Business First Bancshares, Inc. · NASDAQ:BFST
Business First Bancshares — Raymond James U.S. Bank Conference 2018
34 slides from Business First Bancshares's conference presentation, Aug 29, 2018
Slide 1: Business First Bancshares, Inc. Raymond James U.S. Bank Conference
FILED BY BUSINESS FIRST BANCSHARES, INC. PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933 AND DEEMED FILED PURSUANT TO RULE 14a-12 UNDER THE SECURITIES EXCHANGE ACT OF 1934 Filing Company: Business First Bancshares, Inc ‘Subject Company: Richland State Bancorp, Inc. Registration No. 333-227085
Slide 2: Legal Disclosure
Legal Disclosure “This presentation has been prepared by Business First Bancshares, Inc. (the “ Company’) solely for information purposes based on its oun information, ‘as well as information from public sources. This presentation has been preparédto assist interested parties in making thelr oun eva
Slide 3: Legal Disclosure (Cont'd)
Legal Disclosure (Cont'd) Forward-looking statements are based on the information known to, and current beliefs and expectations of, he Company's management and are subject to significant risks and uncertainties. Actual resulls may differ materially rom those contemplated by such forward-looking Sta
Slide 4: Overview of Business First Bancshares, Inc.
Overview of Business First Bancshares, Inc.
Slide 5: Overview of Business First Bancshares, Inc.
Overview of Business First Bancshares, Inc. Founded in 2006; headquartered in Baton Rouge, LA * Commercial bank focused on small-to-midsize businesses and their owners and employees Currently operating in nine Louisiana markets and Dallas, TX ‘Two successful acquisitions since 2015 ‘American Gateway
Slide 6: Our Operating Philosophy Has Been Consistent Since Day One
Our Operating Philosophy Has Been Consistent Since Day 1 Recruiting and “High Tech/ Disciplined ‘Commercial Focus] Retaining Talented High Touch” Ex sere Criteria Bankers Model Pi * Small-to-midsize ~ Experienced and empowered “Branch lite" model In its first 10 years, Business businesses and their
Slide 7: Executive Management Team
Executive Management Team Executive team includes a mix of youth and experience which fosters an energetic and collaborative work environment Geographic diversification amongst executive management team Years Year Started Age Banking at BF Jude Melville 43 13 2006 Director, President and Chief Execu
Slide 8: Market Presidents
Market Presidents + Business First's Market Presidents have diversified experience at a mix of large, regional and community banks + Market Presidents serve as important conduits between executive management and the local markets Market Years in Age Banking Started Prior Exper ma fost Baton Rouge ti
Slide 9: Corporate History
Corporate History 2018: 2016: ‘i ‘Opened new headquartersin | | NaSpAcon downtown Baton Rouge April 9 under 2006: 2008: 2010: Bank opened in Expanded Expanded 2015: 2017: Baton Rouge; into the into the ‘Acquired American Expanded expanded into the | | Lafayette Houma Gateway Financial in into Dallas
Slide 10: Current Footprint
Current Footprint Statewide focus on urban markets ‘Multiple markets provide diversification of both risk and production opportunities Year #of #of Total Market Entered Facilities __ Bankers" Loans East Baton Rouge 2006 EZ 16 $264,008 $298,569 ‘Shreveport 2006 1 i 201,224 103,552 Northshore 2007 1 4
Slide 11: Recent Financial Results — Strong FY 2017 & YTD 2018
Recent Financial Results — Strong FY 2017 & YTD 2018 + FY 2017: Strong Organic Growth = Loan growth of 20.39% Core deposit growth of $137 milion, or 18.0% Core deposit growth essentially matched loan growth for 2H'17 PTPP income growth of 66.09% Core NIM expansion of 13 bps Operating leverage contri
Slide 12: Quarterly Financial Trends
Quarterly Financial Trends Feeoce Shc il Toubseres sisexr susan simize siz ‘sso Gress es (et IF) ‘aoe! ey wome ‘a7 as00 Beste sae ‘ana er ninco S016 Toten Ee) est ‘roses ‘moe eee Tara Common Tangle ast!” on % aa ‘08% ane ane “Taras Soa vibe Per Se ‘sor saa ster sen suas Netto (et Asses aa nee 718% n
Slide 13: Loan Portfolio
Loan Portfolio Commercial lending is primary focus, with C&l representing 22% and Owner Occupied CRE representing 18% Recent acquisitions have provided portfolio diversification Energy concentration has decreased from 19.8% of total loans in Q1'18 to 10.7% in. Q218 * Average funded loan amount of ap
Slide 14: Detailed Loan Composition
Detailed Loan Composition Owner - Occupied CRE makes up 54% of total CRE lending ~ C&D and Total CRE concentrations of 117.4% and 240.5%, respectively CRE Conposton - Owe cape CRE Conpostio - nome Producing Fiore ceocen core = aa [Epson cranes ne 2 (Btmeesttaty re [rene cove en tgeeat tm Mowe oe (Ef
Slide 15: Loan Production
Loan Production » Business First loans have grown at 26.4% CAGR Loan Production— New & Renewed Commitments from 2014-0218 * Continued Loan Growth in Q248. Net organic loan 57500 $750 growth for quarter-end of 14.3% annualized and YTD $695.5 of 11.4% annualized » Increased production in 2017 primaril
Slide 16: Strong Credit Performance
3 Strong Credit Performance Credit quality metrics have improved significantly since 2010 NPLs / Gross Loans FY 2017 NCOs resulted from two previously identified, 3.30% substandard energy credits — $27 million in charge-offs from these two credits ae 23% Balance of the portfolio had only 0.03% of NC
Slide 17: Strong Credit Performance
Strong Credit Performance + Classified Assets have decreased by 47% from $45.5 million at Q4'10 to $29.9 million at 218 + Past due loans have remained low even with the acquisition of two banks and stress in the energy sector in recent years Beginning in Q4’14, as conditions in the energy sector beg
Slide 18: Energy Lending
Energy Lending + Energy loans accounted for approximately 10.7% of portfolio and 76.2% of bank-level capital as of June 30, 2018 Geographic, loan type and collateral diversification 14% of total energy lending is non-correlated (cash secured, petrochem, retail) Active monitoring of exposures Quarter
Slide 19: Energy Lending — Historical Performance
Energy Lending — Historical Performance * Continued stability of Watch List as economic conditions for the energy sector shows incremental improvement Q415 416 lupstream $6905 § 13878 $ 14902 $ 17742 § Inndstream 16072 17.42 95024 25,400 lDownstream 33.279 14248 11,766 10,144 |Support/ Services 77,5
Slide 20: Commercial Real Estate— Historical Performance
Commercial Real Estate— Historical Performance 415 416 [Construction - 1-4 Famiy Residential $ 25035 $ 29683 $ 37585 $ 53075 lOther Const, Development, Vacant Land & Lots 73917 65680 406,120 449619) [Total Construction 98.953 95263 149,685 203.618 96 of Tota Loans 117% 147% 165% %6 01 Total Bank Cap
Slide 21: Deposit Mix
Deposit Mix Business First's deposit gathering strategy is focused on its commercial lending relationships In Q2'16, established a relationship pricing mode! that values deposits and treasury management Incentive plan for lenders tied to deposit growth added in Q3°17. After 3 quarters, the plan has
Slide 22: Yield / Rate Analysis
Yield / Rate Analysis Balance Sheetis asset sensitive Stable core NIM‘ Loan betas have outpaced deposit betas YTD 2018 (including Q2) and through BFST's deposit cycle (Q1 2017-02 2018) Minden acquisition has strengthened loan and deposit betas + Fixed vs. Variable rate loans' — 59% fixed with a weig
Slide 23: Interest Rate Positioning / Securities Portfolio
Interest Rate Positioning / Securities Portfolio Interest Rate Sensitivity”) 40% 3.0% 20% 1.5% 1.3% 1.0% 0.3% i | i oq 30% “3.0% 25% “2.2% 4.0% 3.5% +900 +200 +100 100 13% Change in Net Interest Income @% Change in Economic Value of Equity U.S. goverment soe L1% —SLASL 227% $7285 265% = = % 8a 2% ‘4
Slide 24: Update on Minden Bancorp and Richland State Bancorp Transactions
Update on Minden Bancorp and Richland State Bancorp Transactions * Acquired Minden Bancorp, Inc. (MBL Bank) on January 1, 2018 All cash transaction valued at $76.0mm $323mm in total assets; 1.72% ROAA in FY 2017 ~ Closed transaction in under 3 months System conversion completed July 15, 2018 ~ Pro F
Slide 25: Growth Strategy Going Forward
Growth Strategy Going Forward Mainta Identify and Recruit Talented Bankers * Talented commercial bankers willbe the primary catalyst for future growth in existing or new markets © Bankers are attracted to Business First's: Relationship-based approach Sophisticated business banking capabilities Credi
Slide 26: Appendix
Appendix
Slide 27: Historical Financial Summary
Historical Financial Summary Forthe Year Ended Decerter 3 vip ea 2a 2013 ae Be He. eH 2018 i Towtseses Ser seszzst_— BL EKIEO.— Sea SHETEOH Stones Stazizss stetezuT Gross sane Mosse) asigs6 “aeoz06 sagas eean0g Tange arial rset 4.204001 Devens sem suisse S84H76 2s ang Gam tpssang tama Tomteauty ma s
Slide 28: Energy Portfolio by Total Past Due — As of June 30, 2018
Energy Portfolio by Total Past Due — As of June 30, 2018 lions) Easy EIes TotalPast ‘%ofenergy’ Accruing-PastDue Dues 80-89 Upstream 182 08 - Midstream 223 - = = Downstream 93 = = = Supportiservice e24 18 - 15 Non Ol & Gas 04 15 - 15 Formal | i322 33 = 33 eas aay Pe ore JAccounts Receivable & Invent
Slide 29: Energy Portfolio by Risk Rating — As of June 30, 2018
Energy Portfolio by Risk Rating — As of June 30, 2018 Energy Loans by Risk Rating and Category (§ Millions) ras far# | Upstream | Midstream “Downstream: SUPPOMW | NonOH | Current Quarter Previous Quarter | Service : Gas | Total$ | %ofEnergy | Total$ / %ofEnergy cash Secured 1 03 - 33 3} = 38 29% 36
Slide 30: Energy Portfolio by Risk Rating — As of June 30, 2018
Energy Portfolio by Risk Rating — As of June 30, 2018 Energy Loans by Risk Rating and Col eS ao [fer ‘Current Quarter | Provious Guorter Total$ {%ofEnergy ? Total: % of Energy cash Secured 1 = 38 29% 36; T% Superior 2 | 09 58 43% 42) sae lAccerable 3 | 20 502 | mo | 409 : 367% pass a | 355 487 368%
Slide 31: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ‘Core Net Income, ROMA NIM | Forthe Year Ended December 31, {2014 [2015 | 016 217 az arg | ari | ar ari7 Core Net income: Net Income S$ 40% § 409 S 5111 $ 488 § 3638 S 3108 S (862) S 1682 S$ 2082 § 6746 ‘Adjustments Sale of Paticjpaton terest inImpsired
Slide 32: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures TCE/TBV eA °K {a Paris | ae | asi | asi7 | a2i7 | ‘Tangible Common Equity / Tangible Assets: ‘Tangible Common Eauity Total Shareholders’ Equity Adustments Goodwill Core deposit and other intangibles Total Tangle Common Equity Tangible Assets Total Assets
Slide 33: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures -rcethevearEnded Decemberst, ET ‘Tangible Common Equity / Tangible Assets: Tangible Common Equity Total Shareholders’ Equity S$ 59,624 $ 65.269 $ 71,014 $ 71,923 $ 73845 $ 112449 $ 119559 $ 179,995 ‘Adjustments: Goodwill - - : - - (3378) 824 = 824) Core
Slide 34: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Coretetinterest Margie Neos Sess § O96 S 9608S G41 S 84m S$ STAs HOES IOS S sews Tas0s HHS s MES s UOTE “opened core nest heome i ‘E tea hoe = uae ee Avengevustaning eels -$10QEM SOLI084 SH0H SLORLAGE Stow sse S16n132 SOMES S1oUsI6! StOTTSSS Sulode sLTHS
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