Business First Bancshares, Inc. · NASDAQ:BFST
Business First Bancshares — Investor Presentation (April 2019)
32 slides from Business First Bancshares's investor presentation, Apr 26, 2019
Slide 1: Business First Bancshares, Inc.
b BUSINESS FIRST BANK Go get it. Business First Bancshares, Inc. April 26, 2019
Slide 2: Legal Disclosure
Legal Disclosure Special Note Conceming 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 Litiga
Slide 3: Overview of Business First Bancshares, Inc.
Overview of Business First Bancshares, Inc.
Slide 4: 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 ten Louisiana markets and Dallas, TX Three successful acquisitions since 2015 - American Gateway
Slide 5: Our Operating Philosophy Has Been Consistent Since Day One
Our Operating Philosophy Has Been Consistent Since Day 1 Commercial Focus Recruiting and Retaining Talented Bankers Disciplined Expansion Criteria * Small-to-midsize businesses and their owners and employees * Target $1-$10mm commercial lending relationships that are typically too small for the larg
Slide 6: 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 Yearsin Year Started Jude Melville 44 14 2006 Director, President and Chief Executive Officer Gre
Slide 7: 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’ ‘Year Started Age Banking Prior Experience Investar
Slide 8: Corporate History
Corporate History 2018: Completed $25 million private placement of subordinated notes 2018: Listed on NASDAQ on April 9 under BFST 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 Finan
Slide 9: Current Footprint
Current Footprint J Statewide focus on urban markets + Multiple markets provide diversification of both risk and production opportunities East Baton Rouge 2006 7 16 $304,109 $322,989 Shreveport 2006 1 5 216,966 124,502 Northshore 2007 1 3 119,752 53,823 Lafayette 2008 1 4 63,057 69,303 Lake Charles
Slide 10: Recent Financial Results - Record FY 2018 & Positive 1Q
Recent Financial Results -Record FY 2018 & Positive 1Q 19 FY 2018: Combination of Organic and M&A growth Loan growth of 56.7%; 2018 organic loan growth of 12.5% ~ Core deposit growth of 60% in FY 2018 driven by organic growth and the strategic addition of MBL Bank and Richland State Bank — PTPP CAGR
Slide 11: Quarterly Financial Trends
Quarterly Financial Trends For the Quarter Ended aan. TET ‘302018 aan me [3atance Sheet & Capital Toa Assets 2.101.400 2034398 1.678.198 sesg207 S1s87713 Gress Loans (Esch HFS) 125,182 11525, 09 ‘a7 389 spss 1181 420 Depes is 78383 1754 azsagri 1323483 sears Total Equiy eae 2e0.088, Diese 210.609 ‘7
Slide 12: Loan Portfolio
Loan Portfolio + Commercial lending is primary focus, with C&l representing 21.8% and Owner Occupied CRE representing 18.6% » Recent acquisitions have provided portfolio diversification » Energy concentration has decreased from 19.8% of total loans in Q1'15 to 7.2% in Q1'19 + Average funded loan amo
Slide 13: Detailed Loan Composition
Detailed Loan Composition * Owner - Occupied CRE makes up 53% of total CRE lending ~ C&D and Total CRE concentrations of 91.5% and 221.7%, respectively C&D Composition CRE Composition - Owner Occupied CRE Composition - Income Producing 57% 23% 56% 18% 2.6% 75% 170% 24.0% 65% 167% 390% 134% CAD Parfo
Slide 14: Loan Production
Loan Production + Business First loans have grownat 28.6% CAGR New & Renewed Commitments from 2014 - 2018 . . $1,400.0 $120.0 * Continued Loan Growth. FY 18 net organic loan growth of 12.5%. Annualized loan growth of 15.1% an in 10 19. $1,200 $1000 » Increased production primarily driven by: ~ New l
Slide 15: Strong Credit Performance
Strong Credit Performance Credit quality metrics have continued to improve significantly since 2010 FY 2017 NCOs resulted from two previously identified, substandard energy credits with current specific reserve of $800k — $2.7 million in charge-offs from these two credits — Balance of the portfolio
Slide 16: Strong Credit Performance
Strong Credit Performance * Classified Assets have decreased by 30% from $45.5 million at Q4’10 to $31.6 million at Q1’19 750% - Past due loans have remained low even with the acquisition of two banks and stress in the energy 150% sector in recent years 28% ax ass 62% 49% _ tax 16% * Beginning in Q4
Slide 17: Energy Lending
Energy Lending - Energy loans accounted for approximately 7.2% of ENERGY PORTFOLIO BY COLLATERAL portfolio and 49.7% of bank-level capital as of March 34, 2019 Energy COLLATERAL Total $'s Portfolio Accounts Receivable & Inventory 29.0 25.2% Barges, Crew Boats, Marine Vessels 8.7 76% . . a Equipment
Slide 18: Energy Lending — Historical Performance
Energy Lending — Historical Performance » Continued stability of Watch List as economic conditions for the energy sector shows incremental improvement Q418 119 Upstream $ 12530 $ 12,992 Midstream 18,148, 7,152 Downstream 8,578 4,982 |Support / Services 86,802 85,209 Non-Oil and Gas 1.663 145 861 - 5
Slide 19: Commercial Real Estate — Historical Performance
Commercial Real Estate— Historical Performance Q119 Construction - 14 Family Residential s $54,982 |Other Const, Development, Vacant Land & Lots 156,906 ‘Total Construction 211,888 % of Total Loans 13.3% % of Total Bank Capital 91.5% Multi-Family Properties 30.548 Commercial Rental 256,687 JOther Lo
Slide 20: Deposit Mix
Deposit Mix * Business First's deposit gathering strategy is focused on its commercial lending relationships ~ In Q2’46, established a relationship pricing model that values deposits and treasury management ~ Incentive plan for lenders tied to deposit growth added in Q3'17. After 6 quarters, the pla
Slide 21: Yield / Rate Analysis
Yield / Rate Analysis * Balance Sheets asset sensitive 6.00% 5.22% ’ 5.79% 5.46% 5.229%) 532% —— 08% |=} 5.15% + Stable core NIM‘) ‘eto AP asm Aas ~ Loan betas outpaced deposit betas in FY 2018 and through BFST’s deposit cycle (Q1 2017-Q1 2019) ~ Strategic acquisitions of MBL Bank and Richland State
Slide 22: 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 +
Slide 23: Growth Strategy Going Forward
Growth Strategy Going Forward Identify and Recruit Talented Bankers ned Focus on Business Model Expanding Presence in Existing Markets Disciplined Acquisition Strategy » Talented commercial bankers will be the primary catalyst for future growth in existing or new markets » Bankers are attracted to B
Slide 24: Appendix
Appendix
Slide 25: Historical Financial Summary
Historical Financial Summary yro it Ear 2s Doe 2 26. 207 2018. 20g Intemally Focused Balance Sheet & Capital Total Aesets 652,241 ‘$681,062 684,120 684502 $1,076.08 $1,105,841 $1,521,256 $2,094,896 $2,101,400 (Gross Loans (Excl, HFS) 441,855 460,236 526,045 556,305 772,382 ‘10,951 975,284 1,528,469
Slide 26: Energy Portfolio by Total Past Due — As of March 31, 2019
Energy Portfolio by Total Past Due —As of March 31, 2019 oans by Category and Collateral ($ Millions) RTEGORY, Totas's | *orENergy | TotalPast |%ofEnergy | Accruing- Past Due Nor Portfolio Dues | Portfolio | 3059 60-89 | Accruals Upstream 123 107% 08 04% = = 0.8 Midstream 72 6.2% = - - ~ - Downstrea
Slide 27: Energy Portfolio by Risk Rating — As of March 31, 2019
Energy Portfolio by Risk Rating — As of March 31, 2019 Energy Loans by Risk Rating and Category ions) Mek RING = Support | Non OW1& Current Quarter Previous Quarter Service Gas Total$ | %ofEnergy : Total$ {| % of Energy |Cash Secured 1 06 = 06 0.5% 38 29% Superior 2 32 = 54 45% 54 3.9% JAcceptable 3
Slide 28: Energy Portfolio by Risk Rating — As of March 31, 2019
Energy Portfolio by Risk Rating — As of March 31, 2019 Energy Loans by Risk Rating and Collateral S ns) fommercial | Consumer : CD/ Mkt Current Quarter Previous Quarter Pes i oc RealEstate | RealEstate | Securities | MM Other Total$ i %ofEnergy : Total$ %ofEnergy Cash Secured 1 - = = 06 = 06 0.5% 38
Slide 29: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Core Net income, RO AA, NIM _Forthe YearEnded December 31,0 2014 | 2015 | 2016 20172018 Core Net Income: Net income $ 4033 $ 4096 S 5,111 § 4848 $ 14091 $§ 5659 $ 3445 $ 3900 S$ 3638 $ 3,108 Adustments: Sale of Participation interest in Impaired Credit $
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures a FiscalQuarter Pati | awig | ass | ate | aris | Tangible Common Equity / Tangible Assets: ‘Tangible Common Equity Total Shareholders’ Equity $ 269,144 $ 260,058 $ 212961 $ 210,629 $ 179,994 Adjustments: Goodwill (49534) (49,488) (32,427) (32,852) (22,81
Slide 31: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures TT Forthe YearEndedDecember3t, P2010] 2011 orzo 2s 206 tt Tangible Common Equity / Tangible Assets: ‘Tangible Common Equity Total Shareholders’ Equity $ 59524 $ 66,269 $ 71014 $ 71,923 $ 78845 $ 112449 $ 113559 $ 179935 $ 260,068 Adjustments: Goodwill -
Slide 32: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ‘Quarterly Core NIM. Core Netinterest Margin: Net terest Income S$ 943 $ 9101 $ 97 $ 9318 $ 19560 $ 11690 $ 10533 § 11589 $ 14600 $ 14976 $ 15696 $ 17,117 $ 19,120 ‘Adjustments: Loan purchase dscount accretion ass) gs) gas) am) 308) east) as) ees) Core N
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