Business First Bancshares, Inc. 10-K

ITEM 5. Market for Registrant ’ s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities. Common Stock Our common stock is traded on the Nasdaq Global Select Market under the symbol “BFST”. Our common shares have been traded on the Nasdaq Global Select Market since April 11, 2018. Prior to that date, there was no public trading market for our common stock. As of February 20, 2026, there were 32,710,447 issued and outstanding shares of our common stock held of record by approximately 1,073 shareholders. We also had outstanding 80,726 options to purchase shares of our common stock issued under our equity compensation plans, as described below. Dividends In 2016, our board of directors made the determination to begin paying regular quarterly dividends on our common stock; however, we are not obligated to pay dividends on either our common or preferred stock. Dividends on our common stock are not payable if we have not paid the full dividends on our Series A preferred stock for the most recently completed quarterly dividend period. The payment of future dividends and our dividend policy will depend on our earnings, capital requirements and financial condition, as well as other factors that our board of directors deems relevant. For additional discussion of legal and regulatory restrictions on the payment of dividends, see “ PART I - ITEM 1. Business – Supervision and Regulation – Business First Bancshares, Inc. – Regulatory Restrictions on Dividends. ” Securities Authorized for Issuance under Equity Compensation Plans In 2006, our board of directors adopted the 2006 Stock Option Plan pursuant to which we were permitted to issue stock options to purchase up to 450,000 shares of our common stock, all of which could be issued as either incentive stock options under Section 422A of the Internal Revenue Code of 1986, as amended, or non-qualified stock options. In January 2007, our 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. Our 2006 Stock Option Plan expired on December 22, 2016 and we are no longer permitted to issue additional stock options under this plan. As of December 31, 2025, we had no outstanding and unexercised stock options to purchase our common stock outstanding that had been issued to our executive officers and key personnel. On June 29, 2017, our shareholders approved the 2017 Equity Incentive Plan (the “2017 Plan”). The 2017 Plan provided for the issuance of up to 500,000 shares of our common stock pursuant to various types of equity grants and awards, including incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares and other stock-based awards to eligible participants, which includes our employees, directors and consultants. In June 2022, our shareholders approved an amendment to the 2017 Plan, which increased the number of shares of common stock issuable pursuant to equity grants and awards under the plan from 500,000 to 900,000. Additionally, the number of shares issuable under the 2017 Plan was increased by 143,908 shares as a result of the assumption of options to purchase shares of TCBI common stock that were converted into options to purchase shares of our common stock in connection with the TCBI acquisition on March 1, 2022. The 2017 Plan was combined into the 2024 Equity Incentive Plan, as described below, on August 15, 2025. On May 23, 2024, our shareholders approved the 2024 Equity Incentive Plan (the “2024 Plan”) which reserved 645,000 shares of common stock, plus any shares 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 are terminated or canceled without having been exercised or are forfeited, canceled or repurchased by the Company, for grant, award or issuance to eligible participants, all of which may be subject to incentive stock option treatment. 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 in connection with 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. As of December 31, 2025, there were 195,792 shares of common stock issued under the 2024 Plan to our employees, directors or consultants, of which 193,847 shares are subject to outstanding and unexercised stock options to purchase shares of our common stock, and 676,437 shares of common stock remain available for grant. As of May 23, 2024, there will be no future awards made under the 2017 Plan. 46 Table of Contents The following table summarizes information as of December 31, 2025 relating to the number of securities to be issued upon the exercise of the outstanding options and warrants and their weighted-average exercise price. Number of Securities to Be Issued Upon Exercise of Outstanding Options Weighted-Average Exercise Price of Outstanding Options Number of Securities Remaining Available For Future Issuance Under Equity Compensation Plans Equity compensations plans approved by security holders 80,726 $ 23.48 676,437 Equity compensation plans not approved by security holders — — — Total equity compensation plans 80,726 $ 23.48 676,437 Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities On October 28, 2025, our board of directors approved a stock repurchase program which authorizes Business First to repurchase shares of its common stock with an aggregate purchase price of up to $30,000,000 from time to time, subject to certain limitations and conditions. The stock repurchase program became effective immediately and will continue until October 28, 2027. The stock repurchase program does not obligate Business First to repurchase any shares of its common stock. Business First repurchased 150,504 shares for $3.7 million under the 2025 stock repurchase program between October 28, 2025, and December 31, 2025. Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Maximum number (or approx. dollar value) of shares yet to be purchased under the plan (in thousands) October 1 through October 31, 2025 26,956 $ 24.54 26,956 $ 29,339 November 1 through November 30, 2025 123,548 24.85 123,548 26,269 December 1 through December 31, 2025 — — — 26,269 TOTAL 150,504 $ 24.79 150,504 $ 26,269 Stock Performance Graph The following table and graph compares the cumulative total shareholder return on our common stock to the cumulative total return of the S&P 500 Index and the KBW Nasdaq Regional Bank Index (“KRX”) for the period beginning on January 1, 2021 through December 31, 2025. The following assumes $100 invested on January 1, 2021 in our common stock at the closing price of $20.36 per common share, otherwise reflects our stock and the S&P 500 and KRX values as of close of trading, and assumes the reinvestment of dividends, if any. The historical stock price performance for our common stock shown on the graph below is not necessarily indicative of future stock performance. 47 Table of Contents Date BFST S&P 500 KRX 12/31/2020 $ 100.00 $ 100.00 $ 100.00 3/31/2021 118.03 106.17 129.71 6/30/2021 113.78 115.25 127.86 9/30/2021 116.56 115.92 131.97 12/31/2021 141.68 128.71 136.64 3/31/2022 122.36 122.79 133.67 6/30/2022 107.77 103.02 117.65 9/30/2022 109.49 97.99 122.27 12/31/2022 113.21 105.40 127.17 3/31/2023 88.20 113.30 104.33 6/30/2023 78.21 123.20 98.34 9/30/2023 97.99 119.17 100.68 12/31/2023 129.48 133.10 126.66 3/31/2024 117.77 147.15 119.26 6/30/2024 115.76 153.46 116.03 9/30/2024 137.31 162.49 134.31 12/31/2024 138.22 166.40 143.38 3/31/2025 131.71 159.29 135.48 6/30/2025 134.09 176.72 140.28 9/30/2025 129.19 191.08 148.74 12/31/2025 143.86 196.16 152.71 ITEM 6. [RESERVED] 48 Table of Contents ITEM 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations. This discussion presents management’s analysis of our results of operations and financial condition over each of the last two most recent fiscal years. The discussion should be read in conjunction with our financial statements and the notes related thereto which appear elsewhere in this Report. The following discussion and analysis is to focus on significant changes in the financial condition of Business First and its subsidiaries from December 31, 2024 to December 31, 2025 and its results of operations for the year ended December 31, 2025. This discussion and analysis is intended to highlight and supplement information presented elsewhere in this Report, particularly the consolidated financial statements and related notes appearing in Item 8. This discussion and analysis contains forward-looking statements that are subject to certain risks and uncertainties and are based on certain assumptions that Business First believes are reasonable but may prove to be inaccurate. Certain risks, uncertainties and other factors, including those set forth under “ Forward-Looking Statements, ” “ Risk Factors ” and elsewhere in this statement, may cause actual results to differ materially from those projected results discussed in the forward-looking statements appearing in this discussion and analysis. Business First assumes no obligation to update any of these forward-looking statements. A discussion regarding significant changes in the financial condition of Business First and its subsidiaries from December 31, 2023 to December 31, 2024 and its results of operations for the year ended December 31, 2024 can be found under “ Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations ” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 7, 2025, as amended, which is available on the SEC ’ s website at www.sec.gov and on the Company ’ s website, www.b1bank.com. Overview We are a registered financial holding company headquartered in Baton Rouge, Louisiana. Through our wholly-owned subsidiary, b1BANK, a Louisiana state chartered bank, we provide a broad range of financial services tailored to meet the needs of small-to-midsized businesses and professionals. Since our inception in 2006, our priority has been and continues to be creating shareholder value through the establishment of an attractive commercial banking franchise in Louisiana and across our region. We consider our primary market to include the State of Louisiana, the Dallas/Fort Worth metroplex and Houston. We currently operate out of banking centers and loan production offices in markets across Louisiana and Texas. As of December 31, 2025, we had total assets of $8.2 billion, total loans of $6.2 billion, total deposits of $6.7 billion, and total shareholders’ equity of $896.9 million. As a financial holding company operating through one reportable operating segment, community banking, we generate most of our revenues from interest income on loans, customer service and loan fees, and interest income from securities. We incur interest expense on deposits and other borrowed funds and noninterest expense, such as salaries and employee benefits and occupancy expenses. We analyze our ability to maximize income generated from interest-earning assets and expense of our liabilities through our net interest margin. Net interest margin is a ratio calculated as net interest income divided by average interest-earning assets. Net interest income is the difference between interest income on interest-earning assets, such as loans and securities, and interest expense on interest-bearing liabilities, such as deposits and borrowings, which are used to fund those assets. Changes in the market interest rates and the interest rates we earn on interest-earning assets or pay on interest-bearing liabilities, as well as the volume and types of interest-earning assets, interest-bearing and noninterest-bearing liabilities and shareholders’ equity, are usually the largest drivers of periodic changes in net interest spread, net interest margin and net interest income. Fluctuations in market interest rates are driven by many factors, including governmental monetary policies, inflation, deflation, macroeconomic developments, changes in unemployment, the money supply, political and international conditions, and conditions in domestic and foreign financial markets. Periodic changes in the volume and types of loans in our loan portfolio are affected by, among other factors, economic and competitive conditions in our markets and across our region, as well as developments affecting the real estate, technology, financial services, insurance, transportation, manufacturing and energy sectors within our markets. While we continue to prioritize organic growth, we also seek to capitalize upon other opportunities as they arise. Below is a summary of recent transactions that have contributed to our growth. For additional information about these transactions, See “ Note 3 – Mergers and Acquisitions ” in our audited consolidated financial statements included in Item 8 of this Report. 49 Table of Contents Federal Reserve Bank ’ s Discount Window On April 11, 2023, the Bank opened two new lines of credit for additional contingent liquidity, totaling $967.3 million and $907.7 million as of December 31, 2025 and 2024, respectively, through the Federal Reserve discount window. The Bank has not yet drawn on either of the lines of credit as of the date of this report. Acquisition of Waterstone On January 31, 2024, we consummated 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. Acquisition of Oakwood On October 1, 2024, we consummated the merger of Oakwood, the parent bank holding company for Oakwood Bank, with and into Business First, with Business First continuing as the surviving corporation pursuant to the terms of the Reorganization Agreement. Immediately following the consummation of the Oakwood acquisition, Oakwood Bank merged with and into b1BANK, with b1BANK surviving the merger. Pursuant to the terms of the Reorganization Agreement, upon consummation of the Oakwood acquisition, we issued 3,973,134 shares of our common stock to the former shareholders of Oakwood. As of September 30, 2024, Oakwood had $863.6 million in total assets, $700.2 million in loans and $741.3 million in total deposits. Sale of Kaplan Banking Center On April 4, 2025, we sold the Kaplan banking center, located in Kaplan, Louisiana, to Currency Bank headquartered in Baton Rouge, Louisiana, in accordance with the Branch Purchase and Assumption Agreement dated December 12, 2024. The sale included $50.7 million in deposits, $2.3 million in loans, and $1.4 million in fixed assets, net of depreciation. The total deposit premium paid by Currency Bank as consideration was 8.00% of the total deposits assumed at closing resulting in a gain on the sale of $3.4 million. Acquisition of Progressive On January 1, 2026, we consummated the merger of Progressive, the parent bank holding company for Progressive Bank, with and into Business First, with Business First 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 b1BANK, with b1BANK 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. Financial Highlights The financial highlights as of and for the year ended December 31, 2025 include: • Total assets of $8.2 billion, a $357.7 million, or 4.6%, increase from December 31, 2024. • Total loans held for investment of $6.2 billion, a $208.1 million, or 3.5%, increase from December 31, 2024. • Total deposits of $6.7 billion, a $187.3 million, or 2.9%, increase from December 31, 2024. • Net income available to common shareholders of $82.5 million, a $22.8 million, or 38.1%, increase from the year ended December 31, 2024. • Net interest income of $273.2 million, a $45.8 million, or 20.1%, increase from the year ended December 31, 2024. 50 Table of Contents • An allowance for credit losses of 0.94% of total loans held for investment, compared to 0.98% as of December 31, 2024, and a ratio of nonperforming loans to total loans held for investment of 1.24%, compared to 0.42% as of December 31, 2024. • Earnings per common share for the year ended December 31, 2025 of $2.81 per basic common share and $2.79 per diluted common share, compared to $2.27 per basic common share and $2.26 per diluted common share for the year ended December 31, 2024. • Return to common shareholders on average assets of 1.05% compared to 0.86% for the year ended December 31, 2024. • Return to common shareholders on average common equity of 10.59% compared to 9.54% for the year ended December 31, 2024. • Capital Ratios included Tier 1 Leverage, Common Equity Tier 1, Tier 1 Risk-based and Total Risk-based Capital of 10.08%, 9.94%, 11.00% and 12.93%, respectively, compared to Tier 1 Leverage, Common Equity Tier 1, Tier 1 Risk-based and Total Risk-based Capital of 9.53%, 9.44%, 10.56% and 12.75% for the year ended December 31, 2024. • Book value per common share of $27.95, an increase of 13.5% from $24.62 at December 31, 2024. Results of Operations for the Years Ended December 31, 2025 and 2024 Performance Summary For the year ended December 31, 2025, net income available to common shareholders was $82.5 million, or $2.81 per basic common share and $2.79 per diluted common share, compared to net income available to common shareholders of $59.7 million, or $2.27 per basic common share and $2.26 per diluted common share, for the year ended December 31, 2024. Return to common shareholders on average assets increased to 1.05% for the year ended December 31, 2025 from 0.86% for the year ended December 31, 2024. Return to common shareholders on average common equity increased to 10.59% for the year ended December 31, 2025, as compared to 9.54% for the year ended December 31, 2024. Net Interest Income Our operating results depend primarily on our net interest income, calculated as the difference between interest income on interest-earning assets, such as loans and securities, and interest expense on interest-bearing liabilities, such as deposits and borrowings. Fluctuations in market interest rates impact the yield and rates paid on interest sensitive assets and liabilities. Changes in the amount and type of interest-earning assets and interest-bearing liabilities also impact net interest income. The variance driven by the changes in the amount and mix of interest-earning assets and interest-bearing liabilities is referred to as a “volume change.” Changes in yields earned on interest-earning assets and rates paid on interest-bearing deposits and other borrowed funds are referred to as a “rate change.” To evaluate net interest income, we measure and monitor (1) yields on our loans and other interest-earning assets, (2) the costs of our deposits and other funding sources, (3) our net interest spread and (4) our net interest margin. Net interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest margin is calculated as net interest income divided by average interest-earning assets. Because noninterest-bearing sources of funds, such as noninterest-bearing deposits and shareholders’ equity also fund interest-earning assets, net interest margin includes the benefit of these noninterest-bearing sources. We calculate average assets, liabilities, and equity using a daily average, and average yield/rate utilizing an actual day count convention. For the year ended December 31, 2025, net interest income totaled $273.2 million, and net interest margin and net interest spread were 3.69% and 2.89%, respectively. For the year ended December 31, 2024, net interest income totaled $227.4 million and net interest margin and net interest spread were 3.48% and 2.55%, respectively. The average yield on the loan portfolio was 6.96%, for the year ended December 31, 2025, compared to 7.03% for the year ended December 31, 2024, and the average yield on total interest-earning assets was 6.28% for the year ended December 31, 2025, compared to 6.35% for the year ended December 31, 2024. For the year ended December 31, 2025, overall cost of funds (which includes noninterest-bearing deposits) decreased 25 basis points compared to the year ended December 31, 2024. 51 Table of Contents The following table presents, for the periods indicated, an analysis of net interest income by each major category of interest-earning assets and interest-bearing liabilities, the average amounts outstanding and the interest earned or paid on such amounts. The table also sets forth the average rate earned on interest-earning assets, the average rate paid on interest-bearing liabilities, and the net interest margin on average total interest-earning assets for the same periods. Interest earned on loans that are classified as nonaccrual is not recognized in income; however, the balances are reflected in average outstanding balances for the period. For the years ended December 31, 2025, 2024 and 2023, interest income not recognized on nonaccrual loans was not material. Any nonaccrual loans have been included in the table as loans carrying a zero yield. The average total loans reflected below is net of deferred loan fees and discounts. Acquired loans were recorded at fair value at acquisition and accrete/amortize discounts and premiums as an adjustment to yield. For the Years Ended December 31, 2025 2024 2023 (Dollars in thousands) Average Outstanding Balance Interest Earned/Interest Paid Average Yield/Rate Average Outstanding Balance Interest Earned/Interest Paid Average Yield/Rate Average Outstanding Balance Interest Earned/Interest Paid Average Yield/Rate Assets Interest-earning assets: Total loans $ 6,023,214 $ 419,197 6.96 % $ 5,327,466 $ 374,555 7.03 % $ 4,859,637 $ 323,327 6.65 % Securities 962,566 29,016 3.01 907,736 24,502 2.70 898,771 20,125 2.24 Securities purchased under agreements to resell 33,178 1,692 5.10 13,657 757 5.54 — — — Interest-bearing deposits in other banks 383,504 15,106 3.94 287,474 14,950 5.20 180,997 9,875 5.46 Total interest-earning assets 7,402,462 465,011 6.28 6,536,333 414,764 6.35 5,939,405 353,327 5.95 Allowance for loan losses (56,902) (43,931) (41,665) Noninterest-earning assets 528,183 481,333 444,140 Total assets $ 7,873,743 $ 465,011 $ 6,973,735 $ 414,764 $ 6,341,880 $ 353,327 Liabilities and Shareholders' Equity Interest-bearing liabilities: Interest-bearing deposits $ 5,134,522 $ 168,923 3.29 % $ 4,427,233 $ 165,094 3.73 % $ 3,566,216 $ 106,908 3.00 % Subordinated debt 93,765 4,952 5.28 99,884 5,394 5.40 105,369 5,323 5.05 Subordinated debt - trust preferred securities 5,000 395 7.90 5,000 447 8.94 5,000 430 8.60 Bank Term Funding Program — — — 64,754 2,788 4.31 253,706 11,313 4.46 Advances from FHLB 400,849 16,973 4.23 317,462 13,164 4.15 329,726 13,702 4.16 Other borrowings 23,337 605 2.59 19,464 494 2.54 21,825 522 2.39 Total interest-bearing liabilities 5,657,473 191,848 3.39 4,933,797 187,381 3.80 4,281,842 138,198 3.23 Noninterest-bearing liabilities: Noninterest-bearing deposits 1,296,162 1,285,445 1,412,979 Other liabilities 69,698 56,649 44,173 Total noninterest-bearing liabilities 1,365,860 1,342,094 1,457,152 Shareholders' equity: Common shareholders' equity 778,480 625,914 530,956 Preferred equity 71,930 71,930 71,930 Total shareholders' equity 850,410 697,844 602,886 Total liabilities and shareholders' equity $ 7,873,743 $ 6,973,735 $ 6,341,880 Net interest rate spread (1) 2.89 % 2.55 % 2.72 % Net interest income $ 273,163 $ 227,383 $ 215,129 Net interest margin (2) 3.69 % 3.48 % 3.62 % Overall cost of funds 2.76 % 3.01 % 2.43 % ______________________________ (1) Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities. (2) Net interest margin is equal to net interest income divided by average interest-earning assets. The following table presents information regarding the dollar amount of changes in interest income and interest expense for the periods indicated for each major component of interest-earning assets and interest-bearing liabilities, and distinguishes between the changes attributable to changes in volume and changes attributable to changes in interest rates. 52 Table of Contents For purposes of this table, changes attributable to both rate and volume that cannot be segregated have been allocated to rate. Years Ended December 31, 2025 / 2024 2024 / 2023 Increase (Decrease) due to change in Increase (Decrease) due to change in (Dollars in thousands) Volume Rate Total Volume Rate Total Interest-earning assets: Total loans $ 48,422 $ (3,780) $ 44,642 $ 32,891 $ 18,337 $ 51,228 Securities 1,644 2,870 4,514 (137) 4,514 4,377 Securities purchased under agreements to resell 996 (61) 935 757 — 757 Interest-bearing deposits in other banks 3,783 (3,627) 156 5,537 (462) 5,075 Total increase (decrease) in interest income $ 54,845 $ (4,598) $ 50,247 $ 39,048 $ 22,389 $ 61,437 Interest-bearing liabilities: Interest-bearing deposits $ 23,269 $ (19,440) $ 3,829 $ 32,108 $ 26,078 $ 58,186 Subordinated debt (323) (119) (442) (296) 367 71 Subordinated debt - trust preferred securities — (52) (52) — 17 17 Bank Term Funding Program (2,788) - (2,788) (8,135) (390) (8,525) Advances from FHLB 3,531 278 3,809 (509) (29) (538) Other borrowings 100 11 111 (60) 32 (28) Total increase (decrease) in interest expense 23,789 (19,322) 4,467 23,108 26,075 49,183 Increase (decrease) in net interest income $ 31,056 $ 14,724 $ 45,780 $ 15,940 $ (3,686) $ 12,254 Provision for Credit Losses Our provision for credit losses is a charge to income in order to bring our allowance for credit losses to a level deemed appropriate by management. For a description of the factors taken into account by management in determining the allowance for credit losses see “— Financial Condition — Allowance for Credit Losses .” The provision for credit losses was $11.3 million and $10.9 million for the years ended December 31, 2025 and 2024, respectively. Noninterest Income ( “ Other Income ” ) Our primary sources of noninterest income are service charges on deposit accounts, debit card and automated teller machine (“ATM”) fee income, income from bank-owned life insurance, fees and brokerage commissions, loan sales, swap fee income, and pass-through income from other investments (small business investment company (“SBIC”) partnerships 53 Table of Contents and financial technology (“Fintech”) funds). The following table presents, for the periods indicated, the major categories of noninterest income: For the Years Ended December 31, (Dollars in thousands) 2025 2024 Increase (Decrease) Noninterest income: Service charges on deposit accounts $ 10,704 $ 10,577 $ 127 Debit card and ATM fee income 7,701 7,659 42 Bank-owned life insurance income 3,151 2,875 276 Gain on sales of loans 3,438 2,973 465 Gain on sales of investment securities 64 7 57 Fees and brokerage commissions 8,180 7,844 336 Mortgage origination income 401 238 163 Gain on sales of other real estate owned 570 89 481 Loss on sales of other assets (839) (15) (824) Gain on sale of banking center 3,360 — 3,360 Gain on extinguishment of debt 630 — 630 Swap Fee Income 4,417 2,739 1,678 Pass-through income from other investments 905 1,208 (303) Other 8,860 7,999 861 Total noninterest income $ 51,542 $ 44,193 $ 7,349 Noninterest income for the year ended December 31, 2025 increased $7.3 million, or 16.6%, to $51.5 million compared to noninterest income of $44.2 million for the same period in 2024. The components of noninterest income with significant fluctuations compared to the prior year period were as follows: Gain on sales of loans. We had gains on sales of loans of $3.4 million in 2025, compared to $3.0 million in 2024, an increase of $465,000, or 15.6%, primarily due to increased SBA loan sale activity. Gain on sales of other real estate owned. We had net gains on the sales or other real estate owned of $570,000 in 2025, compared to $89,000 in 2024, an increase of $481,000. The majority of the gains on sale of other real estate was due to one property which sold at a gain of $515,000. Loss on sales of other assets. We had net losses on the sales of other assets of $839,000 in 2025, compared to $15,000 in 2024, a decrease of $824,000. The losses in 2025 were due to the disposals of assets that were no longer in service or retired during the year. Gain on sale of banking center. We sold a banking center located in Kaplan, Louisiana that resulted in a gain of $3.4 million during 2025. Gain on extinguishment of debt. We extinguished $7.0 million in subordinated debt resulting in a gain on the extinguishment of debt of $630,000 during 2025. Swap fee income. We had swap fee income from back-to-back interest rate swaps in the amount of $4.4 million in 2025, compared to $2.7 million during 2024, an increase of $1.7 million, or 61.3%. Other. This category includes a variety of other income producing activities, including wire transfer fees and credit card income. Other income increased $861,000, or 10.8%, for the year ended December 31, 2025, compared to the same period in 2024. 54 Table of Contents Noninterest Expense ( “ Other Expense ” ) Generally, noninterest expense is composed of all employee expenses and costs associated with operating our facilities, obtaining and retaining customer relationships and providing bank services. The largest component of noninterest expense is salaries and employee benefits. Noninterest expense also includes operational expenses, such as occupancy expenses, depreciation and amortization, professional and regulatory fees, including FDIC assessments, data processing expenses, and advertising and promotion expenses, among others. The following table presents, for the periods indicated, the major categories of noninterest expense: For the Years Ended December 31, (Dollars in thousands) 2025 2024 Increase (Decrease) Salaries and employee benefits $ 115,853 $ 103,917 $ 11,936 Non-staff expenses: Occupancy of bank premises 12,876 10,944 1,932 Depreciation and amortization 8,313 7,540 773 Data processing 15,756 11,957 3,799 FDIC assessment fees 3,883 3,598 285 Legal and professional fees 4,566 3,756 810 Advertising and promotions 5,179 4,878 301 Utilities and communications 3,011 2,883 128 Ad valorem shares tax 4,245 4,057 188 Directors' fees 957 1,085 (128) Other real estate owned expenses and write-downs 659 301 358 Merger and conversion related expenses 2,194 1,236 958 Other 25,586 21,500 4,086 Total noninterest expense $ 203,078 $ 177,652 $ 25,426 Noninterest expense for the year ended December 31, 2025 increased $25.4 million, or 14.3%, to $203.1 million compared to noninterest expense of $177.7 million for the same period in 2024. The components of noninterest expense with significant fluctuations compared to the prior year period were as follows: Salaries and employee benefits . Salaries and employee benefits are the largest component of noninterest expense and include payroll expense, the cost of incentive compensation, benefit plans, health insurance and payroll taxes. Salaries and employee benefits were $115.9 million for the year ended December 31, 2025, an increase of $11.9 million, or 11.5%, compared to the same period in 2024. The increase was primarily due to the Oakwood acquisition in late 2024, additional hires for new positions and our merit increase cycle. As of December 31, 2025, we had 831 full-time equivalent employees, compared to 859 full-time equivalents as of December 31, 2024. Salaries and employee benefits included stock-based compensation expense of $5.2 million and $2.5 million for the years ended December 31, 2025 and 2024, respectively. Occupancy of bank premises . Occupancy of bank premises expenses were $12.9 million and $10.9 million for the years ended December 31, 2025 and 2024, respectively, an increase of $1.9 million, or 17.7%, which is primarily due to the Oakwood acquisition. Data processing . Data processing fees were $15.8 million and $12.0 million for the years ended December 31, 2025 and 2024, respectively, an increase of $3.8 million, or 31.8%. The increase was attributed to core conversion costs of $1.8 million, as well as the cost of utilizing two core systems until the Oakwood conversion in September 2025. Merger and conversion related expenses. Merger and conversion related expenses for the year ended December 31, 2025 was primarily to the acquisition of Oakwood and Progressive and for the year ended December 31, 2024 expenses were primarily due to the acquisitions of Waterstone and Oakwood. 55 Table of Contents Other . This category includes various operating and administrative expenses including business development expenses (i.e. travel and entertainment, donations and club dues), insurance, supplies and printing, equipment rent, and software support and maintenance. Other noninterest expense increased $4.1 million, or 19.0%, for the year ended December 31, 2025 compared to the same period in 2024 primarily due to a full year of Oakwood expenses. Income Tax Expense The amount of income tax expense is influenced by the amounts of our pre-tax income, tax-exempt income and other nondeductible expenses. Deferred tax assets and liabilities are reflected at currently enacted income tax rates in effect for the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. For the year ended December 31, 2025, income tax expense totaled $22.4 million, an increase of $4.5 million, or 25.1%, compared to $17.9 million for the same period in 2024. For the years ended December 31, 2025 and 2024, our effective tax rates were 20.4% and 21.6%, respectively. Financial Condition Our total assets increase d $357.7 million, or 4.6%, from $7.9 billion as of December 31, 2024 to $8.2 billion as of December 31, 2025, due primarily to unrealized gains in our securities portfolio, increases in our loan portfolio, as well as our cash and cash equivalents due to our increase in deposits. Loan Portfolio Our primary source of income is interest on loans to individuals, professionals and small-to-midsized businesses in our markets. Our loan portfolio consists primarily of commercial loans and real estate loans secured by commercial real estate properties located in our primary market areas. Our loan portfolio represents the highest yielding component of our earning asset base. As of December 31, 2025, total loans, excluding mortgage loans held for sale, were $6.2 billion, an increase of $208.1 million or 3.5%, compared to $6.0 billion as of December 31, 2024. Additionally, $1.1 million and $717,000 in mortgage loans were classified as loans held for sale as of December 31, 2025 and 2024, respectively. Total loans held for investment as a percentage of deposits were 92.4% and 91.9% as of December 31, 2025 and 2024, respectively. Total loans held for investment as a percentage of assets were 75.3% and 76.1% as of December 31, 2025 and 2024, respectively. 56 Table of Contents The following table summarizes our loan portfolio by type of loan as of the dates indicated: As of December 31, 2025 As of December 31, 2024 (Dollars in thousands) Amount Percent Amount Percent Real Estate Loans: Commercial Real estate rental and leasing $ 1,456,484 23.5 % $ 1,565,311 26.2 % Accommodation and food services 247,951 4.0 300,039 5.0 Other services (except public administration) 160,548 2.6 188,811 3.2 Health care and social assistance 121,850 2.0 128,958 2.2 Finance and insurance 84,592 1.4 65,284 1.1 Construction 63,931 1.0 63,596 1.1 Manufacturing 73,369 1.2 55,288 0.9 Agriculture, forestry, fishing and hunting 42,730 0.7 39,045 0.6 Transportation and warehousing 22,070 0.4 23,305 0.4 Other 337,754 5.4 53,586 0.9 Total Commercial 2,611,279 42.2 2,483,223 41.6 Construction 639,069 10.3 670,502 11.2 Residential 944,065 15.3 884,533 14.8 Total Real Estate Loans 4,194,413 67.8 4,038,258 67.6 Commercial 1,921,833 31.0 1,868,675 31.2 Consumer and Other 73,244 1.2 74,466 1.2 Total loans held for investment $ 6,189,490 100.0 % $ 5,981,399 100.0 % As of December 31, 2025 As of December 31, 2024 (Dollars in thousands) Amount Percent Amount Percent Commercial real estate: Dallas Region $ 720,436 27.6 % $ 778,174 31.3 % New Orleans Region 505,447 19.3 466,661 18.8 North Louisiana Region 454,909 17.4 440,238 17.7 Capitol Region 323,420 12.4 246,321 9.9 Houston Region 240,422 9.2 234,959 9.5 Southwest Louisiana Region 280,889 10.8 234,875 9.5 Bayou Region 85,756 3.3 81,995 3.3 Total commerical real estate loans $ 2,611,279 100.0 % $ 2,483,223 100.0 % Real Estate: Commercial loans are extensions of credit secured by owner-occupied and non-owner-occupied collateral. Repayment is generally dependent on the successful operations of the property. General economic conditions may impact the performance of these types of loans, including fluctuations in the value of real estate, vacancy rates, and unemployment trends. Real estate commercial loans also include farmland loans that can be, or are, used for agricultural purposes. These loans are usually repaid through refinancing, cash flow from the borrower’s ongoing operations, development of the property, or sale of the property. Real Estate: Commercial loans increase d $128.1 million, or 5.2%, to $2.6 billion as of December 31, 2025, from $2.5 billion as of December 31, 2024. Real Estate: Construction loans include loans to small-to-midsized businesses to construct owner-occupied properties, loans to developers of commercial real estate investment properties and residential developments and, to a lesser extent, loans to individual clients for construction of single-family homes in our market areas. Risks associated with these 57 Table of Contents loans include fluctuations in the value of real estate, project completion risk and changes in market trends. We are also exposed to risk based on the ability of the construction loan borrower to finance the loan or sell the property upon completion of the project, which may be affected by changes in secondary market terms and criteria for permanent financing since the time we funded the loan. Real Estate: Construction loans decrease d $31.4 million, or 4.7%, to $639.1 million as of December 31, 2025, from $670.5 million as of December 31, 2024. Real Estate: Residential loans include first and second lien 1-4 family mortgage loans, as well as home equity lines of credit, in each case primarily on owner-occupied primary residences. The Company is exposed to risk based on fluctuations in the value of the real estate collateral securing the loan, as well as changes in the borrower’s financial condition, which could be affected by numerous factors, including divorce, job loss, illness, or other personal hardship. Real estate residential loans also include multi-family residential loans originated to provide permanent financing for multi-family residential income producing properties. Repayment of these loans primarily relies on successful rental and management of the property. Real Estate: Residential loans increase d $59.5 million, or 6.7%, to $944.1 million as of December 31, 2025, from $884.5 million as of December 31, 2024. Commercial loans include general commercial and industrial, or C&I, loans, including commercial lines of credit, working capital loans, term loans, equipment financing, asset acquisition, expansion, and development loans, borrowing base loans, letters of credit and other loan products, primarily in the Company’s target markets that are underwritten based on the borrower’s ability to service the debt from income. Commercial loan risk is derived from the expectation that such loans generally are serviced principally from the operations of the business, and those operations may not be successful. Any interruption or discontinuance of operating cash flows from the business, which may be influenced by events not under the control of the borrower such as economic events and changes in governmental regulations, could materially affect the ability of the borrower to repay the loan. Commercial loans increase d $53.2 million, or 2.8%, and remained at $1.9 billion as of December 31, 2025 and 2024. Consumer and other loans include a variety of loans to individuals for personal, family and household purposes, including secured and unsecured installment and term loans. The risk is based on changes in the borrower’s financial condition, which could be affected by numerous factors, including divorce, job loss, illness or other personal hardship, and fluctuations in the value of the real estate or personal property securing the consumer loan, if any. Consumer and other loans decrease d $1.2 million, or 1.6%, to $73.2 million as of December 31, 2025, from $74.5 million as of December 31, 2024. 58 Table of Contents The contractual maturity ranges of loans in our loan portfolio and the amount of such loans with fixed and floating interest rates in each maturity range as of date indicated are summarized in the following tables: As of December 31, 2025 (Dollars in thousands) One Year or Less One Through Five Years Five Through Fifteen Years After Fifteen Years Total Real Estate Loans: Commercial $ 495,680 $ 1,565,812 $ 486,341 $ 63,446 $ 2,611,279 Construction 245,439 314,697 59,104 19,829 639,069 Residential 196,345 447,791 160,912 139,017 944,065 Total Real Estate Loans 937,464 2,328,300 706,357 222,292 4,194,413 Commercial 873,248 842,456 200,039 6,090 1,921,833 Consumer and Other 49,561 20,483 3,053 147 73,244 Total loans held for investment $ 1,860,273 $ 3,191,239 $ 909,449 $ 228,529 $ 6,189,490 Fixed rate loans: Real Estate Loans: Commercial $ 283,116 $ 999,397 $ 248,466 $ 11,145 $ 1,542,124 Construction 55,596 56,813 10,423 7,985 130,817 Residential 125,470 337,489 107,238 19,724 589,921 Total Real Estate Loans 464,182 1,393,699 366,127 38,854 2,262,862 Commercial 243,915 322,419 87,980 499 654,813 Consumer and Other 39,393 15,770 2,657 147 57,967 Total fixed rate loans $ 747,490 $ 1,731,888 $ 456,764 $ 39,500 $ 2,975,642 Floating rate loans: Real Estate Loans: Commercial $ 212,564 $ 566,415 $ 237,875 $ 52,301 $ 1,069,155 Construction 189,843 257,884 48,681 11,844 508,252 Residential 70,875 110,302 53,674 119,293 354,144 Total Real Estate Loans 473,282 934,601 340,230 183,438 1,931,551 Commercial 629,333 520,037 112,059 5,591 1,267,020 Consumer and Other 10,168 4,713 396 - 15,277 Total floating rate loans $ 1,112,783 $ 1,459,351 $ 452,685 $ 189,029 $ 3,213,848 59 Table of Contents As of December 31, 2024 (Dollars in thousands) One Year or Less One Through Five Years Five Through Fifteen Years After Fifteen Years Total Real Estate Loans: Commercial $ 374,129 $ 1,513,009 $ 513,999 $ 82,086 $ 2,483,223 Construction 320,732 286,326 47,195 16,249 670,502 Residential 143,804 514,596 151,262 74,871 884,533 Total Real Estate Loans 838,665 2,313,931 712,456 173,206 4,038,258 Commercial 919,905 672,153 271,632 4,985 1,868,675 Consumer and Other 44,359 26,830 3,123 154 74,466 Total loans held for investment $ 1,802,929 $ 3,012,914 $ 987,211 $ 178,345 $ 5,981,399 Fixed rate loans: Real Estate Loans: Commercial $ 134,809 $ 1,141,096 $ 349,949 $ 12,854 $ 1,638,708 Construction 66,241 132,702 13,892 7,454 220,289 Residential 72,174 422,430 96,826 21,189 612,619 Total Real Estate Loans 273,224 1,696,228 460,667 41,497 2,471,616 Commercial 179,506 351,913 152,841 — 684,260 Consumer and Other 35,067 21,062 2,585 154 58,868 Total fixed rate loans $ 487,797 $ 2,069,203 $ 616,093 $ 41,651 $ 3,214,744 Floating rate loans: Real Estate Loans: Commercial $ 239,320 $ 371,913 $ 164,050 $ 69,232 $ 844,515 Construction 254,491 153,624 33,303 8,795 450,213 Residential 71,630 92,166 54,436 53,682 271,914 Total Real Estate Loans 565,441 617,703 251,789 131,709 1,566,642 Commercial 740,399 320,240 118,791 4,985 1,184,415 Consumer and Other 9,292 5,768 538 — 15,598 Total floating rate loans $ 1,315,132 $ 943,711 $ 371,118 $ 136,694 $ 2,766,655 Nonperforming Assets Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is generally reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due, or interest may be recognized on a cash basis as long as the remaining book balance of the loan is deemed collectible. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. We have several procedures in place to assist in maintaining the overall quality of our loan portfolio. We have established underwriting guidelines to be followed by our bankers, and we also monitor our delinquency levels for any negative or adverse trends. There can be no assurance, however, that our loan portfolio will not become subject to increasing pressures from deteriorating borrower credit due to general economic conditions. 60 Table of Contents We believe our conservative lending approach and focused management of nonperforming assets has resulted in sound asset quality and the timely resolution of problem assets. We had $89.7 million and $30.5 million in nonperforming assets as of December 31, 2025 and 2024, respectively. We had $76.7 million in nonperforming loans as of December 31, 2025 compared to $25.0 million as of December 31, 2024. The increase in nonperforming assets from December 31, 2024 to December 31, 2025 is primarily due to one lending relationship secured by residential real estate, four secured by commercial and construction real estate, four commercial loans, and two other real estate owned properties. The following tables present information regarding nonperforming loans at the dates indicated: As of December 31, (Dollars in thousands) 2025 2024 2023 Nonaccrual loans $ 74,471 $ 24,147 $ 16,943 Accruing loans 90 or more days past due 2,215 860 127 Total nonperforming loans 76,686 25,007 17,070 Other nonperforming assets — — — Other real estate owned: Commercial real estate, construction, land and land development 12,192 5,197 1,326 Residential real estate 821 332 359 Total other real estate owned 13,013 5,529 1,685 Total nonperforming assets $ 89,699 $ 30,536 $ 18,755 Ratio of nonperforming loans to total loans held for investment 1.24 % 0.42 % 0.34 % Ratio of nonperforming assets to total assets 1.09 0.39 0.28 Ratio of nonaccrual loans to total loans held for investment 1.20 0.40 0.34 As of December 31, (Dollars in thousands) 2025 2024 2023 Nonaccrual loans by category: Real Estate Loans: Commercial $ 36,252 $ 3,621 $ 3,280 Construction 4,539 5,251 3,543 Residential 10,144 7,078 7,352 Total Real Estate Loans 50,935 15,950 14,175 Commercial 23,370 8,039 2,395 Consumer and Other 166 158 373 Total $ 74,471 $ 24,147 $ 16,943 Potential Problem Loans From a credit risk standpoint, we classify loans in one of four categories: pass, special mention, substandard or doubtful. Loans classified as loss are charged-off. The classifications of loans reflect a judgment about the risks of default and loss associated with the loan. Ratings are adjusted to reflect the degree of risk and loss that is believed to be inherent in each credit. Our methodology is structured so that specific allocations are increased in accordance with deterioration in credit quality (and a corresponding increase in risk of loss) or decreased in accordance with improvement in credit quality (and a corresponding decrease in risk of loss). Credits rated special mention show clear signs of financial weaknesses or deterioration in credit worthiness; however, such concerns are not so pronounced that we generally expect to experience significant loss within the short-term. Such credits typically maintain the ability to perform within standard credit terms and credit exposure is not as prominent as credits with a lower rating. 61 Table of Contents Credits rated substandard are those in which the normal repayment of principal and interest may be, or has been, jeopardized by reason of adverse trends or developments of a financial, managerial, economic or political nature, or important weaknesses which exist in collateral. A protracted workout on these credits is a distinct possibility. Prompt corrective action is therefore required to reduce exposure and to assure that adequate remedial measures are taken by the borrower. Credit exposure becomes more likely in such credits and a serious evaluation of the secondary support to the credit is performed. Credits rated doubtful have all the weaknesses inherent in those rated substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The following tables summarize our internal ratings of loans held for investment as of the dates indicated. See Note 7 of the consolidated financial statements for the presentation of loans in their credit quality categories that is in compliance with the CECL standard. As of December 31, 2025 (Dollars in thousands) Pass Special Mention Substandard Doubtful Total Real Estate Loans: Commercial $ 2,472,549 $ 74,116 $ 64,142 $ 472 $ 2,611,279 Construction 621,673 11,229 6,167 — 639,069 Residential 906,308 24,770 12,955 32 944,065 Total Real Estate Loans 4,000,530 110,115 83,264 504 4,194,413 Commercial 1,834,911 39,149 47,650 123 1,921,833 Consumer and Other 72,706 — 536 2 73,244 Total $ 5,908,147 $ 149,264 $ 131,450 $ 629 $ 6,189,490 As of December 31, 2024 (Dollars in thousands) Pass Special Mention Substandard Doubtful Total Real Estate Loans: Commercial $ 2,383,439 $ 75,385 $ 23,548 $ 851 $ 2,483,223 Construction 658,364 3,436 8,702 — 670,502 Residential 871,634 3,163 9,485 251 884,533 Total Real Estate Loans 3,913,437 81,984 41,735 1,102 4,038,258 Commercial 1,828,485 25,979 13,911 300 1,868,675 Consumer and Other 74,097 — 369 — 74,466 Total $ 5,816,019 $ 107,963 $ 56,015 $ 1,402 $ 5,981,399 Allowance for Credit Losses We maintain an allowance for credit losses, which includes both our allowance for loan losses and reserves for unfunded commitments, that represents management’s best estimate of the credit losses and risks inherent in the loan portfolio. In determining the allowance for credit losses, we estimate losses on specific loans, or groups of loans, where the probable loss can be identified and reasonably determined. The balance of the allowance for credit losses is based on internally assigned risk classifications of loans, changes in the nature of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, current economic factors and the estimated impact of current economic conditions on certain historical credit loss rates. For additional discussion of our methodology, please refer to “— Critical Accounting Estimates — Allowance for Credit Losses. ” 62 Table of Contents In connection with our review of the loan portfolio, we consider risk elements attributable to particular loan types or categories in assessing the quality of individual loans. Some of the risk elements we consider include: • for Real Estate: Commercial loans, the debt service coverage ratio (income from the property in excess of operating expenses compared to loan payment requirements), operating results of the owner in the case of owner-occupied properties, the loan to value ratio, the age and condition of the collateral, and the volatility of income, property value and future operating results typical for properties of that type; • for Real Estate: Construction loans, the perceived feasibility of the project including the ability to sell developed lots or improvements constructed for resale or the ability to lease property constructed for lease, the quality and nature of contracts for presale or prelease, if any, the experience and ability of the developer, and the loan to value ratio; • for Real Estate: Residential real estate loans, the borrower’s ability to repay the loan, including a consideration of the debt to income ratio and employment and income stability, the loan to value ratio, and the age, condition and marketability of the collateral; and • for Commercial loans, the operating results of the commercial, industrial or professional enterprise, the borrower’s business, professional and financial ability and expertise, the specific risks and volatility of income and operating results typical for businesses in that category, and the value, nature and marketability of collateral; As of December 31, 2025, the allowance for credit losses totaled $58.1 million, or 0.94%, of total loans held for investment. As of December 31, 2024, the allowance for credit losses totaled $58.5 million, or 0.98%, of total loans held for investment. As of December 31, 2023, the allowance for credit losses totaled $43.7 million, or 0.88%, of total loans held for investment. 63 Table of Contents The following tables present, as of and for the periods indicated, an analysis of the allowance for credit losses and other related data: For the Years Ended December 31, (Dollars in thousands) 2025 2024 2023 Average loans outstanding $ 6,023,214 $ 5,327,466 $ 4,859,637 Gross loans held for investment outstanding end of period $ 6,189,490 $ 5,981,399 $ 4,992,785 Allowance for credit losses at beginning of period $ 58,528 $ 43,738 $ 38,783 Adoption of ASU 2016-13 - - 5,857 Adjustment for Oakwood purchased credit deterioration loans - 8,410 - Provision for credit losses 11,318 10,873 4,483 Charge-offs: Real Estate: Commercial 4,116 (263) 2,049 Construction 20 2,261 36 Residential 242 297 42 Total Real Estate 4,378 2,295 2,127 Commercial 6,768 986 2,813 Consumer and other 1,991 2,392 1,489 Total charge-offs 13,137 5,673 6,429 Recoveries: Real Estate: Commercial 30 86 26 Construction 211 515 1 Residential 33 14 18 Total Real Estate 274 615 45 Commercial 839 236 672 Consumer and other 314 329 327 Total recoveries 1,427 1,180 1,044 Net charge-offs 11,710 4,493 5,385 Allowance for credit losses at end of period $ 58,136 $ 58,528 $ 43,738 Ratio of allowance for credit losses to end of period loans held for investment 0.94 % 0.98 % 0.88 % Ratio of net charge-offs to average loans 0.19 0.08 0.11 Ratio of allowance for credit losses to nonaccrual loans 78.07 242.38 258.15 64 Table of Contents For the Years Ended December 31, 2025 2024 2023 (Dollars in thousands) Net Charge-offs (Recoveries) Percent of Average Loans Net Charge-offs (Recoveries) Percent of Average Loans Net Charge-offs (Recoveries) Percent of Average Loans Real estate: Commercial $ 4,086 0.07 % $ (349) 0.00 % $ 2,023 0.04 % Construction (191) 0.00 1,746 0.03 35 0.00 Residential 209 0.00 283 0.00 24 0.00 Total Real Estate Loans 4,104 0.07 1,680 0.03 2,082 0.04 Commercial 5,929 0.10 750 0.01 2,141 0.05 Consumer and Other 1,677 0.02 2,063 0.04 1,162 0.02 Total net charge-offs (recoveries) $ 11,710 0.19 % $ 4,493 0.08 % $ 5,385 0.11 % Although we believe that we have established our allowance for loan losses in accordance with GAAP and that the allowance for loan losses was adequate to provide for known and estimated losses in the portfolio at all times shown above, future provisions will be subject to ongoing evaluations of the risks in our loan portfolio. If we experience economic declines or if asset quality deteriorates, material additional provisions could be required. The following table shows the allocation of the allowance for credit losses among loan categories and certain other information as of the dates indicated. The allocation of the allowance for credit losses as shown in the table should neither be interpreted as an indication of future charge-offs, nor as an indication that charge-offs in future periods will necessarily occur in these amounts or in the indicated proportions. The total allowance is available to absorb losses from any loan category. For the Years Ended December 31, 2025 2024 2023 (Dollars in thousands) Amount Percent to Total Amount Percent to Total Amount Percent to Total Real estate: Commercial $ 23,806 40.9 % $ 23,688 40.5 % $ 17,882 40.9 % Construction 4,416 7.6 8,473 14.5 8,142 18.6 Residential 7,732 13.3 8,394 14.3 5,662 12.9 Total real estate 35,954 61.8 40,555 69.3 31,686 72.4 Commercial 21,618 37.2 17,432 29.8 11,796 27.0 Consumer and Other 564 1.0 541 0.9 256 0.6 Total allowance for credit losses $ 58,136 100.0 % $ 58,528 100.0 % $ 43,738 100.0 % Securities We use our securities portfolio to provide a source of liquidity, an appropriate return on funds invested, manage interest rate risk, meet collateral requirements, and meet regulatory capital requirements. As of December 31, 2025, the carrying amount of investment securities totaled $989.2 million, an increase of $95.7 million, or 10.7%, compared to $893.5 million as of December 31, 2024. Securities represented 12.0% and 11.4% of total assets as of December 31, 2025 and 2024, respectively. Our investment portfolio consists entirely of securities classified as available for sale. As a result, the carrying values of our investment securities are adjusted for unrealized gain or loss, and any gain or loss is reported on an after-tax basis as 65 Table of Contents a component of other comprehensive income in shareholders’ equity. The following tables summarize the amortized cost and estimated fair value of investment securities as of the dates shown: As of December 31, 2025 (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. treasury securities $ 17,571 $ - $ 293 $ 17,278 U.S. government agencies 10,070 - 196 9,874 Corporate bonds 38,324 377 1,639 37,062 Mortgage-backed securities 674,211 3,153 27,273 650,091 Municipal securities 291,256 536 16,868 274,924 Total $ 1,031,432 $ 4,066 $ 46,269 $ 989,229 As of December 31, 2024 (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. treasury securities $ 17,631 $ - $ 956 $ 16,675 U.S. government agencies 10,164 - 576 9,588 Corporate bonds 47,855 348 3,038 45,165 Mortgage-backed securities 584,321 542 47,125 537,738 Municipal securities 313,452 23 29,092 284,383 Total $ 973,423 $ 913 $ 80,787 $ 893,549 All of our mortgage-backed securities are agency securities. We do not hold any Fannie Mae or Freddie Mac preferred stock, corporate equity, collateralized debt obligations, collateralized loan obligations, private label collateralized mortgage obligations, subprime, Alt-A, or second lien elements in our investment portfolio as of December 31, 2025. The allowance for credit losses encompasses potential expected credit losses related to the securities portfolio. In order to develop an estimate of credit losses expected for the current securities portfolio, we perform an assessment that includes reviewing historical loss data for both our portfolio and similar types of investment securities. Additionally, our review of the securities portfolio for expected credit losses includes an evaluation of factors including the security issuer bond ratings, delinquency status, insurance or other available credit support, as well as our expectations of the forecasted economic outlook relevant to these securities. 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, 2025 and 2024, was negligible and therefore, no allowance for credit loss was recorded related to our investment securities. 66 Table of Contents The following tables set forth the fair value, maturities and approximated weighted average book yield based on estimated annual income divided by the average amortized cost of the securities portfolio as of the dates indicated. The contractual maturity of a mortgage-backed security is the date at which the last underlying mortgage matures. As of December 31, 2025 Within One Year After One Year but Within Five Years After Five Years but Within Ten Years After Ten Years Total (Dollars in thousands) Amount Yield Amount Yield Amount Yield Amount Yield Total Yield U.S. treasury securities $ 17,278 0.80 % $ — — % $ — — % $ — — % $ 17,278 0.80 % U.S. government agencies 9,874 0.92 — — — — — — 9,874 0.92 Corporate bonds 2,002 9.02 13,100 4.13 21,960 5.35 — — 37,062 5.12 Mortgage-backed securities 4,748 1.28 57,984 2.50 202,824 3.45 384,535 3.58 650,091 3.43 Municipal securities 24,785 1.47 96,836 1.97 93,511 2.05 59,792 4.07 274,924 2.41 Total $ 58,687 1.42 % $ 167,920 2.32 % $ 318,295 3.17 % $ 444,327 3.65 % $ 989,229 3.14 % As of December 31, 2024 Within One Year After One Year but Within Five Years After Five Years but Within Ten Years After Ten Years Total (Dollars in thousands) Amount Yield Amount Yield Amount Yield Amount Yield Total Yield U.S. treasury securities $ — — % $ 16,675 0.80 % $ — — % $ — — % $ 16,675 0.80 % U.S. government agencies — — 9,588 0.92 — — — — 9,588 0.92 Corporate bonds — — 6,253 5.00 38,912 4.90 — — 45,165 4.91 Mortgage-backed securities 4,081 2.68 47,501 2.07 184,576 2.99 301,580 3.16 537,738 3.00 Municipal securities 24,577 1.44 93,150 1.76 105,409 1.96 61,247 2.97 284,383 2.07 Total $ 28,658 1.61 % $ 173,167 1.82 % $ 328,897 2.89 % $ 362,827 3.13 % $ 893,549 2.74 % The contractual maturity of mortgage-backed securities, collateralized mortgage obligations and asset-backed securities is not a reliable indicator of their expected life because borrowers have the right to prepay their obligations at any time. Mortgage-backed securities and asset-backed securities are typically issued with stated principal amounts and are backed by pools of mortgage loans and other loans with varying maturities. The term of the underlying mortgages and loans may vary significantly due to the ability of a borrower to prepay. Monthly paydowns on mortgage-backed securities tend to cause the average life of the securities to be much different than the stated contractual maturity. During a period of increasing interest rates, fixed rate mortgage-backed securities do not tend to experience heavy prepayments of principal and, consequently, the average life of this security will be lengthened. If interest rates begin to fall, prepayments may increase, thereby shortening the estimated life of this security. The weighted average life of our investment portfolio was 4.25 years with an estimated effective duration of 3.53 years as of December 31, 2025. As of December 31, 2025 and 2024, we did not own securities of any one issuer for which aggregate adjusted cost exceeded 10% of the consolidated shareholders’ equity as of such respective dates. As of December 31, 2025 and 2024, the Company held other equity securities of $49.3 million and $41.1 million, respectively, comprised mainly of FHLB stock, SBIC’s and financial technology (“Fintech”) fund investments. Deposits We offer a variety of deposit accounts having a wide range of interest rates and terms including demand, savings, money market and time accounts. We rely primarily on competitive pricing policies, convenient locations and personalized service to attract and retain these deposits. Total deposits as of December 31, 2025 were $6.7 billion, an increase of $187.3 million, or 2.9%, compared to $6.5 billion as of December 31, 2024. Total uninsured deposits were $2.9 billion, or 43.2% of deposits as of December 31, 2025 compared to $2.8 billion, or 43.4%, or total deposits as of December 31, 2024. Since it is not reasonably practicable to provide a precise measure of uninsured deposits, the amounts are estimated and are based on the same methodologies and assumptions that are used for regulatory reporting requirements for the call report. 67 Table of Contents Noninterest-bearing deposits as of December 31, 2025 were $1.3 billion compared to $1.4 billion as of December 31, 2024, a decrease of $35.0 million, or 2.6%. Average deposits for the year ended December 31, 2025 were $6.4 billion, an increase of $718.0 million, or 12.6%, compared to the year ended December 31, 2024 of $5.7 billion. The average rate paid on total interest-bearing deposits decreased over this period from 3.73% for the year ended December 31, 2024 to 3.29% for the year ended December 31, 2025. The decrease in average rates was driven by the federal reserve continuing to lower interest rates during the year ended December 31, 2025. In addition, the stability of noninterest-bearing demand accounts served to reduce the cost of deposits to 2.63% for the year ended December 31, 2025 and 2.89% for the year ended December 31, 2024. The following table presents the monthly average balances and weighted average rates paid on deposits for the periods indicated: For the Years Ended December 31 2025 2024 (Dollars in thousands) Average Balance Average Rate Average Balance Average Rate Interest-bearing demand accounts $ 807,107 2.54 % $ 611,561 3.36 % Negotiable order of withdrawal ("NOW") accounts 303,167 2.51 402,046 2.09 Limited access money market accounts and savings 2,601,497 3.24 2,146,610 3.79 Certificates and other time deposits > $250k 783,326 4.19 628,929 4.52 Certificates and other time deposits < $250k 639,425 3.70 638,087 4.13 Total interest-bearing deposits 5,134,522 3.29 4,427,233 3.73 Noninterest-bearing demand accounts 1,296,162 — 1,285,445 — Total deposits $ 6,430,684 2.63 % $ 5,712,678 2.89 % The ratio of average noninterest-bearing deposits to average total deposits for the years ended December 31, 2025 and 2024 was 20.2% and 22.5%, respectively. The following table sets forth the contractual maturities of certain certificates of deposit at December 31, 2025: (Dollars in thousands) Certificates of Deposit More Than $250,000 Certificates of Deposit of $100,000 Through $250,000 3 months or less $ 152,621 $ 146,030 More than 3 months but less than 6 months 234,330 99,296 More than 6 months but less than 12 months 264,393 132,024 12 months or more 153,384 40,759 Total $ 804,728 $ 418,109 Borrowings We utilize short-term and long-term borrowings to supplement deposits to fund our lending and investment activities. In addition, we use short-term borrowings to periodically repurchase outstanding shares of our common stock and for general corporate purposes. Each of these relationships are discussed below. FHLB advances . The FHLB allows us to borrow on a blanket floating lien status collateralized by certain securities and loans. As of December 31, 2025 and 2024, total borrowing capacity of $2.0 billion was available under this arrangement for both periods, and $431.2 million and $355.9 million, respectively, was outstanding with a weighted average stated interest rate of 4.02% as of December 31, 2025 and 4.15% as of December 31, 2024. Our current longest dated FHLB advance matures within eight years. We utilize these borrowings to meet liquidity needs and to fund certain fixed rate loans in our portfolio. 68 Table of Contents The following table presents our FHLB borrowings at the dates indicated. (Dollars in thousands) FHLB Advances December 31, 2025 Amount outstanding at year-end $ 431,200 Weighted average stated interest rate at year-end 4.02 % Maximum month-end balance during the year $ 509,124 Average balance outstanding during the year $ 400,849 Weighted average interest rate during the year 4.23 % December 31, 2024 Amount outstanding at year-end $ 355,875 Weighted average stated interest rate at year-end 4.15 % Maximum month-end balance during the year $ 377,048 Average balance outstanding during the year $ 317,462 Weighted average interest rate during the year 4.15 % Subordinated Note Purchase Agreement ( “ Subordinated Debt ” ) . In December 2018 we issued subordinated notes in the amount of $25.0 million. The subordinated notes bear a fixed rate of interest at 6.75% until December 31, 2028 and a floating rate thereafter through maturity in 2033. The balance outstanding at both December 31, 2025 and 2024 was $25.0 million. These subordinated notes were issued for the purpose of paying off our long term advance and line of credit with First National Bankers' Bank ("FNBB"), for general corporate purposes and to provide Tier 2 capital. The subordinated notes are redeemable by the Company at its option beginning in 2028. On March 26, 2021, we issued $52.5 million in subordinated notes. These subordinated notes bear interest at a fixed rate of 4.25% through March 31, 2026 and a floating rate, based on a benchmark rate plus 354 basis points, thereafter through maturity in 2031. During the year ended December 31, 2025, the Company redeemed $7.0 million and recognized a $630,000 gain on the extinguishment of this debt. The balance outstanding was $45.5 million and $52.5 million at December 31, 2025 and 2024, respectively. The subordinated notes are redeemable by the Company at its option beginning in 2026. On April 1, 2021, we consummated the acquisition of Smith Shellnut Wilson, LLC (“SSW”). Under the terms of the acquisition, we issued $3.9 million in subordinated debt to the former owners of SSW. This subordinated debt bears interest at a fixed rate of 4.75% through April 1, 2026 and a floating rate, based on a benchmark rate plus 442 basis points, thereafter through maturity in 2031. The balance outstanding at both December 31, 2025 and 2024 was $3.9 million. The subordinated notes are redeemable by the Company at its option beginning in 2026. On March 1, 2022, we consummated the acquisition of Texas Citizens Bancorp, Inc. (“TCBI”). As part of the acquisition, we assumed $26.4 million in subordinated debt. Of those notes, $10.0 million bears an adjustable interest rate plus 350 basis points, based on a benchmark rate, adjusting quarterly until maturity on April 11, 2028, and was callable beginning April 11, 2023, $7.5 million bears an adjustable interest rate plus 350 basis points, based on a benchmark rate, adjusting quarterly, until maturity on December 13, 2028, and was callable beginning December 13, 2023, $8.9 million was called on May 1, 2023 and ceased bearing interest as of such date. This $8.9 million note was fully extinguished during the year ended December 31, 2023. As part of valuing these three subordinated notes from TCBI, we incurred a fair value adjustment premium of $3.4 million that will accrete over five-to-seven years, with $603,000 and $833,000 remaining at December 31, 2025 and December 31, 2024, respectively. 69 Table of Contents The following table presents the Subordinated Debt at the dates indicated. (Dollars in thousands) Subordinated Debt December 31, 2025 Amount outstanding at year-end $ 92,530 Weighted average stated interest rate at year-end 5.54 % Maximum month-end balance during the year $ 99,971 Average balance outstanding during the year $ 93,765 Weighted average interest rate during the year 5.28 % December 31, 2024 Amount outstanding at year-end $ 99,760 Weighted average stated interest rate at year-end 5.69 % Maximum month-end balance during the year $ 99,971 Average balance outstanding during the year $ 99,884 Weighted average interest rate during the year 5.40 % Trust preferred securities . In the Pedestal acquisition, we assumed their obligations of $5.2 million in junior subordinated debentures, which are associated with $5.0 million in trust preferred securities issued by a trust. Interest on the junior subordinated debentures is accrued at an annual rate equal to the 3-month LIBOR, as determined in the agreement, plus 3.05%. Interest is payable quarterly. The agreement indenture governing the debentures allows us to defer interest payments for up to 20 consecutive quarterly periods. 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. We have guaranteed, on a subordinated basis, distributions and other payments due on the trust preferred securities subject to the guarantee agreement and the indenture. Principal and interest payments on the junior subordinated debentures are in a superior position to the liquidation rights of holders of common stock. Federal Funds Purchased Lines of Credit Relationships We maintain Federal Funds Purchased Lines of Credit Relationships with the following correspondent banks and limits as of December 31, 2025: (Dollars in thousands) Fed Funds Purchase Limits TIB National Association $ 45,000 PNC Bank 38,000 FNBB 35,000 First Horizon Bank 17,000 ServisFirst Bank 10,000 Total $ 145,000 70 Table of Contents The following table represents combined Federal Funds Purchased Lines of Credit for all relationships at the dates indicated. (Dollars in thousands) Fed Funds Purchased December 31, 2025 Amount outstanding at year-end $ - Weighted average stated interest rate at year-end 0.00 % Maximum month-end balance during the year $ 10 Average balance outstanding during the year $ 1 Weighted average interest rate during the year 5.05 % December 31, 2024 Amount outstanding at year-end $ - Weighted average stated interest rate at year-end 0.00 % Maximum month-end balance during the year $ - Average balance outstanding during the year $ 5 Weighted average interest rate during the year 6.46 % Liquidity and Capital Resources Liquidity Liquidity involves our ability to utilize funds to support asset growth and acquisitions or reduce assets to meet deposit withdrawals and other payment obligations, to maintain reserve requirements and otherwise to operate on an ongoing basis and manage unexpected events. For the years ended December 31, 2025 and 2024, liquidity needs were primarily met by core deposits, security and loan maturities, and amortizing investment and loan portfolios. In addition, we utilize, or have available, brokered deposits, purchased funds from correspondent banks, the Federal Reserve discount window, and overnight advances from the FHLB. As of December 31, 2025 and 2024, we maintained five and six lines of credit, respectively, with correspondent banks which provided for extensions of credit with an availability to borrow up to an aggregate of $145.0 million and $160.0 million as of December 31, 2025 and 2024, respectively. There were no funds under these lines of credit outstanding as of December 31, 2025 and 2024, respectively. 71 Table of Contents The following table illustrates, during the periods presented, the mix of our funding sources and the average assets in which those funds are invested as a percentage of average total assets for the period indicated. Average assets totaled $7.9 billion and $7.0 billion for the years ended December 31, 2025 and 2024, respectively. For the Years Ended December 31, 2025 2024 Source of Funds: Deposits: Noninterest-bearing 16.5 % 18.4 % Interest-bearing 65.2 63.5 Subordinated debt (excluding trust preferred securities) 1.2 1.4 Advances from FHLB 5.1 4.6 Other borrowings 0.3 0.4 Bank Term Funding Program — 0.9 Other liabilities 0.9 0.8 Shareholders' equity 10.8 10.0 Total 100.0 % 100.0 % Uses of Funds: Loans, net of allowance for loan losses 75.8 % 75.8 % Securities available for sale 12.2 13.0 Securities purchased under agreements to resell 0.4 0.2 Interest-bearing deposits in other banks 4.9 4.1 Other noninterest-earning assets 6.7 6.9 Total 100.0 % 100.0 % Average noninterest-bearing deposits to average deposits 20.2 % 22.5 % Average loans to average deposits 93.7 93.3 Our primary source of funds is deposits, and our primary use of funds is loans. We do not expect a change in the primary source or use of our funds in the foreseeable future. Our average loans increased 13.1% for the year ended December 31, 2025 compared to the same period in 2024. We predominantly invest excess funds in overnight deposits with the Federal Reserve, securities, interest-bearing deposits at other banks or other short-term liquid investments until needed to fund loan growth. Our securities portfolio had a weighted average life of 4.25 years and an effective duration of 3.53 years as of December 31, 2025 and a weighted average life of 4.63 years and an effective duration of 3.79 years as of December 31, 2024. As of December 31, 2025, we had outstanding $1.7 billion in commitments to extend credit and $51.2 million in commitments associated with outstanding standby and commercial letters of credit. As of December 31, 2024, we had outstanding $1.4 billion in commitments to extend credit and $50.0 million in commitments associated with outstanding standby and commercial letters of credit. Because commitments associated with letters of credit and commitments to extend credit may expire unused, the total outstanding may not necessarily reflect the actual future cash funding requirements. See “ -Off Balance Sheet Items ” below for additional information. As of December 31, 2025, we had no exposure to future cash requirements associated with known uncertainties or capital expenditures of a material nature. We had cash and cash equivalents, federal funds sold and securities purchased under agreements to resell, of $609.2 million and $567.6 million as of December 31, 2025 and 2024, respectively. Capital Resources Total shareholders’ equity increased to $896.9 million as of December 31, 2025, compared to $799.5 million as of December 31, 2024, an increase of $97.4 million, or 12.2%. This increase was primarily due to net income available to common shareholders of $82.5 million, other comprehensive income of $29.7 million resulting from the after tax effect of unrealized gains in our investment securities portfolio, and offset by dividends paid on common shares of $16.8 million. 72 Table of Contents On January 22, 2026, our board of directors declared a quarterly dividend in the amount of $18.75 per preferred share to the preferred shareholders of record as of February 15, 2026. The dividend is to pay on February 28, 2026, or as soon as practicable thereafter. On January 22, 2026, our board of directors declared a quarterly dividend based upon our financial performance for the three months ended December 31, 2025 in the amount of $0.15 per common share to the common shareholders of record as of February 15, 2026. The dividend is to pay on February 28, 2026, or as soon as practicable thereafter. The declaration and payment of dividends to our shareholders, as well as the amounts thereof, are subject to the discretion of the Board and depend upon our results of operations, financial condition, capital levels, cash requirements, future prospects and other factors deemed relevant by the Board. As a holding company, our ability to pay dividends is largely dependent upon the receipt of dividends from our subsidiary, b1BANK. There can be no assurance that we will declare and pay any dividends to our shareholders. Capital management consists of providing equity to support current and future operations. Banking regulators view capital levels as important indicators of an institution’s financial soundness. As a general matter, FDIC-insured depository institutions and their holding companies are required to maintain minimum capital relative to the amount and types of assets they hold. We are subject to regulatory capital requirements at the holding company and bank levels. As of December 31, 2025 and December 31, 2024, we and b1BANK were in compliance with all applicable regulatory capital requirements, and b1BANK was classified as “well-capitalized,” for purposes of prompt corrective action regulations. As we employ our capital and continue to grow our operations, our regulatory capital levels may decrease depending on our level of earnings. However, we expect to monitor and control our growth in order to remain in compliance with all applicable regulatory capital standards applicable to us. The following table presents the actual capital amounts and regulatory capital ratios for us and b1BANK as of the dates indicated. As of December 31, 2025 2024 (Dollars in thousands) Amount Ratio Amount Ratio Business First Total capital (to risk weighted assets) $ 939,331 12.93 % $ 878,914 12.75 % Tier 1 capital (to risk weighted assets) 799,527 11.00 % 727,959 10.56 % Common Equity Tier 1 capital (to risk weighted assets) 722,597 9.94 % 651,029 9.44 % Tier 1 Leverage capital (to average assets) 799,527 10.08 % 727,959 9.53 % b1BANK Total capital (to risk weighted assets) $ 930,600 12.82 % $ 857,627 12.45 % Tier 1 capital (to risk weighted assets) 872,464 12.02 % 799,099 11.60 % Common Equity Tier 1 capital (to risk weighted assets) 872,464 12.02 % 799,099 11.60 % Tier 1 Leverage capital (to average assets) 872,464 11.01 % 799,099 10.47 % Preferred Stock On September 1, 2022, we entered into a securities purchase agreement with certain investors pursuant to which we offered and sold shares of our 7.50% fixed-to-floating rate non-cumulative perpetual preferred stock, with no par value, for an aggregate purchase price of $72.0 million. The preferred stock was structured to qualify as additional Tier 1 capital under applicable regulatory capital guidelines. Holders of the preferred stock will be entitled to receive, if, when, and as declared by our board of directors, non-cumulative cash dividends at a rate of 7.50% for the first five years following issuance and thereafter at a variable rate equal to the then current 3-month secured overnight financing rate (“SOFR”), reset quarterly, plus 470 basis points. The preferred stock has a perpetual term and may not be redeemed, except under certain circumstances, under the first five years of issuance. 73 Table of Contents Long Term Debt For information on our subordinated debt, please refer to “Borrowings”. FHLB Advances Advances from the FHLB totaled approximately $431.2 million and $355.9 million at December 31, 2025 and 2024, respectively. As of December 31, 2025, and 2024, the FHLB advances were collateralized by a blanket floating lien on certain securities and loans, had a weighted average stated rate of 4.02% and 4.15%, respectively, and mature within eight years. At December 31, 2025, $120.0 million in advances were short term with a rate of 3.62% and $55.0 million with a rate of 4.38% at December 31, 2024. Contractual Obligations The following tables summarize contractual obligations and other commitments to make future payments as of December 31, 2025 and 2024 (other than non-maturity deposit obligations), which consist of future cash payments associated with our contractual obligations pursuant to our FHLB advances, subordinated debt, revolving line of credit, and non-cancelable future operating leases. Payments related to leases are based on actual payments specified in underlying contracts. Advances from the FHLB totaled approximately $431.2 million and $355.9 million as of December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, the FHLB advances were collateralized by a blanket floating lien on certain securities and loans, had a weighted average stated rate of 4.02% and 4.15%, respectively, and maturing within eight years. The subordinated debt totaled $92.5 million and $99.8 million as of December 31, 2025 and 2024. Of this subordinated debt, $25.0 million bears interest at a fixed rate of 6.75% through December 31, 2028 and a floating rate, based on a benchmark rate plus 369 basis points, thereafter through maturity in 2033, $52.5 million of this subordinated debt bears interest at a fixed rate of 4.25% through March 31, 2026 and a floating rate, based on a benchmark rate plus 354 basis points, thereafter through maturity in 2031. During the year ended December 31, 2025, $7.0 million of this debt was redeemed for a gain of $630,000. Also, $3.9 million of this subordinated debt bears interest at a fixed rate of 4.75% through April 1, 2026 and a floating rate, based on a benchmark rate plus 442 basis points, thereafter through maturity in 2031. We acquired three separate notes as part of the TCBI acquisition totaling $26.4 million. Of those notes, $10.0 million bears an adjustable interest rate plus 350 basis points, based on a benchmark rate, adjusting quarterly until maturity on April 11, 2028, and callable beginning April 11, 2023, $7.5 million bears an adjustable interest rate plus 350 basis points, based on a benchmark rate, adjusting quarterly, until maturity on December 13, 2028, and callable beginning December 13, 2023, $8.9 million was called on May 1, 2023 and ceased bearing interest as of such date. This $8.9 million note was fully extinguished during the year ended December 31, 2023. As part of valuing these three subordinated notes from TCBI, we incurred a fair value adjustment premium of $3.4 million that will accrete over five-to-seven years, with $603,000 and $833,000 remaining at December 31, 2025 and December 31, 2024, respectively. We recognized $1.5 million in gains on the extinguishment of this debt during the year ended December 31, 2023. 74 Table of Contents As of December 31, 2025 (Dollars in thousands) 1 year or less More than 1 year but less than 3 years 3 years or more but less than 5 years 5 years or more Total Non-cancelable future operating leases $ 5,896 $ 10,510 $ 7,382 $ 6,383 $ 30,171 Time deposits 1,170,413 227,926 9,106 — 1,407,445 Subordinated debt — 17,500 — 74,427 91,927 Advances from FHLB 256,200 100,000 25,000 50,000 431,200 Subordinated debt - trust preferred securities — — — 5,000 5,000 Securities sold under agreements to repurchase 22,622 — — — 22,622 Standby and commercial letters of credit 47,671 3,486 86 — 51,243 Commitments to extend credit 1,121,371 405,515 97,958 71,259 1,696,103 Total $ 2,624,173 $ 764,937 $ 139,532 $ 207,069 $ 3,735,711 As of December 31, 2024 (Dollars in thousands) 1 year or less More than 1 year but less than 3 years 3 years or more but less than 5 years 5 years or more Total Non-cancelable future operating leases $ 5,888 $ 10,864 $ 8,202 $ 6,844 $ 31,798 Time deposits 983,140 385,363 28,410 — 1,396,913 Subordinated debt — — 17,500 81,427 98,927 Advances from FHLB 82,560 123,315 75,000 75,000 355,875 Subordinated debt - trust preferred securities — — — 5,000 5,000 Securities sold under agreements to repurchase 22,621 — — — 22,621 Standby and commercial letters of credit 43,881 5,885 170 16 49,952 Commitments to extend credit 762,661 373,705 144,823 96,685 1,377,874 Total $ 1,900,751 $ 899,132 $ 274,105 $ 264,972 $ 3,338,960 Off-Balance Sheet Items In the normal course of business, we enter into various transactions which, in accordance with GAAP, are not included in our consolidated balance sheets. We enter into these transactions to meet the financing needs of our customers. These transactions include commitments to extend credit and standby and commercial letters of credit which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated balance sheets. Our commitments associated with outstanding standby and commercial letters of credit and commitments to extend credit expiring by period as of the date indicated are summarized in the tables above. Because commitments associated with letters of credit and commitments to extend credit may expire unused, the amounts shown do not necessarily reflect the actual future cash funding requirements. 75 Table of Contents Standby and commercial letters of credit are conditional commitments issued by us to guarantee the performance of a customer to a third party. In the event of nonperformance by the customer, we have rights to the underlying collateral, which can include commercial real estate, physical plant and property, inventory, receivables, cash and/or marketable securities. The credit risk to us in issuing letters of credit is essentially the same as that involved in extending loan facilities to our customers. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Because many of the commitments are expected to expire without being fully drawn upon, the total commitment amounts disclosed above do not necessarily represent future cash requirements. We evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if considered necessary by us, upon extension of credit, is based on management’s credit evaluation of the customer. Interest Rate Sensitivity and Market Risk As a financial institution, our primary component of market risk is sensitivity to movement in interest rates. Our asset and liability management policy provides management with the guidelines for effective interest rate risk management, and we have established a measurement system for monitoring our interest rate sensitivity position. We manage our sensitivity position within our established guidelines. Fluctuations in interest rates will ultimately impact the level of income and expense recorded on many of our assets and liabilities and the market value of all interest-earning assets and interest-bearing liabilities. Interest rate risk is the potential of economic losses due to interest rate changes. These economic losses can be reflected as a loss of future net interest income and/or a loss of the current fair market value of our equity. The objective of interest rate risk management is to measure the effect on net interest income and economic value of equity and to position the balance sheet to minimize the risk of losses and maximize the amount of income without taking on unnecessary earning volatility. We seek to manage our exposure to interest rates by structuring our balance sheet in the ordinary course of business however we may enter into derivatives contracts to hedge interest rate risk if it is appropriate given our risk profile and policy guidelines. Based upon the nature of our operations, we are not subject to foreign exchange or commodity price risk. We do not own any trading assets. Our exposure to interest rate risk is managed by the asset-liability committee (“ALCO”) of b1BANK, in accordance with policies approved by our board of directors. In determining the appropriate level of interest rate risk, the committee considers the impact on earnings and capital of the current outlook on interest rates, potential changes in interest rates, regional economies, liquidity, business strategies and other factors. The committee meets regularly to review, among other things, the sensitivity of assets and liabilities to interest rate changes, the book and market values of assets and liabilities, unrealized gains and losses, purchase and sale activities, commitments to originate loans and the maturities of investments and borrowings. Additionally, the committee reviews liquidity, cash flow flexibility, maturities of deposits and consumer and commercial deposit activity. Management employs methodologies to manage interest rate risk which include an analysis of relationships between interest-earning assets and interest-bearing liabilities, and an interest rate shock simulation model. We use interest rate risk simulation models and shock analysis to test the interest rate sensitivity of net interest income and fair value of equity, and the impact of changes in interest rates on other financial metrics. Contractual maturities and re-pricing opportunities of loans are incorporated into the model as are prepayment assumptions, maturity data and optionality. Deposit assumptions such as repricing betas and non-maturity balance decay rates are also incorporated into the model. Model assumptions are revised and updated on a regular basis as directed by policy, and more frequently if conditions merit. The assumptions used are inherently uncertain and, as a result, the model cannot precisely measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income. Actual results will differ from the model’s simulated results due to timing, magnitude and frequency of interest rate changes, as well as changes in market conditions, customer behavior, and the application and timing of various management strategies. On at least a quarterly basis, we run simulation models to calculate potential impacts to net interest income and the economic value of equity. Specific details of the simulations are reflected in policy as directed by ALCO. 76 Table of Contents The following table summarizes the simulated change in net interest income and fair value of equity over a 12-month horizon as of the dates indicated: As of December 31, 2025 2024 Change in Interest Rates (Basis Points) Percent Change in Net Interest Income Percent Change in Fair Value of Equity Percent Change in Net Interest Income Percent Change in Fair Value of Equity +300 7.81 % (3.73 %) 8.10 % (0.70 %) +200 5.31 % (2.36 %) 5.60 % (0.30 %) +100 2.69 % (1.03 %) 2.90 % - % Base - % - % - % - % -100 (2.62 %) 0.89 % (2.30 %) 0.30 % -200 (5.09 %) 1.23 % (5.20 %) (1.30 %) The results of the simulations are primarily driven by the contractual characteristics of all balance sheet instruments and customer behavior. Impact of Inflation Our consolidated financial statements and related notes included elsewhere in this statement have been prepared in accordance with GAAP. These require the measurement of financial position and operating results in terms of historical dollars, without considering changes in the relative value of money over time due to inflation or recession. Unlike many industrial companies, substantially all of our assets and liabilities are monetary in nature. As a result, interest rates have a more significant impact on our performance than the effects of general levels of inflation. Interest rates may not necessarily move in the same direction or in the same magnitude as the prices of goods and services. However, other operating expenses do reflect general levels of inflation. Non-GAAP Financial Measures Our accounting and reporting policies conform to GAAP, and the prevailing practices in the banking industry. However, we also evaluate our performance based on certain additional non-GAAP financial measures. We classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively either financial measures calculated in accordance with GAAP, operating measures or other measures that are not non-GAAP financial measures or both. This discussion and analysis section includes certain non-GAAP financial measures (e.g., referenced as “core” or “tangible”) intended to supplement, not substitute for, comparable GAAP measures. These measures typically adjust income available to common shareholders for certain significant activities or transactions that in management’s opinion can distort period-to-period comparisons of Business First’s performance. Transactions that are typically excluded from non-GAAP measures include realized and unrealized gains/losses on former bank premises and equipment, gain/losses on sales of securities, and acquisition-related expenses (including, but not limited to, legal costs, system conversion costs, severance and retention payments, etc.). The measures also typically adjust goodwill and certain intangible assets from book value and shareholders’ equity. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core business. These non-GAAP disclosures are not necessarily comparable to non-GAAP measures that may be presented by other companies. You should understand how such other banking organizations calculate their financial metrics or with names similar to the non-GAAP financial measures we have discussed in this statement when comparing such non-GAAP financial measures. 77 Table of Contents Core Net Income. Core net income available to common shareholders for the year ended December 31, 2025 was $83.5 million, or $2.83 per diluted common share, compared to core net income available to common shareholders of $65.8 million, or $2.49 per diluted common share, for the year ended December 31, 2024. Core net income available to common shareholders for the year ended December 31, 2025 included losses on the sale of former bank premises and equipment of $840,000, a gain on the sale of a branch of $3.4 million, a gain on the extinguishment of subordinated debt of $630,000, a one time employee retention tax credit of $2.0 million, offset with acquisition related expenses of $3.8 million and core conversion expenses of $2.5 million, compared to a CECL impact on the Oakwood acquisition of $4.8 million, acquisition related expenses of $1.6 million and core conversion expenses of $974,000 for the year ended December 31, 2024. For the Years Ended December 31, (Dollars in thousands, except per share data) (Unaudited) 2025 2024 2023 Interest Income: Interest income $ 465,011 $ 414,764 $ 353,327 Core interest income 465,011 414,764 353,327 Interest Expense: Interest expense 191,848 187,381 138,198 Core interest expense 191,848 187,381 138,198 Provision for Credit Losses: Provision for credit losses 11,318 10,873 4,483 CECL Oakwood impact (3) — (4,824) — Core provision expense 11,318 6,049 4,483 Other Income: Other income 51,542 44,193 36,642 (Gains) losses on former bank premises and equipment 840 (50) — (Gains) losses on sale of securities (64) (7) 2,565 Gain on sale of branch (3,360) — (945) Gain on extinguishment of debt (630) — (1,458) Core other income 48,328 44,136 36,804 Other Expense: Other expense 203,078 177,652 156,702 Acquisition-related expenses (2) (3,810) (1,621) (236) Write-down of former bank premises — — (432) Core conversion expense (2,460) (974) — Employee retention tax credit 1,997 — — Core other expense 198,805 175,057 156,034 Pre-Tax Income: Pre-tax income 110,309 83,051 90,586 CECL Oakwood impact (3) — 4,824 — (Gains) losses on former bank premises and equipment 840 (50) — (Gains) losses on sale of securities (64) (7) 2,565 Gain on sale of branch (3,360) — (945) Gain on extinguishment of debt (630) — (1,458) Acquisition-related expenses (2) 3,810 1,621 236 Write-down of former bank premises — — 432 Core conversion expense 2,460 974 — Employee retention tax credit (1,997) — — Core pre-tax income 111,368 90,413 91,416 Provision for Income Taxes: (1) Provision for income taxes 22,448 17,944 19,543 Tax on CECL Oakwood impact (3) — 1,019 — Tax on (gains) losses on former bank premises and equipment 177 (11) — Tax on (gains) losses on sale of securities (13) (1) 542 Tax on gain on sale of branch (833) — (200) Tax on gain on extinguishment of debt (133) — (308) Tax on acquisition-related expenses (2) 682 97 21 Tax on write-down of former bank premises — — 91 Tax on core conversion expense 521 205 — Tax on employee retention tax credit (422) — — Core provision for income taxes 22,427 19,253 19,689 Preferred Dividends Preferred dividends 5,401 5,401 5,401 Core preferred dividends 5,401 5,401 5,401 Net Income Available to Common Shareholders: Net income available to common shareholders 82,460 59,706 65,642 CECL Oakwood impact (3), net of tax — 3,805 — (Gains) losses on former bank premises and equipment , net of tax 663 (39) — (Gains) losses on sale of securities, net of tax (51) (6) 2,023 Gain on sale of branch, net of tax (2,527) — (745) Gain on extinguishment of debt, net of tax (497) — (1,150) Acquisition-related expenses (2), net of tax 3,128 1,524 215 Write-down of former bank premises, net of tax — — 341 78 Table of Contents Core conversion expense, net of tax 1,939 769 — Employee retention tax credit, net of tax (1,575) — — Core net income available to common shareholders $ 83,540 $ 65,759 $ 66,326 Diluted Earnings Per Common Share: Diluted earnings per common share $ 2.79 $ 2.26 $ 2.59 CECL Oakwood impact (3), net of tax — 0.14 — (Gains) losses on former bank premises and equipment , net of tax 0.02 — — (Gains) losses on sale of securities, net of tax — — 0.08 Gain on sale of branch, net of tax (0.09) — (0.03) Gain on extinguishment of debt, net of tax (0.02) — (0.04) Acquisition-related expenses (2), net of tax 0.11 0.06 0.01 Write-down of former bank premises, net of tax — — 0.01 Core conversion expense, net of tax 0.07 0.03 — Employee retention tax credit, net of tax (0.05) — $ — Core diluted earnings per common share $ 2.83 $ 2.49 $ 2.62 _______________________________ (1) Tax rates, exclusive of certain nondeductible acquisition-related expenses and goodwill, utilized were 21.129% for 2025, 2024 and 2023 . These rates approximate the marginal tax rates for the applicable periods. (2) Includes merger and conversion-related expenses and salary and employee benefits. (3) CECL non-PCD provision/unfunded commitment expense attributable to Oakwood. Tangible Book Value Per Common Share. Tangible book value per common share is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate (1) tangible common equity as shareholders’ equity less preferred stock, goodwill, and core deposit and customer intangible assets, net of accumulated amortization, and (2) tangible book value per common share as tangible common equity divided by shares of common stock outstanding. The most directly comparable GAAP financial measure for tangible book value per common share is book value per common share. The following table reconciles, as of the dates set forth below, total shareholders’ equity to tangible common equity and presents tangible book value per common share compared to book value per common share: As of December 31, (Dollars in thousands, except per share data) (Unaudited) 2025 2024 Tangible Common Equity Total shareholders' equity $ 896,883 $ 799,466 Preferred stock (71,930) (71,930) Total common shareholders' equity 824,953 727,536 Adjustments: Goodwill (121,146) (121,572) Core deposit and customer intangibles (14,497) (17,252) Total tangible common equity $ 689,310 $ 588,712 Common shares outstanding (1) 29,510,668 29,552,358 Book value per common shares (1) $ 27.95 $ 24.62 Tangible book value per common shares (1) 23.36 19.92 _______________________________ (1) Excludes the dilutive effect, if any, of 149,240 and 198,238 shares of common stock issuable upon exercise of outstanding stock options and restricted stock awards as of December 31, 2025 and 2024 , respectively. Tangible Common Equity to Tangible Assets . Tangible common equity to tangible assets is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate tangible common equity, as described above, and tangible assets as total assets less goodwill, core deposit and customer intangible assets, net of accumulated amortization. The most directly comparable GAAP financial measure for tangible common equity to tangible assets is total common shareholders’ equity to total assets. 79 Table of Contents The following table reconciles, as of the dates set forth below, total shareholders’ equity to tangible common equity and total assets to tangible assets: As of December 31, (Dollars in thousands, except per share data) (Unaudited) 2025 2024 Tangible Common Equity Total shareholders' equity $ 896,883 $ 799,466 Preferred stock (71,930) (71,930) Total common shareholders' equity 824,953 727,536 Adjustments: Goodwill (121,146) (121,572) Core deposit and customer intangibles (14,497) (17,252) Total tangible common equity $ 689,310 $ 588,712 Tangible Assets Total Assets $ 8,214,740 $ 7,857,090 Adjustments: Goodwill (121,146) (121,572) Core deposit and customer intangibles (14,497) (17,252) Total tangible assets $ 8,079,097 $ 7,718,266 Common Equity to Total Assets 10.0 % 9.3 % Tangible Common Equity to Tangible Assets 8.5 7.6 Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States and with general practices within the financial services industry. Application of these principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under current circumstances. These assumptions form the basis for our judgments about the carrying values of assets and liabilities that are not readily available from independent, objective sources. We evaluate our estimates on an ongoing basis. Use of alternative assumptions may have resulted in significantly different estimates. Actual results may differ from these estimates. We have identified the following critical accounting policies and estimates that, due to the difficult, subjective or complex judgments and assumptions inherent in those policies and estimates and the potential sensitivity of our financial statements to those judgments and assumptions, are critical to an understanding of our financial condition and results of operations. We believe that the judgments, estimates and assumptions used in the preparation of our financial statements are appropriate. Acquired Loans Loans acquired in business combinations are initially recorded at fair value which includes an estimate of credit losses expected to be realized over the remaining lives of the loans. Acquired loans are accounted for based upon a determination of whether they were purchased with more-than insignificant amount of credit deterioration (“PCD” loans) or an insignificant amount of credit deterioration (“non-PCD” loans), in either case as compared to origination. 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. Acquired loans are generally valued using a discount cash flow model. The assumptions in the model included prepayment rates, default/loss given default rates, collateral values, recovery rates, and discount rates. 80 Table of Contents Allowance for Credit Losses on Loans and Unfunded Commitments The allowance for credit losses is established for current expected credit losses on the Company’s loan portfolio, including unfunded credit commitments. The allowance for credit losses is recorded against outstanding loan balances and unfunded credit commitments and represents an estimate of the expected losses within the portfolio at the end of the relevant reporting period. As further discussed in the consolidated financial statements in Note 1 – Summary of Significant Accounting Policies, our policies for the allowance for credit losses were modified on January 1, 2023, to reflect the adoption of Accounting Standards Codification (“ASC”) Topic 326 (“ASC 326”) Financial Instruments – Credit Losses. Management estimates the allowance for credit losses by considering forecast macroeconomic conditions, trends in the portfolio, credit management and underwriting practices and economic conditions affecting our operating footprint. After the forecast period, the Company reverts to long-term historical loss experience on a straight-line basis over a one-year period, adjusted for the composition of the current loan portfolio, to estimate losses over the remaining lives of the portfolio. Development of the estimate is dependent on reported peer losses. Individual loan loss estimates are generally dependent on the fair value of collateral, as well as estimates of the cost to market and sell collateral associated with an individual loan. These estimates are sensitive specific individual collateral markets and can change significantly based on the specific collateral. To a lesser extent, individual reserve estimates reflect specific loan cash flow amounts, which are dependent on borrower specific repayment expectations. The results of our estimated allowance for credit losses also incorporate the reserve for unfunded lending commitments. This reserve methodology is similar to the methodology for loans, however, an added estimate of the expected use of unfunded credit commitments is included in the estimate. Overall, the allowance for credit losses is based upon management’s best estimate using available information at the time. The estimate can be significantly impacted by unexpected changes in the macroeconomic environment, borrower behavior, credit management practices or other relevant credit information. Purchase Accounting Adjustments (other than loans) The Company accounts for acquisitions using the acquisition method of accounting. Under this method, the Company records the assets acquired, including identified intangible assets, and liabilities assumed, at their respective fair values, which generally involves estimates based on third party valuations, such as appraisals, discounted cash flow analyses or other valuation techniques, as well as internal valuations for certain instruments. Core deposit intangibles, deposit premiums, securities, properties, and borrowings are some of the more subjective instruments which are generally fair valued during acquisitions. Further, the determination of the useful lives as well as the appropriate amortization method of other intangible assets is also subjective. ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk. Reference is made to the subheading entitled “Interest Rate Sensitivity and Market Risk” of the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of this report. 81 Table of Contents