Business First Bancshares, Inc., Announces Financial Results for Q2 2025
BATON ROUGE, La., July 28, 2025 (GLOBE NEWSWIRE) -- Business First Bancshares, Inc. (NASDAQ:BFST) (Business First), parent company of b1BANK, today announced its unaudited results for the quarter ended June 30, 2025. Business First reported net income available to common shareholders of $20.8 million or $0.70 per diluted common share, increases of $1.6 million and $0.05, respectively, compared to the linked quarter ended March 31, 2025. On a non-GAAP basis, core net income for the quarter ended June 30, 2025, which excludes certain income and expenses, was $19.5 million or $0.66 per diluted common share, an increase of $0.2 million and $0.01, from the linked quarter.
"Between our latest partnership announcement, successful core conversion and legacy branch repositioning, this was a quarter that positions us for continued growth and development in the coming quarters and years," said Jude Melville, chairman, president and CEO of Business First Bancshares, "I'm especially proud that our team conducted these productive operational activities while continuing to post consistent earnings and healthy balance sheet growth including our tangible book value and capital levels. We look forward to converting our Oakwood franchise systems late in the third quarter and competing from a position of strength in the Dallas market as a fully integrated team."
On Thursday, July 24, 2025, Business First's board of directors declared a quarterly preferred dividend in the amount of $18.75 per share, which is the full quarterly dividend of 1.875% based on the per annum rate of 7.50%. Additionally, the board of directors declared a quarterly common dividend based upon financial performance for the second quarter in the amount of $0.14 per share of common stock. The preferred and common dividends will be paid on August 31, 2025, or as soon thereafter as practicable, to the shareholders of record as of August 15, 2025.
Quarterly Highlights
Sustained Core Performance. Return to common shareholders on average assets, on an annualized basis, was 1.07% for the quarter ended June 30, 2025, or 1.01% on a non-GAAP basis, compared to 1.00% or 1.01% on a non-GAAP basis for the linked quarter.
Capital Growth. Common equity to total assets increased from 9.69% to 9.77% and tangible common equity to tangible assets increased from 8.06% to 8.19%, 1.61% or 6.47% annualized, compared to the linked quarter, driven largely by solid quarterly earnings. On a non-GAAP basis, tangible book value per common share increased to $28.61 as of June 30, 2025, a 77 basis point increase, 3.70% or 14.82% annualized, compared to the linked quarter.
Branch Optimization. In early April, Business First sold a banking branch located in Kaplan, LA (Kaplan) resulting in a net capital injection of $3.4 million. The transaction included a sale of $50.7 million of deposits for an 8.0% purchase premium. The sale is estimated to result in $750,000 lower annual operating cost.
Core Conversion. Business First successfully converted its core processing for loans, deposits, and the general ledger to Fidelity Information Systems ("FIS") to improve capabilities and efficiencies for future growth.
Stable Net Interest Margin (NIM). Net interest income totaled $67.0 million and net interest margin and net interest spread were 3.68% and 2.88%, respectively, compared to $66.0 million, 3.68% and 2.91% for the linked quarter. Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $0.8 million) were 3.64% and 2.84% for the quarter ended June 30, 2025, compared to 3.64% and 2.86% (excluding loan discount accretion of $0.8 million) for the linked quarter. Net interest margin for the quarter was impacted by excess funding utilized during the core conversion (~3 basis points, "bps") and incremental funding cost associated with replacing the Kaplan deposit portfolio (~2 bps).
Progressive Bank Acquisition. On July 7, 2025, Business First executed a definitive agreement to acquire Progressive Bancorp, Inc. ("Progressive") and its wholly-owned bank subsidiary, Progressive Bank. As of March 31, 2025, Progressive reported total assets of $752 million, deposits of $673 million, and equity of $65 million.
Statement of Financial Condition
Loans
Loans held for investment increased $66.7 million or 1.12%, 4.48% annualized. The commercial and commercial real estates portfolios increased $98.8 million and $61.6 million, respectively, compared to the linked quarter. The construction portfolio declined $33.4 million, or 5.27% compared to the linked quarter. Texas-based loans represented approximately 40% of the overall loan portfolio as of June 30, 2025, based on unpaid principal balance.
Credit Quality
Credit quality metrics migrated upwards compared to the linked quarter. The ratio of nonperforming loans compared to loans held for investment increased 28 bps to 0.97% at June 30, 2025, while the ratio of nonperforming assets compared to total assets increased 21 bps to 0.76% compared to the linked quarter. The commercial real estate, commercial, and residential real estate portfolios encompass approximately $22.5 million, $20.8 million, and $7.5 million, respectively, of the $56.4 million nonaccrual balance at June 30, 2025.
Securities
The securities portfolio increased $5.9 million, or 0.64%, from the linked quarter, impacted by $6.4 million in positive fair value adjustments. The securities portfolio, based on estimated fair value, represented 11.83% of total assets as of June 30, 2025.
Deposits
Deposits decreased $38.5 million or 0.60%, 2.39% annualized, for the quarter ended June 30, 2025, compared to the linked quarter. Excluding the $50.7 million in deposits transferred in the Kaplan sale, deposits increased $12.1 million or 0.19%, 0.76% annualized.
Noninterest bearing deposits increased $102.4 million or 7.83% and interest-bearing deposits decreased $140.9 million or 10.77%. The portfolio was impacted by various transactions during the quarter. The money market portfolio was affected by approximately $62.8 million of withdrawals from financial institutional accounts with a weighted average rate of 4.45%. These withdrawals were replaced with more efficient brokered certificates of deposits (CDs). The Kaplan sale accounted for reductions of approximately $41.5 million in interest bearing deposits and $9.2 million in noninterest bearing deposits. Some of the migration was mitigated through successful retail CD promotion offers which generated $43.0 million increase in the portfolio. Additionally, the noninterest bearing portfolio benefited from a short-term inflow of approximately $60 million in deposits which subsequently were withdrawn after quarter end.
Borrowings
Borrowings increased $179.0 million or 41.25%, from the linked quarter due primarily to an increase in short-term Federal Home Loan Bank advances. Additional liquidity was utilized during the quarter as Business First's main correspondent banking relationship was changed during the core conversion process, as well as borrowings for short-term deposit fluctuations.
Shareholders' Equity
Shareholders' equity increased $22.1 million or 2.68% during the quarter ended June 30, 2025. Accumulated other comprehensive income (AOCI) increased $5.1 million or 9.61%, during the quarter due to positive after-tax fair value adjustments in the securities portfolio. Book value per common share increased to $26.23 at June 30, 2025, compared to $25.51 at March 31, 2025, due to strong earnings and positive fair value adjustments. On a non-GAAP basis, tangible book value per common share increased from $20.84 at the linked quarter to $21.61 at June 30, 2025, 3.70% or 14.82% annualized.
Results of Operations
Net Interest Income
For the quarter ended June 30, 2025, net interest income totaled $67.0 million, compared to $66.0 million from the linked quarter. Loan and interest-earning asset yields of 6.96% and 6.31%, decreased 3 and 4 bps, respectively, compared to 6.99% and 6.35% from the linked quarter. Net interest margin and net interest spread were 3.68% and 2.88% compared to 3.68% and 2.91% for the linked quarter. The overall cost of funds, which included noninterest-bearing deposits, declined 4 bps from 2.82% to 2.78% for the quarter ended June 30, 2025, despite the sale of $50.7 million in deposits associated with the Kaplan, LA banking branch sale in April (~2 bps reduction in margin). Additionally, margin was also negatively impacted by ~3 bps due to excess cash carried during the transfer of our primary correspondent banking relationship through the core conversion process.
Non-GAAP net interest income (excluding loan discount accretion of $0.8 million) totaled $66.3 million for the quarter ended June 30, 2025, compared to $65.2 million (excluding loan discount accretion of $0.8 million) for the linked quarter. Non-GAAP net interest margin and net interest spread (excluding loan discount accretion of $0.8 million) were 3.64% and 2.84%, respectively, for the quarter ended June 30, 2025, compared to 3.64% and 2.86% (excluding loan discount accretion of $0.8 million) for the linked quarter.
Provision for Credit Losses
During the quarter ended June 30, 2025, Business First recorded a provision for credit losses of $2.2 million, compared to $2.8 million from the linked quarter. The current quarter's reserve was largely impacted by an additional $1.6 million reserve on a loan transferred to nonaccrual status. At June 30, 2025, the ratio of allowance for credit losses to loans held for investment ratio was 1.02%, compared to 1.01% the linked quarter.
Other Income
For the quarter ended June 30, 2025, other income increased $1.2 million or 8.99%, compared to the linked quarter. The net increase was largely attributable to a $3.4 million gain on the Kaplan sale, offset largely by a $1.0 million reduction in equity investment income, and a $475,000 reduction in gain on sale of Small Business Administration (SBA) loans.
Other Expenses
For the quarter ended June 30, 2025, other expenses increased $628,000 or 1.24%, compared to the linked quarter. The increase was largely attributable to a $2.1 million increase in data processing expenses, of which $1.0 million was associated with core conversion expenses, offset by a $1.2 million reduction in salaries and benefits largely due to lower incentive-based expenses.
Return on Assets and Common Equity
Return to common shareholders on average assets and common equity, each on an annualized basis, were 1.07% and 10.87% for the quarter ended June 30, 2025, compared to 1.00% and 10.48%, respectively, for the linked quarter. Non-GAAP return to common shareholders on average assets and common equity, each on an annualized basis, were 1.01% and 10.23% for the quarter ended June 30, 2025, compared to 1.01% and 10.53%, for the linked quarter.
Conference Call and Webcast
Executive management will host a conference call and webcast to discuss results on Monday, July 28, 2025, at 9:00 a.m. Central Time. Interested parties may attend the call by dialing toll-free 1-800-715-9871 (North America only), conference ID 2799880, or asking for the Business First Bancshares conference call. The live webcast can be found at https://edge.media-server.com/mmc/p/jqbmtwns. On the day of the presentation, the corresponding slide presentation will be available to view on the b1BANK website at https://www.b1bank.com/shareholder-info.
About Business First Bancshares, Inc.
Business First Bancshares, Inc., (NASDAQ:BFST) through its banking subsidiary b1BANK, has $7.9 billion in assets, $5.4 billion in assets under management through b1BANK's affiliate Smith Shellnut Wilson, LLC (SSW) (excludes $0.9 billion of b1BANK assets managed by SSW) and operates Banking Centers and Loan Production Offices in markets across Louisiana and Texas providing commercial and personal banking products and services. b1BANK is a 2024 Mastercard "Innovation Award" winner and multiyear winner of American Banker Magazine's "Best Banks to Work For." Visit b1BANK.com for more information.
Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures (e.g., referenced as "core" or "tangible") intended to supplement, not substitute for, comparable GAAP measures. "Core" measures typically adjust income available to common shareholders for certain significant activities or transactions that, in management's opinion, can distort period-to-period comparisons of Business First's performance. Transactions that are typically excluded from non-GAAP "core" 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 Business First's core business. These non-GAAP disclosures are not necessarily comparable to non-GAAP measures that may be presented by other companies. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided at the end of the tables below.
Special Note Regarding Forward-Looking Statements
Certain statements contained in this release may not be based on historical facts and are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as "anticipate," "believe," "estimate," "expect," "may," "might," "will," "would," "could," or "intend." We caution you not to place undue reliance on the forward-looking statements contained in this news release, in that actual results could differ materially from those indicated in such forward-looking statements as a result of a variety of factors, including those factors specified in our Annual Report on Form 10-K and other public filings. 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 about Business First, you may obtain Business First's reports that are filed with the Securities and Exchange Commission (SEC) free of charge by using the SEC's EDGAR service on the SEC's website at www.SEC.gov or by contacting the SEC for further information at 1-800-SEC-0330. Alternatively, these documents can be obtained free of charge from Business First by directing a request to: Business First Bancshares, Inc., 500 Laurel Street, Suite 101, Baton Rouge, Louisiana 70801, Attention: Corporate Secretary.
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 Business First. 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.
Additional Information and Where to Find It
This communication is being made with respect to the proposed transaction involving Business First and Progressive. This material is not a solicitation of any vote or approval of the Progressive shareholders and is not a substitute for the proxy statement/prospectus or any other documents that Business First and Progressive may send to their respective shareholders in connection with the proposed transaction. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities.
In connection with the proposed transaction, Business First will file with the SEC a Registration Statement on Form S-4 (the "Registration Statement") that will include a proxy statement of Progressive and a prospectus of Business First, as well as other relevant documents concerning the proposed transaction. Before making any voting or investment decision, investors and shareholders are urged to read carefully the Registration Statement and the proxy statement/prospectus regarding the proposed transaction, as well as any other relevant documents filed with the SEC and any amendments or supplements to those documents, because they will contain important information. Progressive will mail the proxy statement/prospectus to its shareholders. Shareholders are also urged to carefully review and consider Business First's public filings with the SEC, including, but not limited to, its proxy statements, its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K. Copies of the Registration Statement and proxy statement/prospectus and other filings incorporated by reference therein, as well as other filings containing information about Business First, may be obtained, free of charge, as they become available at the SEC's website at www.sec.gov. You will also be able to obtain these documents when they are filed, free of charge, from Business First at www.b1BANK.com. Copies of the proxy statement/prospectus can also be obtained, when they become available, free of charge, by directing a request to Business First Bancshares, Inc., 500 Laurel Street, Suite 101, Baton Rouge, LA 70801, Attention: Corporate Secretary, Telephone: 225-248-7600.
Participants in the Solicitation
Business First, Progressive and certain of their respective directors, executive officers and employees may, under the SEC's rules, be deemed to be participants in the solicitation of proxies of Progressive's shareholders in connection with the proposed transaction. Information about Business First's directors and executive officers is available in its definitive proxy statement relating to its 2025 annual meeting of shareholders, which was filed with the SEC on April 9, 2025, and other documents filed by Business First with the SEC. Other information regarding the persons who may, under the SEC's rules, be deemed to be participants in the solicitation of proxies of Progressive's shareholders in connection with the proposed transaction, and a description of their direct and indirect interests, by holdings or otherwise, will be contained in the proxy statement/prospectus regarding the proposed transaction and other relevant materials to be filed with the SEC when they become available. Free copies of these documents may be obtained as described in the preceding paragraph.
Investor Relations Contact:
Gregory Robertson
Matt Sealy
337.721.2701
225.388.6116
Media Contact:
Misty Albrecht
b1BANK
225.286.7879
Business First Bancshares, Inc.
Selected Financial Information
(Unaudited)
Three Months Ended
(Dollars in thousands)
June 30,2025
March 31,2025
June 30,2024
Balance Sheet Ratios
Loans (HFI) to Deposits
94.21
%
92.61
%
97.80
%
Shareholders' Equity to Assets Ratio
10.67
%
10.61
%
9.91
%
Loans Receivable Held for Investment (HFI)
Commercial
$
1,960,974
$
1,862,176
$
1,520,392
Real Estate:
Commercial
2,533,761
2,472,121
2,198,119
Construction
600,292
633,698
637,466
Residential
879,891
934,357
743,876
Total Real Estate
4,013,944
4,040,176
3,579,461
Consumer and Other
72,732
78,567
62,999
Total Loans (Held for Investment)
$
6,047,650
$
5,980,919
$
5,162,852
Allowance for Loan Losses
Balance, Beginning of Period
$
56,863
$
54,840
$
41,165
Oakwood - PCD ALLL
—
—
—
Charge-Offs - Quarterly
(921
)
(1,648
)
(1,426
)
Recoveries - Quarterly
99
671
91
Provision for Loan Losses - Quarterly
2,455
3,000
1,582
Balance, End of Period
$
58,496
$
56,863
$
41,412
Allowance for Loan Losses to Total Loans (HFI)
0.97
%
0.95
%
0.80
%
Allowance for Credit Losses to Total Loans (HFI)/(1)
1.02
%
1.01
%
0.86
%
Net Charge-Offs (Recoveries) to Average Quarterly Total Loans
0.01
%
0.02
%
0.03
%
Remaining Loan Purchase Discount
$
10,099
$
11,322
$
9,690
Nonperforming Assets
Nonperforming
Nonaccrual Loans
$
56,377
$
35,915
$
21,008
Loans Past Due 90 Days or More
2,467
5,635
1,355
Total Nonperforming Loans
58,844
41,550
22,363
Other Nonperforming Assets:
Other Real Estate Owned
1,473
1,282
1,983
Other Nonperforming Assets
—
—
—
Total other Nonperforming Assets
1,473
1,282
1,983
Total Nonperforming Assets
$
60,317
$
42,832
$
24,346
Nonperforming Loans to Total Loans (HFI)
0.97
%
0.69
%
0.43
%
Nonperforming Assets to Total Assets
0.76
%
0.55
%
0.36
%
(1) Allowance for Credit Losses includes the Allowance for Loan Loss and Reserve for Unfunded Commitments.
Business First Bancshares, Inc.
Selected Financial Information
(Unaudited)
Three Months Ended
Six Months Ended
(Dollars in thousands, except per share data)
June 30,2025
March 31,2025
June 30,2024
June 30,2025
June 30,2024
Per Share Data
Basic Earnings per Common Share
$
0.70
$
0.65
$
0.63
$
1.36
$
1.11
Diluted Earnings per Common Share
0.70
0.65
0.62
1.35
1.10
Dividends per Common Share
0.14
0.14
0.14
0.28
0.28
Book Value per Common Share
26.23
25.51
23.24
26.23
23.24
Average Common Shares Outstanding
29,517,495
29,329,668
25,265,495
29,354,228
25,196,079
Average Diluted Common Shares Outstanding
29,586,975
29,545,921
25,395,614
29,500,061
25,412,142
End of Period Common Shares Outstanding
29,602,970
29,572,297
25,502,175
29,602,970
25,502,175
Annualized Performance Ratios
Return to Common Shareholders on Average Assets (1)
1.07
%
1.00
%
0.95
%
1.04
%
0.84
%
Return to Common Shareholders on Average Common Equity (1)
10.87
%
10.48
%
10.94
%
10.68
%
9.73
%
Net Interest Margin (1)
3.68
%
3.68
%
3.45
%
3.68
%
3.39
%
Net Interest Spread (1)
2.88
%
2.91
%
2.47
%
2.90
%
2.42
%
Efficiency Ratio (2)
62.83
%
63.85
%
65.14
%
63.33
%
67.37
%
Total Quarterly/Year-to-Date Average Assets
$
7,791,372
$
7,750,982
$
6,711,173
$
7,771,289
$
6,689,350
Total Quarterly/Year-to-Date Average Common Equity
765,884
742,930
583,184
754,470
580,414
Other Expenses
Salaries and Employee Benefits
$
28,317
$
29,497
$
25,523
$
57,814
$
50,939
Occupancy and Bank Premises
3,119
3,401
2,634
6,520
5,148
Depreciation and Amortization
2,076
2,152
1,742
4,228
3,418
Data Processing
5,321
3,236
2,641
8,557
5,220
FDIC Assessment Fees
861
1,184
874
2,045
1,702
Legal and Other Professional Fees
1,093
1,013
1,042
2,106
1,908
Advertising and Promotions
1,088
1,291
966
2,379
2,111
Utilities and Communications
743
733
718
1,476
1,392
Ad Valorem Shares Tax
1,125
1,125
900
2,250
1,800
Directors' Fees
193
279
268
472
550
Other Real Estate Owned Expenses and Write-Downs
27
23
71
50
108
Merger and Conversion-Related Expenses
210
250
409
460
749
Other
7,033
6,394
5,322
13,427
10,587
Total Other Expenses
$
51,206
$
50,578
$
43,110
$
101,784
$
85,632
Other Income
Service Charges on Deposit Accounts
$
2,633
$
2,860
$
2,537
$
5,493
$
4,976
Gain (Loss) on Sales of Securities
(47
)
(1
)
—
(48
)
(1
)
Debit Card and ATM Fee Income
1,958
1,858
1,950
3,816
3,726
Bank-Owned Life Insurance Income
758
808
627
1,566
1,206
Gain on Sales of Loans
781
1,256
2,460
2,037
2,599
Mortgage Origination Income
55
110
35
165
104
Fees and Brokerage Commission
1,980
2,148
1,875
4,128
3,812
Gain (Loss) on Sales of Other Real Estate Owned
56
(268
)
2
(212
)
65
Gain (Loss) on Disposal of Other Assets
—
155
(15
)
155
(15
)
Gain on Extinguishment of Debt
—
630
—
630
—
Gain on Branch Sale
3,360
—
—
3,360
—
Swap Fee Income
808
739
285
1,547
514
Pass-Through Income (Loss) from Other Investments
(246
)
751
392
505
686
Other
2,319
2,180
2,028
4,499
3,890
Total Other Income
$
14,415
$
13,226
$
12,176
$
27,641
$
21,562
(1) Average outstanding balances are determined utilizing daily averages and average yield/rate is calculated utilizing an actual day count convention.
(2) Noninterest expense (excluding provision for loan losses) divided by noninterest income (excluding security sales gains/losses) plus net interest income less gain/loss on sales of securities.
Business First Bancshares, Inc.
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands)
June 30,2025
March 31,2025
June 30,2024
Assets
Cash and Due From Banks
$
495,757
$
312,887
$
208,051
Federal Funds Sold
39,296
117,422
113,587
Securities Purchased under Agreements to Resell
25,433
50,589
—
Securities Available for Sale, at Fair Values
926,450
920,573
875,048
Mortgage Loans Held for Sale
677
—
680
Loans and Lease Receivable
6,047,650
5,980,919
5,162,852
Allowance for Loan Losses
(58,496
)
(56,863
)
(41,412
)
Net Loans and Lease Receivable
5,989,154
5,924,056
5,121,440
Premises and Equipment, Net
79,007
81,582
68,545
Accrued Interest Receivable
36,738
33,741
30,617
Other Equity Securities
48,736
40,947
38,805
Other Real Estate Owned
1,473
1,282
1,983
Cash Value of Life Insurance
118,707
117,950
100,684
Deferred Taxes, Net
25,222
25,289
25,888
Goodwill
121,146
121,691
91,527
Core Deposit and Customer Intangibles
15,775
16,538
10,849
Other Assets
24,723
20,181
16,185
Total Assets
$
7,948,294
$
7,784,728
$
6,703,889
Liabilities
Deposits
Noninterest-Bearing
$
1,410,708
$
1,308,312
$
1,310,204
Interest-Bearing
5,008,943
5,149,869
4,253,466
Total Deposits
6,419,651
6,458,181
5,563,670
Securities Sold Under Agreements to Repurchase
22,557
19,046
18,445
Federal Home Loan Bank Borrowings
492,946
317,352
305,208
Subordinated Debt
92,645
92,702
99,875
Subordinated Debt - Trust Preferred Securities
5,000
5,000
5,000
Accrued Interest Payable
4,829
5,356
4,517
Other Liabilities
62,226
60,779
42,644
Total Liabilities
7,099,854
6,958,416
6,039,359
Shareholders' Equity
Preferred Stock
71,930
71,930
71,930
Common Stock
29,603
29,572
25,502
Additional Paid-In Capital
502,046
501,609
397,851
Retained Earnings
292,629
276,045
237,031
Accumulated Other Comprehensive Loss
(47,768
)
(52,844
)
(67,784
)
Total Shareholders' Equity
848,440
826,312
664,530
Total Liabilities and Shareholders' Equity
$
7,948,294
$
7,784,728
