What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-26 compared with 2025-03-07 · 331 added, 347 removed, 1465 unchanged (32% of the section changed)

15 unchanged sentences

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 7, 2025, expressed an opinion that the Company had not maintained effective internal control over financial reporting as of December 31, 2024.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2026, expressed an unqualified opinion thereon.

Change in Accounting Principle

14 unchanged sentences

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses

As described in Note 1 and Note 7 to the consolidated financial statements, the Company’s allowance for loan losses is a component of the allowance for credit losses and was $54.8 million as of December 31, 2024.

The allowance for loan losses is estimated utilizing forward-looking expected loss models which consider a variety of factors affecting lifetime credit losses.

Loans sharing risk characteristics are grouped into pools to estimate expected credit losses.

The Company incorporates forecasted economic scenarios over a reasonable and supportable forecast period which incorporates Company and peer historical losses.

The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Loan Losses

As described in Note 1 and Note 7 to the consolidated financial statements, the Company’s allowance for loan losses was $54.0 million as of December 31, 2025.

Loans sharing risk characteristics are grouped into pools and the allowance for loan losses considers expected losses for the remaining lives of those assets.

Management’s measurement of expected losses utilizes forward-looking expected loss models which consider a variety of factors affecting lifetime credit losses.

Forecasted economic scenarios are considered over a reasonable and supportable forecast period which incorporates internal and peer historical losses, and after the forecast period, the Company reverts to long-term historical loss experience to estimate losses over the remaining lives of the portfolio.

Loss estimates also consider qualitative factors affecting credit losses not reflected in the model.

We identified the allowance for loan losses as a critical audit matter.

The principal considerations for that determination included the high degree of judgment and subjectivity relating to assumptions used in the model, such as management’s use of qualitative factor adjustments related to economic conditions.

We identified the qualitative factor adjustments to the allowance for loan losses as a critical audit matter.

The principal considerations for that determination included the high degree of judgment and subjectivity in auditing management’s measurements of those qualitative factor adjustments related to economic conditions.

Auditing these assumptions required a high degree of auditor effort, specialized skills and knowledge, and significant auditor judgment.

The primary procedures we performed to address this critical audit matter included:

◦ We obtained an understanding of the Company’s model and process for determining the allowance for loan losses and evaluated the design and tested the operating effectiveness of controls relating to the allowance for loan losses, including controls over management’s review and approval of qualitative factor adjustments related to economic conditions applied within the qualitative framework to address risks not already incorporated within the model.

◦ We evaluated the reasonableness and adequacy of management’s qualitative factor adjustments related to economic conditions and the completeness and accuracy of data utilized in development of such qualitative factor adjustments.

◦ We obtained an understanding of the Company’s model and process for determining the allowance for loan losses and evaluated the design and tested the operating effectiveness of controls relating to this estimate, including controls over management’s review and approval of qualitative factor adjustments related to economic conditions applied within the qualitative framework to address risks not already incorporated within the model.

◦ We evaluated management’s methodology for developing the qualitative factor adjustments related to economic conditions and the completeness and accuracy of data utilized in development of such adjustments.

◦ We evaluated management’s judgments and assumptions used in the development of the qualitative factor adjustments and its overall reasonableness.

/s/ Forvis Mazars, LLP

We have served as the Company’s auditor since 2019.

Fort Worth, Texas

March 7, 2025

Birmingham, Alabama

February 26, 2026

Report of Independent Registered Public Accounting Firm

4 unchanged sentences

(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management’s assessment.

The Company did not have effective information technology general controls (ITGCs) supporting the Company’s internal control over financial reporting related to change management segregation of duties as described in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A.

This material weakness was considered in determining the nature, timing, and extent of auditing procedures applied in our audit of the Company’s consolidated financial statements, and this report does not affect our report dated March 7, 2025, on those consolidated financial statements.

In our opinion, because of the effect of the material weakness described above on the achievement of the objectives of the control criteria, Business First Bancshares, Inc.

has not maintained effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework:

(2013) issued by the COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of December 31, 2024 and 2023, and for each of the three years in the period ended December 31, 2024, and our report dated March 7, 2025, expressed an unqualified opinion on those financial statements.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework:

(2013) issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of December 31, 2025 and 2024, and for each of the three years in the period ended December 31, 2025, and our report dated February 26, 2026, expressed an unqualified opinion on those financial statements .

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

6 unchanged sentences

We believe that our audit provides a reasonable basis for our opinion.

As described in Management’s Report on Internal Control over Financial Reporting, the scope of management’s assessment of internal control over financial reporting as of December 31, 2024, has excluded Oakwood Bancshares, Inc.

(“Oakwood’) acquired on October 1, 2024.

We have also excluded Oakwood from the scope of our audit of internal control over financial reporting.

Oakwood represented 11.0% percent of consolidated total assets as of December 31, 2024.

Definitions and Limitations of Internal Control over Financial Reporting

6 unchanged sentences

/s/ Forvis Mazars, LLP

Fort Worth, Texas

March 7, 2025

Birmingham, Alabama

February 26, 2026

BUSINESS FIRST BANCSHARES, INC.

24 unchanged sentences

Securities Sold Under Agreements to Repurchase 22,622 22,621

Bank Term Funding Program - 300,000

Federal Home Loan Bank Borrowings 431,200 355,875

66 unchanged sentences

Consolidated Net Income $ 87,861 $ 65,107 $ 71,043

Other Comprehensive Income (Loss):

Unrealized Gain (Loss) on AFS Investment Securities 4,527 13,006 ( 93,418 )

Other Comprehensive Income

Unrealized Gain on AFS Investment Securities 37,607 4,527 13,006

Unrealized Gain (Loss) on Share of Other Equity Investments — 14 ( 782 )

Reclassification Adjustment for Gains (Losses) on Sales of AFS

Investment Securities Included in Net Income 7 ( 2,565 ) ( 48 )

Reclassification Adjustment for Gains (Losses) on Sales of AFS Investment Securities Included in Net Income 64 7 ( 2,565 )

Income Tax Effect ( 7,960 ) ( 961 ) ( 2,040 )

Other Comprehensive Income (Loss) 3,587 7,619 ( 73,027 )

Consolidated Comprehensive Income (Loss) $ 68,694 $ 78,662 $ ( 18,772 )

Other Comprehensive Income 29,711 3,587 7,619

Consolidated Comprehensive Income $ 117,572 $ 68,694 $ 78,662

The accompanying notes are an integral part of these financial statements.

10 unchanged sentences

Balances at December 31, 2022 $ 71,930 $ 25,110 $ 393,690 $ 163,955 $ ( 74,204 ) $ 580,481

Cumulative Effect of Change in Accounting Principle for Credit Losses — — — ( 827 ) — ( 827 )

Comprehensive Income:

Net Income — — — 71,043 — 71,043

Other Comprehensive Loss - - - - ( 73,027 ) ( 73,027 )

Other Comprehensive Income — — — - 7,619 7,619

Cash Dividends Declared on Preferred Stock, $ 75.00 Per Share

2 unchanged sentences

— — — ( 12,655 ) — ( 12,655 )

Preferred Stock Issuance, Net of Issuance Costs 71,930 - - - - 71,930

Stock Issuance, Net of Issuance Costs - 4,636 98,899 - - 103,535

Stock Based Compensation Cost — 242 3,757 - — 3,999

Surrendered Shares of Options Exercised - ( 45 ) ( 1,057 ) - - ( 1,102 )

Balances at December 31, 2023 71,930 25,352 397,447 216,115 ( 66,585 ) 644,259

Cumulative Effect of Change in Accounting Principle for Credit Losses - - - ( 827 ) - ( 827 )

Comprehensive Income:

5 unchanged sentences

— — — ( 14,863 ) — ( 14,863 )

Stock Issuance, Net of Issuance Costs — 3,973 99,805 — — 103,778

Stock Based Compensation Cost — 227 2,772 — — 2,999

7 unchanged sentences

— — — ( 16,844 ) — ( 16,844 )

Stock Issuance, Net of Issuance Costs - 3,973 99,805 - - 103,778

Stock Based Compensation Cost — 109 5,712 — — 5,821

Stock Repurchase — ( 150 ) ( 3,581 ) — — ( 3,731 )

Balances at December 31, 2025 $ 71,930 $ 29,511 $ 502,155 $ 326,574 $ ( 33,287 ) $ 896,883

15 unchanged sentences

(Gain) Loss on Sales of Securities ( 64 ) ( 7 ) 2,565

Gain on Sale Loans ( 2,376 ) ( 671 ) ( 398 )

Gain on Sales of Loans ( 931 ) ( 2,376 ) ( 671 )

Income on Other Equity Securities ( 2,099 ) ( 2,201 ) ( 3,045 )

(Gain) Loss on Sale of Other Real Estate Owned, Net of Writedowns ( 89 ) ( 214 ) 92

Gain on Sales of Other Real Estate Owned, Net of Writedowns ( 511 ) ( 89 ) ( 214 )

Other Real Estate Owned Valuation Allowance 196 — —

Loss on Disposal of Premises and Equipment 840 7 —

Increase in Cash Value of Life Insurance ( 3,151 ) ( 2,875 ) ( 2,247 )

Deferred Income Tax Benefit ( 962 ) ( 2,052 ) ( 1,368 )

Deferred Income Tax Expense (Benefit) 1,199 ( 962 ) ( 2,052 )

Gain on Extinguishment of Debt ( 630 ) — ( 1,458 )

Gain on Sale of Branch ( 3,360 ) — ( 945 )

17 unchanged sentences

Net Purchases of Premises and Equipment ( 66 ) ( 1,562 ) ( 11,648 )

Loss on Disposal of Premises and Equipment 7 - 717

Proceeds from Sales of Other Real Estate 9,766 621 1,240

Net Increase in Securities Purchased Under Agreements to Resell ( 50,835 ) - -

Net (Increase) Decrease in Securities Purchased Under Agreements to Resell 25,248 ( 50,835 ) —

Net (Increase) Decrease in Federal Funds Sold 25,276 ( 43,957 ) ( 135,528 )

7 unchanged sentences

Net Advances (Repayments) on Federal Home Loan Bank Borrowings 75,325 122,488 ( 198,902 )

Net Proceeds (Repayments) on Bank Term Funding Program ( 300,000 ) 300,000 -

Net Proceeds (Repayments) from Short Term Borrowings - - ( 11 )

Net (Repayments) Proceeds on Bank Term Funding Program — ( 300,000 ) 300,000

Repayment of Subordinated Debt ( 6,370 ) — ( 8,900 )

Gain on Extinguishment of Debt - ( 1,458 ) -

Proceeds from Issuance of Preferred Stock, Net of Issuance Costs - - 71,930

Net Proceeds (Costs) from Issuance of Common Stock ( 31 ) - 48,492

Surrendered Shares of Options Exercised - - ( 1,102 )

Net Costs from Issuance of Common Stock — ( 31 ) —

Repurchase of Common Stock ( 3,731 ) — —

Payment of Dividends on Preferred Stock ( 5,401 ) ( 5,401 ) ( 5,401 )

1 unchanged sentence

Net Cash Provided by Financing Activities 281,520 326,499 503,542

Net Increase in Cash and Cash Equivalents 92,988 73,370 84,365

Cash and Cash Equivalents at Beginning of Period 226,110 152,740 68,375

Cash and Cash Equivalents at End of Period $ 319,098 $ 226,110 $ 152,740

Net Increase in Cash and Due From Banks 92,077 92,988 73,370

Cash and Due From Banks at Beginning of Period 319,098 226,110 152,740

Cash and Due From Banks at End of Period $ 411,175 $ 319,098 $ 226,110

Supplemental Disclosures for Cash Flow Information:

4 unchanged sentences

Supplemental Schedule for Noncash Investing and Financing Activities:

Change in the Unrealized Gain (Loss) on Securities Available for Sale $ 4,534 $ 10,441 $ ( 93,466 )

Change in the Unrealized Gain on Securities Available for Sale $ 37,670 $ 4,534 $ 10,441

Change in the Unrealized Gain (Loss) on Equity Securities $ — $ 14 $ ( 782 )

Change in Deferred Tax Effect on the Unrealized (Gain) Loss on Securities Available for Sale and Equity Securities $ ( 961 ) $ ( 2,040 ) $ 19,565

Change in Deferred Tax Effect on the Unrealized Gain on Securities Available for Sale and Equity Securities $ ( 7,960 ) $ ( 961 ) $ ( 2,040 )

Transfer of Loans to Other Real Estate $ 16,935 $ 4,376 $ 1,339

26 unchanged sentences

The Company is also regulated by the Federal Reserve and is subject to periodic examinations.

On March 1, 2022, the Company completed the acquisition of Texas Citizens Bancorp, Inc.

(“TCBI”), and its wholly-owned subsidiary, Texas Citizens Bank, National Association, located in Pasadena, Texas.

The company issued 2,069,532 shares of its common stock to the former shareholders of TCBI.

At February 28, 2022 , TCBI reported $ 534.2 million in total assets, $ 349.5 million in loans and $ 477.2 million in deposits.

On January 31, 2024, the Company completed the acquisition, through b1BANK, of Waterstone, headquartered in Katy, Texas.

Waterstone offers community banks and small businesses a range of SBA lending services including planning, pre-qualification, packaging, closing and disbursements, servicing and liquidations.

Upon consummation of the acquisition, we paid $ 3.3 million in cash to the former owners of Waterstone.

Upon consummation of the acquisition, the Company paid $ 3.3 million in cash to the former owners of Waterstone.

On October 1, 2024, the Company completed the acquisition of Oakwood Bancshares, Inc.

2 unchanged sentences

At September 30, 2024 , Oakwood reported $ 863.6 million in total assets, $ 700.2 million in loans and $ 741.3 million in deposits.

On July 7, 2025, the Company and Progressive Bancorp, Inc., a Louisiana corporation (“Progressive”), entered into a definitive agreement providing for the acquisition by the Company of Progressive and its wholly-owned bank subsidiary, Progressive Bank.

The Company issued 3,192,367 shares of its common stock to the former shareholders of Progressive.

Progressive had approximately $ 773.8 million of total assets, $ 684.9 million of deposits and $ 597.2 million of loans as of March 31, 2025.

See Note 26 for information on this acquisition on January 1, 2026.

Preparation of financial statements in conformity with U.S.

52 unchanged sentences

Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Prior to January 1, 2023, the Bank classified loans as impaired when it was probable the Bank would be unable to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement.

Acquired Loans

2 unchanged sentences

In either case, the difference between the estimated fair value of the acquired loan related to non-credit deterioration is treated as an adjustment to the contractual yield and accreted into interest income over the remaining life of the loan.

Effective January 1, 2023, the Company adopted ASU 2016-13 , Financial Instrument – Credit Losses (Topic 326 ).

Measurement of Credit Losses on Financial Instruments related to the impairment of financial instruments (ASU 2016-13).

Prior to the adoption of Financial Instrument – Credit Losses (Topic 324 ), Measurement of Credit Losses on Financial Instruments , commonly referred to as the Current Expected Credit Loss (“CECL”), ASU 2016-13, acquired performing loans were accounted for under ASC 310-20 , Nonrefundable Fees and Other Costs , with the related discount or premium being recognized as an adjustment to yield over the life of the loan and acquired impaired loans were accounted for according to ASC Topic 310-30 , “ Loans and Debt Securities Acquired with Deteriorated Credit Quality ( “ASC 310-30” ).

Under this method, adjustments to cash flows from the original acquisition date estimates were accounted for as adjustments to accretion for these loans.

Allowance for Credit Losses

Allowance for Loan Losses

Effective January 1, 2023, the allowance for credit losses is established for current expected credit losses on the Company’s loan portfolio, including unfunded credit commitments.

Upon adoption of the guidance on January 1, 2023 , we recognized an $ 827,000 reduction to retained earnings, after recording the relating deferred tax asset adjustment at our adjusted tax rate.

The allowance for credit losses is increased through provisions charged to earnings and reduced by net charge-offs, inclusive of recoveries.

7 unchanged sentences

The allowance recorded for credit losses utilizes forward-looking expected loss models to consider a variety of factors affecting lifetime credit losses.

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

expected prepayments, with loans sharing risk characteristics grouped into pools to estimate expected losses.

These factors include loan and borrower characteristics, such as internal risk ratings, delinquency status, collateral type and available valuation information, and the remaining term of the loan, adjusted for expected prepayments, with loans sharing risk characteristics grouped into pools to estimate expected losses.

Where loans do not exhibit similar risk characteristics, an individual analysis is performed to consider expected credit losses.

3 unchanged sentences

The allowance recorded for individually evaluated loans is based on an analysis utilizing expected cash flows discounted using the original effective interest rate, the observable market price of the loan, or, when repayment is expected through the sale of collateral, the fair value of the collateral, less selling costs, for collateral-dependent loans.

Prior to the adoption of ASU 2016-13 , the allowance for credit losses on loans was a contra-asset valuation account established through a provision for loan losses charged to expense, which represented management’s best estimate of inherent losses that had been incurred within the existing portfolio of loans.

The allowance for credit losses on loans included allowance allocations calculated in accordance with ASC Topic 310 , “Receivables” and allowance allocations calculated in accordance with ASC Topic 450, “Contingencies.”

Allowance for Loans Acquired with Credit Deterioration

Beginning January 1, 2023 , when a loan portfolio is purchased, an allowance is established for those loans considered purchased with more-than-insignificant credit deterioration (PCD) loans, and those not considered purchased with more-than-insignificant credit deterioration (non-PCD).

When a loan portfolio is purchased, an allowance is established for those loans considered purchased with more-than-insignificant credit deterioration (PCD) loans, and those not considered purchased with more-than-insignificant credit deterioration (non-PCD).

The allowance established utilizes the same risk factors discussed above for our non-acquired allowance.

The allowance established for non-PCD loans is recognized through provision expense upon acquisition, whereas the allowance established for loans considered PCD at acquisition is offset by an increase in the basis of the acquired loans.

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

acquired loans.

Any subsequent increases and decreases in the allowance related to acquired loans are recognized through provision expense, with future charge-offs recorded to the allowance.

2 unchanged sentences

The liability for off-balance sheet credit exposure related to loan commitments and other credit guarantees is included in other liabilities.

Therefore business processes and credit risks associated with unfunded credit commitments are essentially the same as for loans, the Company utilizes similar processes to estimate its liability for unfunded credit commitments, adjusted for an expectation of the actual utilization of the committed credit facility.

Therefore, business processes and credit risks associated with unfunded credit commitments are essentially the same as for loans.

The Company utilizes similar processes to estimate its liability for unfunded credit commitments, adjusted for an expectation of the actual utilization of the committed credit facility.

Allowance on Investment Securities

3 unchanged sentences

The results of the analysis are evaluated quarterly to confirm that credit loss estimates are appropriate for the securities portfolio.

Based on our assessments, expected credit losses on the investment securities portfolio as of December 31, 2024 and 2023 , was negligible and therefore, no allowance for credit loss was recorded related to our investment securities.

Prior to the adoption of ASU 2016-13 , declines in the fair value of available-for-sale securities below their cost that were deemed to be other than temporary were reflected in earnings as realized losses.

In estimating other-than-temporary impairment losses prior to January 1, 2023 , management considered, among other things, (i) the length of time and the extent to which the fair value had been less than cost, (ii) the financial condition and near-term prospects of the issuer and (iii) the intent and our ability to retain our investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Based on our assessments, we had no expected credit losses on the investment securities portfolio as of December 31, 2025 and 2024 , therefore, no allowance for credit loss was recorded related to our investment securities.

Accrued Interest

19 unchanged sentences

Valuations are periodically performed by management, and any subsequent write-downs are recorded as a charge to operations, if necessary, to reduce the carrying value of a property to the lower of its cost or fair value less cost to sell.

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Goodwill and Other Intangible Assets

10 unchanged sentences

All servicing rights are identified by class and amortized over the remaining service life of the loan.

Customer-Initiated Derivatives

The Company enters into derivative instruments to meet the needs of its customers through the execution of customer-initiated derivatives (swaps and caps and floors).

These financial instruments involve elements of market and credit risk.

Market and credit risk are included in the determination of fair value.

Market risk is the potential loss that may result from movements in interest rates that cause an unfavorable change in the value of a financial instrument.

Market risk in interest rate contracts executed on behalf of customers is mitigated by taking offsetting positions.

Credit risk is the possible loss that may occur in the event of default by the counterparty to a financial instrument.

The Company manages credit risk arising from customer-initiated derivatives by evaluating the creditworthiness of each customer, utilizing a similar approval process used for its lending activities.

Derivatives with dealer counterparties are either cleared through a clearinghouse or settled directly with a single counterparty.

The Company has quantified the credit risk as not significant as of December 31, 2025, and 2024.

Income primarily results from the spread between the customer derivative and the offsetting dealer position.

For December 31, 2025, and 2024, the Company recognized $ 4.4 million and $ 2.7 million, respectively, in swap fee income.

The provision for income taxes is based on amounts reported in the statement of income after exclusion of nontaxable income such as interest on state and municipal securities.

Also, certain items of income and expense are recognized in

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

different time periods for financial statement purposes than for income tax purposes.

Also, certain items of income and expense are recognized in different time periods for financial statement purposes than for income tax purposes.

Thus, provisions for deferred taxes are recorded in recognition of such temporary differences.

5 unchanged sentences

As of December 31, 2025 and 2024 , the Company does not believe it has taken any positions that would require the recording of any additional tax liability, nor does it believe there are any unrealized tax benefits that would either increase or decrease within the next year.

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company files income tax returns in the U.S.

7 unchanged sentences

Forfeitures are recognized as they occur.

Statements of Cash Flows

For purposes of reporting cash flows, cash and cash equivalents include cash on hand and due from banks.

Comprehensive Income

12 unchanged sentences

Accounting Standards Adopted in 2025

2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures." ASU No.

2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures." ASU 2023-07 requires public business entities, including those with one reportable segment, to disclose additional disaggregated information

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

about a reportable se gment’s income and expenses in both interim and annual periods.

The standard requires disclosure of the title and position of the chief operating decision maker and an explanation of how the reported measure(s) of segment profit or loss are utilized in assessing segment performance allocating resources.

The update permits disclosure of additional measures of a segment’s profit and losses, if multiple measures are utilized by the chief operating decision maker to allocate resources and evaluate profitability.

Such measures, to the extent they are relevant but not in accordance with GAAP, shall be accompanied by appropriate disclosures and reconciliations to the appropriate reported GAAP amounts.

The adoption of this standard did not have a material impact on the consolidated financial statements and disclosur es.

Accounting Standards Not Yet Adopted

2023-09, “Income Taxes (Topic 740):

2 unchanged sentences

ASU 2023-09 also requires all entities to disclose income taxes paid, net of refunds, disaggregated by federal, state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold.

ASU 2023-09 is effective for the Company starting January 1, 2025, though early adoption is permitted.

ASU 2023-09 is not expected to have a significant impact on our financial statements.

ASU 2023-09 became effective for the Company starting January 1, 2025.

ASU 2023-09 did not have a significant impact on our financial statements.

Accounting Standards Not Yet Adopted

ASU 2025-08,” Financial Instruments – Credit Losses (Topic 326), Purchased Loans.” The updates in ASU 2025-08 amend the guidance in ASC 326 on the accounting for certain purchased loans.

Under the ASU, entities must account for acquired loans (excluding credit cards) that meet certain criteria at acquisition (“purchased seasoned loans”) by recognizing them at their purchase price plus an allowance for expected credit losses (i.e., the gross-up approach).

All non-purchased credit deteriorated (“non-PCD”) loans (excluding credit cards) that are acquired in a business combination are deemed seasoned.

Other non-PCD loans (excluding credit cards) are seasoned if they were purchased at least 90 days after origination and the acquirer was not involved in the origination of the loans.

The ASU’s amendments align the accounting for purchased seasoned loans with the treatment of financial assets purchased with more-than-insignificant credit deterioration since origination (“PCD assets”).

The amendments are effective for the Company for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods.

The amendments should be applied prospectively to loans that are acquired on or after the initial application date.

Early adoption is permitted in an interim or annual

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

reporting period in which financial statements have not yet been issued or made available for issuance.

If an entity adopts the amendments in an interim reporting period, it should apply the amendments as of the beginning of that interim reporting period or the beginning of the annual reporting period that includes that interim reporting period.

The adoption of these amendments will result in less provision for loan losses recognized through the consolidated statements of income, in relation to the initial accounting for non-PCD loans.

Note 2 – Reclassifications –

2 unchanged sentences

Note 3 – Mergers and Acquisitions –

Texas Citizens Bancorp, Inc.

On March 1, 2022, the Company consummated the merger of Texas Citizens Bancorp, Inc.

(“TCBI”), headquartered in Pasadena, Texas, with and into the Company, pursuant to the terms of that certain Agreement and Plan of Reorganization (the “Reorganization Agreement”), dated as of October 20, 2021, by and between the Company and TCBI (the “Merger”).

Also on March 1, 2022, TCBI’s wholly owned banking subsidiary, Texas Citizens Bank, National Association, was merged with and into b1BANK.

Pursuant to the terms of the Reorganization Agreement, upon consummation of the Merger, the Company issued 2,069,532 shares of its common stock to the former shareholders of TCBI.

At February 28, 2022, TCBI reported $ 534.2 million in total assets, $ 349.5 million in loans and $ 477.2 million in deposits.

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table reflects the consideration paid for TCBI’s net assets and the identifiable assets purchased and liabilities assumed at their fair values as of March 1, 2022.

Cost and Allocation of Purchase Price for Texas Citizens Bancorp, Inc.

(Dollars in thousands, except per share data)

Purchase Price:

Shares Issued to TCBI's Shareholders on March 1, 2022 2,069,532

Closing Stock Price on February 28, 2022 $ 26.19

Total Stock Issued $ 54,201

Other Consideration, Including Equity Awards 842

Total Purchase Price $ 55,043

Net Assets Acquired:

Cash and Cash Equivalents $ 163,460

Securities Available for Sale 370

Loans and Leases Receivable 338,027

Premises and Equipment, Net 2,776

Cash Value of Life Insurance 12,146

Core Deposit Intangible 3,875

Other Assets 14,731

Total Assets 535,385

Deposits 477,277

Borrowings 30,708

Other Liabilities 1,006

Total Liabilities 508,991

Net Assets Acquired 26,394

Goodwill Resulting from Merger $ 28,649

Oakwood Bancshares, Inc.

32 unchanged sentences

Goodwill Resulting from Merger $ 30,165

The Company has recorded approximately $ 1.6 million and $ 236,000 of acquisition-related costs within merger and conversion-related expenses and salaries and benefits for the years ended December 31, 2024 and 2023, respectively.

The Company has recorded approximately $ 3.8 million and $ 1.6 million of acquisition-related costs within merger and conversion-related expenses and salaries and benefits for the years ended December 31, 2025 and 2024, respectively.

The following is a description of the methods used to determine the fair values of significant assets acquired and liabilities assumed presented above.

23 unchanged sentences

Fair values for borrowings were based on estimated market rates over the remaining terms of the subordinated debt issuances.

Pro forma tables for TCBI and Oakwood were impractical to include due to the cost versus benefit of including such disclosures.

Pro forma tables for Oakwood were impractical to include due to the cost versus benefit of including such disclosures.

Waterstone LSP, LLC

13 unchanged sentences

Years Ended December 31,

2024 2023 2022

(Dollars in thousands, except per share data) 2025 2024 2023

8 unchanged sentences

Note 5 – Cash and Due From Banks –

The Bank is required to maintain funds in cash or on deposit with the Federal Reserve Bank.

The Bank had no required reserves as of December 31, 2024 and 2023.

The Bank is no longer required to maintain funds in cash or on deposit with the Federal Reserve Bank and as of December 31, 2025 and 2024, the Bank had no reserves.

Note 6 – Securities –

1 unchanged sentence

December 31, 2025

(Dollars in thousands)

(Dollars in thousands) Amortized

Treasury Securities $ 17,571 $ — $ 293 $ 17,278

8 unchanged sentences

December 31, 2024

(Dollars in thousands)

(Dollars in thousands) Amortized

Treasury Securities $ 17,631 $ — $ 956 $ 16,675

8 unchanged sentences

Less Than 12 Months 12 Months or Greater Total

(Dollars in thousands)

(Dollars in thousands) Fair

Treasury Securities $ — $ — $ 17,278 $ 293 $ 17,278 $ 293

6 unchanged sentences

Less Than 12 Months 12 Months or Greater Total

(Dollars in thousands)

(Dollars in thousands) Fair

Treasury Securities $ — $ — $ 16,675 $ 956 $ 16,675 $ 956

5 unchanged sentences

As of December 31, 2025 and 2024, no allowance for credit losses was recognized on available for sale securities in an unrealized loss position as management does not believe any of the securities are impaired due to credit quality.

This determination is based on the Company’s analysis of the underlying risk characteristics including credit ratings,

This determination is based on the Company’s analysis of the underlying risk characteristics including credit ratings, historical loss experience, and other qualitative factors.

Further, the securities continue to make principal and interest payments under their contractual terms and management does not have the intent to sell any of the securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of

BUSINESS FIRST BANCSHARES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

historical loss experience, and other qualitative factors.

amortized cost basis.

Therefore, the Company has determined the unrealized losses are due to changes in market interest rates compared to rates when the securities were acquired.

1 unchanged sentence

Actual maturities may differ from contractual maturities in mortgage-backed securities because the mortgages underlying the securities may be called or repaid without any penalties.

(Dollars in thousands)

(Dollars in thousands) Amortized

Less Than One Year $ 59,342 $ 58,687

6 unchanged sentences

There were $ 116,000 and $ 21,000 realized gross gains from sales or redemptions of securities for the years ended December 31, 2025 and 2024, respectively, and none for the year ended December 31, 2023.

There were $ 14,000 , $ 2.6 million and $ 57,000 realized gross losses from sales or redemptions of securities for the years ended December 31, 2024, 2023 and 2022, respectively.

There were $ 52,000 , $ 14,000 and $ 2.6 million realized gross losses from sales or redemptions of securities for the years ended December 31, 2025, 2024 and 2023, respectively.

Other Equity Securities and VIEs

3 unchanged sentences

The Company also has investments of $ 302,000 in TIB National Association, $ 562,000 in Bankers Insurance, LLC, and $ 2.2 million in First National Banker’s Bank at both December 31, 2025 and 2024.

During the year ended December 31, 2025, the Company invested $ 400,000 in One America Bancorp, Inc.

These investments are carried at cost, less any impairment, due to the lack of a quoted market price and a ready market for these types of investments.

26 unchanged sentences

$ 19,348 $ 17,409

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 7 – Loans and the Allowance for Loan Losses –

12 unchanged sentences

The performing 1-4 family residential, multi-family residential, commercial real estate, and commercial loans, are pledged, under a blanket lien, as collateral securing advances from the FHLB at December 31, 2025 and 2024.

Commercial and agricultural loans are pledged against the Federal Reserve Banks’ discount window as of December 31, 2024 and 2023.

Net deferred loan origination fees were $ 12.6 million at both December 31, 2024 and 2023, and are netted in their respective loan categories above.

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Commercial and agricultural loans are pledged against the Federal Reserve Banks’ discount window at December 31, 2025 and 2024.

Net deferred loan origination fees were $ 11.4 million and $ 12.6 million, respectively, at December 31, 2025 and 2024, and are netted in their respective loan categories above.

In addition to loans issued in the normal course of business, the Company considers overdrafts on customer deposit accounts to be loans, and reclassifies overdrafts as loans in its consolidated balance sheets.

2 unchanged sentences

The unpaid principal balances of mortgages and other loans serviced for others were approximately $ 643.8 million and $ 747.0 million at December 31, 2025 and 2024, respectively.

The Company has servicing rights of $ 832,000 and $ 1.1 million recorded at December 31, 2024 and 2023, respectively, which are recorded within other assets.

The Company has servicing rights of $ 956,000 and $ 832,000 recorded at December 31, 2025 and 2024, respectively, which are recorded within other assets.

The Bank grants loans and extensions of credit to individuals and a variety of businesses and corporations located in its general market areas throughout Louisiana and Texas.

9 unchanged sentences

The segmentation and disaggregation of the portfolio is part of the ongoing credit monitoring process.

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Real Estate Portfolio Segment

11 unchanged sentences

Repayment of these loans primarily relies on successful rental and management of the property.

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Commercial Portfolio Segment

7 unchanged sentences

The allowance for credit losses allocated to each portfolio segment is not necessarily indicative of future losses in any particular portfolio segment and does not restrict the use of the allowance to absorb losses in other portfolio segments.

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Allowance for Credit Losses and Recorded Investment in Loans Receivable

December 31, 2025

(Dollars in thousands)

(Dollars in thousands) Real Estate:

Commercial Real Estate:

Construction Real Estate:

Residential Commercial Consumer

and Other Total

Allowance for Loan Losses:

Beginning Balance $ 23,460 $ 7,162 $ 8,036 $ 15,667 $ 515 $ 54,840

Adjustment for Oakwood on PCD Loans 4,013 1,420 374 2,603 - 8,410

Charge-offs ( 4,116 ) ( 20 ) ( 242 ) ( 6,768 ) ( 1,991 ) ( 13,137 )

Recoveries 30 211 33 839 314 1,427

Provision 1,422 892 2,460 3,390 2,345 10,509

Provision (Recovery) 4,112 ( 4,116 ) ( 404 ) 9,544 1,693 10,829

Ending Balance $ 23,486 $ 3,237 $ 7,423 $ 19,282 $ 531 $ 53,959

8 unchanged sentences

December 31, 2024

(Dollars in thousands)

(Dollars in thousands) Real Estate:

Commercial Real Estate:

Construction Real Estate:

Residential Commercial Consumer

and Other Total

Allowance for Loan Losses:

Beginning Balance $ 17,676 $ 6,596 $ 5,485 $ 10,424 $ 233 $ 40,414

Adoption of ASU 2016-13 4,823 933 ( 365 ) ( 2,483 ) ( 248 ) 2,660

Beginning Balance After Adoption 19,525 6,701 4,989 9,238 385 40,838

Adjustment for Oakwood on PCD Loans 4,013 1,420 374 2,603 — 8,410

Charge-offs 263 ( 2,261 ) ( 297 ) ( 986 ) ( 2,392 ) ( 5,673 )

Recoveries 86 515 14 236 329 1,180

Provision (Recovery) 174 ( 70 ) 520 3,327 1,010 4,961

Provision 1,422 892 2,460 3,390 2,345 10,509

Ending Balance $ 23,460 $ 7,162 $ 8,036 $ 15,667 $ 515 $ 54,840

1 unchanged sentence

Beginning Balance $ 206 $ 1,546 $ 177 $ 1,372 $ 23 $ 3,324

Adoption of ASU 2016-13 116 2,113 190 657 121 3,197

Beginning Balance After Adoption 336 2,250 203 886 127 3,802

Provision (Recovery) 22 ( 235 ) 181 393 3 364

3 unchanged sentences

The following table summarizes, by segment, the loan balance and specific allowance allocation for those loans which have been individually evaluated.

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 January 1, 2023

Loan Balance Specific Allocations Loan Balance Specific Allocations

(Dollars in thousands)

December 31, 2025 December 31, 2024

(Dollars in thousands) Loan Balance Specific Allocations Loan Balance Specific Allocations

Real estate loans:

9 unchanged sentences

Loans are graded on a scale of 10 to 80.

Individual loan officers review updated financial information for all pass grade loans to reassess the risk grade, generally on at least an annual basis.

When a loan has a risk grade of 60, it is still considered a pass grade loan;

however, it is considered to be on management’s “watch list,” and subject to additional and more frequent monitoring by both the loan officer and senior credit and risk personnel.

When a loan has a risk grade of 70 or higher, a special assets officer monitors the loan on an on-going basis.

Individual loan officers review updated financial information, which may include credit scores, financial statements, collateral valuations and other borrower information, for all pass grade (10-45) loans to reassess the risk grade, generally on at least an annual basis.

When a loan has a risk grade of 50, it is considered to be on management’s “watch list,” and subject to additional and more frequent monitoring by both the loan officer and senior credit and risk personnel.

Loans graded 60 or higher have exhibited potential or actual credit weakness that makes their full collection uncertain and are considered classified

BUSINESS FIRST BANCSHARES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

loans, consisting of substandard (60), doubtful (70) and loss (80) categories.

Generally, loans that are classified are assigned special assets personnel for ongoing monitoring and resolution.

The following tables set forth the credit quality indicators, disaggregated by loan segment, as of December 31, 2025 and 2024:

December 31, 2025

(Dollars in thousands) Pass

(Risk Grade 10-45) Special Mention

3 unchanged sentences

(Risk Grade 80) Total Current Period Charge- offs

(Dollars in thousands)

Originated in 2025 $ 387,209 $ 1,506 $ 8,789 $ — $ — $ 397,504 $ —

52 unchanged sentences

December 31, 2024

(Dollars in thousands) Pass

(Risk Grade 10-45) Special Mention

3 unchanged sentences

(Risk Grade 80) Total Current Period Charge- offs

(Dollars in thousands)

Originated in 2024 $ 300,564 $ — $ 15,271 $ — $ — $ 315,835 $ —

58 unchanged sentences

• Doubtful loans have specific weaknesses that are severe enough to make collection or liquidation in full highly questionable and improbable.

As of December 31, 2024 and 2023, loan balances outstanding more than 90 days past due and still accruing interest amounted to $ 860,000 and $ 127,000 , respectively.

As of December 31, 2025 and 2024, loan balances outstanding more than 90 days past due and still accruing interest amounted to $ 2.2 million and $ 860,000 , respectively.

As of December 31, 2025 and 2024, loan balances outstanding on nonaccrual status amounted to $ 74.5 million and $ 24.1 million, respectively.

4 unchanged sentences

December 31, 2025

(Dollars in thousands)

(Dollars in thousands) 30-59 Days

Current Total Loans Receivable Recorded Investment Over

13 unchanged sentences

December 31, 2024

(Dollars in thousands)

(Dollars in thousands) 30-59 Days

Past Due 60-89 Days

16 unchanged sentences

The following table presents non-accrual loans by segment as of December 31, 2025 and 2024, respectively.

(Dollars in thousands) December 31,

2025 December 31,

(Dollars in thousands)

Real Estate Loans:

6 unchanged sentences

Total $ 74,471 $ 24,147

The Bank had $ 9.8 million and $ 2.4 million, as of December 31, 2025 and 2024, respectively, in non-accrual loans with no specific allowance allocation.

Accrued interest receivable of $ 1.7 million and $ 3.4 million was outstanding as of December 31, 2025 and 2024, respectively, for all loan deferrals, primarily attributable to the COVID-19 pandemic and, to a much lesser extent, hurricanes which occurred in 2020 and 2021.

19 unchanged sentences

The carrying amount of goodwill as of December 31, 2025 and 2024 was $ 121.1 million and $ 121.6 million, respectively.

In 2024, the increase of $ 33.2 million in goodwill was due to the acquisitions of Waterstone and Oakwood.

In 2023, goodwill was reduced by $ 153,000 due to the sale of the Leesville branch.

In 2025, the decrease of $ 426,000 was due to the sale of the Kaplan banking center and adjustments from the 2024 acquisition of Oakwood.

The Company performed the required annual goodwill impairment test as of October 1, 2025.

14 unchanged sentences

The following table presents the estimated aggregate amortization expense for the periods indicated:

(Dollars in thousands)

December 31, (Dollars in thousands)

Thereafter 3,425

18 unchanged sentences

Other public fund deposits were approximately $ 555.1 million and $ 603.2 million at December 31, 2025 and 2024, respectively.

Note 11 – Borrowings –

The Bank had outstanding advances from the FHLB of $ 355.9 million and $ 211.2 million at December 31, 2024 and 2023, respectively, consisting of:

BUSINESS FIRST BANCSHARES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

One fixed rate loan with an original principal balance of $ 60.0 million.

The loan was made in 2021 and the balance at December 31, 2024 and December 31, 2023 was $ 23.3 million and $ 35.3 million, respectively, with interest at 0.89 %.

Principal and interest payments are due monthly and the loan matures in November 2026.

One fixed rate loan of $ 875,000 at both December 31, 2024 and 2023, that was acquired during the TCBI acquisition, with interest at 4.88 % paid monthly.

Principal is due at maturity in April 2025.

One fixed rate loan of $ 25.0 million at both December 31, 2024 and 2023, with interest at 4.89 % paid monthly.

Principal is due at maturity in July 2025.

One fixed rate loan of $ 25.0 million at both December 31, 2024 and 2023, with interest at 4.65 % paid monthly.

Principal is due at maturity in January 2026.

One fixed rate loan of $ 25.0 million at both December 31, 2024 and 2023, with interest at 4.56 % paid monthly.

Principal is due at maturity in July 2026.

One fixed rate loan of $ 25.0 million at both December 31, 2024 and 2023, with interest at 4.13 % paid monthly.

Principal is due at maturity in October 2028.

This advance has put options beginning in October 2024.

One fixed rate loan of $ 25.0 million at both December 31, 2024 and 2023, with interest at 3.92 % paid monthly.

Principal is due at maturity in October 2030.

This advance has put options beginning in October 2024.

One fixed rate loan of $ 25.0 million at both December 31, 2024 and 2023, with interest at 3.72 % paid monthly.

Principal is due at maturity in October 2033.

This advance has put options beginning in October 2024.

One fixed rate loan of $ 25.0 million at both December 31, 2024 and 2023, with interest at 3.57 % paid monthly.

Principal is due at maturity in October 2033.

This advance has put options beginning in October 2024.

One fixed rate loan with an original principal balance of $ 10.0 million.

The loan was made in 2020 and was acquired during the Oakwood acquisition.

The balance at December 31, 2024 was $ 1.7 million, with interest at 0.52 %.

Principal and interest payments are due monthly and the loan matures in October 2025.

One fixed rate loan of $ 25.0 million at December 31, 2024, with interest at 4.84 % paid monthly.

Principal is due at maturity in December 2026.

One fixed rate loan of $ 25.0 million at December 31, 2024, with interest at 4.78 % paid monthly.

Principal is due at maturity in September 2027.

One fixed rate loan of $ 25.0 million at December 31, 2024, with interest at 4.73 % paid monthly.

Principal is due at maturity in March 2028.

One fixed rate loan of $ 25.0 million at December 31, 2024, with interest at 4.69 % paid monthly.

Principal is due at maturity in September 2028.

One short term, fifteen-day , fixed rate loan of $ 55.0 million at December 31, 2024, with interest at 4.38 %.

Principal and interest was due, paid and rolled into a $ 30.0 million renewal, at maturity in January 2025.

Note 11 – Borrowings –

The Bank had outstanding advances from the FHLB of $ 431.2 million and $ 355.9 million at December 31, 2025 and 2024, respectively, consisting of:

(Dollars in thousands) 2025 2024

4.38 % advance due January 2025

4.88 % advance due April 2025 (a)

4.89 % advance due July 2025

0.52 % advance due October 2025 (b)

4.65 % advance due January 2026

25,000 25,000

3.62 % advance due January 2026 (c)

4.00 % advance due March 2026

4.56 % advance due July 2026

25,000 25,000

3.91 % advance due July 2026

0.89 % advance due November 2026 (d)

11,200 23,300

4.84 % advance due December 2026

25,000 25,000

4.78 % advance due September 2027

25,000 25,000

4.73 % advance due March 2028

25,000 25,000

4.69 % advance due September 2028

25,000 25,000

4.13 % advance due October 2028

25,000 25,000

3.92 % advance due October 2030

25,000 25,000

3.72 % advance due October 2033

25,000 25,000

3.57 % advance due October 2033 (e)

25,000 25,000

Total FHLB advances $ 431,200 $ 355,875

(a) Loan acquired during the TCBI acquisition due and paid in April 2025.

(b) Loan made in 2020 and was acquired during the Oakwood acquisition.

Principal paid monthly

(d) Principal paid monthly.

(e) Loan has put options beginning in October 2024.

These advances are collateralized by the Company’s investment in FHLB stock and a blanket lien on qualifying loans in the Bank’s loan portfolio.

4 unchanged sentences

The Company was not in a purchased position on these lines at December 31, 2025 and 2024.

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On March 12, 2023, the Federal Reserve launched the Bank Term Funding Program (“BTFP”), which offered loans to banks with a term of up to one year .

The loans were secured by pledging the banks’ U.S.

treasuries, agency securities, agency mortgage-backed securities, and any other qualifying assets.

These pledged securities were valued at par for collateral purposes.

The Bank participated in the BTFP and had outstanding debt of $ 300.0 million at December 31, 2023.

These loans bore a fixed interest rate of 4.38 % and matured on March 22, 2024, at which time the Bank repaid them in full.

In December 2018, the Company issued subordinated notes in the amount of $ 25.0 million.

6 unchanged sentences

Interest is payable quarterly.

The indenture allows the Company to defer interest payments for up to 20 consecutive quarterly periods without resulting in a default.

The indenture allows the Company to defer interest payments for up to 20

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

consecutive quarterly periods without resulting in a default.

The trust preferred securities do not have a stated maturity date, however, they are subject to mandatory redemption on September 17, 2033, or upon earlier redemption.

4 unchanged sentences

The subordinated notes were issued to provide additional capital support to the Bank, to support growth, to better position the Company to take advantage of strategic opportunities that may arise from time to time, repayment of existing Company borrowings, and for other general corporate purposes.

The subordinated notes are redeemable by the Company at its option beginning in 2026.

During the first quarter of 2025, $ 7.0 million was redeemed by the Company.

The Company recognized a $ 630,000 gain on the extinguishment of this debt during 2025.

The remaining subordinated notes are redeemable by the Company at its option beginning in 2026.

The balance outstanding was $ 45.5 million and $ 52.5 million at December 31, 2025 and 2024, respectively.

On April 1, 2021, the Company, through b1BANK, consummated the acquisition of SSW.

8 unchanged sentences

The Company recognized a $ 1.5 million gain on the extinguishment of this debt during 2023.

These notes carried an aggregate $ 833,000 and $ 1.1 million fair value adjustment, respectively, as of December 31, 2024 and 2023.

These notes carried an aggregate $ 603,000 and $ 833,000 fair value adjustment, respectively, as of December 31, 2025 and 2024.

Note 12 – Securities Purchased and Sold Under Agreements to Resell and Repurchase –

During the year ended December 31, 2024, the Bank entered into an agreement to purchase investment securities with the intention to resell those securities at various times throughout the year.

At December 31, 2024, the Bank purchased $ 50.8 million at a rate of 5.1 % and maturing in 2025.

At December 31, 2025, the Bank purchased $ 25.6 million at a rate of 4.5 % and maturing in 2026, and $ 50.8 million at a rate of 5.1 % and maturing in 2025 at December 31, 2024.

At December 31, 2025 and 2024, the Bank had also sold various investment securities with an agreement to repurchase these securities at various times within one year.

These securities generally remain under the Bank’s control and are included in securities available for sale.

These pledged securities

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

have coupon rates ranging from 0.9 % to 8.0 % and maturity dates ranging from 2025 to 2041.

The related liability to repurchase these securities was $ 22.6 million and $ 18.9 million at December 31, 2024 and 2023, respectively.

At December 31, 2025, these pledged securities have coupon rates ranging from 1.3 % to 5.0 % and maturity dates ranging from 2028 to 2045.

The related liability to repurchase these securities was $ 22.6 million at both December 31, 2025 and 2024.

Note 13 – Income Taxes –

The consolidated provision (credit) for income taxes consists of the following at December 31, 2025, 2024 and 2023:

2024 2023 2022

(Dollars in thousands) 2025 2024 2023

2 unchanged sentences

Total Provision for Income Taxes $ 22,448 $ 17,944 $ 19,543

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The provision (credit) for federal income taxes differs from the amount computed by applying federal statutory rates to income from operations as indicated in the following analysis at December 31, 2025, 2024 and 2023.

2024 2023 2022

The December 31, 2025 quantitative threshold was 5% totaling $ 1.2 million .

(Dollars in thousands) 2025

Amount Percent

US Federal Statutory Tax $ 23,165 21.0 %

Nontaxable or Nondeductible Items

Tax Exempt Interest ( 1,544 ) ( 1.4 )

State and Local Income Taxes, Net of Federal Benefit 608 0.6

Other (Less Than the 5% Threshold) 128 0.1

Total Provision for Income Taxes $ 22,448 20.4 %

(Dollars in thousands) 2024 2023

Federal Statutory Income Tax $ 17,441 $ 19,023

5 unchanged sentences

Total Provision for Income Taxes $ 17,944 $ 19,543

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

BUSINESS FIRST BANCSHARES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The components of the deferred tax assets and liabilities are as follows:

22 unchanged sentences

The amount of the NOL carryforward the Company is allowed to deduct against current taxable income each year is limited, and the Company may not offset more than 80% of taxable income in any year.

As of December 31, 2024, the NOL and charitable contribution carryforward was $ 3.2 million to be carried forward indefinitely until utilized.

During the 2025 tax year, the Company was able to fully utilize the $ 3.2 million in NOL carryforward as well as the $ 99,000 of charitable contribution carryforward from the year ended December 31, 2024.

As of December 31, 2025, the Company did not have a NOL carryforward.

The following is a summary of federal and state income taxes paid (net of refunds received):

(Dollars in thousands) 2025

Federal $ 22,950

Total Taxes Paid (Net of Refunds Received) $ 24,072

BUSINESS FIRST BANCSHARES, INC.

7 unchanged sentences

Other Comprehensive Income on AFS Investment Securities Before Reclassifications - Net of Tax 29,660 3,570

Other Comprehensive Income (Loss) on Equity Method Investments - Net of Tax 11 ( 616 )

Reclassification Adjustment for Gains (Losses) on Sale of AFS Investment Securities Realized - Net of Tax 6 ( 2,023 )

Other Comprehensive Income on Equity Method Investments - Net of Tax — 11

Reclassification Adjustment for Gains on Sale of AFS Investment Securities Realized - Net of Tax 51 6

Other Comprehensive Income 29,711 3,587

8 unchanged sentences

Common Stock Repurchase Plan

On May 23, 2023, the Company’s board of directors approved a resolution authorizing management to repurchase shares of its common stock with an aggregate purchase price of up to $ 30.0 million from time to time, subject to certain limitations and conditions.

The stock repurchase program expired on December 31, 2023.

The stock repurchase program did not obligate the Company to repurchase any shares of its common stock.

The Company did not repurchase any shares under this plan.

On October 28, 2025, the Company’s board of directors approved a resolution authorizing management to repurchase shares of its common stock with an aggregate purchase price of up to $ 30.0 million from time to time, subject to certain limitations and conditions.

The stock repurchase program will expire on October 28, 2027.

The stock repurchase program does not obligate the Company to repurchase any shares of its common stock.

The Company repurchased 150,504 shares at a total price of $ 3.7 million as part of this plan through December 31, 2025.

Preferred Stock

3 unchanged sentences

The preferred stock is non-convertible and dividends equivalent to $ 75.00 per share were paid during both years ended December 31, 2025 and 2024.

Regulatory Matters

The Company and the Bank are subject to various regulatory capital requirements administered by federal and state banking agencies.

Failure to meet minimum regulatory capital requirements can initiate certain mandatory, and possible

BUSINESS FIRST BANCSHARES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Regulatory Matters

The Company and the Bank are subject to various regulatory capital requirements administered by federal and state banking agencies.

Failure to meet minimum regulatory capital requirements can initiate certain mandatory, and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s financial statements.

additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s financial statements.

Under the regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines involving quantitative measures of assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices.

13 unchanged sentences

Action Provisions

Amount Ratio Amount Ratio Amount Ratio

(Dollars in thousands)

(Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio

December 31, 2025:

16 unchanged sentences

Action Provisions

Amount Ratio Amount Ratio Amount Ratio

(Dollars in thousands)

(Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio

December 31, 2025:

12 unchanged sentences

In January 2007, the Company’s board of directors adopted an amendment to the 2006 Stock Option Plan, which increased the number of available shares under the plan from 450,000 to 1,500,000 .

The 2006 Stock Option Plan expired on December 22, 2016, however, there are still 12,400 fully vested and outstanding options that remain unexercised as of December 31, 2024.

The 2006 Stock Option Plan expired on December 22, 2016, and no shares remain fully vested and unexercised as of December 31, 2025.

On June 29, 2017, the Company’s shareholders approved its 2017 Equity Incentive Plan (the “2017 Plan”).

3 unchanged sentences

As of May 23, 2024, there will be no future awards made under the 2017 Plan.

The 2017 Plan was combined into the 2024 Equity Incentive Plan, as described below, on August 15, 2025.

On May 22, 2024, the Company’s shareholders approved the Business First Bancshares, Inc.

1 unchanged sentence

The authorized share pool under the 2024 Plan is comprised of 645,000 shares, plus any shares that were available for issuance under the 2017 Plan and any underlying awards outstanding under the 2017 Plan as of the effective date of the 2024 Plan that were terminated or cancelled without having been unexercised or forfeited, cancelled, or repurchased by the Company.

In addition, the number of shares issuable under the 2024 Plan was increased by 207,293 shares as a result of the conversion of Oakwood stock options to Company stock options due to

In addition, the number of shares issuable under the 2024 Plan was increased by 207,293 shares as a result of the conversion of Oakwood stock options to Company stock options due to the Oakwood acquisition on October 1, 2024.

In total, the 2024 Plan has reserved 852,293 shares of common stock for grant, award or issuance to eligible participants, all of which may be subject to incentive stock option treatment.

The Plan is administered by the Compensation Committee of the Company’s board of directors, which determines, within

BUSINESS FIRST BANCSHARES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the Oakwood acquisition on October 1, 2024.

In total, the 2024 Plan has reserved 852,293 shares of common stock for grant, award or issuance to eligible participants, all of which may be subject to incentive stock option treatment.

The Plan is administered by the Compensation Committee of the Company’s board of directors, which determines, within the provisions of the 2024 Plan, those eligible participants to whom, and the times at which, grants and awards will be made.

the provisions of the 2024 Plan, those eligible participants to whom, and the times at which, grants and awards will be made.

As of December 31, 2025, there were 195,792 shares of common stock issued pursuant to awards and grants under the 2024 Plan to the Company’s employees, directors or consultants, of which 193,847 shares are subject to outstanding and unexercised awards and grants, and 676,437 shares of common stock remain available for grant.

6 unchanged sentences

For the years ended December 31, 2025, 2024 and 2023, respectively, the Company recognized $ 1.3 million, $ 2.8 million and $ 4.7 million in compensation costs related to restricted stock awards.

At December 31, 2024, 2023 and 2022, respectively, unrecognized share-based compensation associated with these awards totaled $ 1.1 million, $ 3.4 million and $ 3.7 million.

The $ 1.1 million of unrecognized share-based compensation at December 31, 2024 is expected to be recognized over a weighted average period of 0.6 years.

At December 31, 2025, 2024 and 2023, respectively, unrecognized share-based compensation associated with these awards totaled $ 154,000 , $ 1.1 million and $ 3.4 million.

The $ 154,000 of unrecognized share-based compensation at December 31, 2025 is expected to be recognized over a weighted average period of 0.4 years.

The table below summarizes the restricted stock award activity for the period presented.

6 unchanged sentences

Granted 1,945 25.72 207,501 22.43 280,101 20.29

Released ( 161,719 ) 21.67 ( 205,703 ) 21.99 ( 177,951 ) 16.97

Forfeited ( 5,054 ) 22.43 ( 6,903 ) 21.66 ( 2,738 ) 19.51

Earned and Issued ( 205,703 ) 21.99 ( 177,951 ) 16.97 ( 97,558 ) 24.20

Balance, at End of Period 61,103 $ 22.32 225,931 $ 21.83 231,036 $ 21.43

4 unchanged sentences

The grant date fair value of these restricted share units is the same as the value of the corresponding number of shares of common stock.

For the year ended December 31, 2024, the Company recognized $ 115,000 in compensation costs related to restricted stock units.

At December 31, 2024, unrecognized share-based compensation associated with these units totaled $ 4.4 million.

During the years ended December 31, 2025, and 2024, the Company issued shares of restricted stock units which vest in three equal installments over the requisite service period.

For the years ended December 31, 2025, and 2024, respectively, the Company recognized $ 3.8 million and $ 115,000 in compensation costs related to restricted stock units.

At December 31, 2025, and 2024, respectively, unrecognized share-based compensation associated with these units totaled $ 5.2 million and $ 4.4 million.

The $ 5.2 million of unrecognized share-based compensation at December 31, 2025 is expected to be recognized over a weighted average period of 1.5 years.

3 unchanged sentences

Year Ended December 31, 2025

(Dollars in thousands, except per share data)

Shares Weighted Average

(Dollars in thousands, except per share data) Shares Weighted Average

Purchase Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Weighted Average Grant Date Fair Value

1 unchanged sentence

Granted 194,427 — 26.68

Released ( 17,447 ) — 28.55

Forfeited ( 8,389 ) — 27.83

Earned and Issued - - - - -

Balance, at End of Period 327,138 $ — 1.54 8,551 $ 27.45

1 unchanged sentence

Ending Exercisable 11,020 — — 288 28.52

December 31, 2024

(Dollars in thousands, except per share data) Shares Weighted Average

Purchase Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Weighted Average Grant Date Fair Value

Balance, at Beginning of Period — $ — $ —

Granted 158,547 — 28.53

Released — — —

Forfeited — — —

Balance, at End of Period 158,547 $ — 2.36 4,075 $ 28.53

End of Period Vested and Expected to Vest 158,547 $ — 2.36 $ 4,075 $ 28.53

Ending Exercisable — — — — —

Phantom Stock

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The liability for these awards is recorded within other liabilities.

During the year ended December 31, 2024, the Company issued share equivalents of phantom stock which vest in three equal installments over the requisite service period.

For the year ended December 31, 2024, the Company recognized $ 9,000 in compensation costs related to phantom stock.

At December 31, 2024, unrecognized share-based compensation associated with these units totaled $ 275,000 .

During the year ended December 31, 2025, and 2024, the Company issued share equivalents of phantom stock which vest in three equal installments over the requisite service period.

For the years ended December 31, 2025, and 2024, respectively, the Company recognized $ 468,000 and $ 9,000 in compensation costs related to phantom stock.

At December 31, 2025,and 2024, respectively, unrecognized share-based compensation associated with these units totaled

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

$ 461,000 and $ 275,000 .

The $ 461,000 of unrecognized share-based compensation at December 31, 2025 is expected to be recognized over a weighted average period of 1.4 years.

Year Ended December 31, 2025

(Dollars in thousands, except per share data)

Shares Weighted Average

(Dollars in thousands, except per share data) Shares Weighted Average

Purchase Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Weighted Average Grant Date Fair Value

1 unchanged sentence

Granted 25,881 — 26.46

Released ( 3,589 ) — 28.60

Forfeited ( 984 ) — 27.49

Earned and Issued - - - - -

Balance, at End of Period 32,338 $ — 1.37 $ 847 $ 26.93

1 unchanged sentence

Ending Exercisable — — — — —

Year Ended December 31, 2024

(Dollars in thousands, except per share data) Shares Weighted Average

Purchase Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Weighted Average Grant Date Fair Value

Balance, at Beginning of Period — $ — $ —

Granted 11,030 — 28.60

Released — — —

Forfeited — — —

Balance, at End of Period 11,030 $ — 2.36 $ 283 $ 28.60

End of Period Vested and Expected to Vest 11,030 $ — 2.36 $ 283 $ 28.60

Ending Exercisable — — — — —

Stock Options

34 unchanged sentences

An analysis of Other Income for the Company's single reportable operating segment is as follows for the years ended December 31, 2025, 2024 and 2023:

2024 2023 2022

(Dollars in thousands) 2025 2024 2023

9 unchanged sentences

An analysis of Other Expenses for the Company's single reportable operating segment is as follows for the years ended December 31, 2025, 2024 and 2023:

2024 2023 2022

(Dollars in thousands) 2025 2024 2023

8 unchanged sentences

Regulatory Assessments 4,337 4,118 4,119

Taxes and Licenses 103 299 61

Merger and Conversion Costs 2,194 1,236 236

7 unchanged sentences

The Bank’s policy for obtaining collateral, and the nature of such collateral, is essentially the same as that involved in making commitments to extend credit.

The Bank uses the same credit policies in making such

The Bank uses the same credit policies in making such commitments and conditional obligations as it does for instruments that are included in the balance sheet.

In the normal course of business, the Bank has made commitments to extend credit of approximately $ 1.7 billion and standby and commercial letters of credit of approximately $ 51.2 million at December 31, 2025.

As discussed in Note 7, we had a reserve for unfunded loan commitments of $ 4.2 million and $ 3.7 million at December 31, 2025 and 2024, respectively.

BUSINESS FIRST BANCSHARES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

commitments and conditional obligations as it does for instruments that are included in the balance sheet.

In the normal course of business, the Bank has made commitments to extend credit of approximately $ 1.4 billion and standby and commercial letters of credit of approximately $ 50.0 million at December 31, 2024.

As discussed in Note 7, we had a reserve for unfunded loan commitments of $ 3.7 million and $ 3.3 million at December 31, 2024 and 2023, respectively.

Note 20 – Concentrations of Credit –

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Future minimum lease payments under these leases are as follows:

(Dollars in thousands)

December 31, (Dollars in thousands)

2031 and Thereafter $ 6,383

2 unchanged sentences

Present Value of Lease Liabilities $ 26,734

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 22 – Commitments –

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The funds are then lent to small business borrowers.

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Bank has agreed to participate as an investor with McLarty Capital Partners SBIC, L.P.

25 unchanged sentences

The Company has agreed to invest in certain Fintech funds.

As part of the TCBI acquisition, the Company acquired an investment in Work America Capital Fund I, LP and SBRE I, LLC.

During the year ended December 31, 2023, SBRE I, LLC was fully redeemed.

Details of these commitments at December 31, 2025 are below.

9 unchanged sentences

$ 7,200 $ 6,427 $ 773

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Federal Home Loan Bank Letters of Credit

1 unchanged sentence

The outstanding letters of credit as of December 31, 2025 are as follows:

Fifteen letters of credit totaling $ 119.9 million expire in January 2025.

Seven letters of credit totaling $ 175.8 million expire in February 2025.

Ten letters of credit totaling $ 116.2 million expire in January 2026.

Four letters of credit totaling $ 176.0 million expire in February 2026.

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Two letters of credit totaling $ 570,000 expire in March 2026.

One letter of credit of $ 50.0 million expires in April 2026.

One letter of credit of $ 216,000 expires in May 2026.

Three letters of credit totaling $ 26.3 million expire in August 2025.

Two letters of credit totaling $ 2.5 million expire in September 2025.

Two letters of credit totaling $ 464,000 expire in October 2025.

Two letters of credit totaling $ 3.4 million expire in August 2026.

One letter of credit totaling $ 737,000 expires in September 2026.

Two letters of credit totaling $ 1.1 million expire in October 2026.

Three letters of credit totaling $ 1.2 million expire in November 2026.

One letter of credit of $ 329,000 expires in December 2025.

Two letters of credit of $ 23.2 million expires in December 2026.

Note 23 – Related Party Transactions –

15 unchanged sentences

Fair values of investment securities available for sale were primarily measured using information from a third-party pricing service.

This pricing service provides information by utilizing evaluated pricing models supported with market

This pricing service provides information by utilizing evaluated pricing models supported with market data information.

Standard inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, and reference data from market research publications.

The fair values of mortgage loans held for sale are based on commitments on hand from investors within the secondary market for loans with similar characteristics.

BUSINESS FIRST BANCSHARES, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

data information.

Standard inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, and reference data from market research publications.

The fair values of mortgage loans held for sale are based on commitments on hand from investors within the secondary market for loans with similar characteristics.

The following tables present the balance of assets and liabilities measured on a recurring basis as of December 31, 2025 and 2024.

The Company did not record any liabilities at fair value for which measurement of the fair value was made on a recurring basis.

Fair Value Level 1 Level 2 Level 3

(Dollars in thousands)

(Dollars in thousands) Fair Value Level 1 Level 2 Level 3

December 31, 2025

6 unchanged sentences

Loans Held for Sale 1,094 — 1,094 —

Total $ 894,266 $ - $ 857,049 $ 37,217

Interest Rate Swaps 8,023 — 8,023 —

Total assets at fair value $ 998,346 $ — $ 966,378 $ 31,968

Interest Rate Swaps $ 8,023 $ — $ 8,023 $ —

Total liabilities at fair value $ 8,023 $ — $ 8,023 $ —

December 31, 2024

6 unchanged sentences

Loans Held for Sale 717 — 717 —

Total $ 880,406 $ - $ 851,591 $ 28,815

Total Assets at fair value $ 894,266 $ — $ 857,049 $ 37,217

The Company reviews fair value hierarchy classifications on a quarterly basis.

Changes in the Company’s ability to observe inputs to the valuation may cause reclassification of certain assets or liabilities within the fair value hierarchy.

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The tables below provide a reconciliation for assets measured at fair value on a recurring basis using significant unobservable inputs, or Level 3 inputs, for the years ended December 31, 2025 and 2024.

(Dollars in thousands) Municipal

Securities Corporate

(Dollars in thousands)

Balance at December 31, 2023 $ 20,847 $ 7,968

Realized Gains (Losses) Included in Net Income - -

Unrealized Losses Included in Other Comprehensive Loss ( 2,228 ) ( 1,532 )

Unrealized Gains (Losses) Included in Other Comprehensive Loss ( 2,339 ) 782

Purchases 9,938 5,000

Maturities, Prepayments, and Calls ( 3,729 ) ( 1,250 )

Transfers Into Level 3 - -

Transfers Out of Level 3 ( 9,895 ) ( 9,500 )

Balance at December 31, 2024 $ 24,717 $ 12,500

Realized Gains (Losses) Included in Net Income - -

Unrealized Gains (Losses) Included in Other Comprehensive Loss ( 2,339 ) 782

Purchases 9,938 5,000

Unrealized Gains Included in Other Comprehensive Loss 2,458 21

Maturities, Prepayments, and Calls ( 3,728 ) —

Transfers Into Level 3 - -

Transfers Out of Level 3 — ( 4,000 )

Balance at December 31, 2025 $ 23,447 $ 8,521

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table provides quantitative information about significant unobservable inputs used in fair value measurements of Level 3 assets measured at fair value on a recurring basis at December 31, 2025.

(Dollars in thousands) Estimated

Fair Value Valuation

Technique Unobservable

Inputs Range of

(Dollars in thousands)

Inputs Discounts

December 31, 2025

6 unchanged sentences

Impaired loans are Level 3 assets measured using appraisals from external parties of the collateral less any prior liens and adjusted for estimated selling costs.

Adjustments may be made by management based on a

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

customized internally developed discounting matrix.

Adjustments may be made by management based on a customized internally developed discounting matrix.

Repossessed assets are initially recorded at fair value less estimated cost to sell, which is generally 10 %.

1 unchanged sentence

As such, the Bank records repossessed assets as Level 3.

Fair Value Level 1 Level 2 Level 3

(Dollars in thousands)

(Dollars in thousands) Fair Value Level 1 Level 2 Level 3

December 31, 2025

Individually Evaluated Loans $ 62,138 $ - $ - $ 62,138

Impaired/Individually Evaluated Loans $ 14,083 $ — $ — $ 14,083

Other Nonperforming Assets 13,013 — — 13,013

1 unchanged sentence

December 31, 2024

Individually Evaluated Loans $ 4,750 $ - $ - $ 4,750

Impaired/Individually Evaluated Loans $ 62,138 $ — $ — $ 62,138

Other Nonperforming Assets 5,529 — — 5,529

9 unchanged sentences

Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

8 unchanged sentences

Other Equity Securities – The carrying amount approximates its fair value.

Interest Rate Swaps - Market values are obtained from market pricing data sources available for comparable transactions in the over-the-counter derivative market.

Deposits – The fair value of demand deposits and certain money market deposits is the amount payable at the reporting date.

The fair value of fixed-maturity certificates of deposit is estimated using discounted cash flow analyses, with interest rates currently offered for deposits of similar remaining maturities.

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Borrowings – The fair value of FHLB advances and other long-term borrowings is estimated using the rates currently offered for advances of similar maturities.

1 unchanged sentence

Commitments to Extend Credit and Standby and Commercial Letters of Credit – The fair values of commitments to extend credit and standby and commercial letters of credit do not differ significantly from the commitment amount and are therefore omitted from this disclosure.

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The estimated approximate fair values of the Bank’s financial instruments as of December 31, 2025 and 2024 are as follows:

(Dollars in thousands) Carrying

Fair Value Level 1 Level 2 Level 3

(Dollars in thousands)

December 31, 2025

7 unchanged sentences

Other Equity Securities 49,342 49,342 — — 49,342

Interest Rate Swaps 8,023 8,023 — 8,023 —

Total $ 7,912,666 $ 7,893,468 $ 583,568 $ 1,112,257 $ 6,197,643

2 unchanged sentences

Borrowings 551,352 554,309 — 554,309 —

Interest Rate Swaps 8,023 8,023 — 8,023 —

Total $ 7,257,965 $ 7,260,513 $ — $ 562,332 $ 6,698,181

2 unchanged sentences

Cash and Short-Term Investments $ 516,767 $ 516,767 $ 516,767 $ — $ —

Securities Purchased Under Agreements to Resell 50,835 50,835 — 50,835 —

Securities 893,549 893,549 — 856,332 37,217

14 unchanged sentences

In the opinion of management and counsel, the disposition or ultimate resolution of such proceedings would not have a material adverse effect on the Bank’s financial statements.

Note 26 – Subsequent Events –

On January 1, 2026, we consummated the merger of Progressive, the parent bank holding company for Progressive Bank, with and into us, with us continuing as the surviving corporation pursuant to the terms of the Progressive Reorganization Agreement.

Immediately following consummation of the Progressive acquisition, Progressive Bank merged with and into us, with us surviving the merger.

Pursuant to the terms of the Progressive Reorganization Agreement, upon consummation of the Progressive acquisition, we issued 3,192,367 shares of our common stock to the former shareholders of Progressive.

As of December 31, 2025, Progressive had $ 773.8 million in total assets, $ 597.2 million in loans and $ 684.9 million in total deposits.

BUSINESS FIRST BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 27 – Financial Statements – Parent Company Only –

6 unchanged sentences

Investment in Subsidiaries 969,372 870,003

Fintech Funds 4,850 3,924

Fintech Funds and Other Investments 6,057 4,850

Goodwill 5,603 5,603

26 unchanged sentences

Other Operating Expenses 7,348 5,186 6,102

Income (Loss) Before Income Taxes and Equity in Undistributed

Income Before Income Taxes and Equity in Undistributed

Net Income of Subsidiaries 15,871 15,434 2,311

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data