Business First Bancshares, Inc. · NASDAQ:BFST
Business First Bancshares — Debt Investor Presentation (March 2021)
43 slides from Business First Bancshares's debt investor presentation, Mar 26, 2021
Slide 1: Private Placement of Subordinated Notes
Slide 2: Table of Contents
Table of Contents Legal Disclosures Terms of Proposed Private Placement Executive Management Guiding Principles Business First Bancshares, Inc. Overview Investment Highlights. Financial Data COVID-19 Ongoing Pandemic Response Loan Portfolio. Stable Credit Performance. Recent Developments Appendix 3-
Slide 3: Legal Disclosures
Legal Disclosures le Special Note Concerning Forward-Looking Statements This investor presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act made pursuant to the safe harbor provisions of the Private Securities L
Slide 4: Legal Disclosures
Legal Disclosures Offering Disclaimer Any offering of securities may be made only by a purchase agreement and the information contained herein will be superseded in its entirety by such purchase agreement. This investor presentation does not contain all of the information you should consider before
Slide 5: Terms of Proposed Private Placement
Terms of Proposed Private Placement Issuer Business First Bancshares, Inc. (Nasdaq: BFST) Security Type Fixed-to- Floating Rate Subordinated Notes due 2031 Principal Amount $50.0 million Coupon Initial Fixed Rate [TBD] for 5 Years Floating on 90-day average SOFR + [Spread TBD] (floating spread TBD,
Slide 6: Executive Management
Jude Melville Director, President and CEO Age: 46 Years of Experience: 16 Year Started at BFST: 2006 Philip Jordan EVP, Chief Banking Officer Keith Mansfield EVP, Chief Operations Officer Ages 44. 1 of Experience: 23 EVP, Chief Human Resources Officer Ages 44. Years of Experience: 22 Year Started at
Slide 7: Guiding Principles
making bu ar culture, driv ay-to-day interacti y and with our client: 1 positive impact on the communities Forbes BEST-N-STATE Powered by STATISTA IN BATON ROUGE
Slide 8: Business First Bancshares, Inc. Company Overview
Business First Bancshares, In Company Overview Ticker: BFST (NASDAQ) Headquarters: Baton Rouge, Louisiana Franchise Highlights: * Geographically diversified portfolio across I-10 and |-20 corridors + #1 deposit market share in Louisiana for Louisiana-head quartered community banks + Two DFW metrople
Slide 9: Priority: Healthy Growth
Priority: Healthy Growth Expanded into New Orleans DFW, Foundation Buildin listed on NASDAQ: BFST, Priority: Health completed institutional investor-le Strengthening of balance sheet, equity and debt raises, comp! nevelonmentcy four mergers. processes/procedures, prioritization of regulatory relatio
Slide 10: Regional Overview and Market Presidents
Dallas Fort Worth Region z 7 , : North Louisiana Region # of Banking Centers: ” # of Banking Centers: 10 Total Loan: Total Deneck Total Loans: $603.5 Pi Total Deposit $765.9 Market President: Jason Siegele Age: 44 Market President: Chad Carter Years in Banking: 23 Age: 37 Year Started at BFST: 2006
Slide 11: Investment Highlights
Investment Highlights . * Disciplined and experienced management team po ned for growth Experienced 25 average years of experience Leadership * 47 average age of key executives 0.48% Exceptional Credit Quality of 0.05% * Trailing 3 * LLRres at average NCOs / Average Lo rage (excl. PPP) of 2.12%", in
Slide 12: Record Financial Results in FY 2020
Record Financial Results in FY 2020 le Transformative FY 2020 Gross Loans Total Deposits Loan growth of $1.28 billion, or 75%, driven by Pedestal acquisition, PPP lending, and 2020 organic loan growth of 6.29% $3,616.7 $173.9 $1,782.0 Deposit growth of $1.84 billion, or 103%, driven by: 2oiey 2017 -
Slide 13: Quarterly Financial Highlights
uarterly Financial Highlights . For the Quarter Ended, iow ——_ 907020 _ 30/2020. _3/3472020 1273472019 Diluted Earnings per Common Share $0.67 $0.46 $0.11 $0.34 $0.42 ROAA 1.37 % 098 % 023 % 080 % 1.04 % ROAE 13.86 9.85 236 631 8.18 Net Interest Margin 4.26 4.06 3.89 3.93 4.08 Efficiency Ratio 60.27
Slide 14: Q4'20 Balance Sheet Highlights
| Q4'20 Balance Sheet Highlights | Balance Sheet Highlights Change vs Highlights For the quarter ended, $ millions 12/31/2020" 9/30/2020__12/31/2019 Gross Loans (Excl. HFS) $2,091.4 3% 75% ALLL + Fair Value Discount on Acquired Loans $57.6 2% 268% Investment Securities $640.6 17% 130% Deposits $3,.6
Slide 15: Yield / Rate Analysis
Id / Rate Analysis Loans (12/31/20) Yield excludes SBA PPP Loans SBA PPP Yield of 4.66% (inclusive of fees) 582% ( ) 600% wes so1% 5.65% sox 37% variable rate portfolio + 49.4% of variable rate loans havea 5.00% floor of 4% or higher 4.08% 4.06% ace 63% fixed rate portfolio with a weighted 400% a 20
Slide 16: Noninterest Expense Detail
Noninterest Expense Detail . FY 2020 Noninterest Expense Composition Other 20.6% Utilities ane Communications — 2.0% Legal and Other Professional Fees 2.23% Data Processing 5.7% Salaries and Employee Benefits 59.256 Depreciation and ‘Amortization re Occupancy of Bank Premises 5.5% 0 Net NE fg Ascot
Slide 17: Increasing Liquidity
Increasing Liquidity le © $466.8 million, or “75% of total CDs, will reprice within the iquidity Sources (12/31/20 next 12-months®, providing opportunity to further reduce cost FHLB Borrowings Capacity $ 1,033 of funds and improve the funding profile Uneneumbered‘Secinities $ 339 Cash Reserves $ 225
Slide 18: Deposit Composition
Deposit Composition ® Success in increasing transaction deposits has improved cost of funds, allowing for stability in core net interest margin excluding purchase accounting accretion ® Core deposits (excl. jumbo CDs) represent 93.9% of total deposits (as of 12/31/20) ® Time deposits have decreased
Slide 19: Securities Portfolio
® Portfolio’s main purpose is to serve as a source of on balance sheet liquidity 100% of securities are classified as available for sale (AFS) $640.6 million in securities AFS, primarily concentrated in agency MBS and municipal securities Q4’20 weighted average yield of 1.71% - Weighted average life
Slide 20: COVID-19 Ongoing Pandemic Response
@ COVID-19 Deferral Assistance Program Only $3.3 million in COVID-19 deferred loans still remain inthe deferral period (0.5% of original Deferral Assistance Program balances). Remaining loan balances represent an immaterial percentage ofthe total loan portfolio In addition to the Deferral Assistance
Slide 21: Loan Portfolio Composition
Home Equity Farmland, Muttiamily, Loans, 2.8% 2.1% Commercial, 1-4 Family, 14.7% _ NOOCRE, Construction & Land, 15.1% OOCRE, 17.9% Note: La compton based on rgltory dite and ealadee SEA PPP lat ax of December 3 2020, 18.6% COMMERCIAL Outstanding: $578 million Unfunde $320 million Average Loan: $178
Slide 22: Loan Composition: Commercial
Loan Composition: Commercial ‘Commercial Loans By Collateral Cash/Securities, 6.6% ARR Inventory, 32.5% ll other, 14.8% Titled Collateral, 16.9% Equipment, 23.9% 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% Weighted average maturity of Commercial portfolio is 2.75 years Line of Credit usage monitoring
Slide 23: Loan Composition: Commercial Real Estate
Loan Composition: Commercial Real Estate Owner — Occupied CRE makes up approximately 49% of total CRE lending C&D and Total CRE concentrations of 106% and 262%, respectively!” CRE Conpostion - Owner Occupied CRE Conpostion - Income Produchg 74% 266 cay 38% 11.0% Frac 1a 43% 33.288 73% CAD arfoio ‘Qu
Slide 24: Sectors in Focus
Retail, 8.6% Oil and Gas, 7.6% Hotel and Motels, 3.1% Food and Drink Services, 2.3% Other Hospitality, 1.2% Loan portfolio sectors of internal focus determined by current market conditions * Oil & Gas volatility * Economic uncertainty related to COVID All Others, 77.2% Outstanding %of Total Average
Slide 25: Sectors in Focus: Oil and Gas Lending
Sectors in Focus: Oil and Gas Lending Oil and Gas Loans By Function Other, 9.8% Repairs & Maintenance, 17.9% Construction, 10.0% ALLL + Fair Value Discount on Acquired Loans for Oil and Gas loans totals $13.7 million * 7% of Oil and Gas Portfolio balances ® $11.8 million is related to Pedestal loans
Slide 26: Sectors in Focus: Retail Lending
Sectors in Focus: Retail Lending Retail Retail non CRE, 8.2% Single Tenant, No significant concentrations across the portfolio Multi-Tenant, non 58.2% Approximately 60.8% of Single Tenantis owner-occupied Outstanding %of Total Average a 5 i 9 pala Loans Loan Size Past Due $" PastDue % NPLS” —NPL% Si
Slide 27: Sectors in Focus: Hospitality Lending
Sectors in Focus: Hospitality Lending le Hotels and Motels Food and Drink Services NonFlagged Bars, Taverns, Hotels & Motels, Restaurant PUPS: 3.7% Caterers,0.3% 9.9% Suppliers, 3.9% Short-Term, Stay/Bed& Breakfast, 10.0% Full-Service Restaurants, 48.3% Limited Service Restaurants, 43.8% Flagged Hot
Slide 28: Stable Credit Performance
Stable Credit Performance le Past Due Loans() eae Nonperforming Loans‘) 0.57% 4ai9 1020 2020 3020 4020 sais 1020 2020 3020 4020 Past Due Loans to Total Loans OPast Due Loans lB Nonperforming Loans to Total Loans ONPLs ALLL & FV Discount?) Net Charge-offs 2.07% 1.88% 0.03% 4039 1020 2020 3020 4020 40
Slide 29: Recent Developments — Smith Shellnut Wilson, LLC Acquisition
Recent Developments — Smith Shellnut Wilson, LLC Acqu Transaction Overview On March 9, 2021, bIBANK, the wholly-owned subsidiary of Business First Bancshares, Inc. (“BFST”), entered into a definitive Purchase and Sale agreement with Smith Shellnut Wilson, LLC (“SSW”), whereby b1BANK will acquire 100
Slide 30: Appendix
Slide 31: Interest Rate Sensitivity
Interest Rate Sen ity adual 12-Month hock Impact on Net Interest Income 3.4% 55% 25% 2.8% 2.6% 2.8% = a ne +300 bps 4200 bps +100 bps Base radual 12-Mo! jock Impact on Economic Value of Equity 2020 2019 3.8% 23% 2.5% 23% 1.6% || |_| |_| — i — +300 bps 4200 bps +100 bps Base Nolo: bow anahoi rcs aint
Slide 32: Capital Ratios
Capital Ratios le TCE / TA (Consolidated Hold Co.)() CET1 Ratio 1 s i i 1 ee os ' I i : " | I : 1 1 i 1 i i} 1 1 a. ; ney mews wyewaT ALS Lis 12/24/20 norma g ways mews ayaa? ALS Kis An//20 solidsted MBank level Tier 1 Leverage Ratio (CBLR) Total Risk-Based | _‘Total Risk-Based Capital Ratio Ratio 1
Slide 33: Pro Forma Capital
Pro Forma Capita Consolidated Adjustments ‘Actual ye Pro Forma 12/31/20 Capital Infusion Borrowings 12/31/20 Common Equity Before Adjustments $ 409,963 $ - $ - $ 409,963, Less: Goodwill & Intangible Assets, Net 63,620 - - 63,620 Less: Unrealized Gains / (Losses) 10,628 - - 10,628 Estimated Common Eq
Slide 34: Pro Forma Capital: Bank Level
Pro Forma Ca Bank Level . Proposed Pro Forma — Infusion 12/31/20 Common Equity Before Adjustments 432,331 40,000 $ 472,331 Less: Goodwill & Intangible Assets, Net 63,620 - 63,620 Less: Unrealized Gains / (Losses) 10,628 - 10,628 Estimated Common Equity Tier 4 $ 358,083 $ 40,000 $ 398,083 Other Tier
Slide 35: Historical Double Leverage and Interest Coverage
Historical Double Leverage and Interest Coverage le Pre-Tax Income Interest Coverage Po Annual Proforma? _| Annual 2020] Quarter G420 Total Investment in Subsidiaries s 300,122 § 432,486 S 422.486 | 8 472,486 S 472,486 Holding Company Total Equity s 285,097 409,963 S 409,963 | $ 409,963 S 409,963 Do
Slide 36: Selected Financial Data, Fiscal Years 2015-2020
For the Fiscal Year Ended December 31, 2015 2016 2017 2018 2019 2020 Balance Sheet & Capital Total Assets $1,076,089 $1,105,841 $1,321,256 $2,094,896 $2,273,835 ‘$4,160,360 Gross Loans (Excl. HFS) 772,392 810,951 975,284 1,828,469 1,710,265 2.991355 Deposits 904,236 932,795 1,055,533 1,733,934 4,782
Slide 37: Real Estate — Historical Performance
Real Estate — Historical Performance Q415 Q416 Q417 Q418 Q419 Q4'20 Construction - 1-4 Family Residential $25,032 29.683 $ 37,565 $ 55,485 $ 60,780 $ 68,503 JOther Const, Development, Vacant Land & Lots 72,840 64,742 105,970 155,569 183,401 334,562 ‘Total Construction 97,872 94,425 143,535 211,054 2
Slide 38: Oil and Gas Lending — Historical Performance
Oil and Gas Len istorical Performance Q415 Q416 417) 418 419 Q4'20 Upstream $ 6,305 $ 13878 $ 14392 $ 17,742 $ 12530 $ 9639 $ 2,305 Midstream 16,072 17,422 35,024 25,490 18,148, 6518 > 1,669, [Downstream 13.279 14.248 11,766 10.144 8,578 4511 $ 467 |Support / Services 77,520 79,313 73,142 70,765 86,
Slide 39: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ‘Core Net income, ROA. NM For the Year Ended December3t, L205 | zc [7 | oe [ois | 20] 0120 0370 270 Core Net Income: Net Income S 4098 S AIM S 4848 S 14081 S 2a72 S mess SST S 4499 5 20 S$ ge09 S 1383 Adjustments" Sale of Impaired Crect $s - 8 - $ “aps @
Slide 40: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures BSS Sear SSS) Pasig fT at20 [220] 320 | as'20 | Tangible Common Equity / Tangible Assets: ‘Tangible Common Equity Total Shareholders’ Equity $ 285,097 $ 282,020 $ 386,336 $ 398,086 $ 409,963 Adjustments: Goodwill (48,495) (48,495) (53,649) (63,627) (53,8
Slide 41: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures . _FortheYearEndedDecember34, P2015 2016 2017 201820192020 Tangible Common Equity / Tangible Assets: Tangible Common Equity Total Shareholders’ Equity $ 112,449 $ 113,859 $ 179,935 $ 260,058 $ 285,097 $ 409,963 Adjustments: Goodwill (3,376) (6,824) (6,82
Slide 42: Reconciliation of Non-GAAP Financial Measures
‘ion of Non-GAAP Financial Measures le Efficiency Ratio FortheYearEndedDecember31, === Fiscal Quarter, = P2019 2020 asia | ar'20 | az20 ] asi20 | as'20 Core Efficiency Ratio: Noninterest Expense s 58448 100993 $ 15,203 $ 16643 $ 27,797 $ 26,951 $ 29.602 Core Adjustments $ (837) $ (9.630) $ (76) $ (1
Slide 43: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Core Pre-tax, Pre-provision Earnings, Core PTPPAA Q4'19 02°20 Q3'20 Q4'20 Core pre-tax, pre-provision earnings: Pre-tax, pre-provision earnings $ 7680 $ 6372 $ 8118 $ 14198 $ 19,529 Adjustments: Sale of Impaired Credit $ - $ - $ - $ - $ - (Gain)/Loss For
Business First Bancshares — Debt Investor Presentation (March 2021) on 6ix