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What changed in Business First Bancshares, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Business First Bancshares, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+314 added−342 removedSource: 10-K (2026-02-26) vs 10-K (2025-03-07)

Top changes in Business First Bancshares, Inc.'s 2025 10-K

314 paragraphs added · 342 removed · 269 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

58 edited+11 added−19 removed237 unchanged
Biggest changeWhen using the Matrix authority, senior lenders have authority up to $500,000, market leaders have authority up to $750,000, regional market presidents have authority up to $1.5 million, the chief banking officer and regional credit officers have authority up to $2.5 million, regional chairmen have authority up to $2.0 million and the Chief Executive Officer, President, Chief Financial Officer, and Chief Credit Officer each have authority up to $2.5 million.
Biggest changeGenerally, 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.
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.
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.
The FDIC and Louisiana Office of Financial Institutions 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.
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.
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. 5 Table of Contents 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, the last two of which are described in further detail below.
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. 5 Table of Contents 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; (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 three of which are described in further detail below.
Immediately following consummation of the Oakwood acquisition, Oakwood Bank merged with and into us, with us 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.
Immediately following consummation of the Oakwood acquisition, Oakwood Bank merged with and into b1BANK, with b1BANK 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.
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.
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. 22 Table of Contents 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.
We have not elected to use the CBLR framework since the year ended December 31, 2020. 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.
We have not elected to use the CBLR framework since the year ended December 31, 2020. 14 Table of Contents 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.
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.
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 15 Table of Contents required at times when we may not be inclined to provide it.
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.
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 21 Table of Contents personal information to a non-affiliated third party.
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.
In addition, the Federal Reserve has the power to order a financial holding company or its 13 Table of Contents 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.
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.
In general, the Bank may pay dividends to the Company without the 18 Table of Contents 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 Company and the Bank must each remain well capitalized and well managed and the Bank must receive a Community Reinvestment 13 Table of Contents 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.
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.
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.
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. 16 Table of Contents b1BANK The Bank is a commercial bank chartered under the laws of the State of Louisiana.
On October 1, 2024, we consummated the merger of Oakwood, the parent bank holding company for Oakwood Bank, with and into us, with us continuing as the surviving corporation pursuant to the terms of that certain Agreement and Plan of Reorganization (the "Reorganization Agreement"), dated April 25, 2024, by and between us and Oakwood.
On October 1, 2024, we consummated the merger of Oakwood, the parent bank holding company for Oakwood Bank, with and into Business First, with Business First continuing as the surviving corporation pursuant to the terms of that certain Agreement and Plan of Reorganization (the "Oakwood Reorganization Agreement"), dated April 25, 2024, by and between Business First and Oakwood.
In 14 Table of Contents 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.
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.
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 7 Table of Contents banking, electronic funds transfers through ACH services, domestic and foreign wire transfers, traveler’s checks, cash management, vault services, loan and deposit sweep accounts, SBA products, interest-rate swaps and lock box services.
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 banking, electronic funds transfers through ACH services, domestic and foreign wire transfers, traveler’s checks, cash management, vault services, loan and deposit sweep accounts, SBA products, interest-rate swaps and lock box services.
We have also built treasury and cash management programs that cater to our target customers. • 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.
We have also built treasury and cash management programs that cater to our target customers. 6 Table of Contents • 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.
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.
The FDIC’s prompt corrective action regulations also generally prohibit a bank from making any capital distributions 17 Table of Contents (including payment of a dividend) or paying any management fee to its parent holding company if the bank would thereafter be undercapitalized.
As of December 31, 2024, the Bank met the requirements to be categorized as well capitalized under the prompt corrective action framework currently in effect.
As of December 31, 2025, the Bank met the requirements to be categorized as well capitalized under the prompt corrective action framework currently in effect.
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 17 Table of Contents the bank’s capital.
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.
We 8 Table of Contents 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.
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.
As discussed above, in 15 Table of Contents 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.
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 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, 16 Table of Contents supervision and examination by the Louisiana Office of Financial Institutions and the FDIC.
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, supervision and examination by the Louisiana Office of Financial Institutions and the FDIC.
Further, our emphasis on asset/liability management training allows our local banking teams to 6 Table of Contents understand the importance of quality core deposit funding, which we believe is vital to our continued loan growth.
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.
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.
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 20 Table of Contents conducting other types of transactions.
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. Financial Modernization.
If there are additional 19 Table of Contents 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. 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 19 Table of Contents activities.
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.
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 20 Table of Contents authority to supervise and examine depository institutions with $10.0 billion or less in assets for compliance with federal consumer laws remains largely with those institutions’ primary regulators.
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 authority to supervise and examine depository institutions with $10.0 billion or less in assets for compliance with federal consumer laws remains largely with those institutions’ primary regulators.
Our private banking products and services are offered at all of our banking centers. 10 Table of Contents 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.
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.
Risks associated with construction and development loans include fluctuations in the value of real estate, project completion risk and change in market trends.
Risks associated with construction and development loans include fluctuations in the value of real estate, project completion risk and change in 8 Table of Contents market trends.
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. 11 Table of Contents Productivity .
Our Chief Human Resources Officer reports directly to the Chief Administrative Officer 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. Productivity .
Under the Basel III 18 Table of Contents regulatory capital framework, the failure to maintain an adequate capital conservation buffer, as discussed above, may also result in dividend restrictions.
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.
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. Corrective Measures for Capital Deficiencies.
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 thereafter. Corrective Measures for Capital Deficiencies.
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.
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.
As of December 31, 2024, on a consolidated basis, we had total assets of $7.9 billion, total loans of $6.0 billion, total deposits of $6.5 billion and shareholders’ equity of $799.5 million. Our common stock is listed on the Nasdaq Global Select Market under the symbol “BFST”.
As of December 31, 2025, on a consolidated basis, we had total assets of $8.2 billion, total loans of $6.2 billion, total deposits of $6.7 billion and shareholders’ equity of $896.9 million. Our common stock is listed on the Nasdaq Global Select Market under the symbol “BFST”.
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.
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.
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. As of December 31, 2024, the Company’s capital meets or exceeds these capital requirements, including the buffer.
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.
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.
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.
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.
Key items that drive our human capital resources are described below. 11 Table of Contents Structure . As of December 31, 2025, we proudly employ 821 full-time and 21 part-time employees (for a total of 842 employees). Our employees reside in Louisiana, Mississippi, Texas, and 9 other states with remote employees.
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 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 7 Table of Contents centers and loan production offices.
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.
Full-time equivalents (FTEs) as of December 31, 2025, were 831. All banking centers and loan production offices are in Louisiana and Texas, and our subsidiary registered investment advisor (RIA), SSW, is in Mississippi.
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%) (1) Based on EEO-1 job classifications. (2) Based on b1BANK’s Executive Team.
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.
As of September 30, 2024, Oakwood had $863.6 million in total assets, $700.2 million in loans and $741.3 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.
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.
We carefully manage the size of our workforce and reallocate resources as needed. For 2024, we managed an average of $7.0 million in loans held for investment and $7.6 million in deposits per FTE. Diversity . We have an organization-wide focus to improve recruitment and retention of women and ethnic minorities.
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.
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.
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.
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.
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. 10 Table of Contents 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.
As of December 31, 2024, 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.
As of December 31, 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.
Prior to the expansion into the Houston market from the TCBI merger, each of our expansions into new markets to date has been accomplished organically. • Disciplined Acquisition Strategy.
Except for the acquisition of Texas Citizens Bancorp, Inc. ("TCBI"), and our expansion into the Houston market, each of our entries into new markets to date have been accomplished organically. • Disciplined Acquisition Strategy.
All commercial loans require a minimum of two approvers (the banker and at least one other individual with higher authority).
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).
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 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 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.
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.
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.
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.
Any new branch, whether located inside or outside of Louisiana, must also be approved by the FDIC, as the Bank’s primary federal regulator. 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.
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.
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.
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.
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,” imposing both underwriting standards – for example, a borrower’s debt-to-income ratio may not exceed 43.0% – and limits on the terms of their loans.
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.
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.
Our credit underwriters are based throughout our footprint and service all of our markets from those locations. 9 Table of Contents 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.
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.
Employee turnover for 2025 was 21.0%, which includes the positions that were eliminated following the Oakwood conversion. 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.
Furthermore, in 2024, we continued the use of online exit surveys to provide feedback and help increase retention of women and ethnic 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.
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All relationships exceeding $60.0 million or borrowers exceeding $20.0 million are required to be approved by the Director’s Loan 9 Table of Contents Committee, which is comprised of board members.
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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”).
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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.
Added
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.
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In 2024, we completed a third year of our Intern Insights Program, which focuses on creating a pipeline between young diverse talent and the banking industry. Specifically, recruiting efforts focused on junior year finance and accounting majors at Southern University and A&M College in Baton Rouge, a historically black university, for our Intern Insights Program.
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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.
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In 2024, our Talent Development team made significant strides in enhancing and expanding our training initiatives. Our goals were to directly benefit our clients by elevating service standards through strategic development programs.
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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.
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Key among these was the integration of Submittable, which is an online platform used to streamline the submission and review processes into our internal application for external learning and development programs. This innovative platform revolutionized how employees applied for external development programs, streamlining our application process, and improving how managers and executives review and provide feedback on applications.
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In 2025, Talent Development continues to strengthen leadership capability across the organization through redesigned and targeted development experiences. The “Leading b1” manager program has been fully reimagined and relaunched as a 2.5-day workshop. It covers immersive leadership experience focused on coaching, performance management, and leading through change.
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Further advancements were made in our “Learning b1: Manager Orientation” program, which underwent significant improvements with the introduction of personalized coaching sessions. These sessions provided targeted guidance to enhance leadership skills among managers, leading to more efficient teams and, consequently, better internal and external client interactions and service quality.
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Talent Development partnered with business leaders to strengthen operational consistency, risk awareness, and compliance across the organization. Key initiatives included standardized training for frontline practices, system readiness training for retail operations, and targeted programs addressing fraud prevention and compliance. One training to note was “The First Domino: Stopping Fraud in its Tracks”.
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Additionally, our specialized training programs, namely the “Transaction Dispute Reporting for the Frontline” and the “Mastering Currency Transaction Reports: Compliance and Best Practices,” significantly enhanced client service and compliance standards.
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Talent Development remains a key partner in positioning b1BANK to adapt, perform, and grow in a dynamic financial services environment. 12 Table of Contents Our average tenure is 6.5 years of service. During 2025, we had 82 internal employee promotions, 147 external hires, and 9 rehired employees.
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These programs equipped our staff with essential skills for efficient dispute handling and deepened their understanding of critical compliance areas such as CTR’s, thereby ensuring secure, compliant client transactions and maintaining client trust in us. In 2024, we continued the enhancement in our Emergenetics training program.
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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.
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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.
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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, 2025, the Company’s capital meets or exceeds these capital requirements, including the buffer.
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This approach fostered a more dynamic, inclusive, and effective leadership style, significantly impacting our 12 Table of Contents ability to exceed client expectations through superior team performance and decision-making. The enhancement of this innovative training program underscored our ongoing commitment to organizational excellence and superior client service. Our average tenure is 6.6 years of service.
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In 2025, the FDIC, the Bank’s primary federal regulator, approved a final rule to streamline the process for the establishment and relocation of domestic branches. Although new branches must still be approved by the FDIC, provides that most branch establishment or relocation filings that qualify for expedited processing will be deemed approved within three business days after submission.
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Certain loans, including interest-only loans and negative amortization loans, cannot be qualified mortgages. EGRRCPA, among other matters, expanded the definition of qualified mortgages for banks with less than $10 billion in assets. Anti-Money Laundering and OFAC.
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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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf 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.
Biggest changeIf 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. 38 Table of Contents 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.
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; 29 Table of Contents • 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 • the ability to successfully integrate acquired businesses; and • the maintenance of adequate regulatory capital.
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; • 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 29 Table of Contents • the ability to successfully integrate acquired businesses; and • the maintenance of adequate regulatory capital.
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. 41 Table of Contents 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.
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. 40 Table of Contents 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.
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. 42 Table of Contents 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.
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. 41 Table of Contents 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.
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 43 Table of Contents proxy contest, even if those events were perceived by many of our shareholders as beneficial to their interests.
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 42 Table of Contents proxy contest, even if those events were perceived by many of our shareholders as beneficial to their interests.
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. The annual test did not indicate any impairment as of the testing date.
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, 2025. The annual test did not indicate any impairment as of the testing date.
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.
The amount that we, as a mortgagee, may realize after a default is dependent upon factors outside of our 26 Table of Contents 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.
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 37 Table of Contents such examinations could have an adverse effect on our business, financial condition, results of operations and prospects.
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 such examinations could have an adverse effect on our business, financial condition, results of operations and prospects.
Because we have a large average loan size, if only a few of our largest borrowers become unable to repay their loan 27 Table of Contents 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.
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.
As of December 31, 2024, 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.
As of December 31, 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.
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. We face significant competition to attract and retain customers, which could impair our growth, decrease our profitability or result in loss of market share.
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. 23 Table of Contents We face significant competition to attract and retain customers, which could impair our growth, decrease our profitability or result in loss of market share.
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.
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 25 Table of Contents 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.
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. 40 Table of Contents We are subject to commercial real estate lending guidance issued by the federal banking regulators that impacts our operations and capital requirements.
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. We are subject to commercial real estate lending guidance issued by the federal banking regulators that impacts our operations and capital requirements.
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. 31 Table of Contents New lines of business, products, product enhancements or services may subject us to additional risks.
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. New lines of business, products, product enhancements or services may subject us to additional risks.
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.
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. 37 Table of Contents We face a risk of noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations.
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 38 Table of Contents the individual federal banking regulators, as well as the U.S. Department of Justice, Drug Enforcement Administration and Internal Revenue Service.
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 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.
We may also rely on representations of clients and counterparties as to the accuracy and 34 Table of Contents 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.
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.
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 27 Table of Contents 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 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 39 Table of Contents foreclosures or forcing the modification of certain mortgages.
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.
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.
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 32 Table of Contents 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.
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.
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 33 Table of Contents practices within the financial services industry.
In addition, one or more of our employees or vendors could cause a significant operational breakdown or failure, 35 Table of Contents either as a result of human error or where an individual purposefully sabotages or fraudulently manipulates our loan documentation, operations or systems.
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.
Certain accounting policies 34 Table of Contents 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.
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.
As of December 31, 2024, approximately $1.9 billion, or 31.2%, 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.
As of December 31, 2025, approximately $1.9 billion, or 31.0%, 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.
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 36 Table of Contents significantly increase our operating expenses.
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 significantly increase our operating expenses.
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. 24 Table of Contents 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; • 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.
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; 24 Table of Contents • 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.
The Federal Open Market Committee raised the target federal funds rate several times in 2022 and 2023 and reduced them three times in 2024.
The Federal Open Market Committee raised the target federal funds rate several times in 2022 and 2023 and reduced them several times in 2024 and 2025.
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.
Accordingly, we could be required to provide financial assistance to the Bank if it experiences financial distress. 39 Table of Contents 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.
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. As of December 31, 2024, our goodwill totaled $121.6 million.
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, 2025. As of December 31, 2025, our goodwill totaled $121.1 million.
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 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.
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, approximately $3.2 billion, or 52.7% of our loan portfolio is secured by commercial and construction real estate.
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, 2025, approximately $3.3 billion, or 52.5% of our loan portfolio is secured by commercial and construction real estate.
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.
As of December 31, 2025, our allowance for credit losses totaled $58.1 million, which represents approximately 0.94% 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.
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.
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.
As of December 31, 2024, brokered and wholesale deposits, including reciprocal deposits, comprised 18.1% of our total deposits, and our borrowings comprised 60.4% 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.
As of December 31, 2025, brokered and wholesale deposits, including reciprocal deposits, comprised 18.8% of our total deposits, and our borrowings comprised 61.5% 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.
As of December 31, 2024, $758.2 million, or approximately 11.6%, 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 32 Table of Contents and typically fluctuate on a seasonal basis due to timing differences between tax collection and expenditures.
As of December 31, 2025, $754.3 million, or approximately 11.3%, 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.
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. 25 Table of Contents Our growth strategy also relies on our ability to attract and retain additional profitable 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.
The fair value of our investment securities can fluctuate due to factors outside of our control. As of December 31, 2024, the fair value of our investment securities portfolio was approximately $893.5 million, which included a net unrealized loss of approximately $79.9 million.
The fair value of our investment securities can fluctuate due to factors outside of our control. As of December 31, 2025, the fair value of our investment securities portfolio was approximately $989.2 million, which included a net unrealized loss of approximately $42.2 million.
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.
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. 31 Table of Contents 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.
As of December 31, 2024, we held approximately $5.5 million in other real estate owned (“OREO”).
As of December 31, 2025, we held approximately $13.0 million in other real estate owned (“OREO”).
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.
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.
As of December 31, 2024, our average loan size (including unfunded commitments) was approximately $447,000. Further, as of December 31, 2024, our 10 largest borrowing relationships ranged from approximately $23.0 million to $95.2 million (including unfunded commitments) and averaged approximately $44.6 million in total commitments.
As of December 31, 2025, our average loan size (including unfunded commitments) was approximately $542,000. Further, as of December 31, 2025, our 10 largest borrowing relationships ranged from approximately $50.0 million to $140.0 million (including unfunded commitments) and averaged approximately $65.0 million in total commitments.
We conduct our operations exclusively in the state of Louisiana, in the Dallas/Fort Worth metroplex and Houston. As of December 31, 2024, 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.
As of December 31, 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.
The Board of Governors of the Federal Reserve System (the "Federal Reserve"), the Federal Deposit Insurance Corporation (the "FDIC"), and the Louisiana Office of Financial Institutions (the "Louisiana OFI") periodically conduct examinations of various aspects of our business, including our compliance with laws and regulations.
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.
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.
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. 30 Table of Contents 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.
As of December 31, 28 Table of Contents 2024, we had $1.4 billion in unfunded credit commitments to our customers.
As of December 31, 2025, we had $1.7 billion in unfunded credit commitments to our customers.
Our articles of incorporation authorize us to issue up to 50,000,000 shares of common stock. As of February 28, 2025, there are 29,552,358 shares of our common stock issued and outstanding.
Our articles of incorporation authorize us to issue up to 50,000,000 shares of common stock. As of February 20, 2026, there are 32,710,447 shares of our common stock issued and outstanding.
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.
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.
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.
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.
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, 45.0% of our earning assets and 67.5% of our 30 Table of Contents interest-bearing liabilities were variable rate.
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, 2025, 49.7% of our earning assets and 67.7% of our interest-bearing liabilities were variable rate. As of December 31, 2025, our modeled interest sensitivity is modestly asset sensitive.
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.
Technology companies frequently enter into litigation based on allegations of patent infringement or other violations of intellectual property rights. 35 Table of Contents In addition, patent holding companies seek to monetize patents they have purchased or otherwise obtained.
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. 33 Table of Contents 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.
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.
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.
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. The Federal Reserve may require us to commit capital resources to support the Bank.
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.
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.
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 crisis for the purpose of restoring the reserve ratios of the Deposit Insurance Fund.
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.
All of these factors could be detrimental to our business, and the interplay between these factors can be complex and unpredictable. 23 Table of Contents 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.
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.
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.
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.
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.
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.
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. 26 Table of Contents 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.
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.
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.
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.
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.
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. Our financial results depend on management ’ s selection of accounting methods and certain assumptions and estimates.
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.
Any of these developments could have an adverse effect on our business, financial condition and results of operations. 28 Table of Contents 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.
The market value of real estate can fluctuate significantly in a short period of time. As of December 31, 2024, approximately $4.0 billion, or 67.5%, of our total loans were comprised of loans with real estate as a primary or secondary component of collateral.
As of December 31, 2025, approximately $4.2 billion, or 67.8%, of our total loans were comprised of loans with real estate as a primary or secondary component of collateral.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Removed
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.
Added
All of these factors could be detrimental to our business, and the interplay between these factors can be complex and unpredictable.
Removed
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.
Added
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.
Removed
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.
Added
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.
Removed
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.
Added
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.
Removed
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.
Added
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.
Removed
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.
Added
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.
Removed
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.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+8 added−13 removed0 unchanged
Biggest changeDefending 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 Security and risk management strategies. 44 Table of Contents Global threat intelligence is monitored for potential Security risks or vulnerabilities.
Biggest changeEffectively defending against cybersecurity threats demands a concentrated, collaborative approach and, as such, supplementary programs and processes have been instituted into cybersecurity and risk management strategies. 43 Table of Contents We employ a multilayered approach to assessing, identifying and managing material risks from cybersecurity threats.
ITEM 1C. Cybersecurity. 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.
ITEM 1C. Cybersecurity. Cybersecurity Risk Management and 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 (collectively, “Program(s)”) have been adapted to fulfill this obligation by establishing and employing administrative, technical and physical safeguards to maintain a secure and dependable infrastructure and environment.
Consistent with industry guidelines, such as the National Institute of Standards and Technology Cybersecurity framework, and regulatory requirements, guidelines and standards, b1BANK’s cybersecurity program has been adopted to fulfill this obligation by establishing and employing administrative, technical and physical safeguards to maintain a secure and dependable infrastructure and environment.
These Programs focus on identifying and addressing threats to the company and its customers and contribute corporate decision-making guidance for information security, cybersecurity and risk management objectives.
This program focuses on identifying and addressing threats to the company and its customers and contributes corporate decision-making guidance for cybersecurity and risk management objectives.
Removed
These threats are analyzed for potential impact to the bank and are addressed in accordance with Program requirements. b1BANK’s Chief Information Security Officer (“CISO”) presents Security reports to the Operating Committee and Risk Committee of b1BANK’s board of directors on a quarterly basis or as needed. These reports consist of significant Security events and issues, vulnerability metrics, and material risks.
Added
These processes include continuous monitoring of global threat intelligence, vulnerability management processes, incident alerting and periodic, independent audits. Our risk assessment methodology evaluates potential impacts to critical systems and sensitive information across operational, financial, legal, and reputational domains, enabling us to determine whether a cybersecurity threat or incident is material.
Removed
Additional reporting representing the overall state of the Program is presented on at least an annual basis to the full board of directors, which is responsible for overseeing Security functions and associated initiatives.
Added
Materiality determinations follow structured criteria consistent with emerging industry practices and SEC guidance. Security considerations are integrated into our enterprise risk management (ERM) program. Cyber risks are incorporated into the Company’s risk taxonomy, risk appetite framework, and enterprise‑level risk assessments, ensuring consistency in how operational risks—including technology and security risks—are identified, prioritized, and managed.
Removed
Security is embedded into our culture, being promoted through security awareness materials, mandatory testing campaigns and the mandatory annual review and acknowledgement of corporate Security policies and standards. Business Continuity and Incident Response plans have been cohesively established and employed to provide frameworks for responding to and recovering from events such as natural disasters or security events.
Added
We maintain incident response and business continuity plans that provide structured processes to contain, eradicate, and recover from cybersecurity events. These plans are tested at least annually and updated as necessary to reflect emerging threats, operational changes, and regulatory developments. We also manage cybersecurity risks arising from third‑party service providers through a dedicated vendor management program.
Removed
Our Director of Business Continuity and CISO, respectively, are responsible for the facilitation of these plans, as needed, and testing each on at least an annual basis. The owners of these plans are responsible for identifying an appropriate group of cross-enterprise subject matter experts and convening them to ensure a comprehensive response.
Added
Service providers are subjected to comprehensive due‑diligence reviews, contract controls, and ongoing monitoring. Governance Our Board of Directors, through its Risk Committee, provides oversight of cybersecurity risk. The Committee receives quarterly reports from management regarding cybersecurity events, vulnerability trends, risk assessments, and program maturity.
Removed
These groups, under the leadership of our Chief Operations Officer (“COO”), provide appropriate internal notifications of material security events and response activities to our General Counsel, Chief Risk Officer, Chief Executive Officer, and board of directors or other appropriate corporate executives.
Added
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”).
Removed
A vendor management program has been developed and employed to manage potential risks for third-party service providers, suppliers and external partners who have access to our confidential information. The effectiveness of these processes is verified by independent internal and external audit functions or organizations.
Added
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.
Removed
Independent internal and external auditors are engaged to perform Security assessments to determine the appropriateness and effectiveness of the overall Program. Supplementary self-assessments are performed as needed or as required by regulatory guidelines. Assessment results are evaluated to determine the scope of risk on the security of the bank and are addressed in accordance with Program requirements.
Added
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.
Removed
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.
Added
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.
Removed
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.
Removed
Our COO serves on the Risk Committee of the Board, chaired by a board director.
Removed
The Company engages in a continuous, focused risk monitoring process to identify the likelihood and impact of internal 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.
Removed
The CISO and COO together lead efforts to design, 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.
Removed
To date, no risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to affect b1BANK.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeWe believe that our facilities are adequately covered by insurance and that these facilities are adequate to meet our needs.
Biggest changeWe believe that our facilities are adequately covered by insurance and that these facilities are adequate to meet our needs. 44 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

3 edited+0 added−0 removed2 unchanged
Biggest changeWe intend to defend ourselves vigorously against any pending or future claims and litigation. 45 Table of Contents 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.
Biggest changeAt 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.
Mine Safety Disclosures. Not applicable. 46 Table of Contents PART II
Mine Safety Disclosures. Not applicable. 45 Table of Contents PART II
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.
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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

11 edited+3 added−2 removed15 unchanged
Biggest changeThe historical stock price performance for our common stock shown on the graph below is not necessarily indicative of future stock performance. 48 Table of Contents Date BFST S&P 500 KRX 12/31/2019 $ 100.00 $ 100.00 $ 100.00 3/31/2020 54.55 80.40 59.62 6/30/2020 62.43 96.92 68.30 9/30/2020 61.42 105.57 61.30 12/31/2020 83.77 118.40 91.29 3/31/2021 98.87 125.71 118.41 6/30/2021 95.32 136.46 116.73 9/30/2021 97.64 137.25 120.48 12/31/2021 118.68 152.39 124.74 3/31/2022 102.50 145.38 122.03 6/30/2022 90.28 121.97 107.40 9/30/2022 91.72 116.02 111.62 12/31/2022 94.83 124.79 116.10 3/31/2023 73.89 134.14 95.25 6/30/2023 65.52 145.87 89.78 9/30/2023 82.09 141.09 91.92 12/31/2023 108.47 157.59 115.63 3/31/2024 98.66 174.23 108.87 6/30/2024 96.97 181.69 105.92 9/30/2024 115.02 192.38 122.61 12/31/2024 115.79 197.02 130.90 ITEM 6. [RESERVED] 49 Table of Contents ITEM 7.
Biggest changeThe historical stock price performance for our common stock shown on the graph below is not necessarily indicative of future stock performance. 47 Table of Contents Date BFST S&P 500 KRX 12/31/2020 $ 100.00 $ 100.00 $ 100.00 3/31/2021 118.03 106.17 129.71 6/30/2021 113.78 115.25 127.86 9/30/2021 116.56 115.92 131.97 12/31/2021 141.68 128.71 136.64 3/31/2022 122.36 122.79 133.67 6/30/2022 107.77 103.02 117.65 9/30/2022 109.49 97.99 122.27 12/31/2022 113.21 105.40 127.17 3/31/2023 88.20 113.30 104.33 6/30/2023 78.21 123.20 98.34 9/30/2023 97.99 119.17 100.68 12/31/2023 129.48 133.10 126.66 3/31/2024 117.77 147.15 119.26 6/30/2024 115.76 153.46 116.03 9/30/2024 137.31 162.49 134.31 12/31/2024 138.22 166.40 143.38 3/31/2025 131.71 159.29 135.48 6/30/2025 134.09 176.72 140.28 9/30/2025 129.19 191.08 148.74 12/31/2025 143.86 196.16 152.71 ITEM 6. [RESERVED] 48 Table of Contents ITEM 7.
A discussion regarding significant changes in the financial condition of Business First and its subsidiaries from December 31, 2022 to December 31, 2023 and its results of operations for the year ended December 31, 2023 can be found under “
A discussion regarding significant changes in the financial condition of Business First and its subsidiaries from December 31, 2023 to December 31, 2024 and its results of operations for the year ended December 31, 2024 can be found under “
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 to December 31, 2024 and its results of operations for the year ended December 31, 2024.
The following discussion and analysis is to focus on significant changes in the financial condition of Business First and its subsidiaries from December 31, 2024 to December 31, 2025 and its results of operations for the year ended December 31, 2025.
As of May 23, 2024, there will be no future awards made under the 2017 Plan. 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.
As of May 23, 2024, there will be no future awards made under the 2017 Plan. 46 Table of Contents The following table summarizes information as of December 31, 2025 relating to the number of securities to be issued upon the exercise of the outstanding options and warrants and their weighted-average exercise price.
The following assumes $100 invested on January 1, 2020 in our common stock at the closing price of $24.93 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 following assumes $100 invested on January 1, 2021 in our common stock at the closing price of $20.36 per common share, otherwise reflects our stock and the S&P 500 and KRX values as of close of trading, and assumes the reinvestment of dividends, if any.
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 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.
Number of Securities to Be Issued Upon Exercise of Outstanding Options Weighted-Average Exercise Price of Outstanding Options Number of Securities Remaining Available For Future Issuance Under Equity Compensation Plans Equity compensations plans approved by security holders 80,726 $ 23.48 676,437 Equity compensation plans not approved by security holders — — — Total equity compensation plans 80,726 $ 23.48 676,437 Recent Sales of Unregistered Securities None.
Prior to that date, there was no public trading market for our common stock. As of February 28, 2025, there were 29,552,358 issued and outstanding shares of our common stock held of record by approximately 1,040 shareholders. We also had outstanding 179,969 options to purchase shares of our common stock issued under our equity compensation plans, as described below.
Prior to that date, there was no public trading market for our common stock. As of February 20, 2026, there were 32,710,447 issued and outstanding shares of our common stock held of record by approximately 1,073 shareholders. We also had outstanding 80,726 options to purchase shares of our common stock issued under our equity compensation plans, as described below.
As of December 31, 2024, there were 160,336 shares of common stock issued under the 2024 Plan to our employees, directors or consultants, of which 152,084 shares are subject to outstanding and unexercised stock options to 47 Table of Contents purchase shares of our common stock, and 484,664 shares of common stock remain available for grant.
As of December 31, 2025, there were 195,792 shares of common stock issued under the 2024 Plan to our employees, directors or consultants, of which 193,847 shares are subject to outstanding and unexercised stock options to purchase shares of our common stock, and 676,437 shares of common stock remain available for grant.
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.
In January 2007, our board of directors adopted an amendment to the 2006 Stock Option Plan which increased the number of available shares under the plan from 450,000 to 1,500,000. Our 2006 Stock Option Plan expired on December 22, 2016 and we are no longer permitted to issue additional stock options under this plan.
As of December 31, 2024, we had outstanding and unexercised stock options to purchase up to 15,485 shares of our common stock that have been issued under the 2017 Plan.
As of December 31, 2025, we had no outstanding and unexercised stock options to purchase our common stock outstanding that had been issued to our executive officers and key personnel. On June 29, 2017, our shareholders approved the 2017 Equity Incentive Plan (the “2017 Plan”).
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 through December 31, 2024.
Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Maximum number (or approx. dollar value) of shares yet to be purchased under the plan (in thousands) October 1 through October 31, 2025 26,956 $ 24.54 26,956 $ 29,339 November 1 through November 30, 2025 123,548 24.85 123,548 26,269 December 1 through December 31, 2025 — — — 26,269 TOTAL 150,504 $ 24.79 150,504 $ 26,269 Stock Performance Graph The following table and graph compares the cumulative total shareholder return on our common stock to the cumulative total return of the S&P 500 Index and the KBW Nasdaq Regional Bank Index (“KRX”) for the period beginning on January 1, 2021 through December 31, 2025.
Removed
Although our 2006 Stock Option Plan expired on December 22, 2016 and we are no longer permitted to issue additional stock options under this plan, as of December 31, 2024, we had outstanding and unexercised stock options to purchase up to 12,400 shares of our common stock outstanding that have 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.
Added
The 2017 Plan was combined into the 2024 Equity Incentive Plan, as described below, on August 15, 2025.
Removed
On June 29, 2017, our shareholders approved the 2017 Equity Incentive Plan (the “2017 Plan”).
Added
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.
Added
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.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor the Years Ended December 31, 2023 2022 2022 (Dollars in thousands, except per share data) (Unaudited) Interest Income: Interest income $ 414,764 $ 353,327 $ 236,114 Core interest income 414,764 353,327 236,114 Interest Expense: Interest expense 187,381 138,198 36,537 Core interest expense 187,381 138,198 36,537 Provision for Credit Losses: Provision for credit losses 10,873 4,483 10,886 CECL Oakwood impact (3) (4,824) - - Core provision expense 6,049 4,483 10,886 Other Income: Other income 44,193 36,642 29,310 (Gains) losses on former bank premises and equipment (50) - 717 (Gains) losses on sale of securities (7) 2,565 48 Insurance reimbursement of storm expenditures - - (687) Gain on sale of branch - (945) - Gain on extinguishment of debt - (1,458) - Core other income 44,136 36,804 29,388 Other Expense: Other expense 177,652 156,702 149,409 Acquisition-related expenses (2) (1,621) (236) (5,178) Write-down of former bank premises - (432) - Occupancy and bank premises - storm repair - - (501) Core conversion expense (974) - - Core other expense 175,057 156,034 143,730 Pre-Tax Income: Pre-tax income 83,051 90,586 68,592 CECL Oakwood impact (3) 4,824 - - (Gains) losses on former bank premises and equipment (50) - 717 (Gains) losses on sale of securities (7) 2,565 48 Insurance reimbursement of storm expenditures - - (687) Gain on sale of branch - (945) - Gain on extinguishment of debt - (1,458) - Acquisition-related expenses (2) 1,621 236 5,178 Write-down of former bank premises - 432 - Occupancy and bank premises - storm repair - - 501 Core conversion expense 974 - - Core pre-tax income 90,413 91,416 74,349 Provision for Income Taxes: (1) Provision for income taxes 17,944 19,543 14,337 Tax on CECL Oakwood impact (3) 1,019 - - Tax on (gains) losses on former bank premises and equipment (11) - 151 Tax on (gains) losses on sale of securities (1) 542 10 Tax on insurance reimbursement of storm expenditures - - (144) Tax on gain on sale of branch - (200) - Tax on gain on extinguishment of debt - (308) - Tax on acquisition-related expenses (2) 97 21 942 Tax on write-down of former bank premises - 91 - Tax on occupancy and bank premises - storm repair - - 106 Tax on core conversion expense 205 - - Core provision for income taxes 19,253 19,689 15,402 Preferred Dividends Preferred dividends 5,401 5,401 1,350 Core preferred dividends 5,401 5,401 1,350 80 Table of Contents Net Income Available to Common Shareholders: Net income available to common shareholders 59,706 65,642 52,905 CECL Oakwood impact (3), net of tax 3,805 - - (Gains) losses on former bank premises and equipment , net of tax (39) - 566 (Gains) losses on sale of securities, net of tax (6) 2,023 38 Insurance reimbursement of storm expenditures, net of tax - - (543) Gain on sale of branch, net of tax - (745) - Gain on extinguishment of debt, net of tax - (1,150) - Acquisition-related expenses (2), net of tax 1,524 215 4,236 Write-down of former bank premises, net of tax - 341 - Occupancy and bank premises - storm repair, net of tax - - 395 Core conversion expense, net of tax 769 - - Core net income available to common shareholders $ 65,759 $ 66,326 $ 57,597 Diluted Earnings Per Common Share: Diluted earnings per common share $ 2.26 $ 2.59 $ 2.32 CECL Oakwood impact (3), net of tax 0.14 - - (Gains) losses on former bank premises and equipment , net of tax - - 0.02 (Gains) losses on sale of securities, net of tax - 0.08 - Insurance reimbursement of storm expenditures, net of tax - - (0.02) Gain on sale of branch, net of tax - (0.03) - Gain on extinguishment of debt, net of tax - (0.04) - Acquisition-related expenses (2), net of tax 0.06 0.01 0.18 Write-down of former bank premises, net of tax - 0.01 - Occupancy and bank premises - storm repair, net of tax - - 0.02 Core conversion expense, net of tax 0.03 - - Core diluted earnings per common share $ 2.49 $ 2.62 $ 2.52 _______________________________ (1) Tax rates, exclusive of certain nondeductible acquisition-related expenses and goodwill, utilized were 21.129% for both 2024 and 2023 .
Biggest changeFor the Years Ended December 31, (Dollars in thousands, except per share data) (Unaudited) 2025 2024 2023 Interest Income: Interest income $ 465,011 $ 414,764 $ 353,327 Core interest income 465,011 414,764 353,327 Interest Expense: Interest expense 191,848 187,381 138,198 Core interest expense 191,848 187,381 138,198 Provision for Credit Losses: Provision for credit losses 11,318 10,873 4,483 CECL Oakwood impact (3) — (4,824) — Core provision expense 11,318 6,049 4,483 Other Income: Other income 51,542 44,193 36,642 (Gains) losses on former bank premises and equipment 840 (50) — (Gains) losses on sale of securities (64) (7) 2,565 Gain on sale of branch (3,360) — (945) Gain on extinguishment of debt (630) — (1,458) Core other income 48,328 44,136 36,804 Other Expense: Other expense 203,078 177,652 156,702 Acquisition-related expenses (2) (3,810) (1,621) (236) Write-down of former bank premises — — (432) Core conversion expense (2,460) (974) — Employee retention tax credit 1,997 — — Core other expense 198,805 175,057 156,034 Pre-Tax Income: Pre-tax income 110,309 83,051 90,586 CECL Oakwood impact (3) — 4,824 — (Gains) losses on former bank premises and equipment 840 (50) — (Gains) losses on sale of securities (64) (7) 2,565 Gain on sale of branch (3,360) — (945) Gain on extinguishment of debt (630) — (1,458) Acquisition-related expenses (2) 3,810 1,621 236 Write-down of former bank premises — — 432 Core conversion expense 2,460 974 — Employee retention tax credit (1,997) — — Core pre-tax income 111,368 90,413 91,416 Provision for Income Taxes: (1) Provision for income taxes 22,448 17,944 19,543 Tax on CECL Oakwood impact (3) — 1,019 — Tax on (gains) losses on former bank premises and equipment 177 (11) — Tax on (gains) losses on sale of securities (13) (1) 542 Tax on gain on sale of branch (833) — (200) Tax on gain on extinguishment of debt (133) — (308) Tax on acquisition-related expenses (2) 682 97 21 Tax on write-down of former bank premises — — 91 Tax on core conversion expense 521 205 — Tax on employee retention tax credit (422) — — Core provision for income taxes 22,427 19,253 19,689 Preferred Dividends Preferred dividends 5,401 5,401 5,401 Core preferred dividends 5,401 5,401 5,401 Net Income Available to Common Shareholders: Net income available to common shareholders 82,460 59,706 65,642 CECL Oakwood impact (3), net of tax — 3,805 — (Gains) losses on former bank premises and equipment , net of tax 663 (39) — (Gains) losses on sale of securities, net of tax (51) (6) 2,023 Gain on sale of branch, net of tax (2,527) — (745) Gain on extinguishment of debt, net of tax (497) — (1,150) Acquisition-related expenses (2), net of tax 3,128 1,524 215 Write-down of former bank premises, net of tax — — 341 78 Table of Contents Core conversion expense, net of tax 1,939 769 — Employee retention tax credit, net of tax (1,575) — — Core net income available to common shareholders $ 83,540 $ 65,759 $ 66,326 Diluted Earnings Per Common Share: Diluted earnings per common share $ 2.79 $ 2.26 $ 2.59 CECL Oakwood impact (3), net of tax — 0.14 — (Gains) losses on former bank premises and equipment , net of tax 0.02 — — (Gains) losses on sale of securities, net of tax — — 0.08 Gain on sale of branch, net of tax (0.09) — (0.03) Gain on extinguishment of debt, net of tax (0.02) — (0.04) Acquisition-related expenses (2), net of tax 0.11 0.06 0.01 Write-down of former bank premises, net of tax — — 0.01 Core conversion expense, net of tax 0.07 0.03 — Employee retention tax credit, net of tax (0.05) — $ — Core diluted earnings per common share $ 2.83 $ 2.49 $ 2.62 _______________________________ (1) Tax rates, exclusive of certain nondeductible acquisition-related expenses and goodwill, utilized were 21.129% for 2025, 2024 and 2023 .
Tangible common equity to tangible assets is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate tangible common equity, as described above, and tangible assets as total assets less goodwill, core deposit and customer intangible assets, net of accumulated amortization.
Tangible Common Equity to Tangible Assets . Tangible common equity to tangible assets is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate tangible common equity, as described above, and tangible assets as total assets less goodwill, core deposit and customer intangible assets, net of accumulated amortization.
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. 62 Table of Contents Credits rated substandard are those in which the normal repayment of principal and interest may be, or has been, jeopardized by reason of adverse trends or developments of a financial, managerial, economic or political nature, or important weaknesses which exist in collateral.
Such credits typically maintain the ability to perform within standard credit terms and credit exposure is not as prominent as credits with a lower rating. 61 Table of Contents Credits rated substandard are those in which the normal repayment of principal and interest may be, or has been, jeopardized by reason of adverse trends or developments of a financial, managerial, economic or political nature, or important weaknesses which exist in collateral.
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. 61 Table of Contents We believe our conservative lending approach and focused management of nonperforming assets has resulted in sound asset quality and the timely resolution of problem assets.
There can be no assurance, however, that our loan portfolio will not become subject to increasing pressures from deteriorating borrower credit due to general economic conditions. 60 Table of Contents We believe our conservative lending approach and focused management of nonperforming assets has resulted in sound asset quality and the timely resolution of problem assets.
We 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, 2024. The allowance for credit losses encompasses potential expected credit losses related to the securities portfolio.
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.
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. 53 Table of Contents For purposes of this table, changes attributable to both rate and volume that cannot be segregated have been allocated to rate.
The following table presents information regarding the dollar amount of changes in interest income and interest expense for the periods indicated for each major component of interest-earning assets and interest-bearing liabilities, and distinguishes between the changes attributable to changes in volume and changes attributable to changes in interest rates. 52 Table of Contents For purposes of this table, changes attributable to both rate and volume that cannot be segregated have been allocated to rate.
For the years ended December 31, 2024 and 2023, 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.
For the years ended December 31, 2025 and 2024, liquidity needs were primarily met by core deposits, security and loan maturities, and amortizing investment and loan portfolios. In addition, we utilize, or have available, brokered deposits, purchased funds from correspondent banks, the Federal Reserve discount window, and overnight advances from the FHLB.
As of December 31, 2024 and December 31, 2023, 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.
As of December 31, 2025 and December 31, 2024, we and b1BANK were in compliance with all applicable regulatory capital requirements, and b1BANK was classified as “well-capitalized,” for purposes of prompt corrective action regulations. As we employ our capital and continue to grow our operations, our regulatory capital levels may decrease depending on our level of earnings.
Contractual Obligations The following tables summarize contractual obligations and other commitments to make future payments as of December 31, 2024 and 2023 (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.
Contractual Obligations The following tables summarize contractual obligations and other commitments to make future payments as of December 31, 2025 and 2024 (other than non-maturity deposit obligations), which consist of future cash payments associated with our contractual obligations pursuant to our FHLB advances, subordinated debt, revolving line of credit, and non-cancelable future operating leases.
For additional discussion of our methodology, please refer to “— Critical Accounting Estimates — Allowance for Credit Losses. ” 63 Table of Contents In connection with our review of the loan portfolio, we consider risk elements attributable to particular loan types or categories in assessing the quality of individual loans.
For additional discussion of our methodology, please refer to “— Critical Accounting Estimates — Allowance for Credit Losses. ” 62 Table of Contents In connection with our review of the loan portfolio, we consider risk elements attributable to particular loan types or categories in assessing the quality of individual loans.
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.
In December 2018 we issued subordinated notes in the amount of $25.0 million. The subordinated notes bear a fixed rate of interest at 6.75% until December 31, 2028 and a floating rate thereafter through maturity in 2033. The balance outstanding at both December 31, 2025 and 2024 was $25.0 million.
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.
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.
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, the allowance for credit losses totaled $58.5 million, or 0.98%, of total loans held for investment.
Some of the risk elements we consider include: • for Real Estate: Commercial loans, the debt service coverage ratio (income from the property in excess of operating expenses compared to loan payment requirements), operating results of the owner in the case of owner-occupied properties, the loan to value ratio, the age and condition of the collateral, and the volatility of income, property value and future operating results typical for properties of that type; • for Real Estate: Construction loans, the perceived feasibility of the project including the ability to sell developed lots or improvements constructed for resale or the ability to lease property constructed for lease, the quality and nature of contracts for presale or prelease, if any, the experience and ability of the developer, and the loan to value ratio; • for Real Estate: Residential real estate loans, the borrower’s ability to repay the loan, including a consideration of the debt to income ratio and employment and income stability, the loan to value ratio, and the age, condition and marketability of the collateral; and • for Commercial loans, the operating results of the commercial, industrial or professional enterprise, the borrower’s business, professional and financial ability and expertise, the specific risks and volatility of income and operating results typical for businesses in that category, and the value, nature and marketability of collateral; As of December 31, 2025, the allowance for credit losses totaled $58.1 million, or 0.94%, of total loans held for investment.
Immediately following the consummation of the Oakwood acquisition, Oakwood Bank merged with and into us, with us 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.
Immediately following the consummation of the Oakwood acquisition, Oakwood Bank merged with and into b1BANK, with b1BANK surviving the merger. Pursuant to the terms of the Reorganization Agreement, upon consummation of the Oakwood acquisition, we issued 3,973,134 shares of our common stock to the former shareholders of Oakwood.
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).
Noninterest Income ( “ Other Income ” ) Our primary sources of noninterest income are service charges on deposit accounts, debit card and automated teller machine (“ATM”) fee income, income from bank-owned life insurance, fees and brokerage commissions, loan sales, swap fee income, and pass-through income from other investments (small business investment company (“SBIC”) partnerships 53 Table of Contents and financial technology (“Fintech”) funds).
As of December 31, 2024 and 2023, we maintained six and five lines of credit, respectively, with correspondent banks which provided for extensions of credit with an availability to borrow up to an aggregate of $160.0 million and $145.0 million as of December 31, 2024 and 2023, respectively.
As of December 31, 2025 and 2024, we maintained five and six lines of credit, respectively, with correspondent banks which provided for extensions of credit with an availability to borrow up to an aggregate of $145.0 million and $160.0 million as of December 31, 2025 and 2024, respectively.
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, filed with the SEC on March 1, 2024, as amended, which is available on the SEC ’ s website at www.sec.gov and on the Company ’ s website, www.b1bank.com.
Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations ” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 7, 2025, as amended, which is available on the SEC ’ s website at www.sec.gov and on the Company ’ s website, www.b1bank.com.
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. 69 Table of Contents FHLB advances . The FHLB allows us to borrow on a blanket floating lien status collateralized by certain securities and loans.
In addition, we use short-term borrowings to periodically repurchase outstanding shares of our common stock and for general corporate purposes. Each of these relationships are discussed below. FHLB advances . The FHLB allows us to borrow on a blanket floating lien status collateralized by certain securities and loans.
As of December 31, 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, 2025 and 2024, we did not own securities of any one issuer for which aggregate adjusted cost exceeded 10% of the consolidated shareholders’ equity as of such respective dates.
The difference between the estimated fair value of the acquired loan related to non-credit deterioration is treated as an 82 Table of Contents adjustment to the contractual yield and accreted into interest income over the remaining life of the loan. Acquired loans are generally valued using a discount cash flow model.
The difference between the estimated fair value of the acquired loan related to non-credit deterioration is treated as an adjustment to the contractual yield and accreted into interest income over the remaining life of the loan. Acquired loans are generally valued using a discount cash flow model.
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. Standby and commercial letters of credit are conditional commitments issued by us to guarantee the performance of a customer to a third party.
Because commitments associated with letters of credit and commitments to extend credit may expire unused, the amounts shown do not necessarily reflect the actual future cash funding requirements. 75 Table of Contents Standby and commercial letters of credit are conditional commitments issued by us to guarantee the performance of a customer to a third party.
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 79 Table of Contents disclosures are not necessarily comparable to non-GAAP measures that may be presented by other companies.
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.
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 58 Table of Contents extent, loans to individual clients for construction of single-family homes in our market areas.
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.
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 a component of other comprehensive income in shareholders’ equity.
As a result, the carrying values of our investment securities are adjusted for unrealized gain or loss, and any gain or loss is reported on an after-tax basis as 65 Table of Contents a component of other comprehensive income in shareholders’ equity.
There were no funds under these lines of credit outstanding as of December 31, 2024 and 2023, respectively. 73 Table of Contents The following table illustrates, during the periods presented, the mix of our funding sources and the average assets in which those funds are invested as a percentage of average total assets for the period indicated.
There were no funds under these lines of credit outstanding as of December 31, 2025 and 2024, respectively. 71 Table of Contents The following table illustrates, during the periods presented, the mix of our funding sources and the average assets in which those funds are invested as a percentage of average total assets for the period indicated.
Based on our assessments, expected credit losses on the investment securities portfolio as of December 31, 2024 and 2023, was negligible and therefore, no allowance for credit loss was recorded related to our investment securities. 67 Table of Contents 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.
Based on our assessments, expected credit losses on the investment securities portfolio as of December 31, 2025 and 2024, was negligible and therefore, no allowance for credit loss was recorded related to our investment securities. 66 Table of Contents The following tables set forth the fair value, maturities and approximated weighted average book yield based on estimated annual income divided by the average amortized cost of the securities portfolio as of the dates indicated.
As of December 31, 2024, 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 $567.6 million and $377.2 million as of December 31, 2024 and 2023, respectively.
As of December 31, 2025, we had no exposure to future cash requirements associated with known uncertainties or capital expenditures of a material nature. We had cash and cash equivalents, federal funds sold and securities purchased under agreements to resell, of $609.2 million and $567.6 million as of December 31, 2025 and 2024, respectively.
Fed Funds Purchased (Dollars in Thousands) 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.
(Dollars in thousands) Fed Funds Purchased December 31, 2025 Amount outstanding at year-end $ - Weighted average stated interest rate at year-end 0.00 % Maximum month-end balance during the year $ 10 Average balance outstanding during the year $ 1 Weighted average interest rate during the year 5.05 % December 31, 2024 Amount outstanding at year-end $ - Weighted average stated interest rate at year-end 0.00 % Maximum month-end balance during the year $ - Average balance outstanding during the year $ 5 Weighted average interest rate during the year 6.46 % Liquidity and Capital Resources Liquidity Liquidity involves our ability to utilize funds to support asset growth and acquisitions or reduce assets to meet deposit withdrawals and other payment obligations, to maintain reserve requirements and otherwise to operate on an ongoing basis and manage unexpected events.
The preferred stock has a perpetual term and may not be redeemed, except under certain circumstances, under the first five years of issuance. 75 Table of Contents Long Term Debt For information on our subordinated debt, please refer to “Borrowings”. FHLB Advances Advances from the FHLB totaled approximately $355.9 million and $211.2 million at December 31, 2024 and 2023, respectively.
The preferred stock has a perpetual term and may not be redeemed, except under certain circumstances, under the first five years of issuance. 73 Table of Contents Long Term Debt For information on our subordinated debt, please refer to “Borrowings”. FHLB Advances Advances from the FHLB totaled approximately $431.2 million and $355.9 million at December 31, 2025 and 2024, respectively.
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. Core Net Income.
You should understand how such other banking organizations calculate their financial metrics or with names similar to the non-GAAP financial measures we have discussed in this statement when comparing such non-GAAP financial measures. 77 Table of Contents Core Net Income.
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, $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.
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.
The assumptions in the model included prepayment rates, default/loss given default rates, collateral values, recovery rates, and discount rates. Allowance for Credit Losses on Loans and Unfunded Commitments The allowance for credit losses is established for current expected credit losses on the Company’s loan portfolio, including unfunded credit commitments.
The assumptions in the model included prepayment rates, default/loss given default rates, collateral values, recovery rates, and discount rates. 80 Table of Contents Allowance for Credit Losses on Loans and Unfunded Commitments The allowance for credit losses is established for current expected credit losses on the Company’s loan portfolio, including unfunded credit commitments.
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.
As of December 31, 2025 and 2024, the Company held other equity securities of $49.3 million and $41.1 million, respectively, comprised mainly of FHLB stock, SBIC’s and financial technology (“Fintech”) fund investments. Deposits We offer a variety of deposit accounts having a wide range of interest rates and terms including demand, savings, money market and time accounts.
Payments related to leases are based on actual payments specified in underlying contracts. Advances from the FHLB totaled approximately $355.9 million and $211.2 million as of December 31, 2024 and 2023, respectively.
Payments related to leases are based on actual payments specified in underlying contracts. Advances from the FHLB totaled approximately $431.2 million and $355.9 million as of December 31, 2025 and 2024, respectively.
As of December 31, 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 .
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 .
Risks associated with these loans include fluctuations in the value of real estate, project completion risk and changes in market trends.
Risks associated with these 57 Table of Contents loans include fluctuations in the value of real estate, project completion risk and changes in market trends.
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.
Our current longest dated FHLB advance matures within eight years. We utilize these borrowings to meet liquidity needs and to fund certain fixed rate loans in our portfolio. 68 Table of Contents The following table presents our FHLB borrowings at the dates indicated.
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.
If interest rates begin to fall, prepayments may increase, thereby shortening the estimated life of this security. The weighted average life of our investment portfolio was 4.25 years with an estimated effective duration of 3.53 years as of December 31, 2025.
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 $10.9 million and $4.5 million for the years ended December 31, 2024 and 2023, respectively.
For a description of the factors taken into account by management in determining the allowance for credit losses see “— Financial Condition — Allowance for Credit Losses .” The provision for credit losses was $11.3 million and $10.9 million for the years ended December 31, 2025 and 2024, respectively.
As of December 31, 2024, we had outstanding $1.4 billion in commitments to extend credit and $50.0 million in commitments associated with outstanding standby and commercial letters of credit. As of December 31, 2023, we had outstanding $1.2 billion in commitments to extend credit and $45.2 million in commitments associated with outstanding standby and commercial letters of credit.
As of December 31, 2025, we had outstanding $1.7 billion in commitments to extend credit and $51.2 million in commitments associated with outstanding standby and commercial letters of credit. As of December 31, 2024, we had outstanding $1.4 billion in commitments to extend credit and $50.0 million in commitments associated with outstanding standby and commercial letters of credit.
We do not expect a change in the primary source or use of our funds in the foreseeable future. Our average loans increased 9.6% for the year ended December 31, 2024 compared to the same period in 2023.
We do not expect a change in the primary source or use of our funds in the foreseeable future. Our average loans increased 13.1% for the year ended December 31, 2025 compared to the same period in 2024.
For the Years Ended December 31, 2024 2023 Source of Funds: Deposits: Noninterest-bearing 18.4 % 22.3 % Interest-bearing 63.5 56.2 Subordinated debt (excluding trust preferred securities) 1.4 1.7 Advances from FHLB 4.6 5.2 Other borrowings 0.4 0.4 Bank Term Funding Program 0.9 4.0 Other liabilities 0.8 0.7 Shareholders' equity 10.0 9.5 Total 100.0 % 100.0 % Uses of Funds: Loans, net of allowance for loan losses 75.8 % 76.0 % Securities available for sale 13.2 14.2 Interest-bearing deposits in other banks 4.1 2.8 Other noninterest-earning assets 6.9 7.0 Total 100.0 % 100.0 % Average noninterest-bearing deposits to average deposits 22.5 % 28.4 % Average loans to average deposits 93.3 97.6 Our primary source of funds is deposits, and our primary use of funds is loans.
For the Years Ended December 31, 2025 2024 Source of Funds: Deposits: Noninterest-bearing 16.5 % 18.4 % Interest-bearing 65.2 63.5 Subordinated debt (excluding trust preferred securities) 1.2 1.4 Advances from FHLB 5.1 4.6 Other borrowings 0.3 0.4 Bank Term Funding Program — 0.9 Other liabilities 0.9 0.8 Shareholders' equity 10.8 10.0 Total 100.0 % 100.0 % Uses of Funds: Loans, net of allowance for loan losses 75.8 % 75.8 % Securities available for sale 12.2 13.0 Securities purchased under agreements to resell 0.4 0.2 Interest-bearing deposits in other banks 4.9 4.1 Other noninterest-earning assets 6.7 6.9 Total 100.0 % 100.0 % Average noninterest-bearing deposits to average deposits 20.2 % 22.5 % Average loans to average deposits 93.7 93.3 Our primary source of funds is deposits, and our primary use of funds is loans.
Total uninsured deposits were $2.8 billion, or 43.4% of deposits as of December 31, 2024 compared to $2.0 billion, or 38.9%, or total deposits as of December 31, 2023.
Total uninsured deposits were $2.9 billion, or 43.2% of deposits as of December 31, 2025 compared to $2.8 billion, or 43.4%, or total deposits as of December 31, 2024.
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: Fed Funds Purchase Limits (Dollars in thousands) 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 $ 160,000 72 Table of Contents The following table represents combined Federal Funds Purchased Lines of Credit for all relationships at the dates indicated.
Federal Funds Purchased Lines of Credit Relationships We maintain Federal Funds Purchased Lines of Credit Relationships with the following correspondent banks and limits as of December 31, 2025: (Dollars in thousands) Fed Funds Purchase Limits TIB National Association $ 45,000 PNC Bank 38,000 FNBB 35,000 First Horizon Bank 17,000 ServisFirst Bank 10,000 Total $ 145,000 70 Table of Contents The following table represents combined Federal Funds Purchased Lines of Credit for all relationships at the dates indicated.
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 were $6.5 billion, an increase of $1.3 billion, or 24.1%, compared to $5.2 billion as of December 31, 2023.
We rely primarily on competitive pricing policies, convenient locations and personalized service to attract and retain these deposits. Total deposits as of December 31, 2025 were $6.7 billion, an increase of $187.3 million, or 2.9%, compared to $6.5 billion as of December 31, 2024.
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, net interest income totaled $227.4 million, and net interest margin and net interest spread were 3.48% and 2.55%, respectively.
We calculate average assets, liabilities, and equity using a daily average, and average yield/rate utilizing an actual day count convention. For the year ended December 31, 2025, net interest income totaled $273.2 million, and net interest margin and net interest spread were 3.69% and 2.89%, respectively.
We currently operate out of banking centers and loan production offices in markets across Louisiana and Texas. As of December 31, 2024, we had total assets of $7.9 billion, total loans of $6.0 billion, total deposits of $6.5 billion, and total shareholders’ equity of $799.5 million.
We currently operate out of banking centers and loan production offices in markets across Louisiana and Texas. As of December 31, 2025, we had total assets of $8.2 billion, total loans of $6.2 billion, total deposits of $6.7 billion, and total shareholders’ equity of $896.9 million.
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, 2025 was $83.5 million, or $2.83 per diluted common share, compared to core net income available to common shareholders of $65.8 million, or $2.49 per diluted common share, for the year ended December 31, 2024.
Results of Operations for the Years Ended December 31, 2024 and 2023 Performance Summary For the year ended December 31, 2024, net income available to common shareholders was $59.7 million, or $2.27 per basic common share and $2.26 per diluted common share, compared to net income available to common shareholders of $65.6 million, or $2.62 per basic common share and $2.59 per diluted common share, for the year ended December 31, 2023.
Results of Operations for the Years Ended December 31, 2025 and 2024 Performance Summary For the year ended December 31, 2025, net income available to common shareholders was $82.5 million, or $2.81 per basic common share and $2.79 per diluted common share, compared to net income available to common shareholders of $59.7 million, or $2.27 per basic common share and $2.26 per diluted common share, for the year ended December 31, 2024.
Our securities portfolio had a weighted average life of 4.63 years and an effective duration of 3.79 years as of December 31, 2024 and a weighted average life of 4.57 years and an effective duration of 3.81 years as of December 31, 2023.
Our securities portfolio had a weighted average life of 4.25 years and an effective duration of 3.53 years as of December 31, 2025 and a weighted average life of 4.63 years and an effective duration of 3.79 years as of December 31, 2024.
We had swap fee income from back-to-back interest rate swaps in the amount of $2.7 million in 2024, compared to $964,000 during 2023, an increase of $1.8 million, or 184.1%. Other. This category includes a variety of other income producing activities, including wire transfer fees, insurance commissions and credit card 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.
For the Years Ended December 31, 2024 2023 2022 Amount Percent to Total Amount Percent to Total Amount Percent to Total (Dollars in thousands) Real estate: Commercial $ 23,688 40.5 % $ 17,882 40.9 % $ 14,922 38.5 % Construction 8,473 14.5 8,142 18.6 5,905 15.2 Residential 8,394 14.3 5,662 12.9 5,367 13.8 Total real estate 40,555 69.3 31,686 72.4 26,194 67.5 Commercial 17,432 29.8 11,796 27.0 11,950 30.8 Consumer and Other 541 0.9 256 0.6 639 1.7 Total allowance for credit losses $ 58,528 100.0 % $ 43,738 100.0 % $ 38,783 100.0 % 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.
For the Years Ended December 31, 2025 2024 2023 (Dollars in thousands) Amount Percent to Total Amount Percent to Total Amount Percent to Total Real estate: Commercial $ 23,806 40.9 % $ 23,688 40.5 % $ 17,882 40.9 % Construction 4,416 7.6 8,473 14.5 8,142 18.6 Residential 7,732 13.3 8,394 14.3 5,662 12.9 Total real estate 35,954 61.8 40,555 69.3 31,686 72.4 Commercial 21,618 37.2 17,432 29.8 11,796 27.0 Consumer and Other 564 1.0 541 0.9 256 0.6 Total allowance for credit losses $ 58,136 100.0 % $ 58,528 100.0 % $ 43,738 100.0 % Securities We use our securities portfolio to provide a source of liquidity, an appropriate return on funds invested, manage interest rate risk, meet collateral requirements, and meet regulatory capital requirements.
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 .
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 .
The average yield on the loan portfolio was 7.03%, for the year ended December 31, 2024, compared to 6.65% for the year ended December 31, 2023, and the average yield on total interest-earning assets was 6.35% for the year ended December 31, 2024, compared to 5.95% for the year ended December 31, 2023.
The average yield on the loan portfolio was 6.96%, for the year ended December 31, 2025, compared to 7.03% for the year ended December 31, 2024, and the average yield on total interest-earning assets was 6.28% for the year ended December 31, 2025, compared to 6.35% for the year ended December 31, 2024.
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 $202.1 million, or 29.6%, to $884.5 million as of December 31, 2024, from $682.4 million as of December 31, 2023.
Real estate residential loans also include multi-family residential loans originated to provide permanent financing for multi-family residential income producing properties. Repayment of these loans primarily relies on successful rental and management of the property. Real Estate: Residential loans increase d $59.5 million, or 6.7%, to $944.1 million as of December 31, 2025, from $884.5 million as of December 31, 2024.
As of December 31, 2024 and 2023, the FHLB advances were collateralized by a blanket floating lien on certain securities and loans, had a weighted average stated rate of 4.15% and 3.65%, respectively, and maturing within ten years.
As of December 31, 2025, and 2024, the FHLB advances were collateralized by a blanket floating lien on certain securities and loans, had a weighted average stated rate of 4.02% and 4.15%, respectively, and mature within eight years.
Real Estate: Construction loans increased $704,000, or 0.1%, to $670.5 million as of December 31, 2024, from $669.8 million as of December 31, 2023. 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.
Real Estate: Construction loans decrease d $31.4 million, or 4.7%, to $639.1 million as of December 31, 2025, from $670.5 million as of December 31, 2024. Real Estate: Residential loans include first and second lien 1-4 family mortgage loans, as well as home equity lines of credit, in each case primarily on owner-occupied primary residences.
As of December 31, 2022, the allowance for credit losses totaled $38.8 million, or 0.84%, of total loans held for investment. 64 Table of Contents The following tables present, as of and for the periods indicated, an analysis of the allowance for credit losses and other related data: For the Years Ended December 31, 2024 2023 2022 (Dollars in thousands) Average loans outstanding $ 5,327,466 $ 4,859,637 $ 4,020,436 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 $ 43,738 $ 38,783 $ 29,936 Adoption of ASU 2016-13 - 5,857 - Adjustment for Oakwood purchased credit deterioration loans 8,410 - - Provision for credit losses 10,873 4,483 10,667 Charge-offs: Real Estate: Commercial (263) 2,049 51 Construction 2,261 36 16 Residential 297 42 191 Total Real Estate 2,295 2,127 258 Commercial 986 2,813 2,139 Consumer and other 2,392 1,489 424 Total charge-offs 5,673 6,429 2,821 Recoveries: Real Estate: Commercial 86 26 50 Construction 515 1 25 Residential 14 18 20 Total Real Estate 615 45 95 Commercial 236 672 739 Consumer and other 329 327 167 Total recoveries 1,180 1,044 1,001 Net charge-offs 4,493 5,385 1,820 Allowance for credit losses at end of period $ 58,528 $ 43,738 $ 38,783 Ratio of allowance for credit losses to end of period loans held for investment 0.98 % 0.88 % 0.84 % Ratio of net charge-offs to average loans 0.08 0.11 0.05 Ratio of allowance for credit losses to nonaccrual loans 242.38 258.15 350.85 65 Table of Contents For the Years Ended December 31, 2024 2023 2022 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) 0.00 % $ 2,023 0.04 % $ 1 0.00 % Construction 1,746 0.03 % 35 0.00 % (9) 0.00 % Residential 283 0.00 % 24 0.00 % 171 0.00 % Total Real Estate Loans 1,680 0.03 % 2,082 0.04 % 163 0.00 % Commercial 750 0.01 % 2,141 0.05 % 1,400 0.04 % Consumer and Other 2,063 0.04 % 1,162 0.02 % 257 0.01 % Total net charge-offs (recoveries) $ 4,493 0.08 % $ 5,385 0.11 % $ 1,820 0.05 % 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.
As of December 31, 2023, the allowance for credit losses totaled $43.7 million, or 0.88%, of total loans held for investment. 63 Table of Contents The following tables present, as of and for the periods indicated, an analysis of the allowance for credit losses and other related data: For the Years Ended December 31, (Dollars in thousands) 2025 2024 2023 Average loans outstanding $ 6,023,214 $ 5,327,466 $ 4,859,637 Gross loans held for investment outstanding end of period $ 6,189,490 $ 5,981,399 $ 4,992,785 Allowance for credit losses at beginning of period $ 58,528 $ 43,738 $ 38,783 Adoption of ASU 2016-13 - - 5,857 Adjustment for Oakwood purchased credit deterioration loans - 8,410 - Provision for credit losses 11,318 10,873 4,483 Charge-offs: Real Estate: Commercial 4,116 (263) 2,049 Construction 20 2,261 36 Residential 242 297 42 Total Real Estate 4,378 2,295 2,127 Commercial 6,768 986 2,813 Consumer and other 1,991 2,392 1,489 Total charge-offs 13,137 5,673 6,429 Recoveries: Real Estate: Commercial 30 86 26 Construction 211 515 1 Residential 33 14 18 Total Real Estate 274 615 45 Commercial 839 236 672 Consumer and other 314 329 327 Total recoveries 1,427 1,180 1,044 Net charge-offs 11,710 4,493 5,385 Allowance for credit losses at end of period $ 58,136 $ 58,528 $ 43,738 Ratio of allowance for credit losses to end of period loans held for investment 0.94 % 0.98 % 0.88 % Ratio of net charge-offs to average loans 0.19 0.08 0.11 Ratio of allowance for credit losses to nonaccrual loans 78.07 242.38 258.15 64 Table of Contents For the Years Ended December 31, 2025 2024 2023 (Dollars in thousands) Net Charge-offs (Recoveries) Percent of Average Loans Net Charge-offs (Recoveries) Percent of Average Loans Net Charge-offs (Recoveries) Percent of Average Loans Real estate: Commercial $ 4,086 0.07 % $ (349) 0.00 % $ 2,023 0.04 % Construction (191) 0.00 1,746 0.03 35 0.00 Residential 209 0.00 283 0.00 24 0.00 Total Real Estate Loans 4,104 0.07 1,680 0.03 2,082 0.04 Commercial 5,929 0.10 750 0.01 2,141 0.05 Consumer and Other 1,677 0.02 2,063 0.04 1,162 0.02 Total net charge-offs (recoveries) $ 11,710 0.19 % $ 4,493 0.08 % $ 5,385 0.11 % Although we believe that we have established our allowance for loan losses in accordance with GAAP and that the allowance for loan losses was adequate to provide for known and estimated losses in the portfolio at all times shown above, future provisions will be subject to ongoing evaluations of the risks in our loan portfolio.
Average assets totaled $7.0 billion and $6.3 billion for the years ended December 31, 2024 and 2023, respectively.
Average assets totaled $7.9 billion and $7.0 billion for the years ended December 31, 2025 and 2024, respectively.
Other income increased $2.5 million, or 53.0%, for the year ended December 31, 2024, compared to the same period in 2023. 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.
Other income increased $861,000, or 10.8%, for the year ended December 31, 2025, compared to the same period in 2024. 54 Table of Contents Noninterest Expense ( “ Other Expense ” ) Generally, noninterest expense is composed of all employee expenses and costs associated with operating our facilities, obtaining and retaining customer relationships and providing bank services.
The following tables present information regarding nonperforming loans at the dates indicated: As of December 31, 2024 2023 2022 (Dollars in thousands) Nonaccrual loans $ 24,147 $ 16,943 $ 11,054 Accruing loans 90 or more days past due 860 127 335 Total nonperforming loans 25,007 17,070 11,389 Other nonperforming assets - - 62 Other real estate owned: Commercial real estate, construction, land and land development 5,197 1,326 1,199 Residential real estate 332 359 173 Total other real estate owned 5,529 1,685 1,372 Total nonperforming assets $ 30,536 $ 18,755 $ 12,823 Ratio of nonperforming loans to total loans held for investment 0.42 % 0.34 % 0.25 % Ratio of nonperforming assets to total assets 0.39 0.28 0.21 Ratio of nonaccrual loans to total loans held for investment 0.40 0.34 0.24 As of December 31, 2024 2023 2022 (Dollars in thousands) Nonaccrual loans by category: Real Estate Loans: Commercial $ 3,621 $ 3,280 $ 2,644 Construction 5,251 3,543 992 Residential 7,078 7,352 4,080 Total Real Estate Loans 15,950 14,175 7,716 Commercial 8,039 2,395 3,150 Consumer and Other 158 373 188 Total $ 24,147 $ 16,943 $ 11,054 Potential Problem Loans From a credit risk standpoint, we classify loans in one of four categories: pass, special mention, substandard or doubtful.
The following tables present information regarding nonperforming loans at the dates indicated: As of December 31, (Dollars in thousands) 2025 2024 2023 Nonaccrual loans $ 74,471 $ 24,147 $ 16,943 Accruing loans 90 or more days past due 2,215 860 127 Total nonperforming loans 76,686 25,007 17,070 Other nonperforming assets — — — Other real estate owned: Commercial real estate, construction, land and land development 12,192 5,197 1,326 Residential real estate 821 332 359 Total other real estate owned 13,013 5,529 1,685 Total nonperforming assets $ 89,699 $ 30,536 $ 18,755 Ratio of nonperforming loans to total loans held for investment 1.24 % 0.42 % 0.34 % Ratio of nonperforming assets to total assets 1.09 0.39 0.28 Ratio of nonaccrual loans to total loans held for investment 1.20 0.40 0.34 As of December 31, (Dollars in thousands) 2025 2024 2023 Nonaccrual loans by category: Real Estate Loans: Commercial $ 36,252 $ 3,621 $ 3,280 Construction 4,539 5,251 3,543 Residential 10,144 7,078 7,352 Total Real Estate Loans 50,935 15,950 14,175 Commercial 23,370 8,039 2,395 Consumer and Other 166 158 373 Total $ 74,471 $ 24,147 $ 16,943 Potential Problem Loans From a credit risk standpoint, we classify loans in one of four categories: pass, special mention, substandard or doubtful.
The dividend was paid on February 28, 2025. On January 23, 2025, our board of directors declared a quarterly dividend based upon our financial performance for the three months ended December 31, 2024 in the amount of $0.14 per common share to the common shareholders of record as of February 15, 2025. The dividend was paid on February 28, 2025.
The dividend is to pay on February 28, 2026, or as soon as practicable thereafter. On January 22, 2026, our board of directors declared a quarterly dividend based upon our financial performance for the three months ended December 31, 2025 in the amount of $0.15 per common share to the common shareholders of record as of February 15, 2026.
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 $265.3 million, or 12.0%, to $2.5 billion as of December 31, 2024, from $2.2 billion as of December 31, 2023.
These loans are usually repaid through refinancing, cash flow from the borrower’s ongoing operations, development of the property, or sale of the property. Real Estate: Commercial loans increase d $128.1 million, or 5.2%, to $2.6 billion as of December 31, 2025, from $2.5 billion as of December 31, 2024.
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.
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.
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 $59.7 million, other comprehensive income of $3.6 million resulting from the after tax effect of unrealized gains in our investment securities portfolio, and offset by dividends paid on common shares of $14.9 million. 74 Table of Contents On January 23, 2025, 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.
This increase was primarily due to net income available to common shareholders of $82.5 million, other comprehensive income of $29.7 million resulting from the after tax effect of unrealized gains in our investment securities portfolio, and offset by dividends paid on common shares of $16.8 million. 72 Table of Contents On January 22, 2026, our board of directors declared a quarterly dividend in the amount of $18.75 per preferred share to the preferred shareholders of record as of February 15, 2026.
Financial Highlights The financial highlights as of and for the year ended December 31, 2024 include: • Total assets of $7.9 billion, a $1.3 billion, or 19.3%, increase from December 31, 2023. • Total loans held for investment of $6.0 billion, a $988.6 million, or 19.8%, increase from December 31, 2023. • Total deposits of $6.5 billion, a $1.3 billion, or 24.1%, increase from December 31, 2023. • Net income available to common shareholders of $59.7 million, a $5.9 million, or 9.0%, decrease from the year ended December 31, 2023. • Net interest income of $227.4 million, a $12.3 million, or 5.7%, increase from the year ended December 31, 2023. • 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. 51 Table of Contents • Earnings per common share for the year ended December 31, 2024 of $2.27 per basic common share and $2.26 per diluted common share, compared to $2.62 per basic common share and $2.59 per diluted common share for the year ended December 31, 2023. • Return to common shareholders on average assets of 0.86% compared to 1.04% for the year ended December 31, 2023. • Return to common shareholders on average common equity of 9.54% compared to 12.36% for the year ended December 31, 2023. • Capital Ratios included Tier 1 Leverage, Common Equity Tier 1, Tier 1 Risk-based and Total Risk-based Capital of 9.53%, 9.44%, 10.56% and 12.75%, respectively, compared to Tier 1 Leverage, Common Equity Tier 1, Tier 1 Risk-based and Total Risk-based Capital of 9.52%, 9.15%, 10.46% and 12.85% for the year ended December 31, 2023. • Book value per common share of $24.62, an increase of 9.0% from $22.58 at December 31, 2023.
Financial Highlights The financial highlights as of and for the year ended December 31, 2025 include: • Total assets of $8.2 billion, a $357.7 million, or 4.6%, increase from December 31, 2024. • Total loans held for investment of $6.2 billion, a $208.1 million, or 3.5%, increase from December 31, 2024. • Total deposits of $6.7 billion, a $187.3 million, or 2.9%, increase from December 31, 2024. • Net income available to common shareholders of $82.5 million, a $22.8 million, or 38.1%, increase from the year ended December 31, 2024. • Net interest income of $273.2 million, a $45.8 million, or 20.1%, increase from the year ended December 31, 2024. 50 Table of Contents • An allowance for credit losses of 0.94% of total loans held for investment, compared to 0.98% as of December 31, 2024, and a ratio of nonperforming loans to total loans held for investment of 1.24%, compared to 0.42% as of December 31, 2024. • Earnings per common share for the year ended December 31, 2025 of $2.81 per basic common share and $2.79 per diluted common share, compared to $2.27 per basic common share and $2.26 per diluted common share for the year ended December 31, 2024. • Return to common shareholders on average assets of 1.05% compared to 0.86% for the year ended December 31, 2024. • Return to common shareholders on average common equity of 10.59% compared to 9.54% for the year ended December 31, 2024. • Capital Ratios included Tier 1 Leverage, Common Equity Tier 1, Tier 1 Risk-based and Total Risk-based Capital of 10.08%, 9.94%, 11.00% and 12.93%, respectively, compared to Tier 1 Leverage, Common Equity Tier 1, Tier 1 Risk-based and Total Risk-based Capital of 9.53%, 9.44%, 10.56% and 12.75% for the year ended December 31, 2024. • Book value per common share of $27.95, an increase of 13.5% from $24.62 at December 31, 2024.
As of December 31, 2024 2023 Amount Ratio Amount Ratio (Dollars in thousands) Business First Total capital (to risk weighted assets) $ 878,914 12.75 % $ 754,990 12.85 % Tier 1 capital (to risk weighted assets) 727,959 10.56 % 614,975 10.46 % Common Equity Tier 1 capital (to risk weighted assets) 651,029 9.44 % 538,045 9.15 % Tier 1 Leverage capital (to average assets) 727,959 9.53 % 614,975 9.52 % b1BANK Total capital (to risk weighted assets) $ 857,627 12.45 % $ 730,117 12.43 % Tier 1 capital (to risk weighted assets) 799,099 11.60 % 686,379 11.69 % Common Equity Tier 1 capital (to risk weighted assets) 799,099 11.60 % 686,379 11.69 % Tier 1 Leverage capital (to average assets) 799,099 10.47 % 686,379 10.63 % 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.
As of December 31, 2025 2024 (Dollars in thousands) Amount Ratio Amount Ratio Business First Total capital (to risk weighted assets) $ 939,331 12.93 % $ 878,914 12.75 % Tier 1 capital (to risk weighted assets) 799,527 11.00 % 727,959 10.56 % Common Equity Tier 1 capital (to risk weighted assets) 722,597 9.94 % 651,029 9.44 % Tier 1 Leverage capital (to average assets) 799,527 10.08 % 727,959 9.53 % b1BANK Total capital (to risk weighted assets) $ 930,600 12.82 % $ 857,627 12.45 % Tier 1 capital (to risk weighted assets) 872,464 12.02 % 799,099 11.60 % Common Equity Tier 1 capital (to risk weighted assets) 872,464 12.02 % 799,099 11.60 % Tier 1 Leverage capital (to average assets) 872,464 11.01 % 799,099 10.47 % Preferred Stock On September 1, 2022, we entered into a securities purchase agreement with certain investors pursuant to which we offered and sold shares of our 7.50% fixed-to-floating rate non-cumulative perpetual preferred stock, with no par value, for an aggregate purchase price of $72.0 million.
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.
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.
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 Change in Interest Rates (Basis Points) Percent Change in Net Interest Income Percent Change in Fair Value of Equity Percent Change in Net Interest Income Percent Change in Fair Value of Equity +300 8.10 % (0.70 %) (5.50 %) (5.59 %) +200 5.60 % (0.30 %) (3.20 %) (3.47 %) +100 2.90 % - % (1.10 %) (1.39 %) Base - % - % - % - % -100 (2.30 %) 0.30 % 0.30 % 1.40 % -200 (5.20 %) (1.30 %) 0.50 % 2.67 % The results of the simulations are primarily driven by the contractual characteristics of all balance sheet instruments and customer behavior.
Specific details of the simulations are reflected in policy as directed by ALCO. 76 Table of Contents The following table summarizes the simulated change in net interest income and fair value of equity over a 12-month horizon as of the dates indicated: As of December 31, 2025 2024 Change in Interest Rates (Basis Points) Percent Change in Net Interest Income Percent Change in Fair Value of Equity Percent Change in Net Interest Income Percent Change in Fair Value of Equity +300 7.81 % (3.73 %) 8.10 % (0.70 %) +200 5.31 % (2.36 %) 5.60 % (0.30 %) +100 2.69 % (1.03 %) 2.90 % - % Base - % - % - % - % -100 (2.62 %) 0.89 % (2.30 %) 0.30 % -200 (5.09 %) 1.23 % (5.20 %) (1.30 %) The results of the simulations are primarily driven by the contractual characteristics of all balance sheet instruments and customer behavior.
Return to common shareholders on average assets decreased to 0.86% for the year ended December 31, 2024 from 1.04% for the year ended December 31, 2023. Return to common shareholders on average common equity decreased to 9.54% for the year ended December 31, 2024, as compared to 12.36% for the year ended December 31, 2023.
Return to common shareholders on average assets increased to 1.05% for the year ended December 31, 2025 from 0.86% for the year ended December 31, 2024. Return to common shareholders on average common equity increased to 10.59% for the year ended December 31, 2025, as compared to 9.54% for the year ended December 31, 2024.
We had $30.5 million and $18.8 million in nonperforming assets as of December 31, 2024 and 2023, respectively. We had $25.0 million in nonperforming loans as of December 31, 2024 compared to $17.1 million as of December 31, 2023.
We had $89.7 million and $30.5 million in nonperforming assets as of December 31, 2025 and 2024, respectively. We had $76.7 million in nonperforming loans as of December 31, 2025 compared to $25.0 million as of December 31, 2024.
Commercial loans increased $509.8 million, or 37.5%, to $1.9 billion as of December 31, 2024, from $1.4 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.
Commercial loans increase d $53.2 million, or 2.8%, and remained at $1.9 billion as of December 31, 2025 and 2024. Consumer and other loans include a variety of loans to individuals for personal, family and household purposes, including secured and unsecured installment and term loans.
Subordinated Debt (Dollars in Thousands) 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 .
(Dollars in thousands) Subordinated Debt December 31, 2025 Amount outstanding at year-end $ 92,530 Weighted average stated interest rate at year-end 5.54 % Maximum month-end balance during the year $ 99,971 Average balance outstanding during the year $ 93,765 Weighted average interest rate during the year 5.28 % December 31, 2024 Amount outstanding at year-end $ 99,760 Weighted average stated interest rate at year-end 5.69 % Maximum month-end balance during the year $ 99,971 Average balance outstanding during the year $ 99,884 Weighted average interest rate during the year 5.40 % Trust preferred securities .
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 us, with us continuing as the surviving corporation pursuant to the terms of the Reorganization Agreement.
Acquisition of Oakwood On October 1, 2024, we consummated the merger of Oakwood, the parent bank holding company for Oakwood Bank, with and into Business First, with Business First continuing as the surviving corporation pursuant to the terms of the Reorganization Agreement.
As of December 31, 2023, the allowance for credit losses totaled $43.7 million, or 0.88%, of total loans held for investment.
As of December 31, 2024, the allowance for credit losses totaled $58.5 million, or 0.98%, of total loans held for investment.
The following table reconciles, as of the dates set forth below, total shareholders’ equity to tangible common equity and presents tangible book value per common share compared to book value per common share: As of December 31, 2024 2023 (Dollars in thousands, except per share data) (Unaudited) Tangible Common Equity Total shareholders' equity $ 799,466 $ 644,259 Preferred stock (71,930) (71,930) Total common shareholders' equity 727,536 572,329 Adjustments: Goodwill (121,572) (88,391) Core deposit and customer intangibles (17,252) (11,895) Total tangible common equity $ 588,712 $ 472,043 Common shares outstanding (1) 29,552,358 25,351,809 Book value per common shares (1) $ 24.62 $ 22.58 Tangible book value per common shares (1) 19.92 18.62 _______________________________ (1) Excludes the dilutive effect, if any, of 198,238 and 217,094 shares of common stock issuable upon exercise of outstanding stock options and restricted stock awards as of December 31, 2024 and 2023 , respectively. 81 Table of Contents Tangible Common Equity to Tangible Assets .
The following table reconciles, as of the dates set forth below, total shareholders’ equity to tangible common equity and presents tangible book value per common share compared to book value per common share: As of December 31, (Dollars in thousands, except per share data) (Unaudited) 2025 2024 Tangible Common Equity Total shareholders' equity $ 896,883 $ 799,466 Preferred stock (71,930) (71,930) Total common shareholders' equity 824,953 727,536 Adjustments: Goodwill (121,146) (121,572) Core deposit and customer intangibles (14,497) (17,252) Total tangible common equity $ 689,310 $ 588,712 Common shares outstanding (1) 29,510,668 29,552,358 Book value per common shares (1) $ 27.95 $ 24.62 Tangible book value per common shares (1) 23.36 19.92 _______________________________ (1) Excludes the dilutive effect, if any, of 149,240 and 198,238 shares of common stock issuable upon exercise of outstanding stock options and restricted stock awards as of December 31, 2025 and 2024 , respectively.
The following table reconciles, as of the dates set forth below, total shareholders’ equity to tangible common equity and total assets to tangible assets: As of December 31, 2023 2022 (Dollars in thousands, except per share data) (Unaudited) Tangible Common Equity Total shareholders' equity $ 799,466 $ 644,259 Preferred stock (71,930) (71,930) Total common shareholders' equity 727,536 572,329 Adjustments: Goodwill (121,572) (88,391) Core deposit and customer intangibles (17,252) (11,895) Total tangible common equity $ 588,712 $ 472,043 Tangible Assets Total Assets $ 7,857,090 $ 6,584,550 Adjustments: Goodwill (121,572) (88,391) Core deposit and customer intangibles (17,252) (11,895) Total tangible assets $ 7,718,266 $ 6,484,264 Common Equity to Total Assets 9.3 % 8.7 % Tangible Common Equity to Tangible Assets 7.6 7.3 Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States and with general practices within the financial services industry.
The most directly comparable GAAP financial measure for tangible common equity to tangible assets is total common shareholders’ equity to total assets. 79 Table of Contents The following table reconciles, as of the dates set forth below, total shareholders’ equity to tangible common equity and total assets to tangible assets: As of December 31, (Dollars in thousands, except per share data) (Unaudited) 2025 2024 Tangible Common Equity Total shareholders' equity $ 896,883 $ 799,466 Preferred stock (71,930) (71,930) Total common shareholders' equity 824,953 727,536 Adjustments: Goodwill (121,146) (121,572) Core deposit and customer intangibles (14,497) (17,252) Total tangible common equity $ 689,310 $ 588,712 Tangible Assets Total Assets $ 8,214,740 $ 7,857,090 Adjustments: Goodwill (121,146) (121,572) Core deposit and customer intangibles (14,497) (17,252) Total tangible assets $ 8,079,097 $ 7,718,266 Common Equity to Total Assets 10.0 % 9.3 % Tangible Common Equity to Tangible Assets 8.5 7.6 Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States and with general practices within the financial services industry.
For the year ended December 31, 2023, net interest income totaled $215.1 million and net interest margin and net interest spread were 3.62% and 2.72%, respectively.
For the year ended December 31, 2024, net interest income totaled $227.4 million and net interest margin and net interest spread were 3.48% and 2.55%, respectively.
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.
As part of valuing these three subordinated notes from TCBI, we incurred a fair value adjustment premium of $3.4 million that will accrete over five-to-seven years, with $603,000 and $833,000 remaining at December 31, 2025 and December 31, 2024, respectively. 69 Table of Contents The following table presents the Subordinated Debt at the dates indicated.
The increase in nonperforming assets from December 31, 2023 to December 31, 2024 is primarily due to two lending relationships secured by residential real estate, one secured by commercial real estate, and one commercial loan that is unsecured.
The increase in nonperforming assets from December 31, 2024 to December 31, 2025 is primarily due to one lending relationship secured by residential real estate, four secured by commercial and construction real estate, four commercial loans, and two other real estate owned properties.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. Quantitative and Qualitative Disclosures about Market Risk. Reference is made to the subheading entitled “Interest Rate Sensitivity and Market Risk” of the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of this report. 83 Table of Contents
Biggest changeITEM 7A. Quantitative and Qualitative Disclosures about Market Risk. Reference is made to the subheading entitled “Interest Rate Sensitivity and Market Risk” of the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of this report. 81 Table of Contents

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