Business First Bancshares, Inc. · NASDAQ:BFST
Business First Bancshares — Merger or Acquisition (October 2021)
23 slides from Business First Bancshares's merger presentation, Oct 21, 2021
Slide 1: Merger with Texas Citizens Bancorp, Inc.
Slide 2: Legal Disclosures
LEGAL DISCLOSURES Forward-Looking Statements Statements inthis presentation may not be based on historical facts ancl may be “forwarcklooking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forwarctlooking statements may be iclentified by reference to fu
Slide 3: Legal Disclosures
LEGAL DISCLOSURES le Additional Information and Where to Find it This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the Proposed Transaction. No offer of securities shall be made excep
Slide 4: Merger with Texas Citizens Bancorp, Inc
Slide 5: Key Transaction Themes
KEY TRANSACTION THEMES Entry into the Houston, Texas market with over $350 million in loans and over $450 million in deposits Consistent with BFST’s disciplined expansion strategy and complementary to growing DFW, Texas operations Approximately 30% of pro forma loans in Texas. Long-term commitments
Slide 6: Recent Corporate History: Significant Milestones
RECENT CORPORATE HISTORY: SIGNIFICANT MILESTONES e EEE ‘Acquired Smith Shellout Wilson, LLC in Jackson, MS (Opened third DEW, TX location Self-managed $525 mm suboniaated debe issuance (Opened LPO in Rusty LA. Banker ts its in Now Orlane, LA warkst (LPO) so Texas Citizons Bank Tranentio ‘Acquired Pe
Slide 7: Organic Growth Success and Key Investments
ORGANIC GROWTH SUCCESS AND KEY INVESTMENTS Pedestal Transaction closed May 1, 2020 202002 202008 Banker team lift-out in New Orleans (LPO) and LPO in Ruston Opened 3+ full service banking centerin DFW Formation ofnew FIGteam led by Jesse Jackson, former Texas Capital Bank Dallas commercial banker Ac
Slide 8: Texas Citizens Bank Transaction Rationale
TEXAS CITIZENS BANK TRANSACTION RATIONALE Financially Compelling Well-positioned commercial banking platform in Houston MSA Local banking talent joining BFST organization Established Houston base from which to replicate proven organic Dallas strategy One of only two Louisiana-based franchises with b
Slide 9: Overview of Texas Citizens Bancorp, Inc.
OVERVIEW OF TEXAS CITIZENS BANCORP, INC. * Headquartered in Houston, Texas MSA; founded in 2006 * $517 millionin assets institution operating from 6 strategic locations across southern and central Houston ~ $366 mm in loans; $452 mm in deposits Commercial banking focus ~ 57% commercial loans") ~ 45%
Slide 10: BFST Proven Texas Expansion Strategy
BFST PROVEN TEXAS EXPANSION STRATEGY » Since 2017, BFST has executed on a multi-year, organic growth strategy in Dallas Successful ramp up from 1 LPO to 3 full-service banking centers BFST currently has over $600 mmillion of loans outstanding as of September 30, 2021, with 13 producers / commercial
Slide 11: Overview of Houston Market
OVERVIEW OF HOUSTON MARKET le Market Highlights Houston MSA Depos Houston's population of 7.1 million makes it the 5" largest MSA inthe United States Rank Insituton (ST) Branches — Houston's population is larger than all but 14 states ToT ne Houston is projected to be the second fastest growing Bey
Slide 12: Enhanced Market Demographics
ENHANCED MARKET DEMOGRAPHICS le in Market ($B) ea586 e209 Top 25 MsAs Tec $2584 —— See Tep25 uss — Seca Tes | Houston Calas Latfsiana Houston Calas FST: Louisisra Population (000s) Proj. Population Growth Median Household Income Tep25 sas = sae a hess 7 co $6900 Tep25 Mas —— a = ecar x ace S628 Tep2
Slide 13: Pro Forma Footprint
PRO FORMA FOOTPRINT # of Banking Centers: 8) Total Loans: $603.2 Total Deposits: $160.7 Deposits /Banking Center $53.6 REGION. Houston Region (Texas Citizens) # of Banking Centers: Total Loans: Total Deposits: | \senetes Deposits / Bankin: Southwest Louisiana Region # of Banking Cente 4 Total Loan:
Slide 14: Loan and Deposit Composition by Region
LOAN AND DEPOSIT COMPOSITION BY REGION le Estimated 307%+ of BFST credit expostre will be in Texas at clesing 17.5% ., 17.3% 13.8% on 12.3% 12.6% % 18.6% 11.3% -_ Hiicapita [Blnorth Louisiana HBlsouthwest Louisiana [Bayou [ereater New Orleans [falas [Houston 11.4% Loans (excl. PPP) Deposits: 80.6% a
Slide 15: Pro Forma Loan and Deposit Composition
PRO FORMA LOAN AND DEPOSIT COMPOSITION Business First Bancshares, inc. 6.2% Texas Citizens Bancorp, Inc. 6.1% 15.2% S9% 6M 14.1% a a Ta% P eg 27% 4 nny 14.0% y 15.1% 4 4 ‘| i 24.6% 4 V v q A24% 368% 440% 3.3% Commercial \ 3.5% Commercial Commercial ~ S x 18.5% 188% = W7% Apes peo Loans ($000) Loans
Slide 16: Sectors in Focus: Industry Composition
SECTORS IN FOCUS: INDUSTRY COMPOSITION . COVID-19 Sensitive Industries Business First Bancshares ne Texas Gtizens Bancorp Ine. Lee Sd 101% 16.2% 58.0% 5%, 37.6% 51.8% 5.5% .©- Deposits (Smm) %eofLoans_ Deposits ($mm) %ofLoans_ _Deposits(mm) Sof Loans Retall S58 102% S04 7.5% Retail 99% jotes and Mot
Slide 17: Transaction Terms
TRANSACTION TERMS * Consideration mix: 100% stock * Fixed exchange ratio of 0.7038 BFST shares per Texas Citizens share ~ 2.4 million BEST shares * Texas Citizens options will be rolled into BFST options at the exchange ratio * Pro forma ownership: 90.3% BFST / 9.7% Texas Citizens + $52.9 million ag
Slide 18: Due Diligence Process
DUE DILIGENCE PROCESS le + Conducted comprehensive due diligence over a ~60 day period Due Diligence Process Overview * Experienced M&A team that has worked together on multiple successful transactions for BFST * Credit review conducted by internal team of experienced underwriters * Reviewed 75% of
Slide 19: Key Transaction Assumptions
KEY TRANSACTION ASSUMPTIONS le + Approximately $9.2 million’? Texas Citizens YTD 2021 Efficiency ratio of 88.5% Expected retirement of 4 of 6 Texas Citizens executives account for ~$1 millon ~ Elimination of certain professional fees and regulatory costs total ~$3 million — 75% expected to be realiz
Slide 20: Estimated Financial Impact
ESTIMATED FINANCIAL IMPACT . + Greater than 15% in 2023 (first full year of combined operations) — Based on consensus analyst estimates ~_ BFST loan mark accretion front-loaded in 2023, based on the current maturities of TCB loans — Low double digit accretion thereafter Initial Dilution at Close: 5%
Slide 21: Conclusion
CONCLUSION ") * New high-growth market expansion * Transaction consistent with BFST growth strategy * Complementary commercial banking focus * Local banking talent joining BFST with long-term commitments * Established Houston platform from which to expand * Enhanced scale at $5B in pro forma assets
Slide 22: Appendix
8 BUSINESS FIRST APPENDIX
Slide 23: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Core ROAA 9730/2020 | 9/30/2021 Core Net Income: Net Income $ 16,160 $ 40,068 Adjustments": Sale of Impaired Credit $ - $s - Deferred Tax Asset write-down $ - $s - Employee Share Awards- NASDAQ Listing $ - $ - (Gain)/Loss Former Bank Premises & Equipment
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