Business First Bancshares, Inc. · NASDAQ:BFST
Business First Bancshares — Investor Presentation (June 2018)
46 slides from Business First Bancshares's investor presentation, Jun 4, 2018
Slide 1: Follow-On Offering of Common Stock
BUSINESS FIRST BANK. Go get it. Business First Bancshares, Inc. Follow-On Offering of Common Stock 900,000 Shares June 4, 2018
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) ‘This presentation contains “forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act ‘made pursuant tothe safe harbor provisions of the Private Securities Litgalon Reform Act of 1995. All statements other than
Slide 4: Legal Disclosure (Cont'd)
Legal Disclosure (Cont'd) “This presentation includes certain financial measures that are not measures recognized under U.S. generally accepted accounting principles (“GAAP”) and therefore are considered non-GAAP financial measures. The Company's management uses these non-GAAP financial measures in
Slide 5: Offering Overview
Offering Overview
Slide 6: Offering Summary
Offering Summary + Business First Bancshares, Inc. + Follow-On Offering of Common Stock: + 900,000 (100% Primary) + 10,305,931 common shares outstanding as of June 1, 2018 + $23.92 + $21.5 million + 15% + To fund the cash portion of the proposed acquisition of Richland State Bancorp, Inc. (‘RSBI')®)
Slide 7: Transaction Opportunity: Richland State Bancorp, Inc.
Transaction Opportunity: Richland State Bancorp, Inc. b
Slide 8: Overview of Richland State Bancorp, Inc.
Overview of Richland State Bancorp, Inc. * Foundedin 1902; headquartred in Rayvile, Business First Footprint ~ Complementary Balance Sheet (as of 2/91/18) 25% Noninterest Bearing Deposits Sewn Pa Mort, $102 milion in Cash and Securities 70% Gross Loans / Deposits i) i 55% C&D concentration less — 13
Slide 9: Top Deposit Market Share in Louisiana; #5 Among Louisiana-Based Banks
Top 10 Deposit Market Share in Louisiana; #5 Among Louisiana-Based Banks = a = mee 2017 /2017| Deposits) 2017 2017| Deposits] Share| Rank [institution (ST) /Branches| 6) Rank |institution (ST) ‘Branches| (i) rr rere ee” a an ay |e Goan? | el ae aa eos lus brs onnteeane an 2 les om ey me ok aparece 2
Slide 10: Historical Financial Summary of Richland State Bank
Historical Financial Summary of Richland State Bank Forthe Year Ended December 31, Ra 2 2 2015 ‘6 27 Bava Total Assets $273,989 $289.216 $290,426 282,890 sa04.t77 304.994 Gross Loans (Excl HFS) 427.70 143,016, 173.597 109,67 190,76, 188592 Deposts 245,669 27 562 252,665 27510 269,391 Total Equty 017
Slide 11: Pro Forma Loan Composition
Pro Forma Loan Composition Business First Bancshares, Inc. Richland State Bank 14 66% cee, 103% % 16.0% 1 15.3% 204% 2.9% 19.9% 14.9% 184% 4.1% ae 37% 2.24 14% iim 22% r ar% 22% 178% 114% Loans Loms Loms ccrsiacona tara winiaa 160% © Mconscione lane Frese 103% Millcorsrctens Land wives se Dis reny v
Slide 12: Pro Forma Deposit Mix
Pro Forma Deposit Mix Business First Bancshares, Inc. Richland State Bank 64% 63% 22.7% 25.0% aa 23.1% 28.3%) ae) 167% en 21.1% 27.6% 259% 25.1% Deposits Deposits Deposits voninterest Bearing S208815 227% HBvonrteresteearng $87.440 25.0% MB voninterest Bearing 64085 2.1% vows over 21a3¢ 167% © Enowa
Slide 13: Transaction Terms
Transaction Terms + Business First Bancshares, Inc. + _ Richland State Bancorp Inc. (“RSBI"), bank holding company of Richland State Bank Approximately 80% Stock / 20% Cash 4,679,608 BFST shares; ~$9.9 mili in cash + Cashed-out(~$0.7 milion) Weer | * $60.8 million + 453% of March 31, 2018 TBV WACOM
Slide 14: Key Transaction Assumptions
Key Transaction Assumptions + Approximately 80% Stock / 20% Cash + Approximately $4.2 million of annual pre-tax cost saves (-40% of Richland State Bank's NIE) + 75% expected to be realized in FY 2019 with 100% thereafter + 1.5%, or $3.09 million + Richland State Bank’s ALLL as of March 31, 2018 tota
Slide 15: Pro Forma Results
Pro Forma Results + Total Assets:~$2.1 + Gross Loans:~$1.S billion + Total Deposits:~$1.7 bi + Total Equity:~$226 million) As of Pro Forma March 31, 2018 March 31, 2018 C&D! Total RBC 125% 114% CRE! Total RBC 264% ~245% Energy Loans/ Loans 1.2% ~10% Energy Loans/ Total RBC 87.4% 12% moons deserbedon
Slide 16: Preliminary Pro Forma Results
Preliminary Pro Forma Results Estimated Financial Impact® High Single-Digit / Low Double-Digit % Mid Single-Digit % ~4% dilution Neutral 30%+ ~B.5% ~9.5% ~10% ~1% ~10.5% ~12% £00 000shere bese offecnapsthe 15340 opto management propetons, ncudhg key Wansactonassupto BUSINESS FIRST
Slide 17: Overview of Business First Bancshares, Inc.
Overview of Business First Bancshares, Inc.
Slide 18: Overview of Business First Bancshares, Inc.
Overview of Business First Bancshares, Inc. > Founcedin 2006; headquartered in Baton Rouge, LA Business First Footprint + Commercial bank focusedon small-to- —|iay 9 oe midsize businesses and their owners and a orto employees remae $1.2bn gross loanst”; $1.3bn total deposits | x ie ~23%t C&l loans a
Slide 19: 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 20: 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 Officer Age Banking at BF Position with Business First Bank Jude Melville 43 1
Slide 21: 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 Lake Charles / Lafayette Houma NewOrteans |West Baton Rouge Dallas Mic
Slide 22: Corporate History
Corporate History 2016: Opened new headquarters in downtown Baton Rouge 2006: Bank opened in Baton Rouge; 2015: expanded into Acquired American the Shreveport Gateway Financial in market West Baton Rouge 006 200 008 20092010 0 0 0 0 0 0 0 018 2007: 2009: 2011: 2015: 2018: Expanded into Expanded into
Slide 23: Current Footprint
Current Footprint Statewide focus on urban markets ‘Multiple markets provide diversification of both risk and production opportunities Year Hof tof Market Entered Facilities __ Bankers” East Baton Rouge 2006 7 15 Shreveport 2006 1 7 Northshore 2007 1 4 Lafayette 2008 1 4 Lake Charles 2009 1 7 Houma
Slide 24: Recent Financial Results — Strong FY 2017 & Q1'18
Recent Financial Results — Strong FY 2017 & Q1'18 ~ FY 2017: Strong Organic Growth Total Deposits ~ Loan growth of 19.2% samo a) vows ~ Core deposit growth of $137 million, or «#090 seis one — 18.0% - s11008 grag 04 sor B28 ~ Core deposit growth essentialy sono matched loan growth for 2H'17 PE eis 3
Slide 25: Quarterly Financial Trends
Quarterly Financial Trends forthe Quarter Ended Ean a or — mar Toutes susszrs siszze ‘siziaa3t 1.980088 siiteast Gems a sist0 ‘or sor 74508 eexote Besa ‘aor some soisast $2096 some Tweety tae ae ‘2008 vee Sem “Tarte Carmen Eat Tangle ese” ans ‘06% on one ona NetLcrs e H)/ses mam ne8 mem 0% mow Gees
Slide 26: Loan Portfolio
Loan Portfolio Commercial lending is primary focus, with C&l representing 23% 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 11.2% in Q118 * Average funded loan amount of app
Slide 27: Detailed Loan Composition
Detailed Loan Composition ‘Owner ~ Occupied CRE makes up 64% of total CRE len: 19 — C&Dand Total CRE concentrations of 125% and 264%, respectively -ome Producing ia eoeTewt Poo — eae “ine Pies cosecen. oo pe straw toe Re orto bes [Pfr ce tome fom Lpomeotts soe Famwossae ao [ilcorercid Comin Ral -Seg
Slide 28: Loan Production
Loan Production Business First loans have grown at 26.3% CAGR Loan Production— New & Renewed Commitments from 2014 - Q1'18 $7500 $750 ~ Since closing on March 31, 2015, the legacy American $595.5 Gateway portfolio has decreased from $143 milion to $45 millon 8600.0 $600 + Increased production in 201
Slide 29: Strong Credit Performance
Strong Credit Performance Credit quality metrics have improved significantly since 2010 FY 2017 NCOs resulted from two previously identified, substandard energy credits — $27 million in charge-offs from these two credits Balance of the portfolio had only 0.03% of NCOs / Avg. Loans + ALLLIGross Loans
Slide 30: Strong Credit Performance
Strong Credit Performance Past Due Loans / Total Portfolio ome Classified Assets have decreased by 47% from $45.5 million at Q4'10 to $30.9 million at 118 Past due loans have remained low even with the acquisition of American Gateway and stress in the energy sector in recent years Beginning in Q4’14
Slide 31: Energy Lending
Energy Lending + Energy loans accounted for approximately 11.2% of Portfolio and 87.1% of bank-level capital as of March 34, 2018 Geographic, loan type and collateral diversification 18.9% of total energy lending is non-correlated (cash secured, petrochem, retail) * Active monitoring of exposures Qu
Slide 32: Energy Lending — Historical Performance
Energy Lending — Historical Performance * Continued stability of Watch List as economic conditions for the energy sector shows incremental improvement Re] Feesed Caste ere] Fee ceed feel fee] feral [eer] les oer ee ey 2 a a es — ———ee ao Soe ee ee == ree eee 5 a Re ee Re ee Se Gases 33S SEES Se Sere
Slide 33: Deposit Mix
Deposit Mix Business t's deposit gathering strategy is focused on its commercial lending relationships Deposit Mix - March 31, 2018 In Q2'16, established a relationship pricing model that values deposits and treasury management 64% Recently added an incentive plan for lenders tied to deposit growth
Slide 34: Yield / Rate Analysis
Yield / Rate Analysis Balance Sheetis asset sensitive 6.00% 5.45% 1 Noose 22%] 822 a 5.00% | ay, 474: Stable core NIM‘ ox : le core NIMI* 408% ora rN 62% 3.87% 97%: (3.59% Ls | Nazi +> ass a 3% 65% 3.66% 369% 3.00% | 3.05% Fixed vs. Variable rate loans) ~ 58% fixed with a weighted average 200% matur
Slide 35: 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. goemment agencies 095% $2153 1S ST 38S DEE = =% sigs 22
Slide 36: Update on Minden Bancorp Transaction
Update on Minden Bancorp Transaction ‘Acquired Minden Bancorp, Inc. (MBL Bank) on January 1, 2018 All cash transaction valued at $76.0mm $323mm in total assets; 1.72% ROAA in FY 2017 ‘Caplil One Fancial Carp. (VA) 18,463 ‘JPMorgan Chase &. Co. (NY) 1871 Hancock Hoking Co. (MS) 13723 BERABANK Corp (L
Slide 37: Growth Strategy Going Forward
Growth Strategy Going Forward Mainta Identify and Recruit Talented Bankers * Talented commercial bankers willbe the primary catalyst for future growth in existing or new markets © Bankers are attracted to Business First's: Relationship-based approach Sophisticated business banking capabilities Credi
Slide 38: Appendix
Appendix
Slide 39: Historical Financial Summary
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Slide 40: Energy Portfolio by Total Past Due — As of March 31, 2018
Energy Portfolio by Total Past Due — As of March 31, 2018 Past Due Energy Loans by Category and Collateral ‘CATEGORY Accruals Upstream 178 - - 16 Midstream 245 — = = Downstream 98 bo = = SuppordService 313 09% 48 14% = = 15 yotal | 4334) t000% 3a aye ow ae ee Lo [Accounts Recelvable & Inventory 23.8
Slide 41: Energy Portfolio by Risk Rating — As of March 31, 2018
Energy Portfolio by Risk Rating — As of March 31, 2018 Energy Loans by Risk Rating and Category ae a ‘Current Quarter’ Previous Quarter Total$ | %sofEnergy Total$ | % of Energy Icash secured 1 38 38 27% [Superior 2 42 52 lAcceptabie a 48.9 472 Pass 4 488 49.0 ‘TOTAL PASS RATED| 1052 1049) [Passnvatc
Slide 42: Energy Portfolio by Risk Rating — As of March 31, 2018
Energy Portfolio by Risk Rating — As of March 31, 2018 Energy Loans by Risk Rating and Collateral (S Millions) Segoe eran See PEARLS eee ey RealEstate : RealEstate ' Securities Total$ ; %ofEneray ; Total$ ; % of Eneray cas secre i iit eS rm aa GT Acceptable 3 234 2000 | 24 - 34 489 36.7% 472 35.3% i
Slide 43: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Core Net income, ROAA NIM ____-Forthe YearEnded December 31, P| is fs |i ‘Core Net Income: Net income 5 40B 5 40m S SIM S 49m $ 3108 S (862) S 1082S 202 S 1976 Agusiments ‘Sale of Pantcipatin terest inimpares Creat Ss - 8 - 8 = 8 GH Ss - 8 - 5 - 5S - Ss
Slide 44: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ee Q1t3 ‘air Oti7 Tangible Common Equity /Tangible Assets: Tangible Common Equty Total Shareholders’ Equty s 179.994 179.935 $ 120,058 $ 119813 $ 116,201 Adjustments: Goodwill 2.816) (6.824) (6.824) (6824) (6.824) Core deposit and other intangibles (4 36
Slide 45: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures TT Forthe YearEndedDecember3t, A Tangible Common Equity Tangible Assets: Tangible Common Equty TTolal Shareholders’ Equty S 59504 $ 65200 $ T1014 $ 71923 $ BRIS $ 112449 § 113559 $ 170,005 ‘Adjustments Gooawil : - : (9976) (6824) 824) Core deposit and ot
Slide 46: Reconciliation of Non-GAAP Financial Measures
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