Business First (BFST) grows loans and earnings after Progressive Bancorp deal
Filing Impact
Filing Sentiment
Form Type
10-Q
Business First Bancshares, Inc. delivered modestly higher earnings while expanding its balance sheet through acquisition and loan growth in Q1 2026.
Net income available to common shareholders rose to $22.2 million, or $0.68 per share, up from $19.2 million and $0.65 a year earlier. Total assets reached $8.9 billion, loans held for investment were $6.7 billion, and deposits were $7.5 billion, all helped by the January 1 acquisition of Progressive Bancorp, Inc., which added $773.8 million in assets.
Net interest income increased to $75.2 million, though net interest margin edged down to 3.65%. Credit costs remained manageable, but the allowance for credit losses increased to 1.03% of loans and nonperforming loans rose to 1.53% of loans. Shareholders’ equity improved to $991.2 million, or $28.18 book value per share, despite a $4.6 million other comprehensive loss from securities. After quarter-end, the company issued $85.0 million of subordinated notes to refinance debt and support future growth.
Positive
- None.
Negative
- None.
Insights
Q1 2026 shows acquisition-driven growth, stable profitability, and somewhat higher credit risk.
Business First expanded meaningfully with the $83.4 million stock-funded acquisition of Progressive Bancorp, adding loans, deposits, and new markets. Net interest income climbed to $75.2 million, while net interest margin held near prior-year levels at 3.65%, indicating solid spread management despite a high-rate environment.
Asset quality remains acceptable but is softening. The allowance for credit losses increased to 1.03% of loans as nonperforming loans rose to 1.53% of loans. Management also absorbed a securities-related other comprehensive loss of $4.6 million, reflecting higher rates. Post-quarter, the $85.0 million subordinated notes due 2036 refinance $66.9 million of older debt and bolster regulatory capital, supporting future organic and acquisition-driven growth.
Key Figures
Net income to common: $22.2M
Earnings per common share: $0.68
Total assets: $8.9B
+5 more
8 metrics
Net income to common
$22.2M
For the three months ended March 31, 2026
Earnings per common share
$0.68
Basic and diluted EPS, Q1 2026
Total assets
$8.9B
Balance at March 31, 2026
Loans held for investment
$6.7B
Balance at March 31, 2026
Allowance for credit losses ratio
1.03%
Allowance as % of total loans, March 31, 2026
Nonperforming loans ratio
1.53%
Nonperforming loans to total loans, March 31, 2026
Progressive purchase price
$83.45M
Total consideration in stock and cash on January 1, 2026
Subordinated notes issuance
$85.0M
Private placement completed April 2, 2026, 6.50% due 2036
Key Terms
net interest margin, purchased seasoned loans, core deposit intangible, nonaccrual loans, +2 more
6 terms
net interest margin financial
"For the three months ended March 31, 2026, net interest income totaled $75.2 million, and net interest margin and net interest spread were 3.65% and 2.91%, respectively"
Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.
purchased seasoned loans financial
"entities must account for acquired loans ... at acquisition (“purchased seasoned loans”) by recognizing them at their purchase price plus an allowance for expected credit losses"
Purchased seasoned loans are existing loans that an investor buys after they have been outstanding for some time and have a track record of payments. Like buying a used car with a known service history, these loans give buyers clearer information about how likely borrowers are to keep paying, which helps investors estimate future cash flow, potential losses, and the returns they can expect.
core deposit intangible financial
"Core Deposit Intangible (“CDI”): The fair value for core deposit intangible assets was estimated based on a discounted cash flow methodology"
Core deposit intangible is an accounting asset that represents the value of customer deposits a bank gains, usually through an acquisition, because those deposits provide a stable, low-cost source of funding. Think of it like paying for a loyal customer list that will save the bank money over time; it is written down over several years and affects reported earnings and the apparent cost of acquiring new funds, so investors watch it to understand future profitability and capital impact.
nonaccrual loans financial
"As of March 31, 2026, and December 31, 2025, loan balances outstanding on nonaccrual status amounted to $100.8 million and $74.5 million, respectively"
Nonaccrual loans are loans a lender has stopped counting toward interest income because the borrower is overdue or unlikely to pay; the lender only records cash payments received and may set aside extra funds to cover potential losses. For investors, a rising number or amount of nonaccrual loans signals weaker credit quality, lower future interest revenue and larger potential write-downs — similar to pausing expected subscription income when many customers stop paying.
customer-initiated derivatives financial
"The Company enters into derivative instruments to meet the needs of its customers through the execution of customer-initiated derivatives (swaps and caps and floors)"
Level 3 financial
"The Company groups its financial assets and liabilities measured at fair value in three levels ... Level 3 – Includes unobservable inputs"
Level 3 describes the lowest-confidence category in the accounting “fair value” hierarchy, covering assets or liabilities whose prices are not observable in the market and must be estimated using judgment and internal models. For investors, Level 3 items matter because they can introduce greater uncertainty and potential valuation swings—like valuing a unique antique versus checking a price tag on a supermarket shelf—so they signal higher model risk and lower liquidity.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________________________
FORM 10-Q
_______________________________________________________________________
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended March 31, 2026
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission file number: 001-38447
_______________________________________________________________________
(Exact name of registrant as specified in its charter)
_______________________________________________________________________
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | ||||
| (Address of principal executive offices) | (Zip Code) | ||||
(225 ) 248-7600
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | o | x | |||||||||
| Non-accelerated filer | o | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by a check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. o
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b)[]. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
As of April 24, 2026, the issuer has outstanding 32,677,968 shares of common stock, par value $1.00 per share.
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BUSINESS FIRST BANCSHARES, INC.
PART I - FINANCIAL INFORMATION | ||||||||
Item 1. | Financial Statements | 4 | ||||||
Consolidated Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 2025 | 4 | |||||||
Unaudited Consolidated Statements of Income for the three months ended March 31, 2026, and 2025 | 5 | |||||||
Unaudited Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2026, and 2025 | 6 | |||||||
Unaudited Consolidated Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2026, and 2025 | 7 | |||||||
Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2026, and 2025 | 8 | |||||||
Notes to Unaudited Consolidated Financial Statements | 10 | |||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 32 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 58 | ||||||
Item 4. | Controls and Procedures | 58 | ||||||
PART II - OTHER INFORMATION | ||||||||
Item 1. | Legal Proceedings | 59 | ||||||
Item 1A. | Risk Factors | 59 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 59 | ||||||
Item 3. | Defaults Upon Senior Securities | 59 | ||||||
Item 4. | Mine Safety Disclosures | 59 | ||||||
Item 5. | Other Information | 59 | ||||||
Item 6. | Exhibits | 60 | ||||||
Signatures | 61 | |||||||
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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
March 31, 2026 (Unaudited) | December 31, 2025 | ||||||||||
ASSETS | |||||||||||
| Cash and Due from Banks | $ | $ | |||||||||
| Federal Funds Sold | |||||||||||
| Securities Purchased Under Agreements to Resell | |||||||||||
Securities Available for Sale, at Fair Values (Amortized Cost of $ | |||||||||||
| Mortgage Loans Held for Sale | |||||||||||
Loans and Lease Receivable, Net of Allowance for Loan Losses of $ | |||||||||||
| Premises and Equipment, Net | |||||||||||
| Accrued Interest Receivable | |||||||||||
| Other Equity Securities | |||||||||||
| Other Real Estate Owned | |||||||||||
| Cash Value of Life Insurance | |||||||||||
| Deferred Taxes | |||||||||||
| Goodwill | |||||||||||
| Core Deposit and Customer Intangible | |||||||||||
| Other Assets | |||||||||||
| Total Assets | $ | $ | |||||||||
| LIABILITIES | |||||||||||
| Deposits: | |||||||||||
| Noninterest Bearing | $ | $ | |||||||||
| Interest Bearing | |||||||||||
| Total Deposits | |||||||||||
| Securities Sold Under Agreements to Repurchase | |||||||||||
| Federal Home Loan Bank Borrowings | |||||||||||
| Subordinated Debt | |||||||||||
| Subordinated Debt - Trust Preferred Securities | |||||||||||
| Accrued Interest Payable | |||||||||||
| Other Liabilities | |||||||||||
| Total Liabilities | $ | $ | |||||||||
| Commitments and Contingencies (See Note 9) | |||||||||||
| SHAREHOLDERS' EQUITY | |||||||||||
Preferred Stock, | $ | $ | |||||||||
Common Stock, $ | |||||||||||
| Additional Paid-in Capital | |||||||||||
| Retained Earnings | |||||||||||
| Accumulated Other Comprehensive Loss | ( | ( | |||||||||
| Total Shareholders' Equity | |||||||||||
| Total Liabilities and Shareholders' Equity | $ | $ | |||||||||
The accompanying notes are an integral part of these financial statements.
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BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
For the Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Interest Income: | |||||||||||||||||||||||
| Interest and Fees on Loans | $ | $ | |||||||||||||||||||||
| Interest and Dividends on Non-taxable Securities | |||||||||||||||||||||||
| Interest and Dividends on Taxable Securities | |||||||||||||||||||||||
| Interest on Federal Funds Sold and Due From Banks | |||||||||||||||||||||||
| Total Interest Income | |||||||||||||||||||||||
| Interest Expense: | |||||||||||||||||||||||
| Interest on Deposits | |||||||||||||||||||||||
| Interest on Borrowings | |||||||||||||||||||||||
| Total Interest Expense | |||||||||||||||||||||||
| Net Interest Income | |||||||||||||||||||||||
| Provision for Credit Losses | |||||||||||||||||||||||
| Net Interest Income after Provision for Credit Losses | |||||||||||||||||||||||
| Other Income: | |||||||||||||||||||||||
| Service Charges on Deposit Accounts | |||||||||||||||||||||||
| Gain (Loss) on Sales of Securities | ( | ||||||||||||||||||||||
| Gain on Sales of Loans | |||||||||||||||||||||||
| Other Income | |||||||||||||||||||||||
| Total Other Income | |||||||||||||||||||||||
| Other Expenses: | |||||||||||||||||||||||
| Salaries and Employee Benefits | |||||||||||||||||||||||
| Occupancy and Equipment Expense | |||||||||||||||||||||||
| Merger and Conversion-Related Expense | |||||||||||||||||||||||
| Other Expenses | |||||||||||||||||||||||
| Total Other Expenses | |||||||||||||||||||||||
| Income Before Income Taxes | |||||||||||||||||||||||
| Provision for Income Taxes | |||||||||||||||||||||||
| Net Income | |||||||||||||||||||||||
| Preferred Stock Dividends | |||||||||||||||||||||||
| Net Income Available to Common Shareholders | $ | $ | |||||||||||||||||||||
| Earnings Per Common Share: | |||||||||||||||||||||||
| Basic | $ | $ | |||||||||||||||||||||
| Diluted | $ | $ | |||||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
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BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in thousands)
For the Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Consolidated Net Income | $ | $ | |||||||||||||||||||||
| Other Comprehensive Income (Loss): | |||||||||||||||||||||||
| Unrealized Gain (Loss) on Investment Securities | ( | ||||||||||||||||||||||
| Reclassification Adjustment for (Gains) Losses on Sale of AFS Investment Securities Included in Net Income | ( | ||||||||||||||||||||||
| Income Tax Effect | ( | ||||||||||||||||||||||
| Other Comprehensive Income (Loss) | ( | ||||||||||||||||||||||
| Consolidated Comprehensive Income | $ | $ | |||||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
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BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED March 31, 2026 AND 2025
(Dollars in thousands, except per share data)
| Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Shareholders' Equity | ||||||||||||||||||||||||||||||
| Balances at December 31, 2024 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
| Comprehensive Income: | |||||||||||||||||||||||||||||||||||
| Net Income | — | — | — | — | |||||||||||||||||||||||||||||||
| Other Comprehensive Income | — | — | — | — | |||||||||||||||||||||||||||||||
Cash Dividends Declared on Preferred Stock, | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Cash Dividends Declared on Common Stock, | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Stock Based Compensation Cost | — | — | — | ||||||||||||||||||||||||||||||||
Balances at March 31, 2025 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
| Balances at December 31, 2025 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
| Comprehensive Income: | |||||||||||||||||||||||||||||||||||
| Net Income | — | — | — | — | |||||||||||||||||||||||||||||||
| Other Comprehensive Loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Cash Dividends Declared on Preferred Stock, | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Cash Dividends Declared on Common Stock, | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Stock Issuance | — | — | — | ||||||||||||||||||||||||||||||||
| Stock Based Compensation Cost | — | — | — | ||||||||||||||||||||||||||||||||
| Stock Repurchases | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Balances at March 31, 2026 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these financial statements
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BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
For the Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash Flows From Operating Activities: | |||||||||||
| Consolidated Net Income | $ | $ | |||||||||
| Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | |||||||||||
| Provision for Credit Losses | |||||||||||
| Depreciation and Amortization of Premises and Equipment | |||||||||||
| Net Amortization (Accretion) of Purchase Accounting Adjustments | ( | ||||||||||
| Stock Based Compensation Cost | |||||||||||
| Net Amortization (Accretion) of Securities | ( | ||||||||||
| (Gain) Loss on Sales of Securities | ( | ||||||||||
| Gain on Sale of Loans | ( | ( | |||||||||
| Income on Other Equity Securities | ( | ( | |||||||||
| (Gain) Loss on Sale of Other Real Estate Owned, Net of Writedowns | ( | ||||||||||
| Other Real Estate Owned Valuation Allowance | ( | ||||||||||
| Gain on Disposal of Premises and Equipment | ( | ( | |||||||||
| Increase in Cash Value of Life Insurance | ( | ( | |||||||||
| Deferred Income Tax (Benefit) Expense | ( | ||||||||||
| Gain on Extinguishment of Debt | ( | ||||||||||
| Changes in Assets and Liabilities: | |||||||||||
| Decrease in Accrued Interest Receivable | |||||||||||
| (Increase) Decrease in Other Assets | ( | ||||||||||
| Decrease in Accrued Interest Payable | ( | ( | |||||||||
| Increase (Decrease) in Other Liabilities | ( | ||||||||||
| Net Cash Provided by Operating Activities | |||||||||||
| Cash Flows From Investing Activities: | |||||||||||
| Purchases of Securities Available for Sale | ( | ( | |||||||||
| Proceeds from Maturities / Sales of Securities Available for Sale | |||||||||||
| Proceeds from Paydowns of Securities Available for Sale | |||||||||||
| Net Cash Paid in Acquisition | |||||||||||
| Purchases of Other Equity Securities | ( | ( | |||||||||
| Redemption of Other Equity Securities | |||||||||||
| Proceeds from Death Benefit of Cash Value of Life Insurance | |||||||||||
| Net Decrease in Loans | |||||||||||
| Net (Purchases) Disposals of Premises and Equipment | ( | ||||||||||
| Proceeds from Sales of Other Real Estate | |||||||||||
| Net (Increase) Decrease in Securities Purchased Under Agreements to Resell | ( | ||||||||||
| Net Decrease in Federal Funds Sold | |||||||||||
| Net Cash Provided by in Investing Activities | |||||||||||
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For the Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash Flows From Financing Activities: | |||||||||||
| Net Increase (Decrease) in Deposits | ( | ||||||||||
| Net Decrease in Securities Sold Under Agreements to Repurchase | ( | ( | |||||||||
| Net Repayments on Federal Home Loan Bank Borrowings | ( | ( | |||||||||
| Repayment of Subordinated Debt | ( | ||||||||||
| Repurchase of Common Stock | ( | ||||||||||
| Payment of Dividends on Preferred Stock | ( | ( | |||||||||
| Payment of Dividends on Common Stock | ( | ( | |||||||||
| Net Cash Used in Financing Activities | ( | ( | |||||||||
| Net Increase (Decrease) in Cash and Due From Banks | ( | ||||||||||
| Cash and Due From Banks at Beginning of Period | |||||||||||
| Cash and Due From Banks at End of Period | $ | $ | |||||||||
| Supplemental Disclosures for Cash Flow Information: | |||||||||||
| Cash Payments for: | |||||||||||
| Interest on Deposits | $ | $ | |||||||||
| Interest on Borrowings | $ | $ | |||||||||
| Income Tax Payments | $ | $ | |||||||||
| Supplemental Schedule for Noncash Investing and Financing Activities: | |||||||||||
| Change in the Unrealized Gain (Loss) on Securities Available for Sale | $ | ( | $ | ||||||||
| Change in Deferred Tax Effect on the Unrealized (Gain) Loss on Securities Available for Sale | $ | $ | ( | ||||||||
| Transfer of Loans to Other Real Estate | $ | $ | |||||||||
| Acquisitions: | |||||||||||
| Fair Value of Tangible Assets Acquired | $ | $ | |||||||||
| Other Intangible Assets Acquired | |||||||||||
| Liabilities Assumed | |||||||||||
| Net Identifiable Assets Acquired Over Liabilities Assumed | $ | $ | |||||||||
The accompanying notes are an integral part of these financial statements.
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BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1– Basis of Presentation –
The unaudited consolidated financial statements include the accounts of Business First Bancshares, Inc. (the “Company”) and its four direct, wholly-owned subsidiaries, b1BANK (the “Bank”), Coastal Commerce Statutory Trust I, Progressive Statutory Trust I, and Progressive Statutory Trust II; and the Bank’s wholly-owned subsidiaries, Business First Insurance, LLC, Smith Shellnut Wilson, LLC ("SSW"), Waterstone LSP, LLC ("Waterstone"), and b1 Securities, LLC ("b1Securities"). The Bank operates out of full-service banking centers and loan production offices in markets across Louisiana, the Dallas/Fort Worth metroplex and Houston, Texas. As a state bank, it is subject to regulation by the Office of Financial Institutions (“OFI”), State of Louisiana, and the Federal Deposit Insurance Corporation (“FDIC”) and undergoes periodic examinations by these agencies. The Company is also regulated by the Federal Reserve and is subject to periodic examinations.
In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial results for the periods presented, and all such adjustments are of a normal recurring nature. All material intercompany transactions are eliminated. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the entire year.
These interim consolidated financial statements have been prepared according to the rules and regulations of the Securities and Exchange Commission and, therefore, certain information and footnote disclosures normally presented in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) have been omitted or abbreviated. These interim financial statements should be read in conjunction with the audited consolidated financial statements and footnote disclosures for the Company’s previously filed Form 10-K for the year ended December 31, 2025.
Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future. Critical accounting estimates that are particularly susceptible to significant change for the Company include the determination of the acquired loans, allowance for credit losses and purchase accounting adjustments (other than loans). Other estimates include goodwill, fair value of financial instruments, investment securities and the assessment of income taxes. Management does not anticipate any material changes to estimates in the near term. Factors that may cause sensitivity to the aforementioned estimates include but are not limited to: external market factors such as market interest rates and employment rates, changes to operating policies and procedures, economic conditions in the Company’s markets, and changes in applicable banking regulations. Actual results may ultimately differ from estimates.
Accounting Standards Adopted in Current Period
ASU 2025-08,” Financial Instruments – Credit Losses (Topic 326), Purchased Loans.” The updates in ASU 2025-08 amend the guidance in ASC 326 on the accounting for certain purchased loans. Under the ASU, entities must account for acquired loans (excluding credit cards) that meet certain criteria at acquisition (“purchased seasoned loans”) by recognizing them at their purchase price plus an allowance for expected credit losses (i.e., the gross-up approach). All non-purchased credit deteriorated (“non-PCD”) loans (excluding credit cards) that are acquired in a business combination are deemed seasoned. Other non-PCD loans (excluding credit cards) are seasoned if they were purchased at least 90 days after origination and the acquirer was not involved in the origination of the loans. The ASU’s amendments align the accounting for purchased seasoned loans with the treatment of financial assets purchased with more-than-insignificant credit deterioration since origination (“PCD assets”).
The Company adopted the amendments effective January 1, 2026, on a prospective basis. The Progressive acquisition disclosures contained in Note 2, as well as the allowance measurements reflected in Note 5 incorporate the updated guidance.
Accounting Standards Not Yet Adopted
None
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BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 2– Mergers and Acquisitions –
Progressive Bancorp, Inc.
On January 1, 2026, the Company consummated the merger of Progressive Bancorp, Inc. (“Progressive”), headquartered in Monroe, Louisiana, with and into the Company, pursuant to the terms of that certain Agreement and Plan of Reorganization (the “Reorganization Agreement”), dated as of July 7, 2025, by and between the Company and Progressive (the "Merger"). Also on January 1, 2026, Progressive's wholly owned banking subsidiary, Progressive Bank, was merged with and into b1BANK. Pursuant to the terms of the Reorganization Agreement, upon consummation of the Merger, the Company issued 3,192,367 773.8 million in total assets, $597.2 million in loans and $684.9 million in deposits.
The following table reflects the consideration paid for Progressive's net assets and the identifiable assets purchased and liabilities assumed at their fair values as of January 1, 2026. The fair values are provisional estimates and may be adjusted for a period of up to one year from the date of acquisition if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date.
| Cost and Allocation of Purchase Price for Progressive Bancorp, Inc. (Progressive): | |||||
| (Dollars in thousands, except per share data) | |||||
| Purchase Price: | |||||
| Shares Issued to Progressive's Shareholders on January 1, 2026 | |||||
| Closing Stock Price on December 31, 2025 | $ | ||||
| Total Stock Issued | $ | ||||
| Partial Shares Paid in Cash | |||||
| Total Purchase Price | $ | ||||
| Net Assets Acquired: | |||||
| Cash and Cash Equivalents | $ | ||||
| Securities Available for Sale | |||||
| Loans and Leases Receivable, Net of Allowance | |||||
| Premises and Equipment, Net | |||||
| Cash Value of Life Insurance | |||||
| Core Deposit Intangible | |||||
| Other Assets | |||||
| Total Assets | |||||
| Deposits | |||||
| Borrowings | |||||
| Other Liabilities | |||||
| Total Liabilities | |||||
| Net Assets Acquired | |||||
| Goodwill Resulting from Merger | $ | ||||
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BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The Company has recorded approximately $2.2 million and $3.8 million of acquisition-related costs within merger and conversion-related expenses and salaries and benefits for the three months ended March 31, 2026, and year ended December 31, 2025, respectively.
The following is a description of the methods used to determine the fair values of significant assets acquired and liabilities assumed presented above.
Cash and Cash Equivalents: The carrying amount of these assets was a reasonable estimate of fair value based on the short-term nature of these assets.
Securities Available for Sale: Fair values for securities were based on quoted market prices, where available. If quoted market prices were not available, fair value estimates were based on observable inputs including quoted market prices for similar instruments, quoted market prices that were not in an active market or other inputs that were observable in the market. In the absence of observable inputs, fair value was estimated based on pricing models/estimations.
Loans and Leases Receivable: Fair values for loans were based on a discounted cash flow methodology that considered factors including, but not limited to, loan type, classification status, remaining term, prepayment speed, and current discount rates. The discount rates used for loans were based on current market rates for new originations of comparable loans and included adjustments for any liquidity concerns. The discount rate did not include an explicit factor for credit losses, as that was included within the estimated cash flows. As discussed in Note 1, the Company adopted ASU 2025-08, which requires a calculation and application of Day 1 allowance for non-PCD loans, as well as PCD loans. The Day 1 allowance amounts are applied on a gross basis.
Acquired loans are evaluated as either purchased with a more-than insignificant amount of credit deterioration (“PCD”) or an insignificant amount of credit deterioration (“non-PCD”) at acquisition, based upon management’s assessment of whether or not a loan has experienced more than insignificant credit deterioration since origination. This evaluation is completed by management using a variety of factors, including individual loan characteristics as well as industry type and collateral evaluation, among other factors. At acquisition, management designated loans with a fair value of $8.0 million as PCD. The fair value was inclusive of a $6.9 million PCD allowance and $750,000 non-credit fair value discount from the acquired contractual value.
The remainder of the Progressive loan portfolio, with a fair value of $570.4 million at acquisition included a non-PCD allowance of $2.4 million and a non-credit fair value discount of $8.7 million from the acquired contractual value.
Core Deposit Intangible (“CDI”): The fair value for core deposit intangible assets was estimated based on a discounted cash flow methodology that gave appropriate consideration to expected customer attrition rates, net maintenance cost of the deposit base, including interest cost, and alternative cost of funds. The CDI is being amortized over 10 years based upon the period over which estimated economic benefits are estimated to be received.
Deposits: The fair values used for the demand and savings deposits, by definition, equal the amount payable on demand at the acquisition date. Fair values for time deposits were estimated using a discounted cash flow analysis, that applied interest rates currently being offered to the contractual interest rates on such time deposits.
Borrowings: Fair values for borrowings were based on estimated market rates over the remaining terms of the subordinated debt issuances.
Pro forma tables for Progressive were impractical to include due to the insignificance to the overall Company as a whole.
Note 3– Earnings per Common Share –
Basic earnings per share (“EPS”) represents income available to common shareholders divided by the weighted average number of common shares outstanding; no dilution for any potentially convertible shares is included in the calculation. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. The potential common shares that may be issued by the Company relate to outstanding stock options and unvested restricted stock awards (“RSAs”), unvested restricted stock units (“RSUs”) and performance shares, excluding any that were antidilutive. In addition, nonvested share-based payment awards that
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BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
contain nonforfeitable rights to dividends or dividend equivalents are considered participating securities and are included in the computation of EPS pursuant to the two-class method.
For the Three Months Ended March 31, | |||||||||||||||||||||||
| (Dollars in thousands, except per share data) | 2026 | 2025 | |||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net Income | $ | $ | |||||||||||||||||||||
| Less: Preferred Stock Dividends | |||||||||||||||||||||||
| Net Income Available to Common Shares | $ | $ | |||||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted Average Common Shares Outstanding | |||||||||||||||||||||||
| Dilutive Effect of Stock Options and RSAs | |||||||||||||||||||||||
| Weighted Average Dilutive Common Shares | |||||||||||||||||||||||
| Basic Earnings Per Common Share From Net Income Available to Common Shares | $ | $ | |||||||||||||||||||||
| Diluted Earnings Per Common Share From Net Income Available to Common Shares | $ | $ | |||||||||||||||||||||
Note 4– Securities –
The amortized cost and fair values of securities available for sale as of March 31, 2026, and December 31, 2025 are summarized as follows:
March 31, 2026 | |||||||||||||||||||||||
| (Dollars in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
| U.S. Treasury Securities | $ | $ | $ | $ | |||||||||||||||||||
| U.S. Government Agencies | |||||||||||||||||||||||
| Corporate Securities | |||||||||||||||||||||||
| Mortgage-Backed Securities | |||||||||||||||||||||||
| Municipal Securities | |||||||||||||||||||||||
| Total Securities Available for Sale | $ | $ | $ | $ | |||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| (Dollars in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
| U.S. Treasury Securities | $ | $ | $ | $ | |||||||||||||||||||
| U.S. Government Agencies | |||||||||||||||||||||||
| Corporate Securities | |||||||||||||||||||||||
| Mortgage-Backed Securities | |||||||||||||||||||||||
| Municipal Securities | |||||||||||||||||||||||
| Total Securities Available for Sale | $ | $ | $ | $ | |||||||||||||||||||
The following tables present a summary of securities with gross unrealized losses and fair values at March 31, 2026, and December 31, 2025, aggregated by investment category and length of time in a continued unrealized loss position.
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BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Due to the nature of these investments and current prevailing market prices, these unrealized losses are considered non-credit related.
March 31, 2026 | |||||||||||||||||||||||||||||||||||
| Less Than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||
| U.S. Treasury Securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| U.S. Government Agencies | |||||||||||||||||||||||||||||||||||
| Corporate Securities | |||||||||||||||||||||||||||||||||||
| Mortgage-Backed Securities | |||||||||||||||||||||||||||||||||||
| Municipal Securities | |||||||||||||||||||||||||||||||||||
| Total Securities Available for Sale | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Less Than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||
| U.S. Treasury Securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| U.S. Government Agencies | |||||||||||||||||||||||||||||||||||
| Corporate Securities | |||||||||||||||||||||||||||||||||||
| Mortgage-Backed Securities | |||||||||||||||||||||||||||||||||||
| Municipal Securities | |||||||||||||||||||||||||||||||||||
| Total Securities Available for Sale | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
As of March 31, 2026, and December 31, 2025, respectively, no allowance for credit losses was recognized on available for sale securities in an unrealized loss position as management does not believe any of the securities are impaired due to credit quality. This determination is based on the Company’s analysis of the underlying risk characteristics including credit ratings, historical loss experience, and other qualitative factors. Further, the securities continue to make principal and interest payments under their contractual terms and management does not have the intent to sell any of the securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of amortized cost basis. Therefore, the Company has determined the unrealized losses are due to changes in market interest rates compared to rates when the securities were acquired.
The amortized cost and fair values of securities available for sale as of March 31, 2026, by contractual maturity are shown below. Actual maturities may differ from contractual maturities in mortgage-backed securities because the mortgages underlying the securities may be called or repaid without any penalties.
| (Dollars in thousands) | Amortized Cost | Fair Value | |||||||||
| Less Than One Year | $ | $ | |||||||||
| One to Five Years | |||||||||||
| Over Five to Ten Years | |||||||||||
| Over Ten Years | |||||||||||
| Total Securities Available for Sale | $ | $ | |||||||||
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BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Securities available for sale with a fair value of $424.1 million and $398.3 million, were pledged as collateral on public deposits and for other purposes as required or permitted by law as of March 31, 2026, and December 31, 2025, respectively.
There were $88,000 realized gains from sales or redemptions of securities for the three months ended March 31, 2026, and none for the three months ended March 31, 2025. There were $8,000 and $1,000 realized losses from sales or redemptions of securities for the three months ended March 31, 2026, and 2025, respectively.
Note 5– Loans and the Allowance for Loan Losses –
Loans receivable at March 31, 2026, and December 31, 2025, are summarized as follows:
| (Dollars in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Real Estate Loans: | |||||||||||
| Commercial | $ | $ | |||||||||
| Construction | |||||||||||
| Residential | |||||||||||
| Total Real Estate Loans | |||||||||||
| Commercial | |||||||||||
| Consumer and Other | |||||||||||
| Total Loans Held for Investment | |||||||||||
| Less: | |||||||||||
| Allowance for Loan Losses | ( | ( | |||||||||
| Net Loans | $ | $ | |||||||||
The performing 1-4 family residential, multi-family residential, commercial real estate, and commercial loans, are pledged, under a blanket lien, as collateral securing advances from the FHLB at March 31, 2026, and December 31, 2025. Commercial and agricultural loans are pledged against the Federal Reserve Banks’ (“FRB”) discount window as of March 31, 2026, and December 31, 2025.
Net deferred loan origination fees were $9.9 million and $11.4 million at March 31, 2026, and December 31, 2025, respectively, and are netted in their respective loan categories above. In addition to loans issued in the normal course of business, the Company considers overdrafts on customer deposit accounts to be loans and reclassifies overdrafts as loans in its consolidated balance sheets. At March 31, 2026, and December 31, 2025, overdrafts of $1.3 million and $7.9 million, respectively, have been reclassified to loans.
The Bank is the lead lender on participations sold, without recourse, to other financial institutions which amounts are not included in the consolidated balance sheets. The unpaid principal balances of mortgages and other loans serviced for others were approximately $674.7 million and $643.8 million at March 31, 2026 and December 31, 2025, respectively. The Company had servicing rights of $1.2 million and $956,000 recorded at March 31, 2026, and December 31, 2025, respectively, and is recorded within other assets.
The Bank grants loans and extensions of credit to individuals and a variety of businesses and corporations located in its general market areas throughout Louisiana and Texas. Management segregates the loan portfolio into portfolio segments which is defined as the level at which the Bank develops and documents a systematic method for determining its allowance for credit losses. The portfolio segments are segregated based on loan types and the underlying risk factors present in each loan type. Such risk factors are periodically reviewed by management and revised as deemed appropriate.
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BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Portfolio Segments and Risk Factors
The loan portfolio is disaggregated into portfolio segments and then further disaggregated into classes for certain disclosures. GAAP defines a portfolio segment as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses. A class is generally a disaggregation of a portfolio segment. The Company's loan portfolio segments are Real Estate, Commercial, and Consumer and Other. The classes and risk characteristics of each segment are discussed in more detail below. The segmentation and disaggregation of the portfolio is part of the ongoing credit monitoring process.
Real Estate Portfolio Segment
Real Estate: Commercial loans are extensions of credit secured by owner-occupied and non-owner-occupied collateral. Repayment is generally dependent on the successful operations of the property. General economic conditions may impact the performance of these types of loans, including fluctuations in the value of real estate, vacancy rates, and unemployment trends. Real estate commercial loans also include farmland loans that can be, or are, used for agricultural purposes. These loans are usually repaid through refinancing, cash flow from the borrower’s ongoing operations, development of the property, or sale of the property.
Real Estate: Construction loans include loans to small-to-midsized businesses to construct owner-occupied properties, loans to developers of commercial real estate investment properties and residential developments and, to a lesser extent, loans to individual clients for construction of single-family homes in the Company’s market areas. Risks associated with these loans include fluctuations in the value of real estate, project completion risk and changes in market trends. The Company is also exposed to risk based on the ability of the construction loan borrower to finance the loan or sell the property upon completion of the project, which may be affected by changes in secondary market terms and criteria for permanent financing since the time that the Company funded the loan.
Real Estate: Residential loans include first and second lien 1-4 family mortgage loans, as well as home equity lines of credit, in each case primarily on owner-occupied primary residences. The Company is exposed to risk based on fluctuations in the value of the real estate collateral securing the loan, as well as changes in the borrower’s financial condition, which could be affected by numerous factors, including divorce, job loss, illness, or other personal hardship. Real estate residential loans also include multi-family residential loans originated to provide permanent financing for multi-family residential income producing properties. Repayment of these loans primarily relies on successful rental and management of the property.
Commercial Portfolio Segment
Commercial loans include general commercial and industrial, or C&I, loans, including commercial lines of credit, working capital loans, term loans, equipment financing, asset acquisition, expansion, and development loans, borrowing base loans, letters of credit and other loan products, primarily in the Company’s target markets that are underwritten based on the borrower’s ability to service the debt from income. Commercial loan risk is derived from the expectation that such loans generally are serviced principally from the operations of the business, and those operations may not be successful. Any interruption or discontinuance of operating cash flows from the business, which may be influenced by events not under the control of the borrower such as economic events and changes in governmental regulations, could materially affect the ability of the borrower to repay the loan.
Consumer and Other Portfolio Segment
Consumer and other loans include a variety of loans to individuals for personal, family and household purposes, including secured and unsecured installment and term loans. The risk is based on changes in the borrower’s financial condition, which could be affected by numerous factors, including divorce, job loss, illness or other personal hardship, and fluctuations in the value of the real estate or personal property securing the consumer loan, if any.
The following tables set forth, as of March 31, 2026, and 2025, the balance of the allowance for credit losses by loan portfolio segment. The allowance for credit losses allocated to each portfolio segment is not necessarily indicative of future losses in any particular portfolio segment and does not restrict the use of the allowance to absorb losses in other portfolio segments.
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BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Allowance for Credit Losses and Recorded Investment in Loans Receivable
| March 31, 2026 | |||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Real Estate: Commercial | Real Estate: Construction | Real Estate: Residential | Commercial | Consumer and Other | Total | |||||||||||||||||||||||||||||
| Allowance for Loan Losses: | |||||||||||||||||||||||||||||||||||
| Beginning Balance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Adjustment for Progressive on PCD Loans | |||||||||||||||||||||||||||||||||||
| Charge-offs | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Recoveries | |||||||||||||||||||||||||||||||||||
| Provision (Recovery) | ( | ( | |||||||||||||||||||||||||||||||||
| Ending Balance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Reserve for Unfunded Loan Commitments: | |||||||||||||||||||||||||||||||||||
| Beginning Balance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Provision (Recovery) | ( | ||||||||||||||||||||||||||||||||||
| Ending Balance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Total Allowance for Credit Losses | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| March 31, 2025 | |||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Real Estate: Commercial | Real Estate: Construction | Real Estate: Residential | Commercial | Consumer and Other | Total | |||||||||||||||||||||||||||||
| Allowance for Loan Losses: | |||||||||||||||||||||||||||||||||||
| Beginning Balance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Charge-offs | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Recoveries | |||||||||||||||||||||||||||||||||||
| Provision (Recovery) | ( | ( | |||||||||||||||||||||||||||||||||
| Ending Balance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Reserve for Unfunded Loan Commitments: | |||||||||||||||||||||||||||||||||||
| Beginning Balance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Provision (Recovery) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Ending Balance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Total Allowance for Credit Losses | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
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BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Included within the above allowance, in the tables above, are loans which management has individually evaluated to determine an allowance for credit losses. The following table summarizes, by segment, the loan balance and specific allowance allocation for those loans which have been individually evaluated.
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||
| (Dollars in thousands) | Loan Balance | Specific Allocations | Loan Balance | Specific Allocations | |||||||||||||||||||
| Real Estate Loans: | |||||||||||||||||||||||
| Commercial | $ | $ | $ | $ | |||||||||||||||||||
| Construction | |||||||||||||||||||||||
| Residential | |||||||||||||||||||||||
| Total Real Estate Loans | |||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||
| Consumer and Other | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
Credit Quality Indicators
We utilize a risk grading matrix to assign a risk grade to each of our commercial loans. Loans are graded on a scale of 10 to 80. Individual loan officers review updated financial information, which may include credit scores, financial statements, collateral valuations and other borrower information, for all pass grade (10-45) loans to reassess the risk grade, generally on at least an annual basis.
When a loan has a risk grade of 50, it is considered to be on management's “watch list,” and subject to additional and more frequent monitoring by both the loan officer and senior credit and risk personnel. Loans graded 60 or higher have exhibited potential or actual credit weakness that makes their full collection uncertain and are considered classified loans, consisting of substandard (60), doubtful (70) and loss (80) categories. Generally, loans that are classified are assigned special assets personnel for ongoing monitoring and resolution.
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BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following tables set forth the credit quality indicators, disaggregated by loan segment, as of March 31, 2026, and December 31, 2025:
March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||
| Criticized | |||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Pass (Risk Grade 10-45) | Special Mention (Risk Grade 50) | Substandard (Risk Grade 60) | Doubtful (Risk Grade 70) | Loss (Risk Grade 80) | Total | Current Period Charge- offs | ||||||||||||||||||||||||||||||||||
| Real Estate: Commercial | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2026 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Originated in 2025 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2024 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2023 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2022 | |||||||||||||||||||||||||||||||||||||||||
| Originated Prior to 2022 | |||||||||||||||||||||||||||||||||||||||||
| Revolving | |||||||||||||||||||||||||||||||||||||||||
| Revolving Loans Converted to Term | |||||||||||||||||||||||||||||||||||||||||
| Total Real Estate: Commercial | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Real Estate: Construction | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2026 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Originated in 2025 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2024 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2023 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2022 | |||||||||||||||||||||||||||||||||||||||||
| Originated Prior to 2022 | |||||||||||||||||||||||||||||||||||||||||
| Revolving | |||||||||||||||||||||||||||||||||||||||||
| Revolving Loans Converted to Term | |||||||||||||||||||||||||||||||||||||||||
| Total Real Estate: Construction | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Real Estate: Residential | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2026 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Originated in 2025 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2024 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2023 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2022 | |||||||||||||||||||||||||||||||||||||||||
| Originated Prior to 2022 | |||||||||||||||||||||||||||||||||||||||||
| Revolving | |||||||||||||||||||||||||||||||||||||||||
| Revolving Loans Converted to Term | |||||||||||||||||||||||||||||||||||||||||
| Total Real Estate: Residential | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2026 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Originated in 2025 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2024 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2023 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2022 | |||||||||||||||||||||||||||||||||||||||||
| Originated Prior to 2022 | |||||||||||||||||||||||||||||||||||||||||
| Revolving | |||||||||||||||||||||||||||||||||||||||||
| Revolving Loans Converted to Term | |||||||||||||||||||||||||||||||||||||||||
| Total Commercial | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Consumer and Other | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2026 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Originated in 2025 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2024 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2023 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2022 | |||||||||||||||||||||||||||||||||||||||||
| Originated Prior to 2022 | |||||||||||||||||||||||||||||||||||||||||
| Revolving | |||||||||||||||||||||||||||||||||||||||||
| Revolving Loans Converted to Term | |||||||||||||||||||||||||||||||||||||||||
| Total Consumer and Other | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Total Loans | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
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BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
| December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Criticized | |||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Pass (Risk Grade 10-45) | Special Mention (Risk Grade 50) | Substandard (Risk Grade 60) | Doubtful (Risk Grade 70) | Loss (Risk Grade 80) | Total | Current Period Charge- offs | ||||||||||||||||||||||||||||||||||
| Real Estate: Commercial | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2025 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Originated in 2024 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2023 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2022 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2021 | |||||||||||||||||||||||||||||||||||||||||
| Originated Prior to 2021 | |||||||||||||||||||||||||||||||||||||||||
| Revolving | |||||||||||||||||||||||||||||||||||||||||
| Revolving Loans Converted to Term | |||||||||||||||||||||||||||||||||||||||||
| Total Real Estate: Commercial | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Real Estate: Construction | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2025 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Originated in 2024 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2023 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2022 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2021 | |||||||||||||||||||||||||||||||||||||||||
| Originated Prior to 2021 | |||||||||||||||||||||||||||||||||||||||||
| Revolving | |||||||||||||||||||||||||||||||||||||||||
| Revolving Loans Converted to Term | |||||||||||||||||||||||||||||||||||||||||
| Total Real Estate: Construction | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Real Estate: Residential | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2025 | $ | $ | $ | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||
| Originated in 2024 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2023 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2022 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2021 | |||||||||||||||||||||||||||||||||||||||||
| Originated Prior to 2021 | |||||||||||||||||||||||||||||||||||||||||
| Revolving | |||||||||||||||||||||||||||||||||||||||||
| Revolving Loans Converted to Term | |||||||||||||||||||||||||||||||||||||||||
| Total Real Estate: Residential | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2025 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Originated in 2024 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2023 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2022 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2021 | |||||||||||||||||||||||||||||||||||||||||
| Originated Prior to 2021 | |||||||||||||||||||||||||||||||||||||||||
| Revolving | |||||||||||||||||||||||||||||||||||||||||
| Revolving Loans Converted to Term | |||||||||||||||||||||||||||||||||||||||||
| Total Commercial | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Consumer and Other | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2025 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Originated in 2024 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2023 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2022 | |||||||||||||||||||||||||||||||||||||||||
| Originated in 2021 | |||||||||||||||||||||||||||||||||||||||||
| Originated Prior to 2021 | |||||||||||||||||||||||||||||||||||||||||
| Revolving | |||||||||||||||||||||||||||||||||||||||||
| Revolving Loans Converted to Term | |||||||||||||||||||||||||||||||||||||||||
| Total Consumer and Other | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Total Loans | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The above classifications follow regulatory guidelines and can generally be described as follows:
•Pass loans are of satisfactory quality.
•Special mention loans have an existing weakness that could cause future impairment, including the deterioration of financial ratios, past due status, questionable management capabilities and possible reduction in the collateral values.
•Substandard loans have an existing specific and well-defined weakness that may include poor liquidity and deterioration of financial ratios. The loan may be past due and related deposit accounts experiencing overdrafts. Immediate corrective action is necessary.
•Doubtful loans have specific weaknesses that are severe enough to make collection or liquidation in full highly questionable and improbable.
As of March 31, 2026, and December 31, 2025, loan balances outstanding more than 90 days past due and still accruing interest amounted to $1.4 million and $2.2 million, respectively. As of March 31, 2026, and December 31, 2025, loan balances outstanding on nonaccrual status amounted to $100.8 million and $74.5 million, respectively. The Bank considers all loans more than 90 days past due as nonperforming loans.
The following tables provide an analysis of the aging of loans and leases as of March 31, 2026, and December 31, 2025. All loans greater than 90 days past due are generally placed on nonaccrual status.
Aged Analysis of Past Due Loans Receivable
March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | 30-59 Days Past Due | 60-89 Days Past Due | Greater Than 90 Days Past Due | Total Past Due | Current | Total Loans Receivable | Recorded Investment Over 90 Days Past Due and Still Accruing | ||||||||||||||||||||||||||||||||||
| Real Estate Loans: | |||||||||||||||||||||||||||||||||||||||||
| Commercial | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Construction | |||||||||||||||||||||||||||||||||||||||||
| Residential | |||||||||||||||||||||||||||||||||||||||||
| Total Real Estate Loans | |||||||||||||||||||||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||||||||||||||||||||
| Consumer and Other | |||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
| December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | 30-59 Days Past Due | 60-89 Days Past Due | Greater Than 90 Days Past Due | Total Past Due | Current | Total Loans Receivable | Recorded Investment Over 90 Days Past Due and Still Accruing | ||||||||||||||||||||||||||||||||||
| Real Estate Loans: | |||||||||||||||||||||||||||||||||||||||||
| Commercial | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Construction | |||||||||||||||||||||||||||||||||||||||||
| Residential | |||||||||||||||||||||||||||||||||||||||||
| Total Real Estate Loans | |||||||||||||||||||||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||||||||||||||||||||
| Consumer and Other | |||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
The following table presents non-accrual loans by segment as of March 31, 2026, and December 31, 2025.
| (Dollars in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Real Estate Loans: | |||||||||||
| Commercial | $ | $ | |||||||||
| Construction | |||||||||||
| Residential | |||||||||||
| Total Real Estate Loans | |||||||||||
| Commercial | |||||||||||
| Consumer and Other | |||||||||||
| Total | $ | $ | |||||||||
The Bank had $9.3 million and $9.8 million as of March 31, 2026 and December 31, 2025, respectively, in non-accrual loans with no specific allowance allocation.
The Bank seeks to assist customers that are experiencing financial difficulty by renegotiating loans within lending regulations and guidelines. The Bank makes loan modifications, primarily utilizing internal renegotiation programs via direct customer contact, that manage customers’ debt exposures held only by the Bank. Additionally, the Bank makes loan modifications with customers who have elected to work with external renegotiation agencies and these modifications provide solutions to customers’ entire unsecured debt structures. During the periods ended March 31, 2026, and December 31, 2025, the concessions granted to certain borrowers included extending the payment due dates and offering below market contractual interest rates, and were not significant to the consolidated financial statements.
Accrued interest receivable of $1.7
At March 31, 2026 and December 31, 2025, accrued interest receivable on loans was $33.4 million and $33.2 million, respectively, and included within accrued interest receivable on the consolidated balance sheets.
Note 6– Borrowings –
The Company had outstanding advances from the Federal Home Loan Bank (“FHLB”) of $260.8 million and $431.2 million as of March 31, 2026, and December 31, 2025, respectively, consisting of:
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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
| (Dollars in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| $ | $ | ||||||||||
| Total FHLB advances | $ | $ | |||||||||
(a)Short term overnight advance.
(b)Principal paid monthly.
(c)Acquired during the Progressive acquisition.
(d)Loan has put options beginning in October 2024.
The Company had an additional $1.5 billion remaining on the FHLB line availability at March 31, 2026.
On January 1, 2026, in connection with the Progressive acquisition, the Company assumed Progressive Bancorp, Inc.'s junior subordinated debentures issued to Progressive Statutory Trust I and Progressive Statutory Trust II, each of which is a non-consolidated statutory trust. The assumed obligations totaled approximately $5.4 million in aggregate junior subordinated debentures, consisting of $1.2 million related to Progressive Statutory Trust I and $4.1 million related to Progressive Statutory Trust II, and were associated with an aggregated $5.0 million of trust preferred securities outstanding. The junior subordinated debentures related to Progressive Statutory Trust I mature on July 31, 2031, and bear interest at a floating rate equal to the 3-month CME Term SOFR (as the statutory replacement benchmark rate to LIBOR) plus 3.84 %, payable quarterly (which includes the tenor spread adjustment). The junior subordinated debentures related to Progressive Statutory Trust II mature on December 15, 2037, and bear interest at 6.34 % through December 15, 2012 and thereafter at a floating rate equal to the 3-month CME Term SOFR (as the statutory replacement benchmark rate to LIBOR) plus 1.71 %, payable quarterly (which includes the tenor spread adjustment). The applicable indentures permit the Company to defer interest payments for up to 20 consecutive quarterly periods without an event of default. The Company has guaranteed, on a subordinated basis, distributions and other payments due on the related trust preferred securities, subject to the applicable guarantee agreements and indentures. Principal and interest payments on the junior subordinated debentures are in a superior position to the liquidation rights of holders of common stock.
As part of the acquisition of these debentures, the Company had a fair value adjustment of $555,000 , with $544,000 remaining at March 31, 2026.
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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 7– Other Income and Other Expense –
The Company has a single reportable operating segment which is presented as the Consolidated Statements of Income. An analysis of other income for the Company's single reportable operating segment is as follows:
For the Three Months Ended March 31, | |||||||||||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | |||||||||||||||||||||
| Debit Card and ATM Fee Income | |||||||||||||||||||||||
| Cash Value of Life Insurance Income | |||||||||||||||||||||||
| Fees and Brokerage Commissions | |||||||||||||||||||||||
| Pass-Through Income from SBIC and Fintech Partnerships | |||||||||||||||||||||||
| Gain on Extinguishment of Debt | |||||||||||||||||||||||
| Swap Fee Income | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total Other Income | $ | $ | |||||||||||||||||||||
An analysis of other expenses for the Company's single reportable operating segment is as follows:
For the Three Months Ended March 31, | |||||||||||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | |||||||||||||||||||||
| Advertising and Promotions | |||||||||||||||||||||||
| Communications | |||||||||||||||||||||||
| Ad Valorem Shares Tax | |||||||||||||||||||||||
| Data Processing Fees | |||||||||||||||||||||||
| Directors' Fees | |||||||||||||||||||||||
| Insurance | |||||||||||||||||||||||
| Legal and Professional Fees | |||||||||||||||||||||||
| Office Supplies and Printing | |||||||||||||||||||||||
| Regulatory Assessments | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total Other Expenses | $ | $ | |||||||||||||||||||||
Note 8– Leases –
The Bank leases certain branch offices through non-cancelable operating leases with terms that range from one to ten and contain various renewal options for certain of the leases. Certain leases provide for increases in minimum monthly rental payments as defined by the lease agreement. Rental expense under these agreements was $2.0 million and $2.3 million for the three months ended March 31, 2026, and 2025, respectively. At March 31, 2026, the Company had a weighted average lease term of 5.8 years and a weighted average discount rate of 3.97 %.
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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Future minimum lease payments under these leases are as follows:
| (Dollars in thousands) | |||||
| April 1, 2026 through December 31, 2026 | $ | ||||
| January 1, 2027 through December 31, 2027 | |||||
| January 1, 2028 through December 31, 2028 | |||||
| January 1, 2029 through December 31, 2029 | |||||
| January 1, 2030 through December 31, 2030 | |||||
| January 1, 2031 and Thereafter | |||||
| Total Future Minimum Lease Payments | |||||
| Less Imputed Interest | ( | ||||
| Present Value of Lease Liabilities | $ | ||||
Note 9– Commitments and Contingencies –
In the normal course of business, the Bank is a party to financial instruments with off-balance sheet risk to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby and commercial letters of credit which are not included in the accompanying financial statements. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheet.
The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby and commercial letters of credit is represented by the contractual amount of those instruments. The Bank’s policy for obtaining collateral, and the nature of such collateral, is essentially the same as that involved in making commitments to extend credit. The Bank uses the same credit policies in making such commitments and conditional obligations as it does for instruments that are included in the balance sheet. In the normal course of business, the Bank has made commitments to extend credit of approximately $2.0 billion and $1.7 billion at March 31, 2026, and December 31, 2025, respectively, and standby and commercial letters of credit of approximately $55.9 million and $51.2 million at March 31, 2026 and December 31, 2025, respectively. As discussed in Note 5, we have a reserve for unfunded loan commitments of $5.1 million and $4.2 million at March 31, 2026 and December 31, 2025, respectively.
In the normal course of business, the Bank is involved in various legal proceedings. In the opinion of management and counsel, the disposition or ultimate resolution of such proceedings would not have a material adverse effect on the Bank’s financial statements.
Note 10– Customer-Initiated Derivatives
The Company enters into derivative instruments to meet the needs of its customers through the execution of customer-initiated derivatives (swaps and caps and floors). These financial instruments involve elements of market and credit risk. Market and credit risk are included in the determination of fair value. Market risk is the potential loss that may result from movements in interest rates that cause an unfavorable change in the value of a financial instrument. Market risk in interest rate contracts executed on behalf of customers is mitigated by taking offsetting positions. Credit risk is the possible loss that may occur in the event of default by the counterparty to a financial instrument. The Company manages credit risk arising from customer-initiated derivatives by evaluating the creditworthiness of each customer, utilizing a similar approval process used for its lending activities. Derivatives with dealer counterparties are either cleared through a clearinghouse or settled directly with a single counterparty. The Company has quantified the credit risk as not significant as of March 31, 2026.
Income primarily results from the spread between the customer derivative and the offsetting dealer position. For the three months ended March 31, 2026, the Company recognized $1.5 million swap fee income.
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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026 | |||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Notional / Contract Amount | Gross Derivative Assets | Gross Derivative Liabilities | ||||||||||||||||||||||||||||||||
| Customer-initiated and other activities: | |||||||||||||||||||||||||||||||||||
| Interest rate contracts: | |||||||||||||||||||||||||||||||||||
| Caps and floors written | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Caps and floors purchased | |||||||||||||||||||||||||||||||||||
| Swaps | |||||||||||||||||||||||||||||||||||
| Total interest rate contracts | $ | $ | $ | ||||||||||||||||||||||||||||||||
Note 11– Fair Value of Financial Instruments –
Fair Value Disclosures
The Company groups its financial assets and liabilities measured at fair value in three levels. Fair value should be based on the assumptions market participants would use when pricing the asset or liability and establishes a fair value hierarchy that prioritizes the inputs used to develop those assumptions and measure fair value. The hierarchy requires companies to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
•Level 1 – Includes the most reliable sources and includes quoted prices in active markets for identical assets or liabilities.
•Level 2 – Includes observable inputs. Observable inputs include inputs other than quoted prices that are observable for the asset or liability (for example, interest rates and yield curves at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates) as well as inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs).
•Level 3 – Includes unobservable inputs and should be used only when observable inputs are unavailable.
Recurring Basis
Fair values of investment securities available for sale were primarily measured using information from a third-party pricing service. This pricing service provides information by utilizing evaluated pricing models supported with market data information. Standard inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, and reference data from market research publications.
The fair values of mortgage loans held for sale are based on commitments on hand from investors within the secondary market for loans with similar characteristics.
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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following tables present the balance of assets and liabilities measured on a recurring basis as of March 31, 2026, and December 31, 2025.
| (Dollars in thousands) | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||
| Available for Sale: | |||||||||||||||||||||||
| U.S. Treasury Securities | $ | $ | $ | $ | |||||||||||||||||||
| U.S. Government Agency Securities | |||||||||||||||||||||||
| Corporate Securities | |||||||||||||||||||||||
| Mortgage-Backed Securities | |||||||||||||||||||||||
| Municipal Securities | |||||||||||||||||||||||
| Loans Held for Sale | |||||||||||||||||||||||
| Interest Rate Swaps | |||||||||||||||||||||||
| Total assets at fair value | $ | $ | $ | $ | |||||||||||||||||||
| Interest Rate Swaps | $ | $ | $ | $ | |||||||||||||||||||
| Total liabilities at fair value | $ | $ | $ | $ | |||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Available for Sale: | |||||||||||||||||||||||
| U.S. Treasury Securities | $ | $ | $ | $ | |||||||||||||||||||
| U.S. Government Agency Securities | |||||||||||||||||||||||
| Corporate Securities | |||||||||||||||||||||||
| Mortgage-Backed Securities | |||||||||||||||||||||||
| Municipal Securities | |||||||||||||||||||||||
| Loans Held for Sale | |||||||||||||||||||||||
| Interest Rate Swaps | |||||||||||||||||||||||
| Total assets at fair value | $ | $ | $ | $ | |||||||||||||||||||
| Interest Rate Swaps | $ | $ | $ | $ | |||||||||||||||||||
| Total liabilities at fair value | $ | $ | $ | $ | |||||||||||||||||||
The Company reviews fair value hierarchy classifications on a quarterly basis. Changes in the Company's ability to observe inputs to the valuation may cause reclassification of certain assets or liabilities within the fair value hierarchy.
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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The table below provides a reconciliation for assets measured at fair value on a recurring basis using significant unobservable inputs, or Level 3 inputs, as of March 31, 2026, and December 31, 2025.
| (Dollars in thousands) | Municipal Securities | Corporate Securities | |||||||||
| Balance at December 31, 2024 | $ | $ | |||||||||
| Unrealized Gains Included in Other Comprehensive Loss | |||||||||||
| Maturities, Prepayments, and Calls | ( | ||||||||||
| Transfers Out of Level 3 | ( | ||||||||||
| Balance at December 31, 2025 | |||||||||||
| Unrealized Losses Included in Other Comprehensive Loss | ( | ( | |||||||||
| Maturities, Prepayments, and Calls | ( | ||||||||||
| Balance at March 31, 2026 | $ | $ | |||||||||
The following table provides quantitative information about significant unobservable inputs used in fair value measurements of Level 3 assets measured at fair value on a recurring basis at March 31, 2026.
| (Dollars in thousands) | Estimated Fair Value | Valuation Technique | Unobservable Inputs | Discounts | |||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||
| Municipal Securities | $ | Present Value of Expected Future Cash Flow Model | Liquidity Premium | % | |||||||||||||||||||
| Corporate Securities | Present Value of Expected Future Cash Flow Model | Liquidity Premium | % | ||||||||||||||||||||
Nonrecurring Basis
The Company has segregated all financial assets and liabilities that are measured at fair value on a nonrecurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the table below. The Company did not record any liabilities at fair value for which measurement of the fair value was made on a nonrecurring basis.
The fair value of the individually evaluated loans is measured at the fair value of the collateral for collateral-dependent loans. Individually evaluated loans are Level 3 assets measured using appraisals from external parties of the collateral less any prior liens and adjusted for estimated selling costs. Adjustments may be made by management based on a customized internally developed discounting matrix. Repossessed assets are initially recorded at fair value less
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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
estimated cost to sell, which is generally 10 %. The fair value of repossessed assets is based on property appraisals and an analysis of similar properties available. As such, the Bank records repossessed assets as Level 3.
| (Dollars in thousands) | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Individually Evaluated Loans | $ | $ | $ | $ | |||||||||||||||||||
| Other Nonperforming Assets | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Individually Evaluated Loans | $ | $ | $ | $ | |||||||||||||||||||
| Other Nonperforming Assets | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
Fair Value Financial Instruments
The fair value of a financial instruments is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. In accordance with GAAP, certain financial instruments and all non-financial instruments are excluded from these disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.
The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:
Cash and Short-Term Investments – For those short-term instruments, the carrying amount is a reasonable estimate of fair value.
Securities Purchased Under Agreements to Resell - The carrying amount approximates its fair value.
Securities – Fair value of securities is based on quoted market prices. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities.
Loans – The fair value for loans is estimated using discounted cash flow analyses, with interest rates currently being offered for similar loans to borrowers with similar credit rates. Loans with similar classifications are aggregated for purposes of the calculations. The allowance for loan losses, which was used to measure the credit risk, is subtracted from loans.
Cash Value of Bank-Owned Life Insurance (“BOLI”) – The carrying amount approximates its fair value.
Other Equity Securities – The carrying amount approximates its fair value.
Interest Rate Swaps - Market values are obtained from market pricing data sources available for comparable transactions in the over-the-counter derivative market.
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BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Deposits – The fair value of demand deposits and certain money market deposits is the amount payable at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using discounted cash flow analyses, with interest rates currently offered for deposits of similar remaining maturities.
Borrowings – The fair value of FHLB advances and other long-term borrowings is estimated using the rates currently offered for advances of similar maturities. The carrying amount of short-term borrowings maturing within ninety days approximates the fair value.
Commitments to Extend Credit and Standby and Commercial Letters of Credit – The fair values of commitments to extend credit and standby and commercial letters of credit do not differ significantly from the commitment amount and are therefore omitted from this disclosure.
The estimated approximate fair values of the Bank’s financial instruments as of March 31, 2026, and December 31, 2025 are as follows:
| (Dollars in thousands) | Carrying Amount | Total Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||||||||
| Financial Assets: | |||||||||||||||||||||||||||||
| Cash and Short-Term Investments | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Securities Purchased Under Agreements to Resell | |||||||||||||||||||||||||||||
| Securities | |||||||||||||||||||||||||||||
| Loans Held for Sale | |||||||||||||||||||||||||||||
| Loans - Net | |||||||||||||||||||||||||||||
| Cash Value of BOLI | |||||||||||||||||||||||||||||
| Other Equity Securities | |||||||||||||||||||||||||||||
| Interest Rate Swaps | |||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Financial Liabilities: | |||||||||||||||||||||||||||||
| Deposits | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Borrowings | |||||||||||||||||||||||||||||
| Interest Rate Swaps | |||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
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BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
| (Dollars in thousands) | Carrying Amount | Total Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
December 31, 2025 | |||||||||||||||||||||||||||||
| Financial Assets: | |||||||||||||||||||||||||||||
| Cash and Short-Term Investments | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Securities Purchased Under Agreements to Resell | |||||||||||||||||||||||||||||
| Securities | |||||||||||||||||||||||||||||
| Loans Held for Sale | |||||||||||||||||||||||||||||
| Loans - Net | |||||||||||||||||||||||||||||
| Cash Value of BOLI | |||||||||||||||||||||||||||||
| Other Equity Securities | |||||||||||||||||||||||||||||
| Interest Rate Swaps | |||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Financial Liabilities: | |||||||||||||||||||||||||||||
| Deposits | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Borrowings | |||||||||||||||||||||||||||||
| Interest Rate Swaps | |||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Note 12– Subsequent Events –
On April 2, 2026, the Company completed an $85.0 million private placement of subordinated notes with a 6.50 % fixed-to-floating rate due in 2036. The subordinated notes were issued to certain qualified institutional and accredited investors. The notes will bear interest at an annual rate of 6.50 % until March 30, 2031, and then reset quarterly to the then current three-month Secured Overnight Financing Rate plus 300 basis points. The proceeds from the sale of these subordinated notes were utilized to redeem $66.9 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.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
FORWARD-LOOKING STATEMENTS
When we refer in this Form 10-Q to “we,” “our,” “us,” the “Company” and “Business First,” we are referring to Business First Bancshares, Inc. and its consolidated subsidiaries, including b1BANK, which we sometimes refer to as “the Bank,” unless the context indicates otherwise.
The information contained in this Form 10-Q is accurate only as of the date of this form and the dates specified herein.
All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q (this “Report”) and other periodic reports filed by the Company, and other written or oral statements made by us or on our behalf, are “forward-looking statements,” as defined by (and subject to the “safe harbor” protections under) the federal securities laws. These forward-looking statements include statements that reflect the current views of our senior management with respect to our financial performance and future events with respect to our business and the banking industry in general. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “will continue,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” and similar expressions of a future or forward-looking nature. These statements involve estimates, assumptions, and risks and uncertainties. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements.
We believe these factors include, but are not limited to, the following:
•risks related to the integration of any other acquired businesses, including exposure to potential asset quality and credit quality risks and unknown or contingent liabilities, risks related to entering a new geographic market, the time and costs associated with integrating systems, technology platforms, procedures and personnel, the ability to retain key employees and maintain relationships with significant customers, the need for additional capital to finance such transactions, and possible failures in realizing the anticipated benefits from acquisitions;
•changes in the strength of the United States (“U.S.”) economy in general and the local economy in our local market areas adversely affecting our customers and their ability to transact profitable business with us, including the ability of our borrowers to repay their loans according to their terms or a change in the value of the related collateral;
•economic risks posed by our geographic concentration in Louisiana, the Dallas/Fort Worth metroplex and Houston;
•the ability to sustain and continue our organic loan and deposit growth, and manage that growth effectively;
•market declines in industries to which we have exposure, such as the volatility in oil prices and downturns in the energy industry that impact certain of our borrowers and investments that operate within, or are backed by collateral associated with, the energy industry;
•volatility and direction of interest rates and market prices, which could reduce our net interest margins, asset valuations and expense expectations;
•interest rate risk associated with our business;
•changes in the levels of loan prepayments and the resulting effects on the value of our loan portfolio;
•increased competition in the financial services industry, particularly from regional and national institutions and emerging non-bank competitors;
•increased credit risk in our assets and increased operating risk caused by a material change in commercial, consumer and/or real estate loans as a percentage of our total loan portfolio;
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•changes in the value of collateral securing our loans;
•deteriorating asset quality and higher loan charge-offs, and the time and effort required to resolve problem assets;
•the failure of assumptions underlying the establishment of and provisions made to our allowance for credit losses;
•changes in the availability of funds resulting in increased costs or reduced liquidity;
•our ability to maintain important deposit customer relationships and our reputation;
•a determination or downgrade in the credit quality and credit agency ratings of the securities in our securities portfolio;
•increased asset levels and changes in the composition of assets and the resulting impact on our capital levels and regulatory capital ratios;
•our ability to prudently manage our growth and execute our strategy;
•risks associated with our acquisition and de novo branching strategy;
•the loss of senior management or operating personnel and the potential inability to hire qualified personnel at reasonable compensation levels;
•legislative or regulatory developments, including changes in the laws, regulations, interpretations or policies relating to financial institutions, accounting, tax, trade, monetary and fiscal matters;
•government intervention in the U.S. financial system;
•changes in statutes and government regulations or their interpretations applicable to us, including changes in tax requirements and tax rates;
•natural disasters and adverse weather, acts of terrorism, an outbreak of hostilities or other international or domestic calamities, epidemics and pandemics such as coronavirus, and other matters beyond our control; and
•other risks and uncertainties listed from time to time in our reports and documents filed with the U.S. Securities and Exchange Commission (“SEC”).
The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this Report. Additional information on these and other risk factors can be found in Item 1A. “Risk Factors” of this Report and in Item 1A. “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC.
In the event that one or more events related to these, or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made and we do not undertake any obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF BUSINESS FIRST
The following discussion and analysis focuses on significant changes in the financial condition of Business First and its subsidiaries from December 31, 2025 to March 31, 2026, and its results of operations for the three months ended March 31, 2026. This discussion and analysis is intended to highlight and supplement information presented elsewhere in this report and should be read in conjunction with (i) the accompanying unaudited consolidated financial statements and the notes thereto (the “Notes”) and (ii) our Annual Report on Form 10-K for the year ended December 31, 2025, including the audited consolidated financial statements and notes thereto, management’s discussion and analysis, and the risk factor disclosures contained therein. This discussion and analysis contains forward-looking statements that are subject to certain risks and uncertainties and are based on certain assumptions that Business First believes are reasonable but may prove to be inaccurate. Certain risks, uncertainties and other factors, including those set forth under “Forward-Looking Statements,” “Risk Factors” and elsewhere in this report, may cause actual results to differ materially from those projected results discussed in the forward-looking statements appearing in this discussion and analysis. Business First assumes no obligation to update any of these forward-looking statements.
Overview
We are a registered financial holding company headquartered in Baton Rouge, Louisiana. Through our wholly-owned subsidiary, b1BANK, a Louisiana state chartered bank, we provide a broad range of financial services tailored to meet the needs of small-to-midsized businesses and professionals. Since our inception in 2006, our priority has been and continues to be creating shareholder value through the establishment of an attractive commercial banking franchise in Louisiana and across our region. We consider our primary market to include the State of Louisiana, the Dallas/Fort Worth metroplex, and Houston. We currently operate out of banking centers and loan production offices across Louisiana and Texas. As of March 31, 2026, we had total assets of $8.9 billion, total loans of $6.7 billion, total deposits of $7.5 billion, and total shareholders’ equity of $991.2 million.
As a financial holding company operating through one reportable operating segment, community banking, we generate most of our revenues from interest income on loans, customer service and loan fees, and interest income from securities. We incur interest expense on deposits and other borrowed funds and noninterest expense, such as salaries and employee benefits and occupancy expenses. We analyze our ability to maximize income generated from interest-earning assets and expense of our liabilities through our net interest margin. Net interest margin is a ratio calculated as net interest income divided by average interest-earning assets. Net interest income is the difference between interest income on interest-earning assets, such as loans and securities, and interest expense on interest-bearing liabilities, such as deposits and borrowings, which are used to fund those assets.
Changes in the market interest rates and the interest rates we earn on interest-earning assets or pay on interest-bearing liabilities, as well as the volume and types of interest-earning assets, interest-bearing and noninterest-bearing liabilities and shareholders’ equity, are usually the largest drivers of periodic changes in net interest spread, net interest margin and net interest income. Fluctuations in market interest rates are driven by many factors, including governmental monetary policies, inflation, deflation, macroeconomic developments, changes in unemployment, the money supply, political and international conditions, and conditions in domestic and foreign financial markets. Periodic changes in the volume and types of loans in our loan portfolio are affected by, among other factors, economic and competitive conditions in our markets and across our region, as well as developments affecting the real estate, technology, financial services, insurance, transportation, manufacturing and energy sectors within our markets.
Other Developments
Acquisition of Progressive Bancorp, Inc. ("Progressive")
On January 1, 2026, we consummated the merger of Progressive, the parent bank holding company for Progressive Bank, with and into Business First, with Business First continuing as the surviving corporation pursuant to the terms of the Reorganization Agreement. Immediately following consummation of the Progressive acquisition, Progressive Bank merged with and into b1BANK, with b1BANK surviving the merger. Pursuant to the terms of the Reorganization Agreement, upon consummation of the Progressive acquisition, we issued 3,192,367 shares of our common stock to the former shareholders
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of Progressive. As of December 31, 2025, Progressive had $773.8 million in total assets, $597.2 million in loans and $684.9 million in total deposits.
Technology Partnership with Covecta
On February 17, 2026, we announced a strategic partnership with Covecta, to deploy agentic AI across the bank's day to day workflows. The collaboration focuses on streamlining and automating repeatable, policy-driven activities across core deposit and loans operational processes, reducing manual effort and operational friction so that teams can devote more time towards higher value-adding work including analysis, exception handling and customer engagement.
Private Placement of Subordinated Notes
On April 2, 2026, we completed an $85.0 million private placement of subordinated notes with a 6.50% fixed-to-floating rate due in 2036. The subordinated notes were issued to certain qualified institutional and accredited investors. The notes will bear interest at an annual rate of 6.50% until March 30, 2031, and then reset quarterly to the then current three-month Secured Overnight Financing Rate plus 300 basis points. The proceeds from the sale of these subordinated notes were utilized to redeem $66.9 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.
Financial Highlights
The financial highlights as of and for the three months ended March 31, 2026, include:
•Total assets of $8.9 billion, a $692.1 million, or 8.4%, increase from December 31, 2025.
•Total loans held for investment of $6.7 billion, a $494.8 million, or 8.0%, increase from December 31, 2025.
•Total deposits of $7.5 billion, a $766.4 million, or 11.4%, increase from December 31, 2025.
•Net income available to common shareholders of $22.2 million for the three months ended March 31, 2026, a $3.0 million, or 15.7%, increase from the three months ended March 31, 2025. The increase was largely attributable to the acquisition of Progressive during the quarter ended March 31, 2026.
•Net interest income of $75.2 million for the three months ended March 31, 2026, an increase of $9.2 million, or 14.0%, from the three months ended March 31, 2025. The increase was largely attributable to the acquisition of Progressive during the quarter ended March 31, 2026.
•Allowance for credit losses of 1.03% of total loans held for investment, compared to 0.94% as of December 31, 2025, and a ratio of nonperforming loans to total loans held for investment of 1.53%, compared to 1.24% as of December 31, 2025.
•Earnings per common share for the first three months of 2026 of $0.68 per basic and diluted common share, compared to $0.65 per basic and diluted common share for the first three months of 2025.
•Return on average assets of 1.01% over the first three months of 2026, compared to 1.00% for the first three months of 2025.
•Return on average common equity of 9.77% over the first three months of 2026, compared to 10.48% for the first three months of 2025.
•Capital ratios for Tier 1 Leverage, Common Equity Tier 1, Tier 1 Risk-based and Total Risk-based Capital of 10.03%, 10.21%, 11.26% and 13.08%, respectively, compared to 10.08%, 9.94%, 11.00% and 12.93% at December 31, 2025.
•Book value per common share of $28.18, an increase of 0.8% from $27.95 at December 31, 2025.
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Results of Operations for the Three Months Ended March 31, 2026, and 2025
Performance Summary
For the three months ended March 31, 2026, net income available to common shareholders was $22.2 million, or $0.68 per basic and diluted common share, compared to net income of $19.2 million, or $0.65 per basic and diluted common share, for the three months ended March 31, 2025. Return on average assets, on an annualized basis, increased to 1.01% for the three months ended March 31, 2026, from 1.00% for the three months ended March 31, 2025. Return on average equity, on an annualized basis, decreased to 9.77% for the three months ended March 31, 2026, as compared to 10.48% for the three months ended March 31, 2025.
Net Interest Income
Our operating results depend primarily on our net interest income, calculated as the difference between interest income on interest-earning assets, such as loans and securities, and interest expense on interest-bearing liabilities, such as deposits and borrowings. Fluctuations in market interest rates impact the yield and rates paid on interest sensitive assets and liabilities. Changes in the amount and type of interest-earning assets and interest-bearing liabilities also impact net interest income. The variance driven by the changes in the amount and mix of interest-earning assets and interest-bearing liabilities is referred to as a “volume change.” Changes in yields earned on interest-earning assets and rates paid on interest-bearing deposits and other borrowed funds are referred to as a “rate change.”
To evaluate net interest income, we measure and monitor (1) yields on our loans and other interest-earning assets, (2) the costs of our deposits and other funding sources, (3) our net interest spread and (4) our net interest margin. Net interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest margin is calculated as net interest income divided by average interest-earning assets. Because noninterest-bearing sources of funds, such as noninterest-bearing deposits and shareholders’ equity also fund interest-earning assets, net interest margin includes the benefit of these noninterest-bearing sources. We calculate average assets, liabilities, and equity using a daily average, and average yield/rate utilizing an actual day count convention.
For the three months ended March 31, 2026, net interest income totaled $75.2 million, and net interest margin and net interest spread were 3.65% and 2.91%, respectively, compared to $66.0 million, 3.68%, and 2.91%, respectively, for the three months ended March 31, 2025. The average yield on the loan portfolio was 6.61% for the three months ended March 31, 2026, compared to 6.99% for the three months ended March 31, 2025, and the average yield on total interest-earning assets was 5.95% for the three months ended March 31, 2026, compared to 6.35% for the three months ended March 31, 2025. For the three months ended March 31, 2026, overall cost of funds (which includes noninterest-bearing deposits) decreased 37 basis points compared to the three months ended March 31, 2025.
The following table presents, for the periods indicated, an analysis of net interest income by each major category of interest-earning assets and interest-bearing liabilities, the average amounts outstanding and the interest earned or paid on such amounts. The table also sets forth the average rate earned on interest-earning assets, the average rate paid on interest-bearing liabilities, and the net interest margin on average total interest-earning assets for the same periods. Interest earned on loans that are classified as nonaccrual is not recognized in income; however, the balances are reflected in average outstanding balances for the period. For the three months ended March 31, 2026, and 2025, interest income not recognized on nonaccrual loans was not material. Any nonaccrual loans have been included in the table as loans carrying a zero yield. The average total loans reflected below are net of deferred loan fees and discounts. Acquired loans were recorded at fair value at acquisition and accrete/amortize discounts and premiums as an adjustment to yield. Averages presented in the table below, and throughout this report, are daily averages.
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For the Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| (Dollars in thousands) (Unaudited) | Average Outstanding Balance | Interest Earned/Interest Paid | Average Yield/Rate | Average Outstanding Balance | Interest Earned/Interest Paid | Average Yield/Rate | |||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||||||||
| Total loans | $ | 6,698,261 | $ | 109,146 | 6.61 | % | $ | 5,972,120 | $ | 102,992 | 6.99 | % | |||||||||||||||||||||||
| Securities | 1,065,447 | 8,462 | 3.22 | 924,693 | 6,614 | 2.90 | |||||||||||||||||||||||||||||
| Securities purchased under agreements to resell | 26,657 | 302 | 4.59 | 50,836 | 651 | 5.19 | |||||||||||||||||||||||||||||
| Interest-bearing deposits in other banks | 558,468 | 4,584 | 3.33 | 315,750 | 3,436 | 4.41 | |||||||||||||||||||||||||||||
| Total interest-earning assets | 8,348,833 | 122,494 | 5.95 | 7,263,399 | 113,693 | 6.35 | |||||||||||||||||||||||||||||
| Allowance for loan losses | (60,553) | (54,711) | |||||||||||||||||||||||||||||||||
| Noninterest-earning assets | 605,139 | 542,294 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 8,893,419 | $ | 122,494 | $ | 7,750,982 | $ | 113,693 | |||||||||||||||||||||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
| Interest-bearing deposits | $ | 5,884,257 | $ | 42,758 | 2.95 | % | $ | 5,141,498 | $ | 42,439 | 3.35 | % | |||||||||||||||||||||||
| Subordinated debt | 92,163 | 1,209 | 5.32 | 97,251 | 1,262 | 5.26 | |||||||||||||||||||||||||||||
| Subordinated debt - trust preferred securities | 11,671 | 165 | 5.73 | 5,000 | 99 | 8.03 | |||||||||||||||||||||||||||||
| Advances from FHLB | 297,588 | 3,038 | 4.14 | 362,092 | 3,796 | 4.25 | |||||||||||||||||||||||||||||
| Other borrowings | 20,030 | 129 | 2.61 | 18,321 | 114 | 2.52 | |||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 6,305,709 | 47,299 | 3.04 | 5,624,162 | 47,710 | 3.44 | |||||||||||||||||||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 1,521,252 | 1,244,793 | |||||||||||||||||||||||||||||||||
| Other liabilities | 72,491 | 67,167 | |||||||||||||||||||||||||||||||||
| Total noninterest-bearing liabilities | 1,593,743 | 1,311,960 | |||||||||||||||||||||||||||||||||
| Shareholders' equity: | |||||||||||||||||||||||||||||||||||
| Common shareholders' equity | 922,037 | 742,930 | |||||||||||||||||||||||||||||||||
| Preferred equity | 71,930 | 71,930 | |||||||||||||||||||||||||||||||||
| Total shareholders' equity | 993,967 | 814,860 | |||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 8,893,419 | $ | 7,750,982 | |||||||||||||||||||||||||||||||
| Net interest rate spread (1) | 2.91 | % | 2.91 | % | |||||||||||||||||||||||||||||||
| Net interest income | $ | 75,195 | $ | 65,983 | |||||||||||||||||||||||||||||||
| Net interest margin (2) | 3.65 | % | 3.68 | % | |||||||||||||||||||||||||||||||
| Overall cost of funds | 2.45 | % | 2.82 | % | |||||||||||||||||||||||||||||||
____________________________
(1)Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
(2)Net interest margin is equal to net interest income divided by average interest-earning assets.
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The following table presents information regarding the dollar amount of changes in interest income and interest expense for the periods indicated for each major component of interest-earning assets and interest-bearing liabilities and distinguishes between the changes attributable to changes in volume and changes attributable to changes in interest rates. For the purposes of this table, changes attributable to both rate and volume that cannot be segregated have been allocated to rate.
For the Three Months Ended March 31, 2026 compared to the Three Months Ended March 31, 2025 | |||||||||||||||||
| Increase (Decrease) due to change in | |||||||||||||||||
| (Dollars in thousands) (Unaudited) | Volume | Rate | Total | ||||||||||||||
| Interest-earning assets: | |||||||||||||||||
| Total loans | $ | 11,832 | $ | (5,678) | $ | 6,154 | |||||||||||
| Securities | 1,118 | 730 | 1,848 | ||||||||||||||
| Securities purchased under agreements to resell | (274) | (75) | (349) | ||||||||||||||
| Interest-bearing deposits in other banks | 1,992 | (844) | 1,148 | ||||||||||||||
| Total increase (decrease) in interest income | $ | 14,668 | $ | (5,867) | $ | 8,801 | |||||||||||
| Interest-bearing liabilities: | |||||||||||||||||
| Interest-bearing deposits | $ | 5,397 | $ | (5,078) | $ | 319 | |||||||||||
| Subordinated debt | (67) | 14 | (53) | ||||||||||||||
| Subordinated debt - trust preferred securities | 94 | (28) | 66 | ||||||||||||||
| Advances from FHLB | (659) | (99) | (758) | ||||||||||||||
| Other borrowings | 11 | 4 | 15 | ||||||||||||||
| Total increase (decrease) in interest expense | $ | 4,776 | $ | (5,187) | $ | (411) | |||||||||||
| Increase (decrease) in net interest income | $ | 9,892 | $ | (680) | $ | 9,212 | |||||||||||
Provision for Credit Losses
Our provision for credit losses is a charge to income in order to bring our allowance for credit losses to a level deemed appropriate by management. For a description of the factors taken into account by management in determining the allowance for credit losses see “—Financial Condition—Allowance for Credit Losses.” The provision for credit losses was $2.3 million for the three months ended March 31, 2026, and $2.8 million for the same period in 2025. The lower provision for the three months ended March 31, 2026, compared to the same period in 2025 is primarily the result of higher specific reserve estimates during the three months ended March 31, 2025, as compared to the three months ended March 31, 2026. The decrease was partially offset by increased reserve estimates on the pooled portfolio.
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Noninterest Income (“Other Income”)
Our primary sources of noninterest income are service charges on deposit accounts, debit card and automated teller machine (“ATM”) fee income, income from bank-owned life insurance, fees and brokerage commissions, loan sales, swap fee income, and pass-through income from other investments (small business investment company (“SBIC”) partnerships and financial technology (“Fintech”) funds). The following table presents, for the periods indicated, the major categories of noninterest income:
For the Three Months Ended March 31, | |||||||||||||||||
| (Dollars in thousands) (Unaudited) | 2026 | 2025 | Increase (Decrease) | ||||||||||||||
| Noninterest income: | |||||||||||||||||
| Service charges on deposit accounts | $ | 3,142 | $ | 2,860 | $ | 282 | |||||||||||
| Debit card and ATM fee income | 2,306 | 1,858 | 448 | ||||||||||||||
| Cash value of life insurance income | 831 | 808 | 23 | ||||||||||||||
| Gain on sales of loans | 1,341 | 1,256 | 85 | ||||||||||||||
| Gain (loss) on sales of investment securities | 80 | (1) | 81 | ||||||||||||||
| Fees and brokerage commissions | 2,261 | 2,148 | 113 | ||||||||||||||
| Gain on extinguishment of debt | — | 630 | (630) | ||||||||||||||
| Swap fee income | 1,537 | 739 | 798 | ||||||||||||||
| Pass-through income from other investments | 135 | 751 | (616) | ||||||||||||||
| Other | 2,417 | 2,177 | 240 | ||||||||||||||
| Total noninterest income | $ | 14,050 | $ | 13,226 | $ | 824 | |||||||||||
Total noninterest income increased $824,000, or 6.2%, from the three months ended March 31, 2025, mainly attributable to an increase in service charges on deposit accounts of $282,000, or 9.9%, an increase in debit card and ATM fee income of $448,000, or 24.1%, an increase in swap fee income of $798,000, or 108.0%, and the acquisition of Progressive. This is offset by the gain on the extinguishment of debt related to our subordinated debt of $630,000 and higher pass-through income from other investments in the quarter ended March 31, 2025.
Noninterest Expense (“Other Expense”)
Generally, noninterest expense is composed of all employee expenses and costs associated with operating our facilities, obtaining and retaining customer relationships, and providing bank services. The largest component of noninterest expense is salaries and employee benefits. Noninterest expense also includes operational expenses, such as occupancy and equipment expenses, advertising and promotion expenses, data processing expenses, and professional and regulatory fees, including Federal Deposit Insurance Corporation (“FDIC”) assessments, among others.
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The following tables present, for the periods indicated, the major categories of noninterest expense:
For the Three Months Ended March 31, | |||||||||||||||||
| (Dollars in thousands) (Unaudited) | 2026 | 2025 | Increase (Decrease) | ||||||||||||||
| Salaries and employee benefits | $ | 33,039 | $ | 29,497 | $ | 3,542 | |||||||||||
| Non-staff expenses: | |||||||||||||||||
| Occupancy and equipment expense | 8,122 | 7,356 | 766 | ||||||||||||||
| Advertising and promotions | 1,508 | 1,291 | 217 | ||||||||||||||
| Communications | 652 | 591 | 61 | ||||||||||||||
| Ad valorem shares tax | 978 | 1,125 | (147) | ||||||||||||||
| Data processing | 3,712 | 3,236 | 476 | ||||||||||||||
| Directors' fees | 260 | 279 | (19) | ||||||||||||||
| Insurance | 411 | 404 | 7 | ||||||||||||||
| Legal and professional fees | 1,085 | 1,013 | 72 | ||||||||||||||
| Office supplies and printing | 313 | 311 | 2 | ||||||||||||||
| Regulatory assessments | 984 | 1,257 | (273) | ||||||||||||||
| Merger and conversion related expenses | 1,377 | 250 | 1,127 | ||||||||||||||
| Other | 5,030 | 3,968 | 1,062 | ||||||||||||||
| Total noninterest expense | $ | 57,471 | $ | 50,578 | $ | 6,893 | |||||||||||
Total noninterest expense increased $6.9 million, or 13.6%, from the three months ended March 31, 2025, primarily attributed to the increase in salaries and employee benefits of $3.5 million, or 12.0%, and an increase in merger and conversion related expenses of $1.1 million, or 450.8%. The increases were largely attributable to the acquisition of Progressive.
Income Tax Expense
The amount of income tax expense is influenced by the amounts of our pre-tax income, tax-exempt income and other nondeductible expenses. Deferred tax assets and liabilities are reflected at currently enacted income tax rates in effect for the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
For the three months ended March 31, 2026, income tax expense totaled $5.9 million, an increase of $656,000, or 12.4%, compared to $5.3 million for the same period in 2025. Our effective tax rates for the three months ended March 31, 2026, and 2025 were 20.1% and 20.4%, respectively.
Financial Condition
Our total assets increased $692.1 million, or 8.4%, from December 31, 2025, to March 31, 2026, primarily due to the acquisition of Progressive.
Loan Portfolio
Our primary source of income is interest on loans to individuals, professionals and small-to-midsized businesses located in our markets. Our loan portfolio consists primarily of commercial loans and real estate loans secured by commercial real estate properties located in our primary market areas. Our loan portfolio represents the highest yielding component of our earning asset base.
As of March 31, 2026, total loans, excluding mortgage loans held for sale, were $6.7 billion, a $494.8 million increase, or 8.0%, compared to $6.2 billion as of December 31, 2025. Additionally, $480,000, and $1.1 million in loans were classified as loans held for sale as of March 31, 2026, and December 31, 2025, respectively.
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Total loans held for investment as a percentage of total deposits were 89.5% and 92.4% as of March 31, 2026, and December 31, 2025, respectively. Total loans held for investment as a percentage of total assets were 75.0% and 75.3% as of March 31, 2026, and December 31, 2025, respectively.
The following table summarizes our loan portfolio by type of loan as of the dates indicated.
As of March 31, 2026 (Unaudited) | As of December 31, 2025 | ||||||||||||||||||||||
| (Dollars in thousands) | Amount | Percent | Amount | Percent | |||||||||||||||||||
| Real Estate Loans: | |||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||
| Real estate rental and leasing | $ | 1,586,322 | 23.7 | % | $ | 1,456,484 | 23.5 | % | |||||||||||||||
| Accommodation and food services | 280,818 | 4.2 | 247,951 | 4.0 | |||||||||||||||||||
| Other services (except public administration) | 155,478 | 2.3 | 160,548 | 2.6 | |||||||||||||||||||
| Health care and social assistance | 160,533 | 2.4 | 121,850 | 2.0 | |||||||||||||||||||
| Finance and insurance | 86,846 | 1.3 | 84,592 | 1.4 | |||||||||||||||||||
| Construction | 68,004 | 1.0 | 63,931 | 1.0 | |||||||||||||||||||
| Manufacturing | 68,150 | 1.0 | 73,369 | 1.2 | |||||||||||||||||||
| Agriculture, forestry, fishing and hunting | 62,246 | 0.9 | 42,730 | 0.7 | |||||||||||||||||||
| Transportation and warehousing | 18,442 | 0.3 | 22,070 | 0.4 | |||||||||||||||||||
| Other | 354,787 | 5.3 | 337,754 | 5.4 | |||||||||||||||||||
| Total Commercial | 2,841,626 | 42.4 | 2,611,279 | 42.2 | |||||||||||||||||||
| Construction | 685,817 | 10.3 | 639,069 | 10.3 | |||||||||||||||||||
| Residential | 1,141,220 | 17.1 | 944,065 | 15.3 | |||||||||||||||||||
| Total Real Estate Loans | 4,668,663 | 69.8 | 4,194,413 | 67.8 | |||||||||||||||||||
| Commercial | 1,943,412 | 29.1 | 1,921,833 | 31.0 | |||||||||||||||||||
| Consumer and Other | 72,188 | 1.1 | 73,244 | 1.2 | |||||||||||||||||||
| Total loans held for investment | $ | 6,684,263 | 100.0 | % | $ | 6,189,490 | 100.0 | % | |||||||||||||||
As of March 31, 2026 (Unaudited) | As of December 31, 2025 | ||||||||||||||||||||||
| (Dollars in thousands) | Amount | Percent | Amount | Percent | |||||||||||||||||||
| Commercial real estate loans: | |||||||||||||||||||||||
| Dallas Region | $ | 727,527 | 25.5 | % | $ | 720,436 | 27.6 | % | |||||||||||||||
| New Orleans Region | 525,724 | 18.5 | 505,447 | 19.3 | |||||||||||||||||||
| North Louisiana Region | 694,993 | 24.5 | 454,909 | 17.4 | |||||||||||||||||||
| Capitol Region | 294,866 | 10.4 | 323,420 | 12.4 | |||||||||||||||||||
| Houston Region | 212,571 | 7.5 | 240,422 | 9.2 | |||||||||||||||||||
| Southwest Louisiana Region | 303,823 | 10.7 | 280,889 | 10.8 | |||||||||||||||||||
| Bayou Region | 82,122 | 2.9 | 85,756 | 3.3 | |||||||||||||||||||
| Total commercial real estate loans | 2,841,626 | 100.0 | % | 2,611,279 | 100.0 | % | |||||||||||||||||
Real Estate: Commercial loans are extensions of credit secured by owner-occupied and non-owner-occupied collateral. Repayment is generally dependent on the successful operations of the property. General economic conditions may impact the performance of these types of loans, including fluctuations in the value of real estate, vacancy rates, and unemployment trends. Real estate commercial loans also include farmland loans that can be, or are, used for agricultural purposes. These loans are usually repaid through refinancing, cash flow from the borrower’s ongoing operations, development of the property, or sale of the property.
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Real Estate: Commercial loans increased $230.3 million, or 8.8%, to $2.8 billion as of March 31, 2026, from $2.6 billion as of December 31, 2025.
Real Estate: Construction loans include loans to small-to-midsized businesses to construct owner-occupied properties, loans to developers of commercial real estate investment properties and residential developments and, to a lesser extent, loans to individual clients for construction of single-family homes in our market areas. Risks associated with these loans include fluctuations in the value of real estate, project completion risk and changes in market trends. We are also exposed to risk based on the ability of the construction loan borrower to finance the loan or sell the property upon completion of the project, which may be affected by changes in secondary market terms and criteria for permanent financing since the time we funded the loan.
Real Estate: Construction loans increased $46.7 million, or 7.3%, to $685.8 million as of March 31, 2026, from $639.1 million as of December 31, 2025.
Real Estate: Residential loans include first and second lien 1-4 family mortgage loans, as well as home equity lines of credit, in each case primarily on owner-occupied primary residences. The Company is exposed to risk based on fluctuations in the value of the real estate collateral securing the loan, as well as changes in the borrower’s financial condition, which could be affected by numerous factors, including divorce, job loss, illness, or other personal hardship. Real estate residential loans also include multi-family residential loans originated to provide permanent financing for multi-family residential income producing properties. Repayment of these loans primarily relies on successful rental and management of the property.
Real Estate: Residential loans increased $197.2 million, or 20.9%, to $1.1 billion as of March 31, 2026, from $944.1 million as of December 31, 2025.
Commercial loans include general commercial and industrial, or C&I, loans, including commercial lines of credit, working capital loans, term loans, equipment financing, asset acquisition, expansion, and development loans, borrowing base loans, letters of credit and other loan products, primarily in the Company’s target markets that are underwritten based on the borrower’s ability to service the debt from income. Commercial loan risk is derived from the expectation that such loans generally are serviced principally from the operations of the business, and those operations may not be successful. Any interruption or discontinuance of operating cash flows from the business, which may be influenced by events not under the control of the borrower such as economic events and changes in governmental regulations, could materially affect the ability of the borrower to repay the loan.
Commercial loans increased $21.6 million, or 1.1%, remaining at $1.9 billion at both March 31, 2026, and December 31, 2025.
Consumer and other loans include a variety of loans to individuals for personal, family and household purposes, including secured and unsecured installment and term loans. The risk is based on changes in the borrower’s financial condition, which could be affected by numerous factors, including divorce, job loss, illness or other personal hardship, and fluctuations in the value of the real estate or personal property securing the consumer loan, if any.
Consumer and other loans decreased $1.1 million, or 1.4%, to $72.2 million as of March 31, 2026, from $73.2 million as of December 31, 2025.
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The contractual maturity ranges of loans in our loan portfolio and the amount of such loans with fixed and floating interest rates in each maturity range as of the date indicated are summarized in the following tables:
As of March 31, 2026 | |||||||||||||||||||||||||||||
| (Dollars in thousands) (Unaudited) | One Year or Less | One Through Five Years | Five Through Fifteen Years | After Fifteen Years | Total | ||||||||||||||||||||||||
| Real Estate Loans: | |||||||||||||||||||||||||||||
| Commercial | $ | 564,466 | $ | 1,706,065 | $ | 513,854 | $ | 57,241 | $ | 2,841,626 | |||||||||||||||||||
| Construction | 296,056 | 295,535 | 72,656 | 21,570 | 685,817 | ||||||||||||||||||||||||
| Residential | 223,084 | 499,922 | 256,962 | 161,252 | 1,141,220 | ||||||||||||||||||||||||
| Total Real Estate Loans | 1,083,606 | 2,501,522 | 843,472 | 240,063 | 4,668,663 | ||||||||||||||||||||||||
| Commercial | 883,831 | 824,898 | 230,612 | 4,071 | 1,943,412 | ||||||||||||||||||||||||
| Consumer and Other | 42,602 | 22,338 | 7,102 | 146 | 72,188 | ||||||||||||||||||||||||
| Total loans held for investment | $ | 2,010,039 | $ | 3,348,758 | $ | 1,081,186 | $ | 244,280 | $ | 6,684,263 | |||||||||||||||||||
| Total fixed rate loans | $ | 779,112 | $ | 1,903,503 | $ | 615,976 | $ | 47,326 | $ | 3,345,917 | |||||||||||||||||||
| Total floating rate loans | 1,230,927 | 1,445,255 | 465,210 | 196,954 | 3,338,346 | ||||||||||||||||||||||||
Nonperforming Assets
Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is generally reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due, or interest may be recognized on a cash basis as long as the remaining book balance of the loan is deemed collectible. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.
We have several procedures in place to assist in maintaining the overall quality of our loan portfolio. We have established underwriting guidelines to be followed by our bankers, and we also monitor our delinquency levels for any negative or adverse trends. There can be no assurance, however, that our loan portfolio will not become subject to increasing pressures from deteriorating borrower credit due to general economic conditions.
We believe our conservative lending approach and focused management of nonperforming assets has resulted in sound asset quality and the timely resolution of problem assets. We had $123.1 million and $89.7 million in nonperforming assets as of March 31, 2026, and December 31, 2025, respectively. We had $102.2 million in nonperforming loans as of March 31, 2026, compared to $76.7 million as of December 31, 2025. The increase in nonperforming assets from December 31, 2025, to March 31, 2026, is primarily due to six commercial lending relationships, four of which are real estate loans and two are commercial loans. There was also a property in Texas we foreclosed on during the quarter ended March 31, 2026.
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The following tables present information regarding nonperforming assets at the dates indicated:
| (Dollars in thousands) | As of March 31, 2026 (Unaudited) | As of December 31, 2025 | |||||||||
| Nonaccrual loans | $ | 100,803 | $ | 74,471 | |||||||
| Accruing loans 90 or more days past due | 1,404 | 2,215 | |||||||||
| Total nonperforming loans | 102,207 | 76,686 | |||||||||
| Other nonperforming assets | — | — | |||||||||
| Other real estate owned: | |||||||||||
| Commercial real estate, construction, land and land development | 20,467 | 12,192 | |||||||||
| Residential real estate | 431 | 821 | |||||||||
| Total other real estate owned | 20,898 | 13,013 | |||||||||
| Total nonperforming assets | $ | 123,105 | $ | 89,699 | |||||||
| Ratio of nonperforming loans to total loans held for investment | 1.53 | % | 1.24 | % | |||||||
| Ratio of nonperforming assets to total assets | 1.38 | 1.09 | |||||||||
| Ratio of nonaccrual loans to total loans held for investment | 1.51 | 1.20 | |||||||||
| (Dollars in thousands) | As of March 31, 2026 (Unaudited) | As of December 31, 2025 | |||||||||
| Nonaccrual loans by category: | |||||||||||
| Real Estate Loans: | |||||||||||
| Commercial | $ | 44,357 | $ | 36,252 | |||||||
| Construction | 7,236 | 4,539 | |||||||||
| Residential | 15,171 | 10,144 | |||||||||
| Total Real Estate Loans | 66,764 | 50,935 | |||||||||
| Commercial | 33,841 | 23,370 | |||||||||
| Consumer and Other | 198 | 166 | |||||||||
| Total | $ | 100,803 | $ | 74,471 | |||||||
Potential Problem Loans
From a credit risk standpoint, we classify loans in one of four categories: pass, special mention, substandard or doubtful. Loans classified as loss are charged-off. The classifications of loans reflect a judgment about the risks of default and loss associated with the loan. Ratings are adjusted to reflect the degree of risk and loss that is believed to be inherent in each credit. Our methodology is structured so that specific allocations are increased in accordance with deterioration in credit quality (and a corresponding increase in risk of loss) or decreased in accordance with improvement in credit quality (and a corresponding decrease in risk of loss).
For additional information, see Note 5 of the consolidated financial statements for a summary of loans by credit quality indicators.
Allowance for Credit Losses
We maintain an allowance for credit losses, which includes both our allowance for loan losses and reserves for unfunded commitments, that represents management’s best estimate of the credit losses and risks inherent in the loan portfolio. In determining the allowance for credit losses, we estimate losses on specific loans, or groups of loans, where the probable loss can be identified and reasonably determined. The balance of the allowance for credit losses is based on internally assigned risk classifications of loans, changes in the nature of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, current economic factors and the estimated impact of current economic
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conditions on certain historical credit loss rates. For additional information, see Note 5 to the consolidated financial statements.
In connection with our review of the loan portfolio, we consider risk elements attributable to particular loan types or categories in assessing the quality of individual loans. Some of the risk elements we consider include:
•for Real Estate: Commercial loans, the debt service coverage ratio (income from the property in excess of operating expenses compared to loan payment requirements), operating results of the owner in the case of owner-occupied properties, the loan to value ratio, the age and condition of the collateral, and the volatility of income, property value and future operating results typical for properties of that type;
•for Real Estate: Construction loans, the perceived feasibility of the project including the ability to sell developed lots or improvements constructed for resale or the ability to lease property constructed for lease, the quality and nature of contracts for presale or prelease, if any, the experience and ability of the developer, and the loan to value ratio;
•for Real Estate: Residential real estate loans, the borrower’s ability to repay the loan, including a consideration of the debt to income ratio and employment and income stability, the loan to value ratio, and the age, condition and marketability of the collateral; and
•for Commercial loans, the operating results of the commercial, industrial or professional enterprise, the borrower’s business, professional and financial ability and expertise, the specific risks and volatility of income and operating results typical for businesses in that category, and the value, nature and marketability of collateral;
As of March 31, 2026, the allowance for credit losses totaled $68.8 million, or 1.03%, of total loans held for investment. As of December 31, 2025, the allowance for credit losses totaled $58.1 million, or 0.94%, of total loans held for investment.
The following tables present, as of and for the periods indicated, an analysis of the allowance for credit losses and other related data:
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| (Dollars in thousands) | As of and For the Three Months Ended March 31, 2026 (Unaudited) | As of and For the Year Ended December 31, 2025 | |||||||||
| Average loans outstanding | $ | 6,698,261 | $ | 6,023,214 | |||||||
| Gross loans held for investment outstanding end of period | $ | 6,684,263 | $ | 6,189,490 | |||||||
| Allowance for credit losses at beginning of period | $ | 58,136 | $ | 58,528 | |||||||
| Adjustment for Progressive purchased credit deterioration loans | 9,264 | - | |||||||||
| Provision for credit losses | 2,278 | 11,318 | |||||||||
| Charge-offs: | |||||||||||
| Real Estate: | |||||||||||
| Commercial | — | 4,116 | |||||||||
| Construction | — | 20 | |||||||||
| Residential | — | 242 | |||||||||
| Total Real Estate | — | 4,378 | |||||||||
| Commercial | 593 | 6,768 | |||||||||
| Consumer and other | 511 | 1,991 | |||||||||
| Total charge-offs | 1,104 | 13,137 | |||||||||
| Recoveries: | |||||||||||
| Real Estate: | |||||||||||
| Commercial | 6 | 30 | |||||||||
| Construction | 4 | 211 | |||||||||
| Residential | 14 | 33 | |||||||||
| Total Real Estate | 24 | 274 | |||||||||
| Commercial | 113 | 839 | |||||||||
| Consumer and other | 44 | 314 | |||||||||
| Total recoveries | 181 | 1,427 | |||||||||
| Net charge-offs | 923 | 11,710 | |||||||||
| Allowance for credit losses at end of period | $ | 68,755 | $ | 58,136 | |||||||
| Ratio of allowance for credit losses to end of period loans held for investment | 1.03 | % | 0.94 | % | |||||||
| Ratio of net charge-offs to average loans | 0.01 | 0.19 | |||||||||
| Ratio of allowance for credit losses to nonaccrual loans | 68.21 | 78.07 | |||||||||
As of and For the Three Months Ended March 31, 2026 (Unaudited) | As of and For the Year Ended December 31, 2025 | As of and For the Three Months Ended March 31, 2025 (Unaudited) | |||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Net Charge-offs (Recoveries) | Percent of Average Loans | Net Charge-offs (Recoveries) | Percent of Average Loans | Net Charge-offs (Recoveries) | Percent of Average Loans | |||||||||||||||||||||||||||||
| Real estate: | |||||||||||||||||||||||||||||||||||
| Commercial | $ | (6) | 0.00 | % | $ | 4,086 | 0.07 | % | $ | (3) | 0.00 | % | |||||||||||||||||||||||
| Construction | (4) | 0.00 | (191) | 0.00 | (95) | 0.00 | |||||||||||||||||||||||||||||
| Residential | (14) | 0.00 | 209 | 0.00 | 219 | 0.00 | |||||||||||||||||||||||||||||
| Total Real Estate Loans | (24) | 0.00 | 4,104 | 0.07 | 121 | 0.00 | |||||||||||||||||||||||||||||
| Commercial | 480 | 0.01 | 5,929 | 0.10 | 357 | 0.01 | |||||||||||||||||||||||||||||
| Consumer and Other | 467 | 0.01 | 1,677 | 0.02 | 499 | 0.01 | |||||||||||||||||||||||||||||
| Total net charge-offs | $ | 923 | 0.02 | % | $ | 11,710 | 0.19 | % | $ | 977 | 0.02 | % | |||||||||||||||||||||||
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Although we believe that we have established our allowance for credit losses in accordance with U.S. GAAP and that the allowance for credit losses was adequate to provide for known and estimated losses in the portfolio at all times shown above, future provisions will be subject to ongoing evaluations of the risks in our loan portfolio. If we experience economic declines or if asset quality deteriorates, material additional provisions could be required.
The following table shows the allocation of the allowance for credit losses among loan categories and certain other information as of the dates indicated. The allocation of the allowance for credit losses as shown in the table should neither be interpreted as an indication of future charge-offs, nor as an indication that charge-offs in future periods will necessarily occur in these amounts or in the indicated proportions. The total allowance is available to absorb losses from any loan category.
As of March 31, 2026 (Unaudited) | As of December 31, 2025 | As of March 31, 2025 (Unaudited) | |||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Amount | Percent to Total | Amount | Percent to Total | Amount | Percent to Total | |||||||||||||||||||||||||||||
| Real estate: | |||||||||||||||||||||||||||||||||||
| Commercial | $ | 24,434 | 35.5 | % | $ | 23,806 | 40.9 | % | $ | 23,542 | 39.0 | % | |||||||||||||||||||||||
| Construction | 6,216 | 9.1 | 4,416 | 7.6 | 7,392 | 12.2 | |||||||||||||||||||||||||||||
| Residential | 9,845 | 14.3 | 7,732 | 13.3 | 9,339 | 15.5 | |||||||||||||||||||||||||||||
| Total real estate | 40,495 | 58.9 | 35,954 | 61.8 | 40,273 | 66.7 | |||||||||||||||||||||||||||||
| Commercial | 27,488 | 40.0 | 21,618 | 37.2 | 19,532 | 32.4 | |||||||||||||||||||||||||||||
| Consumer and Other | 772 | 1.1 | 564 | 1.0 | 558 | 0.9 | |||||||||||||||||||||||||||||
| Total allowance for credit losses | $ | 68,755 | 100.0 | % | $ | 58,136 | 100.0 | % | $ | 60,363 | 100.0 | % | |||||||||||||||||||||||
Securities
We use our securities portfolio to provide a source of liquidity, an appropriate return on funds invested, manage interest rate risk, meet collateral requirements, and meet regulatory capital requirements. As of March 31, 2026, the carrying amount of investment securities totaled $1.0 billion, an increase of $56.6 million, or 5.7%, compared to $989.2 million as of December 31, 2025. The increase was primarily due to acquisition of Progressive. Securities represented 11.7% and 12.0% of total assets as of March 31, 2026, and December 31, 2025, respectively.
Our investment portfolio consists entirely of securities classified as available for sale. As a result, the carrying values of our investment securities are adjusted for unrealized gain or loss, and any gain or loss is reported on an after-tax basis as a component of other comprehensive income in shareholders’ equity. The following tables summarize the amortized cost and estimated fair value of investment securities as of the dates shown:
As of March 31, 2026 | |||||||||||||||||||||||
| (Dollars in thousands) (Unaudited) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
| U.S. treasury securities | $ | 24,562 | $ | — | $ | 282 | $ | 24,280 | |||||||||||||||
| U.S. government agencies | 10,046 | — | 141 | 9,905 | |||||||||||||||||||
| Corporate bonds | 36,447 | 58 | 1,872 | 34,633 | |||||||||||||||||||
| Mortgage-backed securities | 745,133 | 1,485 | 29,174 | 717,444 | |||||||||||||||||||
| Municipal securities | 277,692 | 260 | 18,397 | 259,555 | |||||||||||||||||||
| Total | $ | 1,093,880 | $ | 1,803 | $ | 49,866 | $ | 1,045,817 | |||||||||||||||
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As of December 31, 2025 | |||||||||||||||||||||||
| (Dollars in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
| U.S. treasury securities | $ | 17,571 | $ | — | $ | 293 | $ | 17,278 | |||||||||||||||
| U.S. government agencies | 10,070 | — | 196 | 9,874 | |||||||||||||||||||
| Corporate bonds | 38,324 | 377 | 1,639 | 37,062 | |||||||||||||||||||
| Mortgage-backed securities | 674,211 | 3,153 | 27,273 | 650,091 | |||||||||||||||||||
| Municipal securities | 291,256 | 536 | 16,868 | 274,924 | |||||||||||||||||||
| Total | $ | 1,031,432 | $ | 4,066 | $ | 46,269 | $ | 989,229 | |||||||||||||||
All of our mortgage-backed securities are agency securities. We do not hold any Fannie Mae or Freddie Mac preferred stock, corporate equity, collateralized debt obligations, collateralized loan obligations, private label collateralized mortgage obligations, subprime, Alt-A, or second lien elements in our investment portfolio as of March 31, 2026.
The allowance for credit losses encompasses potential expected credit losses related to the securities portfolio. In order to develop an estimate of credit losses expected for the current securities portfolio, we perform an assessment that includes reviewing historical loss data for both our portfolio and similar types of investment securities. Additionally, our review of the securities portfolio for expected credit losses includes an evaluation of factors including the security issuer bond ratings, delinquency status, insurance or other available credit support, as well as our expectations of the forecasted economic outlook relevant to these securities. The results of the analysis are evaluated quarterly to confirm that credit loss estimates are appropriate for the securities portfolio. Based on our assessments, expected credit losses on the investment securities portfolio as of both March 31, 2026 and December 31, 2025, was negligible and therefore, no allowance for credit loss was recorded related to our investment securities.
As of March 31, 2026, and December 31, 2025, the Company held other equity securities of $40.0 million and $49.3 million, respectively, comprised mainly of FHLB stock, SBICs and Fintech fund investments.
Deposits
We offer a variety of deposit accounts having a wide range of interest rates and terms including demand, savings, money market and time accounts. We rely primarily on competitive pricing policies, convenient locations and personalized service to attract and retain these deposits.
Total deposits as of March 31, 2026, were $7.5 billion, an increase of $766.4 million, or 11.4%, compared to $6.7 billion as of December 31, 2025. Total uninsured deposits were $3.5 billion, or 46.5%, of total deposits as of March 31, 2026 compared to $2.9 billion, or 43.2%, of total deposits as of December 31, 2025. Since it is not reasonably practical to provide a precise measure of uninsured deposits, the amounts are estimated and are based on the same methodologies and assumptions that are used for regulatory reporting requirements for the call report.
Noninterest-bearing deposits as of March 31, 2026, were $1.6 billion, compared to $1.3 billion as of December 31, 2025, an increase of $253.0 million, or 19.1%.
Average deposits for the three months ended March 31, 2026, were $7.4 billion, an increase of $974.8 million, or 15.2%, over the full year average for the year ended December 31, 2025, of $6.4 billion. The increase was largely attributable to the impact of the acquisition of Progressive on January 1, 2026. The average rate paid on total interest-bearing deposits decreased over this period from 3.29% for the year ended December 31, 2025, to 2.95% for the three months ended March 31, 2026. In addition, noninterest-bearing demand accounts served to reduce the cost of deposits to 2.34% for the three months ended March 31, 2026, compared to 2.63% for the year ended December 31, 2025.
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The following table presents the daily average balances and weighted average rates paid on deposits for the periods indicated:
For the Three Months Ended March 31, (Unaudited) | For the Year Ended December 31, 2025 | ||||||||||||||||||||||
| (Dollars in thousands) | Average Balance | Average Rate | Average Balance | Average Rate | |||||||||||||||||||
| Interest-bearing demand accounts | $ | 889,495 | 2.28 | % | $ | 807,107 | 2.54 | % | |||||||||||||||
| Negotiable order of withdrawal ("NOW") accounts | 411,173 | 2.16 | 303,167 | 2.51 | |||||||||||||||||||
| Limited access money market accounts and savings | 3,148,245 | 2.85 | 2,601,497 | 3.24 | |||||||||||||||||||
| Certificates and other time deposits > $250k | 794,025 | 3.97 | 783,326 | 4.19 | |||||||||||||||||||
Certificates and other time deposits < $250k | 641,319 | 3.57 | 639,425 | 3.70 | |||||||||||||||||||
| Total interest-bearing deposits | 5,884,257 | 2.95 | 5,134,522 | 3.29 | |||||||||||||||||||
| Noninterest-bearing demand accounts | 1,521,252 | — | 1,296,162 | — | |||||||||||||||||||
| Total deposits | $ | 7,405,509 | 2.34 | % | $ | 6,430,684 | 2.63 | % | |||||||||||||||
The ratio of average noninterest-bearing deposits to average total deposits for the three months ended March 31, 2026, and the year ended December 31, 2025, was 20.5% and 20.2%, respectively.
Federal Funds Purchased Lines of Credit Relationships
We maintain Federal Funds Purchased Lines of Credit Relationships with the following correspondent banks and limits as of March 31, 2026:
| (Dollars in thousands) | Fed Funds Purchase Limits | ||||
| TIB National Association | $ | 45,000 | |||
| PNC Bank | 38,000 | ||||
| FNBB | 35,000 | ||||
| First Horizon Bank | 17,000 | ||||
| ServisFirst Bank | 10,000 | ||||
| Total | $ | 145,000 | |||
We had no outstanding balances on these lines at both March 31, 2026 and December 31, 2025.
Liquidity and Capital Resources
Liquidity
Liquidity involves our ability to utilize funds to support asset growth and acquisitions or reduce assets to meet deposit withdrawals and other payment obligations, to maintain reserve requirements and otherwise to operate on an ongoing basis and manage unexpected events. For the three months ended March 31, 2026, and the year ended December 31, 2025, liquidity needs were primarily met by core deposits, security and loan maturities, and amortizing investment and loan portfolios. In addition, we also utilize, or have available, brokered deposits, purchased funds from correspondent banks, the Federal Reserve discount window, and overnight advances from the FHLB. As of March 31, 2026, and December 31, 2025, we maintained five federal funds purchased lines of credit with correspondent banks which provided for extensions of credit with an availability to borrow up to an aggregate of $145.0 million. There were no funds drawn under these lines of credit at March 31, 2026, and December 31, 2025. We had an additional $1.5 billion and $1.2 billion of availability through the FHLB as of March 31, 2026, and December 31, 2025, respectively. As of March 31, 2026 and December 31, 2025, we had $924.7 million and $967.3 million, respectively, of availability through the Federal Reserve Discount Window.
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As of March 31, 2026, we had outstanding $2.0 billion in commitments to extend credit and $55.9 million in commitments associated with outstanding standby and commercial letters of credit. As of December 31, 2025, we had outstanding $1.7 billion in commitments to extend credit and $51.2 million in commitments associated with outstanding standby and commercial letters of credit. Because commitments associated with letters of credit and commitments to extend credit may expire unused, the total outstanding may not necessarily reflect the actual future cash funding requirements. See “Off Balance Sheet Items” below for additional information.
As of March 31, 2026, and December 31, 2025 we had cash and cash equivalents, including federal funds sold and securities purchased under agreements to resell, of $708.8 million and $609.2 million, respectively. We had no exposure to future cash requirements associated with known uncertainties or capital expenditures of a material nature for either period.
Capital Resources
Total shareholders’ equity increased to $991.2 million as of March 31, 2026, compared to $896.9 million as of December 31, 2025, an increase of $94.3 million, or 10.5%. This increase was primarily due to the acquisition of Progressive of $83.4 million and net income of $23.6 million, offset with other comprehensive losses of $4.6 million resulting from the after-tax effect of unrealized losses in our investment securities portfolio and dividends paid on preferred stock and common stock of $6.2 million.
On April 23, 2026, our Board declared a quarterly dividend in the amount of $18.75 per preferred share to the preferred shareholders of record as of May 15, 2026. The dividend is to be paid on May 29, 2026, or as soon as practicable thereafter.
On April 23, 2026, our Board declared a quarterly dividend based upon our financial performance for the three months ended March 31, 2026, in the amount of $0.15 per common share to the common shareholders of record as of May 15, 2026. The dividend is to be paid on May 29, 2026, or as soon as practicable thereafter.
The declaration and payment of dividends to our shareholders, as well as the amounts thereof, are subject to the discretion of the Board and depend upon our results of operations, financial condition, capital levels, cash requirements, future prospects and other factors deemed relevant by the Board. As a holding company, our ability to pay dividends is largely dependent upon the receipt of dividends from our subsidiary, b1BANK. There can be no assurance that we will declare and pay any dividends to our shareholders.
Capital management consists of providing equity to support current and future operations. Banking regulators view capital levels as important indicators of an institution’s financial soundness. As a general matter, FDIC-insured depository institutions and their holding companies are required to maintain minimum capital relative to the amount and types of assets they hold. We are subject to regulatory capital requirements at the holding company and bank levels. As of March 31, 2026, and December 31, 2025, we and b1BANK were in compliance with all applicable regulatory capital requirements, and b1BANK was classified as “well-capitalized,” for purposes of prompt corrective action regulations. As we employ our capital and continue to grow our operations, our regulatory capital levels may decrease depending on our level of earnings. However, we expect to monitor and control our growth in order to remain in compliance with all applicable regulatory capital standards applicable to us.
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The following table presents the actual capital amounts and regulatory capital ratios for us and b1BANK as of the dates indicated.
As of March 31, 2026 (Unaudited) | As of December 31, 2025 | ||||||||||||||||||||||
| (Dollars in thousands) | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
| Business First | |||||||||||||||||||||||
| Total capital (to risk weighted assets) | $ | 1,017,078 | 13.08 | % | $ | 939,331 | 12.93 | % | |||||||||||||||
| Tier 1 capital (to risk weighted assets) | 875,778 | 11.26 | 799,527 | 11.00 | |||||||||||||||||||
| Common Equity Tier 1 capital (to risk weighted assets) | 794,182 | 10.21 | 722,597 | 9.94 | |||||||||||||||||||
| Tier 1 Leverage capital (to average assets) | 875,778 | 10.03 | 799,527 | 10.08 | |||||||||||||||||||
| b1BANK | |||||||||||||||||||||||
| Total capital (to risk weighted assets) | $ | 998,297 | 12.85 | % | $ | 930,600 | 12.82 | % | |||||||||||||||
| Tier 1 capital (to risk weighted assets) | 929,542 | 11.96 | 872,464 | 12.02 | |||||||||||||||||||
| Common Equity Tier 1 capital (to risk weighted assets) | 929,542 | 11.96 | 872,464 | 12.02 | |||||||||||||||||||
| Tier 1 Leverage capital (to average assets) | 929,542 | 10.62 | 872,464 | 11.01 | |||||||||||||||||||
FHLB Advances
Advances from the FHLB totaled approximately $260.8 million and $431.2 million at March 31, 2026 and December 31, 2025, respectively. As of March 31, 2026, and December 31, 2025, the FHLB advances were collateralized by a blanket floating lien on certain securities and loans, had a weighted average stated rate of 4.14% and 4.02%, respectively, and mature within ten years.
Contractual Obligations
The following tables summarize contractual obligations and other commitments to make future payments as of March 31, 2026, and December 31, 2025 (other than non-maturity deposit obligations), which consist of future cash payments associated with our contractual obligations pursuant to our FHLB advances, subordinated debt, revolving line of credit, and non-cancelable future operating leases. Payments related to leases are based on actual payments specified in underlying contracts. Advances from the FHLB totaled approximately $260.8 million and $431.2 million at March 31, 2026 and December 31, 2025, respectively. As of March 31, 2026, and December 31, 2025, the FHLB advances were collateralized by a blanket floating lien on certain securities and loans, had a weighted average stated rate of 4.14% and 4.02%, respectively, and mature within ten years. Subordinated debt totaled $92.5 million at both March 31, 2026 and December 31, 2025, respectively, including premium. Of this subordinated debt, $25.0 million bears interest at a fixed rate of 6.75% through December 31, 2028 and a floating rate, based on a benchmark rate plus 369 basis points, thereafter through maturity in 2033, $52.5 million of this subordinated debt bears interest at a fixed rate of 4.25% through March 31, 2026 and a floating rate, based on a benchmark rate plus 354 basis points, thereafter through maturity in 2031. During the three months ended March 31, 2025, $7.0 million of this debt was redeemed for a gain of $630,000. We had $3.9 million of this subordinated debt bearing interest at a fixed rate of 4.75% through April 1, 2026 and a floating rate, based on a benchmark rate plus 442 basis points, thereafter through maturity in 2031. We acquired three separate notes as part of the TCBI acquisition totaling $26.4 million. Of those notes, $10.0 million bears an adjustable interest rate plus 350 basis points, based on a benchmark rate, adjusting quarterly until maturity on April 11, 2028, and callable beginning April 11, 2023, $7.5 million bears an adjustable interest rate plus 350 basis points, based on a benchmark rate, adjusting quarterly, until maturity on December 13, 2028, and callable beginning December 13, 2023, and $8.9 million, which was called on May 1, 2023 and ceased bearing interest as of such date. As part of valuing these three subordinated notes from TCBI, we incurred a fair value adjustment premium of $3.4 million that will accrete over five-to-seven years, with $545,000 and $603,000 remaining at March 31, 2026 and December 31, 2025, respectively. We acquired two additional trust preferred securities as part of the Progressive acquisition totaling $5.2 million. Of the trust preferred securities, $4.0 million bears an adjustable interest rate plus 1.45%, based on a benchmark rate, adjusting quarterly, until maturity on December 15, 2037, and $1.2 million bears an adjustable rate plus 3.58%, based on a benchmark rate, adjusting quarterly, until maturity on July 31, 2031. As part of valuing these two trust preferred securities from Progressive, we incurred a fair value adjustment of
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$555,000 and will amortize this over 12 years, with $544,000 remaining at March 31, 2026.
As of March 31, 2026 | |||||||||||||||||||||||||||||
| (Dollars in thousands) (Unaudited) | 1 year or less | More than 1 year but less than 3 years | 3 years or more but less than 5 years | 5 years or more | Total | ||||||||||||||||||||||||
| Non-cancelable future operating leases | $ | 5,807 | $ | 10,285 | $ | 6,906 | $ | 5,700 | $ | 28,698 | |||||||||||||||||||
| Time deposits | 1,122,495 | 240,927 | 9,129 | 11 | 1,372,562 | ||||||||||||||||||||||||
| Subordinated debt | — | 17,500 | 45,500 | 28,927 | 91,927 | ||||||||||||||||||||||||
| Advances from FHLB | 83,155 | 100,825 | 26,812 | 50,000 | 260,792 | ||||||||||||||||||||||||
| Subordinated debt - trust preferred securities | — | — | — | 10,210 | 10,210 | ||||||||||||||||||||||||
| Securities sold under agreements to repurchase | 21,594 | — | — | — | 21,594 | ||||||||||||||||||||||||
| Standby and commercial letters of credit | 52,790 | 3,014 | 70 | — | 55,874 | ||||||||||||||||||||||||
| Commitments to extend credit | 1,322,324 | 481,699 | 97,191 | 89,579 | 1,990,793 | ||||||||||||||||||||||||
| Total | $ | 2,608,165 | $ | 854,250 | $ | 185,608 | $ | 184,427 | $ | 3,832,450 | |||||||||||||||||||
As of December 31, 2025 | |||||||||||||||||||||||||||||
| (Dollars in thousands) | 1 year or less | More than 1 year but less than 3 years | 3 years or more but less than 5 years | 5 years or more | Total | ||||||||||||||||||||||||
| Non-cancelable future operating leases | $ | 5,896 | $ | 10,510 | $ | 7,382 | $ | 6,383 | $ | 30,171 | |||||||||||||||||||
| Time deposits | 1,170,413 | 227,926 | 9,106 | — | 1,407,445 | ||||||||||||||||||||||||
| Subordinated debt | — | 17,500 | — | 74,427 | 91,927 | ||||||||||||||||||||||||
| Advances from FHLB | 256,200 | 100,000 | 25,000 | 50,000 | 431,200 | ||||||||||||||||||||||||
| Subordinated debt - trust preferred securities | — | — | — | 5,000 | 5,000 | ||||||||||||||||||||||||
| Securities sold under agreements to repurchase | 22,622 | — | — | — | 22,622 | ||||||||||||||||||||||||
| Standby and commercial letters of credit | 47,671 | 3,486 | 86 | — | 51,243 | ||||||||||||||||||||||||
| Commitments to extend credit | 1,121,371 | 405,515 | 97,958 | 71,259 | 1,696,103 | ||||||||||||||||||||||||
| Total | $ | 2,624,173 | $ | 764,937 | $ | 139,532 | $ | 207,069 | $ | 3,735,711 | |||||||||||||||||||
Off-Balance Sheet Items
In the normal course of business, we enter into various transactions which, in accordance with U.S. GAAP, are not included in our consolidated balance sheets. We enter into these transactions to meet the financing needs of our customers. These transactions include commitments to extend credit and standby and commercial letters of credit which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated balance sheets.
Our commitments associated with outstanding standby and commercial letters of credit and commitments to extend credit expiring by period as of the date indicated are summarized in the tables above. Because commitments associated with letters of credit and commitments to extend credit may expire unused, the amounts shown do not necessarily reflect the actual future cash funding requirements.
Standby and commercial letters of credit are conditional commitments issued by us to guarantee the performance of a customer to a third party. In the event of nonperformance by the customer, we have rights to the underlying collateral, which can include commercial real estate, physical plant and property, inventory, receivables, cash and/or marketable securities. The credit risk to us in issuing letters of credit is essentially the same as that involved in extending loan facilities to our customers.
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Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Because many of the commitments are expected to expire without being fully drawn upon, the total commitment amounts disclosed above do not necessarily represent future cash requirements. We evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if considered necessary by us, upon extension of credit, is based on management’s credit evaluation of the customer.
Interest Rate Sensitivity and Market Risk
As a financial institution, our primary component of market risk is sensitivity to movement in interest rates. Our asset and liability management policy provides management with the guidelines for effective interest rate risk management, and we have established a measurement system for monitoring our net interest rate sensitivity position. We manage our sensitivity position within our established guidelines.
Fluctuations in interest rates will ultimately impact both the level of income and expense recorded on most of our assets and liabilities, and the market value of all interest-earning assets and interest-bearing liabilities. Interest rate risk is the potential of economic losses due to future interest rate changes. These economic losses can be reflected as a loss of future net interest income and/or a loss of current fair market value of equity. The objective interest rate risk management is to measure the effect on net interest income and fair value of equity and to position the balance sheet to minimize the risk of losses and maximize the amount of income without taking on unnecessary earning volatility.
We seek to manage our exposure to interest rates by structuring our balance sheet in the ordinary course of business; however, we may enter into derivative contracts to hedge interest rate risk if it is appropriate given our risk profile and policy guidelines. Based upon the nature of our operations, we are not subject to foreign exchange or commodity price risk. We do not own any trading assets.
Our exposure to interest rate risk is managed by the asset-liability committee (“ALCO”) of b1BANK, in accordance with policies approved by our board of directors. In determining the appropriate level of interest rate risk, the committee considers the impact on earnings and capital of the current outlook on interest rates, potential changes in interest rates, regional economies, liquidity, business strategies and other factors. The committee meets regularly to review, among other things, the sensitivity of assets and liabilities to interest rate changes, the book and market values of assets and liabilities, unrealized gains and losses, purchase and sale activities, commitments to originate loans and the maturities of investments and borrowings. Additionally, the committee reviews liquidity, cash flow flexibility, maturities of deposits and consumer and commercial deposit activity. Management employs methodologies to manage interest rate risk which include an analysis of relationships between interest-earning assets and interest-bearing liabilities, and an interest rate shock simulation model.
We use interest rate risk simulation models and shock analysis to test the interest rate sensitivity of net interest income and fair value of equity, and the impact of changes in interest rates on other financial metrics. Contractual maturities and re-pricing opportunities of loans are incorporated in the model as prepayment assumptions, maturity data and optionality. Deposit assumptions such as repricing betas and non-maturity balance decay rates are also incorporated into the model. Model assumptions are revised and updated on a regular basis as directed by policy, and more frequently if conditions merit. The assumptions used are inherently uncertain and, as a result, the model cannot precisely measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income. Actual results will differ from the model’s simulated results due to timing, magnitude, and frequency of interest rate changes, as well as changes in market conditions, customer behavior, and the application and timing of various management strategies.
On at least a quarterly basis, we run simulation models to calculate potential impacts to net interest income and the fair value of equity. Specific details of the simulations are reflected in policy as directed by ALCO.
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The following table summarizes the simulated change in net interest income and fair value of equity over a 12-month horizon as of the dates indicated:
As of March 31, 2026 | As of December 31, 2025 | |||||||||||||||||||||||||
| Change in Interest Rates (Basis Points) | Percent Change in Net Interest Income | Percent Change in Fair Value of Equity | Percent Change in Net Interest Income | Percent Change in Fair Value of Equity | ||||||||||||||||||||||
| +300 | 8.58 | % | 0.96 | % | 7.81 | % | (3.73 | %) | ||||||||||||||||||
| +200 | 5.86 | 0.89 | 5.31 | (2.36) | ||||||||||||||||||||||
| +100 | 2.97 | 0.68 | 2.69 | (1.03) | ||||||||||||||||||||||
| Base | — | — | — | — | ||||||||||||||||||||||
| -100 | (2.93) | (0.73) | (2.62) | 0.89 | ||||||||||||||||||||||
| -200 | (5.67) | (1.90) | (5.09) | 1.23 | ||||||||||||||||||||||
The results of the simulations are primarily driven by the contractual characteristics of all balance sheet instruments and customer behavior.
Impact of Inflation
Our consolidated financial statements and related notes included elsewhere in this statement have been prepared in accordance with GAAP. These require the measurement of financial position and operating results in terms of historical dollars, without considering changes in the relative value of money over time due to inflation or recession.
Unlike many industrial companies, substantially all of our assets and liabilities are monetary in nature. As a result, interest rates have a more significant impact on our performance than the effects of general levels of inflation. Interest rates may not necessarily move in the same direction or in the same magnitude as the prices of goods and services. However, other operating expenses do reflect general levels of inflation.
Non-GAAP Financial Measures
Our accounting and reporting policies conform to GAAP, and the prevailing practices in the banking industry. However, we also evaluate our performance based on certain additional non-GAAP financial measures. We classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios, or statistical measures calculated using exclusively either financial measures calculated in accordance with GAAP, operating measures or other measures that are not non-GAAP financial measures or both.
This discussion and analysis section 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, gains/losses on sales of securities, and acquisition-related expenses (including, but not limited to, legal costs, system conversion costs, severance and retention payments, etc.). The measures also typically adjust goodwill and certain intangible assets from book value and shareholders’ equity.
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. You should understand how such other banking organizations calculate their financial metrics or with names similar to the non-GAAP financial measures we have discussed in this statement when comparing such non-GAAP financial measures.
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Core Net Income. Core net income available to common shareholders, which excludes certain income and expenses, for the three months ended March 31, 2026, was $24.0 million, or $0.73 per diluted common share, compared to core net income available to common shareholders of $19.3 million, or $0.65 per diluted common share, for the three months ended March 31, 2025. Notable noncore events impacting earnings for the three months ended March 31, 2026, included acquisition-related expenses $2.2 million, compared to a $155,000 gain on sale of a former bank premises, $630,000 gain on the extinguishment of subordinated debt, offset by $679,000 in acquisition-related expenses and core conversion expenses of $216,000 for the same period in 2025.
For the Three Months Ended March 31, | |||||||||||||||||||||||
| (Dollars in thousands, except per share data) (Unaudited) | 2026 | 2025 | |||||||||||||||||||||
| Interest Income: | |||||||||||||||||||||||
| Interest income | $ | 122,494 | $ | 113,693 | |||||||||||||||||||
| Core interest income | 122,494 | 113,693 | |||||||||||||||||||||
| Interest Expense: | |||||||||||||||||||||||
| Interest expense | 47,299 | 47,710 | |||||||||||||||||||||
| Core interest expense | 47,299 | 47,710 | |||||||||||||||||||||
| Provision for Credit Losses: | |||||||||||||||||||||||
| Provision for credit losses | 2,278 | 2,812 | |||||||||||||||||||||
| Core provision expense | 2,278 | 2,812 | |||||||||||||||||||||
| Other Income: | |||||||||||||||||||||||
| Other income | 14,050 | 13,226 | |||||||||||||||||||||
| Gains on former bank premises and equipment | (28) | (155) | |||||||||||||||||||||
| (Gains) losses on sale of securities | (80) | 1 | |||||||||||||||||||||
| Gain on extinguishment of debt | — | (630) | |||||||||||||||||||||
| Core other income | 13,942 | 12,442 | |||||||||||||||||||||
| Other Expense: | |||||||||||||||||||||||
| Other expense | 57,471 | 50,578 | |||||||||||||||||||||
| Acquisition-related expenses (2) | (2,227) | (679) | |||||||||||||||||||||
| Core conversion expenses | — | (216) | |||||||||||||||||||||
| Core other expense | 55,244 | 49,683 | |||||||||||||||||||||
| Pre-Tax Income: | |||||||||||||||||||||||
| Pre-tax income | 29,496 | 25,819 | |||||||||||||||||||||
| Gains on former bank premises and equipment | (28) | (155) | |||||||||||||||||||||
| (Gains) losses on sale of securities | (80) | 1 | |||||||||||||||||||||
| Gain on extinguishment of debt | — | (630) | |||||||||||||||||||||
| Acquisition-related expenses (2) | 2,227 | 679 | |||||||||||||||||||||
| Core conversion expenses | — | 216 | |||||||||||||||||||||
| Core pre-tax income | 31,615 | 25,930 | |||||||||||||||||||||
| Provision for Income Taxes: (1) | |||||||||||||||||||||||
| Provision for income taxes | 5,932 | 5,276 | |||||||||||||||||||||
| Tax on gains on former bank premises and equipment | (6) | (33) | |||||||||||||||||||||
| Tax on (gains) losses on sale of securities | (17) | — | |||||||||||||||||||||
| Tax on gain on extinguishment of debt | — | (133) | |||||||||||||||||||||
| Tax on acquisition-related expenses (2) | 319 | 143 | |||||||||||||||||||||
| Tax on core conversion expenses | — | 46 | |||||||||||||||||||||
| Core provision for income taxes | 6,228 | 5,299 | |||||||||||||||||||||
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| Preferred Dividends | |||||||||||||||||||||||
| Preferred dividends | 1,350 | 1,350 | |||||||||||||||||||||
| Core preferred dividends | 1,350 | 1,350 | |||||||||||||||||||||
| Net Income Available to Common Shareholders: | |||||||||||||||||||||||
| Net income available to common shareholders | 22,214 | 19,193 | |||||||||||||||||||||
| Gains on former bank premises and equipment, net of tax | (22) | (122) | |||||||||||||||||||||
| (Gains) losses on sale of securities, net of tax | (63) | 1 | |||||||||||||||||||||
| Gain on extinguishment of debt, net of tax | — | (497) | |||||||||||||||||||||
| Acquisition-related expenses (2), net of tax | 1,908 | 536 | |||||||||||||||||||||
| Core conversion expenses, net of tax | — | 170 | |||||||||||||||||||||
| Core net income available to common shareholders | $ | 24,037 | $ | 19,281 | |||||||||||||||||||
| Diluted Earnings Per Common Share: | |||||||||||||||||||||||
| Diluted earnings per common share | $ | 0.68 | $ | 0.65 | |||||||||||||||||||
| Gains on former bank premises and equipment , net of tax | — | — | |||||||||||||||||||||
| (Gains) losses on sale of securities, net of tax | — | — | |||||||||||||||||||||
| Gain on extinguishment of debt, net of tax | — | (0.02) | |||||||||||||||||||||
| Acquisition-related expenses (2), net of tax | 0.05 | 0.02 | |||||||||||||||||||||
| Core conversion expenses, net of tax | — | — | |||||||||||||||||||||
| Core diluted earnings per common share | $ | 0.73 | $ | 0.65 | |||||||||||||||||||
____________________________
(1)Tax rates, exclusive of certain nondeductible acquisition-related expenses and goodwill, utilized were 21.129% for both 2026 and 2025. These rates approximate the marginal tax rates for the applicable periods.
(2)Includes merger and conversion-related expenses and salary and employee benefits.
Tangible Book Value Per Common Share. Tangible book value per common share is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate (1) tangible common equity as shareholders’ equity less preferred stock, goodwill, and core deposit and customer intangible assets, net of accumulated amortization, and (2) tangible book value per common share as tangible common equity divided by shares of common stock outstanding. The most directly comparable GAAP financial measure for tangible book value per common share is book value per common share.
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The following table reconciles, as of the dates set forth below, total shareholders’ equity to tangible common equity and presents tangible book value per common share compared to book value per common share:
| (Dollars in thousands, except per share data) (Unaudited) | As of March 31, 2026 | As of December 31, 2025 | |||||||||
| Tangible Common Equity | |||||||||||
| Total shareholders' equity | $ | 991,176 | $ | 896,883 | |||||||
| Preferred stock | (71,930) | (71,930) | |||||||||
| Total common shareholders' equity | 919,246 | 824,953 | |||||||||
| Adjustments: | |||||||||||
| Goodwill | (133,564) | (121,146) | |||||||||
| Core deposit and customer intangibles | (29,409) | (14,497) | |||||||||
| Total tangible common equity | $ | 756,273 | $ | 689,310 | |||||||
| Common shares outstanding (1) | 32,624,887 | 29,510,668 | |||||||||
| Book value per common shares (1) | $ | 28.18 | $ | 27.95 | |||||||
| Tangible book value per common shares (1) | 23.18 | 23.36 | |||||||||
____________________________
(1)Excludes the dilutive effect, if any, of 205,620 and 149,240 shares of common stock issuable upon exercise of outstanding stock options and restricted stock awards as of March 31, 2026 and December 31, 2025, respectively.
Tangible Common Equity to Tangible Assets. Tangible common equity to tangible assets is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate tangible common equity, as described above, and tangible assets as total assets less goodwill, core deposit and customer intangible assets, net of accumulated amortization. The most directly comparable GAAP financial measure for tangible common equity to tangible assets is total common shareholders’ equity to total assets.
The following table reconciles, as of the dates set forth below, total shareholders’ equity to tangible common equity and total assets to tangible assets:
| (Dollars in thousands, except per share data) (Unaudited) | As of March 31, 2026 | As of December 31, 2025 | |||||||||
| Tangible Common Equity | |||||||||||
| Total shareholders' equity | $ | 991,176 | $ | 896,883 | |||||||
| Preferred stock | (71,930) | (71,930) | |||||||||
| Total common shareholders' equity | 919,246 | 824,953 | |||||||||
| Adjustments: | |||||||||||
| Goodwill | (133,564) | (121,146) | |||||||||
| Core deposit and customer intangibles | (29,409) | (14,497) | |||||||||
| Total tangible common equity | $ | 756,273 | $ | 689,310 | |||||||
| Tangible Assets | |||||||||||
| Total Assets | $ | 8,906,808 | $ | 8,214,740 | |||||||
| Adjustments: | |||||||||||
| Goodwill | (133,564) | (121,146) | |||||||||
| Core deposit and customer intangibles | (29,409) | (14,497) | |||||||||
| Total tangible assets | $ | 8,743,835 | $ | 8,079,097 | |||||||
| Common Equity to Total Assets | 10.3 | % | 10.0 | % | |||||||
| Tangible Common Equity to Tangible Assets | 8.6 | 8.5 | |||||||||
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
Risk identification and management are essential elements for the successful management of our business. In the normal course of business, we are subject to various types of risk, including interest rate, credit, and liquidity risk. We control and monitor these risks with policies, procedures, and various levels of managerial and board oversight. Our objective is to optimize profitability while managing and controlling risk within board approved policy limits. Interest rate risk is the sensitivity of net interest income and the market value of financial instruments to the magnitude, direction, and frequency of changes in interest rates. Interest rate risk results from various repricing frequencies and the maturity structure of assets and liabilities. We use our asset liability management policy to control and manage interest rate risk. See Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Interest Rate Sensibility and Market Risk” for additional discussion of interest rate risk.
Liquidity risk represents the inability to generate cash or otherwise obtain funds at reasonable rates to satisfy commitments to borrowers, as well as, the obligations to depositors. We use our asset liability management policy and contingency funding plan to control and manage liquidity risk.
Credit risk represents the possibility that a customer may not perform in accordance with contractual terms. Credit risk results from extending credit to customers, purchasing securities, and entering into certain off-balance sheet loan funding commitments. Our primary credit risk is directly related to our loan portfolio. We use our credit policy and disciplined approach to evaluate the adequacy of our allowance for credit losses to control and manage credit risk. Our investment policy limits the degree of the amount of credit risk that we may assume in our investment portfolio. Our principal financial market risks are liquidity risks and exposures to interest rate movements.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our principal executive officer and principal financial officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a – 15(e) and 15d – 15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Report. Based on such evaluation, our principal executive officer and principal financial officer concluded our disclosure controls and procedures were effective as of the end of the period covered by this Report to provide reasonable assurance that the information we are required to disclose in reports that are filed or furnished under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, including to ensure that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. The effectiveness of our, or any, system of disclosure controls and procedures is subject to certain limitations, including the exercise of judgment in designing, implementing and evaluating the controls and procedures, the assumptions used in identifying the likelihood of future events, and the inability to eliminate misconduct completely. As a result, we cannot assure you that our disclosure controls and procedures will detect all errors or fraud.
Changes in Internal Controls over Financial Reporting
There were no changes in our internal control over financial reporting during the period covered by this Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we are a party to claims and legal proceedings arising in the ordinary course of business. Management evaluates our exposure to these claims and proceedings individually, and in the aggregate, and provides for potential losses on such litigation if the amount of the loss is estimable and the loss is probable. We are not currently involved in any pending legal proceedings other than routine, nonmaterial proceedings occurring in the ordinary course of business.
Item 1A. Risk Factors
In addition to the other information set forth in this Report, we refer you to Item 1A. “Risk Factors” of our Annual Report on Form 10-K for December 31, 2025, filed with the SEC. There have been no material changes in the risk factors disclosed in our Annual Report on Form 10-K for December 31, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a)Not applicable.
(b)Not applicable.
(c)On October 28, 2025, our board of directors approved a stock repurchase program which authorized Business First to repurchase shares of its common stock with an aggregate purchase price of up to $30.0 million from time to time, subject to certain limitations and conditions. The stock repurchase program became effective immediately and will continue until October 28, 2027. The stock repurchase program does not obligate Business First to repurchase any shares of its common stock.
Business First repurchased 99,105 shares for $2.7 million under the 2025 stock repurchase program between January 1, 2026 and March 31, 2026.
Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number (or approx. dollar value) of shares yet to be purchased under the plan (in thousands) | ||||||||||
January 1 through January 31, 2026 | — | $ | — | — | $ | 26,269 | ||||||||
February 1 through February 28, 2026 | 61,656 | 27.80 | 61,656 | 24,555 | ||||||||||
March 1 through March 31, 2026 | 37,449 | 27.67 | 37,449 | 23,519 | ||||||||||
TOTAL | 99,105 | $ | 27.75 | 99,105 | $ | 23,519 | ||||||||
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(a)Not applicable.
(b)Not applicable.
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(c)During the three months ended March 31, 2026, no director or officer of the Company adopted terminated
Item 6. Exhibits
| Number | Description | ||||
| 2.1 | Agreement and Plan of Reorganization, dated July 7, 2025, by and between Business First Bancshares, Inc., and Progressive Bancorp, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Business First Bancshares, Inc. on July 7, 2025). | ||||
| 3.1 | Restated Articles of Incorporation of Business First Bancshares, Inc., adopted October 27, 2022 (incorporated by reference to Exhibit 3.1 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed by Business First Bancshares, Inc. on November 3, 2022). | ||||
| 3.2 | Amended and Restated Bylaws of Business First Bancshares, Inc., adopted April 23, 2020 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed by Business First Bancshares, Inc. on April 28, 2020). | ||||
| 4.1 | Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-4 filed by Business First Bancshares, Inc. on November 12, 2014). | ||||
| 4.2 | Form of Series A Preferred Stock (incorporated by reference to Exhibit A to Exhibit 10.1 to the Current Report on Form 8-K filed by Business First Bancshares, Inc. on September 1, 2022). | ||||
| 10.1 | Form of Subordinated Note Purchase Agreement dated April 2, 2026 by and among Business First Bancshares, Inc. and the Purchasers named therein (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Business First Bancshares, Inc. on April 2, 2026). | ||||
| 31.1 | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | ||||
| 31.2 | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | ||||
| 32.1 | Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* | ||||
| 101.INS | Inline XBRL Instance Document* | ||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document* | ||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document* | ||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document* | ||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document* | ||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document* | ||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | ||||
____________
*Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant hereby duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| BUSINESS FIRST BANCSHARES, INC. | |||||
| May 1, 2026 | /s/ David R. Melville, III | ||||
| David R. Melville, III | |||||
| Chairman, President and Chief Executive Officer | |||||
| May 1, 2026 | /s/ Gregory Robertson | ||||
| Gregory Robertson | |||||
| Chief Financial Officer | |||||
61
FAQ
How did Business First Bancshares (BFST) perform financially in Q1 2026?
Business First Bancshares generated higher earnings in Q1 2026, with net income available to common shareholders of $22.2 million, up from $19.2 million a year earlier. Earnings per share increased to $0.68, reflecting both organic growth and the impact of the Progressive acquisition.
What were Business First Bancshares’ key balance sheet figures for March 31, 2026?
As of March 31, 2026, Business First Bancshares reported $8.9 billion in total assets, $6.7 billion in total loans held for investment, and $7.5 billion in total deposits. Shareholders’ equity was $991.2 million, supporting a book value per common share of $28.18.
How did the Progressive Bancorp acquisition affect BFST’s Q1 2026 results?
The Progressive Bancorp acquisition, completed January 1, 2026, added $773.8 million in assets, $597.2 million in loans, and $684.9 million in deposits at closing. Business First issued 3,192,367 common shares valued at about $83.4 million, contributing to loan, deposit, and revenue growth.
What is Business First Bancshares’ asset quality and reserve position as of Q1 2026?
At March 31, 2026, the allowance for credit losses was 1.03% of total loans held for investment, up from 0.94% at year-end 2025. Nonperforming loans represented 1.53% of total loans, compared with 1.24% at December 31, 2025, indicating somewhat higher credit stress.
What capital and funding actions did Business First Bancshares take around Q1 2026?
On April 2, 2026, after quarter-end, Business First completed an $85.0 million private placement of subordinated notes due 2036 with a 6.50% fixed-to-floating rate. Proceeds were used to redeem $66.9 million of subordinated notes, support b1BANK’s capital, fund growth, and repay other borrowings.
How did net interest income and net interest margin trend for BFST in Q1 2026?
Net interest income rose to $75.2 million in Q1 2026, up 14.0% from Q1 2025. Net interest margin was 3.65%, slightly below 3.68% a year earlier, as higher interest-earning asset volumes offset some margin compression from funding costs.
What strategic technology initiatives did Business First Bancshares announce in early 2026?
On February 17, 2026, Business First announced a partnership with Covecta to deploy agentic AI across daily workflows. The initiative targets automation of repeatable, policy-driven tasks in deposit and loan operations, aiming to reduce manual work and enhance staff focus on analysis and customer engagement.