Q3 FY2026
Filed Oct 26, 2026Business First Bancshares, Inc. Announces Financial Results for Q3 2026
Net income available to common shareholders increased from the linked quarter, core net income and core diluted earnings per common share increased, net interest margin expanded, and loans and deposits grew. Offsetting items included higher other expenses, a higher net charge-off ratio, securities fair value adjustments, and a decline in shareholders' equity.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total interest income, three months ended September 30, 2026GAAP | $127.5M | – | – |
| Total interest expense, three months ended September 30, 2026GAAP | $46.85M | – | – |
| Net interest income, three months ended September 30, 2026GAAP | $80.66M | – | – |
| Net interest income excluding loan discount accretion, three months ended September 30, 2026non-GAAP | $79.44M | – | – |
| Provision for credit losses, three months ended September 30, 2026GAAP | $1.94M | – | – |
| Total other income, three months ended September 30, 2026GAAP | $12.51M | decreased $1.5 million or 10.42% | – |
| Total other expenses, three months ended September 30, 2026GAAP | $60.47M | increased $0.9 million or 1.58% | – |
| Income before income taxes, three months ended September 30, 2026GAAP | $30.77M | – | – |
| Provision for income taxes, three months ended September 30, 2026GAAP | $6.22M | – | – |
| Net income, three months ended September 30, 2026GAAP | $24.55M | – | – |
| Net income available to common shareholders, three months ended September 30, 2026GAAP | $23.20M | increased $0.4 million | – |
| Core net income available to common shareholders, three months ended September 30, 2026non-GAAP | $26.01M | increases of $2.7 million | – |
| Diluted earnings per common share, three months ended September 30, 2026GAAP | $0.71 | increases of $0.01 | – |
| Core diluted earnings per common share, three months ended September 30, 2026non-GAAP | $0.79 | increases of $0.08 | – |
| Net interest margin, three months ended September 30, 2026GAAP | 3.86% | expanded 13 basis points (bps) | – |
| Net interest margin excluding loan discount accretion, three months ended September 30, 2026non-GAAP | 3.80% | 12 bps | – |
| Net interest spread, three months ended September 30, 2026GAAP | 3.09% | – | – |
| Overall cost of funds, three months ended September 30, 2026other | 2.40% | decreased 4 bps | – |
| Return to common shareholders on average assets (annualized), three months ended September 30, 2026GAAP | 1.04% | – | – |
| Core return on average assets (annualized), three months ended September 30, 2026non-GAAP | 1.17% | – | – |
| Return to common shareholders on average common equity (annualized), three months ended September 30, 2026GAAP | 9.75% | – | – |
| Core return on average common equity (annualized), three months ended September 30, 2026non-GAAP | 10.93% | – | – |
| Efficiency ratio, three months ended September 30, 2026GAAP | 64.88% | – | – |
| Core efficiency ratio, three months ended September 30, 2026non-GAAP | 61.08% | – | – |
| Total loans (held for investment), September 30, 2026GAAP | $6.78B | increased $121.4 million or 1.82%, 7.23% annualized | – |
| Total deposits, September 30, 2026GAAP | $7.38B | increased by $141.2 million or 1.95%, 7.74% annualized | – |
| Total assets, September 30, 2026GAAP | $8.96B | – | – |
| Total shareholders' equity, September 30, 2026GAAP | $1.00B | decreased $6.1 million or 0.60% | – |
| Book value per common share, September 30, 2026GAAP | $28.77 | – | – |
| Tangible book value per common share, September 30, 2026non-GAAP | $23.71 | 0.42% or 1.66% annualized | – |
| Allowance for credit losses to total loans (HFI), September 30, 2026other | 0.95% | – | – |
| Nonperforming loans to total loans (HFI), September 30, 2026other | 1.24% | decreased 2 bps | – |
| Nonperforming assets to total assets, September 30, 2026other | 1.22 | decreased by 1 bps | – |
| Net charge-offs to average quarterly total loans, three months ended September 30, 2026other | 0.08 | increased to 8 bps from 4 bps | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- Business First repurchased 204,160 shares, with a market value of $6.3 million, at a weighted average price of $30.81 per share.
- Business First has repurchased a total of 630,618 common shares under the existing stock repurchase program, since October 2025, or $17.6 million at a weighted average repurchase price per share of $27.88.
- The board declared a quarterly preferred dividend of $18.75 per share, which is the full quarterly dividend of 1.875% based on the per annum rate of 7.50%.
- The board declared a quarterly common dividend of $0.15 per share of common stock.
- The preferred and common dividends will be paid on November 30, 2026, or as soon thereafter as practicable, to shareholders of record as of November 15, 2026.
What drove it
- Net interest margin expansion was driven by improvement in book yield on loans and a reduction in the overall cost of funding.
- The reduction in overall cost of funding was driven by decreases of $65.9 million in brokered deposits and $107.8 million in borrowings while core deposit costs remained flat.
- Loan and deposit growth was led by the Houston, Texas and Southwest Louisiana markets.
- Commercial real estate and construction portfolios increased $72.7 million and $80.7 million, respectively, compared to the linked quarter.
- Business First successfully converted Progressive Bank's core systems onto its platform in August 2026.
- The decrease in other income was largely attributable to a $0.8 million decrease in gain on sales of loans and the linked quarter's $0.5 million gain on the redemption of debt.
Concerns
- Other expenses increased $0.9 million or 1.58% compared to the linked quarter, including increases of $1.8 million in occupancy and equipment expense and $1.1 million in merger and conversion-related expenses.
- Net charge-offs to average quarterly total loans increased to 8 bps from 4 bps in the linked quarter, mainly attributable to one previously fully reserved commercial relationship.
- The securities portfolio decreased $54.4 million or 5.23% from the linked quarter, impacted by $24.2 million in negative pre-tax fair value adjustments.
- Accumulated other comprehensive loss increased from $35.8 million to $54.9 million or 53.29% during the quarter due to after-tax fair value adjustments in the securities portfolio.
- Residential real estate loans decreased $30.6 million compared to the linked quarter.
What to watch
- The durability of loan yield improvement and the overall cost of funds after the decline in brokered deposits and borrowings.
- Credit performance following the increase in net charge-offs to average quarterly total loans.
- Expense levels following the occupancy and equipment lease termination fee and merger and conversion-related expenses.
- Securities fair value adjustments and accumulated other comprehensive loss.
- Loan and deposit growth in the Houston, Texas and Southwest Louisiana markets.
Balance sheet and cash flow
- Cash and Due From Banks was $490,037 at September 30, 2026, compared to $575,604 at June 30, 2026 and $399,079 at September 30, 2025.
- Federal Home Loan Bank Borrowings were $334,189 at September 30, 2026, compared to $442,494 at June 30, 2026 and $367,408 at September 30, 2025.
- Subordinated Debt was $114,250 at September 30, 2026, compared to $114,250 at June 30, 2026 and $92,587 at September 30, 2025.
- Securities Available for Sale, at Fair Values were $986,704 at September 30, 2026, compared to $1,041,133 at June 30, 2026 and $985,938 at September 30, 2025.
- Accumulated Other Comprehensive Loss was $(54,910) at September 30, 2026, compared to $(35,822) at June 30, 2026 and $(36,429) at September 30, 2025.
Analysis
Business First reported net income available to common shareholders of $23,201 for the three months ended September 30, 2026, compared with $22,825 in the linked quarter and $21,505 in the prior-year quarter. Diluted earnings per common share were $0.71, compared with $0.70 in the linked quarter and $0.73 in the prior-year quarter. Core net income available to common shareholders was $26,012, compared with $23,330 in the linked quarter, while core diluted earnings per common share were $0.79, compared with $0.71.
The quarter reflected improved net interest income and margin performance. Net interest income was $80,664, compared with $77,844 in the linked quarter and $69,276 in the prior-year quarter. Net interest margin was 3.86%, compared with 3.73% in the linked quarter, while net interest margin excluding loan discount accretion was 3.80%, compared with 3.68%. Management attributed the expansion to improved book yield on loans and lower overall funding costs, with brokered deposits down $65.9 million and borrowings down $107.8 million from the linked quarter.
Balance-sheet growth was led by loans and deposits. Total loans held for investment were $6,780,887 at September 30, 2026, compared with $6,659,447 at June 30, 2026, and total deposits were $7,376,798, compared with $7,235,556. Commercial real estate and construction portfolios increased $72.7 million and $80.7 million, respectively, while residential real estate declined $30.6 million. The company completed the Progressive Bank core-system conversion in August 2026.
Expense and credit developments warrant attention. Total other expenses were $60,465, compared with $59,525 in the linked quarter, including higher occupancy and equipment expense and merger and conversion-related expense. The provision for credit losses was $1,938 versus $1,991 in the linked quarter, but net charge-offs to average quarterly total loans increased to 8 bps from 4 bps. Nonperforming loans to total loans held for investment improved to 1.24% from 1.26%, while the allowance for credit losses to total loans held for investment was 0.95%, compared with 1.02%.
Capital returns included the repurchase of 204,160 shares, with a market value of $6.3 million, at a weighted average price of $30.81 per share, as well as a declared $0.15 quarterly common dividend. Total shareholders' equity was $1,002,516, compared with $1,008,577 at June 30, 2026. The securities portfolio declined by $54.4 million or 5.23%, including $24.2 million in negative pre-tax fair value adjustments, and accumulated other comprehensive loss increased from $35.8 million to $54.9 million. The release did not provide forward financial guidance.
Management, verbatim
Our third quarter showed what disciplined execution can deliver.
Jude Melville, chairman, president, and CEO of Business First
We grew loans and deposits at a balanced pace appropriate to our level of capital strength, and we did so while expanding our net interest margin by 12 basis points and keeping non-interest expenses in check.
Jude Melville, chairman, president, and CEO of Business First
Not in the filing
stated, not guessed- Total revenue
- Segment revenue and segment profitability
- Gross margin
- Operating income
- Operating margin
- Operating cash flow
- Free cash flow
- Forward financial guidance
- Prior-period outlook for comparison
- Management-provided tax-rate guidance
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.