Business First Bancshares, Inc.

Good afternoon. My name is Krista and I'll be your conference operator today. At this time, I would like to welcome everyone to the Business First Bank Shares fourth quarter 2023 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, again, press star one. Thank you. I will now turn the conference over to Matt Seeley, Senior Vice President, Director of Corporate Strategy and SPNA. Matt, you may begin your conference.

Thank you, Krista. Good afternoon, everyone, and thank you all for joining. Earlier today, we issued our fourth 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 at the SEC today. All comments made during today's call are subject to the safe harbor statements in our slide presentation and earnings release. I'm joined this afternoon by Business First Bankers President and CEO, Jude Melville, Chief Financial Officer, Greg Robertson, Chief Banking Officer, Philip Durden, 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. We understand the demands of the season and appreciate you prioritizing this conversation with us. I'll briefly overview our fourth quarter highlights and then take a step back to place the year in a broader context. Our team closed out an eventful year positively with another quarter of solid and consistent fundamental performance. Greg will go into detail in a few minutes on our non-core adjustments, but once they're shipped out, we generated core ROAA of 1.03%, core ROAE of 12.27%, a core efficiency ratio of 62.6%, and a core EPS of 66 cents, all exceeding consensus expectations. We accomplished this in a similar manner to our last couple quarters by managing expenses prudently, by maintaining excellent credit quality, and by funding responsible loan growth through internally generated capital and liquidity. Again, Greg will go into detail on some of the non-core items from the report, but I'd like to specifically mention two items that I consider highlight-worthy. First, you'll remember last quarter we hired a seasoned individual to bring in-house the swaps capability. This quarter, we experienced our first meaningful pickup of nearly a million dollars in non-interest income through this nascent swaps line of business. While we don't expect to replicate this large of an income number on a consistent basis in the near term, we are encouraged by the successful execution and the resulting client satisfaction. Perhaps more important than the fee income generated, The swap enabled us to close a significant credit-worthy loan in terms that we might not have been as interested in accepting from an asset liability management perspective without the swap protection, which enabled us to match both our and the prospective client's needs, a winning combination. Second, our finance team, with the aid of our asset management firms, Ms. Shona Wilson, repositioned a portion of our investment portfolio by divesting $71.5 million of securities. While we recognized the $2.5 million pre-tax sales, we were also able to reinvest the full amount at a rate generating a projected 1.1 year earn back. It was another example of in-house capabilities allowing us to conduct transactions for our own balance sheet at a lower cost and with more control than if we had relied on outside vendors. Between this transaction, improvement in AOCI through movement and yield curve-based valuations, and the accumulation of capital through earnings, we created 14 basis points to consolidate it and 52 basis points to TCE in the quarter, increasing our TCE levels to 7.28%. All in all, the fourth quarter was a solid closing to a successful and challenging year. We finished the year in a strengthened capital position with solid asset quality, ample, diverse, and granular liquidity, and arguably most important, an employee base that's been through and grown from the challenges of 2023. Just as over the course of our time together as an institution, we've gone through and grown from the pandemic and its aftermath, various energy crashes, and the great financial crisis. While we've been successful crisis managers, stepping back to the 10,000-foot view, I'd like to call your attention to pages 9 and 10 of the deck, which illustrate the success we've had not just playing defense, but also going on the offensive and sustaining those efforts over time. On page 9, you'll note the consistency of our core ROAA performance, over 1% in each of the past five years. We've also grown our ROACE over that time period, with a five-year average of 11.46%, and roughly 12.5% for each of the past three. This page details our consistent and balanced growth in loans and deposits, with each up roughly 190% over the past five years. More specifically for loans, you'll note that we have, during that time, over-doubled our exposure in our original markets in Louisiana, while growing our Texas-based exposure by multiple nearly eight times, leaving us as well-balanced geographically as we've ever been and approaching 40% of our exposure in Texas, Dallas and Houston specifically. Moreover, we've accomplished this without sacrificing credit quality with very similar metrics across the whole of our footprint. On page 10, we detail a near four times our increase in aggregate core earnings and a near doubling of core earnings on a per-share basis. even with tuition accumulated from multiple M&A opportunities. The increased scale at which we now operate has resulted in a 500 basis point decline in our efficiency ratio over that time period. Most important, our tangible book value per share, XAOCI, even with the investments required to fund this growth, has grown 36% with a 9.3K growth over the past three years as returns have begun to accelerate. Quarterly results are important, but franchises are built over time, and these results clearly demonstrate that our team has been doing the right things in the right ways over time. Despite this lengthening track record, we entered 2024 excited not so much by past results as by the potential we've positioned ourselves to achieve in upcoming years. Thank you again for your time and attention. I'll now turn the microphone over to our CFO, Greg Robertson, to review the results in greater detail.