Business First Bancshares, Inc. (BFST) completed a private placement of $85 million in 6.50% fixed‑to‑floating rate subordinated notes due 2036, issued to qualified institutional and accredited investors. The notes are structured to qualify as Tier 2 capital, strengthening the bank’s regulatory capital base.
The proceeds will be used to redeem $66.93 million of outstanding subordinated notes, provide additional capital support to its banking subsidiary b1BANK, fund growth initiatives, repay other borrowings, and support general corporate purposes. This refinancing reduces the company’s funding cost and improves its capital ratios, positioning it for post‑acquisition integration and expansion.
The notes carry a 6.50% coupon from issuance through March 30 2031, after which the rate resets quarterly to SOFR plus 300 basis points. The company may redeem the notes at its option on or after the fifth anniversary of the issue date. Fenimore Kay Harrison LLP served as legal counsel and UMB Bank, National Association, acted as paying agent and registrar.
b1BANK reported $8.2 billion in assets, while the company’s affiliate reported $5.7 billion in assets. In the fourth quarter of 2025, BFST posted net income of $21.0 million ($0.71 per diluted share) and in the third quarter $21.5 million ($0.73 per diluted share). Revenue for 2025 was $312.76 million, up 19.97% from $260.70 million in 2024, and earnings were $82.46 million, up 38.11% year‑over‑year. The capital raise supports the bank’s continued growth and strategic initiatives.
The placement enhances Tier 2 capital, refines the debt mix, and provides flexibility to manage interest‑rate risk. The fixed coupon period locks in a 6.50% rate for over four years, while the floating reset allows adaptation to market rates. Redeeming higher‑cost notes reduces funding costs and improves capital ratios, giving the bank a stronger balance sheet for future growth and integration of its recent acquisition of Progressive Bank.
President and CEO Jude Melville has previously stated that capital raises strengthen current capital levels and provide additional capital for organic growth and future strategic initiatives. This aligns with the bank’s focus on supporting small businesses and entrepreneurs across its footprint.
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