UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K


x			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2024~~2025


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission file number: 001-38447

BUSINESS FIRST BANCSHARES, INC.

(Exact name of registrant as specified in its charter)


Louisiana			20-5340628
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

500 Laurel Street, Suite 101 Baton Rouge, Louisiana			70801
(Address of principal executive offices)			(Zip code)

(225) 248-7600

(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $1.00 per share	BFST	Nasdaq Global Select Market

Securities registered under Section 12(g) of the Exchange Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by a check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act)

Yes

The aggregate market value of the voting and non-voting common equity held by non-affiliates was computed by reference to the price at which the common equity was last sold, as of the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $~~522~~697.69 million.

As of February 2820, ~~2025~~2026, there were 2932,~~552~~710,~~358~~447 outstanding shares of the registrant’s common stock, $1.00 par value per share.

Document Incorporated By Reference:

Portions of the registrant’s Definitive Proxy Statement relating to the ~~2025~~2026 Annual Meeting of Shareholders are incorporated by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such Definitive Proxy Statement, or an Amended Annual Report on Form 10-K/A containing such Part III information, will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended December 31, ~~2024~~2025.

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TABLE OF CONTENTS

PART I
ITEM 1.	Business	5
ITEM 1A.	Risk Factors	23
ITEM 1B.	Unresolved Staff Comments	4443
ITEM 1C.	Cybersecurity	4443
ITEM 2.	Properties	4544
ITEM 3.	Legal Proceedings	45
ITEM 4.	Mine Safety Disclosures	4645
PART II
ITEM 5.	Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities	4746
ITEM 6.	~~Selected Financial Data~~[RESERVED]	4948
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5049
ITEM 7A.	Quantitative and Qualitative Disclosures About Market Risk	8381
ITEM 8.	Financial Statements and Supplementary Data	8482
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	~~140~~136
ITEM 9A.	Controls and Procedures	~~140~~136
ITEM 9B.	Other Information	~~141~~137
ITEM 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	~~142~~137
PART III
ITEM 10.	Directors, Executive Officers and Corporate Governance	~~143~~138
ITEM 11.	Executive Compensation	~~143~~138
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	~~143~~138
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	~~143~~138
ITEM 14.	Principal Accountant Fees and Services	~~143~~138
PART IV
ITEM 15.	Exhibits and Financial Statement Schedules	~~144~~139
ITEM 16.	Form 10-K Summary	~~147~~142
Signatures		~~148~~143

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Important Notice about Information in this Annual Report on Form 10-K

When we refer in this Annual Report to “we,” “our,” “us,” “Business First” and the “Company,” we are referring to Business First Bancshares, Inc. and its consolidated subsidiaries, including b1BANK, formerly known as Business First Bank, which we sometimes refer to as “the Bank”, unless the context indicates otherwise.

The information contained in this Annual Report on Form 10-K is accurate only as of the date of this annual report and as of the dates specified herein.

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K, or the “Report,” contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). These forward-looking statements include statements that reflect the current views of our senior management with respect to our financial performance and future events with respect to our business and the banking industry in general, including, without limitation, statements relating to the anticipated benefits of our recent acquisitions. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “will continue,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” and similar expressions of a future or forward-looking nature. These statements involve estimates, assumptions and risks and uncertainties. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements.

We believe these factors include, but are not limited to, the following:

•risks related to the integration of any acquired businesses, including exposure to potential asset quality and credit quality risks and unknown or contingent liabilities, risks related to entering a new geographic market, the time and costs associated with integrating systems, technology platforms, procedures and personnel, the ability to retain key employees and maintain relationships with significant customers, the need for additional capital to finance such transactions, and possible failures in realizing the anticipated benefits from acquisitions;

•changes in the strength of the United States (“U.S.”) economy in general and the local economy in our local market areas adversely affecting our customers and their ability to transact profitable business with us, including the ability of our borrowers to repay their loans according to their terms or a change in the value of the related collateral;

•risks relating to the material weakness we identified in our internal control over financial reporting;

•economic risks posed by our geographic concentration in Louisiana, the Dallas/Fort Worth metroplex and Houston;

•the ability to sustain and continue our organic loan and deposit growth, and manage that growth effectively;

•market declines in industries to which we have exposure, such as the volatility in energy prices and downturns in the energy industry that impact certain of our borrowers and investments that operate within, or are backed by collateral associated with, the energy industry;

•volatility and direction of interest rates and market prices, which could reduce our net interest margins, asset valuations and expense expectations;

•interest rate risk associated with our business;

•changes in the levels of loan prepayments and the resulting effects on the value of our loan portfolio;

•increased competition in the financial services industry, particularly from regional and national institutions and emerging non-bank competitors;

•increased credit risk in our assets and increased operating risk caused by a material change in commercial, consumer and/or real estate loans as a percentage of our total loan portfolio;

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•increased credit risk in our assets and increased operating risk caused by a material change in commercial, consumer and/or real estate loans as a percentage of our total loan portfolio;

•changes in the value of collateral securing our loans;

•deteriorating asset quality and higher loan charge-offs, and the time and effort required to resolve problem assets;

•the failure of assumptions underlying the establishment of and provisions made to our allowance for credit losses;

•changes in the availability of funds resulting in increased costs or reduced liquidity;

•our ability to maintain important deposit customer relationships and our reputation;

•a determination or downgrade in the credit quality and credit agency ratings of the securities in our securities portfolio;

•increased asset levels and changes in the composition of assets and the resulting impact on our capital levels and regulatory capital ratios;

•our ability to prudently manage our growth and execute our strategy;

•risks associated with our acquisition and de novo branching strategy;

•the loss of senior management or operating personnel and the potential inability to hire qualified personnel at reasonable compensation levels;

•legislative or regulatory developments, including changes in the laws, regulations, interpretations or policies relating to financial institutions, accounting, tax, trade, monetary and fiscal matters;

•government intervention in the U.S. financial system;

•changes in statutes and government regulations or their interpretations applicable to us, including changes in tax requirements and tax rates;

•natural disasters and adverse weather, acts of terrorism, an outbreak of hostilities or other international or domestic calamities, epidemics and pandemics such as coronavirus, and other matters beyond our control; and

•other risks and uncertainties listed from time to time in our reports and documents filed with the U.S. Securities and Exchange Commission (“SEC”).

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this Annual Report. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made and we do not undertake any obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

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Summary of Risks Factors

Risks Relating to our Business

•Our business and operations may be adversely affected by weak economic conditions.

•Our geographic concentration imposes risk.

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•We face significant competition to attract and retain customers.

•Our success is largely dependent upon our ability to successfully execute our business strategy.

•We rely heavily on our executive management team and other key employees, and our ability to attract and retain profitable bankers is critical to the success of our business strategy.

•We have identified a material weakness in our internal control over financial reporting. Failure to remediate, improve and maintain the quality of internal control over financial reporting could result in material misstatements in our financial statements and could materially and adversely affect our ability to provide timely and accurate financial information about the Company.

•We may not be able to adequately measure and limit our credit risk.

•Our loan portfolio is largely comprised of commercial loans, which may subject us to increased credit risk.

•Negative changes in the economy affecting real estate values and liquidity could impair loan collateral.

•Large loans to certain borrowers could have a significant adverse impact on our asset quality.

•Our allowance for credit losses may prove to be insufficient to absorb losses on our loan portfolio.

•Our small-to-midsized business customers have fewer resources to weather adverse developments.

•Our ability to maintain our reputation is critical to the success of our business.

•We may not be able to maintain our historical rate of growth, or we may not be able to manage the risks associated with our anticipated growth and expansion.

•Future acquisitions could expose us to financial, execution and operational risks.

•Interest rate shifts could have an adverse effect on our business.

•The markets in which we operate are susceptible to hurricanes and other natural disasters.

•Disruptions in the secondary mortgage market could reduce our ability to resell residential mortgage loans.

•New lines of business, products, product enhancements or services may subject us to additional risks.

•A lack of liquidity could impair our ability to fund operations, and our ability to raise capital or utilize alternative sources of funding may be limited.

•We have a concentration of deposit accounts with state and local municipalities.

•The fair value of our investment securities can fluctuate due to factors outside of our control.

•We need to maintain an effective system of disclosure controls and procedures and internal control over financial reporting.

•Our financial results depend on management’s selection of accounting methods, assumptions, and estimates.

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•We have a continuing need for technological change.

•We rely on third parties to provide key components of our business infrastructure.

•We could be subject to losses, regulatory action or reputational harm due to fraudulent and negligent acts on the part of loan applicants, our employees and vendors.

•Unauthorized access, cyber-crime and other threats to data security.

•We are subject to environmental liability risk associated with our lending activities.

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Risks Related to the Regulation of Our Industry

•We operate in a highly regulated environment, which imposes compliance costs, subjects us to stringent capital requirements and risks relating to noncompliance.

•Federal and state banking agencies periodically conduct examinations of our business.

•New activities and expansion require regulatory approvals.

•Potential limitations on incentive compensation may adversely affect our ability to attract and retain our highest performing employees.

•The Board of Governors of the Federal Reserve System (the “Federal Reserve”) may require us to commit capital resources to support the Bank.

•We are subject to laws regarding the privacy, security and protection of personal information.

Risks Associated with our Common Stock

•The market price of our common stock may be subject to substantial fluctuations, and the prevailing market price of our common stock could impair our ability to raise capital.

•The rights of our common shareholders are subordinate to the rights of other interest holders.

•Our dividend policy may change without notice.

•A takeover could be difficult due to our corporate governance documents and certain laws.

•An investment in Business First’s common stock is not an insured deposit and is subject to risk of loss.

The above summary is subject in its entirety to the more complete discussion of risk factors set for forth in “ITEM 1A. Risk Factors”.

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PART I

ITEM 1. Business.

General

Business First Bancshares, Inc. is a financial holding company headquartered in Baton Rouge, Louisiana, and the parent company of b1BANK, formerly known as Business First Bank, a Louisiana state banking association and community-based financial institution that offers a full array of banking products and services. We currently operate throughout the state of Louisiana, in the Dallas/Fort Worth metroplex and Houston, from a network of banking centers and loan production offices.

Since our founding in 2006, our mission has not changed – we seek to be the financial institution of choice for our markets’ small-to-midsized businesses and their owners and employees. To achieve this goal, we focus on recruiting, retaining and empowering talented bankers who are intimately familiar with and well respected in the communities that they serve, and on providing market-leading products and services that add value to our customers’ businesses. We are currently one of the largest Louisiana-based financial institutions. As of December 31, ~~2024~~2025, on a consolidated basis, we had total assets of $78.92 billion, total loans of $6.02 billion, total deposits of $6.57 billion and shareholders’ equity of $~~799~~896.59 million.

Our common stock is listed on the Nasdaq Global Select Market under the symbol “BFST”.

Our Business Strategy

We believe a bank should be measured by the value it adds to its customers’ businesses. We hold that our customers’ needs are best met through local bankers with deep market experience who are empowered with decision-making authority and supported by centralized risk management practices and advanced technology. We understand our competitive strengths and pursue disciplined growth through the careful selection of markets and our position within those markets. Our expansion strategy primarily consists of identifying and recruiting talented teams of bankers in desirable markets and providing them with a platform to better serve their clients.

We believe there is an area stretching from the Dallas/Fort Worth metroplex to Jackson, Mississippi, along the I-20 corridor and from Houston, Texas to Mobile, Alabama, along the I-10/12 corridors whose small-to-midsized businesses and high net worth individuals are underserved relative to other parts of the country and are well-suited for our commercial and private banking products and services. We intend to leverage our competitive strengths to take advantage of what we believe are significant growth opportunities both within our existing footprint and in this larger region. Our growth strategy includes:

•Expanding Presence in Existing Markets. While we maintain a strong position in almost all of our markets, we are continually working to strengthen our presence in our existing markets. As community bankers, we know that relationships are at the heart of our business, and we are always looking to identify and recruit talented bankers within, as well as outside of, our existing markets. Additionally, we constantly stress deposit growth to our bankers as our ability to grow our loan portfolio within our markets is limited by our ability to fund those loans. In keeping with our branch-lite model, we may consider adding more banking centers or complementary offices in strategic locations in our markets.

•Opportunistic Market Expansion. We are well-positioned to expand along the I-10/12 and I-20 corridors, East Texas markets to the west, and into the Jackson and Gulfport/Biloxi, Mississippi markets to the east, as well as growing our markets in the Dallas/Fort Worth metroplex and Houston. We believe these markets have attractive demographics and a significant concentration of small-to-midsized businesses and high net worth individuals that are historically underserved by the banking industry. We intend to focus on growing into these markets as we identify specific opportunities to recruit talented and entrepreneurial teams of local bankers who fit our culture and banking strategy. ~~Prior~~Except tofor the ~~expansion~~acquisition ~~into~~of ~~the~~Texas ~~Houston~~Citizens ~~market~~Bancorp, ~~from~~Inc. ("TCBI"), and our expansion into the ~~TCBI~~Houston ~~merger~~market, each of our ~~expansions~~entries into new markets to date ~~has~~have been accomplished organically.

•Disciplined Acquisition Strategy. While we will remain focused on organic expansion, we will continue to identify and evaluate opportunities for strategic business acquisitions as they arise from time to time.

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We have historically maintained a disciplined and conservative approach to strategic acquisitions, with our acquisitions to date being (i) the acquisition of American Gateway Financial Corporation within our home market of Baton Rouge in 2015; (ii) the acquisition of Minden Bancorp, Inc. within our second oldest market, Northwest Louisiana, on January 1, 2018; (iii) the acquisition of Richland State Bancorp, Inc., which is in the Northeast Louisiana region, on December 1, 2018; (iv) the acquisition of Pedestal Bancshares, Inc., which operated in southern Louisiana, on May 1, 2020; (v) the acquisition of Smith Shellnut Wilson, LLC, which operates out of the Jackson, Mississippi area, on April 1, 2021; (vi) the acquisition of Texas Citizens Bancorp, Inc., which operates in Houston, Texas, on March 1, 2022; (vii) the acquisition of Waterstone LSP, LLC, which operates in Katy, Texas, on January 31, 2024; ~~and~~ (viii) the acquisition of Oakwood Bancshares, Inc., which operates in the Dallas, Texas area, on October 1, 2024; and (ix) the acquisition of Progressive Bancorp, Inc., which operates in north Louisiana, on January 1, 2026, the last ~~two~~three of which are described in further detail below. We will carefully consider acquisition opportunities that we believe are consistent with our strategic vision and provide attractive risk-adjusted returns to our shareholders.

Recent Acquisition Activity

Waterstone LSP, LLC ("Waterstone"). On January 31, 2024, we completed the acquisition, through b1BANK, of Waterstone, headquartered in Katy, Texas. Waterstone offers community banks and small businesses a range of small business administration ("SBA") lending services including planning, pre-qualification, packaging, closing and disbursements, servicing and liquidations. Upon consummation of the acquisition, we paid $3.3 million in cash to the former owners of Waterstone.

Oakwood Bancshares, Inc. ("Oakwood"). On October 1, 2024, we consummated the merger of Oakwood, the parent bank holding company for Oakwood Bank, with and into usBusiness First, with usBusiness First continuing as the surviving corporation pursuant to the terms of that certain Agreement and Plan of Reorganization (the "Oakwood Reorganization Agreement"), dated April 25, 2024, by and between usBusiness First and Oakwood. Immediately following consummation of the Oakwood acquisition, Oakwood Bank merged with and into usb1BANK, with usb1BANK surviving the merger. Pursuant to the terms of the Oakwood Reorganization Agreement, upon consummation of the Oakwood acquisition, we issued 3,973,134 shares of our common stock to the former shareholders of Oakwood. As of September 30, 2024, Oakwood had $863.6 million in total assets, $700.2 million in loans and $741.3 in total deposits.

Progressive Bancorp, Inc. (“Progressive”). On January 1, 2026, we consummated the merger of Progressive, the parent bank holding company for Progressive Bank, with and into Business First, with Business First continuing as the surviving corporation pursuant to the terms of that certain Agreement and Plan of Reorganization (the "Progressive Reorganization Agreement"), dated July 7, 2025, by and between Business First and Progressive. Immediately following consummation of the Progressive acquisition, Progressive Bank merged with and into b1BANK, with b1BANK surviving the merger. Pursuant to the terms of the Progressive Reorganization Agreement, upon consummation of the Progressive acquisition, we issued 3,192,367 shares of our common stock to the former shareholders of Progressive. As of December 31, 2025, Progressive had $773.8 million in total assets, $597.2 million in loans and $684.9 million in total deposits.

Our Competitive Strengths

We believe the following competitive strengths differentiate us from our peers and position us for future growth:

•Sophisticated Business Lending Capabilities. Unlike traditional community banks, we specifically target business customers with complex needs that require a degree of business lending expertise that is typically found only at larger institutions. We primarily target small-to-midsized businesses with credit needs between $1 million and $10 million, whose banking needs are typically too complex for traditional community banks but are not large enough to attract personalized attention and service from larger institutions. In addition to offering the real estate lending typically available from a community bank, we began focusing heavily on our commercial and industrial (“C&I”) products after the economic downturn in 2008 and have developed extensive C&I expertise across our markets. C&I lending requires experienced bankers with a deep understanding of our customers’ businesses and their banking needs, which we believe is well-suited for our “high touch” approach to banking. We believe that we have developed an expertise in this small-to-midsized business banking niche that is historically underserved, positioning us for meaningful growth going forward. We have also built treasury and cash management programs that cater to our target customers.

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•True Community Banking Model. Despite being located in Louisiana’s largest metropolitan areas and in the two largest metropolitan areas in the state of Texas, we have a true community banking mindset. That means relationship-based banking by bankers who live and work in our markets. Our market presidents and their teams are trained in credit underwriting and asset/liability management, as we view them as comprehensive bankers rather than just credit producers. The experience and talent of our market presidents and their respective banking teams allow us to decentralize significant decision-making authority while maintaining disciplined credit practices. In our experience, developing credit underwriting expertise “on the front lines” promotes quality loan generation and maximizes efficiency. Further, our emphasis on asset/liability management training allows our local banking teams to understand the importance of quality core deposit funding, which we believe is vital to our continued loan growth. In this sense, we view b1BANK as a network of true community banks, not as a typical regional financial institution that makes important credit and strategic decisions at the corporate level without input from its local bankers. In addition, our executive team is located throughout the state of Louisiana, rather than all being in Baton Rouge, providing the bank with a more informed view of our footprint and the best uses of our capital across our footprint.

•Entrepreneurial Culture. We have worked hard to build a team of self-starters who are passionate about the business of banking. We have found success recruiting bankers at much larger institutions who are frustrated by excess bureaucracy, overly centralized decision-making, and an escalated focus on the pursuit of larger business banking clients that larger banks perceive as more profitable than the small-to-midsized businesses we target. Likewise, we have successfully recruited bankers at peer or smaller institutions that do not have the available resources or operating platform to appropriately serve the more sophisticated banking needs of the small-to-midsized businesses in our markets. Our executive team is young and energetic. We believe their collaborative and cohesive approach to working relationships permeates every level of our organization, creating synergies that leave us well-positioned for future growth and helps us attract and retain other talented and entrepreneurial bankers as members of our team.

•History of Disciplined Expansion. Since our founding in 2006, we have grown rapidly across the state of Louisiana, into the Dallas/Fort Worth metroplex and, into Houston. Each of our expansions were initiated with careful identification and recruitment of local banking teams and thoughtful consideration of each market’s different industries and credit exposures. Our banking centers are carefully situated in locations, typically downtowns and suburban centers, optimized for small-to-midsized business customers and high net worth individuals. This disciplined approach to expansion and growth entails not only recruiting the right bankers in the right markets, but in continuing to focus on the customer base that we are optimized to serve rather than chasing larger relationships as we grow. Over the years, the magnitude of our large banking relationships has changed very little, but the number of our large relationships has grown significantly. In order to continue to serve our customers as they grow without taking undue risk, we have developed a strong participation network that we believe underscores the strength of our underwriting process and the quality of our portfolio. We believe that it is important to keep sight of where our strengths lie and not pursue growth blindly.

•Strong Platform for Growth. As a necessary complement to our style of sophisticated community banking, we have made significant investments to build a strong operational platform to empower our individual markets to thrive, to create operational efficiencies across our diverse markets, and to position us for future growth without commensurate growth in operational expenses. We have invested heavily in risk management personnel and modeling capabilities in recent years – we believe our underwriting capabilities are second to none in our markets, and our strong participation network and asset quality metrics are evidence of those capabilities. We invest in technology, which we believe will allow us to maintain staffing that is skewed towards the production side of our business and to accommodate future growth without commensurate increases in operating expenses. We believe our investments in technology will also allow us to maintain our “high tech/high touch” approach without the need for an extensive network of brick and mortar locations.

Our Markets

Our banking operations are currently organized into three regions in Louisiana, which include the largest metropolitan areas in the state, the Dallas/Fort Worth metroplex, and Houston, which we service through our banking ~~centers and loan production offices. We will continue to look for talented teams of bankers in markets and potential acquisitions that fit our model going forward.~~

Our Products and Services

b1BANK is an independent financial institution that is engaged in substantially all of the business operations customarily conducted by financial institutions in Louisiana and Texas. We offer, among other products, checking, savings and money market accounts, certificates of deposit, commercial and consumer loans, mortgage loans, real estate loans, and other installment and term loans. In addition, b1BANK offers our customers wealth management products, drive-through banking facilities, automated teller machines, night depository, personalized checks, credit cards, debit cards, internet

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~~banking,~~centers ~~electronic~~and ~~funds~~loan ~~transfers~~production ~~through~~offices. ~~ACH~~We ~~services,~~will ~~domestic~~continue ~~and~~to ~~foreign~~look ~~wire~~for ~~transfers,~~talented ~~traveler’s~~teams ~~checks,~~of ~~cash~~bankers ~~management,~~in ~~vault~~markets ~~services, loan~~ and ~~deposit~~potential ~~sweep~~acquisitions ~~accounts,~~that ~~SBA~~fit ~~products,~~our ~~interest-rate~~model ~~swaps~~going ~~and lock box services~~forward.

Our Products and Services

Lending Activities

As a business-focused community-based financial institution, we offer a variety of business-related loans, including commercial lines of credit, working capital loans, commercial real estate-backed loans (including loans secured by owner occupied commercial properties), term loans, equipment financing, acquisition, expansion and development loans, borrowing base loans, real estate construction loans, homebuilder loans, letters of credit and other loan products to small-to-midsized businesses, real estate developers, mortgage lenders, manufacturing and industrial companies and other businesses. We also offer various consumer loans to individuals and professionals including residential real estate loans, home equity loans, installment loans, unsecured and secured personal lines of credit, and standby letters of credit. Lending activities originate from the efforts of our bankers, with an emphasis on lending to small-to-midsized businesses, their owners and employees, and individuals located in our market areas. Although all lending involves a degree of risk, we work to mitigate these risks through conservative underwriting policies and consistent monitoring of credit quality indicators.

Commercial and Industrial Loans. We make C&I loans, including commercial lines of credit, working capital loans, term loans, equipment financing, asset acquisition, expansion and development loans, borrowing base loans, accounts receivable factoring, agricultural financing, letters of credit and other loan products, primarily in our target markets that are underwritten on the basis of the borrower’s ability to service the debt from income. We typically take as collateral a lien on general business assets including, among other things, available real estate, accounts receivable, promissory notes, inventory and equipment and generally obtain a personal guaranty of the borrower or principal. Our C&I loans generally have variable interest rates and terms that typically range from one-to-five years depending on factors such as the type and size of the loan, the financial strength of the borrower/guarantor and the age, type and value of the collateral. Fixed rate C&I loan maturities are generally short-term, with one-to-five year maturities, or include periodic interest rate resets. Our underwriting policy does allow for exceptions in which the term and amortization of a C&I loan may be longer than five years; however, the term and amortization must be consistent with the useful life and depreciation rates of the underlying collateral and an underwriting exception will be noted. In general, C&I loans may involve increased credit risk and, therefore, typically yield a higher return than commercial real estate loans. The increased risk in C&I loans derives 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. In addition, the collateral securing C&I loans generally includes moveable property such as equipment and inventory, which may decline in value more rapidly than we anticipated, exposing us to increased credit risk. As a result of these additional complexities, variables and risks, C&I loans require extensive underwriting and servicing.

Construction and Development Loans. Our construction portfolio includes loans to small-to-midsized businesses to construct owner-user properties, loans to developers of commercial real estate investment properties and residential developments and, to a lesser extent, loans to individual clients for construction of single family homes in our market areas. Construction and development loans are generally made with a term of one-to-two years with interest paid monthly. Our underwriting policy does allow for exceptions in which the term of a construction and development loan may be longer than two years; however, the term must be realistic and consistent with the borrower’s documented ability to repay. The ratio of the loan principal to the value of the collateral, as established by independent appraisal, typically will not exceed regulatory supervisory guidelines. Loan proceeds are disbursed based on the percentage of completion and only after the project has been inspected by an experienced construction lender or third-party inspector. Risks associated with construction and development loans include fluctuations in the value of real estate, project completion risk and change in market trends. We are also exposed to risk based on the ability of the construction loan borrower to finance the loan or sell the property upon completion of the project, which may be affected by changes in secondary market terms and criteria for permanent financing since the time that we funded the loan.

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~~generally~~market ~~charge an origination fee for our services~~trends. We ~~typically~~are ~~require~~also ~~personal~~exposed ~~guarantees~~to ~~from~~risk ~~the~~based ~~principal~~on ~~owners of~~ the ~~business~~ability ~~supported by a review~~ of the ~~principal~~construction ~~owners’~~loan ~~personal~~borrower ~~financial~~to ~~statements~~finance ~~and global debt service obligations. Risks associated with commercial real estate loans include fluctuations in~~ the ~~value~~loan ofor ~~real~~sell ~~estate,~~ the ~~overall~~property ~~strength~~upon completion of the ~~economy~~project, ~~new~~which ~~job~~may ~~creation~~be ~~trends,~~affected ~~tenant vacancy rates, environmental contamination and the quality of the borrower’s management. We make efforts to limit our risk~~ by ~~analyzing~~changes ~~borrowers’~~in ~~cash~~secondary ~~flow~~market ~~and~~terms ~~collateral value. The real estate securing our existing commercial real estate loans includes a wide variety of property types, such as owner-occupied~~ and ~~non—owner~~criteria ~~occupied~~for ~~offices/warehouses/production~~permanent ~~facilities,~~financing ~~office~~since ~~buildings,~~the ~~hotels,~~time ~~mixed-use~~that ~~residential/commercial~~we ~~properties,~~funded ~~retail~~the ~~centers and multi-family properties. Our commercial real estate~~ loan ~~portfolio presents a higher risk profile than our consumer real estate and consumer loan portfolios~~.

Commercial Real Estate Loans. We offer real estate loans for commercial property that is owner-occupied as well as commercial property owned by real estate investors. Commercial loans that are secured by owner-occupied commercial real estate and primarily collateralized by operating cash flows are also included in this category of loan. Commercial real estate loan terms are generally five years or less and amortization is generally limited to 25 years or less, although payments may be structured on a longer amortization basis in unusual cases. The interest rates on our commercial real estate loans may be fixed or adjustable, although rates typically are not fixed for a period exceeding five years. We generally charge an origination fee for our services. We typically require personal guarantees from the principal owners of the business supported by a review of the principal owners’ personal financial statements and global debt service obligations. Risks associated with commercial real estate loans include fluctuations in the value of real estate, the overall strength of the economy, new job creation trends, tenant vacancy rates, environmental contamination and the quality of the borrower’s management. We make efforts to limit our risk by analyzing borrowers’ cash flow and collateral value. The real estate securing our existing commercial real estate loans includes a wide variety of property types, such as owner-occupied and non-owner occupied offices/warehouses/production facilities, office buildings, hotels, mixed-use residential/commercial properties, retail centers and multi-family properties. Our commercial real estate loan portfolio presents a higher risk profile than our consumer real estate and consumer loan portfolios.

Residential Real Estate Loans. We offer 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. Our retail consumer real estate lending products are offered primarily to consumer customers within our geographic markets. Although our consumer real estate loan portfolio presents lower levels of risk than our commercial, commercial real estate and construction loan portfolios, we are 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.

Consumer Loans. While our focus is on service to small-to-midsized businesses, we also make a variety of loans to individuals for personal, family and household purposes, including secured and unsecured installment and term loans. Our consumer loans, which are underwritten primarily based on the borrower’s financial condition and, in some cases, are unsecured credits, subject us to risk 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.

Credit Policies and Procedures

General. We adhere to what we believe are disciplined underwriting standards, but also remain cognizant of the need to serve the credit needs of customers in our primary market areas by offering flexible loan solutions in a responsive and timely manner. We maintain asset quality through an emphasis on local market knowledge, long-term customer relationships, consistent and thorough underwriting for all loans and a conservative credit culture. We also seek to maintain a broadly diversified loan portfolio across customer, product and industry types. Our lending policies do not provide for any loans that are highly speculative, subprime, or that have high loan-to-value ratios. These components, together with active credit management, are the foundation of our credit culture, which we believe is critical to enhancing the long-term value of our organization to our customers, employees, shareholders and communities.

Credit Concentrations. In connection with the management of our credit portfolio, we actively manage the composition of our loan portfolio, including credit concentrations. Our loan approval policies establish concentration limits with respect to industry and loan product type to enhance portfolio diversification. In general, loan product concentration levels, our commercial real estate concentrations, and industry concentration levels are monitored monthly and reviewed by the Bank’s board of directors.

Loan Approval Process. We seek to achieve an appropriate balance between prudent, disciplined underwriting and flexibility in our decision-making and responsiveness to our customers. As of December 31, ~~2024~~2025, the Board set the “in-house” household lending limit at $60.0 million with an additional borrower “in-house” lending limit of $20.0 million as of such date. Our credit underwriters are based throughout our footprint and service all of our markets from those locations.

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Our credit approval policies provide for various levels of officer and senior management lending authority for new credits and renewals, which are based on position, capability and experience. We approve loans under four types of authority, Matrix (which includes Executive and Directors’ Loan Committees), Incremental, Small Business, and Consumer authority. All commercial loans require a minimum of two approvers (the banker and at least one other individual with higher authority). Generally, relationships $2.0 million and below are approved within the Centralized Credit Underwriting department which is comprised of credit individuals who are independent of the lending division. The Chief Executive Officer, President, Chief Credit Officer, Chief Financial Officer, Chief Banking Officer and regional credit officers have authority up to $2.5 million, regional chairman have authority up to $2.0 million. A combination of the Chief Banking Officer and Chief Credit Officer (or their assigns) may approve up to $10.0 million. All relationships exceeding $10.0 million are approved by the Executive Loan Committee. All relationships exceeding $60.0 million or borrowers exceeding $20.0 million are required to be approved by the Director’s Loan Committee, which is comprised of board members. Loans may be approved using the Incremental authority when the relationship has already been approved using the Matrix authority, with senior lenders being able to approve up to $250,000, market leaders being able to approve up to $350,000, regional presidents and higher authorities up to $1.5 million, cumulatively. Consumer loans which present an aggregate lending exposure under $10.0 million are approved on a transactional basis by appropriate consumer lending personnel using credit underwriting software which recommends approval or decline based on Bank policy guidelines. Loans exceeding the noted amounts or loans with policy exceptions must be approved by an appropriate override authority (including Senior or Executive level management or Loan Committee authority), which we believe provides platform scalability and furthers our fair lending compliance efforts. These parameters are reviewed periodically by the Bank’s board of directors. We believe that our credit approval process provides for thorough underwriting and efficient decision making.

Credit Risk Management. Credit risk management involves a partnership between our executive team and our market presidents. Loan officers, credit administration personnel and senior management proactively support collection activities. Our evaluation and compensation program includes significant goals, such as the percentages of past due loans and charge-offs to total loans in the officer’s portfolio and at the banking center level. We believe this motivates loan officers and management to focus on the origination and maintenance of high-quality credits consistent with our strategic focus on asset quality. Our policies require rapid notification of delinquency and prompt initiation of collection actions.

We maintain a list of loans, the “Watch List”, that receive additional attention if we believe there may be a potential credit risk. The Risk Committee of the Board reviews a list of loans under foreclosure proceedings while the Impairment Committee reviews a list of impaired loans exceeding $500,000 as well as the list of Classified borrowers with exposures of $250,000 or greater. Impairment Committee minutes are reviewed by the Risk Committee. Loan officers are encouraged to bring potential credit issues to the attention of credit administration personnel, and loan grades are updated as deemed appropriate. Quarterly, our internal loan review department analyzes specific segments of the loan portfolio. Additionally, we periodically have an independent, third-party review performed on our loan portfolio. This review includes analysis of the borrower’s and guarantor’s financial condition, the Bank’s collateral position, and other credit risk factors. Results of the review as well as management responses are presented to the Bank’s Risk Committee. Finally, we perform stress testing on key segments of our portfolio in which we evaluate the impact of declining economic conditions on the portfolio based on previous recessionary periods. The reporting and reviews provide management with additional information for assessing our asset quality.

Deposits

Our deposits serve as the primary funding source for lending, investing and other general banking purposes. We offer business accounts and cash management services, including business checking and savings accounts, and treasury management services. We also provide a full range of deposit products and services, including a variety of checking and savings accounts, certificates of deposit, money market accounts, debit cards, remote deposit capture, online banking, mobile banking, e-Statements, bank-by-mail and direct deposit services. We solicit deposits through our relationship-driven team of dedicated and accessible bankers and through community-focused marketing and have recently implemented an incentive bonus program with our bankers to encourage deposit growth. We also seek to cross-sell deposit products at loan origination.

Given the diverse nature of our banking location network and our relationship-driven approach to our customers, we believe our deposit base is comparatively less sensitive to interest rate variations than our competitors. Nevertheless, we attempt to competitively price our deposit products to promote core deposit growth. As a business-focused bank offering comprehensive business banking services, we encourage our customers to bank their deposits with us and believe that the quality of our lending relationships and personalized service helps us in these efforts.

Wealth Solutions Services

We offer wealth management and other fiduciary and private banking services targeted to high net worth individuals, including professionals, business owners, families and professional service companies and other financial service companies. In addition to fiduciary and investment management fee income, we believe these services enable us to build new relationships and expand existing relationships to grow our deposits and loans. Through our wealth management line of business, we offer financial planning, retirement services and investment management by a team of seasoned advisors providing access to a wide range of certificates of deposits, mutual funds, annuities, individual retirement accounts, money market accounts and other financial products. Our private banking products and services are offered at all of our banking centers.

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Wealth Solutions Services

Other Products and Services

In addition to traditional banking activities and the other products and services specified above, we provide a broad array of financial services to our customers, including debit and credit card products, treasury and cash management services, merchant services, employee and payroll benefits solutions (including payroll cards and bank-at-work benefits) automated clearing house services, lock-box services, remote deposit capture services, receivables factoring, correspondent banking services (offered by our Financial Institutions Group), SBA products, interest-rate swaps and other treasury services.

Subsidiaries

Business First Bancshares, Inc. has two direct, wholly-owned subsidiaries: b1BANK, formerly known as Business First Bank, and Coastal Commerce Statutory Trust I. In addition, b1BANK has four direct, wholly-owned subsidiaries, Business First Insurance, LLC, Smith Shellnut Wilson ("SSW"), Waterstone, and b1Securities, which are indirect subsidiaries of Business First Bancshares, Inc. Business First Insurance, LLC is currently inactive and does not engage in any material business activities.

Competition

The banking and financial services industry is highly competitive, and we compete with a wide range of financial institutions within our markets, including local, regional and national commercial banks and credit unions. We also compete with mortgage companies, brokerage firms, consumer finance companies, mutual funds, securities firms, insurance companies, third-party payment processors, fintech companies and other financial intermediaries for certain of our products and services. Some of our competitors are not subject to the regulatory restrictions and level of regulatory supervision applicable to us.

Interest rates on loans and deposits, as well as prices on fee-based services, are typically significant competitive factors within banking and financial services industry. Many of our competitors are much larger financial institutions that have greater financial resources than we do and compete aggressively for market share. These competitors attempt to gain market share through their financial product mix, pricing strategies and banking center locations. Other important competitive factors in our industry and markets include office locations and hours, quality of customer service, community reputation, continuity of personnel and services, capacity and willingness to extend credit, and ability to offer sophisticated banking products and services. While we seek to remain competitive with respect to fees charged, interest rates and pricing, we believe that our broad and sophisticated commercial banking product suite, our high-quality customer service culture, and our positive reputation and community relationships will enable us to compete successfully within our markets and enhance our ability to attract and retain customers.

Human Capital Resources

Our mission is to be the financial institution of choice for enterprises, their owners, and employees. Accordingly, we aim to attract, develop, and retain employees who can drive financial and strategic growth objectives and build long-term shareholder value while upholding our Guiding Principles of a relationship-driven team, thoughtful, disciplined decision-making, meaningful communication, doing the right thing the right way; and striving to be the best through continual improvement. Key items that drive our human capital resources are described below.

Structure. As of December 31, 2024, we proudly employ 849 full-time and 23 part-time employees (for a total of 872 employees). Our employees reside coast to coast, with personnel located in Louisiana, Mississippi, Texas, and 10 other states with remote employees. Full-time equivalents (FTEs) as of December 31, 2024, were 859, which includes employees from the Oakwood acquisition that closed on October 1, 2024.

All banking centers and loan production offices are in Louisiana and Texas, and our subsidiary registered investment advisor (RIA), SSW, is in Mississippi. Our Chief Human Resources Officer reports directly to the Chief of Staff and manages all aspects of the employee experience, including talent acquisition, diversity and inclusion, learning and development, talent management, compensation, and benefits.

The board of directors is regularly updated on our talent development and human capital management strategies.

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~~Productivity~~Structure. WeAs ~~carefully~~of ~~manage~~December 31, ~~the~~2025, ~~size~~we ofproudly ~~our~~employ ~~workforce~~821 full-time and ~~reallocate~~21 ~~resources~~part-time asemployees ~~needed.~~(for ~~For~~a ~~2024,~~total weof ~~managed~~842 anemployees). ~~average~~Our ofemployees ~~$7.0~~reside ~~million~~ in ~~loans~~Louisiana, ~~held~~Mississippi, ~~for~~Texas, ~~investment~~ and $79 other states with remote employees.6 ~~million~~Full-time inequivalents ~~deposits~~(FTEs) ~~per~~as ~~FTE~~of December 31, 2025, were 831.

~~Diversity.~~All Webanking ~~have~~centers anand ~~organization-wide~~loan ~~focus~~production tooffices ~~improve~~are ~~recruitment~~in ~~and~~Louisiana ~~retention of women~~ and ~~ethnic minorities. In 2024~~Texas, weand ~~completed~~our asubsidiary ~~third~~registered ~~year~~investment ofadvisor ~~our~~(RIA), ~~Intern Insights Program~~SSW, ~~which~~is ~~focuses~~in onMississippi. ~~creating~~Our aChief ~~pipeline~~Human ~~between~~Resources ~~young~~Officer ~~diverse~~reports ~~talent~~directly ~~and~~to the ~~banking~~Chief ~~industry.~~Administrative ~~Specifically,~~Officer ~~recruiting~~and ~~efforts~~manages ~~focused~~all onaspects ~~junior~~of ~~year~~the ~~finance~~employee ~~and~~experience, ~~accounting~~including ~~majors~~talent atacquisition, ~~Southern~~diversity ~~University~~ and ~~A&M College in Baton Rouge~~inclusion, alearning ~~historically~~and ~~black university~~development, ~~for~~talent ~~our Intern Insights Program. Furthermore~~management, ~~in 2024~~compensation, ~~we continued the use of online exit surveys to provide feedback~~ and ~~help increase retention of women and ethnic minorities~~benefits. ~~As of December 31, 2024, our colleagues had the following attributes:~~

	Female	Minority(3)
Employees	580 total (67.4%)	152 total (26.0%)
Officials and Managers(1)	116 total (59.0%)	27 total (23.0%)
Executive Officers(2)	3 total (50.0%)	0 total (0.0%)

The board of directors is regularly updated on our talent development and human capital management strategies.

Productivity. We carefully manage the size of our workforce and reallocate resources as needed. For 2025, we managed an average of $7.4 million in loans held for investment and $8.1 million in deposits per FTE.

Diversity. We continue to recruit and retain women and minorities. In 2025, our Intern Insights Program, which creates a pipeline between diverse talent and the banking industry, experienced significant growth and success as we hosted twelve interns from four Louisiana universities. Furthermore, in 2025, we continued the use of online exit surveys to provide feedback and help increase retention of women and ethnic minorities. As of December 31, 2025, our colleagues had the following attributes:


	Female	Minority(3)
Employees	559 total (67.2%)	157 total (28.1%)
Officials and Managers(1)	102 total (56.4%)	21 total (20.6%)
Executive Officers(2)	3 total (30.0%)	0 total (0.0%)

(1)Based on EEO-1 job classifications.

(2)Based on b1BANK’s Executive Team.

(3)Includes Hispanic/Latino, Black/African American, Asian, American Indian/Alaska Native, Native Hawaiian/Other Pacific Islander

In addition to our continued Diversity Equity and Inclusion (“DEI”) efforts, we have emphasized merit-based promotions to promote from within, and foster talent development of our best human capital resources.

Compensation and Benefits. We provide competitive pay, benefits, and services that meet the varying needs of our employees. Compensation and benefits include market-competitive pay, health insurance options, a health reimbursement account (HRA), a flexible spending account (FSA), dependent care, employer-paid life insurance, voluntary life insurance, dental and vision insurance, employer-paid short-term disability, employer-paid long-term disability, employee assistance programs, employee discounts on our products, critical illness insurance, accident insurance, hospital indemnity insurance, pet insurance, identity and fraud protection, MetLife legal plan, paid time off, (including paid volunteer leave), training and professional development opportunities, and an employer-paid financial wellness program.

Periodic and objective reviews of compensation and benefits by grade level and position are conducted to ensure similar positions are paid comparatively and to solidify that we continuously provide a competitive and valuable offering to satisfy the well-being and needs of our employees.

Attraction, Development and Retention. We measure the success of our talent acquisition strategy on quality of acquisition, diversity in the workplace, and the retention of our employees. Each of these metrics is tracked for all key business lines. Sourcing tools are reviewed and modified as needed to ensure that we experience continued improvement.

In ~~2024~~2025, ~~our~~ Talent Development ~~team~~continues ~~made significant strides in enhancing and expanding our training initiatives. Our goals were~~ to ~~directly~~strengthen ~~benefit~~leadership ~~our~~capability ~~clients~~across bythe ~~elevating~~organization ~~service~~through ~~standards~~redesigned ~~through~~and ~~strategic~~targeted development ~~programs~~experiences. The ~~Key~~“Leading ~~among~~b1” ~~these~~manager ~~was~~program ~~the~~has ~~integration~~been offully ~~Submittable,~~reimagined ~~which is an online platform used to streamline the submission~~ and ~~review~~relaunched ~~processes~~as ~~into~~a ~~our~~2.5-day ~~internal application for external learning and development programs~~workshop. It ~~This~~covers ~~innovative~~immersive ~~platform~~leadership ~~revolutionized~~experience ~~how~~focused ~~employees~~on ~~applied for external development programs~~coaching, ~~streamlining~~performance ~~our application process~~management, and ~~improving~~leading ~~how~~through ~~managers and executives review and provide feedback on applications~~change.

~~Further~~Talent ~~advancements~~Development ~~were~~partnered ~~made in our “Learning b1: Manager Orientation” program, which underwent significant improvements~~ with ~~the~~business ~~introduction~~leaders ~~of personalized coaching sessions. These sessions provided targeted guidance~~ to ~~enhance~~strengthen ~~leadership~~operational ~~skills among managers~~consistency, ~~leading~~risk ~~to more efficient teams and~~awareness, ~~consequently, better internal~~ and ~~external~~compliance ~~client~~across ~~interactions~~the ~~and service quality~~organization. Key ~~Additionally,~~initiatives ~~our~~included ~~specialized~~standardized training ~~programs,~~for ~~namely~~frontline ~~the~~practices, ~~“Transaction~~system ~~Dispute~~readiness ~~Reporting~~training for ~~the~~retail ~~Frontline”~~operations, and ~~the~~targeted ~~“Mastering~~programs ~~Currency~~addressing ~~Transaction~~fraud ~~Reports:~~prevention ~~Compliance~~ and ~~Best Practices,” significantly enhanced client service and~~ compliance ~~standards~~. One ~~These~~training ~~programs~~to ~~equipped~~note ~~our~~was ~~staff~~“The ~~with~~First ~~essential~~Domino: ~~skills~~Stopping ~~for~~Fraud ~~efficient~~in ~~dispute~~its ~~handling~~Tracks”. Talent ~~and~~Development ~~deepened~~remains ~~their~~a ~~understanding~~key ofpartner ~~critical~~in ~~compliance~~positioning ~~areas~~b1BANK ~~such~~to ~~as CTR’s~~adapt, ~~thereby ensuring secure~~perform, ~~compliant~~and ~~client~~grow ~~transactions~~in ~~and~~a ~~maintaining~~dynamic ~~client~~financial ~~trust~~services ~~in us~~environment.

In 2024, we continued the enhancement in our Emergenetics training program. This enhancement is aimed at maximizing the impact of cognitive and behavioral diversity in leadership and team collaboration. By refining the Emergenetics training, we enabled our leaders to more effectively understand and utilize each team member’s unique strengths. This approach fostered a more dynamic, inclusive, and effective leadership style, significantly impacting our

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~~ability~~Our toaverage ~~exceed~~tenure ~~client~~is ~~expectations~~6.5 ~~through~~years ~~superior~~of ~~team~~service. ~~performance~~During 2025, we had 82 internal employee promotions, 147 external hires, and ~~decision-making.~~9 ~~The~~rehired ~~enhancement~~employees. ofEmployee ~~this~~turnover ~~innovative~~for ~~training~~2025 ~~program~~was ~~underscored~~21.0%, ~~our~~which ~~ongoing~~includes ~~commitment~~the topositions ~~organizational~~that ~~excellence~~were ~~and~~eliminated ~~superior~~following ~~client~~the ~~service~~Oakwood conversion.

Our average tenure is 6.6 years of service. During 2024, we had 64 internal employee promotions, 114 external hires, and 11 rehired employees. Employee turnover for 2024 was 13.3%.

Available Information

The Company files reports and other information with the Securities and Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as amended. The SEC maintains an Internet site that contains reports, proxy and information statements and other information about issuers, like the Company, who file electronically with the SEC. The address of that site is http://www.sec.gov.

Documents filed by the Company with the SEC are available from the Company without charge (except for exhibits to the documents). You may obtain documents filed by the Company with the SEC by requesting them in writing or by telephone from the Company at the following address:

Business First Bancshares, Inc.

500 Laurel Street, Suite 101

Baton Rouge, Louisiana 70801

Attention: Saundra Strong, Corporate Secretary

Telephone: (225) 248-7600

www.b1bank.com

Documents filed by the Company with the SEC are also available on the Company’s website, www.b1bank.com. Information furnished by the Company and information on, or accessible through, the SEC’s or the Company’s website is not part of this Annual Report on Form 10-K.

Supervision and Regulation

General

The U.S. banking industry is highly regulated under federal and state law. Consequently, our growth and earnings performance will be affected not only by management decisions and general and local economic conditions, but also by the statutes administered by, and the regulations and policies of, various governmental regulatory authorities. These authorities include the Federal Reserve, Federal Deposit Insurance Corporation (“FDIC”), Consumer Financial Protection Bureau (“CFPB”), Louisiana Office of Financial Institutions (“OFI”), Internal Revenue Service (“IRS”) and state taxing authorities. The effect of these statutes, regulations and policies, and any changes to such statutes, regulations and policies, can be significant and cannot be predicted.

The primary goals of the bank regulatory scheme are to maintain a safe and sound banking system, facilitate the conduct of sound monetary policy and promote fairness and transparency for financial products and services. The system of supervision and regulation applicable to us and our subsidiaries establishes a comprehensive framework for their respective operations and is intended primarily for the protection of the FDIC’s Deposit Insurance Fund, the Bank’s depositors and the public, rather than our shareholders or creditors. The description below summarizes certain elements of the applicable bank regulatory framework. This description is not intended to describe all laws and regulations applicable to us and our subsidiaries, and the description is qualified in its entirety by reference to the full text of the statutes, regulations, policies, interpretive letters and other written guidance that are described herein.

Business First Bancshares, Inc.

As a financial holding company, the Company is permitted to engage in, and be affiliated with companies engaging in, a broader range of activities than those permitted for a bank holding company that has not elected to become a financial holding company. Bank holding companies are generally restricted to engaging in the business of banking, managing or controlling banks and certain other activities determined by the Federal Reserve to be related closely to banking. Financial holding companies may also engage in activities that are considered to be financial in nature, as well as those incidental or complementary to financial activities, including certain insurance underwriting activities. The Company and the Bank must each remain well capitalized and well managed and the Bank must receive a Community Reinvestment Act (“CRA”) rating of at least “satisfactory” at its most recent examination in order for us to maintain our status as a financial holding company. In addition, the Federal Reserve has the power to order a financial holding company or its

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Act (“CRA”) rating of at least “satisfactory” at its most recent examination in order for us to maintain our status as a financial holding company. In addition, the Federal Reserve has the power to order a financial holding company or its subsidiaries to terminate any activity or terminate its ownership or control of any subsidiary, when it has a reasonable cause to believe that continuation of such activity or such ownership or control constitutes a serious risk to the financial safety, soundness, or stability of any bank subsidiary of that financial holding company.

As a bank holding company with respect to the Bank, the Company is also subject to regulation under the Bank Holding Company Act of 1956 (the "BHC Act") and to supervision, examination and enforcement by the Federal Reserve. The BHC Act and other federal laws subject bank holding companies to particular restrictions on the types of activities in which they may engage, and to a range of supervisory requirements and activities, including regulatory enforcement actions for violations of laws and regulations. The Federal Reserve’s jurisdiction also extends to any company that we directly or indirectly control, such as any nonbank subsidiaries and other companies in which we own a controlling investment.

Financial Services Industry Reform. In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") was enacted. The Dodd-Frank Act broadly affected the financial services industry by implementing changes to the financial regulatory landscape aimed at strengthening the sound operation of the financial services sector.

In addition, the Dodd-Frank Act addressed many investor protection, corporate governance and executive compensation matters affecting publicly-traded companies. However, the Jumpstart our Business Startups Act of 2012 (the "JOBS Act") provided certain exceptions to these requirements for so long as a publicly-traded qualifies as an emerging growth company. In 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act (“EGRRCPA”) revised certain aspects of the Dodd-Frank Act. Among other things, EGRRCPA exempts banks with less than $10 billion in assets (and total trading assets and trading liabilities of 5% or less of total assets) from Volcker Rule requirements relating to proprietary trading and clarifies definitions pertaining to Highly Volatile Commercial Real Estate (“HVCRE”), which require higher capital allocations, so that only loans with increased risk are subject to higher risk weightings. Further changes effected by the passage of EGRRCPA are discussed below.

Revised Rules on Regulatory Capital. Regulatory capital rules pursuant to the Basel III requirements, released in July 2013 and effective January 1, 2015, implemented higher minimum capital requirements for bank holding companies and banks. These rules include a new common equity Tier 1 ("CET1") capital requirement and establish criteria that instruments must meet to be considered common equity Tier 1 capital, additional Tier 1 capital or Tier 2 capital. The revised capital rules require banks and bank holding companies to maintain a minimum CET1 capital ratio of 4.5% of risk-based assets, a total Tier 1 capital ratio of 6.0% of risk-based assets, a total capital ratio of 8.0% of risk-based assets and a leverage ratio of 4.0% of average assets.

The capital rules also require banks to maintain a CET1 capital ratio of 6.5%, a total Tier 1 capital ratio of 8.0%, a total capital ratio of 10.0% and a leverage ratio of 5.0% to be deemed “well capitalized” for purposes of certain rules and prompt corrective action requirements. The risk-based ratios include a “capital conservation buffer” of 2.5% above its minimum risk-based capital requirements that must be composed of common equity Tier 1 capital. This buffer helps to ensure that banking organizations conserve capital when it is most needed, allowing them to better weather periods of economic stress. The buffer is measured relative to risk-weighted assets. An institution would be subject to limitations on certain activities including payment of dividends, share repurchases and discretionary bonuses to executive officers if its capital level is below the buffered ratio. Additionally, the Federal Reserve has issued supervisory guidance advising bank holding companies to eliminate, defer, or reduce dividends paid on common stock and share repurchases under certain circumstances, including where the company’s prospective rate of earnings is not consistent with the company’s capital needs or the company will not meet, or is in danger of not meeting, minimum regulatory capital adequacy ratios. The Federal Reserve has recently supplemented this guidance to reiterate the need for bank holding companies to consult with the Federal Reserve sufficiently in advance of the proposed payment of a dividend in certain circumstances. As of December 31, ~~2024~~2025, the Company’s capital meets or exceeds these capital requirements, including the buffer.

On September 17, 2019, the FDIC and other federal bank regulatory agencies approved the community bank leverage ratio (“CBLR”) framework as part of the directive under Section 201 of the EGRRCPA. This framework became effective January 1, 2020, and is available to the Bank and Company as an alternative to the Basel III risk-based capital framework. The community bank leverage ratio requirement is currently 9.0% after being temporarily reduced under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The CBLR framework is an optional framework that is designed to reduce burden by removing the requirements for calculating and reporting risk-based capital ratios for qualifying community banking organizations that opt into the framework. We have not elected to use the CBLR framework since the year ended December 31, 2020.

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Imposition of Liability for Undercapitalized Subsidiaries. Bank regulators are required to take prompt corrective action to resolve problems associated with insured depository institutions whose capital declines below certain levels. In the event an institution becomes undercapitalized, it must submit a capital restoration plan. The capital restoration plan will not be accepted by the regulators unless each company having control of the undercapitalized institution guarantees the subsidiary’s compliance with the capital restoration plan up to a certain specified amount. Any such guarantee from a depository institution’s holding company is entitled to a priority of payment in bankruptcy.

The aggregate liability of the holding company of an undercapitalized bank is limited to the lesser of 5.0% of the institution’s assets at the time it became undercapitalized or the amount necessary to cause the institution to be adequately capitalized. The bank regulators have greater power in situations where an institution becomes significantly or critically undercapitalized or fails to submit a capital restoration plan. For example, a bank holding company controlling such an institution can be required to obtain prior Federal Reserve approval of proposed dividends, or might be required to consent to a consolidation or to divest the troubled institution or other affiliates.

Acquisitions by Bank Holding Companies. The BHC Act, requires every bank holding company to obtain the prior approval of the Federal Reserve before it acquires all or substantially all of the assets of any bank, or ownership or control of any voting shares of any bank or bank holding company if after such acquisition it would own or control, directly or indirectly, more than 5.0% of the voting shares of such bank or bank holding company. In approving bank or bank holding company acquisitions by bank holding companies, the Federal Reserve is required to consider, among other things, the effect of the acquisition on competition, the financial condition, managerial resources and future prospects of the bank holding company and the banks concerned, the convenience and needs of the communities to be served (including the record of performance under the CRA), the effectiveness of the applicant in combating money laundering activities and the extent to which the proposed acquisition would result in greater or more concentrated risks to the stability of the U.S. banking or financial system. Our ability to make future acquisitions will depend on our ability to obtain approval for such acquisitions from the Federal Reserve. The Federal Reserve could deny our application based on the above criteria or other considerations. For example, we could be required to sell banking centers as a condition to receiving regulatory approval, which condition may not be acceptable to us or, if acceptable to us, may reduce the benefit of a proposed acquisition.

Control Acquisitions. Federal and state laws, including the BHC Act and the Change in Bank Control Act (the "CBCA"), impose additional prior notice or approval requirements and ongoing regulatory requirements on any investor that seeks to acquire direct or indirect “control” of an FDIC-insured depository institution or bank holding company. Whether an investor “controls” a depository institution is based on all of the facts and circumstances surrounding the investment. As a general matter, an investor is deemed to control a depository institution or other company if the investor owns or controls 25.0% or more of any class of voting securities. Subject to rebuttal, an investor is presumed to control a depository institution or other company if the investor owns or controls 10.0% or more of any class of voting securities and either the depository institution or company is a public company or no other person will hold a greater percentage of that class of voting securities after the acquisition. If an investor’s ownership of our voting securities were to exceed certain thresholds, the investor could be deemed to “control” us for regulatory purposes, which could subject such investor to regulatory filings or other regulatory consequences. The requirements of the BHC Act and the CBCA could limit our access to capital and could limit parties who could acquire shares of our common stock.

Regulatory Restrictions on Dividends; Source of Strength. As a bank holding company, the Company is subject to certain restrictions on dividends under applicable banking laws and regulations. The Federal Reserve has issued a supervisory letter that provides that a bank holding company should not pay dividends unless: (1) its net income over the last four quarters (net of dividends paid) has been sufficient to fully fund the dividends; (2) the prospective rate of earnings retention appears to be consistent with the capital needs, asset quality and overall financial condition of the bank holding company and its subsidiaries; and (3) the bank holding company will continue to meet minimum required capital adequacy ratios. Failure to comply with the supervisory letter could result in a supervisory finding that the bank holding company is operating in an unsafe and unsound manner. In addition, the Company’s ability to pay dividends may also be limited as a result of the capital conservation buffer under the Basel III regulatory capital framework. In the current financial and economic environment, the Federal Reserve Board has indicated that bank holding companies should carefully review their dividend policy and has discouraged payment ratios that are at maximum allowable levels unless both asset quality and capital are very strong. The Federal Reserve may further restrict the payment of dividends by engaging in supervisory action to restrict dividends or by requiring us to maintain a higher level of capital than would otherwise be required under the Basel III minimum capital requirements.

Under longstanding Federal Reserve policy which has been codified by the Dodd-Frank Act, the Company is expected to act as a source of financial strength to, and to commit resources to support, the Bank. This support may be required at times when we may not be inclined to provide it. In addition, any capital loans that the Company makes to the Bank are subordinate in right of payment to deposits and to certain other indebtedness of the Bank. As discussed above, in

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required at times when we may not be inclined to provide it. In addition, any capital loans that the Company makes to the Bank are subordinate in right of payment to deposits and to certain other indebtedness of the Bank. As discussed above, in certain circumstances, the Company could also be required to guarantee the capital restoration plan of the Bank, if it became undercapitalized for purposes of the Federal Reserve’s prompt corrective action regulations. In the event of our bankruptcy, any commitment by us to a federal bank regulatory agency to maintain the capital of the Bank under a capital restoration plan would be assumed by the bankruptcy trustee and entitled to a priority of payment.

In the event of a bank holding company’s bankruptcy under Chapter 11 of the U.S. Bankruptcy Code, the trustee will be deemed to have assumed and will be required to cure immediately any deficit under any commitment by the debtor holding company to any of the federal banking agencies to maintain the capital of an insured depository institution, and any claim for breach of such obligation will generally have priority over most other unsecured claims.

Scope of Permissible Activities. Under the BHC Act, the Company is prohibited from acquiring a direct or indirect interest in or control of more than 5.0% of the voting shares of any company that is not a bank or financial holding company and from engaging directly or indirectly in activities other than those of banking, managing or controlling banks or furnishing services to or performing services for its subsidiary banks, except that the Company may engage in, directly or indirectly, and may own shares of companies engaged in certain activities found by the Federal Reserve to be so closely related to banking or managing and controlling banks as to be a proper incident thereto. These activities include, among others, operating a mortgage, finance, credit card or factoring company; performing certain data processing operations; providing investment and financial advice; acting as an insurance agent for certain types of credit-related insurance; leasing personal property on a full-payout, nonoperating basis; and providing certain stock brokerage and investment advisory services. In approving acquisitions or the addition of activities, the Federal Reserve considers, among other things, whether the acquisition or the additional activities can reasonably be expected to produce benefits to the public, such as greater convenience, increased competition, or gains in efficiency, that outweigh such possible adverse effects as undue concentration of resources, decreased or unfair competition, conflicts of interest or unsound banking practices.

Notwithstanding the foregoing, the Gramm-Leach-Bliley Act, also known as the Financial Services Modernization Act of 1999, effective March 11, 2000 (the "GLB Act"), amended the BHC Act and eliminated the barriers to affiliations among banks, securities firms, insurance companies and other financial service providers. The GLB Act permitted bank holding companies to become financial holding companies and thereby affiliate with securities firms and insurance companies and engage in other activities that are financial in nature. The GLB Act defines “financial in nature” to include, among other things, securities underwriting, dealing and market making; sponsoring mutual funds and investment companies; insurance underwriting and agency; merchant banking activities; and activities that the Federal Reserve has determined to be closely related to banking. No regulatory approval will be required for a financial holding company to acquire a company, other than a bank or savings association, engaged in activities that are financial in nature or incidental to activities that are financial in nature, as determined by the Federal Reserve. We elected to become a financial holding company in 2020.

Safe and Sound Banking Practices. Bank holding companies are not permitted to engage in unsafe and unsound banking practices. The Federal Reserve’s Regulation Y, for example, generally requires a bank holding company to provide the Federal Reserve with prior notice of any redemption or repurchase of its own equity securities, if the consideration to be paid, together with the consideration paid for any repurchases or redemptions in the preceding year, is equal to 10.0% or more of the bank holding company’s consolidated net worth. The Federal Reserve may oppose the transaction if it believes that the transaction would constitute an unsafe or unsound practice or would violate any law or regulation. In certain circumstances, the Federal Reserve could take the position that paying a dividend would constitute an unsafe or unsound banking practice.

The Federal Reserve has broad authority to prohibit activities of bank holding companies and their nonbanking subsidiaries which represent unsafe and unsound banking practices, result in breaches of fiduciary duty or which constitute violations of laws or regulations, and can assess civil money penalties or impose enforcement action for such activities. The penalties can exceed $1,000,000 for each day the activity continues.

Anti-tying Restrictions. Bank holding companies and their affiliates are prohibited from tying the provision of certain services, such as extensions of credit, to other nonbanking services offered by a bank holding company or its affiliates.

b1BANK

The Bank is a commercial bank chartered under the laws of the State of Louisiana. In addition, its deposits are insured by the FDIC to the maximum extent permitted by law. As a result, the Bank is subject to extensive regulation,

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~~supervision~~b1BANK and examination by the Louisiana Office of Financial Institutions and the FDIC. Finally, we are also subject to secondary oversight by state banking authorities in other states in which we may maintain banking offices. The bank regulatory agencies have the power to enforce compliance with applicable banking laws and regulations. These requirements and restrictions include requirements to maintain reserves against deposits, restrictions on the nature and amount of loans that may be made and the interest that may be charged thereon and restrictions relating to investments and other activities of the Bank.

~~Capital Adequacy Requirements.~~ The ~~FDIC~~Bank ~~and~~is ~~Louisiana~~a ~~Office~~commercial ofbank ~~Financial~~chartered ~~Institutions~~under ~~monitor~~ the ~~capital~~laws ~~adequacy~~ of the ~~Bank~~State byof ~~using~~Louisiana. aIn ~~combination~~addition, ofits ~~risk-based~~deposits ~~guidelines~~are ~~and~~insured ~~leverage~~by ~~ratios~~the ~~similar~~FDIC to ~~those~~the ~~applied~~maximum atextent ~~the~~permitted ~~holding~~by ~~company level~~law. ~~These~~As ~~agencies~~a ~~consider~~result, the ~~bank’s~~Bank ~~capital~~is ~~levels~~subject ~~when~~to ~~taking~~extensive ~~action~~regulation, onsupervision ~~various~~and ~~types~~examination by the Louisiana Office of ~~applications~~Financial Institutions and ~~when~~the ~~conducting~~FDIC. ~~supervisory~~Finally, ~~activities~~we ~~related~~are toalso ~~the~~subject ~~safety~~to ~~and~~secondary ~~soundness~~oversight ofby ~~the~~state ~~bank~~banking ~~and~~authorities ~~the~~in ~~banking~~other ~~system.~~states ~~Under~~in ~~the~~which ~~revised~~we ~~capital~~may ~~rules~~maintain ~~which~~banking ~~became~~offices. ~~effective~~The onbank ~~January~~regulatory 1,agencies ~~2015,~~have the ~~Bank~~power isto ~~required~~enforce tocompliance ~~maintain~~with ~~four~~applicable ~~minimum~~banking ~~capital~~laws ~~standards:~~and ~~(1)~~regulations. aThese ~~leverage~~requirements ~~capital~~and ~~ratio~~restrictions ofinclude atrequirements ~~least~~to ~~4.0%,~~maintain ~~(2)~~reserves aagainst ~~common~~deposits, ~~equity~~restrictions ~~Tier~~on 1the ~~risk-based~~nature ~~capital~~and ~~ratio~~amount of ~~4.5%,~~loans ~~(3)~~that amay ~~Tier~~be 1made ~~risk-based~~and ~~capital~~the ~~ratio~~interest ofthat atmay ~~least~~be ~~6.0%,~~charged thereon and ~~(4)~~restrictions arelating ~~total~~to ~~risk-based~~investments ~~capital~~and ~~ratio~~other activities of atthe ~~least 8~~Bank.~~0%.~~

Capital Adequacy Requirements. The FDIC and Louisiana Office of Financial Institutions (the "Louisiana OFI") monitor the capital adequacy of the Bank by using a combination of risk-based guidelines and leverage ratios similar to those applied at the holding company level. These agencies consider the bank’s capital levels when taking action on various types of applications and when conducting supervisory activities related to the safety and soundness of the bank and the banking system. Under the revised capital rules which became effective on January 1, 2015, the Bank is required to maintain four minimum capital standards: (1) a leverage capital ratio of at least 4.0%, (2) a common equity Tier 1 risk-based capital ratio of 4.5%, (3) a Tier 1 risk-based capital ratio of at least 6.0%, and (4) a total risk-based capital ratio of at least 8.0%.

The Basel III framework also implements a requirement for all FDIC-insured banks to maintain a capital conservation buffer above the minimum capital requirements to avoid certain restrictions on capital distributions and discretionary bonus payments to executive officers. The capital conservation buffer must be composed solely of common equity Tier 1 capital and effectively requires banking organizations to maintain regulatory risk-based capital ratios at least 2.5% above the minimum risk-based capital requirements set forth above.

These capital requirements are minimum requirements. The FDIC or Louisiana Office of Financial Institutions may also set higher capital requirements if warranted by the risk profile of the Bank, economic conditions impacting its markets or other circumstances particular to the bank. For example, FDIC guidance provides that higher capital may be required to take adequate account of, among other things, interest rate risk and the risks posed by concentrations of credit, nontraditional activities or securities trading activities. In addition, the FDIC’s prompt corrective action regulations discussed below, in effect, increase the minimum regulatory capital ratios for banking organizations. Failure to meet capital guidelines could subject the Bank to a variety of enforcement remedies, including issuance of a capital directive, restrictions on business activities and other measures under the FDIC’s prompt corrective action regulations.

Pursuant to section 201(b) of EGRRCPA, the federal bank regulatory agencies adopted a final rule in 2019 imposing a minimum community bank leverage ratio requirement of 9.0%, which was reduced on a temporary basis under the CARES Act in 2020-2021.

As previously mentioned, the Company and Bank elected to adopt the CBLR framework for the year ended December 31, 2020 and elected to revert to the risk weighted ratios for the years ended ~~December 31, 2024, 2023, 2022 and 2021~~thereafter.

Corrective Measures for Capital Deficiencies. The federal banking regulators are required by the Federal Deposit Insurance Act (the "FDI Act") to take “prompt corrective action” with respect to capital-deficient institutions that are FDIC-insured. For this purpose, a financial institution is placed in one of the following five capital tiers: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” and “critically undercapitalized.” The institution’s capital tier depends upon how its capital levels compare with various relevant capital measures and certain other factors, as established by regulation.

To be well capitalized, a financial institution must have a total risk-based capital ratio of at least 10.0%, a Tier 1 risk-based capital ratio of at least 8.0%, a common equity Tier 1 risk-based capital ratio of at least 6.5%, and a leverage ratio of at least 5.0%, and must not be subject to any written agreement, order or directive requiring it to maintain a specific capital level for any capital measure. As of December 31, ~~2024~~2025, the Bank met the requirements to be categorized as well capitalized under the prompt corrective action framework currently in effect.

Banks that are adequately, but not well, capitalized may not accept, renew or rollover brokered deposits except with a waiver from the Federal Reserve and are subject to restrictions on the interest rates that can be paid on its deposits. The FDIC’s prompt corrective action regulations also generally prohibit a bank from making any capital distributions (including payment of a dividend) or paying any management fee to its parent holding company if the bank would thereafter be undercapitalized. Undercapitalized institutions are also subject to growth limitations, may not accept, renew or rollover brokered deposits, and are required to submit a capital restoration plan. The agencies may not accept such a plan without determining, among other things, that the plan is based on realistic assumptions and is likely to succeed in restoring

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(including payment of a dividend) or paying any management fee to its parent holding company if the bank would thereafter be undercapitalized. Undercapitalized institutions are also subject to growth limitations, may not accept, renew or rollover brokered deposits, and are required to submit a capital restoration plan. The agencies may not accept such a plan without determining, among other things, that the plan is based on realistic assumptions and is likely to succeed in restoring the bank’s capital. Significantly undercapitalized depository institutions may be subject to a number of requirements and restrictions, including orders to sell sufficient voting stock to become adequately capitalized, requirements to reduce total assets, and cessation of receipt of deposits from correspondent banks. Generally, subject to a narrow exception, the FDIC must appoint a receiver or conservator for an institution that is critically undercapitalized. The capital classification of a bank also affects the frequency of regulatory examinations, the bank’s ability to engage in certain activities and the deposit insurance premiums paid by the bank.

Branching. Under Louisiana law, the Bank is permitted to establish additional branch offices within Louisiana, subject to the approval of the Louisiana Office of Financial Institutions. As a result of the Dodd-Frank Act, the Bank may also establish additional branch offices outside of Louisiana, subject to prior regulatory approval, so long as the laws of the state where the branch is to be located would permit a state bank chartered in that state to establish a branch. ~~Any~~In ~~new~~2025, ~~branch~~the FDIC, ~~whether~~the ~~located~~Bank’s ~~inside~~primary orfederal ~~outside~~regulator, approved a final rule to streamline the process for the establishment and relocation of ~~Louisiana,~~domestic branches. Although new branches must ~~also~~still be approved by the FDIC, asprovides ~~the~~that ~~Bank’s~~most ~~primary~~branch ~~federal~~establishment ~~regulator~~or relocation filings that qualify for expedited processing will be deemed approved within three business days after submission. Additionally, the final rule significantly reduces the volume of information required to be submitted in branch establishment or relocation filings. The Bank may also establish offices in other states by merging with banks or by purchasing branches of other banks in other states, subject to certain restrictions.

Restrictions on Transactions with Affiliates and Insiders. Transactions between the Bank and its nonbanking subsidiaries and/or affiliates, including the Company, are subject to Section 23A and 23B of the Federal Reserve Act and Regulation W. In general, Section 23A of the Federal Reserve Act imposes limits on the amount of such transactions, and also requires certain levels of collateral for loans to affiliated parties. It also limits the amount of advances to third parties which are collateralized by the securities or obligations of the Company or its subsidiaries. Covered transactions with any single affiliate may not exceed 10.0% of the capital stock and surplus of the Bank, and covered transactions with all affiliates may not exceed, in the aggregate, 20.0% of the Bank’s capital and surplus. For a bank, capital stock and surplus refers to the bank’s Tier 1 and Tier 2 capital, as calculated under the risk-based capital guidelines, plus the balance of the allowance for credit losses excluded from Tier 2 capital. The Bank’s transactions with all of its affiliates in the aggregate are limited to 20.0% of the foregoing capital. “Covered transactions” are defined by statute to include a loan or extension of credit to an affiliate, as well as a purchase of securities issued by an affiliate, a purchase of assets (unless otherwise exempted by the Federal Reserve) from the affiliate, the acceptance of securities issued by the affiliate as collateral for a loan, and the issuance of a guarantee, acceptance or letter of credit on behalf of an affiliate. In addition, in connection with covered transactions that are extensions of credit, the Bank may be required to hold collateral to provide added security to the Bank, and the types of permissible collateral may be limited. The Dodd-Frank Act generally enhances the restrictions on transactions with affiliates, including an expansion of what types of transactions are covered transactions to include credit exposures related to derivatives, repurchase agreement and securities lending arrangements and an increase in the amount of time for which collateral requirements regarding covered transactions must be satisfied.

Affiliate transactions are also subject to Section 23B of the Federal Reserve Act which generally requires that certain transactions between the Bank and its affiliates be on terms substantially the same, or at least as favorable to the Bank, as those prevailing at the time for comparable transactions with or involving other nonaffiliated persons. The Federal Reserve has also issued Regulation W which codifies prior regulations under Sections 23A and 23B of the Federal Reserve Act and interpretive guidance with respect to affiliate transactions.

The restrictions on loans to directors, executive officers, principal shareholders and their related interests (collectively referred to herein as “insiders”) contained in Section 22(h) of the Federal Reserve Act and in Regulation O promulgated by the Federal Reserve apply to all insured institutions and their subsidiaries and bank holding companies. These restrictions include limits on loans to one borrower and conditions that must be met before such a loan can be made. There is also an aggregate limitation on all loans to insiders and their related interests. Generally, the aggregate of these loans cannot exceed the institution’s total unimpaired capital and surplus, although a bank’s regulators may determine that a lesser amount is appropriate. Loans to senior executive officers of a bank are even further restricted. Insiders are subject to enforcement actions for accepting loans in violation of applicable restrictions.

Restrictions on Distribution of Bank Dividends and Assets. The Bank is subject to certain restrictions on dividends under federal and state laws, regulations and policies. In general, the Bank may pay dividends to the Company without the approval of the Louisiana Office of Financial Institutions so long as the amount of the dividend does not exceed the Bank’s net profits earned during the current year combined with its retained net profits of the immediately preceding year. The Bank is required to obtain the approval of the Louisiana Office of Financial Institutions for any amount in excess of this threshold. In addition, under federal law, the Bank may not pay any dividend to the Company if it is undercapitalized or the payment of the dividend would cause it to become undercapitalized. The FDIC may further restrict the payment of dividends by engaging in supervisory action to restrict dividends or by requiring the Bank to maintain a higher level of capital than would otherwise be required to be adequately capitalized for regulatory purposes. Under the Basel III

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approval of the Louisiana Office of Financial Institutions so long as the amount of the dividend does not exceed the Bank’s net profits earned during the current year combined with its retained net profits of the immediately preceding year. The Bank is required to obtain the approval of the Louisiana Office of Financial Institutions for any amount in excess of this threshold. In addition, under federal law, the Bank may not pay any dividend to the Company if it is undercapitalized or the payment of the dividend would cause it to become undercapitalized. The FDIC may further restrict the payment of dividends by engaging in supervisory action to restrict dividends or by requiring the Bank to maintain a higher level of capital than would otherwise be required to be adequately capitalized for regulatory purposes. Under the Basel III regulatory capital framework, the failure to maintain an adequate capital conservation buffer, as discussed above, may also result in dividend restrictions. Moreover, if, in the opinion of the FDIC, the Bank is engaged in an unsound practice (which could include the payment of dividends), the FDIC may require, generally after notice and hearing, the Bank to cease such practice. The FDIC has indicated that paying dividends that deplete a depository institution’s capital base to an inadequate level would be an unsafe banking practice. The FDIC has also issued policy statements providing that insured depository institutions generally should pay dividends only out of current operating earnings.

Further, in the event of a liquidation or other resolution of an insured depository institution, the claims of depositors and other general or subordinated creditors are entitled to a priority of payment over the claims of holders of any obligation of the institution to its shareholders, including any depository institution holding company (such as us) or any shareholder or creditor thereof.

Incentive Compensation Guidance. The federal banking agencies have issued comprehensive guidance on incentive compensation policies intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of those organizations by encouraging excessive risk-taking. The incentive compensation guidance sets expectations for banking organizations concerning their incentive compensation arrangements and related risk-management, control and governance processes. The incentive compensation guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, either individually or as part of a group, is based upon three primary principles: (1) balanced risk-taking incentives, (2) compatibility with effective controls and risk management and (3) strong corporate governance. Any deficiencies in compensation practices that are identified may be incorporated into the organization’s supervisory ratings, which can affect its ability to make acquisitions or take other actions. In addition, under the incentive compensation guidance, a banking organization’s federal supervisor may initiate enforcement action if the organization’s incentive compensation arrangements pose a risk to the safety and soundness of the organization. Further, a provision of the Basel III capital standards described above would limit discretionary bonus payments to bank executives if the institution’s regulatory capital ratios fail to exceed certain thresholds. A number of federal regulatory agencies proposed rules that would require enhanced disclosure of incentive-based compensation arrangements initially in April 2011, and again in April and May 2016, but the rules have not been finalized and would mostly apply to banking organizations with over $50 billion in total assets. The scope and content of the U.S. banking regulators’ policies on executive compensation are continuing to develop and are likely to continue evolving in the future.

Audit Reports. For insured institutions with total assets of $1.0 billion or more, financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), management’s certifications signed by our and the Bank’s chief executive officer and chief accounting or financial officer concerning management’s responsibility for the financial statements, and an attestation by the auditors regarding the Bank’s internal controls must be submitted. For institutions with total assets of more than $3.0 billion, independent auditors may be required to review quarterly financial statements. FDICIA requires that the Bank have an independent audit committee, consisting of outside directors only, or that we have an audit committee that is entirely independent. The committees of such institutions must include members with experience in banking or financial management, must have access to outside counsel and must not include representatives of large customers. The Bank’s audit committee consists entirely of independent directors.

Deposit Insurance Assessments. The FDIC insures the deposits of federally insured banks up to prescribed statutory limits for each depositor through the Deposit Insurance Fund and safeguards the safety and soundness of the banking and thrift industries. The maximum amount of deposit insurance for banks and savings institutions is $250,000 per depositor. The amount of FDIC assessments paid by each insured depository institution is based on its relative risk of default as measured by regulatory capital ratios and other supervisory factors and is calculated based on an institution’s average consolidated total assets minus average tangible equity.

We are generally unable to control the amount of premiums that we are required to pay for FDIC insurance. At least semiannually, the FDIC will update its loss and income projections for the Deposit Insurance Fund and, if needed, will increase or decrease assessment rates, following notice-and-comment rulemaking, if required. If there are additional bank or financial institution failures or if the FDIC otherwise determines to increase assessment rates, the Bank may be required to pay higher FDIC insurance premiums. Any future increases in FDIC insurance premiums may have a material and adverse effect on our earnings.

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~~activities. To do so, a~~ bank ~~must be well capitalized, well managed and have a CRA rating from its primary federal regulator of satisfactory~~ or ~~better. Subsidiary banks of~~ financial ~~holding~~institution ~~companies~~failures or ~~banks~~if ~~with~~the ~~financial~~FDIC ~~subsidiaries~~otherwise ~~must~~determines ~~remain~~to ~~well~~increase ~~capitalized~~assessment ~~and~~rates, ~~well~~the ~~managed~~Bank inmay ~~order~~be torequired ~~continue~~ to ~~engage~~pay inhigher ~~activities~~FDIC ~~that~~insurance ~~are financial in nature without regulatory actions or restrictions~~premiums. ~~Such~~Any ~~actions~~future orincreases ~~restrictions could include divestiture of the “financial~~ in ~~nature”~~FDIC ~~subsidiary~~insurance orpremiums ~~subsidiaries. In addition, a financial holding company or a bank~~ may ~~not~~have ~~acquire~~ a ~~company~~material ~~that~~and isadverse ~~engaged~~effect inon ~~activities~~our ~~that are financial in nature unless each of the subsidiary banks of the financial holding company or the bank has a CRA rating of satisfactory or better~~earnings. ~~Neither we nor the Bank maintains a financial subsidiary.~~

Financial Modernization. Under the GLB Act, banks may establish financial subsidiaries and engage, subject to limitations on investment, in activities that are financial in nature, other than insurance underwriting as principal, insurance company portfolio investment, real estate development, real estate investment, annuity issuance and merchant banking activities. To do so, a bank must be well capitalized, well managed and have a CRA rating from its primary federal regulator of satisfactory or better. Subsidiary banks of financial holding companies or banks with financial subsidiaries must remain well capitalized and well managed in order to continue to engage in activities that are financial in nature without regulatory actions or restrictions. Such actions or restrictions could include divestiture of the “financial in nature” subsidiary or subsidiaries. In addition, a financial holding company or a bank may not acquire a company that is engaged in activities that are financial in nature unless each of the subsidiary banks of the financial holding company or the bank has a CRA rating of satisfactory or better. Neither we nor the Bank maintains a financial subsidiary.

Brokered Deposit Restrictions. Insured depository institutions that are categorized as adequately capitalized institutions under the FDI Act and corresponding federal regulations cannot accept, renew or roll over brokered deposits, without receiving a waiver from the FDIC, and are subject to restrictions on the interest rates that can be paid on any deposits. The EGRRCPA exempted reciprocal deposits from the definition of brokered deposits. Insured depository institutions that are categorized as undercapitalized capitalized institutions under the FDI Act and corresponding federal regulations may not accept, renew, or roll over brokered deposits. The Bank is not currently subject to such restrictions.

Concentrated Commercial Real Estate Lending Regulations. The federal banking regulatory agencies have promulgated guidance governing financial institutions with concentrations in commercial real estate lending. The guidance provides that a bank has a concentration in commercial real estate lending if (1) total reported loans for acquisition, construction, land development, and other land represent 100.0% or more of total risk-based capital or (2) total reported loans secured by multi-family and nonfarm nonresidential properties and loans for acquisition, construction, land development, and other land represent 300.0% or more of total risk-based capital and the bank’s commercial real estate loan portfolio has increased 50% or more during the prior 36 months. Owner occupied loans are excluded from this second category. If a concentration is present, management must employ heightened risk management practices that address, among other things, Board and management oversight and strategic planning, portfolio management, development of underwriting standards, risk assessment and monitoring through market analysis and stress testing, and maintenance of increased capital levels as needed to support the level of commercial real estate lending. Our acquisition, construction, land development, and other land portfolio is currently over the regulatory guidance percentage threshold due to the timing of draws on several larger construction and development projects and our portfolio secured by multi-family and nonfarm nonresidential properties and loans for acquisition, construction, land development, and other land is within the percentage threshold.

Community Reinvestment Act. The CRA and the regulations issued thereunder are intended to encourage banks to help meet the credit needs of their entire assessment area, including low and moderate income neighborhoods, consistent with the safe and sound operations of such banks. These regulations also provide for regulatory assessment of a bank’s record in meeting the needs of its assessment area when considering applications to establish branches, merger applications and applications to acquire the assets and assume the liabilities of another bank. The Financial Institution Reform Recovery and Enforcement Act (the "FIRREA") requires federal banking agencies to make public a rating of a bank’s performance under the CRA. In the case of a bank holding company, the CRA performance record of the banks involved in the transaction are reviewed in connection with the filing of an application to acquire ownership or control of shares or assets of a bank or to merge with any other bank holding company. An unsatisfactory CRA record could substantially delay approval or result in denial of an application. The Bank received a “satisfactory” rating in its most recent CRA examination in April, 2023.

Consumer Laws and Regulations. The Bank is subject to numerous laws and regulations intended to protect consumers in transactions with the Bank. These laws include, among others, laws regarding unfair, deceptive and abusive acts and practices, usury laws, and other federal consumer protection statutes. These federal laws include the Electronic Fund Transfer Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Real Estate Procedures Act of 1974, the S.A.F.E. Mortgage Licensing Act of 2008, the Truth in Lending Act and the Truth in Savings Act, among others. Many states and local jurisdictions have consumer protection laws analogous, and in addition, to those enacted under federal law. These laws and regulations mandate certain disclosure requirements and regulate the manner in which financial institutions must deal with customers when taking deposits, making loans and conducting other types of transactions. Failure to comply with these laws and regulations could give rise to regulatory sanctions, customer rescission and registration rights, action by state and local attorneys general and civil or criminal liability.

In addition, the Dodd-Frank Act created the CFPB. The CFPB has broad authority to regulate the offering and provision of consumer financial products. The Dodd-Frank Act gives the CFPB authority to supervise and examine depository institutions with more than $10.0 billion in assets for compliance with these federal consumer laws. The

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~~authority~~conducting toother ~~supervise~~types ~~and~~of ~~examine depository institutions with $10~~transactions.0 ~~billion~~Failure orto ~~less~~comply ~~in assets for compliance~~ with ~~federal~~these ~~consumer~~ laws ~~remains largely with those institutions’ primary regulators. However, the CFPB may participate in examinations of these smaller institutions on a “sampling basis”~~ and ~~may~~regulations ~~refer~~could ~~potential~~give ~~enforcement~~rise ~~actions against such institutions~~ to ~~their~~regulatory ~~primary regulators. Accordingly~~sanctions, ~~the~~customer ~~CFPB~~rescission ~~may participate in examinations of the Bank, which currently has assets of less than $10.0 billion,~~ and ~~could~~registration supervise and examine our other direct or indirect subsidiaries that offer consumer financial products or services. The CFPB also has supervisory and examination authority over certain nonbank institutions that offer consumer financial products. The Dodd-Frank Act identifies a number of covered nonbank institutionsrights, ~~and~~action also authorizes the CFPB to identify additional institutions that will be subject to its jurisdiction. In addition, the Dodd-Frank Act permits states to adopt consumer protection laws and regulations that are stricter than those regulations promulgated by ~~the~~state ~~CFPB,~~ and ~~state~~local attorneys general ~~are~~and ~~permitted~~civil toor ~~enforce~~criminal ~~consumer protection rules adopted by the CFPB against certain institutions~~liability.

~~Mortgage~~In ~~Lending~~addition, ~~Rules.~~the ~~The~~ Dodd-Frank Act ~~authorized~~created the CFPB. toThe ~~establish~~CFPB ~~certain~~has ~~minimum~~broad ~~standards~~authority ~~for~~to regulate the ~~origination~~offering and provision of ~~residential~~consumer ~~mortgages,~~financial ~~including~~products. aThe ~~determination~~Dodd-Frank ofAct gives the ~~borrower’s~~CFPB ~~ability~~authority to ~~repay~~supervise and examine depository institutions with more than $10.0 ~~Under~~billion ~~the~~in ~~Dodd-Frank~~assets ~~Act~~for ~~and~~compliance ~~related~~with ~~rules,~~these ~~financial~~federal consumer laws. The authority to supervise and examine depository institutions ~~may~~with ~~not~~$10.0 ~~make~~billion aor ~~residential~~less ~~mortgage~~in ~~loan~~assets ~~unless~~for ~~they~~compliance ~~make~~with afederal ~~“reasonable~~consumer ~~and~~laws ~~good~~remains ~~faith~~largely ~~determination”~~with ~~that~~those institutions’ primary regulators. However, the ~~consumer~~CFPB ~~has~~may participate in examinations of these smaller institutions on a “~~reasonable~~sampling ~~ability~~basis” and may refer potential enforcement actions against such institutions to ~~repay~~their ~~the~~primary ~~loan~~regulators. ~~The~~Accordingly, ~~Dodd-Frank~~the ~~Act~~CFPB ~~allows~~may ~~borrowers~~participate toin ~~raise~~examinations ~~certain~~of ~~defenses~~the toBank, ~~foreclosure~~which ~~but~~currently ~~provides~~has aassets ~~full~~of orless ~~partial~~than ~~safe~~$10.0 ~~harbor~~billion, ~~from~~and ~~such~~could ~~defenses~~supervise ~~for~~and ~~loans~~examine our other direct or indirect subsidiaries that ~~are~~offer ~~“qualified~~consumer ~~mortgages~~financial products or services.” The ~~rules~~CFPB ~~define~~also ~~“qualified~~has ~~mortgages,”~~supervisory ~~imposing~~and ~~both~~examination ~~underwriting~~authority ~~standards~~over –certain ~~for~~nonbank ~~example,~~institutions athat ~~borrower’s~~offer ~~debt~~consumer financial products. The Dodd-~~to-income~~Frank ~~ratio~~Act ~~may~~identifies ~~not~~a ~~exceed~~number ~~43.0%~~of –covered nonbank institutions, and ~~limits~~also onauthorizes the ~~terms~~CFPB ofto ~~their~~identify ~~loans~~additional institutions that will be subject to its jurisdiction. ~~Certain~~In ~~loans~~addition, ~~including~~the ~~interest~~Dodd-~~only~~Frank ~~loans~~Act permits states to adopt consumer protection laws and ~~negative~~regulations ~~amortization~~that ~~loans,~~are ~~cannot~~stricter bethan ~~qualified~~those ~~mortgages.~~regulations ~~EGRRCPA,~~promulgated ~~among~~by ~~other~~the ~~matters~~CFPB, ~~expanded~~and ~~the~~state ~~definition~~attorneys ofgeneral ~~qualified~~are ~~mortgages~~permitted ~~for~~to ~~banks~~enforce ~~with~~consumer ~~less~~protection ~~than~~rules ~~$10~~adopted ~~billion~~by inthe ~~assets~~CFPB against certain institutions.

Mortgage Lending Rules. The Dodd-Frank Act authorized the CFPB to establish certain minimum standards for the origination of residential mortgages, including a determination of the borrower’s ability to repay. Under the Dodd-Frank Act and related rules, financial institutions may not make a residential mortgage loan unless they make a “reasonable and good faith determination” that the consumer has a “reasonable ability” to repay the loan. The Dodd-Frank Act allows borrowers to raise certain defenses to foreclosure but provides a full or partial safe harbor from such defenses for loans that are “qualified mortgages.” The rules define “qualified mortgages” to have certain specified characteristics and prohibit certain loans, including interest only loans and negative amortization loans, from being qualified mortgages. In 2021, the CFPB replaced the previous debt-to-income limitations with a revised qualified mortgage definition. The revised qualified mortgage definition is based on the relationship of the loan’s annual percentage rate to the average prime offer rate. Additionally, the CFPB has issued rules to implement requirements of the Dodd-Frank Act pertaining to mortgage loan origination and integrated mortgage disclosure rules.

Anti-Money Laundering and OFAC. Under federal law, including the Bank Secrecy Act (the "BSA"), and the USA PATRIOT Act of 2001, certain financial institutions, such as the Bank, must maintain anti-money laundering programs that include established internal policies, procedures and controls; a designated BSA officer; an ongoing employee training program; and testing of the program by an independent audit function. Financial institutions are also prohibited from entering into specified financial transactions and account relationships and must meet enhanced standards for due diligence and customer identification especially in their dealings with foreign financial institutions and foreign customers. Financial institutions must take reasonable steps to conduct enhanced scrutiny of account relationships to guard against money laundering and to report any suspicious transactions, and law enforcement authorities have been granted increased access to financial information maintained by financial institutions. The Financial Crimes Enforcement Network ("FinCEN"), issued final rules under the BSA in July 2016 that clarify and strengthen the due diligence requirements for banks with regard to their customers.

The Office of Foreign Assets Control ("OFAC") administers laws and Executive Orders that prohibit U.S. entities from engaging in transactions with certain prohibited parties. OFAC publishes lists of persons and organizations suspected of aiding, harboring or engaging in terrorist acts, known as Specially Designated Nationals and Blocked Persons. Generally, if a bank identifies a transaction, account or wire transfer relating to a person or entity on an OFAC list, it must freeze the account or block the transaction, file a suspicious activity report and notify the appropriate authorities.

Bank regulators routinely examine institutions for compliance with these obligations and they must consider an institution’s compliance in connection with the regulatory review of applications, including applications for bank mergers and acquisitions. Failure of a financial institution to maintain and implement adequate programs to combat money laundering and terrorist financing and comply with OFAC sanctions, or to comply with relevant laws and regulations, could have serious legal, reputational and financial consequences for the institution.

Privacy. The federal banking regulators have adopted rules that limit the ability of banks and other financial institutions to disclose non-public information about consumers to non-affiliated third parties. These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a non-affiliated third party. These regulations affect how consumer information is transmitted through financial services companies and conveyed to outside vendors. In addition, consumers may also prevent disclosure of certain information among affiliated companies that is assembled or used to determine eligibility for a product or service, such as that shown on consumer credit reports and asset and income information from applications. Consumers also have the option to direct banks and other financial institutions not to share information about transactions and experiences with affiliated companies for the purpose of marketing products or services. In addition to applicable federal privacy regulations, the Bank is subject to certain state privacy laws.

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personal information to a non-affiliated third party. These regulations affect how consumer information is transmitted through financial services companies and conveyed to outside vendors. In addition, consumers may also prevent disclosure of certain information among affiliated companies that is assembled or used to determine eligibility for a product or service, such as that shown on consumer credit reports and asset and income information from applications. Consumers also have the option to direct banks and other financial institutions not to share information about transactions and experiences with affiliated companies for the purpose of marketing products or services. In addition to applicable federal privacy regulations, the Bank is subject to certain state privacy laws.

Federal Home Loan Bank (“FHLB”) System. The FHLB system, of which the Bank is a member, consists of 11 regional FHLBs governed and regulated by the Federal Housing Finance Board ("FHFB"). The FHLBs serve as reserve or credit facilities for member institutions within their assigned regions. The reserves are funded primarily from proceeds derived from the sale of consolidated obligations of the FHLB system. The FHLBs make loans (i.e., advances) to members in accordance with policies and procedures established by the FHLB and the Boards of directors of each regional FHLB.

As a system member, according to currently existing policies and procedures, the Bank is entitled to borrow from the Dallas FHLB provided it posts acceptable collateral. The Bank is also required to own a certain amount of capital stock in the FHLB. The Bank is in compliance with the stock ownership rules with respect to such advances, commitments and letters of credit and collateral requirements with respect to home mortgage loans and similar obligations. All loans, advances and other extensions of credit made by the FHLB to the Bank are secured by a portion of the respective mortgage loan portfolio, certain other investments and the capital stock of the FHLB held by the Bank.

Enforcement Powers. The bank regulatory agencies have broad enforcement powers, including the power to terminate deposit insurance, impose substantial fines and other civil and criminal penalties, and appoint a conservator or receiver. Failure to comply with applicable laws, regulations and supervisory agreements, breaches of fiduciary duty or the maintenance of unsafe and unsound conditions or practices could subject us or our subsidiaries, including the Bank, as well as their respective officers, directors, and other institution-affiliated parties, to administrative sanctions and potentially substantial civil money penalties. For example, the regulatory authorities may appoint the FDIC as conservator or receiver for a banking institution (or the FDIC may appoint itself, under certain circumstances) if any one or more of a number of circumstances exist, including, without limitation, the fact that the banking institution is undercapitalized and has no reasonable prospect of becoming adequately capitalized, fails to become adequately capitalized when required to do so, fails to submit a timely and acceptable capital restoration plan or materially fails to implement an accepted capital restoration plan.

Effect of Governmental Monetary Policies

The commercial banking business is affected not only by general economic conditions but also by U.S. fiscal policy and the monetary policies of the Federal Reserve. Some of the instruments of monetary policy available to the Federal Reserve include changes in the discount rate on member bank borrowings, the fluctuating availability of borrowings at the “discount window,” open market operations, the imposition of and changes in reserve requirements against member banks’ deposits and certain borrowings by banks and their affiliates and assets of foreign branches. These policies influence to a significant extent the overall growth of bank loans, investments, and deposits and the interest rates charged on loans or paid on deposits. We cannot predict the nature of future fiscal and monetary policies or the effect of these policies on our operations and activities, financial condition, results of operations, growth plans or future prospects.

Impact of Current Laws and Regulations

The cumulative effect of these laws and regulations, while providing certain benefits, adds significantly to the cost of our operations and thus has a negative impact on our profitability. There has also been a notable expansion in recent years of financial service providers that are not subject to the examination, oversight, and other rules and regulations to which we are subject. Those providers, because they are not so highly regulated, may have a competitive advantage over us and may continue to draw large amounts of funds away from traditional banking institutions, with a continuing adverse effect on the banking industry in general.

~~Cybersecurity~~Future Legislation and Regulatory Reform

WeFrom ~~are~~time ~~subject~~ to ~~guidance and standards~~time, asvarious ~~directed~~legislative ~~by federal law~~ and ~~prescribed~~regulatory byinitiatives ~~federal~~related ~~regulators, which necessitate the responsibility~~ to ~~secure~~financial ~~nonpublic,~~institutions ~~confidential~~are ~~customer~~introduced ~~and consumer information and provide notice to such entities~~ in ~~the~~Congress ~~event their data is disclosed due to a security breach. Under certain circumstances, federal~~ and state ~~regulators~~legislatures. ~~must~~New ~~also~~regulations ~~be notified in the event of a data breach as mandated by applicable state laws~~ and ~~federal~~statutes ~~regulations. Financial institutions~~ are ~~expected~~regularly toproposed ~~comply~~that ~~with~~contain ~~such~~wide-ranging ~~guidance~~proposals ~~and~~for ~~standards~~altering ~~and~~the tostructures, ~~accordingly~~regulations ~~establish~~ and ~~employ~~competitive ~~appropriate~~relationships ~~information~~of ~~security~~financial ~~and~~institutions ~~cybersecurity~~operating ~~programs~~in ~~and~~the ~~associated~~United ~~risk management processes~~States.

Cybersecurity risks are expected to increase due to the rapid evolution and sophistication of cybersecurity attacks and the accessibility of resources required for their execution. In turn, Congress, multiple states, and federal regulators frequently issue new guidance and standards and are currently considering the enactment of additional or enhanced laws or

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~~regulations~~We cannot predict whether or in what form any proposed regulation or statute will be adopted or the extent to which ~~could~~our ~~impose~~business ~~increased~~may ~~obligations~~be ~~for~~affected ~~companies~~by ~~responsible~~any ~~for~~new regulation or statute. Future legislation, regulation and policies, and the ~~safeguarding~~effects of ~~nonpublic,~~that ~~customer~~legislation and ~~consumer~~regulation ~~information~~and those policies, ~~specifically~~may have a significant influence on our operations and activities, financial ~~institutions~~condition, results of operations, growth plans or future prospects and the overall growth and distribution of loans, investments and deposits. Such legislation, regulation and policies have had a significant effect on the operations and activities, financial condition, results of operations, growth plans and future prospects of commercial banks in the past and are expected to continue to do so.

On November 23, 2021, federal banking agencies issued a joint final rule requiring financial institutions to provide notification to their primary federal regulator as soon as possible and no later than 36 hours after a “computer-security incident” has been determined to be a “notification event,” as those terms are defined under the final rule. Additionally, the rule requires bank service providers to contact each affected banking organization customer as soon as possible once the bank service provider determines it has experienced a computer-security incident that has materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade, covered services provided to such banking organizations for four or more hours.

On May 16, 2024, the SEC adopted an amendment to Regulation S-P requiring a covered institution to provide notice as soon as practicable, but not later than 30 days after becoming aware that an incident involving unauthorized access to or use of customer information has occurred or is reasonably likely to have occurred. The notice must include details about the incident, the breached data, and how affected individuals can respond to the breach to protect themselves.

Future Legislation and Regulatory Reform

From time to time, various legislative and regulatory initiatives related to financial institutions are introduced in Congress and state legislatures. New regulations and statutes are regularly proposed that contain wide-ranging proposals for altering the structures, regulations and competitive relationships of financial institutions operating in the United States. We cannot predict whether or in what form any proposed regulation or statute will be adopted or the extent to which our business may be affected by any new regulation or statute. Future legislation, regulation and policies, and the effects of that legislation and regulation and those policies, may have a significant influence on our operations and activities, financial condition, results of operations, growth plans or future prospects and the overall growth and distribution of loans, investments and deposits. Such legislation, regulation and policies have had a significant effect on the operations and activities, financial condition, results of operations, growth plans and future prospects of commercial banks in the past and are expected to continue to do so.

ITEM 1A. Risk Factors.

In evaluating our business, you should consider carefully the factors described below. The occurrence of one or more of these events could significantly and adversely affect our business, prospects, financial condition, results of operations and cash flows. You should also consider the cautionary statement regarding the use of forward-looking statements elsewhere in this Report.

Risks Relating to our Business

As a business operating in the financial services industry, our business and operations may be adversely affected in numerous and complex ways by weak economic conditions.

Our businesses and operations, which primarily consist of lending money to customers in the form of loans, borrowing money from customers in the form of deposits and investing in securities, are sensitive to general business and economic conditions in the United States. Uncertainty about federal fiscal monetary and related policies, the medium and long-term fiscal outlook of the federal government, and future tax rates is a concern for businesses, consumers, and investors in the United States. Changes in any of the policies are influenced by macroeconomic conditions and other factors that are beyond our control. In addition, economic conditions in foreign countries, including global political hostilities or public health outbreaks and uncertainty over the stability of foreign currencies, could affect the stability of global financial markets, which could hinder domestic economic growth.

Adverse economic conditions in the United States and in foreign countries, including adverse conditions resulting from natural disasters and adverse weather, acts of terrorism, an outbreak of hostilities or other international or domestic calamities, epidemics and pandemics such as coronavirus, and other matters beyond our control, and the government policy responses to such conditions, could have an adverse effect on our business, financial conditions, results of operations and prospects.

All of these factors could be detrimental to our business, and the interplay between these factors can be complex and unpredictable.

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The geographic concentration of our business in the state of Louisiana, in the Dallas/Fort Worth metroplex and Houston, imposes risks and may magnify the consequences of any regional or local economic downturn affecting our markets, including any downturn in the real estate sector.

We conduct our operations exclusively in the state of Louisiana, in the Dallas/Fort Worth metroplex and Houston. As of December 31, ~~2024~~2025, the substantial majority of the loans in our loan portfolio were made to borrowers who live and/or conduct business in our markets and the substantial majority of our secured loans were secured by collateral located in our markets. Accordingly, we are exposed to risks associated with a lack of geographic diversification as any regional or local economic downturn that affects our markets, our existing or prospective borrowers, or property values in our markets may affect us and our profitability more significantly and more adversely than our competitors whose operations are less geographically focused.

The economic conditions in our markets are highly dependent on the real estate sector as well as the technology, financial services, insurance, transportation, manufacturing and energy sectors. Any downturn or adverse development in these sectors, particularly the real estate and energy sectors in our markets, could have a material adverse impact on our business, financial condition and results of operations, and future prospects. Any adverse economic developments, among other things, could negatively affect the volume of loan originations, increase the level of nonperforming assets, increase the rate of foreclosure losses on loans, and reduce the value of our loans.

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We face significant competition to attract and retain customers, which could impair our growth, decrease our profitability or result in loss of market share.

We operate in the highly competitive banking industry and face significant competition for customers from bank and non-bank competitors, particularly regional and nationwide institutions, in originating loans, attracting deposits and providing other financial services. Our competitors are generally larger and may have significantly more resources, greater name recognition, and more extensive and established branch networks or geographic footprints than we do. Because of their scale, many of these competitors can be more aggressive than we can on loan and deposit pricing. Also, many of our non-bank competitors have fewer regulatory constraints and may have lower cost structures. We expect competition to continue to intensify due to financial institution consolidation; legislative, regulatory and technological changes; and the emergence of alternative banking sources.

Our ability to compete successfully will depend on a number of factors, including, among other things:

•our ability to develop, maintain and build long-term customer relationships based on top quality service, high ethical standards and safe, sound assets;

•our scope, relevance and pricing of products and services offered to meet customer needs and demands;

•the rate at which we introduce new products and services relative to our competitors;

•customer satisfaction with our level of service;

•our ability to expand our market position;

•industry and general economic trends; and

•our ability to keep pace with technological advances and to invest in new technology.

Increased competition could require us to increase the rates we pay on deposits or lower the rates we offer on loans, which could reduce our profitability. Our failure to compete effectively in our primary markets could cause us to lose market share and could have an adverse effect on our business, financial condition and results of operations.

Our success is largely dependent upon our ability to successfully execute our business strategy, and failure to successfully execute our business strategy could have an adverse effect on our business, financial condition and results of operations.

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Our success, including our ability to achieve our growth and profitability goals, is dependent on the ability of our management team to execute on our long-term business strategy, which requires them to, among other things:

•attract and retain experienced and talented bankers in each of our markets;

•maintain adequate funding sources, including by continuing to attract stable, low-cost deposits;

•increase our operating efficiency and profitability;

•implement new technologies to enhance the client experience, keep pace with our competitors and improve efficiency;

•attract and maintain commercial banking relationships with well-qualified businesses, real estate developers and investors with proven track records in our market areas;

•attract sufficient loans that meet prudent credit standards, including in our commercial and industrial and owner-occupied commercial real estate loan categories;

•maintain adequate liquidity and regulatory capital and comply with applicable federal and state banking regulations;

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•obtain federal and state regulatory approvals;

•manage our credit, interest rate and liquidity risk;

•develop new, and grow our existing, streams of noninterest income;

•oversee the performance of third party service providers that provide material services to our business; and

•maintain expenses in line with their current projections.

Failure to achieve these strategic goals could adversely affect our ability to successfully implement our business strategies and could negatively impact our business, growth prospects, financial condition and results of operations. Furthermore, if we do not manage our growth effectively, our business, financial condition, results of operations and future prospects could be negatively affected, and we may not be able to continue to implement our business strategy and successfully conduct our operations.

We rely heavily on our executive management team and other key employees, and an unexpected loss of their service could have an adverse effect on our business, financial condition and results of operations.

Our success depends in large part on the performance of our key personnel, as well as on our ability to attract, motivate and retain highly qualified senior and middle management and other skilled employees. Competition for employees is intense, and the process of locating key personnel with the combination of skills and attributes required to execute our business plan may be lengthy. We may not be successful in retaining our key employees, and the unexpected loss of services of one or more of our key personnel could have an adverse effect on our business because of their skills, knowledge of our primary markets, years of industry experience and the difficulty of promptly finding qualified replacement personnel. If the services of any of our key personnel should become unavailable for any reason, we may not be able to identify and hire qualified persons on terms acceptable to us, or at all, which could have an adverse effect on our business, financial condition and results of operations.

Our ability to attract and retain profitable bankers is critical to the success of our business strategy, and any failure to do so could have a material adverse effect on our business, financial condition and results of operations.

Our ability to retain and grow our loans, deposits and fee income depends upon the business generation capabilities, reputation and relationship management skills of our bankers. If we were to lose the services of any of our bankers, including profitable bankers employed by banks that we may acquire, to a new or existing competitor or otherwise, we may not be able to retain valuable relationships and some of our customers could choose to use the services of a competitor instead of our services.

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Our growth strategy also relies on our ability to attract and retain additional profitable bankers. We may face difficulties in recruiting and retaining bankers of our desired caliber, including as a result of competition from other financial institutions. In particular, many of our competitors are significantly larger with greater financial resources, and may be able to offer more attractive compensation packages and broader career opportunities. Additionally, we may incur significant expenses and expend significant time and resources on training, integration and business development before we are able to determine whether a new banker will be profitable or effective. If we are unable to attract and retain profitable bankers, or if our bankers fail to meet our expectations in terms of customer relationships and profitability, we may be unable to execute our business strategy, which could have an adverse effect on our business, financial condition and results of operations.

We may not be able to adequately measure and limit our credit risk, which could lead to unexpected losses.

Our business depends on our ability to successfully measure and manage credit risk. As a lender, we are exposed to the risk that the principal of, or interest on, a loan will not be repaid timely or at all or that the value of any collateral supporting a loan will be insufficient to cover our outstanding exposure. In addition, we are exposed to risks with respect to the period of time over which the loan may be repaid, risks relating to proper loan underwriting, risks resulting from changes in economic and industry conditions, and risks inherent in dealing with individual loans and borrowers. The creditworthiness of a borrower is affected by many factors including local market conditions and general economic conditions. If the overall economic climate in the United States, generally, or our market areas, specifically, experiences material disruption, our borrowers may experience difficulties in repaying their loans, the collateral we hold may decrease in value or become illiquid, and the level of nonperforming loans, charge-offs and delinquencies could rise and require significant additional provisions for credit losses. Additional factors related to the credit quality of commercial loans include the quality of the management of the business and the borrower’s ability both to properly evaluate changes in the supply and demand characteristics affecting our market for products and services and to effectively respond to those changes. Additional factors related to the credit quality of commercial real estate loans include tenant vacancy rates and the quality of management of the property.

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in value or become illiquid, and the level of nonperforming loans, charge-offs and delinquencies could rise and require significant additional provisions for credit losses. Additional factors related to the credit quality of commercial loans include the quality of the management of the business and the borrower’s ability both to properly evaluate changes in the supply and demand characteristics affecting our market for products and services and to effectively respond to those changes. Additional factors related to the credit quality of commercial real estate loans include tenant vacancy rates and the quality of management of the property.

Our risk management practices, such as monitoring the concentration of our loans within specific industries and our credit approval, review and administrative practices, may not adequately reduce credit risk, and our credit administration personnel, policies and procedures may not adequately adapt to changes in economic or any other conditions affecting customers and the quality of the loan portfolio. In addition, many of our loans are made to small and midsized businesses that may be less able to withstand competitive, economic and financial pressures than larger borrowers. A failure to effectively measure and limit the credit risk associated with our loan portfolio may result in loan defaults, foreclosures and additional charge-offs, and may necessitate that we significantly increase our allowance for credit losses, each of which could adversely affect our net income. As a result, our inability to successfully manage credit risk could have an adverse effect on our business, financial condition and results of operations.

Our commercial real estate loan portfolio exposes us to risks that may be greater than the risks related to our other mortgage loans.

Our loan portfolio includes owner-occupied and non-owner-occupied commercial real estate loans for individuals and businesses for various purposes, which are secured by commercial properties, as well as real estate acquisition, construction and development loans. As of December 31, ~~2024~~2025, approximately $3.23 billion, or 52.75% of our loan portfolio is secured by commercial and construction real estate. These loans typically involve repayment dependent upon income generated, or expected to be generated, by the property securing the loan in amounts sufficient to cover operating expenses and debt service, which may be adversely affected by changes in the economy or local market conditions. These loans expose us to greater credit risk than loans secured by residential real estate because the collateral securing these loans typically cannot be liquidated as easily as residential real estate because there are fewer potential purchasers of the collateral. Additionally, non-owner-occupied commercial real estate loans generally involve relatively large balances to single borrowers or related groups of borrowers. Accordingly, charge-offs on non-owner-occupied commercial real estate loans may be larger on a per loan basis than those incurred with our residential or consumer loan portfolios. Unexpected deterioration in the credit quality of our commercial real estate loan portfolio would require us to increase our provision for credit losses, which would reduce our profitability, and could adversely affect our business, financial condition, results of operations and prospects.

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Because a significant portion of our loan portfolio is comprised of real estate loans, negative changes in the economy affecting real estate values and liquidity could impair the value of collateral securing our real estate loans and result in loan and other losses.

The market value of real estate can fluctuate significantly in a short period of time. As of December 31, ~~2024~~2025, approximately $4.02 billion, or 67.58%, of our total loans were comprised of loans with real estate as a primary or secondary component of collateral. Adverse changes affecting real estate values and the liquidity of real estate in one or more of our markets could increase the credit risk associated with our loan portfolio, and could result in losses that adversely affect our business, financial condition, and results of operations. Negative changes in the economy affecting real estate values and liquidity in our market areas could significantly impair the value of property pledged as collateral on loans and affect our ability to sell the collateral upon foreclosure without a loss or additional losses. Collateral may have to be sold for less than the outstanding balance of the loan, which could result in losses on such loans. Such declines and losses could have adverse effect on our business, financial condition and results of operations. If real estate values decline, it is also more likely that we would be required to increase our allowance for credit losses, which could have an adverse effect on our business, financial condition and results of operations.

We engage in lending secured by real estate and may be forced to foreclose on the collateral and own the underlying real estate, subjecting us to the costs and potential risks associated with the ownership of the real property.

Since we originate loans secured by real estate, we may have to foreclose on the collateral property to protect our investment and may thereafter, own and operate such property, in which case, we would be exposed to the risks inherent in the ownership of real estate. As of December 31, ~~2024~~2025, we held approximately $513.50 million in other real estate owned (“OREO”). The amount that we, as a mortgagee, may realize after a default is dependent upon factors outside of our control, including, but not limited to general or local economic conditions, environmental cleanup liability, assessments, interest rates, real estate tax rates, operating expenses of the mortgaged properties, ability to obtain and maintain adequate occupancy of the properties, zoning laws, governmental and regulatory rules, and natural disasters. Our inability to manage the amount of costs or size of the risks associated with the ownership of real estate, or write-downs in the value of OREO, could have an adverse effect on our business, financial condition and results of operations.

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control, including, but not limited to general or local economic conditions, environmental cleanup liability, assessments, interest rates, real estate tax rates, operating expenses of the mortgaged properties, ability to obtain and maintain adequate occupancy of the properties, zoning laws, governmental and regulatory rules, and natural disasters. Our inability to manage the amount of costs or size of the risks associated with the ownership of real estate, or write-downs in the value of OREO, could have an adverse effect on our business, financial condition and results of operations.

A large portion of our loan portfolio is comprised of commercial loans secured by receivables, inventory, equipment or other commercial collateral, the deterioration in value of which could expose us to credit losses and could adversely affect our business, financial condition and results of operations.

As of December 31, ~~2024~~2025, approximately $1.9 billion, or 31.20%, of our total loans were commercial loans to businesses. In general, these loans are collateralized by general business assets, including, among other things, accounts receivable, inventory and equipment and most are backed by a personal guaranty of the borrower or principal. These commercial loans are typically larger in amount than loans to individuals and, therefore, have the potential for larger losses on a single loan basis. Additionally, the repayment of commercial loans is subject to the ongoing business operations of the borrower. The collateral securing such loans generally includes movable property, such as equipment and inventory, which may decline in value more rapidly than we anticipate exposing us to increased credit risk. In addition, a portion of our customer base, including customers in the energy and real estate business, may be exposed to volatile businesses or industries which are sensitive to commodity prices or market fluctuations, such as energy prices. Accordingly, negative changes in commodity prices and real estate values and liquidity could impair the value of the collateral securing these loans. Significant adverse changes in the economy or local market conditions in which our commercial lending customers operate could cause rapid declines in loan collectability and the values associated with general business assets resulting in inadequate collateral coverage that may expose us to credit losses and could adversely affect our business, financial condition and results of operations.

Our portfolio contains a number of large loans to certain borrowers, and deterioration in the financial condition of these large loans could have a significant adverse impact on our asset quality.

Our growth over the past several years has been partially attributable to our ability to originate and retain relatively large loans given our asset size. As of December 31, ~~2024~~2025, our average loan size (including unfunded commitments) was approximately $~~447~~542,000. Further, as of December 31, ~~2024~~2025, our 10 largest borrowing relationships ranged from approximately $2350.0 million to $95140.20 million (including unfunded commitments) and averaged approximately $4465.60 million in total commitments. Along with other risks inherent in our loans, such as the deterioration of the underlying businesses or property securing these loans, the higher average size of our loans presents a risk to our lending operations. Because we have a large average loan size, if only a few of our largest borrowers become unable to repay their loan obligations as a result of economic or market conditions or personal circumstances, our nonperforming loans and our provision for credit losses could increase significantly, which could have an adverse effect on our business, financial condition and results of operations.

Our allowance for credit losses may prove to be insufficient to absorb losses inherent in our loan portfolio, which could have a material adverse effect on our business, financial condition and results of operations.

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~~obligations~~adequacy asof aour ~~result~~allowance for credit losses. Finally, the measure of ~~economic~~our orallowance ~~market~~for ~~conditions~~credit orlosses ~~personal~~is ~~circumstances~~dependent on the adoption and interpretation of accounting standards. The Financial Accounting Standards Board (“FASB”) issued a new credit impairment model, ~~our~~the ~~nonperforming~~Current ~~loans~~Expected Credit Loss (“CECL”) model, which became applicable to us on January 1, 2023. CECL requires financial institutions to estimate and ~~our~~develop a provision for credit losses ~~could~~at ~~increase~~origination ~~significantly~~for the lifetime of the loan, ~~which~~as ~~could~~opposed ~~have~~to reserving for incurred or probable losses up to the balance sheet date. Upon adoption of the guidance on January 1, 2023, we recognized an ~~adverse~~$827,000 ~~effect~~reduction to retained earnings, after recording the relating deferred tax asset adjustment at our adjusted tax rate. Under the CECL model, credit deterioration would be reflected in the income statement in the period of origination or acquisition of the loan, with changes in expected credit losses due to further credit deterioration or improvement reflected in the periods in which the expectation changes. Moreover, the CECL model is heavily dependent on macroeconomic forecasts, with changes in those forecasts potentially requiring material increases to our level of allowance for credit losses which could adversely affect our business, financial condition, ~~and~~ results of operations, and capital.

We maintain an allowance for credit losses that represents management’s judgment of probable losses and risks inherent in our loan portfolio, including unfunded commitments. As of December 31, 2024, our allowance for credit losses totaled $58.5 million, which represents approximately 0.98% of our total loans held for investment. The level of the allowance reflects management’s continuing evaluation of general economic conditions, diversification and seasoning of the loan portfolio, historic loss experience, identified credit problems, delinquency levels and adequacy of collateral. The allowance also incorporates our current views on our current risk management practices, which may change in the future. Additionally, the allowance incorporates historical industry loss data as part of the estimate. The determination of the appropriate level of the allowance for credit losses is inherently highly subjective and requires us to make significant estimates of and assumptions regarding current credit risks and future trends, all of which may undergo material changes. Inaccurate management assumptions, deterioration of economic conditions affecting borrowers, new information regarding existing loans, identification or deterioration of additional problem loans, acquisition of problem loans and other factors, both within and outside of our control, may require us to increase our allowance for credit losses. In addition, our regulators, as an integral part of their periodic examination, review our methodology for calculating, and the adequacy of, our allowance for credit losses and may direct us to make additions to the allowance based on their judgments about information available to them at the time of their examination. Further, if actual charge-offs in future periods exceed the amounts allocated to the allowance for credit losses, we may need additional provisions for credit losses to restore the adequacy of our allowance for credit losses. Finally, the measure of our allowance for credit losses is dependent on the adoption and interpretation of accounting standards. The Financial Accounting Standards Board (“FASB”) issued a new credit impairment model, the Current Expected Credit Loss (“CECL”) model, which became applicable to us on January 1, 2023. CECL requires financial institutions to estimate and develop a provision for credit losses at origination for the lifetime of the loan, as opposed to reserving for incurred or probable losses up to the balance sheet date. Upon adoption of the guidance on January 1, 2023, we recognized an $827,000 reduction to retained earnings, after recording the relating deferred tax asset adjustment at our adjusted tax rate. Under the CECL model, credit deterioration would be reflected in the income statement in the period of origination or acquisition of the loan, with changes in expected credit losses due to further credit deterioration or improvement reflected in the periods in which the expectation changes. Moreover, the CECL model is heavily dependent on macroeconomic forecasts, with changes in those forecasts potentially requiring material increases to our level of allowance for credit losses which could adversely affect our business, financial condition, results of operations, and capital.

The small-to-midsized businesses that we lend to may have fewer resources to weather adverse business developments, which may impair a borrower’s ability to repay a loan, and such impairment could have a material adverse effect on our business, financial condition and results of operations.

We focus our business development and marketing strategy primarily on small-to-midsized businesses, who frequently have smaller market shares than their competition, may be more vulnerable to economic downturns, often need substantial additional capital to expand or compete and may experience substantial volatility in operating results, any of which may impair a borrower’s ability to repay a loan. In addition, the success of a small-to-midsized business often depends on the management skills, talents and efforts of one or two people or a small group of people, and the death, disability or resignation of one or more of these people could have an adverse impact on the business and its ability to repay its loan. If general economic conditions negatively impact the markets in which we operate and small-to-midsized businesses are adversely affected or our borrowers are otherwise harmed by adverse business developments, this, in turn, could have a material adverse effect on our business, financial condition and results of operations.

The borrowing needs of our customers may increase, especially during a challenging economic environment, which could result in increased borrowing against our contractual obligations to extend credit.

A commitment to extend credit is a formal agreement to lend funds to a customer as long as there is no violation of any condition established under the agreement. The actual borrowing needs of our customers under these credit commitments have historically been lower than the contractual amount of the commitments. A significant portion of these commitments expire without being drawn upon. Because of the credit profile of our customers, we typically have a substantial amount of total unfunded credit commitments, which is not reflected on our balance sheet. As of December 31, 2025, we had $1.7 billion in unfunded credit commitments to our customers. Actual borrowing needs of our customers may exceed our expectations, especially during a challenging economic environment when our customers’ companies may be more dependent on our credit commitments due to the lack of available credit elsewhere, the increasing costs of credit, or the limited availability of financings from venture firms. This could adversely affect our liquidity, which could impair our ability to fund operations and meet obligations as they become due and could have a material adverse effect on our business, financial condition and results of operations.

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2024, we had $1.4 billion in unfunded credit commitments to our customers. Actual borrowing needs of our customers may exceed our expectations, especially during a challenging economic environment when our customers’ companies may be more dependent on our credit commitments due to the lack of available credit elsewhere, the increasing costs of credit, or the limited availability of financings from venture firms. This could adversely affect our liquidity, which could impair our ability to fund operations and meet obligations as they become due and could have a material adverse effect on our business, financial condition and results of operations.

Our ability to maintain our reputation is critical to the success of our business.

Our business plan emphasizes relationship banking. We have benefited from strong relationships with and among our customers. As a result, our reputation is one of the most valuable components of our business. Our growth over the past several years has depended on attracting new customers from competing financial institutions and increasing our market share, primarily by the involvement in our primary markets and word-of-mouth advertising, rather than on growth in the market for banking services in our primary markets. As such, we strive to enhance our reputation by recruiting, hiring and retaining employees who share our core values of being an integral part of the communities we serve and delivering superior service to our customers. If our reputation is negatively affected by the actions of our employees or otherwise, our existing relationships may be damaged. We could lose some of our existing customers, including groups of large customers who have relationships with each other, and we may not be successful in attracting new customers. Any of these developments could have an adverse effect on our business, financial condition and results of operations.

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Our business has grown rapidly, and we may not be able to maintain our historical rate of growth, which could have an adverse effect on our ability to successfully implement our business strategy.

Our business has grown rapidly. Financial institutions that grow rapidly can experience significant difficulties as a result of rapid growth. Furthermore, our primary strategy focuses on organic growth, supplemented by acquisitions of banking teams or other financial institutions. We may be unable to execute on aspects of our growth strategy to sustain our historical rate of growth or we may be unable to grow at all. More specifically, we may be unable to generate sufficient new loans and deposits within acceptable risk and expense tolerances, obtain the personnel or funding necessary for additional growth or find suitable banking teams or acquisition candidates. Various factors, such as economic conditions and competition, may impede or prohibit the growth of our operations, the opening of new branches, and the consummation of acquisitions. Further, we may be unable to attract and retain experienced bankers, which could adversely affect our growth. The success of our strategy also depends on our ability to effectively manage growth, which is dependent upon a number of factors, including our ability to adapt existing credit, operational, technology and governance infrastructure to accommodate expanded operations. If we fail to build infrastructure sufficient to support rapid growth or fail to implement one or more aspects of our strategy, we may be unable to maintain historical earnings trends, which could have an adverse effect on our business, financial condition and results of operations.

We may not be able to manage the risks associated with our anticipated growth and expansion through de novo branching.

Our business strategy includes evaluating strategic opportunities to grow through de novo branching, and we believe that banking location expansion has been meaningful to our growth since inception. De novo branching carries with it certain potential risks, including significant startup costs and anticipated initial operating losses; an inability to gain regulatory approval; an inability to secure the services of qualified senior management to operate the de novo banking location and successfully integrate and promote our corporate culture; poor market reception for de novo banking locations established in markets where we do not have a preexisting reputation; challenges posed by local economic conditions; challenges associated with securing attractive locations at a reasonable cost; and the additional strain on management resources and internal systems and controls. Failure to adequately manage the risks associated with our anticipated growth through de novo branching could have an adverse effect on our business, financial condition and results of operations.

We may pursue acquisitions in the future, which could expose us to financial, execution and operational risks that could have an adverse effect on our business, financial condition, results of operations and growth prospects.

Although we generally plan to continue to grow our business organically, we may from time to time consider acquisition opportunities that we believe complement our activities and have the ability to enhance our profitability. Our acquisition activities could be material to our business and involve a number of risks, including those associated with:

•the identification of suitable candidates for acquisition;

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•the diversion of management attention from the operation of our existing business to identify, evaluate and negotiate potential transactions;

•the ability to attract funding to support additional growth within acceptable risk tolerances;

•the use of inaccurate estimates and judgments to evaluate credit, operations, management and market risks with respect to the target institution or assets;

•the ability to maintain asset quality;

•the adequacy of due diligence and the potential exposure to unknown or contingent liabilities related to the acquisition

•the retention of customers and key personnel, including bankers;

•the timing and uncertainty associated with obtaining necessary regulatory approvals;

•the incurrence of an impairment of goodwill associated with an acquisition and adverse effects on our results of operations

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•the ability to successfully integrate acquired businesses; and

•the maintenance of adequate regulatory capital.

The market for acquisition targets is highly competitive, which may adversely affect our ability to find acquisition candidates that fit our strategy and standards at acceptable prices. We face significant competition in pursuing acquisition targets from other banks and financial institutions, many of which possess greater financial, human, technical and other resources than we do. Our ability to compete in acquiring target institutions will depend on our available financial resources to fund the acquisitions, including the amount of cash and cash equivalents we have and the liquidity and value of our common stock. In addition, increased competition may also drive up the acquisition consideration that we will be required to pay in order to successfully capitalize on attractive acquisition opportunities. To the extent that we are unable to find suitable acquisition targets, an important component of our growth strategy may not be realized.

Acquisitions of financial institutions also involve operational risks and uncertainties, such as unknown or contingent liabilities with no available manner of recourse, exposure to unexpected problems such as asset quality, the retention of key employees and customers, and other issues that could negatively affect our business. We may not be able to complete future acquisitions or, if completed, we may not be able to successfully integrate the operations, technology platforms, management, products and services of the entities that we acquire or to realize our attempts to eliminate redundancies. The integration process may also require significant time and attention from our management that would otherwise be directed toward servicing existing business and developing new business. Failure to successfully integrate the entities we acquire into our existing operations in a timely manner may increase our operating costs significantly and could have an adverse effect on our business, financial condition and results of operations. Further, acquisitions typically involve the payment of a premium over book and market values and, therefore, some dilution of our tangible book value and net income per common share may occur in connection with any future acquisition, and the carrying amount of any goodwill that we currently maintain or may acquire may be subject to impairment in future periods.

Interest rate shifts could have an adverse effect on our business, financial condition, results of operations and growth prospects.

The majority of our banking assets are monetary in nature and subject to risk from changes in interest rates. Like most financial institutions, our earnings and cash flows depend to a great extent upon the level of our net interest income, or the difference between the interest income we earn on loans, investments and other interest-earning assets, and the interest we pay on interest-bearing liabilities, such as deposits and borrowings. Changes in interest rates can increase or decrease our net interest income, because different types of assets and liabilities may react differently, and at different times, to market interest rate changes. When interest-bearing liabilities mature or reprice more quickly, or to a greater degree than interest-earning assets in a period, an increase in interest rates could reduce net interest income. Similarly, when interest-earning assets mature or reprice more quickly, or to a greater degree than interest-bearing liabilities, falling interest rates could reduce net interest income. As of December 31, ~~2024~~2025, 4549.07% of our earning assets and 67.57% of our interest-bearing liabilities were variable rate. As of December 31, 2025, our modeled interest sensitivity is modestly asset sensitive. Should the assumptions in the model occur, we estimate our net interest income to experience a minor increase if rates rise, and a minor decrease if rates decline. However, it is likely that customer and market responses would differ from those in the model, and there is no guarantee that actual results will match modeled results.

Interest rates increased rapidly during 2022 and 2023 to levels that we have not experienced in recent history. Interest rates subsequently declined in 2024 and 2025, but have not returned to pre-2022 levels. An increase or stabilization in interest rates could have a number of effects on our business, which may include reduced loan demand, increased delinquencies and increased loan paydowns and payoffs. Conversely, a decrease in the general level of interest rates may affect us through, among other things, increased prepayments on our loan portfolio and increased competition for deposits. Accordingly, changes in the level of market interest rates affect our net yield on interest-earning assets, loan origination volume, loan portfolio and our overall results. Although our asset-liability management strategy is designed to control and mitigate exposure to the risks related to changes in market interest rates, those rates are affected by many factors outside of our control, including governmental monetary policies, inflation, deflation, recession, changes in unemployment, the money supply, international disorder and instability in domestic and foreign financial markets.

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interest-bearing liabilities were variable rate. As of December 31, 2024, our modeled interest sensitivity is modestly asset sensitive. Should the assumptions in the model occur, we estimate our net interest income to experience a minor increase if rates rise, and a minor decrease if rates decline. However, it is likely that customer and market responses would differ from those in the model, and there is no guarantee that actual results will match modeled results.

Interest rates increased rapidly during 2022 and 2023 to levels that we have not experienced in recent history. Interest rates subsequently declined in 2024, but have not returned to pre-2022 levels. An increase or stabilization in interest rates could have a number of effects on our business, which may include reduced loan demand, increased delinquencies and increased loan paydowns and payoffs. Conversely, a decrease in the general level of interest rates may affect us through, among other things, increased prepayments on our loan portfolio and increased competition for deposits. Accordingly, changes in the level of market interest rates affect our net yield on interest-earning assets, loan origination volume, loan portfolio and our overall results. Although our asset-liability management strategy is designed to control and mitigate exposure to the risks related to changes in market interest rates, those rates are affected by many factors outside of our control, including governmental monetary policies, inflation, deflation, recession, changes in unemployment, the money supply, international disorder and instability in domestic and foreign financial markets.

The markets in which we operate are susceptible to hurricanes and other natural disasters and adverse weather, which could result in a disruption of our operations and increases in credit losses.

A significant portion of our business is generated from markets that have been, and may continue to be, damaged by major hurricanes, floods, tropical storms, tornadoes and other natural disasters and adverse weather. Natural disasters can disrupt our operations, cause widespread property damage, and severely depress the local economies in which we operate. If the economies in our primary markets experience an overall decline as a result of a natural disaster, adverse weather, or other disaster, demand for loans and our other products and services could be reduced. In addition, the rates of delinquencies, foreclosures, bankruptcies and losses on loan portfolios may increase substantially, as uninsured property losses or sustained job interruption or loss may materially impair the ability of borrowers to repay their loans. Moreover, the value of real estate or other collateral that secures the loans could be materially and adversely affected by a disaster. A disaster could, therefore, result in decreased revenue and credit losses that could have an adverse effect on our business, financial condition and results of operations.

We earn income by originating residential mortgage loans for resale in the secondary mortgage market, and disruptions in that market could reduce our operating income.

Historically, we have earned income by originating mortgage loans for sale in the secondary market. A historical focus of our loan origination and sales activities has been to enter into formal commitments and informal agreements with larger banking companies and mortgage investors. Under these arrangements, we originate single family mortgages that are priced and underwritten to conform to previously agreed criteria before loan funding and are delivered to the investor shortly after funding. However, in the recent past, disruptions in the secondary market for residential mortgage loans have limited the market for, and liquidity of, most mortgage loans other than conforming Federal National Mortgage Association ("Fannie Mae") and Federal Home Loan Mortgage Corporation ("Freddie Mac") loans. The effects of these disruptions in the secondary market for residential mortgage loans may reappear.

In addition, because government-sponsored entities like Fannie Mae and Freddie Mac, who account for a substantial portion of the secondary market, are governed by federal law, any future changes in laws that significantly affect the activity of these entities could, in turn, adversely affect our operations. In September 2008, Fannie Mae and Freddie Mac were placed into conservatorship by the federal government. The federal government has for many years considered proposals to reform Fannie Mae and Freddie Mac, but the results of any such reform and their impact on us are difficult to predict. To date, no reform proposal has been enacted.

These disruptions may not only affect us but also the ability and desire of mortgage investors and other banks to purchase residential mortgage loans that we originate. As a result, we may not be able to maintain or grow the income we receive from originating and reselling residential mortgage loans, which would reduce our operating income. Additionally, we may be required to hold mortgage loans that we originated for sale, increasing our exposure to interest rate risk and the value of the residential real estate that serves as collateral for the mortgage loan.

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New lines of business, products, product enhancements or services may subject us to additional risks.

From time to time, we implement new lines of business, or offer new products and product enhancements as well as new services within our existing lines of business and we will continue to do so in the future. There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. In implementing, developing or marketing new lines of business, products, product enhancements or services, we may invest significant time and resources, although we may not assign the appropriate level of resources or expertise necessary to make these new lines of business, products, product enhancements or services successful or to realize their expected benefits. Further, initial timetables for the introduction and development of new lines of business, products, product enhancements or services may not be achieved, and price and profitability targets may not prove feasible. External factors, such as compliance with regulations, competitive alternatives and shifting market preferences, may also impact the ultimate implementation of a new line of business or offerings of new products, product enhancements or services. Furthermore, any new line of business, product, product enhancement or service could have a significant impact on the effectiveness of our system of internal controls. Failure to successfully manage these risks in the development and implementation of new lines of business or offerings of new products, product enhancements or services could have an adverse impact on our business, financial condition or results of operations.

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A lack of liquidity could impair our ability to fund operations, which could have an adverse effect on our business, financial condition and results of operations.

Liquidity is essential to our business, and we monitor our liquidity and manage our liquidity risk at the holding company and bank levels. We rely on our ability to generate deposits and effectively manage the repayment and maturity schedules of our loans and investment securities, respectively, to ensure that we have adequate liquidity to fund our operations. An inability to raise funds through deposits, borrowings, the sale of our investment securities, the sale of loans, and other sources could have a substantial negative effect on our liquidity. Our most important source of funds is deposits. Deposit balances can decrease when customers perceive alternative investments as providing a better risk/return tradeoff. If customers move money out of bank deposits and into other investments such as money market funds, we would lose a relatively low-cost source of funds, increasing our funding costs and reducing our net interest income and net income.

Other primary sources of funds consist of cash flows from operations, maturities and sales of investment securities, and proceeds from the issuance and sale of our equity and debt securities to investors. Additional liquidity is provided by the ability to borrow from the Federal Reserve Bank (“FRB”) of Atlanta and the FHLB of Dallas. We also borrow funds from third-party lenders, such as other financial institutions. Our access to funding sources in amounts adequate to finance or capitalize our activities, or on terms that are acceptable to us, could be impaired by factors that affect us directly or the financial services industry or economy in general, such as disruptions in the financial markets or negative views and expectations about the prospects for the financial services industry. Our access to funding sources could also be affected by a decrease in the level of our business activity as a result of a downturn in our primary market area or by one or more adverse regulatory actions against us.

Recent increases in interest rates have resulted in large unrealized losses in our investment securities portfolio. Selling securities with an unrealized loss would result in the realization of such losses, which would negatively impact regulatory capital, among other effects. Accordingly, investment securities with unrealized losses may have diminished utility as a source of liquidity prior to maturity.

Any decline in available funding could adversely impact our ability to originate loans, invest in securities, meet our expenses, or to fulfill obligations such as repaying our borrowings or meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity and could, in turn, have an adverse effect on our business, financial condition and results of operations. In addition, because our primary asset at the holding company level is the Bank, our liquidity at the holding company level depends primarily on our receipt of dividends from the Bank. If the Bank is unable to pay dividends to us for any reason, we may be unable to satisfy our holding company level obligations, which include funding operating expenses and debt service.

We have a concentration of deposit accounts with state and local municipalities that is a material source of our funding, and the loss of these deposits or significant fluctuations in balances held by these public bodies could force us to fund our business through more expensive and less stable sources.

As of December 31, ~~2024~~2025, $~~758~~754.23 million, or approximately 11.63%, of our total deposits consisted of deposit accounts of public bodies, such as state or local municipalities, or public funds. These types of deposits are often secured and typically fluctuate on a seasonal basis due to timing differences between tax collection and expenditures. Municipal deposits are also generally more sensitive to interest rates and may require competitive rates at placement and subsequent rollover dates, which may make it more difficult for the Bank to attract and retain public and municipal deposits. Withdrawals of deposits or significant fluctuation in a material portion of our largest public fund depositors could force us to rely more heavily on borrowings and other sources of funding for our business and withdrawal demands, adversely affecting our net interest margin and results of operations. We may also be forced, as a result of any withdrawal of deposits, to rely more heavily on other, potentially more expensive and less stable funding sources. Consequently, the occurrence of any of these events could have an adverse effect on our business, financial condition and results of operations.

We may need to raise additional capital in the future, and if we fail to maintain sufficient capital, we may not be able to maintain regulatory compliance, which could have an adverse effect on our business, financial condition and results of operations.

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~~and~~such ~~typically~~amounts ~~fluctuate~~as onthe aregulators ~~seasonal~~may ~~basis~~require ~~due~~from time to ~~timing~~time. ~~differences~~Importantly, ~~between~~regulatory ~~tax~~capital ~~collection~~requirements ~~and~~could ~~expenditures.~~increase ~~Municipal~~from ~~deposits~~current ~~are~~levels, ~~also~~which ~~generally~~could ~~more~~require ~~sensitive~~us to ~~interest~~raise ~~rates~~additional ~~and~~capital ~~may~~or ~~require~~reduce ~~competitive~~our ~~rates~~operations. atEven ~~placement~~if ~~and~~we ~~subsequent~~satisfy ~~rollover~~all ~~dates,~~applicable ~~which~~regulatory ~~may~~capital ~~make~~minimums, itour ~~more~~regulators ~~difficult~~could ~~for~~ask ~~the~~us ~~Bank~~ to ~~attract~~maintain ~~and~~capital ~~retain~~levels ~~public~~which ~~and~~are ~~municipal~~significantly ~~deposits.~~in ~~Withdrawals~~excess of ~~deposits~~those orminimums. ~~significant~~Our ~~fluctuation~~ability into araise ~~material~~additional ~~portion~~capital ofdepends ~~our~~on ~~largest~~conditions ~~public~~in ~~fund~~the ~~depositors~~capital ~~could~~markets, ~~force~~economic usconditions toand ~~rely~~a ~~more~~number ~~heavily~~of onother ~~borrowings~~factors, ~~and~~including ~~other~~investor ~~sources~~perceptions ofregarding ~~funding~~the ~~for~~banking ~~our~~industry, ~~business~~market conditions and ~~withdrawal~~governmental ~~demands~~activities, ~~adversely~~and ~~affecting~~on our ~~net~~financial ~~interest~~condition ~~margin~~ and ~~results of operations~~performance. WeAccordingly, ~~may~~we ~~also~~cannot beassure ~~forced,~~you asthat awe ~~result~~will ofbe ~~any~~able ~~withdrawal~~to ofraise ~~deposits,~~additional tocapital ~~rely~~if ~~more~~needed ~~heavily~~or on ~~other,~~terms ~~potentially~~acceptable ~~more~~to ~~expensive~~us. ~~and~~If ~~less~~we ~~stable~~fail ~~funding~~to ~~sources.~~maintain ~~Consequently~~capital to meet regulatory requirements, ~~the~~we ~~occurrence~~could ofbe ~~any~~subject ofto ~~these~~enforcement ~~events~~actions, which could have an adverse effect on our business, financial condition and results of operations.

We face significant capital and other regulatory requirements as a financial institution. We may need to raise additional capital in the future to provide us with sufficient capital resources and liquidity to meet our commitments and business needs, which could include the possibility of financing acquisitions. In addition, we, on a consolidated basis, and b1BANK, on a stand-alone basis, must meet certain regulatory capital requirements and maintain sufficient liquidity in such amounts as the regulators may require from time to time. Importantly, regulatory capital requirements could increase from current levels, which could require us to raise additional capital or reduce our operations. Even if we satisfy all applicable regulatory capital minimums, our regulators could ask us to maintain capital levels which are significantly in excess of those minimums. Our ability to raise additional capital depends on conditions in the capital markets, economic conditions and a number of other factors, including investor perceptions regarding the banking industry, market conditions and governmental activities, and on our financial condition and performance. Accordingly, we cannot assure you that we will be able to raise additional capital if needed or on terms acceptable to us. If we fail to maintain capital to meet regulatory requirements, we could be subject to enforcement actions, which could have an adverse effect on our business, financial condition and results of operations.

We utilize alternative sources of funding, which may become more expensive or may not be available in the future, which could have an adverse effect on our business, financial condition and results of operations.

Along with its core deposits, the Bank utilizes alternative funding methods, including brokered and wholesale time deposits, short- and long-term borrowings through a correspondent bank, FHLB advances, Bank Term Funding Program (“BTFP”), securities sold under agreements to repurchase and Federal Funds Purchased borrowings. As of December 31, ~~2024~~2025, brokered and wholesale deposits, including reciprocal deposits, comprised 18.18% of our total deposits, and our borrowings comprised 6061.45% of our total shareholders’ equity. As a result of the rise in interest rates during 2022 and 2023, these funding sources have become significantly more expensive than in past years. If we continue to use these alternative funding methods, our interest expense will decline. If these funding sources become more expensive or difficult to access, our net interest income may decline, our liquidity and ability to make new loans may be impaired, or we may fail to meet regulatory capital requirements, any of which could have an adverse effect on our business, financial condition and results of operations.

The fair value of our investment securities can fluctuate due to factors outside of our control.

As of December 31, ~~2024~~2025, the fair value of our investment securities portfolio was approximately $~~893~~989.52 million, which included a net unrealized loss of approximately $7942.92 million. Factors beyond our control can significantly influence the fair value of securities in our portfolio and can cause potential adverse changes to the fair value of these securities. For example, fixed-rate securities are generally subject to decreases in market value when interest rates rise. The Federal Open Market Committee raised the target federal funds rate several times in 2022 and 2023 and reduced them ~~three~~several times in 2024 and 2025. In addition to market interest rates, other factors that could cause adverse changes to the fair value of our securities include, but are not limited to, rating agency actions with respect to the securities, defaults by the issuer with respect to the underlying securities, and continued instability in the capital markets. Any of these factors, among others, could cause other-than-temporary impairments and realized or unrealized losses in future periods and declines in other comprehensive income, which could have an adverse effect on our business, results of operations, financial condition and future prospects. The process for determining whether impairment of a security is other-than-temporary often requires complex, subjective judgments about whether there has been a significant deterioration in the financial condition of the issuer, whether management has the intent or ability to hold a security for a period of time sufficient to allow for any anticipated recovery in fair value, the future financial performance and liquidity of the issuer and any collateral underlying the security, and other relevant factors.

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If we fail to maintain an effective system of disclosure controls and procedures and internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.

Ensuring that we have adequate disclosure controls and procedures, including internal controls over financial reporting, in place so we can produce accurate financial statements on a timely basis is costly and time-consuming and needs to be reevaluated frequently. As a public company, we are subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"). Our internal controls, disclosure controls and procedures are based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met, due to certain inherent limitations. Any failure or circumvention of our controls and procedures; failure to comply with regulations related to controls and procedures could have a material adverse effect on our reputation, business, financial condition and results of operations.

We have identified a material weakness in our internal control over financial reporting. Failure to remediate, improve and maintain the quality of internal control over financial reporting could result in material misstatements in our financial statements and could materially and adversely affect our ability to provide timely and accurate financial information about the Company, which could harm our reputation and share price.

In January 2025, we identified control deficiencies involving the design and operation of information technology general controls (“ITGCs”) around change management segregation of duties with respect to certain information technology (“IT”) systems that support our financial reporting process, which we have outsourced to a third party service provider. Specifically, user access controls at our third party service provider lacked sufficient segregation of duties as multiple end users had the ability to both install changes into the production environment and develop application source code via permissions inherited through group membership. Management concluded that these control deficiencies constituted a material weakness in our internal control over financial reporting, as the identified deficiencies could have had a direct or indirect impact on some of our financial reporting controls that relied on certain IT system reports. For further discussion of this material weakness, see “Item 9A, Controls and Procedures.”

A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management cannot be certain that other deficiencies or material weaknesses will not arise or be identified or that the Company will be able to correct and maintain adequate controls over financial processes and reporting in the future.

Management, with oversight from the Audit Committee, is committed to maintaining a strong internal control environment, and has taken, and will continue to take, actions necessary to remediate the material weakness. The identified material weakness in our internal control over financial reporting will not be considered remediated until the remediated controls operate for a sufficient period of time and can be tested and concluded by management to be designed and operating effectively. Our remediation efforts include working with our third party service provider to ensure that it has taken steps to address its user access controls that led to the change management segregation of duties deficiencies. Accordingly, we cannot provide any assurance that our remediation efforts will be successful or that our internal control over financial reporting will be effective as a result of these efforts. As we continue to evaluate operating effectiveness and monitor improvements to our internal control over financial reporting, we may take additional measures to address control deficiencies or modify our remediation efforts.

Unsuccessful remediation efforts could result in material misstatements in, or restatements of, the Company’s financial statements, could cause the Company to fail to meet its reporting obligations and/or could cause investors to lose confidence in the Company’s reported financial information, which would adversely affect the trading price of the Company’s common stock and harm the Company’s reputation. In addition, such failures could result in violations of applicable securities laws, an inability to meet Nasdaq listing requirements, a default in covenants under the Company’s credit facilities, and/or exposure to lawsuits, investigations or other legal proceedings.

Our financial results depend on management’s selection of accounting methods and certain assumptions and estimates.

Our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and with general practices within the financial services industry. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of certain assets and liabilities, disclosure of contingent assets and liabilities and the reported amount of related revenues and expenses. Certain accounting policies

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practices within the financial services industry. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of certain assets and liabilities, disclosure of contingent assets and liabilities and the reported amount of related revenues and expenses. Certain accounting policies inherently are based to a greater extent on estimates, assumptions and judgments of management and, as such, have a greater possibility of producing results that could be materially different than originally reported. They require management to make subjective or complex judgments, estimates or assumptions, and changes in those estimates or assumptions could have a significant impact on our consolidated financial statements. These critical accounting policies and estimates include acquired loans and allowance for credit losses and purchase accounting adjustments (other than loans). Because of the uncertainty of estimates involved in these matters, we may be required to significantly increase our allowance for credit losses or sustain credit losses that are significantly higher than the reserve provided, or otherwise incur charges that could have a material adverse effect on our business, financial condition and results of operations.

From time to time, the FASB and the SEC change the financial accounting and reporting standards or the interpretation of such standards that govern the preparation of our consolidated financial statements which could affect our critical accounting policies and critical accounting estimates and assumptions made by management. These changes are beyond our control, can be difficult to predict, and could materially impact how we report our financial condition and results of operations.

We have a continuing need for technological change, and we may not have the resources to effectively implement new technology, or we may experience operational challenges when implementing new technology.

The financial services industry is undergoing rapid technological changes with frequent introductions of new technology-driven products and services. In addition to better serving customers, the effective use of technology increases efficiency and enables financial institutions to reduce costs. Our future success will depend, at least in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands for convenience as well as to create additional efficiencies in our operations as we continue to grow and expand our products and service offerings. We may experience operational challenges as we implement these new technology enhancements or products, which could result in us not fully realizing the anticipated benefits from such new technology or require us to incur significant costs to remedy any such challenges in a timely manner.

Many of our larger competitors have substantially greater resources to invest in technological improvements. As a result, they may be able to offer additional or superior products compared to those that we will be able to provide, which would put us at a competitive disadvantage. Accordingly, we may lose customers seeking new technology-driven products and services to the extent we are unable to provide such products and services.

We rely on third parties to provide key components of our business infrastructure, and a failure of these parties to perform for any reason could disrupt our operations.

Third parties provide key components of our business infrastructure such as data processing, internet connections, network access, core application processing, statement production and account analysis. Our business depends on the successful and uninterrupted functioning of our information technology and telecommunications systems and third-party servicers. The failure of these systems, or the termination of a third-party software license or service agreement on which any of these systems is based, could interrupt our operations. Because our information technology and telecommunications systems interface with and depend on third-party systems, we could experience service denials if demand for such services exceeds capacity or such third-party systems fail or experience interruptions. Replacing vendors or addressing other issues with our third-party service providers could entail significant delay and expense. If we are unable to efficiently replace ineffective service providers, or if we experience a significant, sustained or repeated, system failure or service denial, it could compromise our ability to operate effectively, damage our reputation, result in a loss of customer business, and subject us to additional regulatory scrutiny and possible financial liability, any of which could have an adverse effect on our business, financial condition and results of operations.

We could be subject to losses, regulatory action or reputational harm due to fraudulent and negligent acts on the part of loan applicants, our employees and vendors.

In deciding whether to extend credit or enter into other transactions with clients and counterparties, and the terms of any such transaction, we may rely on information furnished by or on behalf of clients and counterparties, including financial statements, property appraisals, title information, employment and income documentation, account information and other financial information. We may also rely on representations of clients and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors. Any such misrepresentation or incorrect or incomplete information, whether fraudulent or inadvertent, may not be detected prior to funding. In addition, one or more of our employees or vendors could cause a significant operational breakdown or failure,

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completeness of that information and, with respect to financial statements, on reports of independent auditors. Any such misrepresentation or incorrect or incomplete information, whether fraudulent or inadvertent, may not be detected prior to funding. In addition, one or more of our employees or vendors could cause a significant operational breakdown or failure, either as a result of human error or where an individual purposefully sabotages or fraudulently manipulates our loan documentation, operations or systems. Whether a misrepresentation is made by the applicant or another third party, we generally bear the risk of loss associated with the misrepresentation. A loan subject to a material misrepresentation is typically unsellable or subject to repurchase if it is sold prior to detection of the misrepresentation. The sources of the misrepresentations may also be difficult to locate, and we may be unable to recover any of the monetary losses we may suffer as a result of the misrepresentations. Any of these developments could have an adverse effect on our business, financial condition and results of operations.

Unauthorized access, cyber-crime and other threats to data security may require significant resources, harm our reputation, and otherwise have an adverse effect on our business, financial condition and results of operations.

We necessarily collect, use and hold personal and financial information concerning individuals and businesses with which we have a banking relationship. Threats to data security, including unauthorized access, and cyber-attacks, rapidly emerge and change, exposing us to additional costs for protection or remediation and competing time constraints to secure our data in accordance with customer expectations and statutory and regulatory privacy and other requirements. It is difficult or impossible to defend against every risk being posed by changing technologies, as well as criminals intent on committing cyber-crime. Increasing sophistication of cyber-criminals and terrorists make keeping up with new threats difficult and could result in a breach. Controls employed by our information technology department and our other employees and vendors could prove inadequate. We could also experience a breach due to intentional or negligent conduct on the part of employees or other internal sources, software bugs or other technical malfunctions, or other causes. As a result of any of these threats, our customer accounts may become vulnerable to account takeover schemes or cyber-fraud. Our systems and those of our third party vendors may also become vulnerable to damage or disruption due to circumstances beyond our or their control, such as from catastrophic events, power anomalies or outages, natural disasters, network failures, and viruses and malware.

It is difficult or impossible to defend against every risk being posed by changing technologies, as well as criminals intent on committing cyber-crime. Controls employed by our information technology department and our other employees and vendors could prove inadequate. In the last few years, the number of cyber incidents has drastically increased. The sophistication of these cyber incidents has also increased, and is expected to increase further, as cyber-criminals utilize artificial intelligence and related emerging technologies. Increasing sophistication of cyber-criminals and terrorists make keeping up with new threats difficult and could result in a breach. We could also experience a breach due to intentional or negligent conduct on the part of employees or other internal sources, software bugs or other technical malfunctions, or other causes. As a result of any of these threats, our customer accounts may become vulnerable to account takeover schemes or cyber-fraud. Our systems and those of our third party vendors may also become vulnerable to damage or disruption due to circumstances beyond our or their control, such as from catastrophic events, power anomalies or outages, natural disasters, network failures, and viruses and malware. A breach of our security that results in unauthorized access to our data could expose us to a disruption or challenges relating to our daily operations as well as to data loss, litigation, damages, fines and penalties, significant increases in compliance costs, and reputational damage, any of which could have an adverse effect on our business, results of operations, financial condition, and future prospects.

Additionally, the cyber-resilience of banking organizations has become of increased importance to federal and state banking regulators. New or revised laws and regulations designed to address cybersecurity risks may impact our current and planned privacy, data protection and information security-related policies, the collection, use, sharing, retention and safeguarding of customer and employee information, and current or planned business activities. Compliance with current or future privacy, data protection and information security laws may result in additional compliance and technology costs, which could adversely affect our profitability.

We are subject to environmental liability risk associated with our lending activities.

In the course of our business, we may purchase real estate, or we may foreclose on and take title to real estate. As a result, we could be subject to environmental liabilities with respect to these properties. We may be held liable to a governmental entity or to third parties for property damage, personal injury, investigation and clean-up costs incurred by these parties in connection with environmental contamination or may be required to investigate or clean up hazardous or toxic substances or chemical releases at a property. The costs associated with investigation or remediation activities could be substantial. In addition, if we are the owner or former owner of a contaminated site, we may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from the property. Any significant environmental liabilities could cause an adverse effect on our business, financial condition and results of operations.

We are subject to claims and litigation pertaining to intellectual property.

Banking and other financial services companies, such as ours, rely on technology companies to provide information technology products and services necessary to support their day-to-day operations. Technology companies frequently enter into litigation based on allegations of patent infringement or other violations of intellectual property rights. In addition, patent holding companies seek to monetize patents they have purchased or otherwise obtained. Competitors of our vendors, or other individuals or companies, may from time to time claim to hold intellectual property sold to us by our vendors. Such claims may increase in the future as the financial services sector becomes more reliant on information technology vendors. The plaintiffs in these actions frequently seek injunctions and substantial damages.

Regardless of the scope or validity of such patents or other intellectual property rights, or the merits of any claims by potential or actual litigants, we may have to engage in protracted litigation. Such litigation is often expensive, time-consuming, disruptive to our operations and distracting to management. If we are found to infringe one or more patents or other intellectual property rights, we may be required to pay substantial damages or royalties to a third party. In certain cases, we may consider entering into licensing agreements for disputed intellectual property, although no assurance can be given that such licenses can be obtained on acceptable terms or that litigation will not occur. These licenses may also 35

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~~significantly~~In ~~increase~~addition, ~~our~~patent ~~operating~~holding ~~expenses.~~companies Ifseek ~~legal~~to ~~matters~~monetize ~~related~~patents tothey ~~intellectual~~have ~~property~~purchased ~~claims~~or ~~were~~otherwise ~~resolved~~obtained. ~~against~~Competitors usof our vendors, or ~~settled~~other individuals or companies, wemay ~~could~~from betime ~~required~~to time claim to ~~make~~hold ~~payments~~intellectual property sold to us by our vendors. Such claims may increase in ~~amounts~~the ~~that~~future ~~could~~as ~~have~~the anfinancial ~~adverse~~services ~~effect~~sector becomes more reliant on ~~our~~information ~~business,~~technology ~~financial~~vendors. ~~condition~~The ~~and~~plaintiffs ~~results~~in ofthese ~~operations~~actions frequently seek injunctions and substantial damages.

If the goodwill that we have recorded or may record in connection with a business acquisition becomes impaired, it could require charges to earnings.

Goodwill represents the amount by which the cost of an acquisition exceeded the fair value of net assets we acquired in connection with the purchase of another financial institution. We review goodwill for impairment at least annually, or more frequently if a triggering event occurs which indicates that the carrying value of the asset might be impaired.

Our goodwill impairment test is performed annually and was completed as of October 1, ~~2024~~2025. The annual test did not indicate any impairment as of the testing date. We estimate the fair value of the reporting unit compared to its carrying value including goodwill. If the carrying amount of the reporting unit goodwill exceeds the fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. Any such adjustments are reflected in our results of operations in the periods in which they become known. Following the testing date, management determined no triggering event had occurred through December 31, ~~2024~~2025. As of December 31, ~~2024~~2025, our goodwill totaled $121.61 million. While we have not recorded any impairment charges since we initially recorded the goodwill, there can be no assurance that our future evaluations of our existing goodwill or goodwill we may acquire in the future will not result in findings of impairment and related write-downs, which could adversely affect our business, financial condition and results of operations.

Risks Related to the Regulation of Our Industry

We operate in a highly regulated environment and the laws and regulations that govern our operations, corporate governance, executive compensation and accounting principles, or changes in them, or our failure to comply with them, could have an adverse effect on our business, financial condition and results of operations.

We are subject to extensive regulation, supervision and legal requirements that govern almost all aspects of our operations. These laws and regulations are not intended to protect our shareholders. Rather, these laws and regulations are intended to protect customers, depositors, the Deposit Insurance Fund and the overall financial stability of the United States, and not shareholders or counterparties. These laws and regulations, among other matters, prescribe minimum capital requirements, impose limitations on the business activities in which we can engage, limit the dividend or distributions that the Bank can pay to us, restrict the ability of institutions to guarantee our debt, and impose certain specific accounting requirements on us that may be more restrictive and may result in greater or earlier charges to earnings or reductions in our capital than GAAP would require. Compliance with laws and regulations can be difficult and costly, and changes to laws and regulations often impose additional compliance costs. Our failure to comply with these laws and regulations, even if the failure follows good faith effort or reflects a difference in interpretation, could subject us to restrictions on our business activities, fines and other penalties, any of which could adversely affect our results of operations, capital base and the price of our securities. Further, any new laws, rules and regulations could make compliance more difficult or expensive. All of these laws and regulations, and the supervisory framework applicable to our industry, could have a material adverse effect on our business, financial condition, and results of operations.

If we do not meet minimum capital requirements, we will be subject to prompt corrective action by federal bank regulatory agencies. Prompt corrective action can include progressively more restrictive constraints on operations, management and capital distributions. Failure to meet the capital conservation buffer will result in certain limitations on dividends, capital repurchases, and discretionary bonus payments to executive officers. We have submitted a comprehensive capital plan to our regulators for review. Even if we satisfy the objectives of our capital plan and meet minimum capital requirements, it is possible that our regulators may ask us to raise additional capital. For additional discussion regarding our capital requirements, please see “PART I – ITEM 1. Business – Supervision and Regulation – b1BANK – Capital Adequacy Requirements.”

Federal and state banking agencies periodically conduct examinations of our business, including compliance with laws and regulations, and our failure to comply with any supervisory actions to which we are or become subject as a result of 36

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~~such~~dividends, ~~examinations~~capital ~~could~~repurchases, and discretionary bonus payments to executive officers. We have ansubmitted ~~adverse~~a ~~effect~~comprehensive oncapital plan to our ~~business~~regulators for review. Even if we satisfy the objectives of our capital plan and meet minimum capital requirements, ~~financial~~it ~~condition~~is possible that our regulators may ask us to raise additional capital. For additional discussion regarding our capital requirements, ~~results~~please ofsee ~~operations~~“PART I – ITEM 1. Business – Supervision and ~~prospects~~Regulation – b1BANK – Capital Adequacy Requirements. ”

~~The Board of Governors of the~~ Federal ~~Reserve System (the "Federal Reserve"), the Federal Deposit Insurance Corporation (the "FDIC"),~~ and ~~the~~state ~~Louisiana~~banking ~~Office~~agencies ~~of Financial Institutions (the "Louisiana OFI")~~ periodically conduct examinations of ~~various aspects of~~ our business, including ~~our~~ compliance with laws and regulations~~. If~~, asand aour ~~result~~failure ~~of an examination, a federal or state banking agency were~~ to ~~determine~~comply ~~that~~with ~~our financial condition, capital resources, asset quality, earnings prospects, management, liquidity or other aspects of~~ any ofsupervisory ~~our~~actions ~~operations~~to ~~had~~which ~~become unsatisfactory, or that~~ we orare ~~the Bank were in violation of any law~~ or ~~regulation,~~become itsubject ~~may~~as ~~take~~ a ~~number~~result of different remedial actions as it deems appropriate. These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative action to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in our capital, to restrict our growth, to assess civil monetary penalties against us or the Bank or our respective officers or directors, to remove officers and directors and, if it is concluded that such ~~conditions~~examinations ~~cannot be corrected or there is an imminent risk of loss to depositors, to terminate the Bank’s deposit insurance and place it into receivership or conservatorship. Any such regulatory action~~ could have aan ~~material~~ adverse effect on our business, financial condition, results of operations, ~~financial condition~~ and prospects.

The Federal Reserve, the FDIC, and the Louisiana OFI periodically conduct examinations of various aspects of our business, including our compliance with laws and regulations. If, as a result of an examination, a federal or state banking agency were to determine that our financial condition, capital resources, asset quality, earnings prospects, management, liquidity or other aspects of any of our operations had become unsatisfactory, or that we or the Bank were in violation of any law or regulation, it may take a number of different remedial actions as it deems appropriate. These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative action to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in our capital, to restrict our growth, to assess civil monetary penalties against us or the Bank or our respective officers or directors, to remove officers and directors and, if it is concluded that such conditions cannot be corrected or there is an imminent risk of loss to depositors, to terminate the Bank’s deposit insurance and place it into receivership or conservatorship. Any such regulatory action could have a material adverse effect on our business, results of operations, financial condition and prospects.

We are subject to stringent capital requirements, which may result in lower returns on equity, require us to raise additional capital, limit growth opportunities or result in regulatory restrictions.

The Dodd-Frank Act required the federal banking agencies to establish stricter risk-based capital requirements and leverage limits to apply to banks and bank holding companies. See “PART I – ITEM 1. Business – Supervision and Regulation – Business First Bancshares, Inc. – Revised Rules on Regulatory Capital.” If we do not meet minimum capital requirements, we will be subject to prompt corrective action by federal bank regulatory agencies. Prompt corrective action can include progressively more restrictive constraints on operations, management and capital distributions.

Failure to meet the capital conservation buffer will result in certain limitations on dividends, capital repurchases, and discretionary bonus payments to executive officers. We have submitted a comprehensive capital plan to our regulators for review. Even if we satisfy the objectives of our capital plan and meet minimum capital requirements, it is possible that our regulators may ask us to raise additional capital. For additional discussion regarding our capital requirements, please see “PART I – ITEM 1. Business – Supervision and Regulation – b1BANK – Capital Adequacy Requirements.”

New activities and expansion require regulatory approvals, and failure to obtain them may restrict our growth.

From time to time, we may complement and expand our business by pursuing strategic acquisitions of financial institutions and other complementary businesses. Generally, we must receive state and federal regulatory approval before we can acquire an FDIC-insured depository institution or related business. In determining whether to approve a proposed acquisition, federal banking regulators will consider, among other factors, the effect of the acquisition on competition, our financial condition, our future prospects, and the impact of the proposal on U.S. financial stability. The regulators also review current and projected capital ratios and levels, the competence, experience and integrity of management and its record of compliance with laws and regulations, the convenience and needs of the communities to be served, including the acquiring institution’s record of compliance under the CRA and the effectiveness of the acquiring institution in combating money laundering activities. Such regulatory approvals may not be granted on terms that are acceptable to us, or at all. We may also be required to sell branches as a condition to receiving regulatory approval, which condition may not be acceptable to us or, if acceptable to us, may reduce the benefit of any acquisition.

In addition to the acquisition of existing financial institutions, as opportunities arise, we plan to continue de novo branching as a part of our organic growth strategy. De novo branching and any acquisitions carry with them numerous risks, including the inability to obtain all required regulatory approvals. The failure to obtain these regulatory approvals for potential future strategic acquisitions and de novo branches could impact our business plans and restrict our growth.

~~We face a risk of noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations.~~ 37

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~~the~~We ~~individual~~face ~~federal~~a ~~banking~~risk ~~regulators, as well as the U.S. Department~~ of ~~Justice,~~noncompliance ~~Drug Enforcement Administration~~ and ~~Internal~~enforcement ~~Revenue~~action ~~Service. We are also subject to increased scrutiny of compliance~~ with the ~~rules~~Bank ~~enforced~~Secrecy byAct ~~the Office of Foreign Assets Control. To comply with regulations, guidelines~~ and ~~examination~~other ~~procedures in this area, we have dedicated significant resources to our~~ anti-money laundering ~~program.~~statutes ~~If our policies, procedures~~ and systems are deemed deficient, we could be subject to liability, including fines and regulatory actions, which may include restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plan, including acquisitions and de novo branchingregulations. ~~Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us.~~

The BSA, the USA PATRIOT Act of 2001, and other laws and regulations require financial institutions, among other duties, to institute and maintain an effective anti-money laundering program and file suspicious activity and currency transaction reports as appropriate. The federal Financial Crimes Enforcement Network is authorized to impose significant civil money penalties for violations of those requirements and has recently engaged in coordinated enforcement efforts with the individual federal banking regulators, as well as the U.S. Department of Justice, Drug Enforcement Administration and Internal Revenue Service. We are also subject to increased scrutiny of compliance with the rules enforced by the Office of Foreign Assets Control. To comply with regulations, guidelines and examination procedures in this area, we have dedicated significant resources to our anti-money laundering program. If our policies, procedures and systems are deemed deficient, we could be subject to liability, including fines and regulatory actions, which may include restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plan, including acquisitions and de novo branching. Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us.

We are subject to numerous laws designed to protect consumers, including the CRA and fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions.

The CRA, the Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations impose nondiscriminatory lending requirements on financial institutions. The Department of Justice and other federal agencies are responsible for enforcing these laws and regulations. A successful regulatory challenge to an institution’s performance under the CRA or fair lending laws and regulations could result in a wide variety of sanctions, including damages and civil money penalties, injunctive relief, restrictions on mergers and acquisitions activity, restrictions on expansion, and restrictions on entering new business lines. Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private class action litigation. Such actions could have a material adverse effect on our business, financial condition, results of operations and prospects.

The performance of a financial institution under the CRA in meeting the credit needs of its community is a factor that must be taken into consideration when the federal banking agencies evaluate applications related to mergers and acquisitions, as well as branch opening and relocations. If we are unable to maintain at least a “satisfactory” CRA rating, our ability to complete the acquisition of another financial institution or open a new branch will be adversely impacted. If we receive an overall CRA rating of less than “satisfactory”, our regulators would not re-evaluate our rating until our next CRA examination, which may not occur for one or more years, and it is possible that a low CRA rating would not improve in the future.

Federal, state and local consumer lending laws may restrict our ability to originate certain mortgage loans, increase our risk of liability with respect to such loans, or increase the time and expense associated with the foreclosure process or prevent us from foreclosing at all.

Federal, state and local laws have been adopted that are intended to eliminate certain lending practices considered “predatory.” These laws prohibit practices such as steering borrowers away from more affordable products, selling unnecessary insurance to borrowers, repeatedly refinancing loans and making loans without a reasonable expectation that the borrowers will be able to repay the loans irrespective of the value of the underlying property. It is our policy not to make predatory loans, but these laws create the potential for liability with respect to our lending and loan investment activities. They increase our cost of doing business and, ultimately, may prevent us from making certain loans and cause us to reduce the average percentage rate or the points and fees on loans that we do make.

Additionally, consumer protection initiatives or changes in state or federal law may substantially increase the time and expense associated with the foreclosure process or prevent us from foreclosing at all. While historically the states in which we operate have had foreclosure laws that are favorable to lenders, a number of states in recent years have either considered or adopted foreclosure reform laws that make it substantially more difficult and expensive for lenders to foreclose on properties in default, and we cannot be certain that the states in which we operate will not adopt similar legislation in the future. If new state or federal laws or regulations are ultimately enacted that significantly raise the cost of foreclosure or raise outright barriers, such could have an adverse effect on our business, financial condition and results of operations.

The expanding body of federal, state and local regulations and/or the licensing of loan collections or other aspects of our business and our sales of loans to third parties may increase the cost of compliance and the risks of noncompliance and subject us to litigation. 38

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~~foreclosures~~The orexpanding ~~forcing~~body ~~the modification~~ of ~~certain~~federal, ~~mortgages.~~state Ifand ~~regulators~~local ~~impose~~regulations ~~new~~ and/or ~~more~~the ~~restrictive~~licensing ~~requirements,~~of weloan ~~may~~collections ~~incur~~or ~~additional~~other ~~significant~~aspects ~~costs~~of toour ~~comply~~business ~~with~~and ~~such~~our ~~requirements~~sales ~~which~~of ~~may~~loans ~~further adversely affect us. In addition, were we~~ to bethird ~~subject~~parties tomay ~~regulatory~~increase ~~investigation~~the orcost ~~regulatory~~of ~~action~~compliance ~~regarding our loan modification~~ and ~~foreclosure~~the ~~practices,~~risks itof ~~could~~noncompliance ~~have an adverse effect on our business, financial condition~~ and ~~results~~subject ofus ~~operations~~to litigation.

Loan collection is subject to extensive regulation by federal, state and local governmental authorities as well as to various laws and judicial and administrative decisions imposing requirements and restrictions on those activities. The volume of new or modified laws and regulations has increased in recent years and, in addition, some individual municipalities have begun to enact laws that restrict loan collection activities including delaying or temporarily preventing foreclosures or forcing the modification of certain mortgages. If regulators impose new or more restrictive requirements, we may incur additional significant costs to comply with such requirements which may further adversely affect us. In addition, were we to be subject to regulatory investigation or regulatory action regarding our loan modification and foreclosure practices, it could have an adverse effect on our business, financial condition and results of operations.

In addition, we have sold loans to third parties. In connection with these sales, we or certain of our subsidiaries or legacy companies make or have made various representations and warranties, breaches of which may result in a requirement that we repurchase the loans, or otherwise make whole or provide other remedies to counterparties. These aspects of our business or our failure to comply with applicable laws and regulations could possibly lead to: civil and criminal liability; loss of licensure; damage to our reputation in the industry; fines and penalties and litigation, including class action lawsuits; and administrative enforcement actions. Any of these outcomes could materially and adversely affect us.

Potential limitations on incentive compensation contained in proposed federal agency rulemaking may adversely affect our ability to attract and retain our highest performing employees.

In April 2011 and May 2016, the FDIC, other federal banking agencies and the SEC jointly published proposed rules designed to implement provisions of the Dodd-Frank Act prohibiting incentive compensation arrangements that would encourage inappropriate risk taking at covered financial institutions, which includes a bank or bank holding company with $1 billion or more in assets, such as the Bank and the Company. It cannot be determined at this time whether or when a final rule will be adopted and whether compliance with such a final rule will substantially affect the manner in which we structure compensation for our executives and other employees. Depending on the nature and application of the final rules, we may not be able to successfully compete with certain financial institutions and other companies that are not subject to some or all of the rules to retain and attract executives and other high performing employees. If this were to occur, relationships that we have established with our customers may be impaired, which could in turn adversely impact our business, financial condition and results of operations.

Increases in FDIC insurance premiums could adversely affect our earnings and results of operations.

The deposits of the Bank are insured by the FDIC up to legal limits and, accordingly, subject it to the payment of FDIC deposit insurance assessments. The Bank’s regular assessments are determined by the level of its assessment base and its risk classification, which is based on its regulatory capital levels and the level of supervisory concern that it poses. Moreover, the FDIC has the unilateral power to change deposit insurance assessment rates and the manner in which deposit insurance is calculated and also to charge special assessments to FDIC-insured institutions. The FDIC utilized all of these powers during the ~~financial~~2008 ~~crisis~~Global Financial Crisis for the purpose of restoring the reserve ratios of the Deposit Insurance Fund and again in response to the high-profile bank failures that occurred in 2023. Any future special assessments, increases in assessment rates or premiums, or required prepayments in FDIC insurance premiums could reduce our profitability or limit our ability to pursue certain business opportunities, which could materially and adversely affect our business, financial condition, and results of operations. ~~We experienced an increase in FDIC insurance premiums in 2023 due to increased regulatory rates.~~

The Federal Reserve may require us to commit capital resources to support the Bank.

Under longstanding Federal Reserve policy which has been codified by the Dodd-Frank Act, we are expected to act as a source of financial and managerial strength to the Bank and to commit resources to support the Bank. Under the “source of strength” doctrine, the Federal Reserve may require us to make capital injections into the Bank at times when we may not be inclined to do so and may charge us with engaging in unsafe and unsound practices for failure to commit such resources. Accordingly, we could be required to provide financial assistance to the Bank if it experiences financial distress.

Such a capital injection may be required at a time when our resources are limited and we may be required to borrow the funds or to raise additional equity capital to make the required capital injection. In the event of our bankruptcy, the bankruptcy trustee will assume any commitment by us to a federal bank regulatory agency to maintain the capital of a subsidiary bank. Moreover, bankruptcy law provides that claims based on any such commitment will be entitled to a priority of payment over the claims of our general unsecured creditors, including the holders of any note obligations. 39

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We are subject to commercial real estate lending guidance issued by the federal banking regulators that impacts our operations and capital requirements.

The federal banking regulators have issued guidance regarding concentrations in commercial real estate lending directed at institutions that have particularly high concentrations of commercial real estate loans within their lending portfolios. This guidance suggests that institutions whose commercial real estate loans exceed certain percentages of capital should implement heightened risk management practices appropriate to their concentration risk and may be required to maintain higher capital ratios than institutions with lower concentrations in commercial real estate lending. As of December 31, ~~2024~~2025, we were within the 300.0% regulatory guideline for commercial real estate, as well as the 100.0% regulatory guideline for construction, land development, and other land loans due to the timing of draws on several larger construction and development projects. We have documented procedures and systems in place to manage and monitor our commercial real estate exposures in excess of regulatory guidelines. It should be noted, however, that increases in our commercial real estate lending, particularly as we expand into metropolitan markets and make more of these loans, could subject us to additional supervisory analysis. We cannot guarantee that any risk management practices we implement will be effective to prevent losses relating to our commercial real estate portfolio. Management has implemented controls to monitor our commercial real estate lending concentrations, but we cannot predict the extent to which this guidance will impact our operations or capital requirements. Management has implemented controls to monitor our commercial real estate lending concentrations as well as the progress of commercial real estate construction projects with loans exceeding $1.0 million, but we cannot predict the extent to which this guidance will impact our operations or capital requirements.

We are subject to laws regarding the privacy, information security and protection of personal information and any violation of these laws or another incident involving personal, confidential or proprietary information of individuals could damage our reputation and otherwise adversely affect our operations and financial condition.

Our business requires the collection and retention of large volumes of customer data, including personally identifiable information in various information systems that we maintain and in those maintained by third parties with whom we contract to provide data services. We also maintain important internal company data such as personally identifiable information about our employees and information relating to our operations. We are subject to complex and evolving laws and regulations governing the privacy and protection of personal information of individuals (including customers, employees, suppliers and other third parties). For example, our business is subject to the Gramm-Leach-Bliley Act which, among other things: (i) imposes certain limitations on our ability to share nonpublic personal information about our customers with nonaffiliated third parties; (ii) requires that we provide certain disclosures to customers about our information collection, sharing and security practices and afford customers the right to “opt out” of any information sharing by us with nonaffiliated third parties (with certain exceptions); and (iii) requires that we develop, implement and maintain a written comprehensive information security program containing appropriate safeguards based on our size and complexity, the nature and scope of our activities, and the sensitivity of customer information we process, as well as plans for responding to data security breaches. Various state and federal banking regulators and states have also enacted data security breach notification requirements with varying levels of individual, consumer, regulatory or law enforcement notification in certain circumstances in the event of a security breach. Ensuring that our collection, use, transfer and storage of personal information complies with all applicable laws and regulations can increase our costs. Furthermore, we may not be able to ensure that all of our clients, suppliers, counterparties and other third parties have appropriate controls in place to protect the confidentiality of the information that they exchange with us, particularly where such information is transmitted by electronic means. If personal, confidential or proprietary information of customers or others were to be mishandled or misused (in situations where, for example, such information was erroneously provided to parties who are not permitted to have the information, or where such information was intercepted or otherwise compromised by third parties), we could be exposed to litigation or regulatory sanctions under personal information laws and regulations. Concerns regarding the effectiveness of our measures to safeguard personal information, or even the perception that such measures are inadequate, could cause us to lose customers or potential customers for our products and services and thereby reduce our revenues. Accordingly, any failure or perceived failure to comply with applicable privacy or data protection laws and regulations may subject us to inquiries, examinations and investigations that could result in requirements to modify or cease certain operations or practices or in significant liabilities, fines or penalties, and could damage our reputation and otherwise adversely affect our operations and financial condition.

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Risks Associated with our Common Stock

The market price of our common stock may be subject to substantial fluctuations, which may make it difficult for you to sell your common shares at the volume, prices and times desired.

Assuming the presence of a public market for our common stock, the market price of our common stock may be highly volatile, which may make it difficult for you to resell your common shares at the volume, prices and times desired. There are many factors that may impact the market price and trading volume of our common stock, including, without limitation:

•actual or anticipated fluctuations in our operating results, financial condition or asset quality;

•changes in economic or business conditions;

•the effects of, and changes in, trade, monetary and fiscal policies, including the interest rate policies of the Federal Reserve, or in laws or regulations affecting us;

•the public reaction to our press releases, our other public announcements and our filings with the SEC;

•changes in accounting standards, policies, guidance, interpretations or principles;

•the number of securities analysts covering us;

•publication of research reports about us, our competitors, or the financial services industry generally, or changes in, or failure to meet, securities analysts’ estimates of our financial and operating performance, or lack of research reports by industry analysts or ceasing of coverage;

•changes in market valuations or earnings of companies that investors deem comparable to us;

•the trading volume of our common stock;

•future issuances of our common stock or other securities;

•future sales of our common stock by us or our directors, executive officers or significant shareholders;

•additions or departures of key personnel;

•perceptions in the marketplace regarding our competitors and us;

•significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving our competitors or us;

•other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services; and

•other news, announcements or disclosures (whether by us or others) related to us, our competitors, our core market or the financial services industry.

In particular, the realization of any of the risks described in this “Risk Factors” section could have a material adverse effect on the market price of our common stock and cause the value of your investment to decline. The stock market and, in particular, the market for financial institution stocks have experienced substantial fluctuations in recent years, which in many cases have been unrelated to the operating performance and prospects of particular companies. In addition, significant fluctuations in the trading volume in our common stock may cause significant price variations to occur. Increased market volatility could have an adverse effect on the market price of our common stock, which could make it difficult to sell your common shares at the volume, prices and times desired.

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Future sales or the availability for sale of substantial amounts of our common stock in the public market could adversely affect the prevailing market price of our common stock and impair our ability to raise capital through future sales of equity securities.

Our articles of incorporation authorize us to issue up to 50,000,000 shares of common stock. As of February 2820, ~~2025~~2026, there are 2932,~~552~~710,~~358~~447 shares of our common stock issued and outstanding. We may issue shares of our common stock or other securities from time to time for any number of reasons, including as consideration for future acquisitions and investments and under compensation and incentive plans. If any such acquisition or investment is significant, the number of shares of our common stock, or the number or aggregate principal amount, as the case may be, of other securities that we may issue may in turn be substantial. We may also grant registration rights covering those securities in connection with any such acquisitions and investments.

We cannot predict the size of future issuances of our common stock or the effect, if any, that future issuances and sales of our common stock will have on the market price of our common stock. Sales of substantial amounts of our common stock (including shares of our common stock issued in connection with an acquisition or under a compensation or incentive plan), or the perception that such sales could occur, may adversely affect prevailing market prices for our common stock and could impair our ability to raise capital through future sales of our securities.

The rights of our common shareholders are subordinate to the rights of our outstanding subordinated notes and our outstanding preferred stock and may be subordinate to the rights of the holders of any senior indebtedness or preferred stock that we may issue in the future.

Shares of our common stock are equity interests and do not constitute indebtedness. As such, shares of our common stock rank junior to all of our outstanding indebtedness, including our outstanding subordinated notes in the amount of $100.0 million, our trust preferred securities of $5.0 million, and to other non-equity claims against us and our assets available to satisfy claims against us, including in our liquidation. Our common stock also ranks junior to the $72.0 million of Series A preferred stock that we issued during 2022.

Our board of directors also has the authority to issue in the aggregate up to 4,928,000 shares of additional preferred stock, and to determine the terms of each issue of preferred stock and any indebtedness, without shareholder approval. Accordingly, you should assume that any shares of preferred stock and any indebtedness that we may issue in the future will also be senior to our common stock. As a result, holders of our common stock bear the risk that our future issuances of debt or equity securities or our incurrence of other borrowings may negatively affect the market price of our common stock.

Our dividend policy may change without notice, and our future ability to pay dividends is subject to restrictions.

Holders of our common stock are entitled to receive only such cash dividends as our board of directors may declare out of funds legally available for the payment of dividends. Although we have declared a quarterly cash dividend on our common stock since the second quarter of 2016, we have no obligation to continue paying dividends, and we may change our dividend policy at any time without notice to our shareholders. We may not pay any dividends on our common stock if we have not paid the full dividends on our outstanding Series A preferred stock for the most recent quarterly dividend period. Our ability to pay dividends may also be limited on account of any outstanding indebtedness or preferred stock we may issue in the future, as we generally are required to make payments on any outstanding indebtedness and outstanding preferred stock before any dividends can be paid on our common stock. Finally, because our primary asset is our investment in the stock of the Bank, we are dependent upon dividends from the Bank to pay our operating expenses, satisfy our obligations and to pay dividends on our common stock, and the Bank’s ability to pay dividends on its common stock will substantially depend upon its earnings and financial condition, liquidity and capital requirements, the general economic and regulatory climate and other factors deemed relevant by its board of directors. There are numerous laws and banking regulations that limit our and the Bank’s ability to pay dividends. See “Dividend Policy” and “PART I – ITEM 1. Business – Supervision and Regulation – Business First Bancshares, Inc. – Regulatory Restrictions on Dividends.”

Our corporate governance documents, and certain corporate and banking laws applicable to us, could make a takeover more difficult.

Certain provisions of our articles of incorporation and bylaws, each as amended and restated, and corporate and federal banking laws, could make it more difficult for a third party to acquire control of our organization or conduct a

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proxy contest, even if those events were perceived by many of our shareholders as beneficial to their interests. These provisions, and the corporate and banking laws and regulations applicable to us:

•enable our board of directors to issue additional shares of authorized, but unissued capital stock;

•enable our board of directors, without shareholder approval, to issue “blank check” preferred stock with such designations, rights and preferences as may be determined from time to time by the board;

•enable our board of directors to increase the size of the board and fill the vacancies created by the increase;

•do not provide for cumulative voting in the election of directors;

•enable our board of directors to amend our bylaws without shareholder approval;

•require the vote of holders of at least 80% of the outstanding shares of our capital stock to modify the sections of our articles of incorporation addressing limitation of liability and indemnification of our officers and directors;

•require the request of holders of at least 25% of the outstanding shares of our capital stock entitled to vote at a meeting to call a special shareholders’ meeting;

•establish an advance notice procedure for director nominations and other shareholder proposals; and

•require prior regulatory application and approval of any transaction involving control of our organization.

These provisions may discourage potential acquisition proposals and could delay or prevent a change in control, including under circumstances in which our shareholders might otherwise receive a premium over the market price of our shares. See “Description of our Capital Stock” and “Supervision and Regulation.”

An investment in Business First’s common stock is not an insured deposit and is subject to risk of loss.

Your investment in our common stock is not a bank deposit and is not insured or guaranteed by the FDIC or any other government agency. Your investment is subject to investment risk, and you must be capable of affording the loss of your entire investment.

ITEM 1B. Unresolved Staff Comments.

Not applicable.

ITEM 1C. Cybersecurity.

~~Financial~~Cybersecurity ~~institutions~~Risk ~~have~~Management ~~an obligation to customers, consumers~~ and ~~stakeholders to safeguard the confidentiality, integrity and availability of nonpublic, sensitive information and the information systems used to store, transmit or process such information.~~ Strategy

Financial institutions have an obligation to customers, consumers and stakeholders to safeguard the confidentiality, integrity and availability of nonpublic, sensitive information and the information systems used to store, transmit or process such information. Consistent with industry guidelines, such as the National Institute of Standards and Technology Cybersecurity framework, and regulatory requirements, guidelines and standards, b1BANK’s ~~information security and~~ cybersecurity ~~programs~~program ~~(collectively,~~has ~~“Program(s)”) have~~ been ~~adapted~~adopted to fulfill this obligation by establishing and employing administrative, technical and physical safeguards to maintain a secure and dependable infrastructure and environment. ~~These~~This ~~Programs~~program ~~focus~~focuses on identifying and addressing threats to the company and its customers and ~~contribute~~contributes corporate decision-making guidance for ~~information security,~~ cybersecurity and risk management objectives.

~~Defending~~Effectively defending against ~~information security and~~ cybersecurity ~~(collectively, “Security”)~~ threats demands a concentrated, collaborative approach and, as such, supplementary programs and processes have been instituted into ~~governing~~cybersecurity ~~Security~~ and risk management strategies.

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~~Global~~We ~~threat~~employ ~~intelligence~~a ismultilayered ~~monitored~~approach ~~for potential Security risks or vulnerabilities. These threats are analyzed for potential impact~~ to ~~the~~assessing, ~~bank~~identifying and ~~are~~managing ~~addressed~~material inrisks ~~accordance~~from ~~with~~cybersecurity ~~Program requirements~~threats. ~~b1BANK’s~~These ~~Chief~~processes ~~Information~~include ~~Security~~continuous ~~Officer~~monitoring ~~(“CISO”) presents Security reports to the Operating Committee and Risk Committee~~ of ~~b1BANK’s~~global ~~board~~threat ~~of directors on a quarterly basis or as needed. These reports consist of significant Security events and issues~~intelligence, vulnerability ~~metrics,~~management ~~and material risks. Additional reporting representing the overall state of the Program is presented on at least an annual basis to the full board of directors~~processes, ~~which~~incident isalerting ~~responsible for overseeing Security functions~~ and ~~associated~~periodic, ~~initiatives.~~independent audits.

~~Security~~Our isrisk ~~embedded~~assessment ~~into~~methodology ~~our~~evaluates ~~culture,~~potential ~~being~~impacts ~~promoted~~to ~~through~~critical ~~security~~systems ~~awareness~~and ~~materials,~~sensitive ~~mandatory~~information ~~testing~~across ~~campaigns~~operational, financial, legal, and ~~the~~reputational ~~mandatory~~domains, ~~annual~~enabling ~~review~~us ~~and~~to ~~acknowledgement~~determine ofwhether ~~corporate~~a ~~Security~~cybersecurity ~~policies~~threat ~~and~~or ~~standards~~incident is material. Materiality determinations follow structured criteria consistent with emerging industry practices and SEC guidance.

~~Business~~Security ~~Continuity~~considerations ~~and~~are ~~Incident~~integrated ~~Response~~into ~~plans~~our ~~have~~enterprise ~~been~~risk ~~cohesively~~management ~~established~~(ERM) ~~and employed to provide frameworks for responding to and recovering from events such as natural disasters or security events~~program. ~~Our~~Cyber ~~Director~~risks ~~of Business Continuity and CISO, respectively,~~ are ~~responsible~~incorporated ~~for~~into the ~~facilitation~~Company’s ofrisk ~~these plans~~taxonomy, asrisk ~~needed~~appetite framework, and ~~testing each on at least an annual basis. The owners of these plans are responsible for identifying an appropriate group of cross-~~enterprise‑level ~~subject~~risk ~~matter experts and convening them to ensure a comprehensive response. These groups~~assessments, ~~under~~ensuring ~~the~~consistency ~~leadership~~in ofhow ~~our~~operational ~~Chief~~risks—including ~~Operations~~technology ~~Officer~~and ~~(“COO”), provide appropriate internal notifications of material~~ security ~~events~~risks—are ~~and response activities to our General Counsel~~identified, ~~Chief Risk Officer~~prioritized, ~~Chief Executive Officer,~~ and ~~board of directors or other appropriate corporate executives~~managed.

AWe ~~vendor~~maintain ~~management~~incident ~~program~~response ~~has been developed~~ and ~~employed~~business tocontinuity ~~manage~~plans ~~potential~~that ~~risks~~provide ~~for~~structured ~~third-party~~processes ~~service~~to ~~providers~~contain, ~~suppliers~~eradicate, and ~~external~~recover ~~partners~~from ~~who~~cybersecurity ~~have~~events. ~~access~~These toplans ~~our~~are ~~confidential~~tested ~~information.~~at ~~The~~least ~~effectiveness~~annually ofand ~~these~~updated ~~processes~~as isnecessary ~~verified~~to byreflect ~~independent~~emerging ~~internal~~threats, ~~and~~operational ~~external~~changes, ~~audit~~and ~~functions~~regulatory ~~or organizations~~developments.

~~Independent~~We ~~internal~~also ~~and~~manage ~~external~~cybersecurity ~~auditors~~risks ~~are~~arising ~~engaged~~from tothird‑party ~~perform~~service ~~Security~~providers ~~assessments~~through toa ~~determine~~dedicated ~~the~~vendor ~~appropriateness~~management ~~and effectiveness of the overall Program~~program. ~~Supplementary~~Service ~~self-assessments~~providers are ~~performed~~subjected ~~as needed or as required by regulatory guidelines. Assessment results are evaluated~~ to ~~determine~~comprehensive ~~the~~due‑diligence ~~scope~~reviews, ofcontract ~~risk~~controls, ~~on the security of the bank~~ and ~~are~~ongoing ~~addressed in accordance with Program requirements~~monitoring.

Our current CISO maintains appropriate security certifications and has over 20 years of experience in an information security role. The CISO manages a group dedicated to the security of the bank. This group is responsible for information technology monitoring and incident response activities, the latter covering the response coordination to cyber-attacks under the leadership and pursuant to the direction of the CISO. Our CISO reports directly to our COO and oversees, is assigned the responsibly of and is held accountable for the implementation and monitoring of the Program. Our COO serves on the Risk Committee of the Board, chaired by a board director. Governance

~~The~~Our ~~Company~~Board ~~engages~~of ~~in a continuous~~Directors, ~~focused~~through ~~risk~~its ~~monitoring~~Risk ~~process~~Committee, toprovides ~~identify~~oversight ~~the likelihood and impact~~ of ~~internal~~cybersecurity ~~and external threats to our information security systems and data and assesses the sufficiency of the controls in place to mitigate these threats to acceptable levels on a~~ risk~~-based basis~~. The ~~CISO~~Committee ~~and~~receives ~~COO~~quarterly ~~together~~reports ~~lead~~from ~~efforts~~management toregarding ~~design,~~cybersecurity implement and operate necessary controls commensurate with the materiality and criticality of identified risks and the sensitivity of the information assets and systems used throughout the bank. To dateevents, novulnerability ~~risks from cybersecurity threats~~trends, ~~including~~risk ~~as a result of any previous cybersecurity incidents~~assessments, ~~have~~and ~~materially~~program ~~affected or are reasonably likely to affect b1BANK~~maturity.

Management of cybersecurity risk is led by our Chief Information Security Officer (“CISO”), who has over 20 years of information security experience and maintains relevant industry certifications. The CISO is responsible for implementing and monitoring the cybersecurity program and reports directly to the Chief Operating Officer (“COO”). Consistent with peer disclosures, our management structure ensures that individuals with appropriate expertise lead cybersecurity functions and regularly communicate with the Board.

Our cybersecurity governance model includes cross‑functional committees and working groups responsible for coordinating risk assessments, program enhancements, incident response preparedness, and alignment with regulatory requirements.

Security awareness and training programs are mandatory for all employees, reinforcing a security‑focused culture across the enterprise.

Cybersecurity Incidents

We assess whether identified cybersecurity incidents are material under applicable regulatory standards. During the reporting period, we did not identify any cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Bank.

We continue to monitor the evolving threat landscape and adapt our controls accordingly. While immaterial cybersecurity incidents may occur from time to time, our established controls and incident response processes have effectively mitigated these events without material impact.

ITEM 2. Properties.

Our current principal offices are located at 500 Laurel Street, Baton Rouge, Louisiana. We currently operate out of our network of banking centers and loan production offices located throughout the State of Louisiana, in the Dallas/Fort Worth metroplex and Houston. Our office locations are either owned or leased. We believe that our facilities are adequately covered by insurance and that these facilities are adequate to meet our needs.

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ITEM 3. Legal Proceedings.

We are not currently subject to any material legal proceedings. We are from time to time subject to claims and litigation arising in the ordinary course of business. These claims and litigation may include, among other things, allegations of violation of banking and other applicable regulations, competition law, labor laws and consumer protection laws, as well as claims or litigation relating to intellectual property, securities, breach of contract and tort. We intend to defend ourselves vigorously against any pending or future claims and litigation.

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At this time, in the opinion of management, the likelihood is remote that the impact of such proceedings, either individually or in the aggregate, would have a material adverse effect on our combined results of operations, financial condition or cash flows. However, one or more unfavorable outcomes in any claim or litigation against us could have a material adverse effect for the period in which they are resolved. In addition, regardless of their merits or their ultimate outcomes, such matters are costly, divert management’s attention and may materially adversely affect our reputation, even if resolved in our favor.

ITEM 4. Mine Safety Disclosures.

Not applicable.

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PART II

ITEM 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.

Common Stock

Our common stock is traded on the Nasdaq Global Select Market under the symbol “BFST”. Our common shares have been traded on the Nasdaq Global Select Market since April 11, 2018. Prior to that date, there was no public trading market for our common stock. As of February 2820, ~~2025~~2026, there were 2932,~~552~~710,~~358~~447 issued and outstanding shares of our common stock held of record by approximately 1,~~040~~073 shareholders. We also had outstanding ~~179~~80,~~969~~726 options to purchase shares of our common stock issued under our equity compensation plans, as described below.

Dividends

In 2016, our board of directors made the determination to begin paying regular quarterly dividends on our common stock; however, we are not obligated to pay dividends on either our common or preferred stock. Dividends on our common stock are not payable if we have not paid the full dividends on our Series A preferred stock for the most recently completed quarterly dividend period. The payment of future dividends and our dividend policy will depend on our earnings, capital requirements and financial condition, as well as other factors that our board of directors deems relevant. For additional discussion of legal and regulatory restrictions on the payment of dividends, see “PART I - ITEM 1. Business – Supervision and Regulation – Business First Bancshares, Inc. – Regulatory Restrictions on Dividends.”

Securities Authorized for Issuance under Equity Compensation Plans

In 2006, our board of directors adopted the 2006 Stock Option Plan pursuant to which we were permitted to issue stock options to purchase up to 450,000 shares of our common stock, all of which could be issued as either incentive stock options under Section 422A of the Internal Revenue Code of 1986, as amended, or non-qualified stock options.

In January 2007, our board of directors adopted an amendment to the 2006 Stock Option Plan which increased the number of available shares under the plan from 450,000 to 1,500,000. ~~Although~~Our ~~our~~ 2006 Stock Option Plan expired on December 22, 2016 and we are no longer permitted to issue additional stock options under this plan,. asAs of December 31, ~~2024~~2025, we had no outstanding and unexercised stock options to purchase ~~up to 12,400 shares of~~ our common stock outstanding that ~~have~~had been issued to our executive officers and key personnel ~~and remain subject to the terms and conditions of the 2006 Stock Option Plan until they are exercised or forfeited~~.

On June 29, 2017, our shareholders approved the 2017 Equity Incentive Plan (the “2017 Plan”). The 2017 Plan provided for the issuance of up to 500,000 shares of our common stock pursuant to various types of equity grants and awards, including incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares and other stock-based awards to eligible participants, which includes our employees, directors and consultants. In June 2022, our shareholders approved an amendment to the 2017 Plan, which increased the number of shares of common stock issuable pursuant to equity grants and awards under the plan from 500,000 to 900,000. Additionally, the number of shares issuable under the 2017 Plan was increased by 143,908 shares as a result of the assumption of options to purchase shares of TCBI common stock that were converted into options to purchase shares of our common stock in connection with the TCBI acquisition on March 1, 2022. AsThe of2017 ~~December 31,~~Plan ~~2024,~~was wecombined ~~had~~into ~~outstanding~~the ~~and~~2024 ~~unexercised~~Equity ~~stock~~Incentive ~~options~~Plan, toas ~~purchase~~described upbelow, toon August 15,~~485~~ ~~shares of our common stock that have been issued under the 2017 Plan~~2025.

On May 23, 2024, our shareholders approved the 2024 Equity Incentive Plan (the “2024 Plan”) which reserved 645,000 shares of common stock, plus any shares available for issuance under the 2017 Plan and any underlying awards outstanding under the 2017 Plan as of the effective date of the 2024 Plan that are terminated or canceled without having been exercised or are forfeited, canceled or repurchased by the Company, for grant, award or issuance to eligible participants, all of which may be subject to incentive stock option treatment. In addition, the number of shares issuable under the 2024 Plan was increased by 207,293 shares as a result of the conversion of Oakwood stock options to Company stock options in connection with the Oakwood acquisition on October 1, 2024. In total, the 2024 Plan has reserved 852,293 shares of common stock for grant, award, or issuance to eligible participants, all of which may be subject to incentive stock option treatment. As of December 31, ~~2024~~2025, there were ~~160~~195,~~336~~792 shares of common stock issued under the 2024 Plan to our employees, directors or consultants, of which ~~152~~193,~~084~~847 shares are subject to outstanding and unexercised stock options to purchase shares of our common stock, and 676,437 shares of common stock remain available for grant. As of May 23, 2024, there will be no future awards made under the 2017 Plan.

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~~purchase~~The ~~shares~~following oftable ~~our~~summarizes ~~common~~information ~~stock,~~as ~~and~~of ~~484~~December 31,~~664~~ ~~shares~~2025 ofrelating ~~common~~to ~~stock~~the ~~remain~~number ~~available~~of ~~for~~securities ~~grant.~~to Asbe ofissued ~~May~~upon ~~23,~~the ~~2024,~~exercise ~~there~~of ~~will~~the beoutstanding nooptions ~~future~~and ~~awards~~warrants ~~made~~and ~~under~~their ~~the~~weighted-average ~~2017~~exercise ~~Plan~~price.

The following table summarizes information as of December 31, 2024 relating to the number of securities to be issued upon the exercise of the outstanding options and warrants and their weighted-average exercise price.


	Number of Securities to Be Issued Upon Exercise of Outstanding Options	Weighted-Average Exercise Price of Outstanding Options		Number of Securities Remaining Available For Future Issuance Under Equity Compensation Plans
Equity compensations plans approved by security holders	80,726	$	23.48	676,437
Equity compensation plans not approved by security holders	—	—		—
Total equity compensation plans	80,726	$	23.48	676,437

	Number of Securities to Be Issued Upon Exerciseof Outstanding Options	Weighted-AverageExercise Price ofOutstanding Options		Number of Securities Remaining Available For Future IssuanceUnder EquityCompensation Plans
Equity compensations plans approved by security holders	179,969	$	21.77	484,664
Equity compensation plans not approved by security holders	-	-		-
Total equity compensation plans	179,969	$	21.77	484,664

Recent Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities

On October 28, 2025, our board of directors approved a stock repurchase program which authorizes Business First to repurchase shares of its common stock with an aggregate purchase price of up to $30,000,000 from time to time, subject to certain limitations and conditions. The stock repurchase program became effective immediately and will continue until October 28, 2027. The stock repurchase program does not obligate Business First to repurchase any shares of its common stock.

Business First repurchased 150,504 shares for $3.7 million under the 2025 stock repurchase program between October 28, 2025, and December 31, 2025.


Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum number (or approx. dollar value) of shares yet to be purchased under the plan (in thousands)
October 1 through October 31, 2025	26,956	$	24.54	26,956	$	29,339
November 1 through November 30, 2025	123,548	24.85		123,548	26,269
December 1 through December 31, 2025	—	—		—	26,269
TOTAL	150,504	$	24.79	150,504	$	26,269

Stock Performance Graph

The following table and graph compares the cumulative total shareholder return on our common stock to the cumulative total return of the S&P 500 Index and the KBW Nasdaq Regional Bank Index (“KRX”) for the period beginning on January 1, ~~2020~~2021 through December 31, ~~2024~~2025. The following assumes $100 invested on January 1, ~~2020~~2021 in our common stock at the closing price of $2420.9336 per common share, otherwise reflects our stock and the S&P 500 and KRX values as of close of trading, and assumes the reinvestment of dividends, if any. The historical stock price performance for our common stock shown on the graph below is not necessarily indicative of future stock performance.

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Date	BFST		S&P 500		KRX
12/31/2019	$	100.00	$	100.00	$	100.00
12/31/2020	$	100.00	$	100.00	$	100.00
3/31/2020	54.55		80.40		59.62
3/31/2021	118.03		106.17		129.71
6/30/2020	62.43		96.92		68.30
6/30/2021	113.78		115.25		127.86
9/30/2020	61.42		105.57		61.30
9/30/2021	116.56		115.92		131.97
12/31/2020	83.77		118.40		91.29
12/31/2021	141.68		128.71		136.64
3/31/2021	98.87		125.71		118.41
3/31/2022	122.36		122.79		133.67
6/30/2021	95.32		136.46		116.73
6/30/2022	107.77		103.02		117.65
9/30/2021	97.64		137.25		120.48
9/30/2022	109.49		97.99		122.27
12/31/2021	118.68		152.39		124.74
12/31/2022	113.21		105.40		127.17
3/31/2022	102.50		145.38		122.03
3/31/2023	88.20		113.30		104.33
6/30/2022	90.28		121.97		107.40
6/30/2023	78.21		123.20		98.34
9/30/2022	91.72		116.02		111.62
9/30/2023	97.99		119.17		100.68
12/31/2022	94.83		124.79		116.10
12/31/2023	129.48		133.10		126.66
3/31/2023	73.89		134.14		95.25
3/31/2024	117.77		147.15		119.26
6/30/2023	65.52		145.87		89.78
6/30/2024	115.76		153.46		116.03
9/30/2023	82.09		141.09		91.92
9/30/2024	137.31		162.49		134.31
12/31/2023	108.47		157.59		115.63
12/31/2024	138.22		166.40		143.38
3/31/2024	98.66		174.23		108.87
3/31/2025	131.71		159.29		135.48
6/30/2024	96.97		181.69		105.92
6/30/2025	134.09		176.72		140.28
9/30/2024	115.02		192.38		122.61
9/30/2025	129.19		191.08		148.74
12/31/2024	115.79		197.02		130.90
12/31/2025	143.86		196.16		152.71

ITEM 6. [RESERVED]

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ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This discussion presents management’s analysis of our results of operations and financial condition over each of the last two most recent fiscal years. The discussion should be read in conjunction with our financial statements and the notes related thereto which appear elsewhere in this Report.

The following discussion and analysis is to focus on significant changes in the financial condition of Business First and its subsidiaries from December 31, ~~2023~~2024 to December 31, ~~2024~~2025 and its results of operations for the year ended December 31, ~~2024~~2025. This discussion and analysis is intended to highlight and supplement information presented elsewhere in this Report, particularly the consolidated financial statements and related notes appearing in Item 8. This discussion and analysis contains forward-looking statements that are subject to certain risks and uncertainties and are based on certain assumptions that Business First believes are reasonable but may prove to be inaccurate. Certain risks, uncertainties and other factors, including those set forth under “Forward-Looking Statements,” “Risk Factors” and elsewhere in this statement, may cause actual results to differ materially from those projected results discussed in the forward-looking statements appearing in this discussion and analysis. Business First assumes no obligation to update any of these forward-looking statements. A discussion regarding significant changes in the financial condition of Business First and its subsidiaries from December 31, ~~2022~~2023 to December 31, ~~2023~~2024 and its results of operations for the year ended December 31, ~~2023~~2024 can be found under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024, filed with the SEC on March 17, ~~2024~~2025, as amended, which is available on the SEC’s website at www.sec.gov and on the Company’s website, www.b1bank.com.

Overview

We are a registered financial holding company headquartered in Baton Rouge, Louisiana. Through our wholly-owned subsidiary, b1BANK, a Louisiana state chartered bank, we provide a broad range of financial services tailored to meet the needs of small-to-midsized businesses and professionals. Since our inception in 2006, our priority has been and continues to be creating shareholder value through the establishment of an attractive commercial banking franchise in Louisiana and across our region. We consider our primary market to include the State of Louisiana, the Dallas/Fort Worth metroplex and Houston. We currently operate out of banking centers and loan production offices in markets across Louisiana and Texas. As of December 31, ~~2024~~2025, we had total assets of $78.92 billion, total loans of $6.02 billion, total deposits of $6.57 billion, and total shareholders’ equity of $~~799~~896.59 million.

As a financial holding company operating through one reportable operating segment, community banking, we generate most of our revenues from interest income on loans, customer service and loan fees, and interest income from securities. We incur interest expense on deposits and other borrowed funds and noninterest expense, such as salaries and employee benefits and occupancy expenses. We analyze our ability to maximize income generated from interest-earning assets and expense of our liabilities through our net interest margin. Net interest margin is a ratio calculated as net interest income divided by average interest-earning assets. Net interest income is the difference between interest income on interest-earning assets, such as loans and securities, and interest expense on interest-bearing liabilities, such as deposits and borrowings, which are used to fund those assets.

Changes in the market interest rates and the interest rates we earn on interest-earning assets or pay on interest-bearing liabilities, as well as the volume and types of interest-earning assets, interest-bearing and noninterest-bearing liabilities and shareholders’ equity, are usually the largest drivers of periodic changes in net interest spread, net interest margin and net interest income. Fluctuations in market interest rates are driven by many factors, including governmental monetary policies, inflation, deflation, macroeconomic developments, changes in unemployment, the money supply, political and international conditions, and conditions in domestic and foreign financial markets. Periodic changes in the volume and types of loans in our loan portfolio are affected by, among other factors, economic and competitive conditions in our markets and across our region, as well as developments affecting the real estate, technology, financial services, insurance, transportation, manufacturing and energy sectors within our markets.

While we continue to prioritize organic growth, we also seek to capitalize upon other opportunities as they arise. Below is a summary of recent transactions that have contributed to our growth. For additional information about these transactions, See “Note 3 – Mergers and Acquisitions” in our audited consolidated financial statements included in Item 8 of this Report.

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Bank Term Funding Program (“BTFP”)

On March 12, 2023, the Federal Reserve developed the BTFP, which offered loans to banks with a term of up to one year. These loans were secured by pledging participating banks’ U.S. treasuries, agency securities, agency mortgage-backed securities, and other qualifying assets. These pledged securities were valued at par for collateral purposes. The Bank participated in the BTFP and had outstanding debt of $300.0 million at December 31, 2023. These loans bore a fixed rate of 4.38% and matured on March 22, 2024, at which time we repaid them in full.

Federal Reserve Bank’s Discount Window

On April 11, 2023, the Bank opened two new lines of credit for additional contingent liquidity, totaling $~~907~~967.73 million and $1907.07 ~~billion~~million as of December 31, ~~2024~~2025 and ~~2023~~2024, respectively, through the Federal Reserve discount window. The Bank has not yet drawn on either of the lines of credit as of the date of this report.

Sale of Leesville Banking Center

On August 31, 2023, we sold the Leesville banking center, located in Leesville, Louisiana, to Merchants & Farmers Bank & Trust Company headquartered in Leesville, Louisiana, in accordance with the Branch Purchase and Assumption Agreement dated May 11, 2023. We maintained the loan portfolio and transferred those loans to other nearby banking centers. The sale included total deposits of $16.3 million and a pre-tax gain of $945,000.

Acquisition of Waterstone

On January 31, 2024, we consummated the acquisition, through b1BANK, of Waterstone, headquartered in Katy, Texas. Waterstone offers community banks and small businesses a range of SBA lending services including planning, pre-qualification, packaging, closing and disbursements, servicing, and liquidations. Upon consummation of the acquisition, we paid $3.3 million in cash to the former owners of Waterstone.

Acquisition of Oakwood

On October 1, 2024, we consummated the merger of Oakwood, the parent bank holding company for Oakwood Bank, with and into usBusiness First, with usBusiness First continuing as the surviving corporation pursuant to the terms of the Reorganization Agreement. Immediately following the consummation of the Oakwood acquisition, Oakwood Bank merged with and into usb1BANK, with usb1BANK surviving the merger. Pursuant to the terms of the Reorganization Agreement, upon consummation of the Oakwood acquisition, we issued 3,973,134 shares of our common stock to the former shareholders of Oakwood. As of September 30, 2024, Oakwood had $863.6 million in total assets, $700.2 million in loans and $741.3 million in total deposits.

Sale of Kaplan Banking Center

On April 4, 2025, we sold the Kaplan banking center, located in Kaplan, Louisiana, to Currency Bank headquartered in Baton Rouge, Louisiana, in accordance with the Branch Purchase and Assumption Agreement dated December 12, 2024. The sale included $50.7 million in deposits, $2.3 million in loans, and $1.4 million in fixed assets, net of depreciation. The total deposit premium paid by Currency Bank as consideration was 8.00% of the total deposits assumed at closing resulting in a gain on the sale of $3.4 million.

Acquisition of Progressive

On January 1, 2026, we consummated the merger of Progressive, the parent bank holding company for Progressive Bank, with and into Business First, with Business First continuing as the surviving corporation pursuant to the terms of the Progressive Reorganization Agreement. Immediately following consummation of the Progressive acquisition, Progressive Bank merged with and into b1BANK, with b1BANK surviving the merger. Pursuant to the terms of the Progressive Reorganization Agreement, upon consummation of the Progressive acquisition, we issued 3,192,367 shares of our common stock to the former shareholders of Progressive. As of December 31, 2025, Progressive had $773.8 million in total assets, $597.2 million in loans and $684.9 million in total deposits.

Financial Highlights

The financial highlights as of and for the year ended December 31, ~~2024~~2025 include:

•Total assets of $78.92 billion, a $1357.37 ~~billion~~million, or 194.36%, increase from December 31, ~~2023~~2024.

•Total loans held for investment of $6.02 billion, a $~~988~~208.61 million, or 193.85%, increase from December 31, ~~2023~~2024.

•Total deposits of $6.57 billion, a $1187.3 ~~billion~~million, or 242.19%, increase from December 31, ~~2023~~2024.

•Net income available to common shareholders of $5982.75 million, a $522.98 million, or 938.01%, ~~decrease~~increase from the year ended December 31, ~~2023~~2024.

•Net interest income of $~~227~~273.42 million, a $1245.38 million, or 520.71%, increase from the year ended December 31, ~~2023~~2024.

•An allowance for credit losses of 0.98% of total loans held for investment, compared to 0.88% as of December 31, 2023, and a ratio of nonperforming loans to total loans held for investment of 0.42%, compared to 0.34% as of December 31, 2023.50

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•~~Earnings~~An ~~per~~allowance ~~common share~~ for ~~the~~credit ~~year~~losses ~~ended~~of ~~December 31,~~0.94% ~~2024~~ of ~~$2.27~~total ~~per~~loans ~~basic~~held ~~common~~for ~~share~~investment, ~~and~~compared $2to 0.2698% ~~per~~as ~~diluted~~of ~~common~~December 31, ~~share~~2024, ~~compared~~and toa ~~$2.62~~ratio ~~per~~of ~~basic~~nonperforming ~~common~~loans ~~share~~to ~~and~~total ~~$2.59~~loans ~~per~~held ~~diluted~~for ~~common~~investment ~~share~~of ~~for~~1.24%, ~~the~~compared ~~year~~to ~~ended~~0.42% as of December 31, ~~2023~~2024.

•~~Return~~Earnings toper common ~~shareholders~~share onfor ~~average~~the ~~assets~~year ended December 31, 2025 of 0$2.~~86%~~81 per basic common share and $2.79 per diluted common share, compared to 1$2.~~04%~~27 per basic common share and $2.26 per diluted common share for the year ended December 31, ~~2023~~2024.

•Return to common shareholders on average ~~common~~assets ~~equity~~ of 91.5405% compared to 120.3686% for the year ended December 31, ~~2023~~2024.

•~~Capital~~Return ~~Ratios~~to ~~included~~common ~~Tier~~shareholders 1on ~~Leverage,~~average ~~Common~~common ~~Equity~~equity ~~Tier 1, Tier 1 Risk-based and Total Risk-based Capital~~ of ~~9.53%, 9.44%,~~ 10.5659% ~~and 12.75%, respectively,~~ compared to ~~Tier 1 Leverage, Common Equity Tier 1, Tier 1 Risk-based and Total Risk-based Capital of~~ 9.5254%, ~~9.15%, 10.46% and 12.85%~~ for the year ended December 31, ~~2023~~2024.

•~~Book~~Capital ~~value~~Ratios ~~per~~included ~~common~~Tier ~~share~~1 Leverage, Common Equity Tier 1, Tier 1 Risk-based and Total Risk-based Capital of ~~$24~~10.6208%, an9.94%, ~~increase~~11.00% and 12.93%, respectively, compared to Tier 1 Leverage, Common Equity Tier 1, Tier 1 Risk-based and Total Risk-based Capital of 9.053%, ~~from~~9.44%, ~~$22~~10.5856% atand 12.75% for the year ended December 31, ~~2023~~2024.

~~Results~~•Book value per common share of ~~Operations~~$27.95, ~~for~~an ~~the~~increase ~~Years~~of ~~Ended~~13.5% from $24.62 at December 31, 2024 ~~and 2023~~.

Results of Operations for the Years Ended December 31, 2025 and 2024

Performance Summary

For the year ended December 31, ~~2024~~2025, net income available to common shareholders was $5982.75 million, or $2.2781 per basic common share and $2.2679 per diluted common share, compared to net income available to common shareholders of $6559.67 million, or $2.6227 per basic common share and $2.5926 per diluted common share, for the year ended December 31, ~~2023~~2024. Return to common shareholders on average assets ~~decreased~~increased to 01.8605% for the year ended December 31, ~~2024~~2025 from 10.0486% for the year ended December 31, ~~2023~~2024. Return to common shareholders on average common equity ~~decreased~~increased to 910.5459% for the year ended December 31, ~~2024~~2025, as compared to 129.3654% for the year ended December 31, ~~2023~~2024.

Net Interest Income

Our operating results depend primarily on our net interest income, calculated as the difference between interest income on interest-earning assets, such as loans and securities, and interest expense on interest-bearing liabilities, such as deposits and borrowings. Fluctuations in market interest rates impact the yield and rates paid on interest sensitive assets and liabilities. Changes in the amount and type of interest-earning assets and interest-bearing liabilities also impact net interest income. The variance driven by the changes in the amount and mix of interest-earning assets and interest-bearing liabilities is referred to as a “volume change.” Changes in yields earned on interest-earning assets and rates paid on interest-bearing deposits and other borrowed funds are referred to as a “rate change.”

To evaluate net interest income, we measure and monitor (1) yields on our loans and other interest-earning assets, (2) the costs of our deposits and other funding sources, (3) our net interest spread and (4) our net interest margin. Net interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest margin is calculated as net interest income divided by average interest-earning assets. Because noninterest-bearing sources of funds, such as noninterest-bearing deposits and shareholders’ equity also fund interest-earning assets, net interest margin includes the benefit of these noninterest-bearing sources. We calculate average assets, liabilities, and equity using a daily average, and average yield/rate utilizing an actual day count convention.

For the year ended December 31, ~~2024~~2025, net interest income totaled $~~227~~273.42 million, and net interest margin and net interest spread were 3.4869% and 2.5589%, respectively. For the year ended December 31, ~~2023~~2024, net interest income totaled $~~215~~227.14 million and net interest margin and net interest spread were 3.6248% and 2.7255%, respectively. The average yield on the loan portfolio was 76.0396%, for the year ended December 31, ~~2024~~2025, compared to 67.6503% for the year ended December 31, ~~2023~~2024, and the average yield on total interest-earning assets was 6.3528% for the year ended December 31, ~~2024~~2025, compared to 56.9535% for the year ended December 31, ~~2023~~2024. For the year ended December 31, ~~2024~~2025, overall cost of funds (which includes noninterest-bearing deposits) ~~increased~~decreased 5825 basis points compared to the year ended December 31, ~~2023~~2024.

Table of Contents

The following table presents, for the periods indicated, an analysis of net interest income by each major category of interest-earning assets and interest-bearing liabilities, the average amounts outstanding and the interest earned or paid on such amounts. The table also sets forth the average rate earned on interest-earning assets, the average rate paid on interest-bearing liabilities, and the net interest margin on average total interest-earning assets for the same periods. Interest earned on loans that are classified as nonaccrual is not recognized in income; however, the balances are reflected in average outstanding balances for the period. For the years ended December 31, ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, interest income not recognized on nonaccrual loans was not material. Any nonaccrual loans have been included in the table as loans carrying a zero yield. The average total loans reflected below is net of deferred loan fees and discounts. Acquired loans were recorded at fair value at acquisition and accrete/amortize discounts and premiums as an adjustment to yield.

	For the Years Ended December 31,
	2024						2023						2022
	2025						2024						2023
	Average Outstanding Balance		Interest Earned/Interest Paid		Average Yield/Rate		Average Outstanding Balance		Interest Earned/Interest Paid		Average Yield/Rate		Average Outstanding Balance		Interest Earned/Interest Paid		Average Yield/Rate
(Dollars in thousands)	Average Outstanding Balance		Interest Earned/Interest Paid		Average Yield/Rate		Average Outstanding Balance		Interest Earned/Interest Paid		Average Yield/Rate		Average Outstanding Balance		Interest Earned/Interest Paid		Average Yield/Rate
	(Dollars in thousands)
Assets
Interest-earning assets:
Total loans	$	56,~~327~~023,~~466~~214	$	~~374~~419,~~555~~197	76.0396	%	$	45,~~859~~327,~~637~~466	$	~~323~~374,~~327~~555	67.6503	%	$	4,~~020~~859,~~436~~637	$	~~218~~323,~~032~~327	56.4265	%
Securities	~~921~~962,~~393~~566		2529,~~259~~016		23.7401		~~898~~907,~~771~~736		2024,~~125~~502		2.2470		~~956~~898,~~232~~771		1620,~~503~~125		12.7324
Interest-bearing deposits in other banks	287,474		14,950		5.20		180,997		9,875		5.46		115,016		1,579		1.37
Securities purchased under agreements to resell	33,178		1,692		5.10		13,657		757		5.54		—		—		—
Total interest-earning assets	6,536,333		414,764		6.35		5,939,405		353,327		5.95		5,091,684		236,114		4.64
Interest-bearing deposits in other banks	383,504		15,106		3.94		287,474		14,950		5.20		180,997		9,875		5.46
Allowance for loan losses	(43,931)						(41,665)						(32,093)
Total interest-earning assets	7,402,462		465,011		6.28		6,536,333		414,764		6.35		5,939,405		353,327		5.95
Noninterest-earning assets	481,333						444,140						413,917
Allowance for loan losses	(56,902)						(43,931)						(41,665)
Total assets	$	6,973,735	$	414,764			$	6,341,880	$	353,327			$	5,473,508	$	236,114
Noninterest-earning assets	528,183						481,333						444,140
Total assets	$	7,873,743	$	465,011			$	6,973,735	$	414,764			$	6,341,880	$	353,327
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing deposits	$	45,~~427~~134,~~233~~522	$	~~165~~168,~~094~~923	3.7329	%	$	34,~~566~~427,~~216~~233	$	~~106~~165,~~908~~094	3.0073	%	$	3,~~007~~566,~~882~~216	$	24106,~~413~~908	03.8100	%
Subordinated debt	9993,~~884~~765		54,~~394~~952		5.4028		~~105~~99,~~369~~884		5,~~323~~394		5.0540		~~106~~105,~~054~~369		5,~~108~~323		45.8205
Subordinated debt - trust preferred securities	5,000		~~447~~395		87.9490		5,000		~~430~~447		8.6094		5,000		~~247~~430		48.9460
Bank Term Funding Program	~~64,754~~—		~~2,788~~—		~~4.31~~—		~~253~~64,~~706~~754		112,~~313~~788		4.4631		-253,706		-11,313		-4.46
Advances from FHLB	~~317~~400,~~462~~849		1316,~~164~~973		4.1523		~~329~~317,~~726~~462		13,~~702~~164		4.1615		~~271~~329,~~025~~726		613,~~479~~702		24.3916
First National Bankers Bank ("FNBB") Line of Credit	-		-		-		-		-		-		2,500		121		4.84
Other borrowings	23,337		605		2.59		19,464		494		2.54		21,825		522		2.39
Other borrowings	19,464		494		2.54		21,825		522		2.39		23,197		169		0.73
Total interest-bearing liabilities	5,657,473		191,848		3.39		4,933,797		187,381		3.80		4,281,842		138,198		3.23
Total interest-bearing liabilities	4,933,797		187,381		3.80		4,281,842		138,198		3.23		3,415,658		36,537		1.07
Noninterest-bearing liabilities:
Noninterest-bearing deposits	1,~~285~~296,~~445~~162						1,~~412~~285,~~979~~445						1,~~539~~412,~~938~~979
Other liabilities	5669,~~649~~698						4456,~~173~~649						3744,~~533~~173
Total noninterest-bearing liabilities	1,~~342~~365,~~094~~860						1,~~457~~342,~~152~~094						1,~~577~~457,~~471~~152
Shareholders' equity:
Common shareholders' equity	~~625~~778,~~914~~480						~~530~~625,~~956~~914						~~456~~530,~~388~~956
Preferred equity	71,930						71,930						2371,~~991~~930
Total shareholders' equity	~~697~~850,~~844~~410						~~602~~697,~~886~~844						~~480~~602,~~379~~886
Total liabilities and shareholders' equity	$	67,~~973~~873,~~735~~743					$	6,~~341~~973,~~880~~735					$	56,~~473~~341,~~508~~880
Net interest rate spread (1)					2.5589	%					2.7255	%					32.5772	%
Net interest income			$	~~227~~273,~~383~~163					$	~~215~~227,~~129~~383					$	~~199~~215,~~577~~129
Net interest margin (2)					3.4869	%					3.6248	%					3.9262	%
Overall cost of funds					32.0176	%					23.4301	%					02.7443	%

______________________________

_______________________________

(1)Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.

(2)Net interest margin is equal to net interest income divided by average interest-earning assets.

The following table presents information regarding the dollar amount of changes in interest income and interest expense for the periods indicated for each major component of interest-earning assets and interest-bearing liabilities, and distinguishes between the changes attributable to changes in volume and changes attributable to changes in interest rates.

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For purposes of this table, changes attributable to both rate and volume that cannot be segregated have been allocated to rate.

	For the Year Ended December 31, 2024 compared to the Year Ended December 31, 2023
Years Ended December 31,	2025 / 2024						2024 / 2023
	Increase (Decrease) due to change in						Increase (Decrease) due to change in
	Volume		Rate		Total
(Dollars in thousands)	Volume		Rate		Total		Volume		Rate		Total
	(Dollars in thousands)
Interest-earning assets:
Interest-earning assets:
Total loans	$	48,422	$	(3,780)	$	44,642	$	32,891	$	18,337	$	51,228
Total loans	$	32,891	$	18,337	$	51,228
Securities	1,644		2,870		4,514		(137)		4,514		4,377
Securities	620		4,514		5,134
Securities purchased under agreements to resell	996		(61)		935		757		—		757
Interest-bearing deposits in other banks	53,~~537~~783		(~~462~~3,627)		~~5,075~~156		5,537		(462)		5,075
Total increase in interest income	$	39,048	$	22,389	$	61,437
Total increase (decrease) in interest income	$	54,845	$	(4,598)	$	50,247	$	39,048	$	22,389	$	61,437
Interest-bearing liabilities:
Interest-bearing deposits	$	3223,~~108~~269	$	26(19,~~078~~440)	$	583,~~186~~829	$	32,108	$	26,078	$	58,186
Subordinated debt	(~~296~~323)		~~367~~(119)		71(442)		(296)		367		71
Subordinated debt - trust preferred securities	-—		17(52)		17(52)		—		17		17
Bank Term Funding Program	(82,~~135~~788)		~~(390)~~-		(82,~~525~~788)		(8,135)		(390)		(8,525)
Advances from FHLB	~~(509)~~3,531		~~(29)~~278		~~(538)~~3,809		(509)		(29)		(538)
Other borrowings	~~(60)~~100		3211		~~(28)~~111		(60)		32		(28)
Total increase in interest expense	23,108		26,075		49,183
Total increase (decrease) in interest expense	23,789		(19,322)		4,467		23,108		26,075		49,183
Increase (decrease) in net interest income	$	1531,~~940~~056	$	(314,~~686)~~724	$	1245,~~254~~780	$	15,940	$	(3,686)	$	12,254

	For the Year Ended December 31, 2023 compared to the Year Ended December 31, 2022
	Increase (Decrease) due to change in
	Volume		Rate		Total
	(Dollars in thousands)
Interest-earning assets:
Total loans	$	55,835	$	49,460	$	105,295
Securities	(1,287)		4,909		3,622
Interest-bearing deposits in other banks	3,600		4,696		8,296
Total increase in interest income	$	58,148	$	59,065	$	117,213
Interest-bearing liabilities:
Interest-bearing deposits	$	16,738	$	65,757	$	82,495
Subordinated debt	(35)		250		215
Subordinated debt - trust preferred securities	-		183		183
Bank Term Funding Program	11,313		-		11,313
Advances from FHLB	2,439		4,784		7,223
FNBB Line of Credit	-		(121)		(121)
Other borrowings	(33)		386		353
Total increase in interest expense	30,422		71,239		101,661
Increase (decrease) in net interest income	$	27,726	$	(12,174)	$	15,552

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Provision for Credit Losses

Our provision for credit losses is a charge to income in order to bring our allowance for credit losses to a level deemed appropriate by management. For a description of the factors taken into account by management in determining the allowance for credit losses see “—Financial Condition—Allowance for Credit Losses.” The provision for credit losses was $1011.93 million and $410.59 million for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively. The higher provision during the year ended December 31, 2024 compared to 2023 relates primarily to the acquisition of Oakwood, and, to a lesser extent, increases from organic loan growth and non-performing loans.

Noninterest Income (“Other Income”)

Our primary sources of noninterest income are service charges on deposit accounts, debit card and automated teller machine (“ATM”) fee income, income from bank-owned life insurance, fees and brokerage commissions, loan sales, swap fee income, and pass-through income from other investments (small business investment company (“SBIC”) partnerships ~~and financial technology (“Fintech”) funds). The following table presents, for the periods indicated, the major categories of noninterest income:~~

	For the Years Ended December 31,
	2024		2023		Increase (Decrease)
	(Dollars in thousands)
Noninterest income:
Service charges on deposit accounts	$	10,577	$	9,704	$	873
Debit card and ATM fee income	7,659		6,590		1,069
Bank-owned life insurance income	2,875		2,247		628
Gain on sales of loans	2,973		1,972		1,001
Gain (loss) on sales of investment securities	7		(2,565)		2,572
Fees and brokerage commissions	7,844		7,247		597
Mortgage origination income	238		285		(47)
Correspondent bank income	715		456		259
Gain on sales of other real estate owned	89		646		(557)
Loss on sales of other assets	(15)		(15)		-
Gain on sale of banking center	-		945		(945)
Gain on extinguishment of debt	-		1,458		(1,458)
Swap Fee Income	2,739		964		1,775
Pass-through income from other investments	1,208		1,946		(738)
Other	7,284		4,762		2,522
Total noninterest income	$	44,193	$	36,642	$	7,551

Noninterest income for the year ended December 31, 2024 increased $7.6 million, or 20.6%, to $44.2 million compared to noninterest income of $36.6 million for the same period in 2023. The components of noninterest income with significant fluctuations compared to the prior year period were as follows:

Service charges on deposit accounts. We earn fees from our customers for deposit-related services, and these fees constitute a significant and predictable component of our noninterest income. Service charges on deposit accounts were $10.6 million for the year ended December 31, 2024, compared to $9.7 million for the 2023, an increase of $873,000, or 9.0%.

Gain on sales of loans. We had gains on sales of loans of $3.0 million in 2024, compared to $2.0 million in 2023, an increase of $1.0 million, or 50.8%, primarily due to increased SBA loan sale activity.

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~~Gain~~and financial technology (~~loss~~“Fintech”) ~~on sales of investment securities~~funds). WeThe ~~had~~following ~~net~~table ~~gains on the sales of investment securities of $7~~presents,~~000~~ infor ~~2024, compared to net losses on~~ the ~~sales~~periods ~~of $2.6 million in 2023. During the fourth quarter of 2023~~indicated, ~~we sold $71.5 million in securities at a loss, with a weighted average book yield of 1.98% and reinvested~~ the ~~funds~~major ~~into~~categories ~~high yielding investments with an average book yield~~ of ~~5.17%,~~noninterest ~~locking~~income: ~~in higher yields and keeping consistent, the duration and overall portfolio weighted average life.~~

Gain on sales of other real estate owned. We had net gains on the sales or other real estate owned of $89,000 in 2024, compared to $646,000 in 2023, a decrease of $557,000. The majority of the gains on sale of other real estate in 2023 resulted from the sale of two properties at a total gain of $511,000.


	For the Years Ended December 31,
(Dollars in thousands)	2025		2024		Increase (Decrease)

Noninterest income:
Service charges on deposit accounts	$	10,704	$	10,577	$	127
Debit card and ATM fee income	7,701		7,659		42
Bank-owned life insurance income	3,151		2,875		276
Gain on sales of loans	3,438		2,973		465
Gain on sales of investment securities	64		7		57
Fees and brokerage commissions	8,180		7,844		336
Mortgage origination income	401		238		163

Gain on sales of other real estate owned	570		89		481
Loss on sales of other assets	(839)		(15)		(824)
Gain on sale of banking center	3,360		—		3,360
Gain on extinguishment of debt	630		—		630
Swap Fee Income	4,417		2,739		1,678
Pass-through income from other investments	905		1,208		(303)
Other	8,860		7,999		861
Total noninterest income	$	51,542	$	44,193	$	7,349

~~Gain~~Noninterest onincome ~~sale~~for ofthe ~~banking~~year ~~center.~~ended WeDecember 31, ~~sold~~2025 aincreased ~~banking~~$7.3 ~~center~~million, ~~located~~or ~~in Leesville~~16.6%, ~~Louisiana~~to ~~that~~$51.5 ~~resulted~~million incompared ato ~~gain~~noninterest income of $~~945,000~~44.2 ~~during~~million ~~2023~~for the same period in 2024. The components of noninterest income with significant fluctuations compared to the prior year period were as follows:

Gain on ~~extinguishment~~sales of ~~debt~~loans. We ~~extinguished~~had gains on sales of loans of $83.94 million in ~~subordinated~~2025, ~~debt~~compared ~~resulting~~to in$3.0 amillion ~~gain~~in on2024, ~~the~~an ~~extinguishment~~increase of ~~debt~~$465,000, ofor $115.56%, ~~million~~primarily ~~during~~due ~~2023~~to increased SBA loan sale activity.

~~Swap~~Gain ~~fee~~on ~~income~~sales of other real estate owned. We had ~~swap~~net ~~fee~~gains ~~income~~on ~~from~~the ~~back-to-back~~sales ~~interest~~or ~~rate~~other ~~swaps~~real inestate ~~the~~owned ~~amount~~ of $~~2.7~~570,000 ~~million~~ in ~~2024~~2025, compared to $~~964~~89,000 ~~during~~in ~~2023~~2024, an increase of $1481,000.8 ~~million,~~The ormajority ~~184~~of the gains on sale of other real estate was due to one property which sold at a gain of $515,000.~~1%.~~

~~Other~~Loss on sales of other assets. ~~This~~We ~~category~~had ~~includes~~net alosses ~~variety~~on the sales of other ~~income~~assets ~~producing~~of ~~activities~~$839,000 ~~including~~in ~~wire~~2025, ~~transfer~~compared ~~fees~~to $15,000 ~~insurance~~in ~~commissions~~2024, ~~and~~a ~~credit~~decrease ~~card~~of ~~income~~$824,000. ~~Other~~The ~~income~~losses ~~increased~~in ~~$2.5~~2025 ~~million,~~were ordue ~~53.0%,~~to ~~for~~ the ~~year~~disposals ~~ended~~of ~~December 31,~~assets ~~2024,~~that ~~compared~~were tono ~~the~~longer ~~same~~in ~~period~~service inor ~~2023~~retired during the year.

Gain on sale of banking center. We sold a banking center located in Kaplan, Louisiana that resulted in a gain of $3.4 million during 2025.

Gain on extinguishment of debt. We extinguished $7.0 million in subordinated debt resulting in a gain on the extinguishment of debt of $630,000 during 2025.

Swap fee income. We had swap fee income from back-to-back interest rate swaps in the amount of $4.4 million in 2025, compared to $2.7 million during 2024, an increase of $1.7 million, or 61.3%.

Other. This category includes a variety of other income producing activities, including wire transfer fees and credit card income. Other income increased $861,000, or 10.8%, for the year ended December 31, 2025, compared to the same period in 2024.

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Noninterest Expense (“Other Expense”)

Generally, noninterest expense is composed of all employee expenses and costs associated with operating our facilities, obtaining and retaining customer relationships and providing bank services. The largest component of noninterest expense is salaries and employee benefits. Noninterest expense also includes operational expenses, such as occupancy expenses, depreciation and amortization, professional and regulatory fees, including FDIC assessments, data processing expenses, and advertising and promotion expenses, among others.

The following table presents, for the periods indicated, the major categories of noninterest expense:

For the Years Ended December 31,

2024

2023

Increase (Decrease)

(Dollars in thousands)

2025

2024

Increase (Decrease)

(Dollars in thousands)

Salaries and employee benefits

115,853

103,917

11,936

Salaries and employee benefits

103,917

90,611

13,306

Non-staff expenses:

Occupancy of bank premises

1012,~~944~~876

910,~~518~~944

1,~~426~~932

Depreciation and amortization

78,~~540~~313

67,~~767~~540

773

Data processing

1115,~~957~~756

911,~~034~~957

23,~~923~~799

FDIC assessment fees

3,~~598~~883

3,~~645~~598

~~(47)~~285

Legal and professional fees

34,~~756~~566

3,~~173~~756

~~583~~810

Advertising and promotions

45,~~878~~179

4,~~628~~878

~~250~~301

Utilities and communications

23,~~883~~011

2,~~899~~883

~~(16)~~128

Ad valorem shares tax

4,~~057~~245

34,~~160~~057

~~897~~188

Directors' fees

~~1,085~~957

1,~~079~~085

6(128)

Other real estate owned expenses and write-downs

~~301~~659

~~687~~301

~~(386)~~358

Merger and conversion related expenses

12,~~236~~194

1,236

~~1,000~~958

Other

2125,~~500~~586

21,~~265~~500

~~235~~4,086

Total noninterest expense

~~177~~203,~~652~~078

~~156~~177,~~702~~652

2025,~~950~~426

56Noninterest expense for the year ended December 31, 2025 increased $25.4 million, or 14.3%, to $203.1 million compared to noninterest expense of $177.7 million for the same period in 2024. The components of noninterest expense with significant fluctuations compared to the prior year period were as follows:

Salaries and employee benefits. Salaries and employee benefits are the largest component of noninterest expense and include payroll expense, the cost of incentive compensation, benefit plans, health insurance and payroll taxes. Salaries and employee benefits were $115.9 million for the year ended December 31, 2025, an increase of $11.9 million, or 11.5%, compared to the same period in 2024. The increase was primarily due to the Oakwood acquisition in late 2024, additional hires for new positions and our merit increase cycle. As of December 31, 2025, we had 831 full-time equivalent employees, compared to 859 full-time equivalents as of December 31, 2024. Salaries and employee benefits included stock-based compensation expense of $5.2 million and $2.5 million for the years ended December 31, 2025 and 2024, respectively.

Occupancy of bank premises. Occupancy of bank premises expenses were $12.9 million and $10.9 million for the years ended December 31, 2025 and 2024, respectively, an increase of $1.9 million, or 17.7%, which is primarily due to the Oakwood acquisition.

Data processing. Data processing fees were $15.8 million and $12.0 million for the years ended December 31, 2025 and 2024, respectively, an increase of $3.8 million, or 31.8%. The increase was attributed to core conversion costs of $1.8 million, as well as the cost of utilizing two core systems until the Oakwood conversion in September 2025.

Merger and conversion related expenses. Merger and conversion related expenses for the year ended December 31, 2025 was primarily to the acquisition of Oakwood and Progressive and for the year ended December 31, 2024 expenses were primarily due to the acquisitions of Waterstone and Oakwood.

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~~Noninterest~~Other. ~~expense~~This ~~for~~category ~~the~~includes ~~year~~various ~~ended~~operating ~~December 31,~~and ~~2024~~administrative ~~increased~~expenses ~~$21~~including business development expenses (i.0e. ~~million~~travel and entertainment, ordonations ~~13.4%~~and club dues), toinsurance, ~~$177.7~~supplies ~~million~~and ~~compared~~printing, toequipment rent, and software support and maintenance. Other noninterest expense ofincreased $~~156~~4.71 million, or 19.0%, for the ~~same~~year ~~period~~ended inDecember 31, ~~2023.~~2025 ~~The~~compared ~~components~~to ofthe ~~noninterest~~same ~~expense~~period ~~with~~in ~~significant~~2024 ~~fluctuations~~primarily ~~compared~~due to ~~the~~a ~~prior~~full year ~~period~~of ~~were~~Oakwood asexpenses. ~~follows:~~

Salaries and employee benefits. Salaries and employee benefits are the largest component of noninterest expense and include payroll expense, the cost of incentive compensation, benefit plans, health insurance and payroll taxes. Salaries and employee benefits were $103.9 million for the year ended December 31, 2024, an increase of $13.3 million, or 14.7%, compared to the same period in 2023. The increase was primarily due to the acquisitions of Waterstone and Oakwood, additional hires for new positions and our merit increase cycle. As of December 31, 2024, we had 859 full-time equivalent employees, compared to 761 full-time equivalents as of December 31, 2023. Salaries and employee benefits included stock-based compensation expense of $2.5 million and $4.4 million for the years ended December 31, 2024 and 2023, respectively.

Occupancy of bank premises. Occupancy of bank premises expenses were $10.9 million and $9.5 million for the years ended December 31, 2024 and 2023, respectively, an increase of $1.4 million, or 15.0%, which is primarily due to the acquisition of Oakwood.

Data processing. Data processing fees were $12.0 million and $9.0 million for the years ended December 31, 2024 and 2023, respectively, an increase of $2.9 million, or 32.4%.

Merger and conversion related expenses. Merger and conversion related expenses for the year ended December 31, 2024 was primarily to the acquisitions of Waterstone and Oakwood in 2024.

Other. This category includes various operating and administrative expenses including business development expenses (i.e. travel and entertainment, donations and club dues), insurance, supplies and printing, equipment rent, and software support and maintenance. Other noninterest expense increased $235,000, or 1.1%, for the year ended December 31, 2024 compared to the same period in 2023.

Income Tax Expense

The amount of income tax expense is influenced by the amounts of our pre-tax income, tax-exempt income and other nondeductible expenses. Deferred tax assets and liabilities are reflected at currently enacted income tax rates in effect for the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

For the year ended December 31, ~~2024~~2025, income tax expense totaled $1722.94 million, an ~~decrease~~increase of $14.65 million, or 825.21%, compared to $1917.59 million for the same period in ~~2023~~2024. For the years ended December 31, ~~2024~~2025 and ~~2023~~2024, our effective tax rates were 2120.64% and 21.6%, respectively.

Financial Condition

Our total assets increased $1357.37 ~~billion~~million, or 194.36%, from $67.69 billion as of December 31, ~~2023~~2024 to $78.92 billion as of December 31, ~~2024~~2025, due primarily ~~from~~to ~~the~~unrealized ~~acquisition~~gains ofin ~~Oakwood~~our securities portfolio, increases in our loan portfolio, as well as our cash and cash equivalents due to our increase in deposits.

Loan Portfolio

Our primary source of income is interest on loans to individuals, professionals and small-to-midsized businesses in our markets. Our loan portfolio consists primarily of commercial loans and real estate loans secured by commercial real estate properties located in our primary market areas. Our loan portfolio represents the highest yielding component of our earning asset base.

As of December 31, ~~2024~~2025, total loans, excluding mortgage loans held for sale, were $6.02 billion, an increase of $~~988~~208.61 million or 193.85%, compared to $56.0 billion as of December 31, ~~2023~~2024. ~~The increase was primarily due to the acquisition of Oakwood.~~ Additionally, $~~717,000~~1.1 million and $~~835~~717,000 in mortgage loans were classified as loans held for sale as of December 31, ~~2024~~2025 and ~~2023~~2024, respectively.

57Total loans held for investment as a percentage of deposits were 92.4% and 91.9% as of December 31, 2025 and 2024, respectively. Total loans held for investment as a percentage of assets were 75.3% and 76.1% as of December 31, 2025 and 2024, respectively.

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Total loans held for investment as a percentage of deposits were 91.9% and 95.1% as of December 31, 2024 and 2023, respectively. Total loans held for investment as a percentage of assets were 76.1% and 75.8% as of December 31, 2024 and 2023, respectively.

The following table summarizes our loan portfolio by type of loan as of the dates indicated:

	As of December 31, 2024				As of December 31, 2023
	As of December 31, 2025				As of December 31, 2024
	Amount		Percent		Amount		Percent
(Dollars in thousands)	Amount		Percent		Amount		Percent
	(Dollars in thousands)
Real Estate Loans:
Commercial
Retail and Wholesale	$	580,974	9.7	%	$	573,725	11.5	%
Real estate rental and leasing	$	1,456,484	23.5	%	$	1,565,311	26.2	%
Hospitality	310,576		5.2		249,027		5.0
Accommodation and food services	247,951		4.0		300,039		5.0
Healthcare	218,152		3.6		201,098		4.0
Other services (except public administration)	160,548		2.6		188,811		3.2
Services	170,747		2.9		155,283		3.1
Health care and social assistance	121,850		2.0		128,958		2.2
Energy	98,779		1.7		100,523		2.0
Finance and insurance	84,592		1.4		65,284		1.1
Other	1,103,995		18.5		938,272		18.8
Construction	63,931		1.0		63,596		1.1
Total Commercial	2,483,223		41.6		2,217,928		44.4
Manufacturing	73,369		1.2		55,288		0.9
Construction	670,502		11.2		669,798		13.4
Agriculture, forestry, fishing and hunting	42,730		0.7		39,045		0.6
Residential	884,533		14.8		682,394		13.7
Transportation and warehousing	22,070		0.4		23,305		0.4
Total Real Estate Loans	4,038,258		67.6		3,570,120		71.5
Other	337,754		5.4		53,586		0.9
Commercial	1,868,675		31.2		1,358,838		27.2
Total Commercial	2,611,279		42.2		2,483,223		41.6
Consumer and Other	74,466		1.2		63,827		1.3
Construction	639,069		10.3		670,502		11.2
Total loans held for investment	$	5,981,399	100.0	%	$	4,992,785	100.0	%
Residential	944,065		15.3		884,533		14.8
Total Real Estate Loans	4,194,413		67.8		4,038,258		67.6
Commercial	1,921,833		31.0		1,868,675		31.2
Consumer and Other	73,244		1.2		74,466		1.2
Total loans held for investment	$	6,189,490	100.0	%	$	5,981,399	100.0	%

As of December 31, 2024

As of December 31, 2023

As of December 31, 2025

As of December 31, 2024

Amount

Percent

Amount

Percent

(Dollars in thousands)

Amount

Percent

Amount

Percent

(Dollars in thousands)

Commercial real estate:

Dallas Region

~~778~~720,~~174~~436

3127.36

~~618~~778,~~608~~174

2731.93

New Orleans Region

~~466~~505,~~661~~447

1819.83

~~439~~466,~~087~~661

1918.8

North Louisiana Region

~~440~~454,~~238~~909

17.74

~~418~~440,~~510~~238

1817.97

Capitol Region

~~246~~323,~~321~~420

912.94

~~213~~246,~~492~~321

9.69

Houston Region

~~234~~240,~~959~~422

9.52

~~243~~234,~~097~~959

119.05

Southwest Louisiana Region

~~234~~280,~~875~~889

910.58

~~201~~234,~~538~~875

9.15

Bayou Region

8185,~~995~~756

3.3

8381,~~596~~995

3.83

Total commerical real estate loans

2,~~483~~611,~~223~~279

100.0

2,~~217~~483,~~928~~223

100.0

Real Estate: Commercial loans are extensions of credit secured by owner-occupied and non-owner-occupied collateral. Repayment is generally dependent on the successful operations of the property. General economic conditions may impact the performance of these types of loans, including fluctuations in the value of real estate, vacancy rates, and unemployment trends. Real estate commercial loans also include farmland loans that can be, or are, used for agricultural purposes. These loans are usually repaid through refinancing, cash flow from the borrower’s ongoing operations, development of the property, or sale of the property.

Real Estate: Commercial loans increased $~~265~~128.31 million, or 125.02%, to $2.56 billion as of December 31, ~~2024~~2025, from $2.25 billion as of December 31, ~~2023~~2024.

Real Estate: Construction loans include loans to small-to-midsized businesses to construct owner-occupied properties, loans to developers of commercial real estate investment properties and residential developments and, to a lesser extent, loans to individual clients for construction of single-family homes in our market areas. Risks associated with these

5857

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~~extent,~~ loans ~~to individual clients for construction of single-family homes in our market areas. Risks associated with these loans~~ include fluctuations in the value of real estate, project completion risk and changes in market trends. We are also exposed to risk based on the ability of the construction loan borrower to finance the loan or sell the property upon completion of the project, which may be affected by changes in secondary market terms and criteria for permanent financing since the time we funded the loan.

Real Estate: Construction loans ~~increased~~decreased $~~704~~31.4 million,~~000,~~ or 04.17%, to $~~670~~639.51 million as of December 31, ~~2024~~2025, from $~~669~~670.85 million as of December 31, ~~2023~~2024.

Real Estate: Residential loans include first and second lien 1-4 family mortgage loans, as well as home equity lines of credit, in each case primarily on owner-occupied primary residences. The Company is exposed to risk based on fluctuations in the value of the real estate collateral securing the loan, as well as changes in the borrower’s financial condition, which could be affected by numerous factors, including divorce, job loss, illness, or other personal hardship. Real estate residential loans also include multi-family residential loans originated to provide permanent financing for multi-family residential income producing properties. Repayment of these loans primarily relies on successful rental and management of the property.

Real Estate: Residential loans increased $~~202~~59.15 million, or ~~29.~~6.7%, to $~~884~~944.51 million as of December 31, ~~2024~~2025, from $~~682~~884.45 million as of December 31, ~~2023~~2024.

Commercial loans include general commercial and industrial, or C&I, loans, including commercial lines of credit, working capital loans, term loans, equipment financing, asset acquisition, expansion, and development loans, borrowing base loans, letters of credit and other loan products, primarily in the Company’s target markets that are underwritten based on the borrower’s ability to service the debt from income. Commercial loan risk is derived from the expectation that such loans generally are serviced principally from the operations of the business, and those operations may not be successful. Any interruption or discontinuance of operating cash flows from the business, which may be influenced by events not under the control of the borrower such as economic events and changes in governmental regulations, could materially affect the ability of the borrower to repay the loan.

Commercial loans increased $~~509~~53.82 million, or 372.58%, toand remained at $1.9 billion as of December 31, ~~2024,~~2025 ~~from~~and $12024.~~4 billion as of December 31, 2023.~~

Consumer and other loans include a variety of loans to individuals for personal, family and household purposes, including secured and unsecured installment and term loans. The risk is based on changes in the borrower’s financial condition, which could be affected by numerous factors, including divorce, job loss, illness or other personal hardship, and fluctuations in the value of the real estate or personal property securing the consumer loan, if any.

Consumer and other loans ~~increased~~decreased $101.62 million, or 161.76%, to $7473.52 million as of December 31, ~~2024~~2025, from $6374.85 million as of December 31, ~~2023~~2024.

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The contractual maturity ranges of loans in our loan portfolio and the amount of such loans with fixed and floating interest rates in each maturity range as of date indicated are summarized in the following tables:

As of December 31, 2024

As of December 31, 2025

One Year or Less

One Through FiveYears

Five Through Fifteen Years

After Fifteen Years

Total

(Dollars in thousands)

One Year or Less

One Through FiveYears

Five Through Fifteen Years

After Fifteen Years

Total

(Dollars in thousands)

Real Estate Loans:

Commercial

~~374~~495,~~129~~680

1,~~513~~565,~~009~~812

~~513~~486,~~999~~341

8263,~~086~~446

2,~~483~~611,~~223~~279

Construction

~~320~~245,~~732~~439

~~286~~314,~~326~~697

4759,~~195~~104

1619,~~249~~829

~~670~~639,~~502~~069

Residential

~~143~~196,~~804~~345

~~514~~447,~~596~~791

~~151~~160,~~262~~912

74139,~~871~~017

~~884~~944,~~533~~065

Total Real Estate Loans

~~838~~937,~~665~~464

2,~~313~~328,~~931~~300

~~712~~706,~~456~~357

~~173~~222,~~206~~292

4,~~038~~194,~~258~~413

Commercial

~~919~~873,~~905~~248

~~672~~842,~~153~~456

~~271~~200,~~632~~039

46,~~985~~090

1,~~868~~921,~~675~~833

Consumer and Other

4449,~~359~~561

2620,~~830~~483

3,~~123~~053

~~154~~147

7473,~~466~~244

Total loans held for investment

1,~~802~~860,~~929~~273

3,~~012~~191,~~914~~239

~~987~~909,~~211~~449

~~178~~228,~~345~~529

56,~~981~~189,~~399~~490

Fixed rate loans:

Real Estate Loans:

Commercial

~~134~~283,~~809~~116

1999,~~141,096~~397

~~349~~248,~~949~~466

1211,~~854~~145

1,~~638~~542,~~708~~124

Construction

6655,~~241~~596

~~132~~56,~~702~~813

1310,~~892~~423

7,~~454~~985

~~220~~130,~~289~~817

Residential

72125,~~174~~470

~~422~~337,~~430~~489

96107,~~826~~238

2119,~~189~~724

~~612~~589,~~619~~921

Total Real Estate Loans

~~273~~464,~~224~~182

1,~~696~~393,~~228~~699

~~460~~366,~~667~~127

4138,~~497~~854

2,~~471~~262,~~616~~862

Commercial

~~179~~243,~~506~~915

~~351~~322,~~913~~419

~~152~~87,~~841~~980

-499

~~684~~654,~~260~~813

Consumer and Other

3539,~~067~~393

2115,~~062~~770

2,~~585~~657

~~154~~147

5857,~~868~~967

Total fixed rate loans

~~487~~747,~~797~~490

21,~~069~~731,~~203~~888

~~616~~456,~~093~~764

4139,~~651~~500

32,~~214~~975,~~744~~642

Floating rate loans:

Real Estate Loans:

Commercial

~~239~~212,~~320~~564

~~371~~566,~~913~~415

~~164~~237,~~050~~875

6952,~~232~~301

~~844~~1,~~515~~069,155

Construction

~~254~~189,~~491~~843

~~153~~257,~~624~~884

3348,~~303~~681

811,~~795~~844

~~450~~508,~~213~~252

Residential

7170,~~630~~875

92110,~~166~~302

5453,~~436~~674

53119,~~682~~293

~~271~~354,~~914~~144

Total Real Estate Loans

~~565~~473,~~441~~282

~~617~~934,~~703~~601

~~251~~340,~~789~~230

~~131~~183,~~709~~438

1,~~566~~931,~~642~~551

Commercial

~~740~~629,~~399~~333

~~320~~520,~~240~~037

~~118~~112,~~791~~059

45,~~985~~591

1,~~184~~267,~~415~~020

Consumer and Other

910,~~292~~168

54,~~768~~713

~~538~~396

15,~~598~~277

Total floating rate loans

1,~~315~~112,~~132~~783

~~943~~1,~~711~~459,351

~~371~~452,~~118~~685

~~136~~189,~~694~~029

23,~~766~~213,~~655~~848

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As of December 31, 2023

As of December 31, 2024

One Year or Less

One Through FiveYears

Five Through Fifteen Years

After Fifteen Years

Total

(Dollars in thousands)

One Year or Less

One Through FiveYears

Five Through Fifteen Years

After Fifteen Years

Total

(Dollars in thousands)

Real Estate Loans:

Commercial

~~251~~374,~~365~~129

1,~~256~~513,~~655~~009

~~620~~513,~~029~~999

8982,~~879~~086

2,~~217~~483,~~928~~223

Construction

~~325~~320,~~883~~732

~~278~~286,~~039~~326

4547,~~910~~195

1916,~~966~~249

~~669~~670,~~798~~502

Residential

79143,~~357~~804

~~401~~514,~~852~~596

~~137~~151,~~283~~262

6374,~~902~~871

~~682~~884,~~394~~533

Total Real Estate Loans

~~656~~838,~~605~~665

12,~~936~~313,~~546~~931

~~803~~712,~~222~~456

173,~~747~~206

34,~~570~~038,~~120~~258

Commercial

~~520~~919,~~058~~905

~~594~~672,~~274~~153

~~243~~271,~~744~~632

~~762~~4,985

1,~~358~~868,~~838~~675

Consumer and Other

3544,~~971~~359

2326,~~520~~830

43,~~134~~123

~~202~~154

6374,~~827~~466

Total loans held for investment

1,~~212~~802,~~634~~929

23,~~554~~012,~~340~~914

1987,~~051,100~~211

~~174~~178,~~711~~345

45,~~992~~981,~~785~~399

Fixed rate loans:

Real Estate Loans:

Commercial

~~156~~134,~~227~~809

1,~~067~~141,~~124~~096

~~450~~349,~~884~~949

1712,~~470~~854

1,~~691~~638,~~705~~708

Construction

9666,~~020~~241

~~187~~132,~~970~~702

1613,~~388~~892

137,~~866~~454

~~314~~220,~~244~~289

Residential

4972,~~434~~174

~~344~~422,~~549~~430

8596,~~731~~826

1421,~~952~~189

~~494~~612,~~666~~619

Total Real Estate Loans

~~301~~273,~~681~~224

1,~~599~~696,~~643~~228

~~553~~460,~~003~~667

4641,~~288~~497

2,~~500~~471,~~615~~616

Commercial

~~134~~179,~~242~~506

~~331~~351,~~029~~913

~~147~~152,~~388~~841

-—

~~612~~684,~~659~~260

Consumer and Other

2635,~~867~~067

1721,~~373~~062

32,~~260~~585

~~159~~154

4758,~~659~~868

Total fixed rate loans

~~462~~487,~~790~~797

12,~~948~~069,~~045~~203

~~703~~616,~~651~~093

4641,~~447~~651

3,~~160~~214,~~933~~744

Floating rate loans:

Real Estate Loans:

Commercial

95239,~~138~~320

~~189~~371,~~531~~913

~~169~~164,~~145~~050

7269,~~409~~232

~~526~~844,~~223~~515

Construction

~~229~~254,~~863~~491

90153,~~069~~624

2933,~~522~~303

68,~~100~~795

~~355~~450,~~554~~213

Residential

2971,~~923~~630

5792,~~303~~166

5154,~~552~~436

4853,~~950~~682

~~187~~271,~~728~~914

Total Real Estate Loans

~~354~~565,~~924~~441

~~336~~617,~~903~~703

~~250~~251,~~219~~789

~~127~~131,~~459~~709

1,~~069~~566,~~505~~642

Commercial

~~385~~740,~~816~~399

~~263~~320,~~245~~240

96118,~~356~~791

~~762~~4,985

~~746~~1,~~179~~184,415

Consumer and Other

9,~~104~~292

65,~~147~~768

~~874~~538

43—

1615,~~168~~598

Total floating rate loans

~~749~~1,~~844~~315,132

~~606~~943,~~295~~711

~~347~~371,~~449~~118

~~128~~136,~~264~~694

12,~~831~~766,~~852~~655

Nonperforming Assets

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is generally reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due, or interest may be recognized on a cash basis as long as the remaining book balance of the loan is deemed collectible. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

We have several procedures in place to assist in maintaining the overall quality of our loan portfolio. We have established underwriting guidelines to be followed by our bankers, and we also monitor our delinquency levels for any negative or adverse trends. There can be no assurance, however, that our loan portfolio will not become subject to increasing pressures from deteriorating borrower credit due to general economic conditions.

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We believe our conservative lending approach and focused management of nonperforming assets has resulted in sound asset quality and the timely resolution of problem assets. We had $3089.57 million and $1830.85 million in nonperforming assets as of December 31, ~~2024~~2025 and ~~2023~~2024, respectively. We had $2576.07 million in nonperforming loans as of December 31, ~~2024~~2025 compared to $1725.10 million as of December 31, ~~2023~~2024. The increase in nonperforming assets from December 31, ~~2023~~2024 to December 31, ~~2024~~2025 is primarily due to ~~two~~one lending ~~relationships~~relationship secured by residential real estate, ~~one~~four secured by commercial and construction real estate, four commercial loans, and ~~one~~two ~~commercial~~other ~~loan~~real ~~that~~estate isowned ~~unsecured~~properties.

The following tables present information regarding nonperforming loans at the dates indicated:

	As of December 31,
	2024			2023			2022
(Dollars in thousands)	2025			2024			2023
	(Dollars in thousands)
Nonaccrual loans	$	74,471		$	24,147		$	16,943
Nonaccrual loans	$	24,147		$	16,943		$	11,054
Accruing loans 90 or more days past due	2,215			860			127
Accruing loans 90 or more days past due	860			127			335
Total nonperforming loans	76,686			25,007			17,070
Total nonperforming loans	25,007			17,070			11,389
Other nonperforming assets	—			—			—
Other nonperforming assets	-			-			62
Other real estate owned:
Commercial real estate, construction, land and land development	512,~~197~~192			15,~~326~~197			1,~~199~~326
Residential real estate	~~332~~821			~~359~~332			~~173~~359
Total other real estate owned	513,~~529~~013			15,~~685~~529			1,~~372~~685
Total nonperforming assets	$	3089,~~536~~699		$	1830,~~755~~536		$	1218,~~823~~755
Ratio of nonperforming loans to total loans held for investment	01.4224		%	0.3442		%	0.2534		%
Ratio of nonperforming assets to total assets	01.3909			0.2839			0.2128
Ratio of nonaccrual loans to total loans held for investment	01.4020			0.3440			0.2434

As of December 31,

2024

2023

2022

(Dollars in thousands)

2025

2024

2023

(Dollars in thousands)

Nonaccrual loans by category:

Real Estate Loans:

Commercial

336,~~621~~252

3,~~280~~621

23,~~644~~280

Construction

54,~~251~~539

35,~~543~~251

~~992~~3,543

Residential

710,~~078~~144

7,~~352~~078

47,~~080~~352

Total Real Estate Loans

1550,~~950~~935

1415,~~175~~950

714,~~716~~175

Commercial

823,~~039~~370

28,~~395~~039

32,~~150~~395

Consumer and Other

~~158~~166

~~373~~158

~~188~~373

Total

2474,~~147~~471

1624,~~943~~147

1116,~~054~~943

Potential Problem Loans

From a credit risk standpoint, we classify loans in one of four categories: pass, special mention, substandard or doubtful. Loans classified as loss are charged-off. The classifications of loans reflect a judgment about the risks of default and loss associated with the loan. Ratings are adjusted to reflect the degree of risk and loss that is believed to be inherent in each credit. Our methodology is structured so that specific allocations are increased in accordance with deterioration in credit quality (and a corresponding increase in risk of loss) or decreased in accordance with improvement in credit quality (and a corresponding decrease in risk of loss).

Credits rated special mention show clear signs of financial weaknesses or deterioration in credit worthiness; however, such concerns are not so pronounced that we generally expect to experience significant loss within the short-term. Such credits typically maintain the ability to perform within standard credit terms and credit exposure is not as prominent as credits with a lower rating.

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Credits rated substandard are those in which the normal repayment of principal and interest may be, or has been, jeopardized by reason of adverse trends or developments of a financial, managerial, economic or political nature, or important weaknesses which exist in collateral. A protracted workout on these credits is a distinct possibility. Prompt corrective action is therefore required to reduce exposure and to assure that adequate remedial measures are taken by the borrower. Credit exposure becomes more likely in such credits and a serious evaluation of the secondary support to the credit is performed.

Credits rated doubtful have all the weaknesses inherent in those rated substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

The following tables summarize our internal ratings of loans held for investment as of the dates indicated. See Note 7 of the consolidated financial statements for the presentation of loans in their credit quality categories that is in compliance with the CECL standard.

As of December 31, 2024

As of December 31, 2025

Pass

Special Mention

Substandard

Doubtful

Total

(Dollars in thousands)

Pass

Special Mention

Substandard

Doubtful

Total

(Dollars in thousands)

Real Estate Loans:

Commercial

2,~~383~~472,~~439~~549

7574,~~385~~116

2364,~~548~~142

~~851~~472

2,~~483~~611,~~223~~279

Construction

~~658~~621,~~364~~673

311,~~436~~229

86,~~702~~167

-—

~~670~~639,~~502~~069

Residential

~~871~~906,~~634~~308

324,~~163~~770

912,~~485~~955

~~251~~32

~~884~~944,~~533~~065

Total Real Estate Loans

34,~~913~~000,~~437~~530

81110,~~984~~115

4183,~~735~~264

~~1,102~~504

4,~~038~~194,~~258~~413

Commercial

1,~~828~~834,~~485~~911

2539,~~979~~149

1347,~~911~~650

~~300~~123

1,~~868~~921,~~675~~833

Consumer and Other

7472,~~097~~706

-—

~~369~~536

-2

7473,~~466~~244

Total

5,~~816~~908,~~019~~147

~~107~~149,~~963~~264

56131,~~015~~450

~~1,402~~629

56,~~981~~189,~~399~~490

As of December 31, 2023

As of December 31, 2024

Pass

Special Mention

Substandard

Doubtful

Total

(Dollars in thousands)

Pass

Special Mention

Substandard

Doubtful

Total

(Dollars in thousands)

Real Estate Loans:

Commercial

2,~~188~~383,~~840~~439

1875,~~658~~385

923,~~163~~548

~~1,267~~851

2,~~217~~483,~~928~~223

Construction

~~661~~658,~~796~~364

43,~~087~~436

38,~~570~~702

~~345~~—

~~669~~670,~~798~~502

Residential

~~669~~871,~~391~~634

3,~~161~~163

9,~~353~~485

~~489~~251

~~682~~884,~~394~~533

Total Real Estate Loans

3,~~520~~913,~~027~~437

2581,~~906~~984

2241,~~086~~735

21,~~101~~102

34,~~570~~038,~~120~~258

Commercial

1,~~338~~828,~~339~~485

1425,~~623~~979

513,~~308~~911

~~568~~300

1,~~358~~868,~~838~~675

Consumer and Other

6374,~~265~~097

~~100~~—

~~462~~369

-—

6374,~~827~~466

Total

45,~~921~~816,~~631~~019

40107,~~629~~963

2756,~~856~~015

21,~~669~~402

45,~~992~~981,~~785~~399

Allowance for Credit Losses

We maintain an allowance for credit losses, which includes both our allowance for loan losses and reserves for unfunded commitments, that represents management’s best estimate of the credit losses and risks inherent in the loan portfolio. In determining the allowance for credit losses, we estimate losses on specific loans, or groups of loans, where the probable loss can be identified and reasonably determined. The balance of the allowance for credit losses is based on internally assigned risk classifications of loans, changes in the nature of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, current economic factors and the estimated impact of current economic conditions on certain historical credit loss rates. For additional discussion of our methodology, please refer to “—Critical Accounting Estimates—Allowance for Credit Losses.”

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In connection with our review of the loan portfolio, we consider risk elements attributable to particular loan types or categories in assessing the quality of individual loans. Some of the risk elements we consider include:

•for Real Estate: Commercial loans, the debt service coverage ratio (income from the property in excess of operating expenses compared to loan payment requirements), operating results of the owner in the case of owner-occupied properties, the loan to value ratio, the age and condition of the collateral, and the volatility of income, property value and future operating results typical for properties of that type;

•for Real Estate: Construction loans, the perceived feasibility of the project including the ability to sell developed lots or improvements constructed for resale or the ability to lease property constructed for lease, the quality and nature of contracts for presale or prelease, if any, the experience and ability of the developer, and the loan to value ratio;

•for Real Estate: Residential real estate loans, the borrower’s ability to repay the loan, including a consideration of the debt to income ratio and employment and income stability, the loan to value ratio, and the age, condition and marketability of the collateral; and

•for Commercial loans, the operating results of the commercial, industrial or professional enterprise, the borrower’s business, professional and financial ability and expertise, the specific risks and volatility of income and operating results typical for businesses in that category, and the value, nature and marketability of collateral;

As of December 31, ~~2024~~2025, the allowance for credit losses totaled $58.51 million, or 0.9894%, of total loans held for investment. As of December 31, ~~2023~~2024, the allowance for credit losses totaled $4358.75 million, or 0.8898%, of total loans held for investment. As of December 31, ~~2022~~2023, the allowance for credit losses totaled $3843.87 million, or 0.8488%, of total loans held for investment.

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The following tables present, as of and for the periods indicated, an analysis of the allowance for credit losses and other related data:

	For the Years Ended December 31,
	2024			2023			2022
(Dollars in thousands)	2025			2024			2023
	(Dollars in thousands)
Average loans outstanding	$	6,023,214		$	5,327,466		$	4,859,637
Average loans outstanding	$	5,327,466		$	4,859,637		$	4,020,436
Gross loans held for investment outstanding end of period	$	6,189,490		$	5,981,399		$	4,992,785
Gross loans held for investment outstanding end of period	$	5,981,399		$	4,992,785		$	4,606,176
Allowance for credit losses at beginning of period	$	58,528		$	43,738		$	38,783
Allowance for credit losses at beginning of period	$	43,738		$	38,783		$	29,936
Adoption of ASU 2016-13	-			-			5,857
Adoption of ASU 2016-13	-			5,857			-
Adjustment for Oakwood purchased credit deterioration loans	-			8,410			-
Adjustment for Oakwood purchased credit deterioration loans	8,410			-			-
Provision for credit losses	11,318			10,873			4,483
Provision for credit losses	10,873			4,483			10,667
Charge-offs:
Real Estate:
Commercial	~~(263)~~4,116			~~2,049~~(263)			512,049
Construction	~~2,261~~20			362,261			1636
Residential	~~297~~242			42297			~~191~~42
Total Real Estate	24,~~295~~378			2,~~127~~295			~~258~~2,127
Commercial	~~986~~6,768			~~2,813~~986			2,~~139~~813
Consumer and other	21,~~392~~991			12,~~489~~392			~~424~~1,489
Total charge-offs	513,~~673~~137			65,~~429~~673			26,~~821~~429
Recoveries:
Real Estate:
Commercial	8630			2686			5026
Construction	~~515~~211			1515			251
Residential	1433			1814			2018
Total Real Estate	~~615~~274			45615			9545
Commercial	~~236~~839			~~672~~236			~~739~~672
Consumer and other	~~329~~314			~~327~~329			~~167~~327
Total recoveries	1,~~180~~427			1,~~044~~180			1,~~001~~044
Net charge-offs	411,~~493~~710			54,~~385~~493			15,~~820~~385
Allowance for credit losses at end of period	$	58,~~528~~136		$	4358,~~738~~528		$	3843,~~783~~738
Ratio of allowance for credit losses to end of period loans held for investment	0.9894		%	0.8898		%	0.8488		%
Ratio of net charge-offs to average loans	0.0819			0.1108			0.0511
Ratio of allowance for credit losses to nonaccrual loans	~~242~~78.3807			~~258~~242.1538			~~350~~258.8515

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	For the Years Ended December 31,
	2024				2023				2022
	2025				2024				2023
	Net Charge-offs (Recoveries)		Percent of Average Loans		Net Charge-offs (Recoveries)		Percent of Average Loans		Net Charge-offs (Recoveries)		Percent of Average Loans
(Dollars in thousands)	Net Charge-offs (Recoveries)		Percent of Average Loans		Net Charge-offs (Recoveries)		Percent of Average Loans		Net Charge-offs (Recoveries)		Percent of Average Loans
	(Dollars in thousands)
Real estate:
Commercial	$	~~(349)~~4,086	0.0007	%	$	~~2,023~~(349)	0.0400	%	$	12,023	0.0004	%
Construction	~~1,746~~(191)		0.0300	%	351,746		0.0003	%	~~(9)~~35		0.00	%
Residential	~~283~~209		0.00	%	24283		0.00	%	~~171~~24		0.00	%
Total Real Estate Loans	14,~~680~~104		0.0307	%	21,~~082~~680		0.0403	%	~~163~~2,082		0.0004	%
Commercial	~~750~~5,929		0.0110	%	~~2,141~~750		0.0501	%	12,~~400~~141		0.0405	%
Consumer and Other	21,~~063~~677		0.0402	%	12,~~162~~063		0.0204	%	~~257~~1,162		0.0102	%
Total net charge-offs (recoveries)	$	411,~~493~~710	0.0819	%	$	54,~~385~~493	0.1108	%	$	15,~~820~~385	0.0511	%

Although we believe that we have established our allowance for loan losses in accordance with GAAP and that the allowance for loan losses was adequate to provide for known and estimated losses in the portfolio at all times shown above, future provisions will be subject to ongoing evaluations of the risks in our loan portfolio. If we experience economic declines or if asset quality deteriorates, material additional provisions could be required.

The following table shows the allocation of the allowance for credit losses among loan categories and certain other information as of the dates indicated. The allocation of the allowance for credit losses as shown in the table should neither be interpreted as an indication of future charge-offs, nor as an indication that charge-offs in future periods will necessarily occur in these amounts or in the indicated proportions. The total allowance is available to absorb losses from any loan category.

	For the Years Ended December 31,
	2024				2023				2022
	2025				2024				2023
	Amount		Percent to Total		Amount		Percent to Total		Amount		Percent to Total
(Dollars in thousands)	Amount		Percent to Total		Amount		Percent to Total		Amount		Percent to Total
	(Dollars in thousands)
Real estate:
Commercial	$	23,~~688~~806	40.59	%	$	1723,~~882~~688	40.95	%	$	1417,~~922~~882	3840.59	%
Construction	84,~~473~~416		147.56		8,~~142~~473		1814.65		58,~~905~~142		1518.26
Residential	87,~~394~~732		1413.3		58,~~662~~394		1214.93		5,~~367~~662		1312.89
Total real estate	4035,~~555~~954		6961.38		3140,~~686~~555		7269.43		2631,~~194~~686		6772.54
Commercial	1721,~~432~~618		2937.82		1117,~~796~~432		2729.08		11,~~950~~796		3027.80
Consumer and Other	~~541~~564		01.90		~~256~~541		0.69		~~639~~256		10.76
Total allowance for credit losses	$	58,~~528~~136	100.0	%	$	4358,~~738~~528	100.0	%	$	3843,~~783~~738	100.0	%

Securities

We use our securities portfolio to provide a source of liquidity, an appropriate return on funds invested, manage interest rate risk, meet collateral requirements, and meet regulatory capital requirements. As of December 31, ~~2024~~2025, the carrying amount of investment securities totaled $~~893~~989.52 million, an increase of $1495.07 million, or 110.67%, compared to $~~879~~893.65 million as of December 31, ~~2023~~2024. Securities represented 1112.40% and 1311.4% of total assets as of December 31, ~~2024~~2025 and ~~2023~~2024, respectively.

Our investment portfolio consists entirely of securities classified as available for sale. As a result, the carrying values of our investment securities are adjusted for unrealized gain or loss, and any gain or loss is reported on an after-tax basis as

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a component of other comprehensive income in shareholders’ equity. The following tables summarize the amortized cost and estimated fair value of investment securities as of the dates shown:


	As of December 31, 2025
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

U.S. treasury securities	$	17,571	$	-	$	293	$	17,278
U.S. government agencies	10,070		-		196		9,874
Corporate bonds	38,324		377		1,639		37,062
Mortgage-backed securities	674,211		3,153		27,273		650,091
Municipal securities	291,256		536		16,868		274,924
Total	$	1,031,432	$	4,066	$	46,269	$	989,229


	As of December 31, 2024
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

U.S. treasury securities	$	17,631	$	-	$	956	$	16,675
U.S. government agencies	10,164		-		576		9,588
Corporate bonds	47,855		348		3,038		45,165
Mortgage-backed securities	584,321		542		47,125		537,738
Municipal securities	313,452		23		29,092		284,383
Total	$	973,423	$	913	$	80,787	$	893,549

All of our mortgage-backed securities are agency securities. We do not hold any Fannie Mae or Freddie Mac preferred stock, corporate equity, collateralized debt obligations, collateralized loan obligations, private label collateralized mortgage obligations, subprime, Alt-A, or second lien elements in our investment portfolio as of December 31, 2025.

The allowance for credit losses encompasses potential expected credit losses related to the securities portfolio. In order to develop an estimate of credit losses expected for the current securities portfolio, we perform an assessment that includes reviewing historical loss data for both our portfolio and similar types of investment securities. Additionally, our review of the securities portfolio for expected credit losses includes an evaluation of factors including the security issuer bond ratings, delinquency status, insurance or other available credit support, as well as our expectations of the forecasted economic outlook relevant to these securities. The results of the analysis are evaluated quarterly to confirm that credit loss estimates are appropriate for the securities portfolio. Based on our assessments, expected credit losses on the investment securities portfolio as of December 31, 2025 and 2024, was negligible and therefore, no allowance for credit loss was recorded related to our investment securities.

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~~Our~~The ~~investment~~following ~~portfolio~~tables ~~consists~~set ~~entirely~~forth ofthe ~~securities~~fair ~~classified as available for sale. As a result~~value, ~~the~~maturities ~~carrying~~and ~~values~~approximated ofweighted ~~our~~average ~~investment~~book ~~securities~~yield ~~are~~based ~~adjusted~~on ~~for~~estimated ~~unrealized~~annual ~~gain~~income ordivided ~~loss,~~by ~~and~~the ~~any~~average ~~gain~~amortized orcost ~~loss~~of isthe ~~reported~~securities onportfolio ~~an after-tax basis~~ as ~~a component~~ of ~~other~~the ~~comprehensive~~dates ~~income in shareholders’ equity~~indicated. The ~~following~~contractual ~~tables~~maturity ~~summarize~~of ~~the~~a ~~amortized~~mortgage-backed ~~cost~~security ~~and~~is ~~estimated~~the ~~fair~~date ~~value~~at ofwhich ~~investment~~the ~~securities~~last asunderlying ofmortgage ~~the dates shown:~~matures.

	As of December 31, 2024
	As of December 31, 2025
	Amortized Cost		Gross UnrealizedGains			Gross UnrealizedLosses		Fair Value
	Within One Year					After One Year but Within Five Years					After Five Years but Within Ten Years				After Ten Years				Total
(Dollars in thousands)	~~(Dollars in thousands)~~Amount		Yield			Amount		Yield			Amount		Yield		Amount		Yield		Total		Yield
U.S. treasury securities	$	17,~~631~~278	$0.80	-	%	$	~~956~~—	$—	~~16,675~~	%	$	—	—	%	$	—	—	%	$	17,278	0.80	%
U.S. government agencies	109,~~164~~874		-0.92			~~576~~—		~~9,588~~—			—		—		—		—		9,874		0.92
Corporate bonds	472,~~855~~002		~~348~~9.02			313,~~038~~100		~~45,165~~4.13			21,960		5.35		—		—		37,062		5.12
Mortgage-backed securities	~~584~~4,~~321~~748		~~542~~1.28			4757,~~125~~984		~~537,738~~2.50			202,824		3.45		384,535		3.58		650,091		3.43
Municipal securities	~~313~~24,~~452~~785		231.47			2996,~~092~~836		~~284,383~~1.97			93,511		2.05		59,792		4.07		274,924		2.41
Total	$	~~973~~58,~~423~~687	$1.42	~~913~~	%	$	80167,~~787~~920	$2.32	~~893,549~~	%	$	318,295	3.17	%	$	444,327	3.65	%	$	989,229	3.14	%

	As of December 31, 2023
	As of December 31, 2024
	Amortized Cost		Gross UnrealizedGains			Gross UnrealizedLosses		Fair Value
	Within One Year					After One Year but Within Five Years					After Five Years but Within Ten Years				After Ten Years				Total
(Dollars in thousands)	~~(Dollars in thousands)~~Amount		Yield			Amount		Yield			Amount		Yield		Amount		Yield		Total		Yield
U.S. treasury securities	$	~~17,690~~—	$—	-	%	$	116,~~451~~675	$0.80	~~16,239~~	%	$	—	—	%	$	—	—	%	$	16,675	0.80	%
U.S. government agencies	~~10,258~~—		-—			~~848~~9,588		~~9,410~~0.92			—		—		—		—		9,588		0.92
Corporate bonds	~~49,609~~—		-—			56,~~770~~253		~~43,839~~5.00			38,912		4.90		—		—		45,165		4.91
Mortgage-backed securities	~~555~~4,~~148~~081		~~976~~2.68			4947,~~814~~501		~~506,310~~2.07			184,576		2.99		301,580		3.16		537,738		3.00
Municipal securities	~~331~~24,~~273~~577		~~298~~1.44			2793,~~798~~150		~~303,773~~1.76			105,409		1.96		61,247		2.97		284,383		2.07
Total	$	~~963~~28,~~978~~658	$1.61	~~1,274~~	%	$	85173,~~681~~167	$1.82	~~879,571~~	%	$	328,897	2.89	%	$	362,827	3.13	%	$	893,549	2.74	%

~~All~~The contractual maturity of ~~our~~mortgage-backed securities, collateralized mortgage obligations and asset-backed securities is not a reliable indicator of their expected life because borrowers have the right to prepay their obligations at any time. Mortgage-backed securities and asset-backed securities are ~~agency~~typically issued with stated principal amounts and are backed by pools of mortgage loans and other loans with varying maturities. The term of the underlying mortgages and loans may vary significantly due to the ability of a borrower to prepay. Monthly paydowns on mortgage-backed securities tend to cause the average life of the securities to be much different than the stated contractual maturity. WeDuring a period of increasing interest rates, fixed rate mortgage-backed securities do not ~~hold~~tend ~~any~~to ~~Fannie~~experience ~~Mae~~heavy orprepayments ~~Freddie~~of ~~Mac~~principal ~~preferred~~and, ~~stock~~consequently, ~~corporate~~the ~~equity,~~average ~~collateralized~~life ~~debt~~of ~~obligations,~~this ~~collateralized~~security ~~loan~~will ~~obligations,~~be ~~private~~lengthened. ~~label~~If ~~collateralized~~interest ~~mortgage~~rates ~~obligations,~~begin ~~subprime~~to fall, ~~Alt-A~~prepayments may increase, orthereby ~~second~~shortening ~~lien~~the ~~elements~~estimated inlife of this security. The weighted average life of our investment portfolio was 4.25 years with an estimated effective duration of 3.53 years as of December 31, ~~2024~~2025.

~~The~~As ~~allowance for credit losses encompasses potential expected credit losses related to the securities portfolio. In order to develop an estimate~~ of ~~credit losses expected for the current securities portfolio~~December 31, we2025 ~~perform an assessment that includes reviewing historical loss data for both our portfolio~~ and ~~similar types of investment securities. Additionally~~2024, ~~our~~we ~~review~~did ofnot ~~the~~own securities ~~portfolio for expected credit losses includes an evaluation~~ of ~~factors~~any ~~including~~one ~~the security~~ issuer ~~bond~~for ~~ratings,~~which ~~delinquency~~aggregate ~~status,~~adjusted ~~insurance~~cost orexceeded ~~other~~10% ~~available credit support, as well as our expectations~~ of the ~~forecasted~~consolidated ~~economic~~shareholders’ ~~outlook~~equity relevant to these securities. The results of the analysis are evaluated quarterly to confirm that credit loss estimates are appropriate for the securities portfolio. Based on our assessments, expected credit losses on the investment securities portfolio as of ~~December 31,~~such ~~2024~~respective ~~and 2023, was negligible and therefore, no allowance for credit loss was recorded related to our investment securities~~dates.

67As of December 31, 2025 and 2024, the Company held other equity securities of $49.3 million and $41.1 million, respectively, comprised mainly of FHLB stock, SBIC’s and financial technology (“Fintech”) fund investments.

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The following tables set forth the fair value, maturities and approximated weighted average yield based on estimated annual income divided by the average amortized cost of the securities portfolio as of the dates indicated. The contractual maturity of a mortgage-backed security is the date at which the last underlying mortgage matures.

	As of December 31, 2024
	Within One Year				After One Year but Within Five Years				After Five Years but Within Ten Years				After Ten Years				Total
	Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield		Total		Yield
	(Dollars in thousands)
U.S. treasury securities	$	-	-	%	$	16,675	0.80	%	$	-	-	%	$	-	-	%	$	16,675	0.80	%
U.S. government agencies	-		-	%	9,588		0.92	%	-		-	%	-		-	%	9,588		0.92	%
Corporate bonds	-		-	%	6,253		5.00	%	38,912		4.90	%	-		-	%	45,165		4.91	%
Mortgage-backed securities	4,081		2.68	%	47,501		2.07	%	184,576		2.99	%	301,580		3.16	%	537,738		3.00	%
Municipal securities	24,577		1.44	%	93,150		1.76	%	105,409		1.96	%	61,247		2.97	%	284,383		2.07	%
Total	$	28,658	1.61	%	$	173,167	1.82	%	$	328,897	2.89	%	$	362,827	3.13	%	$	893,549	2.74	%

	As of December 31, 2023
	Within One Year				After One Year but Within Five Years				After Five Years but Within Ten Years				After Ten Years				Total
	Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield		Total		Yield
	(Dollars in thousands)
U.S. treasury securities	$	-	-	%	$	16,239	0.80	%	$	-	-	%	$	-	-	%	$	16,239	0.80	%
U.S. government agencies	-		-	%	9,410		0.92	%	-		-	%	-		-	%	9,410		0.92	%
Corporate bonds	213		-	%	2,390		4.78	%	41,236		4.61	%	-		-	%	43,839		4.60	%
Mortgage-backed securities	147		1.28	%	46,339		2.06	%	191,332		2.68	%	268,492		2.73	%	506,310		2.65	%
Municipal securities	16,766		1.56	%	96,739		1.55	%	117,092		1.91	%	73,176		2.38	%	303,773		1.89	%
Total	$	17,126	1.54	%	$	171,117	1.63	%	$	349,660	2.65	%	$	341,668	2.66	%	$	879,571	2.43	%

The contractual maturity of mortgage-backed securities, collateralized mortgage obligations and asset-backed securities is not a reliable indicator of their expected life because borrowers have the right to prepay their obligations at any time. Mortgage-backed securities and asset-backed securities are typically issued with stated principal amounts and are backed by pools of mortgage loans and other loans with varying maturities. The term of the underlying mortgages and loans may vary significantly due to the ability of a borrower to prepay. Monthly paydowns on mortgage-backed securities tend to cause the average life of the securities to be much different than the stated contractual maturity. During a period of increasing interest rates, fixed rate mortgage-backed securities do not tend to experience heavy prepayments of principal and, consequently, the average life of this security will be lengthened. If interest rates begin to fall, prepayments may increase, thereby shortening the estimated life of this security. The weighted average life of our investment portfolio was 4.63 years with an estimated effective duration of 3.79 years as of December 31, 2024.

As of December 31, 2024 and 2023, we did not own securities of any one issuer for which aggregate adjusted cost exceeded 10% of the consolidated shareholders’ equity as of such respective dates.

As of December 31, 2024 and 2023, the Company held other equity securities of $41.1 million and $33.9 million, respectively, comprised mainly of FHLB stock, SBIC’s and financial technology (“Fintech”) fund investments.

Deposits

We offer a variety of deposit accounts having a wide range of interest rates and terms including demand, savings, money market and time accounts. We rely primarily on competitive pricing policies, convenient locations and personalized service to attract and retain these deposits.

Total deposits as of December 31, ~~2024~~2025 were $6.57 billion, an increase of $1187.3 ~~billion~~million, or 242.19%, compared to $56.25 billion as of December 31, ~~2023~~2024. Total uninsured deposits were $2.89 billion, or 43.42% of deposits as of December 31, ~~2024~~2025 compared to $2.08 billion, or 3843.94%, or total deposits as of December 31, ~~2023~~2024. Since it is not reasonably practicable to provide a precise measure of uninsured deposits, the amounts are estimated and are based on the same methodologies and assumptions that are used for regulatory reporting requirements for the call report.

6867

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~~provide~~Noninterest-bearing adeposits ~~precise~~as ~~measure~~ of ~~uninsured deposits~~December 31, ~~the~~2025 ~~amounts~~were ~~are~~$1.3 ~~estimated~~billion ~~and~~compared ~~are~~to ~~based~~$1.4 onbillion ~~the~~as ~~same~~of ~~methodologies~~December 31, ~~and~~2024, ~~assumptions~~a ~~that~~decrease ~~are~~of ~~used~~$35.0 ~~for~~million, ~~regulatory~~or ~~reporting requirements for the call report~~2.6%.

~~Noninterest-bearing~~Average deposits asfor ofthe year ended December 31, ~~2024~~2025 were $16.4 billion, an increase of $718.0 million, or 12.6%, compared to the year ended December 31, 2024 of $15.37 billion. asThe ofaverage rate paid on total interest-bearing deposits decreased over this period from 3.73% for the year ended December 31, ~~2023~~2024 to 3.29% for the year ended December 31, an2025. ~~increase~~The decrease in average rates was driven by the federal reserve continuing to lower interest rates during the year ended December 31, 2025. In addition, the stability of ~~$58~~noninterest-bearing demand accounts served to reduce the cost of deposits to 2.063% ~~million~~for the year ended December 31, or2025 4and 2.589% for the year ended December 31, 2024.

Average deposits for the year ended December 31, 2024 were $5.7 billion, an increase of $733.5 million, or 14.7%, compared to the year ended December 31, 2023 of $5.0 billion. The average rate paid on total interest-bearing deposits increased over this period from 3.00% for the year ended December 31, 2023 to 3.73% for the year ended December 31, 2024. The increase in average rates was driven by the federal reserve raising interest rates during the years ended December 31, 2023 and 2022. In addition, the stability and the continued growth of noninterest-bearing demand accounts served to reduce the cost of deposits to 2.89% for the year ended December 31, 2024 and 2.15% for the year ended December 31, 2023.

The following table presents the monthly average balances and weighted average rates paid on deposits for the periods indicated:

	For the Years Ended December 31
	2024				2023
	2025				2024
	Average Balance		Average Rate		Average Balance		Average Rate
(Dollars in thousands)	Average Balance		Average Rate		Average Balance		Average Rate
	(Dollars in thousands)
Interest-bearing demand accounts	$	807,107	2.54	%	$	611,561	3.36	%
Interest-bearing demand accounts	$	611,561	3.36	%	$	507,782	3.40	%
Negotiable order of withdrawal ("NOW") accounts	303,167		2.51		402,046		2.09
Negotiable order of withdrawal ("NOW") accounts	402,046		2.09	%	468,094		1.33	%
Limited access money market accounts and savings	2,601,497		3.24		2,146,610		3.79
Limited access money market accounts and savings	2,146,610		3.79	%	1,441,836		2.77	%
Certificates and other time deposits > $250k	783,326		4.19		628,929		4.52
Certificates and other time deposits > $250k	628,929		4.52	%	498,054		4.01	%
Certificates and other time deposits < $250k	639,425		3.70		638,087		4.13
Certificates and other time deposits < $250k	638,087		4.13	%	650,450		3.61	%
Total interest-bearing deposits	5,134,522		3.29		4,427,233		3.73
Total interest-bearing deposits	4,427,233		3.73	%	3,566,216		3.00	%
Noninterest-bearing demand accounts	1,296,162		—		1,285,445		—
Noninterest-bearing demand accounts	1,285,445		-	%	1,412,979		-	%
Total deposits	$	6,430,684	2.63	%	$	5,712,678	2.89	%
Total deposits	$	5,712,678	2.89	%	$	4,979,195	2.15	%

The ratio of average noninterest-bearing deposits to average total deposits for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 was 2220.52% and 2822.45%, respectively.

The following table sets forth the contractual maturities of certain certificates of deposit at December 31, ~~2024~~2025:

	Certificates of Deposit More Than$250,000		Certificates of Deposit of $100,000 Through$250,000
(Dollars in thousands)	Certificates of Deposit More Than$250,000		Certificates of Deposit of $100,000 Through$250,000
	(Dollars in thousands)
3 months or less	$	152,621	$	146,030
3 months or less	$	81,665	$	168,219
More than 3 months but less than 6 months	234,330		99,296
More than 3 months but less than 6 months	180,467		119,280
More than 6 months but less than 12 months	264,393		132,024
More than 6 months but less than 12 months	150,957		128,370
12 months or more	153,384		40,759
12 months or more	274,512		81,042
Total	$	804,728	$	418,109
Total	$	687,601	$	496,911

Borrowings

We utilize short-term and long-term borrowings to supplement deposits to fund our lending and investment activities. In addition, we use short-term borrowings to periodically repurchase outstanding shares of our common stock and for general corporate purposes. Each of these relationships are discussed below.

69FHLB advances. The FHLB allows us to borrow on a blanket floating lien status collateralized by certain securities and loans. As of December 31, 2025 and 2024, total borrowing capacity of $2.0 billion was available under this arrangement for both periods, and $431.2 million and $355.9 million, respectively, was outstanding with a weighted average stated interest rate of 4.02% as of December 31, 2025 and 4.15% as of December 31, 2024. Our current longest dated FHLB advance matures within eight years. We utilize these borrowings to meet liquidity needs and to fund certain fixed rate loans in our portfolio.

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FHLB advances. The FHLB allows us to borrow on a blanket floating lien status collateralized by certain securities and loans. As of December 31, 2024 and 2023, total borrowing capacity of $2.0 billion and $1.8 billion, respectively, was available under this arrangement and $355.9 million and $211.2 million, respectively, was outstanding with a weighted average stated interest rate of 4.15% as of December 31, 2024 and 3.65% as of December 31, 2023. Our current longest dated FHLB advance matures within ten years. We utilize these borrowings to meet liquidity needs and to fund certain fixed rate loans in our portfolio.

The following table presents our FHLB borrowings at the dates indicated.

	FHLB Advances
(Dollars in thousands)	FHLB Advances
	(Dollars in Thousands)
December 31, 2025
Amount outstanding at year-end	$	431,200
Weighted average stated interest rate at year-end	4.02		%
Maximum month-end balance during the year	$	509,124
Average balance outstanding during the year	$	400,849
Weighted average interest rate during the year	4.23		%
December 31, 2024
Amount outstanding at year-end	$	355,875
Weighted average stated interest rate at year-end	4.15		%
Maximum month-end balance during the year	$	377,048
Average balance outstanding during the year	$	317,462
Weighted average interest rate during the year	4.15		%
December 31, 2023
Amount outstanding at year-end	$	211,198
Weighted average stated interest rate at year-end	3.65		%
Maximum month-end balance during the year	$	517,112
Average balance outstanding during the year	$	329,726
Weighted average interest rate during the year	4.16		%

~~Bank~~Subordinated ~~Term~~Note ~~Funding~~Purchase ~~Program~~Agreement (“~~BTFP~~Subordinated Debt”). OnIn ~~March~~December ~~12,~~2018 ~~2023,~~we ~~the~~issued ~~Federal~~subordinated ~~Reserve~~notes ~~launched~~in the ~~BTFP,~~amount ~~which~~of ~~offered~~$25.0 ~~loans~~million. toThe ~~banks~~subordinated ~~with~~notes bear a ~~term~~fixed rate of upinterest toat ~~one year~~6.75% ~~The~~until ~~loans~~December ~~were~~31, ~~secured~~2028 byand ~~pledging~~a ~~participating~~floating ~~banks’~~rate Uthereafter through maturity in 2033.S. ~~treasuries,~~The ~~agency~~balance ~~securities,~~outstanding ~~agency~~at ~~mortgage-backed~~both ~~securities~~December 31, 2025 and ~~any~~2024 ~~other~~was ~~qualifying~~$25.0 ~~assets~~million. These ~~pledged~~subordinated ~~securities~~notes were ~~valued~~issued ~~at par~~ for ~~collateral~~the ~~purposes.~~purpose ~~The~~of ~~Bank~~paying ~~participated~~off inour ~~the~~long ~~BTFP~~term advance and ~~had~~line ~~outstanding~~of ~~debt~~credit ofwith ~~$300.0~~First ~~million~~National atBankers' ~~December 31~~Bank ("FNBB"), ~~2023.~~for ~~These~~general ~~loans~~corporate ~~bore~~purposes aand ~~fixed~~to ~~interest~~provide ~~rate~~Tier of2 4capital.~~38%~~ ~~and~~The ~~matured~~subordinated onnotes ~~March~~are ~~22,~~redeemable ~~2024,~~by atthe ~~which~~Company ~~time~~at weits ~~repaid~~option ~~them~~beginning in ~~full~~2028.

70On March 26, 2021, we issued $52.5 million in subordinated notes. These subordinated notes bear interest at a fixed rate of 4.25% through March 31, 2026 and a floating rate, based on a benchmark rate plus 354 basis points, thereafter through maturity in 2031. During the year ended December 31, 2025, the Company redeemed $7.0 million and recognized a $630,000 gain on the extinguishment of this debt. The balance outstanding was $45.5 million and $52.5 million at December 31, 2025 and 2024, respectively. The subordinated notes are redeemable by the Company at its option beginning in 2026.

On April 1, 2021, we consummated the acquisition of Smith Shellnut Wilson, LLC (“SSW”). Under the terms of the acquisition, we issued $3.9 million in subordinated debt to the former owners of SSW. This subordinated debt bears interest at a fixed rate of 4.75% through April 1, 2026 and a floating rate, based on a benchmark rate plus 442 basis points, thereafter through maturity in 2031. The balance outstanding at both December 31, 2025 and 2024 was $3.9 million. The subordinated notes are redeemable by the Company at its option beginning in 2026.

On March 1, 2022, we consummated the acquisition of Texas Citizens Bancorp, Inc. (“TCBI”). As part of the acquisition, we assumed $26.4 million in subordinated debt. Of those notes, $10.0 million bears an adjustable interest rate plus 350 basis points, based on a benchmark rate, adjusting quarterly until maturity on April 11, 2028, and was callable beginning April 11, 2023, $7.5 million bears an adjustable interest rate plus 350 basis points, based on a benchmark rate, adjusting quarterly, until maturity on December 13, 2028, and was callable beginning December 13, 2023, $8.9 million was called on May 1, 2023 and ceased bearing interest as of such date. This $8.9 million note was fully extinguished during the year ended December 31, 2023. As part of valuing these three subordinated notes from TCBI, we incurred a fair value adjustment premium of $3.4 million that will accrete over five-to-seven years, with $603,000 and $833,000 remaining at December 31, 2025 and December 31, 2024, respectively.

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The following table presents our Bank Term Funding Program borrowings at the date indicated.

	BTFP
	(Dollars in Thousands)
December 31, 2024
Amount outstanding at year-end	$	-
Weighted average stated interest rate at year-end	-		%
Maximum month-end balance during the year	$	300,000
Average balance outstanding during the year	$	64,754
Weighted average interest rate during the year	4.31		%
December 31, 2023
Amount outstanding at year-end	$	300,000
Weighted average stated interest rate at year-end	4.38		%
Maximum month-end balance during the year	$	428,000
Average balance outstanding during the year	$	253,706
Weighted average interest rate during the year	4.46		%

Subordinated Note Purchase Agreement (“Subordinated Debt”). In December 2018 we issued subordinated notes in the amount of $25.0 million. The subordinated notes bear a fixed rate of interest at 6.75% until December 31, 2028 and a floating rate thereafter through maturity in 2033. The balance outstanding at both December 31, 2024 and 2023 was $25.0 million. These subordinated notes were issued for the purpose of paying off our long term advance and line of credit with First National Bankers' Bank ("FNBB"), for general corporate purposes and to provide Tier 2 capital. The subordinated notes are redeemable by the Company at its option beginning in 2028.

On March 26, 2021, we issued $52.5 million in subordinated notes. These subordinated notes bear interest at a fixed rate of 4.25% through March 31, 2026 and a floating rate, based on a benchmark rate plus 354 basis points, thereafter through maturity in 2031. The balance outstanding at both December 31, 2024 and 2023 was $52.5 million. The subordinated notes are redeemable by the Company at its option beginning in 2026.

On April 1, 2021, we consummated the acquisition of SSW. Under the terms of the acquisition, we issued $3.9 million in subordinated debt to the former owners of SSW. This subordinated debt bears interest at a fixed rate of 4.75% through April 1, 2026 and a floating rate, based on a benchmark rate plus 442 basis points, thereafter through maturity in 2031. The balance outstanding at both December 31, 2024 and 2023 was $3.9 million. The subordinated notes are redeemable by the Company at its option beginning in 2026.

On March 1, 2022, we consummated the acquisition of TCBI. As part of the acquisition, we assumed $26.4 million in subordinated debt. Of those notes, $10.0 million bears an adjustable interest rate plus 350 basis points, based on a benchmark rate, adjusting quarterly until maturity on April 11, 2028, and was callable beginning April 11, 2023, $7.5 million bears an adjustable interest rate plus 350 basis points, based on a benchmark rate, adjusting quarterly, until maturity on December 13, 2028, and was callable beginning December 13, 2023, $8.9 million was called on May 1, 2023 and ceased bearing interest as of such date. This $8.9 million note was fully extinguished during the year ended December 31, 2023. As part of valuing these three subordinated notes from TCBI, we incurred a fair value adjustment premium of $3.4 million that will accrete over five-to-seven years, with $833,000 and $1.1 million remaining at December 31, 2024 and December 31, 2023, respectively. We recognized $1.5 million in gains on the extinguishment of this debt during the year ended December 31, 2023.

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The following table presents the Subordinated Debt at the dates indicated.

	Subordinated Debt
(Dollars in thousands)	Subordinated Debt
	(Dollars in Thousands)
December 31, 2025
Amount outstanding at year-end	$	92,530
Weighted average stated interest rate at year-end	5.54		%
Maximum month-end balance during the year	$	99,971
Average balance outstanding during the year	$	93,765
Weighted average interest rate during the year	5.28		%
December 31, 2024
Amount outstanding at year-end	$	99,760
Weighted average stated interest rate at year-end	5.69		%
Maximum month-end balance during the year	$	99,971
Average balance outstanding during the year	$	99,884
Weighted average interest rate during the year	5.40		%
December 31, 2023
Amount outstanding at year-end	$	99,990
Weighted average stated interest rate at year-end	5.72		%
Maximum month-end balance during the year	$	110,698
Average balance outstanding during the year	$	105,369
Weighted average interest rate during the year	5.05		%

Trust preferred securities. In the Pedestal acquisition, we assumed their obligations of $5.2 million in junior subordinated debentures, which are associated with $5.0 million in trust preferred securities issued by a trust. Interest on the junior subordinated debentures is accrued at an annual rate equal to the 3-month LIBOR, as determined in the agreement, plus 3.05%. Interest is payable quarterly. The agreement indenture governing the debentures allows us to defer interest payments for up to 20 consecutive quarterly periods. The trust preferred securities do not have a stated maturity date, however, they are subject to mandatory redemption on September 17, 2033, or upon earlier redemption. We have guaranteed, on a subordinated basis, distributions and other payments due on the trust preferred securities subject to the guarantee agreement and the indenture. Principal and interest payments on the junior subordinated debentures are in a superior position to the liquidation rights of holders of common stock.

Federal Funds Purchased Lines of Credit Relationships

We maintain Federal Funds Purchased Lines of Credit Relationships with the following correspondent banks and limits as of December 31, ~~2024~~2025:

	Fed Funds Purchase Limits
(Dollars in thousands)	Fed Funds Purchase Limits
	(Dollars in thousands)
TIB National Association	$	45,000
TIB National Association	$	55,000
PNC Bank	38,000
FNBB	35,000
First Horizon Bank	17,000
ServisFirst Bank	10,000
Texas Capital	5,000
Total	$	145,000
Total	$	160,000

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The following table represents combined Federal Funds Purchased Lines of Credit for all relationships at the dates indicated.

	Fed Funds Purchased
(Dollars in thousands)	Fed Funds Purchased
	(Dollars in Thousands)
December 31, 2025
Amount outstanding at year-end	$	-
Weighted average stated interest rate at year-end	0.00		%
Maximum month-end balance during the year	$	10
Average balance outstanding during the year	$	1
Weighted average interest rate during the year	5.05		%
December 31, 2024
Amount outstanding at year-end	$	-
Weighted average stated interest rate at year-end	0.00		%
Maximum month-end balance during the year	$	-
Average balance outstanding during the year	$	5
Weighted average interest rate during the year	6.46		%
December 31, 2023
Amount outstanding at year-end	$	-
Weighted average stated interest rate at year-end	0.00		%
Maximum month-end balance during the year	$	14,622
Average balance outstanding during the year	$	474
Weighted average interest rate during the year	1.96		%

Liquidity and Capital Resources

Liquidity

Liquidity involves our ability to utilize funds to support asset growth and acquisitions or reduce assets to meet deposit withdrawals and other payment obligations, to maintain reserve requirements and otherwise to operate on an ongoing basis and manage unexpected events. For the years ended December 31, ~~2024~~2025 and ~~2023~~2024, liquidity needs were primarily met by core deposits, security and loan maturities, and amortizing investment and loan portfolios. In addition, we utilize, or have available, brokered deposits, purchased funds from correspondent banks, the Federal Reserve discount window, and overnight advances from the FHLB. As of December 31, ~~2024~~2025 and ~~2023~~2024, we maintained ~~six~~five and ~~five~~six lines of credit, respectively, with correspondent banks which provided for extensions of credit with an availability to borrow up to an aggregate of $~~160~~145.0 million and $~~145~~160.0 million as of December 31, ~~2024~~2025 and ~~2023~~2024, respectively. There were no funds under these lines of credit outstanding as of December 31, ~~2024~~2025 and ~~2023~~2024, respectively.

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The following table illustrates, during the periods presented, the mix of our funding sources and the average assets in which those funds are invested as a percentage of average total assets for the period indicated. Average assets totaled $7.09 billion and $67.30 billion for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively.

	For the Years Ended December 31,
	2024		2023
	2025		2024
Source of Funds:
Deposits:
Noninterest-bearing	1816.45	%	2218.34	%
Interest-bearing	6365.52		5663.25
Subordinated debt (excluding trust preferred securities)	1.42		1.74
Advances from FHLB	45.61		54.26
Other borrowings	0.43		0.4
Bank Term Funding Program	~~0.9~~—		4.0.9
Other liabilities	0.89		0.78
Shareholders' equity	10.08		910.50
Total	100.0	%	100.0	%
Uses of Funds:
Loans, net of allowance for loan losses	75.8	%	7675.08	%
Securities available for sale	1312.2		1413.20
Interest-bearing deposits in other banks	4.1		2.8
Securities purchased under agreements to resell	0.4		0.2
Other noninterest-earning assets	6.9		7.0
Interest-bearing deposits in other banks	4.9		4.1
Other noninterest-earning assets	6.7		6.9
Total	100.0	%	100.0	%
Average noninterest-bearing deposits to average deposits	2220.52	%	2822.45	%
Average loans to average deposits	93.37		9793.63

Our primary source of funds is deposits, and our primary use of funds is loans. We do not expect a change in the primary source or use of our funds in the foreseeable future. Our average loans increased 913.61% for the year ended December 31, ~~2024~~2025 compared to the same period in ~~2023~~2024. We predominantly invest excess funds in overnight deposits with the Federal Reserve, securities, interest-bearing deposits at other banks or other short-term liquid investments until needed to fund loan growth. Our securities portfolio had a weighted average life of 4.6325 years and an effective duration of 3.7953 years as of December 31, ~~2024~~2025 and a weighted average life of 4.5763 years and an effective duration of 3.8179 years as of December 31, ~~2023~~2024.

As of December 31, ~~2024~~2025, we had outstanding $1.47 billion in commitments to extend credit and $5051.02 million in commitments associated with outstanding standby and commercial letters of credit. As of December 31, ~~2023~~2024, we had outstanding $1.24 billion in commitments to extend credit and $4550.20 million in commitments associated with outstanding standby and commercial letters of credit. Because commitments associated with letters of credit and commitments to extend credit may expire unused, the total outstanding may not necessarily reflect the actual future cash funding requirements. See “-Off Balance Sheet Items” below for additional information.

As of December 31, ~~2024~~2025, we had no exposure to future cash requirements associated with known uncertainties or capital expenditures of a material nature. We had cash and cash equivalents, federal funds sold and securities purchased under agreements to resell, of $~~567~~609.62 million and $~~377~~567.26 million as of December 31, ~~2024~~2025 and ~~2023~~2024, respectively.

Capital Resources

Total shareholders’ equity increased to $~~799~~896.59 million as of December 31, ~~2024~~2025, compared to $~~644~~799.35 million as of December 31, ~~2023~~2024, an increase of $~~155~~97.24 million, or 2412.12%. This increase was primarily due to ~~the acquisition of Oakwood, which resulted in stock issuance of $103.8 million,~~ net income available to common shareholders of $5982.75 million, other comprehensive income of $329.67 million resulting from the after tax effect of unrealized gains in our investment securities portfolio, and offset by dividends paid on common shares of $1416.98 million.

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On January 2322, ~~2025~~2026, our board of directors declared a quarterly dividend in the amount of $18.75 per preferred share to the preferred shareholders of record as of February 15, ~~2025~~2026. The dividend ~~was~~is ~~paid~~to pay on February 28, ~~2025~~2026, or as soon as practicable thereafter.

On January 2322, ~~2025~~2026, our board of directors declared a quarterly dividend based upon our financial performance for the three months ended December 31, ~~2024~~2025 in the amount of $0.1415 per common share to the common shareholders of record as of February 15, ~~2025~~2026. The dividend ~~was~~is ~~paid~~to pay on February 28, ~~2025~~2026, or as soon as practicable thereafter.

The declaration and payment of dividends to our shareholders, as well as the amounts thereof, are subject to the discretion of the Board and depend upon our results of operations, financial condition, capital levels, cash requirements, future prospects and other factors deemed relevant by the Board. As a holding company, our ability to pay dividends is largely dependent upon the receipt of dividends from our subsidiary, b1BANK. There can be no assurance that we will declare and pay any dividends to our shareholders.

Capital management consists of providing equity to support current and future operations. Banking regulators view capital levels as important indicators of an institution’s financial soundness. As a general matter, FDIC-insured depository institutions and their holding companies are required to maintain minimum capital relative to the amount and types of assets they hold. We are subject to regulatory capital requirements at the holding company and bank levels. As of December 31, ~~2024~~2025 and December 31, ~~2023~~2024, we and b1BANK were in compliance with all applicable regulatory capital requirements, and b1BANK was classified as “well-capitalized,” for purposes of prompt corrective action regulations. As we employ our capital and continue to grow our operations, our regulatory capital levels may decrease depending on our level of earnings. However, we expect to monitor and control our growth in order to remain in compliance with all applicable regulatory capital standards applicable to us.

The following table presents the actual capital amounts and regulatory capital ratios for us and b1BANK as of the dates indicated.

	As of December 31,
	2024				2023
	2025				2024
	Amount		Ratio		Amount		Ratio
(Dollars in thousands)	Amount		Ratio		Amount		Ratio
	(Dollars in thousands)
Business First
Total capital (to risk weighted assets)	$	~~878~~939,~~914~~331	12.7593	%	$	~~754~~878,~~990~~914	12.8575	%
Tier 1 capital (to risk weighted assets)	~~727~~799,~~959~~527		1011.5600	%	~~614~~727,~~975~~959		10.4656	%
Common Equity Tier 1 capital (to risk weighted assets)	~~651~~722,~~029~~597		9.4494	%	~~538~~651,~~045~~029		9.1544	%
Tier 1 Leverage capital (to average assets)	~~727~~799,~~959~~527		910.5308	%	~~614~~727,~~975~~959		9.5253	%
b1BANK
Total capital (to risk weighted assets)	$	~~857~~930,~~627~~600	12.4582	%	$	~~730~~857,~~117~~627	12.4345	%
Tier 1 capital (to risk weighted assets)	~~799~~872,~~099~~464		1112.6002	%	~~686~~799,~~379~~099		11.6960	%
Common Equity Tier 1 capital (to risk weighted assets)	~~799~~872,~~099~~464		1112.6002	%	~~686~~799,~~379~~099		11.6960	%
Tier 1 Leverage capital (to average assets)	~~799~~872,~~099~~464		1011.4701	%	~~686~~799,~~379~~099		10.6347	%

Preferred Stock

On September 1, 2022, we entered into a securities purchase agreement with certain investors pursuant to which we offered and sold shares of our 7.50% fixed-to-floating rate non-cumulative perpetual preferred stock, with no par value, for an aggregate purchase price of $72.0 million. The preferred stock was structured to qualify as additional Tier 1 capital under applicable regulatory capital guidelines. Holders of the preferred stock will be entitled to receive, if, when, and as declared by our board of directors, non-cumulative cash dividends at a rate of 7.50% for the first five years following issuance and thereafter at a variable rate equal to the then current 3-month secured overnight financing rate (“SOFR”), reset quarterly, plus 470 basis points. The preferred stock has a perpetual term and may not be redeemed, except under certain circumstances, under the first five years of issuance.

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Long Term Debt

For information on our subordinated debt, please refer to “Borrowings”.

FHLB Advances

Advances from the FHLB totaled approximately $~~355~~431.92 million and $~~211~~355.29 million at December 31, ~~2024~~2025 and ~~2023~~2024, respectively. As of December 31, ~~2024~~2025, and ~~2023~~2024, the FHLB advances were collateralized by a blanket floating lien on certain securities and loans, had a weighted average stated rate of 4.1502% and 34.6515%, respectively, and mature within ~~ten~~eight years. At December 31, ~~2024~~2025, $55120.0 million in advances were short term with a rate of 43.3862% and ~~none~~$55.0 million with a rate of 4.38% at December 31, ~~2023~~2024.

Bank Term Funding Program (“BTFP”)

On March 12, 2023, the Federal Reserve launched the BTFP, which offered loans to banks with a term of up to one year. The loans were secured by pledging participating banks’ U.S. treasuries, agency securities, agency mortgage-backed securities, and any other qualifying assets. These pledged securities were valued at par for collateral purposes. The Bank participated in the BTFP and had outstanding debt of $300.0 million at December 31, 2023. These loans bore a fixed interest rate of 4.38% and mature on March 22, 2024, at which time we repaid them in full.

Contractual Obligations

The following tables summarize contractual obligations and other commitments to make future payments as of December 31, ~~2024~~2025 and ~~2023~~2024 (other than non-maturity deposit obligations), which consist of future cash payments associated with our contractual obligations pursuant to our FHLB advances, subordinated debt, revolving line of credit, and non-cancelable future operating leases. Payments related to leases are based on actual payments specified in underlying contracts. Advances from the FHLB totaled approximately $~~355~~431.92 million and $~~211~~355.29 million as of December 31, ~~2024~~2025 and ~~2023~~2024, respectively. As of December 31, ~~2024~~2025 and ~~2023~~2024, the FHLB advances were collateralized by a blanket floating lien on certain securities and loans, had a weighted average stated rate of 4.1502% and 34.6515%, respectively, and maturing within ~~ten~~eight years. We participated in the BTFP in March 2023 and as of December 31, 2023, had outstanding debt of $300.0 million, at a fixed rate of 4.38% and set to mature on March 22, 2024. We repaid this debt in full at the time of maturity. The subordinated debt totaled $9992.85 million and $~~100~~99.08 million as of December 31, ~~2024~~2025 and ~~2023~~2024. Of this subordinated debt, $25.0 million bears interest at a fixed rate of 6.75% through December 31, 2028 and a floating rate, based on a benchmark rate plus 369 basis points, thereafter through maturity in 2033, $52.5 million of this subordinated debt bears interest at a fixed rate of 4.25% through March 31, 2026 and a floating rate, based on a benchmark rate plus 354 basis points, thereafter through maturity in 2031. During the year ended December 31, 2025, $7.0 million of this debt was redeemed for a gain of $630,000. Also, $3.9 million of this subordinated debt bears interest at a fixed rate of 4.75% through April 1, 2026 and a floating rate, based on a benchmark rate plus 442 basis points, thereafter through maturity in 2031. We acquired three separate notes as part of the TCBI acquisition totaling $26.4 million. Of those notes, $10.0 million bears an adjustable interest rate plus 350 basis points, based on a benchmark rate, adjusting quarterly until maturity on April 11, 2028, and callable beginning April 11, 2023, $7.5 million bears an adjustable interest rate plus 350 basis points, based on a benchmark rate, adjusting quarterly, until maturity on December 13, 2028, and callable beginning December 13, 2023, $8.9 million was called on May 1, 2023 and ceased bearing interest as of such date. This $8.9 million note was fully extinguished during the year ended December 31, 2023. As part of valuing these three subordinated notes from TCBI, we incurred a fair value adjustment premium of $3.4 million that will accrete over five-to-seven years, with $~~833~~603,000 and $~~1.1~~833,000 ~~million~~ remaining at December 31, ~~2024~~2025 and December 31, ~~2023~~2024, respectively. We recognized $1.5 million in gains on the extinguishment of this debt during the year ended December 31, 2023.

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	As of December 31, 2024
	As of December 31, 2025
	1 year or less		More than 1 yearbut less than 3 years		3 years or more but less than 5 years		5 years or more		Total
(Dollars in thousands)	1 year or less		More than 1 yearbut less than 3 years		3 years or more but less than 5 years		5 years or more		Total
	(Dollars in thousands)
Non-cancelable future operating leases	$	5,896	$	10,510	$	7,382	$	6,383	$	30,171
Non-cancelable future operating leases	$	5,888	$	10,864	$	8,202	$	6,844	$	31,798
Time deposits	1,170,413		227,926		9,106		—		1,407,445
Time deposits	983,140		385,363		28,410		-		1,396,913
Subordinated debt	—		17,500		—		74,427		91,927
Subordinated debt	-		-		17,500		81,427		98,927
Advances from FHLB	256,200		100,000		25,000		50,000		431,200
Advances from FHLB	82,560		123,315		75,000		75,000		355,875
Subordinated debt - trust preferred securities	—		—		—		5,000		5,000
Subordinated debt - trust preferred securities	-		-		-		5,000		5,000
Securities sold under agreements to repurchase	22,622		—		—		—		22,622
Securities sold under agreements to repurchase	22,621		-		-		-		22,621
Standby and commercial letters of credit	47,671		3,486		86		—		51,243
Standby and commercial letters of credit	43,881		5,885		170		16		49,952
Commitments to extend credit	1,121,371		405,515		97,958		71,259		1,696,103
Commitments to extend credit	762,661		373,705		144,823		96,685		1,377,874
Total	$	2,624,173	$	764,937	$	139,532	$	207,069	$	3,735,711
Total	$	1,900,751	$	899,132	$	274,105	$	264,972	$	3,338,960

	As of December 31, 2023
	As of December 31, 2024
	1 year or less		More than 1 yearbut less than 3 years		3 years or more but less than 5 years		5 years or more		Total
(Dollars in thousands)	1 year or less		More than 1 yearbut less than 3 years		3 years or more but less than 5 years		5 years or more		Total
	(Dollars in thousands)
Non-cancelable future operating leases	$	5,888	$	10,864	$	8,202	$	6,844	$	31,798
Non-cancelable future operating leases	$	4,429	$	7,166	$	6,426	$	5,617	$	23,638
Time deposits	983,140		385,363		28,410		—		1,396,913
Time deposits	1,027,366		238,222		35,490		21		1,301,099
Subordinated debt	—		—		17,500		81,427		98,927
Subordinated debt	-		-		17,500		81,427		98,927
Advances from FHLB	82,560		123,315		75,000		75,000		355,875
Advances from FHLB	-		111,198		25,000		75,000		211,198
Subordinated debt - trust preferred securities	—		—		—		5,000		5,000
BTFP	300,000		-		-		-		300,000
Securities sold under agreements to repurchase	22,621		—		—		—		22,621
Subordinated debt - trust preferred securities	-		-		-		5,000		5,000
Standby and commercial letters of credit	43,881		5,885		170		16		49,952
Securities sold under agreements to repurchase	18,885		-		-		-		18,885
Commitments to extend credit	762,661		373,705		144,823		96,685		1,377,874
Standby and commercial letters of credit	43,704		927		546		-		45,177
Total	$	1,900,751	$	899,132	$	274,105	$	264,972	$	3,338,960
Commitments to extend credit	625,521		330,138		106,171		112,477		1,174,307
Total	$	2,019,905	$	687,651	$	191,133	$	279,542	$	3,178,231

Off-Balance Sheet Items

In the normal course of business, we enter into various transactions which, in accordance with GAAP, are not included in our consolidated balance sheets. We enter into these transactions to meet the financing needs of our customers. These transactions include commitments to extend credit and standby and commercial letters of credit which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated balance sheets.

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Our commitments associated with outstanding standby and commercial letters of credit and commitments to extend credit expiring by period as of the date indicated are summarized in the tables above. Because commitments associated with letters of credit and commitments to extend credit may expire unused, the amounts shown do not necessarily reflect the actual future cash funding requirements.

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Standby and commercial letters of credit are conditional commitments issued by us to guarantee the performance of a customer to a third party. In the event of nonperformance by the customer, we have rights to the underlying collateral, which can include commercial real estate, physical plant and property, inventory, receivables, cash and/or marketable securities. The credit risk to us in issuing letters of credit is essentially the same as that involved in extending loan facilities to our customers.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Because many of the commitments are expected to expire without being fully drawn upon, the total commitment amounts disclosed above do not necessarily represent future cash requirements. We evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if considered necessary by us, upon extension of credit, is based on management’s credit evaluation of the customer.

Interest Rate Sensitivity and Market Risk

As a financial institution, our primary component of market risk is sensitivity to movement in interest rates. Our asset and liability management policy provides management with the guidelines for effective interest rate risk management, and we have established a measurement system for monitoring our interest rate sensitivity position. We manage our sensitivity position within our established guidelines.

Fluctuations in interest rates will ultimately impact the level of income and expense recorded on many of our assets and liabilities and the market value of all interest-earning assets and interest-bearing liabilities. Interest rate risk is the potential of economic losses due to interest rate changes. These economic losses can be reflected as a loss of future net interest income and/or a loss of the current fair market value of our equity. The objective of interest rate risk management is to measure the effect on net interest income and economic value of equity and to position the balance sheet to minimize the risk of losses and maximize the amount of income without taking on unnecessary earning volatility.

We seek to manage our exposure to interest rates by structuring our balance sheet in the ordinary course of business however we may enter into derivatives contracts to hedge interest rate risk if it is appropriate given our risk profile and policy guidelines. Based upon the nature of our operations, we are not subject to foreign exchange or commodity price risk. We do not own any trading assets.

Our exposure to interest rate risk is managed by the asset-liability committee (“ALCO”) of b1BANK, in accordance with policies approved by our board of directors. In determining the appropriate level of interest rate risk, the committee considers the impact on earnings and capital of the current outlook on interest rates, potential changes in interest rates, regional economies, liquidity, business strategies and other factors. The committee meets regularly to review, among other things, the sensitivity of assets and liabilities to interest rate changes, the book and market values of assets and liabilities, unrealized gains and losses, purchase and sale activities, commitments to originate loans and the maturities of investments and borrowings. Additionally, the committee reviews liquidity, cash flow flexibility, maturities of deposits and consumer and commercial deposit activity. Management employs methodologies to manage interest rate risk which include an analysis of relationships between interest-earning assets and interest-bearing liabilities, and an interest rate shock simulation model.

We use interest rate risk simulation models and shock analysis to test the interest rate sensitivity of net interest income and fair value of equity, and the impact of changes in interest rates on other financial metrics. Contractual maturities and re-pricing opportunities of loans are incorporated into the model as are prepayment assumptions, maturity data and optionality. Deposit assumptions such as repricing betas and non-maturity balance decay rates are also incorporated into the model. Model assumptions are revised and updated on a regular basis as directed by policy, and more frequently if conditions merit. The assumptions used are inherently uncertain and, as a result, the model cannot precisely measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income. Actual results will differ from the model’s simulated results due to timing, magnitude and frequency of interest rate changes, as well as changes in market conditions, customer behavior, and the application and timing of various management strategies.

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On at least a quarterly basis, we run simulation models to calculate potential impacts to net interest income and the economic value of equity. Specific details of the simulations are reflected in policy as directed by ALCO.

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The following table summarizes the simulated change in net interest income and fair value of equity over a 12-month horizon as of the dates indicated:

	As of December 31,
	2024				2023
	2025				2024
Change in Interest Rates (Basis Points)	Percent Change inNet Interest Income		Percent Change inFair Value of Equity		Percent Change inNet Interest Income		Percent Change inFair Value of Equity
+300	87.1081	%	(03.7073	%)	(58.5010	%)	(50.5970	%)
+200	5.6031	%	(02.3036	%)	(35.2060	%)	(30.4730	%)
+100	2.9069	%	-(1.03	%)	(12.1090	%)	~~(1.39~~-	%)
Base	-	%	-	%	-	%	-	%
-100	(2.3062	%)	0.3089	%	0(2.30	%)	10.4030	%
-200	(5.2009	%)	(1.3023	%)	0(5.5020	%)	2(1.6730	%)

The results of the simulations are primarily driven by the contractual characteristics of all balance sheet instruments and customer behavior.

Impact of Inflation

Our consolidated financial statements and related notes included elsewhere in this statement have been prepared in accordance with GAAP. These require the measurement of financial position and operating results in terms of historical dollars, without considering changes in the relative value of money over time due to inflation or recession.

Unlike many industrial companies, substantially all of our assets and liabilities are monetary in nature. As a result, interest rates have a more significant impact on our performance than the effects of general levels of inflation. Interest rates may not necessarily move in the same direction or in the same magnitude as the prices of goods and services. However, other operating expenses do reflect general levels of inflation.

Non-GAAP Financial Measures

Our accounting and reporting policies conform to GAAP, and the prevailing practices in the banking industry. However, we also evaluate our performance based on certain additional non-GAAP financial measures. We classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively either financial measures calculated in accordance with GAAP, operating measures or other measures that are not non-GAAP financial measures or both.

This discussion and analysis section includes certain non-GAAP financial measures (e.g., referenced as “core” or “tangible”) intended to supplement, not substitute for, comparable GAAP measures. These measures typically adjust income available to common shareholders for certain significant activities or transactions that in management’s opinion can distort period-to-period comparisons of Business First’s performance. Transactions that are typically excluded from non-GAAP measures include realized and unrealized gains/losses on former bank premises and equipment, gain/losses on sales of securities, and acquisition-related expenses (including, but not limited to, legal costs, system conversion costs, severance and retention payments, etc.). The measures also typically adjust goodwill and certain intangible assets from book value and shareholders’ equity.

Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core business. These non-GAAP disclosures are not necessarily comparable to non-GAAP measures that may be presented by other companies. You should understand how such other banking organizations calculate their financial metrics or with names similar to the non-GAAP financial measures we have discussed in this statement when comparing such non-GAAP financial measures.

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~~disclosures~~Core ~~are~~Net ~~not~~Income. ~~necessarily~~Core ~~comparable~~net income available to ~~non-GAAP~~common ~~measures~~shareholders ~~that~~for ~~may~~the beyear ~~presented~~ended byDecember 31, ~~other~~2025 ~~companies~~was $83.5 ~~You~~million, ~~should~~or ~~understand~~$2.83 ~~how~~per ~~such~~diluted ~~other~~common ~~banking~~share, ~~organizations~~compared ~~calculate~~to ~~their~~core ~~financial~~net ~~metrics~~income available to common shareholders of $65.8 million, or $2.49 per diluted common share, for the year ended December 31, 2024. Core net income available to common shareholders for the year ended December 31, 2025 included losses on the sale of former bank premises and equipment of $840,000, a gain on the sale of a branch of $3.4 million, a gain on the extinguishment of subordinated debt of $630,000, a one time employee retention tax credit of $2.0 million, offset with ~~names~~acquisition ~~similar~~related expenses of $3.8 million and core conversion expenses of $2.5 million, compared to a CECL impact on the ~~non-GAAP~~Oakwood ~~financial~~acquisition ~~measures~~of we$4.8 ~~have~~million, ~~discussed~~acquisition inrelated ~~this~~expenses ~~statement~~of ~~when~~$1.6 ~~comparing~~million ~~such~~and ~~non-GAAP~~core ~~financial~~conversion ~~measures~~expenses of $974,000 for the year ended December 31, 2024.

Core Net Income. Core net income available to common shareholders for the year ended December 31, 2024 was $65.8 million, or $2.49 per diluted common share, compared to core net income available to common shareholders of $66.3 million, or $2.62 per diluted common share, for the year ended December 31, 2023. Core net income available to common shareholders for the year ended December 31, 2024 included a CECL impact on the Oakwood acquisition of $4.8 million, acquisition related expenses of $1.6 million and core conversion expenses of $974,000, compared to an adjustment for $2.6 million in losses on sales of securities, $945,000 in a gain on the sale of our Leesville, Louisiana banking center, $1.5 million in a gain on the extinguishment of debt associated with the TCBI acquisition in 2022, which was attributed to the $8.9 million subordinated debt redemption, $236,000 in acquisition-related expenses, and a $432,000 write-down on former bank premises for the year ended December 31, 2023.


	For the Years Ended December 31,
(Dollars in thousands, except per share data) (Unaudited)	2025		2024		2023

Interest Income:
Interest income	$	465,011	$	414,764	$	353,327
Core interest income	465,011		414,764		353,327
Interest Expense:
Interest expense	191,848		187,381		138,198
Core interest expense	191,848		187,381		138,198
Provision for Credit Losses:
Provision for credit losses	11,318		10,873		4,483
CECL Oakwood impact (3)	—		(4,824)

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