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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