Business First Bancshares, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Business First Bank Shares Q2 2023 call. I would like to now turn the call over to Matt Seeley, Director of Corporate Strategy and FP&A. Matt, please go ahead.

Good afternoon, and thank you all for joining. Earlier today, we issued our second quarter 2023 earnings press release. a copy of which is available on our website, along with the slide presentation that we will reference during today's call. Please refer to slide three of our presentation, which includes our safe harbor statements regarding forward-looking statements and the use of non-GAAP financial measures. For those of you joining by phone, please note the slide presentation is available on our website at www.b1bank.com. Please also note our safe harbor statements are available on page seven of our earnings press release that was filed with the SEC today. All comments made during today's call are subject to these Safe Harbor statements in our slide presentation and earnings release. I'm joined this afternoon by Business First Bank Shares President and CEO, Jude Melville, Chief Financial Officer, Greg Robertson, Chief Banking Officer, Philip Jordan, and Chief Administrative Officer, Jerry Vaskegu. After the presentation, we'll be happy to address any questions you may have. And with that, I'll turn the call over to you, Jude.

Okay, thanks, Matt, and thank you, everybody, for joining us. I know it's a busy time, and we appreciate you prioritizing this conversation. Last quarter, I began by discussing our longer-term objectives to give some context to our near-term results, and while it won't take as much time to review the specific long-term goals on this call, I do want to take a moment to remind us of what those general priorities are. Management of risk through diversification as geographical, industry, product set, duration, revenue streams, among others. Number two, achievement of greater efficiency and optionality through scaling. Number three, an increase in core profitability levels through a focus on capital allocation and management. Finally, a qualitative rather than a quantitative goal to continue selective additions when available with key teammates with the experience and talent to help us prepare for the opportunities that will present themselves as we gain success on the previously mentioned three more numerical priorities. We've been through enough periods of uncertainty to know we have a responsibility to continue preparing for the future, even in a time of caution. I'm pleased to congratulate our team on another quarter of progress in each of these areas. On management of risk through diversification, we continue to diversify our asset exposure even in a time of lower growth. Our loan growth was again led by our Dallas region, which generated over 50% of the net increase, with the runner-up this quarter being our North Louisiana region. Two very different regions, both of which we are gaining significant brand recognition with them. On the type of loan front, growth was again led by increased CNI exposure, accounting for roughly two-thirds of our increased balances. I'll also mention encouraging progress in diversifying revenue streams through some positive movement in our SBA line of business. Last year, we had about $200,000 in income from SBA, and this year we expect to average more than that number on a quarterly basis. So it's not yet the needle mover we eventually expect it will be, but we do like the trajectory. On scale, we slowed down our growth to match the current economic and rate environments, a reflection of the optionality our current size offers. This size, we should be able to operate at solid levels of efficiency without relying on the significant levels of growth we've looked over the past few years. So we have the opportunity to be increasingly selective, which will pay off in asset quality, loan pricing, and capital usage. Our growth, while slow, is still healthy at about 8% annualized, a level that's manageable, fundable, and capitalizable within the limits of our retained earnings. Excluding the impact from our sub-debt redemption, we were capital accretive on all regulatory ratios, and if we were to back out the impact of AOCI, we would have been capital accretive on all of our capital ratios, including TCE levels. We expect this to continue to be the case in future quarters as we remain selective on loan growth, likely in the 4% to 5% range. On earnings, we are very pleased with the results, and while we aren't yet where we want to be, we have taken a significant step forward. We booked a 1.18 ROA, a 14% ROE, and 73 cent earnings per share. These are GAAP numbers. Three main drivers are our financial results for good NEM protection, good expense control, and continued solid asset quality. Greg will dive deeper into each of these fronts in a few minutes. Now, these gap results did include some net positive non-run rate income and expenses, but even backing out those items, our results would still have performed at solid levels, producing non-gap results of 1.04 ROA, 12.4% ROE, and 64% TPS. A couple points I want to note. First, non-run rate does not mean accidental or not real. Our additional income came primarily from investments we've made over the years in small business investment companies, or SBICs. which returned at a higher level than normal this quarter, and through a decision to retire some holding company debt early. Second, what we believe has fundamentally changed in our earnings profile is that a roughly 1.0 ROA over the past year or two would have been where we expected to land assuming everything went right. Now we view a 1.0 ROA as a baseline from which we have the opportunity to outperform when things fall our way, as happened this quarter. That doesn't make us a high performer yet, but it's a concrete step in the right direction and in line with the goals we've been articulating for you over the past few quarters. Finally, on the topic of people, while we do not believe we need to add significant numbers of producers at this time, as our most recent hires still have capacity to grow their individual books, we did add two impactful back office hires that are providing immediate impact. Zach Smith joined us as treasurer. Zach was one of the leaders in the treasury department at Bank OZK, a larger regional bank, and also has experience with Comerica. We were also joined by a new chief HR officer, Mike Pelche. Mike was CHRO for Iberia Bank for many years prior to their merger with First Horizons. Both of these individuals, each of whom has been with larger banks as they have grown, will, through their experiences and relationships, contribute materially to our journey, both navigating the current uncertain times and in a time of opportunity that will surely follow. I'm going to turn it over now to Greg and Matt to cover these results in detail, but I'd like to reiterate my thanks to our team. We've navigated a number of crises and perceived crises together, beginning with the great financial crisis while we were a de novo bank. We've navigated not always perfectly, but always with one eye towards the immediate needs of our current customers, shareholders, and regulatory partners, and one eye mindful of the long-term opportunity we believe our franchise has before us. This quarter is another demonstration of our capacity on both fronts. That concludes my remarks, and I'll turn it over to Greg for more detail on the financials.