Business First Bancshares, Inc.

Hello, and thank you for standing by. My name is Mark, and I will be your conference operator today. At this time, I would like to welcome everyone to Business First BankShare's Q3 2025 earnings call. Online submit plays 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 this time, simply press star followed by the number one on your telephone keypad. And to withdraw your question, press star one again. I would now like to turn the call over to Matt Seeley. You may begin.

Thank you. Good afternoon, and thank you all for joining. Earlier today, we issued our third quarter 2025 earnings press release, a copy of which is available on our website, along with a 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 that slide presentation is available on our website at www.b1bank.com. Please also note our safe harbor statements are available on page 7 of our earnings press release that was filed with 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 Bank Shares Chairman and CEO, Jude Melville, Chief Financial Officer, Greg Robertson, Chief Banking Officer, Philip Jordan, and President of V1 Bank, Jerry Vaskegu. After the presentation, we'll be happy to address any questions you might have.

With that, I'll turn the call over to you, Jude. Okay, thanks, Matt, and good afternoon, and thank you all for being with us today. It was another solid work-a-day quarter for our company. Greg will follow my remarks with specific numbers that I know you're eager to dive into, but I'd like to use my time to highlight three themes on which we are focused. First, we continue to show incremental quality earnings improvement, and importantly, that improvement has been driven in large part by strong expense control. To be specific, three-quarters of essentially flat core non-interest expenses. We've made significant investment over the past few years in our effort to reach a meaningful asset size distributed over what we consider to be an attractive footprint. And having done so, I've been pivoting our focus to the generation of operating leverage and expected to remain there. As a result, our aggregate earnings, our capital ratios, our tangible book value levels, and our efficiency ratio all show material improvement over the quarter and year to date, trends we expect to continue. Second, our team has executed magnificently on the operational challenges we committed to this year, converting our entire core bank at the end of the second quarter to a new processor, and following quickly behind that, converting Oakwood Bank to the new system at the end of the third quarter. Although this aspect of performance doesn't easily fit into an earnings model, it's critical to our ongoing performance as an institution. Preparing to be better as we get bigger creates value that unfortunately may only be recognized over time. but I want to be sure to congratulate our team now on the job excellently done. In addition to system-wide efficiencies, operational excellence is also what allows us to feel confident that we can reap the financial potential associated with our two current M&A initiatives. We expect to see much more of the all-in economic benefit from the Oakwood transaction achieved by the first quarter of 2026. We also remain on pace to close the Progressive Bank transaction early in the first quarter, and scheduled to convert that asset in August, enabling us to fully incorporate both institutions and demonstrate unified post-integration financials in full by the fourth quarter of 26. We are focused on execution as we optimize the partnerships and opportunities on our plate. Third, we've included a new chart in our deck on page 15, illustrating the momentum we are experiencing in revenue generation from our young correspondent banking unit. We have about 175 banks that we partner with in some form, and expect to generate over $17 million in revenue this year, leading to the unit contributing roughly $5 million towards our combined net income over the course of the year. We're only getting started on this front and believe the investments we've made towards this initiative will lead to even more capital-efficient earnings production as we grow operating leverage within the unit, much as we're beginning to see the efficiency benefit of scale across our entire bank. So our job for the next few quarters is relatively straightforward and clear. remain committed to effective expense control, fully execute on our recent acquisitions, maintain our historically stable and relatively strong net interest margin as we grow within our retained capital, and continue the progress we've been building as we've been building an alternate source of non-interest income through the building of our correspondent banking unit. As we execute on these priorities, we're confident the combined effect will equate to steady profitability and tangible bulk value increases over the course of 2026 in both aggregate and per share basis, with visibility into a roughly 1.2 core ROA run rate by the end of the fourth quarter. It's an exciting time, and we look forward to answering any questions you might have. With that, I'll turn it over to Greg.