,232     1,829 2.41 %     253,902     1,386 2.18 %
Interest-Bearing Deposit in Other Banks   16,070     129 3.21 %     23,716     197 3.32 %     31,858     162 2.03 %
Total Interest-Earning Assets   1,977,474     26,320 5.32 %     1,929,035     25,896 5.37 %     1,543,820     19,325 5.01 %
Allowance for Loan Losses   (11,783 )         (11,702 )         (9,945 )    
Noninterest-Earning Assets   191,068           185,359           132,242      
Total Assets $ 2,156,759   $ 26,320     $ 2,102,692   $ 25,896     $ 1,666,117   $ 19,325  
                       
                       
Liabilities and Shareholders' Equity                      
                       
Interest-Bearing Liabilities                      
Interest-Bearing Deposits $ 1,300,740   $ 5,050 1.55 %   $ 1,335,630   $ 5,038 1.51 %   $ 1,028,412   $ 3,127 1.22 %
Subordinated Debt   25,000     422 6.75 %     25,000     429 6.86 %     -     - -  
Advances from Federal Home Loan Bank ("FHLB")   105,588     560 2.12 %     36,856     224 2.43 %     85,000     506 2.38 %
Other Borrowings   23,718     30 0.51 %     14,390     12 0.33 %     17,484     56 1.28 %
Total Interest-Bearing Liabilities   1,455,046     6,062 1.67 %     1,411,876     5,703 1.62 %     1,130,896     3,689 1.31 %
                       
Noninterest-Bearing Liabilities                      
Noninterest-Bearing Deposits   398,748           396,793           315,111      
Other Liabilities   24,937           23,761           8,479      
Total Noninterest-Bearing Liabilities   423,685           420,554           323,590      
Shareholders' Equity   278,028           270,262           211,631      
Total Liabilities and Shareholders' Equity $ 2,156,759         $ 2,102,692         $ 1,666,117      
                       
Net Interest Spread     3.66 %       3.75 %       3.70 %
Net Interest Income   $ 20,258       $ 20,193       $ 15,636  
Net Interest Margin     4.10 %       4.19 %       4.05 %
                       
Overall Cost of Funds     1.31 %       1.26 %       1.02 %
                       
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)
               
               
  For the Nine Months Ended September 30,
  2019   2018
  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 $ 1,605,423   $ 70,701 5.87 %   $ 1,216,395   $ 50,002 5.48 %
Securities Available for Sale   303,374     5,486 2.41 %     254,035     4,223 2.22 %
Interest-Bearing Deposit in Other Banks   26,621     616 3.09 %     32,899     417 1.69 %
Total Interest-Earning Assets   1,935,418     76,803 5.29 %     1,503,329     54,642 4.85 %
Allowance for Loan Losses   (11,625 )         (9,516 )    
Noninterest-Earning Assets   187,924           141,209      
Total Assets $ 2,111,717   $ 76,803     $ 1,635,022   $ 54,642  
               
               
Liabilities and Shareholders' Equity              
               
Interest-Bearing Liabilities              
Interest-Bearing Deposits $ 1,323,927   $ 14,845 1.50 %   $ 1,022,982   $ 7,980 1.04 %
Subordinated Debt   25,000     1,267 6.76 %     -     - 0.00 %
Advances from Federal Home Loan Bank ("FHLB")   59,990     1,065 2.37 %     84,777     1,387 2.18 %
Other Borrowings   16,863     55 0.43 %     18,478     163 1.18 %
Total Interest-Bearing Liabilities   1,425,780     17,232 1.61 %     1,126,237     9,530 1.13 %
               
Noninterest-Bearing Liabilities              
Noninterest-Bearing Deposits   396,452           309,526      
Other Liabilities   19,105           8,604      
Total Noninterest-Bearing Liabilities   415,557           318,130      
Shareholders' Equity   270,380           190,655      
Total Liabilities and Shareholders' Equity $ 2,111,717         $ 1,635,022      
               
Net Interest Spread     3.68 %       3.72 %
Net Interest Income   $ 59,571       $ 45,112  
Net Interest Margin     4.10 %       4.00 %
               
Overall Cost of Funds     1.26 %       0.89 %
               
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)
           
           
  September 30, June 30, March 31, December 31, September 30,
(Dollars in thousands, except per share data) 2019 2019 2019 2018 2018
           
Tangible Common Equity          
Total Shareholders' Equity $ 280,340   $ 277,469   $ 269,144   $ 260,058   $ 212,961  
Adjustments:          
Goodwill   (48,333 )   (48,503 )   (49,534 )   (49,488 )   (32,427 )
Core Deposit Intangible   (6,916 )   (7,139 )   (7,655 )   (7,885 )   (4,103 )
Total Tangible Common Equity $ 225,091   $ 221,827   $ 211,955   $ 202,685   $ 176,431  
           
           
Tangible Assets          
Total Assets $ 2,220,840   $ 2,153,608   $ 2,101,400   $ 2,094,896   $ 1,678,195  
Adjustments:          
Goodwill   (48,333 )   (48,503 )   (49,534 )   (49,488 )   (32,427 )
Core Deposit Intangible   (6,916 )   (7,139 )   (7,655 )   (7,885 )   (4,103 )
Total Tangible Assets $ 2,165,591   $ 2,097,966   $ 2,044,211   $ 2,037,523   $ 1,641,665  
           
           
Common Shares Outstanding   13,274,823     13,361,482     13,361,482     13,213,280     11,533,721  
Book Value per Common Share $ 21.12   $ 20.77   $ 20.14   $ 19.68   $ 18.46  
Tangible Book Value per Common Share $ 16.96   $ 16.60   $ 15.86   $ 15.34   $ 15.30  
Common Equity to Total Assets   12.62 %   12.88 %   12.81 %   12.41 %   12.69 %
Tangible Common Equity to Tangible Assets   10.39 %   10.57 %   10.37 %   9.95 %   10.75 %
           



Business First Bancshares, Inc.
Non-GAAP Measures
(Unaudited)
                 
  Quarter Ended   Nine Months Ended
  September 30, June 30, March 31, December 31, September 30,   September 30, September 30,
(Dollars in thousands, except per share data) 2019
2019
2019
2018
2018
  2019
2018
                 
Core Net Income                
Net Income $ 5,511   $ 6,843   $ 5,659   $ 3,445   $ 3,900     $ 18,013   $ 10,646  
Adjustments: (1)                
Noninterest Income                
Sale of Impaired Credit   -     (91 )   -     (87 )   -       (91 )   -  
Tax Impact   -     19     -     18     -       19     -  
(Gains) Losses on Former Bank Premises and Equipment   594     -     -     (494 )   139       594     139  
Tax Impact   (125 )   -     -     104     (29 )     (125 )   (29 )
(Gains) Losses on Sale of Securities   (26 )   (58 )   -     (7 )   -       (84 )   -  
Tax Impact   5     12     -     1     -       18     -  
(Gains) Losses on Sale of Banking Center   12     (593 )   -     -     -       (581 )   -  
Tax Impact   (3 )   125     -     -     -       122     -  
Noninterest Expense                    
Early Lease Termination Penalty   87     -     -     -     -       87     -  
Tax Impact   (18 )   -     -     -     -       (18 )   -  
Employee Share Awards – NASDAQ Listing   -     -     -     -     -       -     118  
Tax Impact   -     -     -     -     -       -     (25 )
Acquisition-Related Expenses (2)   288     436     (50 )   2,132     509       674     1,436  
Tax Impact   (60 )   (91 )   16     (410 )   (90 )     (135 )   (213 )
Core Net Income $ 6,265   $ 6,602   $ 5,625   $ 4,702   $ 4,429     $ 18,493   $ 12,072  
                 
Average Common Shares Outstanding   13,315,351     13,361,482     13,287,560     12,099,659     11,533,374       13,321,566     10,795,989  
Average Diluted Shares Outstanding   13,669,370     13,740,937     13,653,125     12,521,017     11,993,734       13,675,585     11,256,349  
                 
Earnings per Share - Basic $ 0.41   $ 0.51   $ 0.43   $ 0.28   $ 0.34     $ 1.35   $ 0.99  
Earnings per Share - Diluted $ 0.40   $ 0.50   $ 0.41   $ 0.28   $ 0.33     $ 1.32   $ 0.95  
Core Earnings per Share – Basic $ 0.47   $ 0.49   $ 0.42   $ 0.39   $ 0.38     $ 1.39   $ 1.12  
Core Earnings per Share – Diluted $ 0.46   $ 0.48   $ 0.41   $ 0.38   $ 0.37     $ 1.35   $ 1.07  
                 
Total Quarterly/Year-to-Date Average Assets $ 2,156,759   $ 2,102,692   $ 2,075,683   $ 1,827,598   $ 1,666,117     $ 2,111,717   $ 1,635,022  
Total Quarterly/Year-to-Date Average Equity $ 278,028   $ 270,262   $ 262,681   $ 228,496   $ 211,631     $ 270,380   $ 190,655  
                 
Return on Average Assets   1.02 %   1.30 %   1.09 %   0.75 %   0.94 %     1.14 %   0.87 %
Return on Average Equity   7.93 %   10.13 %   8.62 %   6.03 %   7.37 %     8.88 %   7.45 %
Core Return on Average Assets   1.16 %   1.26 %   1.08 %   1.03 %   1.06 %     1.17 %   0.98 %
Core Return on Average Equity   9.01 %   9.77 %   8.57 %   8.23 %   8.37 %     9.12 %   8.44 %
                 
Core Efficiency Ratio                
Noninterest Expense   14,878     14,577     13,790     14,409     11,870       43,245     35,839  
Core Adjustments   (375 )   (436 )   50     (2,132 )   (509 )     (761 )   (1,554 )
Net Interest and Noninterest Income (3)   22,154     24,354     21,431     19,601     17,183       67,939     50,400  
Core Adjustments   606     (684 )   -     (581 )   139       (78 )   139  
                 
Efficiency Ratio   67.16 %   59.85 %   64.35 %   73.51 %   69.08 %     63.65 %   71.11 %
Core Efficiency Ratio   63.72 %   59.74 %   64.58 %   64.55 %   65.59 %     62.60 %   67.84 %
                 
Net Interest Income                
Net Interest Income $ 20,258   $ 20,193   $ 19,120   $ 17,117   $ 15,636     $ 59,571   $ 45,112  
Adjustments:                
Loan Discount Accretion   (544 )   (826 )   (432 )   (283 )   (268 )     (1,802 )   (995 )
Net Interest Income Excluding Loan Discount Accretion $ 19,714   $ 19,367   $ 18,688   $ 16,834   $ 15,368     $ 57,769   $ 44,117  
                 
Total Average Interest-Earnings Assets $ 1,977,474   $ 1,929,035   $ 1,904,870   $ 1,681,240   $ 1,543,820     $ 1,935,418   $ 1,503,329  
                 
Net Interest Margin (4)   4.10 %   4.19 %   4.01 %   4.07 %   4.05 %     4.10 %   4.00 %
Net Interest Margin Excluding Loan Discount Accretion (4)   3.99 %   4.02 %   3.92 %   4.01 %   3.98 %     3.98 %   3.91 %
Net Interest Spread   3.66 %   3.75 %   3.61 %   3.70 %   3.70 %     3.68 %   3.72 %
Net Interest Spread Excluding Loan Discount Accretion   3.55 %   3.58 %   3.52 %   3.63 %   3.63 %     3.56 %   3.63 %
                 
(1) Tax rates, exclusive of certain nondeductible merger-related expenses, utilized were 21% for 2019 and 2018. These rates approximated the marginal tax rates.    
(2) Includes merger and conversion-related expenses and salary and employee benefits.            
(3) Excludes gains/losses on sales of securities.                
(4) Calculated utilizing a 30/360 day count convention.                
                 

Misty Albrecht
Business First Bank
225.286.7879
Misty.Albrecht@b1BANK.com

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