Note 15 - Shareholders' Equity and Regulatory Matters -

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

Note 15 – Shareholders’ Equity and Regulatory Matters –

Shareholders’ Equity of the Company includes the undistributed earnings of the Bank. The Company pays dividends from its assets, which are provided primarily by dividends from the Bank. Certain restrictions exist regarding the ability of the Bank to pay cash distributions. Louisiana statutes require approval to pay distributions in excess of a bank’s earnings in the current year plus retained net profits for the preceding year. The Company paid quarterly common stock dividends totaling $0.50 per share and $0.48 per share for the years ended December 31, 2023 and 2022, respectively, based upon quarterly financial performance. The Company paid full quarterly preferred stock dividends totaling $75.00 per share for the year ended December 31, 2023 and, $18.75 per share for the year ended December 31, 2022, following issuance of the preferred stock on September 1, 2022.

Common Stock Repurchase Plan

On October 22, 2020, the Company’s board of directors approved a resolution authorizing management to repurchase shares of its common stock with an aggregate purchase price of up to $30.0 million from time to time, subject to certain limitations and conditions. The stock repurchase program expired on December 31, 2021. The stock repurchase program did not obligate the Company to repurchase any shares of its common stock. The Company repurchased $10.9 million and $798,000 of shares for the years ended December 31, 2021 and 2020, respectively.

On May 23, 2023, the Company’s board of directors approved a resolution authorizing management to repurchase shares of its common stock with an aggregate purchase price of up to $30.0 million from time to time, subject to certain limitations and conditions. The stock repurchase program expired on December 31, 2023. The stock repurchase program did not obligate the Company to repurchase any shares of its common stock. The Company did not repurchase any shares under this plan.

Preferred Stock

On September 1, 2022, the Company entered into a securities purchase agreement with certain investors pursuant to which the Company offered and sold shares of its 7.50% fixed-to-floating rate non-cumulative perpetual preferred stock, with no par value, for an aggregate purchase price of $72.0 million. Holders of the preferred stock are entitled to receive, if, when, and as declared by the Company’s board of directors, non-cumulative cash dividends at a rate of 7.50% per share for the first five years following issuance and thereafter at a variable rate equal to the then current 3-month secured overnight financing rate (“SOFR”), reset quarterly, plus 470 basis points. The preferred stock has a perpetual term and may not be redeemed, except under certain circumstances, under the first five years of issuance. The preferred stock is non-convertible and dividends equivalent to $75.00 per share and $18.75 per share were paid during the years ended December 31, 2023 and 2022, respectively.

Regulatory Matters

The Company and the Bank are subject to various regulatory capital requirements administered by federal and state banking agencies. Failure to meet minimum regulatory capital requirements can initiate certain mandatory, and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s financial statements.

Under the regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines involving quantitative measures of assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification under the prompt corrective action guidelines are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Prompt corrective action provisions are not applicable to bank holding companies.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios. As detailed below, as of December 31, 2023 and 2022, the Bank met all of the capital adequacy requirements to which it is subject.

As of December 31, 2023 and 2022, each of the Company and the Bank was categorized as well capitalized under the regulatory framework for prompt corrective action. For the years ended December 31, 2023 and 2022, each of the Company and the Bank was required to maintain minimum total capital, Tier 1 capital, risk-based common equity Tier 1, and Tier 1 leverage ratios at the levels disclosed in the table below to be categorized as well capitalized. There are no conditions or events since the most recent notification that management believes have changed the prompt corrective action category.

The following is a summary of the Company’s (consolidated) and the Bank’s actual capital amounts and ratios at December 31, 2023 and 2022.

Business First Bancshares, Inc. (Consolidated)	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
December 31, 2023:
Total Capital (to Risk-Weighted Assets)	$	754,990		12.85	%	$	470,215		8.00	%	$	587,769		10.00	%
Tier 1 Capital (to Risk-Weighted Assets)		614,975		10.46	%		352,661		6.00	%		470,215		8.00	%
Common Equity Tier 1 Capital (to Risk-Weighted Assets)		538,045		9.15	%		264,496		4.50	%		382,050		6.50	%
Tier 1 Leveraged Capital (to Average Assets)		614,975		9.52	%		258,407		4.00	%		323,008		5.00	%
December 31, 2022:
Total Capital (to Risk-Weighted Assets)	$	704,840		12.75	%	$	442,391		8.00	%	$	552,988		10.00	%
Tier 1 Capital (to Risk-Weighted Assets)		557,088		10.07	%		331,793		6.00	%		442,391		8.00	%
Common Equity Tier 1 Capital (to Risk-Weighted Assets)		480,158		8.68	%		248,845		4.50	%		359,442		6.50	%
Tier 1 Leveraged Capital (to Average Assets)		557,088		9.49	%		234,859		4.00	%		293,574		5.00	%

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
b1BANK	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
December 31, 2023:
Total Capital (to Risk-Weighted Assets)	$	730,117		12.43	%	$	469,751		8.00	%	$	587,188		10.00	%
Tier 1 Capital (to Risk-Weighted Assets)		686,379		11.69	%		352,313		6.00	%		469,751		8.00	%
Common Equity Tier 1 Capital (to Risk-Weighted Assets)		686,379		11.69	%		264,235		4.50	%		381,672		6.50	%
Tier 1 Leveraged Capital (to Average Assets)		686,379		10.63	%		258,203		4.00	%		322,754		5.00	%
December 31, 2022:
Total Capital (to Risk-Weighted Assets)	$	657,588		11.91	%	$	441,833		8.00	%	$	552,292		10.00	%
Tier 1 Capital (to Risk-Weighted Assets)		618,805		11.20	%		331,375		6.00	%		441,833		8.00	%
Common Equity Tier 1 Capital (to Risk-Weighted Assets)		618,805		11.20	%		248,531		4.50	%		358,989		6.50	%
Tier 1 Leveraged Capital (to Average Assets)		618,805		10.55	%		234,679		4.00	%		293,348		5.00	%