Business First Bancshares, Inc. 10-K

ITEM 9A. Controls and Procedures. Disclosure Controls and Procedures Our management, including our principal executive officer and our principal financial officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2024. Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based on their evaluation, our principal executive officer and our principal financial officer concluded that, as of the evaluation date, due to the material weakness in our internal control over financial reporting described below, our disclosure controls and procedures were not effective as of December 31, 2024. However, after giving full consideration to the material weakness described below, management has concluded that the consolidated financial statements included in this Report present fairly, in all material respects, the Company’s financial position, the results of its operations and its cash flows for each of the periods presented in conformity with GAAP. Management ’ s Annual Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of our principal executive officer and our principal financial officer to provide reasonable assurance regarding the reliability of the financial reporting and preparation of our financial statements for external purposes in accordance with GAAP. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use, or disposition of the Company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024, based on the criteria for effective internal control established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. As permitted by SEC guidance, management excluded from its assessment the operations of Oakwood Bancshares, Inc. ("Oakwood"), which was acquired by us on October 1, 2024, and is described in "Note 3 - Mergers and Acquisitions" of the Notes to Consolidated Financial Statements included in Item 8 in this report. Oakwood represented 11.0% of our total assets as of December 31, 2024. Based on the assessment, management determined that the Company’s internal control over financial reporting was not effective as of December 31, 2024 because of the material weakness described below. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable 140 Table of Contents possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In January 2025, we identified control deficiencies involving the design and operation of information technology general controls (“ITGCs”) around change management segregation of duties with respect to certain information technology (“IT”) systems that support our financial reporting process, which we have outsourced to a third party service provider. Specifically, user access controls at our third party service provider lacked sufficient segregation of duties as multiple end users had the ability to both install changes into the production environment and develop application source code via permissions inherited through group membership. As a result, unauthorized changes could have gone undetected and could have had a direct or indirect impact on some of our financial reporting controls (both automated and manual) that relied on certain system reports. Through our own testing procedures, we determined no unauthorized changes occurred in the production database during the applicable periods. Nonetheless, we concluded that the deficiencies constituted a material weakness. Forvis Mazars, LLP, an independent registered public accounting firm, has issued an unqualified opinion on our financial statements, which states that our consolidated financial statements present fairly, in all material respects, the financial position of the Company, the results of its operations and its cash flows for each of the periods presented in conformity with GAAP. The effectiveness of our internal control over financial reporting as of December 31, 2024 has also been audited by Forvis Mazars, LLP, an independent registered public accounting firm, as stated in their report which is included herein. Management’s Remediation Plan As noted above, during management’s assessment of internal control over financial reporting, a material weakness was identified related to the design and operation of ITGCs at our third party service provider. As management is responsible for maintaining effective internal control over financial reporting, and for the assessment of the effectiveness of internal control over financial reporting, we understand the importance of developing a remediation plan with our third party service provider that is aligned with management and overseen by the Audit Committee of our Board of Directors. Management, with the oversight of the Audit Committee of our Board of Directors, is committed to maintaining a strong internal control environment, and has taken, and will continue to take, actions necessary to remediate the material weakness. The identified material weakness in our internal control over financial reporting will not be considered remediated until the remediated controls operate for a sufficient period of time and can be tested and concluded by management to be designed and operating effectively. Our remediation efforts include working with our third party service provider to ensure that it has taken steps to address its user access controls that led to the change management segregation of duties deficiencies. Accordingly, we cannot provide any assurance that our remediation efforts will be successful or that our internal control over financial reporting will be effective as a result of these efforts. As we continue to evaluate operating effectiveness and monitor improvements to our internal control over financial reporting, we may take additional measures to address control deficiencies or modify our remediation efforts. In addition, management will report the progress and status of our remediation efforts to the Audit Committee of our Board of Directors on a periodic basis. Although unrelated to our remediation efforts, it is important to note that prior to the identification of the control deficiencies described above, we had notified our third party service provider of our intent to terminate our existing relationship with them effective as of May 2025, at which time we will transition the applicable services to a new third party service provider. Changes in Internal Control over Financial Reporting There were no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the year ended December 31, 2024, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting. ITEM 9B. Other Information. (a) Not applicable 141 Table of Contents (b) During the three months ended December 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading agreement,” as each term is defined in Item 408(a) of Regulation S-K. During the three months ended December 31, 2024, the Company did not adopt or terminate any “Rule 10b5-1 trading arrangement” as such term is defined in Item 408(a) of Regulation S-K. ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 142 Table of Contents PART III ITEM 10. Directors, Executive Officers and Corporate Governance. The information called for by this item is incorporated herein by reference from our Definitive Proxy Statement for our Annual Meeting of Shareholders tentatively being held on May 22, 2025, or an Amended Annual Report on Form 10-K/A containing such information, a copy of which will be filed with the SEC within 120 days of the end of the fiscal year ended December 31, 2024. ITEM 11. Executive Compensation. The information called for by this item relating to security ownership of certain beneficial owners and management is incorporated herein by reference from our Definitive Proxy Statement for our Annual Meeting of Shareholders tentatively being held on May 22, 2025, or an Amended Annual Report on Form 10-K/A containing such information, a copy of which will be filed with the SEC within 120 days of the end of the fiscal year ended December 31, 2024. ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters. The information called for by this item is incorporated herein by reference from our Definitive Proxy Statement for our Annual Meeting of Shareholders tentatively being held on May 22, 2025, or an Amended Annual Report on Form 10-K/A containing such information, a copy of which will be filed with the SEC within 120 days of the end of the fiscal year ended December 31, 2024. ITEM 13. Certain Relationships and Related Transactions, and Director Independence. The information called for by this item is incorporated herein by reference from our Definitive Proxy Statement for our Annual Meeting of Shareholders tentatively being held on May 22, 2025, or an Amended Annual Report on Form 10-K/A containing such information, a copy of which will be filed with the SEC within 120 days of the end of the fiscal year ended December 31, 2024. ITEM 14. Principal Accountant Fees and Services. The information called for by this item is incorporated herein by reference from our Definitive Proxy Statement for our Annual Meeting of Shareholders tentatively being held on May 22, 2025, or an Amended Annual Report on Form 10-K/A containing such information, a copy of which will be filed with the SEC within 120 days of the end of the fiscal year ended December 31, 2024. The Independent Registered Accounting Firm is Forvis Mazars, LLP (PCAOB Firm ID No. 686 ) located in Fort Worth, TX . 143 Table of Contents PART IV ITEM 15. Exhibits and Financial Statement Schedules. (a) List of documents filed as part of this Report (1) Financial Statements The following financial statements are included in Item 8 of this Report: Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Comprehensive Income Consolidated Statements of Changes in Shareholders’ Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements (2) Financial Statement Schedules Financial statement schedules are omitted either because they are not required or are not applicable, or because the required information is shown in the financial statements or notes thereto. (3) Exhibits Number Description 2.1 Agreement and Plan of Reorganization, dated October 20, 2021, by and between Business First Bancshares, Inc., and Texas Citizens Bancorp, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Business First Bancshares, Inc. on October 21, 2021). 2.2 Agreement and Plan of Reorganization, by and between Business First Bancshares, Inc., and Oakwood Bancshares, Inc., dated April 25, 2024 (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Business First Bancshares, Inc. on April 25, 2024). 3.1 Restated Articles of Incorporation of Business First Bancshares, Inc., adopted October 27, 2022 (incorporated by reference to Exhibit 3.1 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed by Business First Bancshares, Inc. on November 3, 2022). 3.2 Amended and Restated Bylaws of Business First Bancshares, Inc., adopted April 23, 2020 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed by Business First Bancshares, Inc. on April 28, 2020). 4.1 Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-4 filed by Business First Bancshares, Inc. on November 12, 2014). 4.2 Form of Series A Preferred Stock (incorporated by reference to Exhibit A to Exhibit 10.1 to the Current Report on Form 8-K filed by Business First Bancshares, Inc. on September 1, 2022). 4.3 Description of Securities Registered under Section 12 of the Exchange Act (incorporated by reference to Exhibit 4.3 included in the Annual Report on Form 10-K for the year ended December 31, 2023, filed by Business First Bancshares, Inc. on March 2, 2023). Instruments defining the rights of the long-term debt securities of Business First Bancshares, Inc. and its subsidiaries are omitted pursuant to section (b)(4)(iii)(A) of Item 601 of Regulation S-K. Business First Bancshares, Inc. hereby agrees to furnish copies of these instruments to the SEC upon request. 144 Table of Contents 10.1+ Amended and Restated Executive Employment Agreement by and between Business First Bank and David R. Melville, III, dated November 6, 2019 (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, filed by Business First Bancshares, Inc. on November 7, 2019). 10.2+ Change in Control Agreement, dated November 6, 2019, between Business First Bank and Gregory Robertson (incorporated by reference to Exhibit 10.3 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, filed by Business First Bancshares, Inc. on November 7, 2019). 10.3+ Change in Control Agreement, dated November 6, 2019, between Business First Bank and Philip Jordan (incorporated by reference to Exhibit 10.4 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, filed by Business First Bancshares, Inc. on November 7, 2019). 10.4+ Business First Bancshares 2006 Stock Option Plan (“2006 Stock Option Plan”) (incorporated by reference to Exhibit 10.5 to the Registration Statement on Form S-4 filed by Business First Bancshares, Inc. on November 12, 2014). 10.5+ Form of Incentive Stock Option Award Agreement under 2006 Stock Option Plan (incorporated by reference to Exhibit 10.6 to the Registration Statement on Form S-4 filed by Business First Bancshares, Inc. on November 12, 2014). 10.6+ Form of Incentive Stock Option Award Agreement (As Amended), under 2006 Stock Option Plan (incorporated by reference to Exhibit 10.7 to the Registration Statement on Form S-4 filed by Business First Bancshares, Inc. on November 12, 2014). 10.7+ Amendment No. 1 to the 2006 Stock Option Plan, dated December 17, 2007 (incorporated by reference to Exhibit 10.9 to Amendment No. 2 to Form S-4 Registration Statement filed by Business First Bancshares, Inc. on February 5, 2015). 10.8+ Business First Bancshares, Inc., 2017 Equity Incentive Plan (as amended) (incorporated by reference to Appendix A included in the Definitive Additional Materials to the Definitive Proxy Statement on Form DEF 14A filed by Business First Bancshares, Inc., dated as of April 28, 2022, and filed May 3, 2022). 10.9+ Business First Bancshares, Inc., 2024 Equity Incentive Plan (incorporated by reference to Appendix A included in the Definitive Proxy Statement filed by Business First Bancshares, Inc. on April 10, 2024). 10.10+ Supplemental Executive Retirement Plan, adopted as of August 1, 2009, by Business First Bank (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by Business First Bancshares, Inc. on January 13, 2021). 10.11+ Supplemental Executive Retirement Plan Participation Agreement, dated as of January 7, 2021, between b1BANK and Gregory Robertson (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Business First Bancshares, Inc. on January 13, 2021). 10.12+ Supplemental Executive Retirement Plan Participation Agreement, dated as of October 20, 2009, between b1BANK and David R. Melville, III (incorporated by reference to Exhibit 10.16 to the Annual Report on Form 10-K filed by Business First Bancshares, Inc. on March 5, 2021). 10.13+ Supplemental Executive Retirement Plan Participation Agreement, dated as of October 20, 2009, between b1BANK and Philip Jordan (incorporated by reference to Exhibit 10.17 to the Annual Report on Form 10-K filed by Business First Bancshares, Inc. on March 5, 2021). 10.14+ Change in Control Agreement, dated October 29, 2019, between Business First Bancshares, Inc. and Keith Mansfield (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, filed by Business First Bancshares, Inc. on August 4, 2022). 145 Table of Contents 10.15+ Supplemental Executive Retirement Plan Participation Agreement, dated as of January 7, 2021, between b1BANK and Keith Mansfield (incorporated by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, filed by Business First Bancshares, Inc. on August 4, 2022). 10.16+ Change in Control Agreement, dated June 23, 2022, between Business First Bancshares, Inc. and Saundra Strong (incorporated by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, filed by Business First Bancshares, Inc. on May 4, 2023). 10.17+ Supplemental Executive Retirement Plan Participation Agreement, dated as of April 27, 2023, between b1BANK and Saundra Strong (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, filed by Business First Bancshares, Inc. on May 4, 2023). 10.18+ Change in Control Agreement, dated November 16, 2022, by and among Business First Bancshares, Inc., b1BANK and N. Jerome Vascocu, Jr. (incorporated by reference to Exhibit 10.3 of the Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, filed by Business First Bancshares, Inc. on July 31, 2024). 10.19+ Retention Bonus Agreement, dated November 21, 2022, by and among Business First Bancshares, Inc., b1BANK and N. Jerome Vascocu, Jr. (incorporated by reference to Exhibit 10.4 of the Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, filed by Business First Bancshares, Inc. on July 31, 2024). 10.20+ Supplemental Executive Retirement Plan Participation Agreement, dated February 28, 2023, between b1BANK and N. Jerome Vascocu, Jr. (incorporated by reference to Exhibit 10.5 of the Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, filed by Business First Bancshares, Inc. on July 31, 2024). 10.21+ b1BANK Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K, filed by Business First Bancshares, Inc. on December 12, 2024). 10.22+ Form of Securities Purchase Agreement by and among Business First Bancshares, Inc. and the several purchasers of Series A Preferred Stock named therein (incorporated by reference to Exhibit A to Exhibit 10.1 to the Current Report on Form 8-K filed by Business First Bancshares, Inc., on September 1, 2022). 19.1 Insider Trading Policy* 21.1 List of subsidiaries of Business First Bancshares, Inc.* 23.1 Consent of Forvis Mazars, LLP* 24.1 Power of Attorney (contained on the signature page hereto).* 31.1 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* 31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* 32.1 Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** 97.1 Clawback Policy (incorporated by reference to Exhibit 97.1 to the Annual Report on Form 10-K filed by Business First Bancshares, Inc. on March 1, 2024). 101.INS Inline XBRL Instance Document* 101.SCH Inline XBRL Taxonomy Extension Schema Document* 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document* 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document* 146 Table of Contents 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document* 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document* 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) _________________________ * Filed herewith. ** Furnished herewith, and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act. + Represents a management contract or a compensatory plan or arrangement. ITEM 16. Form 10-K Summary. None. 147 Table of Contents SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BUSINESS FIRST BANCSHARES, INC. March 7, 2025 By: /s/ David R. Melville, III David R. Melville, III Chairman, President and Chief Executive Officer The undersigned directors and officers do hereby constitute and appoint David R. Melville, III and Gregory Robertson and either of them, our true and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution, to do any and all acts and things in our name and behalf in our capacities as directors and officers, and to execute any and all instruments for us and in our names in the capacities indicated below, that such person may deem necessary or advisable to enable Business First Bancshares, Inc. to comply with the Securities Exchange Act of 1934 and any rules, regulations and requirements of the Securities and Exchange Commission in connection with this Annual Report on Form 10-K for the fiscal year ended December 31, 2024, including specifically, but not limited to, power and authority to sign for us, or any of us, in the capacities indicated below, any and all amendments hereto; and we do hereby ratify and confirm all that such person or persons shall do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on the 7th day of March, 2025. Signature Title Date By: /s/ David R. Melville, III Chairman, President, Chief Executive Officer and Director March 7, 2025 David R. Melville, III (Principal Executive Officer) By: /s/ Gregory Robertson Chief Financial Officer March 7, 2025 Gregory Robertson (Principal Financial Officer) By /s/ James J. Buquet, III Director March 7, 2025 James J. Buquet, III By: /s/ Carol M. Calkins Director March 7, 2025 Carol M. Calkins By: /s/ Ricky D. Day Director March 7, 2025 Ricky D. Day By: /s/ John Ducrest Director March 7, 2025 John Ducrest By: /s/ Mark P. Folse Director March 7, 2025 Mark P. Folse By: /s/ William Hall Director March 7, 2025 William Hall By: /s/ J. Vernon Johnson Director March 7, 2025 148 Table of Contents J. Vernon Johnson By: /s/ Rolfe H. McCollister, Jr. Director March 7, 2025 Rolfe H. McCollister, Jr. By: /s/ Andrew D. McLindon Director March 7, 2025 Andrew D. McLindon By: /s/ Patrick E. Mockler Director March 7, 2025 Patrick E. Mockler By: /s/ David A. Montgomery, Jr. Director March 7, 2025 David A. Montgomery, Jr. By: /s/ Arthur J. Price Director March 7, 2025 Arthur J. Price By: /s/ Aimee Quirk Director March 7, 2025 Aimee Quirk By: /s/ Zeenat Sidi Director March 7, 2025 Zeenat Sidi By: /s/ Kenneth Smith Director March 7, 2025 Kenneth Smith By: /s/ Keith A. Tillage Director March 7, 2025 Keith A. Tillage By: /s/ Steven G. White Director March 7, 2025 Steven G. White 149