BFST

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How BFST rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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New in FY2025

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.
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.
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.
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.
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.
On January 1, 2026, we consummated the merger of Progressive, the parent bank holding company for Progressive Bank, with and into Business First, with Business First continuing as the surviving corporation pursuant to the terms of that certain Agreement and Plan of Reorganization (the "Progressive Reorganization Agreement"), dated July 7, 2025, by and between Business First and Progressive.
Immediately following consummation of the Progressive acquisition, Progressive Bank merged with and into b1BANK, with b1BANK surviving the merger.
Pursuant to the terms of the Progressive Reorganization Agreement, upon consummation of the Progressive acquisition, we issued 3,192,367 shares of our common stock to the former shareholders of Progressive.
As of December 31, 2025, Progressive had $773.8 million in total assets, $597.2 million in loans and $684.9 million in total deposits.
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.
Generally, relationships $2.0 million and below are approved within the Centralized Credit Underwriting department which is comprised of credit individuals who are independent of the lending division.
The Chief Executive Officer, President, Chief Credit Officer, Chief Financial Officer, Chief Banking Officer and regional credit officers have authority up to $2.5 million, regional chairman have authority up to $2.0 million.
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.
Full-time equivalents (FTEs) as of December 31, 2025, were 831.
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.
For 2025, we managed an average of $7.4 million in loans held for investment and $8.1 million in deposits per FTE.
We continue to recruit and retain women and minorities.
In 2025, our Intern Insights Program, which creates a pipeline between diverse talent and the banking industry, experienced significant growth and success as we hosted twelve interns from four Louisiana universities.
Furthermore, in 2025, we continued the use of online exit surveys to provide feedback and help increase retention of women and ethnic minorities.
As of December 31, 2025, our colleagues had the following attributes: Female Minority (3) Employees 559 total (67.2%) 157 total (28.1%) Officials and Managers (1) 102 total (56.4%) 21 total (20.6%) Executive Officers (2) 3 total (30.0%) 0 total (0.0%) (1) Based on EEO-1 job classifications.
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.
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”.
Talent Development remains a key partner in positioning b1BANK to adapt, perform, and grow in a dynamic financial services environment.
Our average tenure is 6.5 years of service.
During 2025, we had 82 internal employee promotions, 147 external hires, and 9 rehired employees.
Employee turnover for 2025 was 21.0%, which includes the positions that were eliminated following the Oakwood conversion.
Additionally, the Federal Reserve has issued supervisory guidance advising bank holding companies to eliminate, defer, or reduce dividends paid on common stock and share repurchases under certain circumstances, including where the company’s prospective rate of earnings is not consistent with the company’s capital needs or the company will not meet, or is in danger of not meeting, minimum regulatory capital adequacy ratios.
The Federal Reserve has recently supplemented this guidance to reiterate the need for bank holding companies to consult with the Federal Reserve sufficiently in advance of the proposed payment of a dividend in certain circumstances.
As of December 31, 2025, the Company’s capital meets or exceeds these capital requirements, including the buffer.
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.
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.
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.
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.

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Gone since FY2024

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.
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.
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.
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.
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.
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.
When 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.
As of December 31, 2024, we proudly employ 849 full-time and 23 part-time employees (for a total of 872 employees).
Our employees reside coast to coast, with personnel located in Louisiana, Mississippi, Texas, and 10 other states with remote employees.
Full-time equivalents (FTEs) as of December 31, 2024, were 859, which includes employees from the Oakwood acquisition that closed on October 1, 2024.
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.
For 2024, we managed an average of $7.0 million in loans held for investment and $7.6 million in deposits per FTE.
We have an organization-wide focus to improve recruitment and retention of women and ethnic minorities.
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.
Furthermore, in 2024, we continued the use of online exit surveys to provide feedback and help increase retention of women and ethnic minorities.
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.
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.
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.
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.
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.
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.
This enhancement is aimed at maximizing the impact of cognitive and behavioral diversity in leadership and team collaboration.
By refining the Emergenetics training, we enabled our leaders to more effectively understand and utilize each team member’s unique strengths.
This approach fostered a more dynamic, inclusive, and effective leadership style, significantly impacting our 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.
During 2024, we had 64 internal employee promotions, 114 external hires, and 11 rehired employees.
As of December 31, 2024, the Company’s capital meets or exceeds these capital requirements, including the buffer.
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.
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.
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.
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 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.
Certain loans, including interest-only loans and negative amortization loans, cannot be qualified mortgages.

and 48 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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