Business First Bancshares, Inc. 10-K

ITEM 8. Financial Statements and Supplementary Data. CONTENTS Annual Audited Financial Statements: Report of Independent Registered Public Accounting Firm 83 Consolidated Balance Sheets 86 Consolidated Statements of Income 87 Consolidated Statements of Comprehensive Income 88 Consolidated Statements of Changes in Shareholders' Equity 89 Consolidated Statements of Cash Flows 90 - 92 Notes to Consolidated Financial Statements 92 - 136 82 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders, Board of Directors, and Audit Committee Business First Bancshares, Inc. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Business First Bancshares, Inc. (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2026, expressed an unqualified opinion thereon. Change in Accounting Principle As discussed in Notes 1 and 7 to the financial statements, effective January 1, 2023, the Company changed its method of accounting for credit losses due to the adoption of Accounting Standards Codification Topic 326, Financial Instruments – Credit Losses. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 83 Table of Contents Allowance for Loan Losses As described in Note 1 and Note 7 to the consolidated financial statements, the Company’s allowance for loan losses was $54.0 million as of December 31, 2025. Loans sharing risk characteristics are grouped into pools and the allowance for loan losses considers expected losses for the remaining lives of those assets. Management’s measurement of expected losses utilizes forward-looking expected loss models which consider a variety of factors affecting lifetime credit losses. Forecasted economic scenarios are considered over a reasonable and supportable forecast period which incorporates internal and peer historical losses, and after the forecast period, the Company reverts to long-term historical loss experience to estimate losses over the remaining lives of the portfolio. Loss estimates also consider qualitative factors affecting credit losses not reflected in the model. We identified the qualitative factor adjustments to the allowance for loan losses as a critical audit matter. The principal considerations for that determination included the high degree of judgment and subjectivity in auditing management’s measurements of those qualitative factor adjustments related to economic conditions. Auditing these assumptions required a high degree of auditor effort, specialized skills and knowledge, and significant auditor judgment. The primary procedures we performed to address this critical audit matter included: ◦ We obtained an understanding of the Company’s model and process for determining the allowance for loan losses and evaluated the design and tested the operating effectiveness of controls relating to this estimate, including controls over management’s review and approval of qualitative factor adjustments related to economic conditions applied within the qualitative framework to address risks not already incorporated within the model. ◦ We evaluated management’s methodology for developing the qualitative factor adjustments related to economic conditions and the completeness and accuracy of data utilized in development of such adjustments. ◦ We evaluated management’s judgments and assumptions used in the development of the qualitative factor adjustments and its overall reasonableness. /s/ Forvis Mazars, LLP We have served as the Company’s auditor since 2019. Birmingham, Alabama February 26, 2026 84 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders, Board of Directors, and Audit Committee Business First Bancshares, Inc. Opinion on the Internal Control over Financial Reporting We have audited Business First Bancshares Inc’s (the “Company”) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of December 31, 2025 and 2024, and for each of the three years in the period ended December 31, 2025, and our report dated February 26, 2026, expressed an unqualified opinion on those financial statements . Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definitions and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of reliable financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. /s/ Forvis Mazars, LLP Birmingham, Alabama February 26, 2026 85 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) December 31, 2025 2024 ASSETS Cash and Due from Banks $ 411,175 $ 319,098 Federal Funds Sold 172,393 197,669 Securities Purchased Under Agreements to Resell 25,587 50,835 Securities Available for Sale, at Fair Values (Amortized Cost of $ 1,031,432 at December 31, 2025 and $ 973,423 at December 31, 2024) 989,229 893,549 Mortgage Loans Held for Sale 1,094 717 Loans and Lease Receivable, Net of Allowance for Loan Losses of $ 53,959 and $ 54,840 at December 31, 2025 and 2024, respectively 6,135,531 5,926,559 Premises and Equipment, Net 73,982 81,953 Accrued Interest Receivable 38,494 35,872 Other Equity Securities 49,342 41,100 Other Real Estate Owned 13,013 5,529 Cash Value of Life Insurance 120,292 117,645 Deferred Taxes 20,477 29,591 Goodwill 121,146 121,572 Core Deposit and Customer Intangible 14,497 17,252 Other Assets 28,488 18,149 Total Assets $ 8,214,740 $ 7,857,090 LIABILITIES Deposits: Noninterest Bearing $ 1,322,074 $ 1,357,045 Interest Bearing 5,376,516 5,154,286 Total Deposits 6,698,590 6,511,331 Securities Sold Under Agreements to Repurchase 22,622 22,621 Federal Home Loan Bank Borrowings 431,200 355,875 Subordinated Debt 92,530 99,760 Subordinated Debt - Trust Preferred Securities 5,000 5,000 Accrued Interest Payable 4,166 5,969 Other Liabilities 63,749 57,068 Total Liabilities 7,317,857 7,057,624 Commitments and Contingencies (See Notes 19 and 22) SHAREHOLDERS' EQUITY Preferred Stock, No Par Value; 5,000,000 Shares Authorized; 72,010 Shares ($ 1,000 Liquidation Preference) Issued and Outstanding at both December 31, 2025 and 2024 71,930 71,930 Common Stock, $ 1 Par Value; 50,000,000 Shares Authorized; 29,510,668 and 29,552,358 Shares Issued and Outstanding at December 31, 2025 and 2024, respectively 29,511 29,552 Additional Paid-in Capital 502,155 500,024 Retained Earnings 326,574 260,958 Accumulated Other Comprehensive Loss ( 33,287 ) ( 62,998 ) Total Shareholders' Equity 896,883 799,466 Total Liabilities and Shareholders' Equity $ 8,214,740 $ 7,857,090 The accompanying notes are an integral part of these financial statements. 86 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data) Years Ended December 31, 2025 2024 2023 Interest Income: Interest and Fees on Loans $ 419,197 $ 374,555 $ 323,327 Interest and Dividends on Non-taxable Securities 6,890 4,265 4,340 Interest and Dividends on Taxable Securities 22,126 20,994 15,785 Interest on Federal Funds Sold and Due From Banks 16,798 14,950 9,875 Total Interest Income 465,011 414,764 353,327 Interest Expense: Interest on Deposits 168,923 165,094 106,908 Interest on Borrowings 22,925 22,287 31,290 Total Interest Expense 191,848 187,381 138,198 Net Interest Income 273,163 227,383 215,129 Provision for Credit Losses 11,318 10,873 4,483 Net Interest Income after Provision for Credit Losses 261,845 216,510 210,646 Other Income: Service Charges on Deposit Accounts 10,704 10,577 9,704 Gain (Loss) on Sales of Securities 64 7 ( 2,565 ) Gain on Sales of Loans 3,438 2,973 1,972 Other Income 37,336 30,636 27,531 Total Other Income 51,542 44,193 36,642 Other Expenses: Salaries and Employee Benefits 115,853 103,917 90,611 Occupancy and Equipment Expense 28,611 23,989 20,859 Other Expenses 58,614 49,746 45,232 Total Other Expenses 203,078 177,652 156,702 Income Before Income Taxes 110,309 83,051 90,586 Provision for Income Taxes 22,448 17,944 19,543 Net Income 87,861 65,107 71,043 Preferred Stock Dividends 5,401 5,401 5,401 Net Income Available to Common Shareholders $ 82,460 $ 59,706 $ 65,642 Earnings Per Common Share: Basic $ 2.81 $ 2.27 $ 2.62 Diluted $ 2.79 $ 2.26 $ 2.59 The accompanying notes are an integral part of these financial statements. 87 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in thousands) Years Ended December 31, 2025 2024 2023 Consolidated Net Income $ 87,861 $ 65,107 $ 71,043 Other Comprehensive Income Unrealized Gain on AFS Investment Securities 37,607 4,527 13,006 Unrealized Gain (Loss) on Share of Other Equity Investments — 14 ( 782 ) Reclassification Adjustment for Gains (Losses) on Sales of AFS Investment Securities Included in Net Income 64 7 ( 2,565 ) Income Tax Effect ( 7,960 ) ( 961 ) ( 2,040 ) Other Comprehensive Income 29,711 3,587 7,619 Consolidated Comprehensive Income $ 117,572 $ 68,694 $ 78,662 The accompanying notes are an integral part of these financial statements. 88 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS ’ EQUITY (Dollars in thousands, except per share data) Preferred Stock Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Shareholders' Equity Balances at December 31, 2022 $ 71,930 $ 25,110 $ 393,690 $ 163,955 $ ( 74,204 ) $ 580,481 Cumulative Effect of Change in Accounting Principle for Credit Losses — — — ( 827 ) — ( 827 ) Comprehensive Income: Net Income — — — 71,043 — 71,043 Other Comprehensive Income — — — - 7,619 7,619 Cash Dividends Declared on Preferred Stock, $ 75.00 Per Share — — — ( 5,401 ) — ( 5,401 ) Cash Dividends Declared on Common Stock, $ 0.50 Per Share — — — ( 12,655 ) — ( 12,655 ) Stock Based Compensation Cost — 242 3,757 - — 3,999 Balances at December 31, 2023 71,930 25,352 397,447 216,115 ( 66,585 ) 644,259 Comprehensive Income: Net Income — — — 65,107 — 65,107 Other Comprehensive Income — — — — 3,587 3,587 Cash Dividends Declared on Preferred Stock, $ 75.00 Per Share — — — ( 5,401 ) — ( 5,401 ) Cash Dividends Declared on Common Stock, $ 0.56 Per Share — — — ( 14,863 ) — ( 14,863 ) Stock Issuance, Net of Issuance Costs — 3,973 99,805 — — 103,778 Stock Based Compensation Cost — 227 2,772 — — 2,999 Balances at December 31, 2024 71,930 29,552 500,024 260,958 ( 62,998 ) 799,466 Comprehensive Income: Net Income — — — 87,861 — 87,861 Other Comprehensive Income — — — — 29,711 29,711 Cash Dividends Declared on Preferred Stock, $ 75.00 Per Share — — — ( 5,401 ) — ( 5,401 ) Cash Dividends Declared on Common Stock, $ 0.57 Per Share — — — ( 16,844 ) — ( 16,844 ) Stock Based Compensation Cost — 109 5,712 — — 5,821 Stock Repurchase — ( 150 ) ( 3,581 ) — — ( 3,731 ) Balances at December 31, 2025 $ 71,930 $ 29,511 $ 502,155 $ 326,574 $ ( 33,287 ) $ 896,883 The accompanying notes are an integral part of these financial statements. 89 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) Years Ended December 31, 2025 2024 2023 Cash Flows From Operating Activities: Consolidated Net Income $ 87,861 $ 65,107 $ 71,043 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Provision for Credit Losses 11,318 10,873 4,483 Depreciation and Amortization 5,680 5,257 4,670 Net Accretion of Purchase Accounting Adjustments ( 2,313 ) ( 2,505 ) ( 7,615 ) Stock Based Compensation Cost 5,821 2,999 3,999 Net Amortization of Securities 798 2,140 4,197 (Gain) Loss on Sales of Securities ( 64 ) ( 7 ) 2,565 Gain on Sales of Loans ( 931 ) ( 2,376 ) ( 671 ) Income on Other Equity Securities ( 2,099 ) ( 2,201 ) ( 3,045 ) Gain on Sales of Other Real Estate Owned, Net of Writedowns ( 511 ) ( 89 ) ( 214 ) Other Real Estate Owned Valuation Allowance 196 — — Loss on Disposal of Premises and Equipment 840 7 — Increase in Cash Value of Life Insurance ( 3,151 ) ( 2,875 ) ( 2,247 ) Deferred Income Tax Expense (Benefit) 1,199 ( 962 ) ( 2,052 ) Gain on Extinguishment of Debt ( 630 ) — ( 1,458 ) Gain on Sale of Branch ( 3,360 ) — ( 945 ) Changes in Assets and Liabilities: Increase in Accrued Interest Receivable ( 2,636 ) ( 3,079 ) ( 4,250 ) (Increase) Decrease in Other Assets ( 10,434 ) 9 ( 1,683 ) Increase (Decrease) in Accrued Interest Payable ( 1,755 ) ( 10,498 ) 12,749 Increase (Decrease) in Other Liabilities 6,254 ( 391 ) 11,443 Net Cash Provided by Operating Activities 92,083 61,409 90,969 Cash Flows From Investing Activities: Purchases of Securities Available for Sale ( 687,861 ) ( 104,165 ) ( 131,038 ) Proceeds from Maturities / Sales of Securities Available for Sale 551,832 40,720 91,981 Proceeds from Paydowns of Securities Available for Sale 77,285 67,864 53,916 Net Cash Received in Acquisition — 96,824 — Net Cash Paid in Sale of Branch ( 43,084 ) — ( 14,506 ) Purchases of Other Equity Securities ( 14,317 ) ( 5,015 ) ( 15,573 ) Redemption of Other Equity Securities 8,174 1,713 21,361 Purchase of Life Insurance — ( 3,000 ) ( 2,273 ) Proceeds from Death Benefit of Cash Value of Life Insurance 504 813 — Net Increase in Loans ( 234,283 ) ( 294,941 ) ( 379,073 ) Net Purchases of Premises and Equipment ( 66 ) ( 1,562 ) ( 11,648 ) Proceeds from Sales of Other Real Estate 9,766 621 1,240 Net (Increase) Decrease in Securities Purchased Under Agreements to Resell 25,248 ( 50,835 ) — Net (Increase) Decrease in Federal Funds Sold 25,276 ( 43,957 ) ( 135,528 ) Net Cash Used in Investing Activities ( 281,526 ) ( 294,920 ) ( 521,141 ) 90 Table of Contents (CONTINUED) Years Ended December 31, 2025 2024 2023 Cash Flows From Financing Activities: Net Increase in Deposits 238,540 520,570 444,780 Net Increase (Decrease) in Securities Sold Under Agreements to Repurchase 1 3,736 ( 1,323 ) Net Increase (Decrease) in Federal Funds Purchased — — ( 14,057 ) Net Advances (Repayments) on Federal Home Loan Bank Borrowings 75,325 122,488 ( 198,902 ) Net (Repayments) Proceeds on Bank Term Funding Program — ( 300,000 ) 300,000 Repayment of Subordinated Debt ( 6,370 ) — ( 8,900 ) Net Costs from Issuance of Common Stock — ( 31 ) — Repurchase of Common Stock ( 3,731 ) — — Payment of Dividends on Preferred Stock ( 5,401 ) ( 5,401 ) ( 5,401 ) Payment of Dividends on Common Stock ( 16,844 ) ( 14,863 ) ( 12,655 ) Net Cash Provided by Financing Activities 281,520 326,499 503,542 Net Increase in Cash and Due From Banks 92,077 92,988 73,370 Cash and Due From Banks at Beginning of Period 319,098 226,110 152,740 Cash and Due From Banks at End of Period $ 411,175 $ 319,098 $ 226,110 Supplemental Disclosures for Cash Flow Information: Cash Payments for: Interest on Deposits $ 170,706 $ 164,197 $ 104,811 Interest on Borrowings $ 22,945 $ 32,056 $ 20,638 Income Tax Payments $ 24,072 $ 17,352 $ 16,095 Supplemental Schedule for Noncash Investing and Financing Activities: Change in the Unrealized Gain on Securities Available for Sale $ 37,670 $ 4,534 $ 10,441 Change in the Unrealized Gain (Loss) on Equity Securities $ — $ 14 $ ( 782 ) Change in Deferred Tax Effect on the Unrealized Gain on Securities Available for Sale and Equity Securities $ ( 7,960 ) $ ( 961 ) $ ( 2,040 ) Transfer of Loans to Other Real Estate $ 16,935 $ 4,376 $ 1,339 Acquisitions: Fair Value of Tangible Assets Acquired $ — $ 847,743 $ — Other Intangible Assets Acquired — 7,640 — Liabilities Assumed — 781,609 — Net Identifiable Assets Acquired Over Liabilities Assumed $ — $ 73,774 $ — The accompanying notes are an integral part of these financial statements. 91 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 – Nature of Operations – Summary of Significant Accounting Policies – The accounting principles followed by Business First Bancshares, Inc. and its two wholly-owned subsidiaries, b1BANK (the “Bank”), and Coastal Commerce Statutory Trust, I; and the Bank’s wholly-owned subsidiaries, Business First Insurance, LLC, Smith Shellnut Wilson, LLC (“SSW”), Waterstone LSP, LLC ("Waterstone"), and b1 Securities, LLC ("b1Securities") are those which are generally practiced within the banking industry. The methods of applying those principles conform with generally accepted accounting principles (“GAAP”) and have been applied on a consistent basis. The principles which significantly affect the determination of financial position, results of operations, changes in shareholders’ equity and cash flows are summarized below. Principles of Consolidation The consolidated financial statements include the accounts of Business First Bancshares, Inc. and its wholly-owned subsidiary, b1BANK, and the Bank’s wholly-owned subsidiaries, Business First Insurance, LLC, SSW, Waterstone and b1Securities (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated. The Company has a single reportable operating segment called Community Banking. Our chief executive officer is our chief operating decision maker. Our chief executive officer reviews net income on a routine basis to make decisions about allocating capital and personnel throughout the Company, as well as the composition of the balance sheet. See the Consolidated Statements of Income, Consolidated Statements of Financial Condition, and Note 18 for information utilized to assess performance of the reportable operating segment. Nature of Operations The Bank operates out of full-service banking centers and loan production offices in markets across Louisiana, the Dallas/Fort Worth, Texas metroplex, and Houston, Texas. As a state bank, it is subject to regulation by the Office of Financial Institutions (“OFI”), State of Louisiana, and the Federal Deposit Insurance Corporation (“FDIC”), and undergoes periodic examinations by these agencies. The Company is also regulated by the Federal Reserve and is subject to periodic examinations. On January 31, 2024, the Company completed the acquisition, through b1BANK, of Waterstone, headquartered in Katy, Texas. Waterstone offers community banks and small businesses a range of SBA lending services including planning, pre-qualification, packaging, closing and disbursements, servicing and liquidations. Upon consummation of the acquisition, the Company paid $ 3.3 million in cash to the former owners of Waterstone. On October 1, 2024, the Company completed the acquisition of Oakwood Bancshares, Inc. (“Oakwood”), the parent bank holding company for Oakwood Bank, located in the Dallas, Texas region. The company issued 3,973,134 shares of its common stock to the former shareholders of Oakwood. At September 30, 2024 , Oakwood reported $ 863.6 million in total assets, $ 700.2 million in loans and $ 741.3 million in deposits. On July 7, 2025, the Company and Progressive Bancorp, Inc., a Louisiana corporation (“Progressive”), entered into a definitive agreement providing for the acquisition by the Company of Progressive and its wholly-owned bank subsidiary, Progressive Bank. The Company issued 3,192,367 shares of its common stock to the former shareholders of Progressive. Progressive had approximately $ 773.8 million of total assets, $ 684.9 million of deposits and $ 597.2 million of loans as of March 31, 2025. See Note 26 for information on this acquisition on January 1, 2026. Estimates Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future. Critical accounting estimates that are particularly susceptible to significant change for the Company include the determination of the acquired loans and allowance for credit losses and purchase accounting adjustments (other than loans). Other estimates include goodwill, fair value of financial instruments, investment securities and the assessment of income taxes. Management does not anticipate any material changes to estimates in the near term. Factors that may cause sensitivity to the aforementioned estimates include but are not limited to: external market factors such as market interest rates and employment rates, changes to operating policies and procedures, economic conditions 92 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS in the Company’s markets, and changes in applicable banking regulations. Actual results may ultimately differ from estimates. The Bank’s loans are generally secured by specific items of collateral including real property, business assets, and consumer assets. Although the Bank has a diversified loan portfolio, a substantial portion of its debtors’ ability to honor their contracts is dependent on local economic conditions in the Bank’s market area. While management uses available information to recognize losses on loans, further reductions in the carrying amounts of loans may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the estimated losses on loans. Such agencies may require the Bank to recognize additional losses based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the estimated losses on loans may change materially in the near term. However, the amount of the change that is reasonably possible cannot be estimated. Acquisition Accounting Acquisitions are accounted for under the purchase method of accounting. Purchased assets and assumed liabilities are recorded at their respective acquisition date fair values, and identifiable intangible assets are recorded at fair value. If the consideration given exceeds the fair value of the net assets received, goodwill is recognized. The Company generally records provisional amounts of fair value at the time of acquisition based on the information available. The provisional fair values are subject to refinement for up to one year after the closing date of an acquisition as information relative to closing date fair values becomes available. Securities Management determines the appropriate classification of debt securities (held to maturity, available for sale or trading) at the time of purchase and re-evaluates this classification quarterly. Securities classified as available for sale are those debt securities the Bank intends to hold for an indefinite period of time but not necessarily to maturity. Any decision to sell a security classified as available for sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Bank’s assets and liabilities, liquidity needs, regulatory capital considerations, and other similar factors. Securities available for sale are recorded at fair value. Unrealized gains or losses are reported as a component of comprehensive income. Realized gains or losses, determined on the basis of the cost of specific securities sold, are included in earnings. Securities classified as held to maturity are those debt securities the Bank has both the intent and ability to hold to maturity regardless of changes in market conditions, liquidity needs or changes in general economic conditions. These securities are recorded at cost adjusted for amortization of premium and accretion of discount, computed by various methods approximating the interest method over their contractual lives. The Bank has no securities classified as held to maturity at December 31, 2025 and 2024. Securities classified as trading are those securities held for resale in anticipation of short-term market movements. These securities are recorded at market value with any market adjustments included in earnings. The Bank has no securities classified as trading at December 31, 2025 and 2024. Other Equity Securities The Bank has invested in Federal Home Loan Bank (“FHLB”) stock, and other similar correspondent banks, which is reflected at cost in these financial statements. As a member of the FHLB System, the Bank is required to purchase and maintain stock in an amount determined by the FHLB. The FHLB stock is redeemable at par value at the discretion of the FHLB. The Bank has invested in certain equity investments which are accounted for under the equity method of accounting, which are considered to be variable interest entities (“VIE”). Loans, including acquired loans Loans Loans are stated at principal amounts outstanding, adjusted for deferred fees, costs and fair value adjustments, in the case of acquired loans, less the allowance for loan losses. Interest on loans is accrued daily based on the principal 93 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS outstanding. Deferred fees, costs and fair value adjustments for acquired loans are recognized as an adjustment to yield over the life of the loan. Generally, the Bank discontinues the accrual of interest income when a loan becomes 90 days past due as to principal or interest. When a loan is placed on nonaccrual status, previously recognized but uncollected interest is reversed from interest income. Subsequent cash receipts on nonaccrual loans are generally accounted for on the cost recovery method until the loans qualify for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Acquired Loans Purchased loans acquired in a business combination are initially recorded at their estimated fair value as of the acquisition date. Subsequent to acquisition, acquired loans are accounted for based upon a determination of whether they were purchased with more-than insignificant amount of credit deterioration (“PCD”) or an insignificant (“non-PCD”) amount of credit deterioration compared to origination. In either case, the difference between the estimated fair value of the acquired loan related to non-credit deterioration is treated as an adjustment to the contractual yield and accreted into interest income over the remaining life of the loan. Allowance for Credit Losses Allowance for Loan Losses The allowance for credit losses is increased through provisions charged to earnings and reduced by net charge-offs, inclusive of recoveries. Management evaluates the appropriateness of the allowance for credit losses on a quarterly basis. The allowance considers expected losses for the remaining lives of the applicable assets. The Company subscribes to a third-party service to provide economic forecasts at both the national and state levels, including GDP and unemployment, and other relevant forecasts. National forecasted economic scenarios are considered over a reasonable and supportable forecast period, currently one year, which incorporates Company and peer historical losses. 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. The economic scenarios are updated at least quarterly and are designed to provide estimates that take into consideration the customer base of our loan portfolio. Loss estimates also consider qualitative factors affecting credit losses not reflected in the model, including trends in the portfolio, credit management and underwriting practices and forecasted economic conditions affecting our operating footprint. The allowance recorded for credit losses utilizes forward-looking expected loss models to consider a variety of factors affecting lifetime credit losses. These factors include loan and borrower characteristics, such as internal risk ratings, delinquency status, collateral type and available valuation information, and the remaining term of the loan, adjusted for expected prepayments, with loans sharing risk characteristics grouped into pools to estimate expected losses. Where loans do not exhibit similar risk characteristics, an individual analysis is performed to consider expected credit losses. For each loan portfolio, model estimates are adjusted as necessary to consider any relevant qualitative factors that would affect the accuracy of the model. The results of the analysis are evaluated quarterly to confirm the estimates are appropriate for each loan portfolio. Expected credit loss estimates also include consideration of expected cash recoveries on loans previously charged-off, or, expected recoveries on collateral dependent loans where recovery is expected through sale of the collateral. The allowance recorded for individually evaluated loans is based on an analysis utilizing expected cash flows discounted using the original effective interest rate, the observable market price of the loan, or, when repayment is expected through the sale of collateral, the fair value of the collateral, less selling costs, for collateral-dependent loans. Allowance for Loans Acquired with Credit Deterioration When a loan portfolio is purchased, an allowance is established for those loans considered purchased with more-than-insignificant credit deterioration (PCD) loans, and those not considered purchased with more-than-insignificant credit deterioration (non-PCD). The allowance established utilizes the same risk factors discussed above for our non-acquired allowance. The allowance established for non-PCD loans is recognized through provision expense upon acquisition, whereas the allowance established for loans considered PCD at acquisition is offset by an increase in the basis of the 94 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS acquired loans. Any subsequent increases and decreases in the allowance related to acquired loans are recognized through provision expense, with future charge-offs recorded to the allowance. Allowance for Unfunded Credit Commitments The Company also assesses the credit risk associated with off-balance sheet loan commitments and letters of credit. The liability for off-balance sheet credit exposure related to loan commitments and other credit guarantees is included in other liabilities. Therefore, business processes and credit risks associated with unfunded credit commitments are essentially the same as for loans. The Company utilizes similar processes to estimate its liability for unfunded credit commitments, adjusted for an expectation of the actual utilization of the committed credit facility. Allowance on Investment Securities The allowance for credit losses encompasses potential expected credit losses related to the securities portfolio for credit losses. The assessment includes reviewing historical loss data for both our portfolio and similar types of investment securities to develop an estimate for the current securities portfolio. 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, and our ability and intent to hold the security over a period of time sufficient to recover its value up to the amortized cost basis. The results of the analysis are evaluated quarterly to confirm that credit loss estimates are appropriate for the securities portfolio. Based on our assessments, we had no expected credit losses on the investment securities portfolio as of December 31, 2025 and 2024 , therefore, no allowance for credit loss was recorded related to our investment securities. Accrued Interest The Company has elected to exclude accrued interest receivable from the amortized cost basis on its loan and debt securities portfolio. The Company has also elected to not measure an allowance for credit losses on accrued interest for loans held-for-investment or debt securities based on its policy to write off uncollectible interest in a timely manner. For loans, this occurs when a loan is placed on nonaccrual status. Generally, for loans, such elections are made no later than 90 days after a loan has become past due, although certain loans accrue interest after 90 days based on management’s evaluation of the borrower’s ability to continue making contractual payments. For debt securities, the elections are made based solely on management’s evaluation of the ability of the security issuer, and any relevant entities, to continue making contractual payments. Such write-offs are recognized as a reduction of interest income. Accrued interest receivable for the loan and securities portfolio is included within Accrued Interest Receivable in the Consolidated Balance Sheets. Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation. Depreciation is provided at rates based upon estimated useful service lives using the straight-line method for financial reporting purposes. The costs of assets retired or otherwise disposed of and the related accumulated depreciation are eliminated from the accounts in the year of disposal and the resulting gains or losses are included in current operations. Expenditures for maintenance and repairs are charged to operations as incurred. Costs of major additions and improvements are capitalized and expensed over their estimated depreciable lives. Other Real Estate Owned Real estate properties acquired through or in lieu of loan foreclosure or negotiated settlement are initially recorded at the fair value less estimated selling cost at the date of acquisition. Any write-downs based on the asset’s fair value at the date of acquisition are charged to the allowance for loan losses. After foreclosure, valuations are periodically performed by management and property held for sale is carried at the lower of the new cost basis or fair value less cost to sell. Impairment losses on property to be held and used are measured as the amount by which the carrying amount of a property exceeds its fair value. Costs of significant property improvements are capitalized, whereas costs relating to holding property are expensed. Valuations are periodically performed by management, and any subsequent write-downs are recorded as a charge to operations, if necessary, to reduce the carrying value of a property to the lower of its cost or fair value less cost to sell. 95 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Goodwill and Other Intangible Assets Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. Goodwill and other intangible assets deemed to have an indefinite useful life are not amortized but instead are subject to review for impairment annually, or more frequently if deemed necessary. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives and reviewed for impairment. If impaired, the asset is written down to its estimated fair value. Our other intangibles include core deposit intangibles (“CDI”) representing the value of the acquired core deposit base are generally recorded in connection with business combinations involving banks and branch locations; and customer-related intangibles representing the value of a customer list consisting of customer contact information acquired through business combination. The Company’s policy is to amortize these intangibles on a straight-line basis over their estimated useful life. Core deposit and customer intangibles are tested for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable from future undiscounted cash flows. The Company recognizes the rights to service mortgage and other loans as separate assets, which are recorded in other assets in the consolidated balance sheets, when purchased or when servicing is contractually separated from the underlying loans by sale with servicing rights retained. For loan sales with servicing retained, a servicing right, generally an asset, is recorded at fair value at the time of sale for the right to service the loans sold. All servicing rights are identified by class and amortized over the remaining service life of the loan. Customer-Initiated Derivatives The Company enters into derivative instruments to meet the needs of its customers through the execution of customer-initiated derivatives (swaps and caps and floors). These financial instruments involve elements of market and credit risk. Market and credit risk are included in the determination of fair value. Market risk is the potential loss that may result from movements in interest rates that cause an unfavorable change in the value of a financial instrument. Market risk in interest rate contracts executed on behalf of customers is mitigated by taking offsetting positions. Credit risk is the possible loss that may occur in the event of default by the counterparty to a financial instrument. The Company manages credit risk arising from customer-initiated derivatives by evaluating the creditworthiness of each customer, utilizing a similar approval process used for its lending activities. Derivatives with dealer counterparties are either cleared through a clearinghouse or settled directly with a single counterparty. The Company has quantified the credit risk as not significant as of December 31, 2025, and 2024. Income primarily results from the spread between the customer derivative and the offsetting dealer position. For December 31, 2025, and 2024, the Company recognized $ 4.4 million and $ 2.7 million, respectively, in swap fee income. Income Taxes The provision for income taxes is based on amounts reported in the statement of income after exclusion of nontaxable income such as interest on state and municipal securities. Also, certain items of income and expense are recognized in different time periods for financial statement purposes than for income tax purposes. Thus, provisions for deferred taxes are recorded in recognition of such temporary differences. Deferred taxes are provided utilizing a liability method whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the reported amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company files a consolidated federal income tax return. Consolidated income tax expense is allocated on the basis of each entity’s income adjusted for permanent differences. The Company evaluates all significant tax positions as required by accounting principles generally accepted in the United States of America. As of December 31, 2025 and 2024 , the Company does not believe it has taken any positions that would require the recording of any additional tax liability, nor does it believe there are any unrealized tax benefits that would either increase or decrease within the next year. 96 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company files income tax returns in the U.S. federal jurisdiction and applicable states. With few exceptions, the Company is no longer subject to federal and state income tax examinations by tax authorities for years before 2022. Any interest and penalties assessed by income taxing authorities are not significant, and are included in other expenses in these financial statements, as applicable. Stock Based Compensation As described in Note 16 , the Company has issued stock options, stock grants, phantom stock awards (settled only in cash), and restricted stock awards which incorporate stock-based compensation. The Company has adopted a fair value-based method of accounting for these awards. The compensation cost is measured at the grant date based on the value of the award and is recognized over the requisite service period, which is usually the vesting period. Forfeitures are recognized as they occur. Comprehensive Income Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities or other equity investments, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income. The components of comprehensive income are disclosed on the Consolidated Statements of Comprehensive Income for all periods presented. Advertising The Company expenses all costs of advertising and promotion the first time the advertising or promotion takes place. For the years ended December 31, 2025, 2024 and 2023 , the Company expensed costs of $ 5.2 million, $ 4.9 million and $ 4.6 million, respectively. Recognition of Revenue from Contracts with Customers Service charges on deposit accounts, fee and broker commissions, ATM/debit card fee income (including interchange), and transactional income from traditional banking services, are the significant noninterest income sources of revenue from contracts with customers. The Company generally acts in a principal capacity in the performance of these services. The Company’s performance obligations are generally satisfied as the services are rendered and typically do not extend beyond a reporting period. Fees, which are typically billed and collected after services are rendered, are readily determinable and allocated individually to each service. In the normal course of business, the Company does not generally grant refunds for services provided. As such, the Company does not establish provisions for estimated returns. Accounting Standards Adopted in 2025 ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” ASU 2023-09 requires public business entities to disclose additional information in specified categories with respect to the rate reconciliation for federal, state and foreign income taxes. In addition, the updates also require more details about reconciling items in the rate reconciliation in some categories if items meet a quantitative threshold. ASU 2023-09 also requires all entities to disclose income taxes paid, net of refunds, disaggregated by federal, state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. ASU 2023-09 became effective for the Company starting January 1, 2025. ASU 2023-09 did not have a significant impact on our financial statements. Accounting Standards Not Yet Adopted ASU 2025-08,” Financial Instruments – Credit Losses (Topic 326), Purchased Loans.” The updates in ASU 2025-08 amend the guidance in ASC 326 on the accounting for certain purchased loans. Under the ASU, entities must account for acquired loans (excluding credit cards) that meet certain criteria at acquisition (“purchased seasoned loans”) by recognizing them at their purchase price plus an allowance for expected credit losses (i.e., the gross-up approach). All non-purchased credit deteriorated (“non-PCD”) loans (excluding credit cards) that are acquired in a business combination are deemed seasoned. Other non-PCD loans (excluding credit cards) are seasoned if they were purchased at least 90 days after origination and the acquirer was not involved in the origination of the loans. The ASU’s amendments align the accounting for purchased seasoned loans with the treatment of financial assets purchased with more-than-insignificant credit deterioration since origination (“PCD assets”). The amendments are effective for the Company for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The amendments should be applied prospectively to loans that are acquired on or after the initial application date. Early adoption is permitted in an interim or annual 97 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS reporting period in which financial statements have not yet been issued or made available for issuance. If an entity adopts the amendments in an interim reporting period, it should apply the amendments as of the beginning of that interim reporting period or the beginning of the annual reporting period that includes that interim reporting period. The adoption of these amendments will result in less provision for loan losses recognized through the consolidated statements of income, in relation to the initial accounting for non-PCD loans. Note 2 – Reclassifications – Certain reclassifications may have been made to the prior years’ financial statements in order to conform to the classifications adopted for reporting in 2025 . These reclassifications have no material effect on previously reported shareholders’ equity or net income. Note 3 – Mergers and Acquisitions – Oakwood Bancshares, Inc. On October 1, 2024, the Company consummated the merger of Oakwood Bancshares, Inc. (“Oakwood”), headquartered in the Dallas, Texas region, with and into the Company, pursuant to the terms of that certain Agreement and Plan of Reorganization (the “Oakwood Reorganization Agreement”), dated as of April 25, 2024, by and between the Company and Oakwood. Also on October 1, 2024, Oakwood's wholly owned banking subsidiary, Oakwood Bank, was merged with and into b1BANK. Pursuant to the terms of the Oakwood Reorganization Agreement, upon consummation of the Oakwood acquisition, the Company issued 3,973,134 shares of its common stock to the former shareholders of Oakwood. At September 30, 2024, Oakwood reported $ 863.6 million in total assets, $ 700.2 million in loans and $ 741.3 million in deposits. 98 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table reflects the consideration paid for Oakwood's net assets and the identifiable assets purchased and liabilities assumed at their fair values as of October 1, 2024. Cost and Allocation of Purchase Price for Oakwood Bancshares, Inc. (Oakwood): (Dollars in thousands, except per share data) Purchase Price: Shares Issued to Oakwood's Shareholders on October 1, 2024 3,973,134 Closing Stock Price on September 30, 2024 $ 25.67 Total Stock Issued $ 101,990 Partial Shares Paid in Cash 10 Other Consideration, Including Equity Awards 1,819 Total Purchase Price $ 103,819 Net Assets Acquired: Cash and Cash Equivalents $ 102,691 Securities Available for Sale 15,996 Loans and Leases Receivable, Net of Allowance 687,456 Premises and Equipment, Net 16,020 Cash Value of Life Insurance 16,105 Core Deposit Intangible 7,640 Other Assets 9,364 Total Assets 855,272 Deposits 742,347 Borrowings 22,189 Other Liabilities 17,082 Total Liabilities 781,618 Net Assets Acquired 73,654 Goodwill Resulting from Merger $ 30,165 The Company has recorded approximately $ 3.8 million and $ 1.6 million of acquisition-related costs within merger and conversion-related expenses and salaries and benefits for the years ended December 31, 2025 and 2024, respectively. The following is a description of the methods used to determine the fair values of significant assets acquired and liabilities assumed presented above. Cash and Cash Equivalents: The carrying amount of these assets was a reasonable estimate of fair value based on the short-term nature of these assets. Securities Available for Sale: Fair values for securities were based on quoted market prices, where available. If quoted market prices were not available, fair value estimates were based on observable inputs including quoted market prices for similar instruments, quoted market prices that were not in an active market or other inputs that were observable in the market. In the absence of observable inputs, fair value was estimated based on pricing models/estimations. Loans and Leases Receivable: Fair values for loans were based on a discounted cash flow methodology that considered factors including, but not limited to, loan type, classification status, remaining term, prepayment speed, and current discount rates. The discount rates used for loans were based on current market rates for new originations of comparable loans and included adjustments for any liquidity concerns. The discount rate did not include an explicit factor for credit losses, as that was included within the estimated cash flows. 99 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As discussed in Note 1, acquired loans are evaluated as either PCD or non-PCD at acquisition, based upon management's assessment of whether or not a loan has experienced more than insignificant credit deterioration since origination. This evaluation is completed by management using a variety of factors, including individual loan characteristics as well as industry type and collateral evaluation, among other factors. At acquisition, management designated loans with a fair value of $ 146.9 million as PCD. The fair value was inclusive of an $ 8.4 million PCD allowance and $ 2.3 million non-credit fair value discount from the acquired contractual value. The remainder of the Oakwood loan portfolio, with a fair value of $ 540.6 million at acquisition included a non-credit fair value discount of $ 2.0 million from the acquired contractual value. Core Deposit Intangible ( “ CDI ” ): The fair value for core deposit intangible assets was estimated based on a discounted cash flow methodology that gave appropriate consideration to expected customer attrition rates, net maintenance cost of the deposit base, including interest cost, and alternative cost of funds. The CDI is being amortized over 10 years based upon the period over which estimated economic benefits are estimated to be received. Deposits: The fair values used for the demand and savings deposits, by definition, equal the amount payable on demand at the acquisition date. Fair values for time deposits were estimated using a discounted cash flow analysis, that applied interest rates currently being offered to the contractual interest rates on such time deposits. Borrowings: Fair values for borrowings were based on estimated market rates over the remaining terms of the subordinated debt issuances. Pro forma tables for Oakwood were impractical to include due to the cost versus benefit of including such disclosures. Waterstone LSP, LLC On January 31, 2024, the Company 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 liquidation. Upon consummation of the acquisition, the Company paid $ 3.3 million in cash to the former owners of Waterstone. Note 4 – Earnings per Common Share – Basic earnings per common share (“EPS”) represents income available to common shareholders divided by the weighted average number of common shares outstanding; no dilution for any potentially convertible shares is included in the calculation. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. The potential common shares that may be issued by the Company relate to outstanding stock options, unvested restricted stock awards (“RSAs”), unvested restricted stock units ("RSUs") and performance shares, excluding any that were antidilutive. In addition, nonvested share-based payment awards that 100 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS contain nonforfeitable rights to dividends or dividend equivalents are considered participating securities and are included in the computation of EPS pursuant to the two-class method. Years Ended December 31, (Dollars in thousands, except per share data) 2025 2024 2023 Numerator: Net Income $ 87,861 $ 65,107 $ 71,043 Less: Preferred Stock Dividends 5,401 5,401 5,401 Net Income Available to Common Shares $ 82,460 $ 59,706 $ 65,642 Denominator: Weighted Average Common Shares Outstanding 29,396,462 26,253,846 25,079,106 Dilutive Effect of Stock Options and Restricted Stock Awards 149,240 198,238 217,094 Weighted Average Dilutive Common Shares 29,545,702 26,452,084 25,296,200 Basic Earnings Per Common Share From Net Income Available to Common Shares $ 2.81 $ 2.27 $ 2.62 Diluted Earnings Per Common Share From Net Income Available to Common Shares $ 2.79 $ 2.26 $ 2.59 Note 5 – Cash and Due From Banks – The Bank is no longer required to maintain funds in cash or on deposit with the Federal Reserve Bank and as of December 31, 2025 and 2024, the Bank had no reserves. Note 6 – Securities – The amortized cost and fair values of securities available for sale as of December 31, 2025 and 2024 are summarized as follows: 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 Securities 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 Securities Available for Sale $ 1,031,432 $ 4,066 $ 46,269 $ 989,229 101 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 Securities 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 Securities Available for Sale $ 973,423 $ 913 $ 80,787 $ 893,549 The following tables present a summary of securities with gross unrealized losses and fair values at December 31, 2025 and 2024, aggregated by investment category and length of time in a continued unrealized loss position. Due to the nature of these investments and current prevailing market prices, these unrealized losses are considered non-credit related. December 31, 2025 Less Than 12 Months 12 Months or Greater Total (Dollars in thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses U.S. Treasury Securities $ — $ — $ 17,278 $ 293 $ 17,278 $ 293 U.S. Government Agencies — — 9,874 196 9,874 196 Corporate Securities 2,580 2 21,086 1,637 23,666 1,639 Mortgage-Backed Securities 83,844 506 336,946 26,767 420,790 27,273 Municipal Securities 12,939 57 210,329 16,811 223,268 16,868 Total Securities Available for Sale $ 99,363 $ 565 $ 595,513 $ 45,704 $ 694,876 $ 46,269 December 31, 2024 Less Than 12 Months 12 Months or Greater Total (Dollars in thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses U.S. Treasury Securities $ — $ — $ 16,675 $ 956 $ 16,675 $ 956 U.S. Government Agencies — — 9,588 576 9,588 576 Corporate Securities 4,262 132 28,894 2,906 33,156 3,038 Mortgage-Backed Securities 151,443 3,618 341,347 43,507 492,790 47,125 Municipal Securities 33,240 686 240,768 28,406 274,008 29,092 Total Securities Available for Sale $ 188,945 $ 4,436 $ 637,272 $ 76,351 $ 826,217 $ 80,787 As of December 31, 2025 and 2024, no allowance for credit losses was recognized on available for sale securities in an unrealized loss position as management does not believe any of the securities are impaired due to credit quality. This determination is based on the Company’s analysis of the underlying risk characteristics including credit ratings, historical loss experience, and other qualitative factors. Further, the securities continue to make principal and interest payments under their contractual terms and management does not have the intent to sell any of the securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of 102 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS amortized cost basis. Therefore, the Company has determined the unrealized losses are due to changes in market interest rates compared to rates when the securities were acquired. The amortized cost and fair values of securities available for sale as of December 31, 2025 by contractual maturity are shown below. Actual maturities may differ from contractual maturities in mortgage-backed securities because the mortgages underlying the securities may be called or repaid without any penalties. (Dollars in thousands) Amortized Cost Fair Value Less Than One Year $ 59,342 $ 58,687 One to Five Years 175,939 167,920 Over Five to Ten Years 332,836 318,295 Over Ten Years 463,315 444,327 Total Securities Available for Sale $ 1,031,432 $ 989,229 Securities available for sale with a fair value of $ 398.3 million and $ 385.4 million, respectively, were pledged as collateral on public deposits and for other purposes as required or permitted by law as of December 31, 2025 and 2024. At December 31, 2025 and 2024, accrued interest receivable on securities was $ 5.3 million and $ 4.9 million, respectively, and is included within accrued interest receivable on the consolidated balance sheets. There were $ 116,000 and $ 21,000 realized gross gains from sales or redemptions of securities for the years ended December 31, 2025 and 2024, respectively, and none for the year ended December 31, 2023. There were $ 52,000 , $ 14,000 and $ 2.6 million realized gross losses from sales or redemptions of securities for the years ended December 31, 2025, 2024 and 2023, respectively. Other Equity Securities and VIEs The Company has invested in the Federal Home Loan Bank of Dallas which is included in other equity securities and reflected at cost in these financial statements. The cost of these securities was $ 26.5 million and $ 20.6 million, respectively, at December 31, 2025 and 2024. The Federal Home Loan Bank stock is pledged to secure advances from the Federal Home Loan Bank of Dallas at both December 31, 2025 and 2024. The Company also has investments of $ 302,000 in TIB National Association, $ 562,000 in Bankers Insurance, LLC, and $ 2.2 million in First National Banker’s Bank at both December 31, 2025 and 2024. During the year ended December 31, 2025, the Company invested $ 400,000 in One America Bancorp, Inc. These investments are carried at cost, less any impairment, due to the lack of a quoted market price and a ready market for these types of investments. VIEs are legal entities that either do not have sufficient equity to finance their activities without the support from other parties or whose equity investors lack a controlling financial interest. The Company has investments in certain partnerships and limited liability entities that have been evaluated and determined to be VIEs. Consolidation of a VIE is appropriate if a reporting entity holds a controlling financial interest in the VIE and is the primary beneficiary. The Company is not the primary beneficiary and does not hold a controlling interest in the VIEs as it does not have the power to direct the activities that most significantly impact the VIEs’ economic performance. 103 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Small Business Investment Companies (“SBIC”) and financial technology (“Fintech”) funds at December 31, 2025 and 2024 are summarized below. December 31, (Dollars in thousands) 2025 2024 McLarty Capital Partners SBIC, L.P. $ 417 $ 408 McLarty Capital Partners SBIC II, L.P. 2,908 2,562 Firmament Capital Partners SBIC III, L.P. 1,960 1,736 Firmament Capital Partners SBIC IV, L.P. 1,408 843 Bluehenge Capital Secured Debt SBIC, L.P. 1,762 2,485 Bluehenge Capital Secured Debt SBIC II, L.P. 1,951 1,784 New Louisiana Angel Fund 2, LLC 49 49 Pharos Capital Partners IV-A, L.P. 702 657 Valesco Fund II, LP 987 976 Valesco Fund III, LP 650 318 GP Capital Partners, LP 896 741 BankTech Ventures, LP 357 311 JAM FINTOP Banktech, LP 520 699 Ledyard Capital Managers, LLC 1,428 1,150 Mendon Ventures Banktech Fund I, LP 2,235 1,514 Castle Creek Launchpad Fund I, LP 1,118 781 Work America Capital Fund I, LP — 395 $ 19,348 $ 17,409 Note 7 – Loans and the Allowance for Loan Losses – Loans receivable at December 31, 2025 and 2024 are summarized as follows: December 31, (Dollars in thousands) 2025 2024 Real estate loans: Commercial $ 2,611,279 $ 2,483,223 Construction 639,069 670,502 Residential 944,065 884,533 Total real estate loans 4,194,413 4,038,258 Commercial 1,921,833 1,868,675 Consumer and other 73,244 74,466 Total loans held for investment 6,189,490 5,981,399 Less: Allowance for loan losses ( 53,959 ) ( 54,840 ) Net loans $ 6,135,531 $ 5,926,559 The performing 1-4 family residential, multi-family residential, commercial real estate, and commercial loans, are pledged, under a blanket lien, as collateral securing advances from the FHLB at December 31, 2025 and 2024. 104 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Commercial and agricultural loans are pledged against the Federal Reserve Banks’ discount window at December 31, 2025 and 2024. Net deferred loan origination fees were $ 11.4 million and $ 12.6 million, respectively, at December 31, 2025 and 2024, and are netted in their respective loan categories above. In addition to loans issued in the normal course of business, the Company considers overdrafts on customer deposit accounts to be loans, and reclassifies overdrafts as loans in its consolidated balance sheets. At December 31, 2025 and 2024, overdrafts of $ 7.9 million and $ 3.0 million, respectively, have been reclassified to loans. The Bank is the lead lender on participations sold, without recourse, to other financial institutions which amounts are not included in the consolidated balance sheets. The unpaid principal balances of mortgages and other loans serviced for others were approximately $ 643.8 million and $ 747.0 million at December 31, 2025 and 2024, respectively. The Company has servicing rights of $ 956,000 and $ 832,000 recorded at December 31, 2025 and 2024, respectively, which are recorded within other assets. The Bank grants loans and extensions of credit to individuals and a variety of businesses and corporations located in its general market areas throughout Louisiana and Texas. Management segregates the loan portfolio into portfolio segments which is defined as the level at which the Bank develops and documents a systematic method for determining its allowance for credit losses. The portfolio segments are segregated based on loan types and the underlying risk factors present in each loan type. Such risk factors are periodically reviewed by management and revised as deemed appropriate. Portfolio Segments and Risk Factors The loan portfolio is disaggregated into portfolio segments and then further disaggregated into classes for certain disclosures. GAAP defines a portfolio segment as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses. A class is generally a disaggregation of a portfolio segment. The Company's loan portfolio segments are Real Estate, Commercial, and Consumer and Other. The classes and risk characteristics of each segment are discussed in more detail below. The segmentation and disaggregation of the portfolio is part of the ongoing credit monitoring process. Real Estate Portfolio Segment 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: 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 the Company’s market areas. Risks associated with these loans include fluctuations in the value of real estate, project completion risk and changes in market trends. The Company is 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 that the Company funded the loan. 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. 105 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Commercial Portfolio Segment 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. Consumer and Other Portfolio Segment 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. The following tables set forth, as of December 31, 2025 and 2024, the balance of the allowance for credit losses by loan portfolio segment. The allowance for credit losses allocated to each portfolio segment is not necessarily indicative of future losses in any particular portfolio segment and does not restrict the use of the allowance to absorb losses in other portfolio segments. Allowance for Credit Losses and Recorded Investment in Loans Receivable December 31, 2025 (Dollars in thousands) Real Estate: Commercial Real Estate: Construction Real Estate: Residential Commercial Consumer and Other Total Allowance for Loan Losses: Beginning Balance $ 23,460 $ 7,162 $ 8,036 $ 15,667 $ 515 $ 54,840 Charge-offs ( 4,116 ) ( 20 ) ( 242 ) ( 6,768 ) ( 1,991 ) ( 13,137 ) Recoveries 30 211 33 839 314 1,427 Provision (Recovery) 4,112 ( 4,116 ) ( 404 ) 9,544 1,693 10,829 Ending Balance $ 23,486 $ 3,237 $ 7,423 $ 19,282 $ 531 $ 53,959 Reserve for Unfunded Credit Commitments: Beginning Balance $ 228 $ 1,311 $ 358 $ 1,765 $ 26 $ 3,688 Provision (Recovery) 92 ( 132 ) ( 49 ) 571 7 489 Ending Balance $ 320 $ 1,179 $ 309 $ 2,336 $ 33 $ 4,177 Total Allowance for Credit Losses $ 23,806 $ 4,416 $ 7,732 $ 21,618 $ 564 $ 58,136 106 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 (Dollars in thousands) Real Estate: Commercial Real Estate: Construction Real Estate: Residential Commercial Consumer and Other Total Allowance for Loan Losses: Beginning Balance $ 17,676 $ 6,596 $ 5,485 $ 10,424 $ 233 $ 40,414 Adjustment for Oakwood on PCD Loans 4,013 1,420 374 2,603 — 8,410 Charge-offs 263 ( 2,261 ) ( 297 ) ( 986 ) ( 2,392 ) ( 5,673 ) Recoveries 86 515 14 236 329 1,180 Provision 1,422 892 2,460 3,390 2,345 10,509 Ending Balance $ 23,460 $ 7,162 $ 8,036 $ 15,667 $ 515 $ 54,840 Reserve for Unfunded Credit Commitments: Beginning Balance $ 206 $ 1,546 $ 177 $ 1,372 $ 23 $ 3,324 Provision (Recovery) 22 ( 235 ) 181 393 3 364 Ending Balance $ 228 $ 1,311 $ 358 $ 1,765 $ 26 $ 3,688 Total Allowance for Credit Losses $ 23,688 $ 8,473 $ 8,394 $ 17,432 $ 541 $ 58,528 Included within the above allowance are loans which management has individually evaluated to determine an allowance for credit losses. The following table summarizes, by segment, the loan balance and specific allowance allocation for those loans which have been individually evaluated. December 31, 2025 December 31, 2024 (Dollars in thousands) Loan Balance Specific Allocations Loan Balance Specific Allocations Real estate loans: Commercial $ 29,248 $ 1,873 $ 42,407 $ 3,529 Construction 2,141 149 11,777 975 Residential 2,380 — 11,012 519 Total real estate loans 33,769 2,022 65,196 5,023 Commercial 10,771 4,989 99,234 2,505 Consumer and other — — — — Total $ 44,540 $ 7,011 $ 164,430 $ 7,528 Credit Quality Indicators We utilize a risk grading matrix to assign a risk grade to each of our commercial loans. Loans are graded on a scale of 10 to 80. Individual loan officers review updated financial information, which may include credit scores, financial statements, collateral valuations and other borrower information, for all pass grade (10-45) loans to reassess the risk grade, generally on at least an annual basis. When a loan has a risk grade of 50, it is considered to be on management’s “watch list,” and subject to additional and more frequent monitoring by both the loan officer and senior credit and risk personnel. Loans graded 60 or higher have exhibited potential or actual credit weakness that makes their full collection uncertain and are considered classified 107 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS loans, consisting of substandard (60), doubtful (70) and loss (80) categories. Generally, loans that are classified are assigned special assets personnel for ongoing monitoring and resolution. The following tables set forth the credit quality indicators, disaggregated by loan segment, as of December 31, 2025 and 2024: December 31, 2025 Criticized (Dollars in thousands) Pass (Risk Grade 10-45) Special Mention (Risk Grade 50) Substandard (Risk Grade 60) Doubtful (Risk Grade 70) Loss (Risk Grade 80) Total Current Period Charge- offs Real Estate: Commercial Originated in 2025 $ 387,209 $ 1,506 $ 8,789 $ — $ — $ 397,504 $ — Originated in 2024 279,558 12,505 14,421 — — 306,484 — Originated in 2023 206,195 22,360 3,622 — — 232,177 — Originated in 2022 642,357 21,182 29,621 — — 693,160 3,850 Originated in 2021 366,356 7,871 1,048 — — 375,275 2 Originated Prior to 2021 536,644 8,692 6,641 472 — 552,449 — Revolving 51,905 — — — — 51,905 264 Revolving Loans Converted to Term 2,325 — — — — 2,325 — Total Real Estate: Commercial $ 2,472,549 $ 74,116 $ 64,142 $ 472 $ — $ 2,611,279 $ 4,116 Real Estate: Construction Originated in 2025 $ 206,047 $ 848 $ — $ — $ — $ 206,895 $ — Originated in 2024 155,588 — 474 — — 156,062 — Originated in 2023 42,018 3,561 1,205 — — 46,784 — Originated in 2022 104,768 2,074 2,088 — — 108,930 1 Originated in 2021 26,011 3,056 472 — — 29,539 19 Originated Prior to 2021 31,263 1,690 1,928 — — 34,881 — Revolving 54,618 — — — — 54,618 — Revolving Loans Converted to Term 1,360 — — — — 1,360 — Total Real Estate: Construction $ 621,673 $ 11,229 $ 6,167 $ — $ — $ 639,069 $ 20 Real Estate: Residential Originated in 2025 $ 95,656 $ 1,377 $ — $ — $ — $ 97,033 $ ( 79 ) Originated in 2024 84,881 — 507 — — 85,388 — Originated in 2023 84,761 — 1,346 — — 86,107 — Originated in 2022 242,424 614 1,830 — — 244,868 8 Originated in 2021 136,520 14,266 454 32 — 151,272 — Originated Prior to 2021 148,862 6,755 6,611 — — 162,228 197 Revolving 110,519 1,758 2,120 — — 114,397 116 Revolving Loans Converted to Term 2,685 — 87 — — 2,772 — Total Real Estate: Residential $ 906,308 $ 24,770 $ 12,955 $ 32 $ — $ 944,065 $ 242 Commercial Originated in 2025 $ 350,624 $ 606 $ 326 $ — $ — $ 351,556 $ 3 Originated in 2024 246,163 7,686 1,782 — — 255,631 239 Originated in 2023 166,677 2,265 3,363 48 — 172,353 1,051 Originated in 2022 137,273 16,048 9,030 — — 162,351 4,279 Originated in 2021 69,146 1,467 5,367 13 — 75,993 464 Originated Prior to 2021 98,366 884 3,290 38 — 102,578 732 Revolving 748,302 10,058 1,576 24 — 759,960 — Revolving Loans Converted to Term 18,360 135 22,916 — — 41,411 — Total Commercial $ 1,834,911 $ 39,149 $ 47,650 $ 123 $ — $ 1,921,833 $ 6,768 Consumer and Other Originated in 2025 $ 12,063 $ — $ 8 $ — $ — $ 12,071 $ 1,119 Originated in 2024 6,896 — 6 — — 6,902 49 Originated in 2023 3,812 — 19 — — 3,831 169 Originated in 2022 2,771 — 33 — — 2,804 97 Originated in 2021 1,045 — 68 2 — 1,115 48 Originated Prior to 2021 29,095 — 125 — — 29,220 12 Revolving 16,120 — 19 — — 16,139 497 Revolving Loans Converted to Term 904 — 258 — — 1,162 — Total Consumer and Other $ 72,706 $ — $ 536 $ 2 $ — $ 73,244 $ 1,991 Total Loans $ 5,908,147 $ 149,264 $ 131,450 $ 629 $ — $ 6,189,490 $ 13,137 108 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 Criticized (Dollars in thousands) Pass (Risk Grade 10-45) Special Mention (Risk Grade 50) Substandard (Risk Grade 60) Doubtful (Risk Grade 70) Loss (Risk Grade 80) Total Current Period Charge- offs Real Estate: Commercial Originated in 2024 $ 300,564 $ — $ 15,271 $ — $ — $ 315,835 $ — Originated in 2023 223,301 22,051 135 — — 245,487 — Originated in 2022 752,449 40,646 — — — 793,095 2 Originated in 2021 400,133 5,861 470 — — 406,464 — Originated in 2020 147,800 1,853 635 — — 150,288 5 Originated Prior to 2020 508,370 4,779 6,557 851 — 520,557 ( 270 ) Revolving 50,813 195 480 — — 51,488 — Revolving Loans Converted to Term 9 — — — — 9 — Total Real Estate: Commercial $ 2,383,439 $ 75,385 $ 23,548 $ 851 $ — $ 2,483,223 $ ( 263 ) Real Estate: Construction Originated in 2024 $ 203,537 $ — $ 402 $ — $ — $ 203,939 $ — Originated in 2023 86,505 — 586 — — 87,091 46 Originated in 2022 176,301 2,886 2,188 — — 181,375 278 Originated in 2021 86,514 — 3,522 — — 90,036 1,937 Originated in 2020 26,646 — 14 — — 26,660 — Originated Prior to 2020 23,696 154 1,990 — — 25,840 — Revolving 54,990 396 — — — 55,386 — Revolving Loans Converted to Term 175 — — — — 175 — Total Real Estate: Construction $ 658,364 $ 3,436 $ 8,702 $ — $ — $ 670,502 $ 2,261 Real Estate: Residential Originated in 2024 $ 80,126 $ — $ 225 $ — $ — $ 80,351 $ 2 Originated in 2023 102,618 175 244 — — 103,037 3 Originated in 2022 228,784 1,179 1,200 8 — 231,171 12 Originated in 2021 145,072 205 — — — 145,277 1 Originated in 2020 69,222 315 555 9 — 70,101 2 Originated Prior to 2020 133,993 1,122 6,170 234 — 141,519 73 Revolving 111,452 167 1,091 — — 112,710 204 Revolving Loans Converted to Term 367 — — — — 367 — Total Real Estate: Residential $ 871,634 $ 3,163 $ 9,485 $ 251 $ — $ 884,533 $ 297 Commercial Originated in 2024 $ 399,093 $ 223 $ 4,308 $ — $ — $ 403,624 $ 1 Originated in 2023 286,436 1,385 2,301 — — 290,122 76 Originated in 2022 235,534 8,471 1,611 — — 245,616 459 Originated in 2021 178,248 2,562 1,684 — — 182,494 276 Originated in 2020 81,809 41 707 — — 82,557 97 Originated Prior to 2020 100,096 2,526 629 300 — 103,551 77 Revolving 546,947 10,771 2,671 — — 560,389 — Revolving Loans Converted to Term 322 — — — — 322 — Total Commercial $ 1,828,485 $ 25,979 $ 13,911 $ 300 $ — $ 1,868,675 $ 986 Consumer and Other Originated in 2024 $ 12,084 $ — $ 8 $ — $ — $ 12,092 $ 32 Originated in 2023 7,118 — 33 — — 7,151 84 Originated in 2022 4,646 — 18 — — 4,664 427 Originated in 2021 2,195 — 49 — — 2,244 4 Originated in 2020 1,183 — 60 — — 1,243 31 Originated Prior to 2020 22,352 — 64 — — 22,416 40 Revolving 24,474 — 137 — — 24,611 1,774 Revolving Loans Converted to Term 45 — — — — 45 — Total Consumer and Other $ 74,097 $ — $ 369 $ — $ — $ 74,466 $ 2,392 Total Loans $ 5,816,019 $ 107,963 $ 56,015 $ 1,402 $ — $ 5,981,399 $ 5,673 109 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The above classifications follow regulatory guidelines and can generally be described as follows: • Pass loans are of satisfactory quality. • Special mention loans have an existing weakness that could cause future impairment, including the deterioration of financial ratios, past due status, questionable management capabilities and possible reduction in the collateral values. • Substandard loans have an existing specific and well-defined weakness that may include poor liquidity and deterioration of financial ratios. The loan may be past due and related deposit accounts experiencing overdrafts. Immediate corrective action is necessary. • Doubtful loans have specific weaknesses that are severe enough to make collection or liquidation in full highly questionable and improbable. As of December 31, 2025 and 2024, loan balances outstanding more than 90 days past due and still accruing interest amounted to $ 2.2 million and $ 860,000 , respectively. As of December 31, 2025 and 2024, loan balances outstanding on nonaccrual status amounted to $ 74.5 million and $ 24.1 million, respectively. The Bank considers all loans more than 90 days past due as nonperforming loans. The following tables provide an analysis of the aging of loans and leases as of December 31, 2025 and 2024. All loans greater than 90 days past due are generally placed on nonaccrual status. Aged Analysis of Past Due Loans Receivable December 31, 2025 (Dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Past Due Total Past Due Current Total Loans Receivable Recorded Investment Over 90 Days Past Due and Still Accruing Real Estate Loans: Commercial $ 1,838 $ 38,693 $ 10,097 $ 50,628 $ 2,560,651 $ 2,611,279 $ 363 Construction 1,988 72 4,363 6,423 632,646 639,069 — Residential 3,775 1,562 8,151 13,488 930,577 944,065 79 Total Real Estate Loans 7,601 40,327 22,611 70,539 4,123,874 4,194,413 442 Commercial 15,585 552 24,692 40,829 1,881,004 1,921,833 1,760 Consumer and Other 185 356 163 704 72,540 73,244 13 Total $ 23,371 $ 41,235 $ 47,466 $ 112,072 $ 6,077,418 $ 6,189,490 $ 2,215 110 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 (Dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Past Due Total Past Due Current Total Loans Receivable Recorded Investment Over 90 Days Past Due and Still Accruing Real Estate Loans: Commercial $ 6,688 $ 303 $ 3,035 $ 10,026 $ 2,473,197 $ 2,483,223 $ — Construction 1,700 594 4,600 6,894 663,608 670,502 — Residential 2,631 786 5,174 8,591 875,942 884,533 482 Total Real Estate Loans 11,019 1,683 12,809 25,511 4,012,747 4,038,258 482 Commercial 8,741 1,075 7,674 17,490 1,851,185 1,868,675 240 Consumer and Other 177 48 262 487 73,979 74,466 138 Total $ 19,937 $ 2,806 $ 20,745 $ 43,488 $ 5,937,911 $ 5,981,399 $ 860 The Bank seeks to assist customers that are experiencing financial difficulty by renegotiating loans within lending regulations and guidelines. The Bank makes loan modifications, primarily utilizing internal renegotiation programs via direct customer contact, that manage customers’ debt exposures held only by the Bank. Additionally, the Bank makes loan modifications with customers who have elected to work with external renegotiation agencies and these modifications provide solutions to customers’ entire unsecured debt structures. During the periods ended December 31, 2025 and 2024, the concessions granted to certain borrowers included extending the payment due dates and offering below market contractual interest rates, and were not significant to the consolidated financial statements. The following table presents non-accrual loans by segment as of December 31, 2025 and 2024, respectively. (Dollars in thousands) December 31, 2025 December 31, 2024 Real Estate Loans: Commercial $ 36,252 $ 3,621 Construction 4,539 5,251 Residential 10,144 7,078 Total Real Estate Loans 50,935 15,950 Commercial 23,370 8,039 Consumer and Other 166 158 Total $ 74,471 $ 24,147 The Bank had $ 9.8 million and $ 2.4 million, as of December 31, 2025 and 2024, respectively, in non-accrual loans with no specific allowance allocation. Accrued interest receivable of $ 1.7 million and $ 3.4 million was outstanding as of December 31, 2025 and 2024, respectively, for all loan deferrals, primarily attributable to the COVID-19 pandemic and, to a much lesser extent, hurricanes which occurred in 2020 and 2021. These loans are no longer within their deferral periods. The accrued interest on the loans is due at their maturity. At December 31, 2025 and 2024, accrued interest receivable on loans was $ 33.2 million and $ 30.9 million, respectively, and included within accrued interest receivable on the consolidated balance sheets. 111 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 8 – Premises and Equipment – Bank premises and equipment at December 31, 2025 and 2024 consist of the following: (Dollars in thousands) 2025 2024 Land $ 6,795 $ 7,619 Buildings and Leasehold Improvements 59,404 65,388 Furniture and Equipment 41,270 40,537 Right of Use Asset 25,936 27,955 Total Bank Premises and Equipment 133,405 141,499 Less: Accumulated Depreciation ( 59,423 ) ( 59,546 ) Total Bank Premises and Equipment, net $ 73,982 $ 81,953 The provision for depreciation and amortization attributable to bank premises and equipment charged to operating expenses was $ 5.7 million, $ 5.3 million and $ 4.7 million for the years ended December 31, 2025, 2024 and 2023, respectively. Note 9 - Goodwill and Other Intangible Assets – Goodwill was recorded as a result of acquisitions. The carrying amount of goodwill as of December 31, 2025 and 2024 was $ 121.1 million and $ 121.6 million, respectively. In 2025, the decrease of $ 426,000 was due to the sale of the Kaplan banking center and adjustments from the 2024 acquisition of Oakwood. The Company performed the required annual goodwill impairment test as of October 1, 2025. The Company’s annual test did not indicate any impairment as of the testing date. Following the testing date, management determined no triggering event had occurred though December 31, 2025. Core deposit and customer intangible assets were acquired in conjunction with the business combinations. A summary of the core deposit and customer intangible assets as of December 31, 2025 and 2024 is as follows: (Dollars in thousands) 2025 2024 Gross Carrying Amount $ 28,690 $ 21,050 Adjustment for Sale of Branch ( 122 ) — Acquired in Oakwood Acquisition — 7,640 Less: Accumulated Amortization ( 14,071 ) ( 11,438 ) Net Carrying Amount $ 14,497 $ 17,252 112 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Amortization expense on the core deposit and customer intangible assets totaled approximately $ 2.6 million, $ 2.3 million and $ 2.1 million during the years ended December 31, 2025, 2024 and 2023, respectively. The following table presents the estimated aggregate amortization expense for the periods indicated: December 31, (Dollars in thousands) 2026 $ 2,556 2027 2,556 2028 2,278 2029 1,971 2030 1,711 Thereafter 3,425 Total Core Deposit and Customer Intangible $ 14,497 Note 10 – Deposits – Deposit accounts at December 31, 2025 and 2024 are summarized as follows: (Dollars in thousands) 2025 2024 Noninterest Bearing - DDA $ 1,322,074 $ 1,357,045 Noninterest Bearing Deposits 1,322,074 1,357,045 Interest Bearing - DDA 901,593 766,086 NOW and Super NOW Accounts 366,181 411,077 Money Market Accounts 2,536,495 2,354,563 Savings Accounts 164,802 225,647 Certificates of Deposit Over $250,000 804,728 687,601 Other Certificates of Deposit 602,717 709,312 Interest Bearing Deposits 5,376,516 5,154,286 Total Deposits $ 6,698,590 $ 6,511,331 Approximately 83.2 % of certificates of deposit as of December 31, 2025 have stated maturity dates during 2026 and the remaining 16.8 % have stated maturity dates during 2027 and beyond. At December 31, 2025 and 2024, total deposits for the top three customer relationships was approximately $ 241.2 million and $ 211.3 million, respectively, which represented 3.6 % and 3.2 % of total deposits, respectively. Brokered and reciprocal deposits were approximately $ 1.3 billion and $ 1.2 billion at December 31, 2025 and 2024, respectively. Included in these brokered and reciprocal deposits are public fund deposits of approximately $ 199.2 million and $ 155.0 million at December 31, 2025 and 2024, respectively. Other public fund deposits were approximately $ 555.1 million and $ 603.2 million at December 31, 2025 and 2024, respectively. 113 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 11 – Borrowings – The Bank had outstanding advances from the FHLB of $ 431.2 million and $ 355.9 million at December 31, 2025 and 2024, respectively, consisting of: (Dollars in thousands) 2025 2024 4.38 % advance due January 2025 $ — $ 55,000 4.88 % advance due April 2025 (a) — 875 4.89 % advance due July 2025 — 25,000 0.52 % advance due October 2025 (b) — 1,700 4.65 % advance due January 2026 25,000 25,000 3.62 % advance due January 2026 (c) 120,000 — 4.00 % advance due March 2026 25,000 — 4.56 % advance due July 2026 25,000 25,000 3.91 % advance due July 2026 25,000 — 0.89 % advance due November 2026 (d) 11,200 23,300 4.84 % advance due December 2026 25,000 25,000 4.78 % advance due September 2027 25,000 25,000 4.73 % advance due March 2028 25,000 25,000 4.69 % advance due September 2028 25,000 25,000 4.13 % advance due October 2028 25,000 25,000 3.92 % advance due October 2030 25,000 25,000 3.72 % advance due October 2033 25,000 25,000 3.57 % advance due October 2033 (e) 25,000 25,000 Total FHLB advances $ 431,200 $ 355,875 (a) Loan acquired during the TCBI acquisition due and paid in April 2025. (b) Loan made in 2020 and was acquired during the Oakwood acquisition. Principal paid monthly (c) Short term overnight advance. (d) Principal paid monthly. (e) Loan has put options beginning in October 2024. These advances are collateralized by the Company’s investment in FHLB stock and a blanket lien on qualifying loans in the Bank’s loan portfolio. The blanket lien totaled approximately $ 2.0 billion at December 31, 2025 with unused availability for advances and letters of credit of approximately $ 1.2 billion. The Company has outstanding lines of credit with several of its correspondent banks available to assist in the management of short-term liquidity. These agreements provide for interest based upon the federal funds rate on the outstanding balance. Total available lines of credit as of December 31, 2025 and 2024 were $ 145.0 million and $ 160.0 million, respectively. The Company was not in a purchased position on these lines at December 31, 2025 and 2024. In December 2018, the Company 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. The subordinated notes were issued for the purpose of paying off a long term advance and line of credit with First National Bankers Bank, for general corporate purposes and to provide Tier 2 capital. The subordinated notes are redeemable by the Company at its option beginning in 2028. In the Pedestal acquisition, the Company assumed Pedestal’s junior subordinated debentures, which are associated with $ 5.0 million in trust preferred securities acquired from Pedestal. Interest on the junior subordinated debentures is accrued at an annual rate equal to the 3-month LIBOR, as determined in the indenture governing the debentures, plus 3.05 %. Interest is payable quarterly. The indenture allows the Company to defer interest payments for up to 20 114 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS consecutive quarterly periods without resulting in a default. The trust preferred securities do not have a stated maturity date, however, they are subject to mandatory redemption on September 17, 2033, or upon earlier redemption. The Company has 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. On March 26, 2021, the Company issued $ 52.5 million in subordinated debt. 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. The subordinated notes were issued to provide additional capital support to the Bank, to support growth, to better position the Company to take advantage of strategic opportunities that may arise from time to time, repayment of existing Company borrowings, and for other general corporate purposes. During the first quarter of 2025, $ 7.0 million was redeemed by the Company. The Company recognized a $ 630,000 gain on the extinguishment of this debt during 2025. The remaining subordinated notes are redeemable by the Company at its option beginning in 2026. The balance outstanding was $ 45.5 million and $ 52.5 million at December 31, 2025 and 2024, respectively. On April 1, 2021, the Company, through b1BANK, consummated the acquisition of SSW. Under the terms of the acquisition, the Company 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 subordinated notes are redeemable by the Company at its option beginning in 2026. On March 1, 2022, the Company assumed, in connection with the TCBI acquisition, three tranches of subordinated debt with an aggregate principal balance outstanding of $ 26.4 million. One tranche in the amount of $ 10.0 million bears an adjustable interest rate, based on a benchmark rate plus 350 basis points, until maturity on April 11, 2028, and was callable beginning April 11, 2023. Another tranche in the amount of $ 7.5 million bears an adjustable interest rate, based on a benchmark rate plus 350 basis points, until maturity on December 13, 2028, and was callable beginning December 13, 2023. The third tranche in the amount of $ 8.9 million had an adjustable interest rate plus 595 basis points, based on a benchmark rate, until maturity on March 24, 2027. The $ 8.9 million tranche was called on May 1, 2023 by the Company and has been fully extinguished. The Company recognized a $ 1.5 million gain on the extinguishment of this debt during 2023. These notes carried an aggregate $ 603,000 and $ 833,000 fair value adjustment, respectively, as of December 31, 2025 and 2024. Note 12 – Securities Purchased and Sold Under Agreements to Resell and Repurchase – During the year ended December 31, 2024, the Bank entered into an agreement to purchase investment securities with the intention to resell those securities at various times throughout the year. At December 31, 2025, the Bank purchased $ 25.6 million at a rate of 4.5 % and maturing in 2026, and $ 50.8 million at a rate of 5.1 % and maturing in 2025 at December 31, 2024. At December 31, 2025 and 2024, the Bank had also sold various investment securities with an agreement to repurchase these securities at various times within one year. These securities generally remain under the Bank’s control and are included in securities available for sale. At December 31, 2025, these pledged securities have coupon rates ranging from 1.3 % to 5.0 % and maturity dates ranging from 2028 to 2045. The related liability to repurchase these securities was $ 22.6 million at both December 31, 2025 and 2024. Note 13 – Income Taxes – The consolidated provision (credit) for income taxes consists of the following at December 31, 2025, 2024 and 2023: (Dollars in thousands) 2025 2024 2023 Provision for Current Taxes - Federal $ 21,249 $ 18,906 $ 17,491 Provision (Credit) for Deferred Taxes 1,199 ( 962 ) 2,052 Total Provision for Income Taxes $ 22,448 $ 17,944 $ 19,543 115 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The provision (credit) for federal income taxes differs from the amount computed by applying federal statutory rates to income from operations as indicated in the following analysis at December 31, 2025, 2024 and 2023. The December 31, 2025 quantitative threshold was 5% totaling $ 1.2 million . (Dollars in thousands) 2025 Amount Percent US Federal Statutory Tax $ 23,165 21.0 % Nontaxable or Nondeductible Items Tax Exempt Interest ( 1,544 ) ( 1.4 ) Other 91 0.1 State and Local Income Taxes, Net of Federal Benefit 608 0.6 Other (Less Than the 5% Threshold) 128 0.1 Total Provision for Income Taxes $ 22,448 20.4 % (Dollars in thousands) 2024 2023 Federal Statutory Income Tax $ 17,441 $ 19,023 Tax Exempt Income ( 513 ) ( 188 ) Stock Based Compensation ( 9 ) 197 Goodwill Write-off for Branch Sale - 32 State Taxes 928 695 Other - Net 97 ( 216 ) Total Provision for Income Taxes $ 17,944 $ 19,543 116 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the deferred tax assets and liabilities are as follows: (Dollars in thousands) 2025 2024 State NOL $ 2,368 $ 2,634 State NOL Valuation Allowance ( 2,368 ) ( 2,634 ) Net Operating Loss Carryforward — 681 Unrealized Loss on Securities 8,917 16,876 Acquired Loans Fair Market Value Adjustment 1,582 2,561 Allowance for Loan Losses 11,401 11,587 Lease Liability 5,649 8,139 Deferred Compensation 3,597 3,227 Stock Awards 1,212 1,012 Reserve for Unfunded Commitments 883 779 Credit Card Rewards 151 509 Other 371 1,146 Deferred Tax Assets 33,763 46,517 Right of Use Asset 5,480 7,976 Core Deposit Intangible 3,063 3,645 Depreciation 3,110 3,727 Acquired Securities Difference in Basis 740 868 Other 893 710 Deferred Tax Liabilities 13,286 16,926 Net Deferred Tax Asset $ 20,477 $ 29,591 The Company acquired certain deferred tax attributes and liabilities as a result of the TCBI acquisition in 2022 and Oakwood acquisition in 2024, including a federal net operating loss (“NOL”) carryforward of $ 8.8 million and $ 4.2 million , respectively, and a federal charitable contribution carryforward of $ 229,000 and $ 99,000 . The amount of the NOL carryforward the Company is allowed to deduct against current taxable income each year is limited, and the Company may not offset more than 80% of taxable income in any year. During the 2025 tax year, the Company was able to fully utilize the $ 3.2 million in NOL carryforward as well as the $ 99,000 of charitable contribution carryforward from the year ended December 31, 2024. As of December 31, 2025, the Company did not have a NOL carryforward. The following is a summary of federal and state income taxes paid (net of refunds received): (Dollars in thousands) 2025 Federal $ 22,950 State 1,122 Total Taxes Paid (Net of Refunds Received) $ 24,072 117 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 14 – Accumulated Other Comprehensive Income (Loss) – The following is a summary of the changes in the balances of each component of accumulated other comprehensive income (loss) for the years ended December 31, 2025 and 2024: (Dollars in thousands) 2025 2024 Unrealized Gains (Losses) on AFS Investment Securities and Equity Method Investments: Balance at Beginning of Year $ ( 62,998 ) $ ( 66,585 ) Other Comprehensive Income on AFS Investment Securities Before Reclassifications - Net of Tax 29,660 3,570 Other Comprehensive Income on Equity Method Investments - Net of Tax — 11 Reclassification Adjustment for Gains on Sale of AFS Investment Securities Realized - Net of Tax 51 6 Other Comprehensive Income 29,711 3,587 Balance at End of Year $ ( 33,287 ) $ ( 62,998 ) Note 15 – Shareholders ’ Equity and Regulatory Matters – Shareholders’ Equity of the Company includes the undistributed earnings of the Bank. The Company pays dividends from its assets, which are provided primarily by dividends from the Bank. Certain restrictions exist regarding the ability of the Bank to pay cash distributions. Louisiana statutes require approval to pay distributions in excess of a bank’s earnings in the current year plus retained net profits for the preceding year. The Company paid quarterly common stock dividends totaling $ 0.57 per share and $ 0.56 per share for the years ended December 31, 2025 and 2024, respectively, based upon quarterly financial performance. The Company paid full quarterly preferred stock dividends totaling $ 75.00 per share for both years ended December 31, 2025 and 2024. Common Stock Repurchase Plan On October 28, 2025, the Company’s board of directors approved a resolution authorizing management to repurchase shares of its common stock with an aggregate purchase price of up to $ 30.0 million from time to time, subject to certain limitations and conditions. The stock repurchase program will expire on October 28, 2027. The stock repurchase program does not obligate the Company to repurchase any shares of its common stock. The Company repurchased 150,504 shares at a total price of $ 3.7 million as part of this plan through December 31, 2025. Preferred Stock On September 1, 2022, the Company entered into a securities purchase agreement with certain investors pursuant to which the Company offered and sold shares of its 7.50 % fixed-to-floating rate non-cumulative perpetual preferred stock, with no par value, for an aggregate purchase price of $ 72.0 million. Holders of the preferred stock are entitled to receive, if, when, and as declared by the Company’s board of directors, non-cumulative cash dividends at a rate of 7.50 % per share 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. The preferred stock is non-convertible and dividends equivalent to $ 75.00 per share were paid during both years ended December 31, 2025 and 2024. Regulatory Matters The Company and the Bank are subject to various regulatory capital requirements administered by federal and state banking agencies. Failure to meet minimum regulatory capital requirements can initiate certain mandatory, and possible 118 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s financial statements. Under the regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines involving quantitative measures of assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification under the prompt corrective action guidelines are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Prompt corrective action provisions are not applicable to bank holding companies. Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios. As detailed below, as of December 31, 2025 and 2024, the Bank met all of the capital adequacy requirements to which it is subject. As of December 31, 2025 and 2024, each of the Company and the Bank was categorized as well capitalized under the regulatory framework for prompt corrective action. For the years ended December 31, 2025 and 2024, each of the Company and the Bank was required to maintain minimum total capital, Tier 1 capital, risk-based common equity Tier 1, and Tier 1 leverage ratios at the levels disclosed in the table below to be categorized as well capitalized. There are no conditions or events since the most recent notification that management believes have changed the prompt corrective action category. The following is a summary of the Company’s (consolidated) and the Bank’s actual capital amounts and ratios at December 31, 2025 and 2024. Business First Bancshares, Inc. (Consolidated) Actual For Capital Adequacy Purposes To Be Well Capitalized Under Prompt Corrective Action Provisions (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio December 31, 2025: Total Capital (to Risk-Weighted Assets) $ 939,331 12.93 % $ 581,331 8.00 % $ 726,664 10.00 % Tier 1 Capital (to Risk-Weighted Assets) 799,527 11.00 % 435,998 6.00 % 581,331 8.00 % Common Equity Tier 1 Capital (to Risk-Weighted Assets) 722,597 9.94 % 326,999 4.50 % 472,332 6.50 % Tier 1 Leveraged Capital (to Average Assets) 799,527 10.08 % 317,221 4.00 % 396,526 5.00 % December 31, 2024: Total Capital (to Risk-Weighted Assets) $ 878,914 12.75 % $ 551,523 8.00 % $ 689,404 10.00 % Tier 1 Capital (to Risk-Weighted Assets) 727,959 10.56 % 413,643 6.00 % 551,523 8.00 % Common Equity Tier 1 Capital (to Risk-Weighted Assets) 651,029 9.44 % 310,232 4.50 % 448,113 6.50 % Tier 1 Leveraged Capital (to Average Assets) 727,959 9.53 % 305,647 4.00 % 382,058 5.00 % 119 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS b1BANK Actual For Capital Adequacy Purposes To Be Well Capitalized Under Prompt Corrective Action Provisions (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio December 31, 2025: Total Capital (to Risk-Weighted Assets) $ 930,600 12.82 % $ 580,690 8.00 % $ 725,862 10.00 % Tier 1 Capital (to Risk-Weighted Assets) 872,464 12.02 % 435,517 6.00 % 580,690 8.00 % Common Equity Tier 1 Capital (to Risk-Weighted Assets) 872,464 12.02 % 326,638 4.50 % 471,811 6.50 % Tier 1 Leveraged Capital (to Average Assets) 872,464 11.01 % 316,916 4.00 % 396,145 5.00 % December 31, 2024: Total Capital (to Risk-Weighted Assets) $ 857,627 12.45 % $ 551,140 8.00 % $ 688,925 10.00 % Tier 1 Capital (to Risk-Weighted Assets) 799,099 11.60 % 413,355 6.00 % 551,140 8.00 % Common Equity Tier 1 Capital (to Risk-Weighted Assets) 799,099 11.60 % 310,016 4.50 % 447,801 6.50 % Tier 1 Leveraged Capital (to Average Assets) 799,099 10.47 % 305,247 4.00 % 381,559 5.00 % Note 16 – Stock Based Compensation – Equity Incentive Plan In 2006, the Company’s board of directors adopted the 2006 Stock Option Plan, pursuant to which the Company was permitted to issue stock options to purchase up to 450,000 shares of the Company’s 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, the Company’s board of directors adopted an amendment to the 2006 Stock Option Plan, which increased the number of available shares under the plan from 450,000 to 1,500,000 . The 2006 Stock Option Plan expired on December 22, 2016, and no shares remain fully vested and unexercised as of December 31, 2025. On June 29, 2017, the Company’s shareholders approved its 2017 Equity Incentive Plan (the “2017 Plan”). The 2017 Plan provided for the grant of various types of equity grants and awards, including incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares and other stock-based awards to eligible participants, which includes the Company’s employees, directors and consultants. On June 23, 2022, the Company's shareholders approved an additional 400,000 shares to be reserved for future awards under the 2017 Plan. In addition, 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 Company common stock upon the TCBI acquisition on March 1, 2022. As of May 23, 2024, there will be no future awards made under the 2017 Plan. The 2017 Plan was combined into the 2024 Equity Incentive Plan, as described below, on August 15, 2025. On May 22, 2024, the Company’s shareholders approved the Business First Bancshares, Inc. 2024 Equity Incentive Plan (the “2024 Plan”). The authorized share pool under the 2024 Plan is comprised of 645,000 shares, plus any shares that were available for issuance under the 2017 Plan and any underlying awards outstanding under the 2017 Plan as of the effective date of the 2024 Plan that were terminated or cancelled without having been unexercised or forfeited, cancelled, or repurchased by the Company. In addition, the number of shares issuable under the 2024 Plan was increased by 207,293 shares as a result of the conversion of Oakwood stock options to Company stock options due to the Oakwood acquisition on October 1, 2024. In total, the 2024 Plan has reserved 852,293 shares of common stock for grant, award or issuance to eligible participants, all of which may be subject to incentive stock option treatment. The Plan is administered by the Compensation Committee of the Company’s board of directors, which determines, within 120 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS the provisions of the 2024 Plan, those eligible participants to whom, and the times at which, grants and awards will be made. As of December 31, 2025, there were 195,792 shares of common stock issued pursuant to awards and grants under the 2024 Plan to the Company’s employees, directors or consultants, of which 193,847 shares are subject to outstanding and unexercised awards and grants, and 676,437 shares of common stock remain available for grant. Restricted Stock Awards The Company issues restricted stock under various plans for certain officers and other key employees. The restricted stock awards may not be sold or otherwise transferred until certain restrictions have lapsed. The holders of the restricted stock receive dividends and have full voting rights with respect to those shares as of the date of grant. The compensation expense for these awards is determined based upon the market value of the Company’s common stock at the grant date applied to the total number of shares awarded and is recognized over the requisite service period. During the years ended December 31, 2025, 2024 and 2023, the Company issued shares of restricted stock which vest in three equal installments over the requisite service period. For the years ended December 31, 2025, 2024 and 2023, respectively, the Company recognized $ 1.3 million, $ 2.8 million and $ 4.7 million in compensation costs related to restricted stock awards. At December 31, 2025, 2024 and 2023, respectively, unrecognized share-based compensation associated with these awards totaled $ 154,000 , $ 1.1 million and $ 3.4 million. The $ 154,000 of unrecognized share-based compensation at December 31, 2025 is expected to be recognized over a weighted average period of 0.4 years. The table below summarizes the restricted stock award activity for the period presented. Year Ended December 31, 2025 Year Ended December 31, 2024 Year Ended December 31, 2023 Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Balance, at Beginning of Period 225,931 $ 21.83 231,036 $ 21.43 131,624 $ 24.45 Granted 1,945 25.72 207,501 22.43 280,101 20.29 Released ( 161,719 ) 21.67 ( 205,703 ) 21.99 ( 177,951 ) 16.97 Forfeited ( 5,054 ) 22.43 ( 6,903 ) 21.66 ( 2,738 ) 19.51 Balance, at End of Period 61,103 $ 22.32 225,931 $ 21.83 231,036 $ 21.43 Restricted Stock Units The Company issues restricted share units to certain key officers and executive officers. The Company issues a.) restricted share units that vest after the end of a three-year performance period, based on satisfaction of performance conditions set for in the restricted share unit agreements, or b.) shares which vest ratably over a three-year service period. Recipients do not possess voting or investment power over the common stock underlying such units until vesting. The grant date fair value of these restricted share units is the same as the value of the corresponding number of shares of common stock. During the years ended December 31, 2025, and 2024, the Company issued shares of restricted stock units which vest in three equal installments over the requisite service period. For the years ended December 31, 2025, and 2024, respectively, the Company recognized $ 3.8 million and $ 115,000 in compensation costs related to restricted stock units. At December 31, 2025, and 2024, respectively, unrecognized share-based compensation associated with these units totaled $ 5.2 million and $ 4.4 million. The $ 5.2 million of unrecognized share-based compensation at December 31, 2025 is expected to be recognized over a weighted average period of 1.5 years. 121 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Year Ended December 31, 2025 (Dollars in thousands, except per share data) Shares Weighted Average Purchase Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Weighted Average Grant Date Fair Value Balance, at Beginning of Period 158,547 $ — $ 28.53 Granted 194,427 — 26.68 Released ( 17,447 ) — 28.55 Forfeited ( 8,389 ) — 27.83 Balance, at End of Period 327,138 $ — 1.54 8,551 $ 27.45 End of Period Vested and Expected to Vest 327,138 $ — 1.54 $ 8,551 $ 27.45 Ending Exercisable 11,020 — — 288 28.52 December 31, 2024 (Dollars in thousands, except per share data) Shares Weighted Average Purchase Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Weighted Average Grant Date Fair Value Balance, at Beginning of Period — $ — $ — Granted 158,547 — 28.53 Released — — — Forfeited — — — Balance, at End of Period 158,547 $ — 2.36 4,075 $ 28.53 End of Period Vested and Expected to Vest 158,547 $ — 2.36 $ 4,075 $ 28.53 Ending Exercisable — — — — — Phantom Stock The Company issues phantom stock awards to certain key officers and employees. The awards are subject to a vesting period of three years and are paid out in cash upon vesting. The amount paid per vesting period is calculated as the number of vested “share equivalents” multiplied by the closing market price of a share of the Company’s common stock on the vesting date. Share equivalents are calculated on the date of grant as the total award’s dollar value is divided by the closing market price of a share of the Company’s common stock on the grant date. The liability for these awards is recorded within other liabilities. During the year ended December 31, 2025, and 2024, the Company issued share equivalents of phantom stock which vest in three equal installments over the requisite service period. For the years ended December 31, 2025, and 2024, respectively, the Company recognized $ 468,000 and $ 9,000 in compensation costs related to phantom stock. At December 31, 2025,and 2024, respectively, unrecognized share-based compensation associated with these units totaled 122 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS $ 461,000 and $ 275,000 . The $ 461,000 of unrecognized share-based compensation at December 31, 2025 is expected to be recognized over a weighted average period of 1.4 years. Year Ended December 31, 2025 (Dollars in thousands, except per share data) Shares Weighted Average Purchase Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Weighted Average Grant Date Fair Value Balance, at Beginning of Period 11,030 $ — $ 28.60 Granted 25,881 — 26.46 Released ( 3,589 ) — 28.60 Forfeited ( 984 ) — 27.49 Balance, at End of Period 32,338 $ — 1.37 $ 847 $ 26.93 End of Period Vested and Expected to Vest 32,388 $ — 1.37 $ 847 $ 26.93 Ending Exercisable — — — — — Year Ended December 31, 2024 (Dollars in thousands, except per share data) Shares Weighted Average Purchase Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Weighted Average Grant Date Fair Value Balance, at Beginning of Period — $ — $ — Granted 11,030 — 28.60 Released — — — Forfeited — — — Balance, at End of Period 11,030 $ — 2.36 $ 283 $ 28.60 End of Period Vested and Expected to Vest 11,030 $ — 2.36 $ 283 $ 28.60 Ending Exercisable — — — — — Stock Options As of December 31, 2025, the Company had 80,726 outstanding and 77,344 vested and exercisable stock options, all of which have been issued to our executive officers and key personnel and remain subject to the terms and conditions of the 2006 Stock Option Plan, 2017 Plan and 2024 Plan until they are exercised or forfeited. As of December 31, 2025, the weighted average exercise price of the stock options was $ 23.52 . 123 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following is an analysis of the activity related to the stock options: Years Ended December 31, 2025 2024 2023 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Outstanding Options, at Beginning of Period 179,969 $ 21.77 120,608 $ 18.59 130,924 $ 18.59 Granted — — 207,293 22.91 — — Exercised ( 95,867 ) 20.25 ( 137,375 ) 19.25 ( 7,500 ) 17.11 Forfeited or Expired ( 3,376 ) 24.16 ( 10,557 ) 22.02 ( 2,816 ) 22.38 Outstanding Options, at End of Period 80,726 $ 23.48 179,969 $ 21.77 120,608 $ 18.59 Exercisable, at End of Period 77,344 $ 23.52 174,055 $ 21.74 111,032 $ 18.24 The aggregate intrinsic value of outstanding awards at December 31, 2025 and 2024 is $ 214,000 and $ 707,000 with a weighted average remaining contractual life of 3.8 years and 3.7 years, respectively. Note 17 – Employee Benefit Plans – Defined Contribution Plan The Bank has a defined contribution plan qualified under Internal Revenue Code 401(K) for those employees who meet the eligibility requirements. Contributions may be made by eligible employees subject to Internal Revenue Service limits. The Bank contributes a matching contribution up to 4 % of wages which totaled $ 3.1 million, $ 2.8 million and $ 2.4 million and is included in salaries and employee benefits for the years ended December 31, 2025, 2024 and 2023, respectively. Deferred Compensation The Company has established certain unfunded nonqualified deferred compensation agreements for the purpose of providing deferred compensation as retirement benefits for a select group of management. At December 31, 2025 and 2024, the Company had recorded accrued liabilities of $ 4.8 million and $ 4.1 million, respectively. The expense related to the deferred compensation agreements was $ 719,000 , $ 766,000 and $ 586,000 for the years ended December 31, 2025, 2024 and 2023, respectively. 124 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 18 – Other Income and Expenses – An analysis of Other Income for the Company's single reportable operating segment is as follows for the years ended December 31, 2025, 2024 and 2023: (Dollars in thousands) 2025 2024 2023 Debit Card and ATM Fee Income $ 7,701 $ 7,659 $ 6,590 Cash Value of Life Insurance Income 3,151 2,875 2,247 Fees and Brokerage Commissions 8,180 7,844 7,247 Pass-Through Income from SBIC Partnerships 905 1,208 1,946 Gain on Extinguishment of Debt 630 — 1,458 Gain on Sale of Branch 3,360 — 945 Swap Fee Income 4,417 2,739 964 Other 8,992 8,311 6,134 Total Other Income $ 37,336 $ 30,636 $ 27,531 An analysis of Other Expenses for the Company's single reportable operating segment is as follows for the years ended December 31, 2025, 2024 and 2023: (Dollars in thousands) 2025 2024 2023 Advertising and Promotions $ 5,179 $ 4,878 $ 4,628 Communications 2,382 2,247 2,290 Ad Valorem Shares Tax 4,245 4,057 3,160 Data Processing Fees 15,756 11,957 9,034 Directors' Fees 957 1,085 1,079 Insurance 1,669 2,025 2,028 Legal and Professional Fees 4,566 3,756 3,173 Office Supplies and Printing 1,234 1,091 1,215 Regulatory Assessments 4,337 4,118 4,119 Merger and Conversion Costs 2,194 1,236 236 Other 16,095 13,296 14,270 Total Other Expenses $ 58,614 $ 49,746 $ 45,232 Note 19 – Financial Instruments with Off-Balance-Sheet Risk – In the normal course of business, the Bank is a party to financial instruments with off-balance-sheet risk to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby and commercial letters of credit which are not included in the accompanying financial statements. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheet. The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby and commercial letters of credit is represented by the contractual amount of those instruments. The Bank’s policy for obtaining collateral, and the nature of such collateral, is essentially the same as that involved in making commitments to extend credit. The Bank uses the same credit policies in making such commitments and conditional obligations as it does for instruments that are included in the balance sheet. In the normal course of business, the Bank has made commitments to extend credit of approximately $ 1.7 billion and standby and commercial letters of credit of approximately $ 51.2 million at December 31, 2025. As discussed in Note 7, we had a reserve for unfunded loan commitments of $ 4.2 million and $ 3.7 million at December 31, 2025 and 2024, respectively. 125 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 20 – Concentrations of Credit – The majority of the Bank’s business activities are with customers in the Bank’s market area, which consists primarily of Louisiana, the Dallas / Fort Worth, Texas metroplex, and Houston, Texas. The majority of such customers are depositors of the Bank. The concentrations of credit by type of loan are shown in Note 7. The Bank, as a matter of policy, does not extend credit to any single borrower or group of related borrowers in excess of the Bank’s legal lending limits. Most of the Bank’s credits are to individuals and businesses secured by real estate. A substantial portion of their ability to pay on their debt is dependent on the local economy and industries in the areas. Within the loan portfolio, the Bank has a concentration of credits secured by real estate. The Bank had extended credit secured by non-farm non-residential real estate totaling approximately $ 2.5 billion and $ 2.3 billion, which accounted for 40.5 % and 39.2 % of total loans held for investment at December 31, 2025 and 2024, respectively. Additionally, the Bank had extended credit secured by construction and land development totaling approximately $ 639.1 million and $ 670.5 million, respectively; these loans represented 10.3 % and 11.2 % of total loans held for investment at December 31, 2025 and 2024, respectively. The Bank maintains amounts on deposit and federal funds sold with correspondent banks which may periodically exceed the federally insured amount. Note 21 – Leases – The Bank leases certain branch offices through non-cancelable operating leases with terms that range from one to ten years and contain various renewal options for certain of the leases. Certain leases provide for increases in minimum monthly rental payments as defined by the lease agreement. Rental expense under these agreements was $ 8.3 million, $ 6.6 million and $ 5.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. The Company had a weighted average lease term of 5.9 years and 6.3 years and a weighted average discount rate of 3.96 % and 3.69 % as of December 31, 2025 and 2024, respectively. Future minimum lease payments under these leases are as follows: December 31, (Dollars in thousands) 2026 $ 5,896 2027 $ 5,494 2028 $ 5,016 2029 $ 4,263 2030 $ 3,119 2031 and Thereafter $ 6,383 Total Future Minimum Lease Payments $ 30,171 Less Imputed Interest $ ( 3,437 ) Present Value of Lease Liabilities $ 26,734 Note 22 – Commitments – SBIC Capital Commitment The SBIC is a program initiated by the U.S. Small Business Administration ("SBA") in 1958 to assist in the funding of small business loans. The program is a joint venture between investors with venture capital, the SBA, and small business borrowers. Investors are responsible for funding the first portion of the capital requirements, with the remaining requirement being funded by the SBA. The funds are then lent to small business borrowers. 126 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Bank has agreed to participate as an investor with McLarty Capital Partners SBIC, L.P. (“McLarty”), McLarty Capital Partners SBIC II, L.P. (“McLarty II”), Firmament Capital Partners SBIC III, L.P. (“Firmament III”), Firmament Capital Partners SBIC IV, L.P. (“Firmament IV”), Bluehenge Capital Secured Debt SBIC, L.P. (“Bluehenge”), Bluehenge Capital Secured Debt SBIC II, L.P. (“Bluehenge II”), New Louisiana Angel Fund 2, LLC (“New Louisiana”), Pharos Capital Partners IV-A, L.P. (“Pharos”) and Valesco Fund III, LP ("Valesco III"). As part of the TCBI acquisition, the Bank acquired investments in and committed to invest further in Bluehenge Capital Secured Debt SBIC, L.P. (included with prior Bluehenge investments), Valesco Fund II, LP (“Valesco II”) and GP Capital Partners, LP (“GP Capital”). Details of these commitments at December 31, 2025 are below. Total Capital Commitment Capital Called Remaining Unfunded Capital Commitment McLarty $ 2,000 $ 1,802 $ 198 McLarty II 2,500 2,222 278 Firmament III 2,500 1,873 627 Firmament IV 2,500 1,140 1,360 Bluehenge 2,500 2,312 188 Bluehenge II 2,500 1,574 926 New Louisiana 50 50 — Pharos 1,000 730 270 Valesco II 1,000 822 178 Valesco III 2,000 736 1,264 GP Capital 1,000 900 100 $ 19,550 $ 14,161 $ 5,389 Fintech Fund Commitment The Company has agreed to invest in certain Fintech funds. Details of these commitments at December 31, 2025 are below. Total Capital Commitment Capital Called Remaining Unfunded Capital Commitment BankTech Ventures, LP $ 500 $ 370 $ 130 JAM FINTOP Banktech, LP 1,000 723 277 Ledyard Capital Managers, LLC 1,000 1,000 — Mendon Ventures Banktech Fund I, LP 2,500 2,500 — Castle Creek Launchpad Fund I, LP 1,500 1,134 366 Work America Capital Fund I, LP 700 700 — $ 7,200 $ 6,427 $ 773 Federal Home Loan Bank Letters of Credit The Bank had outstanding letters of credit on behalf of others from the FHLB of $ 372.6 million and $ 327.2 million at December 31, 2025 and 2024, respectively. The outstanding letters of credit as of December 31, 2025 are as follows: Ten letters of credit totaling $ 116.2 million expire in January 2026. Four letters of credit totaling $ 176.0 million expire in February 2026. 127 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Two letters of credit totaling $ 570,000 expire in March 2026. One letter of credit of $ 50.0 million expires in April 2026. One letter of credit of $ 216,000 expires in May 2026. Two letters of credit totaling $ 3.4 million expire in August 2026. One letter of credit totaling $ 737,000 expires in September 2026. Two letters of credit totaling $ 1.1 million expire in October 2026. Three letters of credit totaling $ 1.2 million expire in November 2026. Two letters of credit of $ 23.2 million expires in December 2026. Note 23 – Related Party Transactions – In the ordinary course of business, the Bank has granted loans to directors, officers and their affiliates. Such loans were made on substantially the same terms as those prevailing at the time for comparable transactions with other customers. Such loans amounted to $ 7.2 million and $ 15.2 million at December 31, 2025 and 2024, respectively. Related party deposits totaled $ 35.7 million and $ 57.1 million as of December 31, 2025 and 2024, respectively. Note 24 – Fair Value of Financial Instruments – Fair Value Disclosures The Company groups its financial assets and liabilities measured at fair value in three levels. Fair value should be based on the assumptions market participants would use when pricing the asset or liability and establishes a fair value hierarchy that prioritizes the inputs used to develop those assumptions and measure fair value. The hierarchy requires companies to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: • Level 1 – Includes the most reliable sources and includes quoted prices in active markets for identical assets or liabilities. • Level 2 – Includes observable inputs. Observable inputs include inputs other than quoted prices that are observable for the asset or liability (for example, interest rates and yield curves at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates) as well as inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs). • Level 3 – Includes unobservable inputs and should be used only when observable inputs are unavailable. Recurring Basis Fair values of investment securities available for sale were primarily measured using information from a third-party pricing service. This pricing service provides information by utilizing evaluated pricing models supported with market data information. Standard inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, and reference data from market research publications. The fair values of mortgage loans held for sale are based on commitments on hand from investors within the secondary market for loans with similar characteristics. 128 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following tables present the balance of assets and liabilities measured on a recurring basis as of December 31, 2025 and 2024. The Company did not record any liabilities at fair value for which measurement of the fair value was made on a recurring basis. (Dollars in thousands) Fair Value Level 1 Level 2 Level 3 December 31, 2025 Available for Sale: U.S. Treasury Securities $ 17,278 $ — $ 17,278 $ — U.S. Government Agency Securities 9,874 — 9,874 — Corporate Securities 37,062 — 28,541 8,521 Mortgage-Backed Securities 650,091 — 650,091 — Municipal Securities 274,924 — 251,477 23,447 Loans Held for Sale 1,094 — 1,094 — Interest Rate Swaps 8,023 — 8,023 — Total assets at fair value $ 998,346 $ — $ 966,378 $ 31,968 Interest Rate Swaps $ 8,023 $ — $ 8,023 $ — Total liabilities at fair value $ 8,023 $ — $ 8,023 $ — December 31, 2024 Available for Sale: U.S. Treasury Securities $ 16,675 $ — $ 16,675 $ — U.S. Government Agency Securities 9,588 — 9,588 — Corporate Securities 45,165 — 32,665 12,500 Mortgage-Backed Securities 537,738 — 537,738 — Municipal Securities 284,383 — 259,666 24,717 Loans Held for Sale 717 — 717 — Total Assets at fair value $ 894,266 $ — $ 857,049 $ 37,217 The Company reviews fair value hierarchy classifications on a quarterly basis. Changes in the Company’s ability to observe inputs to the valuation may cause reclassification of certain assets or liabilities within the fair value hierarchy. The tables below provide a reconciliation for assets measured at fair value on a recurring basis using significant unobservable inputs, or Level 3 inputs, for the years ended December 31, 2025 and 2024. (Dollars in thousands) Municipal Securities Corporate Bonds Balance at December 31, 2023 $ 20,847 $ 7,968 Unrealized Gains (Losses) Included in Other Comprehensive Loss ( 2,339 ) 782 Purchases 9,938 5,000 Maturities, Prepayments, and Calls ( 3,729 ) ( 1,250 ) Balance at December 31, 2024 $ 24,717 $ 12,500 Unrealized Gains Included in Other Comprehensive Loss 2,458 21 Maturities, Prepayments, and Calls ( 3,728 ) — Transfers Out of Level 3 — ( 4,000 ) Balance at December 31, 2025 $ 23,447 $ 8,521 129 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table provides quantitative information about significant unobservable inputs used in fair value measurements of Level 3 assets measured at fair value on a recurring basis at December 31, 2025. (Dollars in thousands) Estimated Fair Value Valuation Technique Unobservable Inputs Discounts December 31, 2025 Municipal Securities $ 23,447 Present Value of Expected Future Cash Flow Model Liquidity Premium 1 % Corporate Securities 8,521 Present Value of Expected Future Cash Flow Model Liquidity Premium 2 % Nonrecurring Basis The Company has segregated all financial assets and liabilities that are measured at fair value on a nonrecurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the table below. The Company did not record any liabilities at fair value for which measurement of the fair value was made on a nonrecurring basis. The fair value of the impaired/individually evaluated loans is measured at the fair value of the collateral for collateral-dependent loans. Impaired loans are Level 3 assets measured using appraisals from external parties of the collateral less any prior liens and adjusted for estimated selling costs. Adjustments may be made by management based on a customized internally developed discounting matrix. Repossessed assets are initially recorded at fair value less estimated cost to sell, which is generally 10 %. The fair value of repossessed assets is based on property appraisals and an analysis of similar properties available. As such, the Bank records repossessed assets as Level 3. (Dollars in thousands) Fair Value Level 1 Level 2 Level 3 December 31, 2025 Assets: Impaired/Individually Evaluated Loans $ 14,083 $ — $ — $ 14,083 Other Nonperforming Assets 13,013 — — 13,013 Total $ 27,096 $ — $ — $ 27,096 December 31, 2024 Assets: Impaired/Individually Evaluated Loans $ 62,138 $ — $ — $ 62,138 Other Nonperforming Assets 5,529 — — 5,529 Total $ 67,667 $ — $ — $ 67,667 Fair Value Financial Instruments The fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. In accordance with GAAP, certain financial instruments and all non-financial instruments are excluded from these disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. 130 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: Cash and Short-Term Investments – For those short-term instruments, the carrying amount is a reasonable estimate of fair value. Securities Purchased Under Agreements to Resell - The carrying amount approximates its fair value. Securities – Fair value of securities is based on quoted market prices. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. Loans – The fair value for loans is estimated using discounted cash flow analyses, with interest rates currently being offered for similar loans to borrowers with similar credit rates. Loans with similar classifications are aggregated for purposes of the calculations. The allowance for loan losses, which was used to measure the credit risk, is subtracted from loans. Cash Value of Bank-Owned Life Insurance (“BOLI") – The carrying amount approximates its fair value. Other Equity Securities – The carrying amount approximates its fair value. Interest Rate Swaps - Market values are obtained from market pricing data sources available for comparable transactions in the over-the-counter derivative market. Deposits – The fair value of demand deposits and certain money market deposits is the amount payable at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using discounted cash flow analyses, with interest rates currently offered for deposits of similar remaining maturities. Borrowings – The fair value of FHLB advances and other long-term borrowings is estimated using the rates currently offered for advances of similar maturities. The carrying amount of short-term borrowings maturing within ninety days approximates the fair value. Commitments to Extend Credit and Standby and Commercial Letters of Credit – The fair values of commitments to extend credit and standby and commercial letters of credit do not differ significantly from the commitment amount and are therefore omitted from this disclosure. 131 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The estimated approximate fair values of the Bank’s financial instruments as of December 31, 2025 and 2024 are as follows: (Dollars in thousands) Carrying Amount Total Fair Value Level 1 Level 2 Level 3 December 31, 2025 Financial Assets: Cash and Short-Term Investments $ 583,568 $ 583,568 $ 583,568 $ — $ — Securities Purchased Under Agreements to Resell 25,587 25,587 — 25,587 — Securities 989,229 989,229 — 957,261 31,968 Loans Held for Sale 1,094 1,094 — 1,094 — Loans - Net 6,135,531 6,116,333 — — 6,116,333 Cash Value of BOLI 120,292 120,292 — 120,292 — Other Equity Securities 49,342 49,342 — — 49,342 Interest Rate Swaps 8,023 8,023 — 8,023 — Total $ 7,912,666 $ 7,893,468 $ 583,568 $ 1,112,257 $ 6,197,643 Financial Liabilities: Deposits $ 6,698,590 $ 6,698,181 $ — $ — $ 6,698,181 Borrowings 551,352 554,309 — 554,309 — Interest Rate Swaps 8,023 8,023 — 8,023 — Total $ 7,257,965 $ 7,260,513 $ — $ 562,332 $ 6,698,181 December 31, 2024 Financial Assets: Cash and Short-Term Investments $ 516,767 $ 516,767 $ 516,767 $ — $ — Securities Purchased Under Agreements to Resell 50,835 50,835 — 50,835 — Securities 893,549 893,549 — 856,332 37,217 Loans Held for Sale 717 717 — 717 — Loans - Net 5,926,559 5,832,326 — — 5,832,326 Cash Value of BOLI 117,645 117,645 — 117,645 — Other Equity Securities 41,100 41,100 — — 41,100 Total $ 7,547,172 $ 7,452,939 $ 516,767 $ 1,025,529 $ 5,910,643 Financial Liabilities: Deposits $ 6,511,331 $ 6,513,709 $ — $ — $ 6,513,709 Borrowings 483,256 465,834 — 465,834 — Total $ 6,994,587 $ 6,979,543 $ — $ 465,834 $ 6,513,709 132 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 25 – Litigation and Contingencies – In the normal course of business, the Bank is involved in various legal proceedings. In the opinion of management and counsel, the disposition or ultimate resolution of such proceedings would not have a material adverse effect on the Bank’s financial statements. Note 26 – Subsequent Events – On January 1, 2026, we consummated the merger of Progressive, the parent bank holding company for Progressive Bank, with and into us, with us continuing as the surviving corporation pursuant to the terms of the Progressive Reorganization Agreement. Immediately following consummation of the Progressive acquisition, Progressive Bank merged with and into us, with us surviving the merger. Pursuant to the terms of the Progressive Reorganization Agreement, upon consummation of the Progressive acquisition, we issued 3,192,367 shares of our common stock to the former shareholders of Progressive. As of December 31, 2025, Progressive had $ 773.8 million in total assets, $ 597.2 million in loans and $ 684.9 million in total deposits. 133 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 27 – Financial Statements – Parent Company Only – The balance sheets and statements of income for Business First Bancshares, Inc. (Parent Company) are as follows: BALANCE SHEETS AS OF DECEMBER 31, 2025 AND 2024 (Dollars in thousands) 2025 2024 Assets: Cash $ 11,951 $ 9,165 Investment in Subsidiaries 969,372 870,003 Fintech Funds and Other Investments 6,057 4,850 Goodwill 5,603 5,603 Income Taxes Receivable 854 13,482 Other Assets 1,308 1,313 Total Assets $ 995,145 $ 904,416 Liabilities: Subordinated Debt $ 92,530 $ 99,760 Subordinated Debt - Trust Preferred Securities 5,155 5,155 Other Liabilities 577 35 Total Liabilities 98,262 104,950 Shareholders' Equity: Preferred Stock 71,930 71,930 Common Stock 29,511 29,552 Additional Paid-in Capital 502,155 500,024 Retained Earnings 326,574 260,958 Accumulated Other Comprehensive Loss ( 33,287 ) ( 62,998 ) Total Shareholders' Equity 896,883 799,466 Total Liabilities and Shareholders' Equity $ 995,145 $ 904,416 134 Table of Contents BUSINESS FIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 (Dollars in thousands) 2025 2024 2023 Income: Dividend Income From Subsidiaries $ 28,000 $ 26,000 $ 13,000 Interest Income 12 13 19 Other Income 554 448 1,147 Expenses: Interest Expense 5,347 5,841 5,753 Other Operating Expenses 7,348 5,186 6,102 Income Before Income Taxes and Equity in Undistributed Net Income of Subsidiaries 15,871 15,434 2,311 Income Tax Benefit ( 2,487 ) ( 2,035 ) ( 2,059 ) Income Before Equity in Undistributed Net Income of Subsidiaries 18,358 17,469 4,370 Equity in Undistributed Net Income of Subsidiaries 69,503 47,638 66,673 Net Income 87,861 65,107 71,043 Preferred Stock Dividends 5,401 5,401 5,401 Net Income Available to Common Shareholders $ 82,460 $ 59,706 $ 65,642 135 Table of Contents ITEM 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure. Not applicable.