Business First Bancshares (Nasdaq: BFST) completed a private placement of $85.0 million principal of 6.50% fixed-to-floating subordinated notes due 2036 on April 2, 2026. The Notes are structured to qualify as Tier 2 capital.
Proceeds will redeem $66.93 million of outstanding subordinated notes, provide additional capital support to b1BANK, support growth, repay borrowings, and for general corporate purposes. Interest is 6.50% through March 30, 2031, then resets quarterly to SOFR + 300 bps; callable by the company on or after the fifth anniversary.
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Positive
$85.0M subordinated notes issued
Notes structured as Tier 2 capital
Proceeds to redeem $66.93M existing subordinated notes
Capital to support b1BANK growth and repay borrowings
Negative
Fixed interest of 6.50% through March 30, 2031
Post-2031 rate resets to SOFR + 300bps (rate uncertainty)
Notes are not FDIC insured and not registered under the Securities Act
News Market Reaction – BFST
+0.15%
+0.15%Session close to close
In the Apr 6 session, BFST gained 0.15%, reflecting a mild positive market reaction.
This announcement details a capital-structure move: a private placement of $85.0M in 6.50% fixed-to-...
Analysis
This announcement details a capital-structure move: a private placement of $85.0M in 6.50% fixed-to-floating subordinated notes due 2036, structured as Tier 2 capital. Proceeds are earmarked to redeem $66.93M of existing subordinated notes, support b1BANK, fund growth, and repay borrowings. In context of recent M&A and a stock repurchase program, investors may watch funding costs, regulatory capital ratios, and future debt redemptions as key metrics.
Key Figures
Private placement size:$85.0MCoupon rate (fixed):6.50%Redemption of old notes:$66.93M+5 more
8 metrics
Private placement size$85.0MAggregate principal amount of subordinated notes
Coupon rate (fixed)6.50%Annual interest from Apr 2, 2026 through Mar 30, 2031
Redemption of old notes$66.93MOutstanding subordinated notes to be redeemed with proceeds
Spread over SOFR300 basis pointsReset spread over three-month SOFR from Mar 31, 2031
Maturity year2036Stated maturity of subordinated notes
Initial fixed periodApr 2, 2026–Mar 30, 2031Period during which 6.50% fixed rate applies
Authorized up to $30M in common stock repurchases over 24 months.
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Pattern Detected
Recent news with seemingly positive implications (AI partnership, earnings) sometimes coincided with short-term share price declines, while M&A and capital return announcements saw modest gains.
Recent Company History
Over the past six months, Business First Bancshares reported solid FY2025 results with net income of $82.5M and diluted EPS of $2.79, expanded via the Progressive Bank acquisition to about $8.7B in assets, and authorized a $30M stock repurchase program. It also announced an AI partnership to streamline operations. Against this backdrop of balance-sheet growth and technology investment, the new $85.0M subordinated notes private placement further adjusts the capital structure after recent M&A and buyback activity.
"completion of the private placement of $85.0 million in aggregate principal"
A private placement is a sale of securities directly to a selected group of investors, typically institutions or accredited investors, instead of through a public offering. It lets a company raise money faster and with fewer regulatory steps; for existing shareholders it matters because the newly issued shares, often sold at a discount, increase the share count and can dilute their ownership.
subordinated notesfinancial
"6.50% fixed-to-floating rate subordinated notes (the Notes) due 2036"
Subordinated notes are loans companies issue that rank below other debts for repayment, meaning holders get paid only after higher-priority creditors if the issuer runs into trouble. Because they act like being farther back in line at a buffet, they usually offer higher interest to compensate for greater risk, so investors watch them for potential higher returns but also increased chance of loss and sensitivity to the issuer’s financial health.
tier 2 capitalregulatory
"structured to qualify as Tier 2 capital for the Company for regulatory capital"
Tier 2 capital is the secondary cushion a bank holds to absorb losses after its core capital is used, made up of items like long-term subordinated debt and certain reserves. Think of it as a backup battery that kicks in only after the main battery fails; it matters to investors because its size and quality affect a bank’s regulatory strength, creditworthiness, and the safety of dividends and bond payments under stress.
secured overnight financing rate (sofr)financial
"reset quarterly to an interest rate per annum equal to the then current three-month Secured Overnight Financing Rate (SOFR)"
A secured overnight financing rate (SOFR) is the interest rate on very short, one‑day loans that are backed by high‑quality collateral (like government bonds), so lenders face less risk. Investors care because SOFR is a widely used benchmark that sets the cost of borrowing and the pricing of loans, bonds and derivatives; think of it as a trusted yardstick for short‑term interest costs that influences returns and valuations across markets.
basis pointsfinancial
"Secured Overnight Financing Rate (SOFR) plus 300 basis points"
Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.
paying agentfinancial
"UMB Bank, National Association is serving as the paying agent and registrar"
A paying agent is a bank or company that helps deliver payments, like interest or dividends, to investors. It’s like a trusted middleman who makes sure everyone gets their money on time, so investors don’t have to handle the details themselves.
registrarfinancial
"UMB Bank, National Association is serving as the paying agent and registrar"
A registrar is the official record-keeper for a company’s shareholders, maintaining the list of who owns what shares, handling transfers, and processing updates like address changes and share issuance. Think of it like a town clerk for stock ownership: accurate records let investors receive dividends, vote at meetings, and complete trades without delay, so the registrar’s work directly affects an investor’s rights and the smooth functioning of equity transactions.
BATON ROUGE, La., April 02, 2026 (GLOBE NEWSWIRE) -- Business First Bancshares, Inc. (Nasdaq: BFST) (Business First or the Company), parent company of b1BANK, is pleased to announce the completion of the private placement of $85.0 million in aggregate principal amount of 6.50% fixed-to-floating rate subordinated notes (the Notes) due 2036, to certain qualified institutional and accredited investors. The Notes have been structured to qualify as Tier 2 capital for the Company for regulatory capital purposes. The proceeds from the sale of the Notes will be utilized to redeem $66.93 million in outstanding subordinated notes, to provide additional capital support to b1BANK, to support growth, to better position the Company to take advantage of strategic opportunities that may arise from time to time, to repay other existing borrowings, and for other general corporate purposes.
The Notes will initially bear interest at an annual rate of 6.50% beginning April 2, 2026, through March 30, 2031. From March 31, 2031, to the stated maturity date or early redemption date, the interest rate will reset quarterly to an interest rate per annum equal to the then current three-month Secured Overnight Financing Rate (SOFR) plus 300 basis points. The Notes are redeemable by the Company, at its option, in whole or in part, on or after the fifth anniversary of the issue date, and at any time upon the occurrence of certain events.
Fenimore Kay Harrison LLP served as legal counsel to Business First and UMB Bank, National Association is serving as the paying agent and registrar.
This press release is for informational purposes only and shall not constitute an offer to sell, or the solicitation of an offer to buy, any security, nor shall there be any sale 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. The Notes have not been registered under the Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The indebtedness evidenced by the Notes is not a deposit and is not insured by the Federal Deposit Insurance Corporation or any other government agency or fund.
About Business First Bancshares, Inc. Business First Bancshares, Inc., (Nasdaq: BFST) through its banking subsidiary b1BANK, has $8.2 billion in assets, $5.7 billion in assets under management through b1BANK’s affiliate Smith Shellnut Wilson, LLC (SSW) (not including $1.0 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.
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.
Media Contact: Misty Albrecht
b1BANK
225.286.7879
media@b1BANK.com
Investor Relations Contact:
Gregory Robertson
Matt Sealy
337.721.2701
225.388.6116
Gregory.Robertson@b1BANK.com
Matt.Sealy@b1BANK.com
FAQ
What did Business First Bancshares (BFST) announce on April 2, 2026 regarding subordinated notes?
They completed a private placement of $85.0 million 6.50% fixed-to-floating subordinated notes due 2036. According to the company, proceeds will redeem $66.93 million of outstanding subordinated notes and support bank capital and growth.
How does the interest rate on BFST's new subordinated notes work after March 31, 2031?
Interest resets quarterly to three-month SOFR + 300 basis points from March 31, 2031. According to the company, the initial fixed rate is 6.50% through March 30, 2031 before the reset period.
Will BFST's new subordinated notes count as regulatory capital for b1BANK?
Yes, the Notes were structured to qualify as Tier 2 capital for regulatory capital purposes. According to the company, this treatment supports b1BANK's capital position and strategic flexibility.
When can Business First redeem the new BFST subordinated notes?
The company may redeem the Notes, in whole or in part, on or after the fifth anniversary of the issue date. According to the company, earlier redemption is possible upon certain events specified in the terms.
Are BFST's subordinated notes insured or registered for public sale in the U.S.?
No, the indebtedness is not FDIC insured and the Notes have not been registered under the Securities Act. According to the company, the Notes were sold in a private placement to qualified investors under applicable exemptions.
