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     162  0 Kommentare Business First Bancshares, Inc., Announces Financial Results for Q3 2020

    BATON ROUGE, La., Oct. 22, 2020 (GLOBE NEWSWIRE) -- Business First Bancshares, Inc. (NASDAQ: BFST) (Business First), parent company of b1BANK, Baton Rouge, Louisiana, today announced its unaudited results for the quarter ended September 30, 2020, including net income of $9.6 million, or $0.46 per diluted share, increases of $4.1 million and $0.06, respectively, from the quarter ended September 30, 2019. On a non-GAAP basis, core net income for the quarter ended September 30, 2020, which excludes certain income and expenses, was $11.0 million, or $0.53 per diluted share, an increase of $4.7 million and increase of $0.07, respectively, from the quarter ended September 30, 2019.

    “In our last earning report, I said the second quarter was simultaneously the most challenging, and in many ways, the most rewarding period we’ve experienced as a company,” said Jude Melville, president and CEO. “but I can now say that about the third quarter. In addition to weathering the ongoing health and related economic crises, our people were impacted over the past few weeks by landfall of not one but two hurricanes. Our performance in the quarter reflects a strength and resiliency that enables us to be there for our clients, and we are as committed as ever to continuing to be that stable resource in times of both plenty and need.”

    On October 22, 2020, Business First’s board of directors declared a quarterly dividend based upon financial performance for the third quarter in the amount of $0.10 per share, same as the prior quarter, to the common shareholders of record as of November 15, 2020. The dividend will be paid on November 30, 2020, or as soon thereafter as practicable.

    Also, on October 22, 2020, Business First’s board of directors terminated its existing stock repurchase program, which was set to expire December 13, 2020, and adopted a new stock repurchase program. Under the new repurchase program, Business First may repurchase shares of its common stock with an aggregate purchase price of up to $30,000,000 until the program’s expiration on December 31, 2021.

    Quarterly Highlights

    • COVID-19 and Hurricane Related Matters. Business First proactively assisted, and continues to assist (when prudent), clients by deferring principal and/or interest payments. Business First had 245 loans and 290 loans with outstanding principal balances of $184.3 million and $85.0 million within the deferral periods related to the COVID-19 pandemic and Hurricane Laura, respectively, as of September 30, 2020. Of loans remaining in the deferral period, 167 qualifying loans to seasoned, highly rated customers with an outstanding balance of $149.4 million were strategically converted to interest only.

      Additionally, Business First has funded approximately 2,800 loans with an aggregate outstanding balance of $397.7 million as of September 30, 2020, under the Small Business Administration (SBA) Paycheck Protection Program (PPP).
    • Strong Loan Growth. Total loans held for investment at September 30, 2020, were $3.1 billion, an increase of $87.7 million compared to June 30, 2020. Net loan growth was 2.93%, or 11.71 % annualized, for the quarter ended September 30, 2020.
    • Stable Credit Quality. Ratios of nonperforming loans compared to loans held for investment and nonperforming assets compared to total assets remained stable from 0.39% and 0.49%, respectively, at June 30, 2020, to 0.32% and 0.54% at September 30, 2020.
    • Net Interest Margin and Spread. Net interest margin and spread increased from 3.89% and 3.59%, respectively, for the quarter ended June 30, 2020, to 4.06% and 3.81% for the quarter ended September 30, 2020. The increases were largely attributable to purchase accounting accretion (loans and deposits/borrowings), an additional day in the quarter, and repricing of time deposits upon maturity. Excluding loan discount accretion, net interest margin and spread were 3.81% and 3.56%, respectively, for the quarter ended September 30, 2020, compared to 3.71% and 3.41% for the quarter ended June 30, 2020.

    Financial Condition

    September 30, 2020, Compared to June 30, 2020

    Loans

    Total loans held for investment increased by $87.7 million compared to June 30, 2020. The increase was largely attributable to growth within the multi-family residential and nonfarm nonresidential commercial real estate portfolios. Net loan growth for the quarter ended September 30, 2020, was 2.93% for the quarter, or 11.71% annualized.

    Business First’s unfunded commitments remained constant throughout the quarter ended September 30, 2020, after increasing during the quarter ended June 30, 2020, as a result of the acquisition of Pedestal. Business First has not identified any unusual customer usage of unfunded commitments since the beginning of the COVID-19 pandemic in March 2020.

    Credit Quality

    Nonperforming loans as a percentage of total loans held for investment decreased from 0.39% as of June 30, 2020, to 0.32% as of September 30, 2020. The decrease was partially attributable to net loan charge-offs which totaled $866,000, or three basis points, for the quarter ended September 30, 2020. Nonperforming assets as a percentage of total assets increased from 0.49% as of June 30, 2020, to 0.54% as of September 30, 2020. The increase was largely attributable to the transfer of former branches of Pedestal and b1BANK to other real estate owned, part of the strategic plan of the acquisition.

    Total Shareholders Equity

    Book value per common share was $19.26 at September 30, 2020, compared to $18.69 at June 30, 2020. On a non-GAAP basis, tangible book value per share was $16.18 at September 30, 2020, compared to $15.59 at June 30, 2020.

    September 30, 2020, Compared to September 30, 2019

    Loans

    Total loans held for investment increased by $1.4 billion compared to September 30, 2019, or 81.89%, due primarily to the acquisition of Pedestal and origination of SBA PPP loans during the quarter ended June 30, 2020.

    Credit Quality

    Nonperforming loans as a percentage of total loans held for investment decreased from 0.70% as of September 30, 2019, to 0.32% as of September 30, 2020. Nonperforming assets as a percentage of total assets decreased from 0.64% as of September 30, 2019, to 0.54% as of September 30, 2020. The decreases were largely attributable to an increase in overall total loans held for investment and total assets from the acquisition of Pedestal during the quarter ended June 30, 2020, as well as a decrease in nonperforming loans, offset by an increase in other real estate owned.

    Total Shareholders Equity

    Book value per common share was $19.26 at September 30, 2020, compared to $21.12 at September 30, 2019. On a non-GAAP basis, tangible book value per share was $16.18 at September 30, 2020, compared to $16.96 at September 30, 2019. The decreases were attributable to the initial book value dilution caused by the acquisition of Pedestal during the quarter ended June 30, 2020.

    Results of Operations

    Third Quarter 2020 Compared to Second Quarter 2020

    Net Income and Diluted Earnings Per Share

    For the quarter ended September 30, 2020, net income was $9.6 million, or $0.46 per diluted share, compared to net income of $2.1 million, or $0.11 per diluted share, for the quarter ended June 30, 2020. The increases were largely attributable to an increase in net interest income (primarily due to a full quarter of a larger balance sheet after the Pedestal acquisition), a decrease in the provision for loan losses and lower acquisition-related expenses (which includes costs recorded within salaries and employee benefits attributed to acquisitions, such as severance, stay bonus, etc.), offset by a decrease in other income, largely attributable to a reduction in investment income from Small Business Investment Companies (SBIC).

    On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended September 30, 2020, was $11.0 million, or $0.53 per diluted share, compared to core net income of $7.4 million, or $0.41 per diluted share, for the quarter ended June 30, 2020. Notable noncore events impacting earnings for the quarter ended September 30, 2020, included the incurrence of $1.2 million in acquisition-related expenses and $635,000 in losses attributed to losses on former bank premises and equipment in other income, largely attributable to branches planned to be closed in contemplation of the Pedestal acquisition, compared to the incurrence of $6.6 million in acquisition-related expenses for the quarter ended June 30, 2020.

    Interest Income

    For the quarter ended September 30, 2020, net interest income totaled $36.9 million and net interest margin and net interest spread were 4.06% and 3.81%, respectively, compared to $30.9 million, 3.89% and 3.59% for the quarter ended June 30, 2020. The average yield on the loan portfolio (excluding SBA PPP loans) was 5.65% for the quarter ended September 30, 2020, compared to 5.61% for the quarter ended June 30, 2020. The average yield on total interest-earning assets was 4.67% for the quarter ended September 30, 2020, compared to 4.65% for the quarter ended June 30, 2020. The increase in interest income was largely attributable to higher average balances due to the Pedestal acquisition during the quarter ended June 30, 2020.

    Net interest margin and net interest spread were positively impacted for the quarter ended September 30, 2020, by additional loan discount accretion, reduction in the overall cost of funds (which includes noninterest-bearing deposits) and an additional day in the quarter, offset by yield reductions in securities and SBA PPP loans.

    The average loan yield (excluding SBA PPP loans) and total interest-earning assets was also impacted by additional loan discount and an additional day in the quarter.  

    Net interest margin and net interest spread (excluding loan discount accretion of $2.3 million) were 3.81% and 3.56%, respectively, for the quarter ended September 30, 2020, compared to 3.71% and 3.41% (excluding loan discount accretion of $1.5 million) for the quarter ended June 30, 2020.

    Interest Expense

    For the quarter ended September 30, 2020, overall cost of funds (which includes noninterest-bearing deposits) decreased by 14 basis points, from 0.77% to 0.63%, compared to the quarter ended June 30, 2020. The decrease in cost of funds was largely attributable to the repricing of time deposits upon maturity.

    Other Income

    For the quarter ended September 30, 2020, other income was impacted by a reduction of $1.3 million in SBIC investment income, partially offset by $869,000 increases in both the service charges on deposit accounts and debit card and ATM fee income associated with a full quarterly impact of the Pedestal accounts, as well as an insurance settlement of $390,000 within other income related to a prior charged-off loan, compared to the quarter ended June 30, 2020.

    Other Expense

    For the quarter ended September 30, 2020, the decreases were largely attributed to reductions in salaries and employee benefits, $2.2 million, and merger and conversion-related expenses, $1.2 million, both of which resulted from elevated expenses during the quarter ended June 30, 2020, attributable to the Pedestal acquisition, partially offset by increases in various other categories which were mainly attributable to the full quarterly impact of the Pedestal acquisition, as well as an increase in our FDIC assessments, $322,000, due to increased deposits attributable to the Pedestal acquisition and SBA PPP loan program, compared to the quarter ended June 30, 2020.

    Provision for Loan Losses

    During the quarter ended September 30, 2020, Business First recorded a provision for loan losses of $2.5 million, compared to $5.4 million for the quarter ended June 30, 2020. The reserve for the quarter ended September 30, 2020, was impacted by net charge-offs of $866,000, new net loan production, and the continued impact of the qualitative factors related to COVID-19.   

    Return on Assets and Equity

    Return on average assets and equity, each on an annualized basis, were 0.98% and 9.85%, respectively, for the quarter ended September 30, 2020, compared to 0.23% and 2.35%, respectively, for the quarter ended June 30, 2020. Both returns were significantly impacted by additional provision for loan loss and acquisition-related expenses recorded during the quarter ended June 30, 2020.

    Third Quarter 2020 Compared to Third Quarter 2019

    Net Income and Diluted Earnings Per Share

    For the quarter ended September 30, 2020, net income was $9.6 million, or $0.46 per diluted share, compared to net income of $5.5 million, or $0.40 per diluted share, for the quarter ended September 30, 2019. The increases in net income and diluted earnings per share were largely attributable to the increases in net interest income and other income related to the acquisition of Pedestal on May 1, 2020, offset by increases in the provision for loan losses associated with the COVID-19 pandemic in 2020 and additional expenses associated with the acquisition of Pedestal on May 1, 2020.

    On a non-GAAP basis, core net income, which excludes certain income and expenses, for the quarter ended September 30, 2020, was $11.0 million, or $0.53 per diluted share, compared to core net income of $6.3 million, or $0.46 per diluted share, for the quarter ended September 30, 2019. Notable noncore events impacting earnings for the quarter ended September 30, 2020, included the incurrence of $1.2 million in acquisition-related expenses and $635,000 in losses attributed to losses on former bank premises and equipment in other income, compared to the incurrence of $288,000 in acquisition-related expenses and $594,000 losses on former bank premises and equipment in other income for the quarter ended September 30, 2019.

    Interest Income

    For the quarter ended September 30, 2020, net interest income totaled $36.9 million and net interest margin and net interest spread were 4.06% and 3.81%, respectively, compared to $20.3 million, 4.10% and 3.66% for the quarter ended September 30, 2019. The average yield on the loan portfolio (excluding SBA PPP loans) was 5.65% for the quarter ended September 30, 2020, compared to 5.87% for the quarter ended September 30, 2019. The average yield on total interest-earning assets was 4.67% for the quarter ended September 30, 2020, compared to 5.32% for the quarter ended September 30, 2019.   The increase in interest income was largely attributable to higher average balances due to the Pedestal acquisition and origination of SBA PPP loans during 2020.

    Average loan yield (excluding SBA PPP loans), average yield on total interest-earning assets, net interest margin, and net interest spread were impacted for the quarter ended September 30, 2020, by the federal funds rate cuts of 175 basis points, which occurred during the fourth quarter of 2019 through the first quarter of 2020. The average yield on total interest-earning assets was also impacted by the lower-yielding SBA PPP loans originated during the quarter ended June 30, 2020.

    Net interest margin and net interest spread (excluding loan discount accretion of $2.3 million) were 3.81% and 3.56%, respectively, for the quarter ended September 30, 2020, compared to 3.99% and 3.55% (excluding loan discount accretion of $544,000) for the quarter ended September 30, 2019.

    Interest Expense

    For the quarter ended September 30, 2020, overall cost of funds (which includes noninterest-bearing deposits) decreased by 68 basis points, from 1.31% to 0.63%, compared to the quarter ended September 30, 2019. The decrease in cost of funds was partially attributable to the accretion of deposit and Federal Home Loan Bank (FHLB) premiums associated with the Pedestal acquisition, $796,000 or 11 basis points, but largely attributable to an overall reduction in interest rates on deposit offerings and the lower-yielding deposit portfolio acquired from Pedestal.

    Other Income

    For the quarter ended September 30, 2020, the increase was largely attributable to the acquisition of Pedestal during the quarter ended June 30, 2020.

    Other Expense

    For the quarter ended September 30, 2020, the increase was largely attributable to the acquisition of Pedestal during the quarter ended June 30, 2020.

    Provision for Loan Losses

    During the quarter ended September 30, 2020, Business First recorded a provision for loan losses of $2.5 million compared to $479,000 for the quarter ended September 30, 2019. The reserve for the quarter ended September 30, 2020, was impacted by $866,000 in net charge-offs, higher net new loan growth and the impact of the COVID-19 pandemic on the qualitative factors within the allowance for loan and lease losses.

    Return on Assets and Equity

    Return on average assets and return on average equity, each on an annualized basis, were 0.98% and 9.85%, respectively, for the quarter ended September 30, 2020, from 1.02% and 7.93%, respectively, for the quarter ended September 30, 2019. Both returns were significantly impacted by the provision for loan loss and acquisition-related expenses recorded for the quarter ended September 30, 2020, in addition to a lower net interest margin for the quarter ended September 30, 2020.

    About Business First Bancshares, Inc.

    Business First Bancshares, Inc., through its banking subsidiary b1BANK, formerly known as Business First Bank, operates 42 banking centers in markets across Louisiana and in the Dallas, Texas area. b1BANK provides commercial and personal banking, treasury management and wealth solutions services to small to midsize businesses and their owners and employees. Visit www.b1BANK.com for more information. Business First’s common stock is traded on the NASDAQ Global Select Market under the symbol “BFST.”

    Non-GAAP Financial Measures

    This press release includes certain non-GAAP financial measures (e.g., referenced as “core”) intended to supplement, not substitute for, comparable GAAP measures. These measures typically adjust income available to common shareholders for certain significant activities or transactions that, in management’s opinion, can distort period-to-period comparisons of Business First’s performance. Transactions that are typically excluded from non-GAAP measures include realized and unrealized gains/losses on former bank premises and equipment, investment sales, impaired loan sales, acquisition-related expenses (including, but not limited to, legal costs, system conversion costs, severance and retention payments, etc.). 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. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided at the end of the tables below.

    Special Note Regarding Forward-Looking Statements

    Certain statements contained in this release may not be based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “may,” “might,” “will,” “would,” “could,” or “intend.” We caution you not to place undue reliance on the forward-looking statements contained in this news release, in that actual results could differ materially from those indicated in such forward-looking statements as a result of a variety of factors, including those factors specified in our Annual Report on Form 10-K and other public filings. Actual results will also be significantly impacted by the effects of the ongoing COVID-19 pandemic, including, among other effects: the impact of the public health crisis; the extent and duration of closures of businesses, including our branches, vendors and customers; the operation of financial markets; employment levels; market liquidity; the impact of various actions taken in response by the U.S. federal government, the Federal Reserve, other banking regulators, state and local governments; the adequacy of our allowance for loan losses in relation to potential losses in our loan portfolio; and the impact that all of these factors have on our borrowers, other customers, vendors and counterparties. We undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release.

    Additional Information

    For additional information on Business First, you may obtain Business First’s reports that are filed with the Securities and Exchange Commission (SEC) free of charge by using the SEC’s EDGAR service on the SEC’s website at www.sec.gov or by contacting the SEC for further information at 1-800-SEC-0330. Alternatively, these documents can be obtained free of charge from Business First by directing a request to: Business First Bancshares, Inc., 500 Laurel Street, Suite 101, Baton Rouge, Louisiana 70801, Attention: Corporate Secretary.

    No Offer or Solicitation

    This release does not constitute or form part of any offer to sell, or a solicitation of an offer to purchase, any securities of the Company. There will be no sale of securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

    Misty Albrecht
    b1BANK
    225.286.7879
    Misty.Albrecht@b1BANK.com


    Business First Bancshares, Inc.  
    Selected Financial Information  
    (Unaudited)  
             
      September 30, June 30, September 30,  
    (Dollars in thousands)  2020  2020  2019  
             
    Balance Sheet Ratios        
             
    Loans (HFI) to Deposits   95.25%     92.12%     97.77%    
    Shareholders' Equity to Assets Ratio   10.07%     9.75%     12.62%    
             
    Loans Receivable Held for Investment        
             
    Commercial (1) $ 1,015,173   $ 1,026,596   $ 415,163    
    Real Estate:        
    Construction and Land   334,100     333,675     220,524    
    Farmland   56,567     57,498     45,809    
    1-4 Family Residential   493,344     495,827     281,413    
    Multi-Family Residential   99,901     59,213     31,448    
    Nonfarm Nonresidential   970,197     914,601     620,427    
    Total Real Estate   1,954,109     1,860,814     1,199,621    
    Consumer (1)   113,192     107,402     79,943    
    Total Loans [Held for Investment] $ 3,082,474   $ 2,994,812   $ 1,694,727    
             
    Allowance for Loan Losses        
             
    Balance, Beginning of Period $ 18,715   $ 13,319   $ 11,603    
    Charge-offs – Quarterly   (956 )   (98 )   (13 )  
    Recoveries – Quarterly   90     51     21    
    Provision for Loan Losses – Quarterly   2,491     5,443     479    
    Balance, End of Period $ 20,340   $ 18,715   $ 12,090    
             
    Allowance for Loan Losses to Total Loans (HFI)   0.66%     0.62%     0.71%    
    Net Charge-offs (Recoveries) to Average Total Loans   0.03%     0.00%     -0.00 %  
             
    Remaining Loan Purchase Discount $ 38,207   $ 44,302   $ 4,848    
             
    Nonperforming Assets        
             
    Nonperforming Loans:        
    Nonaccrual Loans (2) $ 7,988   $ 11,433   $ 11,577    
    Loans Past Due 90 Days or More (2)   1,986     317     277    
    Total Nonperforming Loans   9,974     11,750     11,854    
    Other Nonperforming Assets:        
    Other Real Estate Owned   10,994     7,642     2,326    
    Other Nonperforming Assets:   414
        179     5    
    Total Other Nonperforming Assets   11,408     7,821     2,331    
    Total Nonperforming Assets $ 21,382   $ 19,571   $ 14,185    
             
    Nonperforming Loans to Total Loans (HFI)   0.32%     0.39%     0.70%    
    Nonperforming Assets to Total Assets   0.54%     0.49%     0.64%    
             
    (1) Small Business Adminstration SBA Paycheck Protection Program PPP loans accounted for $392.9 million and $4.8 million of the Commercial and Consumer portfolios, respectively, as of September 30, 2020.  
    SBA PPP loans accounted for $389.9 million and $5.5 million of the Commercial and Consumer portfolios, respectively, as of June 30, 2020.    
             
    (2) Past due and nonaccrual loan amounts exclude acquired impaired loans, even if contractually past due or if the Company does not expect to receive payment in full, as the Company is currently accreting interest income over the expected life of the loans.  


    Business First Bancshares, Inc.  
    Selected Financial Information  
    (Unaudited)  
                 
      Three Months Ended Nine Months Ended  
      September 30, June 30, September 30, September 30, September 30,  
    (Dollars in thousands, except per share data)  2020  2020  2019  2020  2019  
                 
    Per Share Data            
                 
    Basic Earnings per Common Share $ 0.47   $ 0.11   $ 0.41   $ 0.93   $ 1.35    
    Diluted Earnings per Common Share   0.46     0.11     0.40     0.93     1.32    
    Dividends per Common Share   0.10     0.10     0.10     0.30     0.28    
    Book Value per Common Share   19.26     18.69     21.12     19.26     21.12    
                 
                 
    Average Common Shares Outstanding   20,613,481     18,108,068     13,315,351     17,356,830     13,321,566    
    Average Diluted Shares Outstanding   20,704,444     18,121,958     13,669,370     17,409,821     13,675,585    
    End of Period Common Shares Outstanding   20,667,237     20,667,237     13,274,823     20,667,237     13,274,823    
                 
                 
    Annualized Performance Ratios            
                 
    Return on Average Assets   0.98%     0.23%     1.02%     0.67%     1.14%    
    Return on Average Equity   9.85%     2.35%     7.93%     6.30%     8.88%    
    Net Interest Margin   4.06%     3.89%     4.10%     3.97%     4.10%    
    Net Interest Spread   3.81%     3.59%     3.66%     3.67%     3.68%    
    Efficiency Ratio (1)   65.65%     77.40%     67.16%     71.42%     63.65%    
                 
    Total Quarterly/Year-to-Date Average Assets $ 3,933,631   $ 3,496,074   $ 2,156,759   $ 3,224,940   $ 2,111,717    
    Total Quarterly/Year-to-Date Average Equity   390,209     349,634     278,028     341,904     270,380    
                 
    Other Expenses            
                 
    Salaries and Employee Benefits $ 15,430   $ 17,621   $ 8,793   $ 42,486   $ 26,101    
    Occupancy and Bank Premises   1,394     1,370     1,230     3,824     3,412    
    Depreciation and Amortization   1,322     1,073     645     2,996     1,906    
    Data Processing   1,832     1,055     380     3,539     1,572    
    FDIC Assessment Fees   594     272     (105 )   1,013     293    
    Legal and Other Professional Fees   555     543     346     1,492     1,017    
    Advertising and Promotions   320     334     544     960     1,150    
    Utilities and Communications   789     645     397     1,751     1,018    
    Ad Valorem Shares Tax   673     450     345     1,498     1,035    
    Directors' Fees   117     100     121     291     451    
    Other Real Estate Owned Expenses and Write-Downs   171     51     19     475     118    
    Merger and Conversion-Related Expenses   556     1,726     350     3,430     331    
    Other   3,198     2,557     1,813     7,636     4,841    
    Total Other Expenses $ 26,951   $ 27,797   $ 14,878   $ 71,391   $ 43,245    
                 
    Other Income            
                 
    Service Charges on Deposit Accounts $ 1,592   $ 1,163   $ 1,035   $ 3,686   $ 3,007    
    Gain on Sales of Securities   95     -     26     120     84    
    Debit card and ATM Fee Income   1,399     959     460     2,765     1,397    
    Bank-Owned Life Insurance Income   237     255     175     689     517    
    Gain on Sales of Loans   -     7     24     184     115    
    Mortgage Origination Income   123     126     120     364     308    
    Brokerage Commission   281     236     15     537     58    
    Correspondent Bank Income   45     32     118     186     343    
    Rental Income   14     15     159     60     488    
    Gain (loss) on Sale of Banking Center   -     -     (12 )   -     581    
    Gain (loss) on Sales of Other Real Estate Owned   (104 )   (19 )   78     28     27    
    Loss on Disposal of Other Assets   (627 )   -     (650 )   (627 )   (650 )  
    Pass-through Income from SBIC Partnerships   364     1,624     138     2,368     1,404    
    Other   798     598     236     1,657     773    
    Total Other Income $ 4,217   $ 4,996   $ 1,922   $ 12,017   $ 8,452    
                 
    (1) Noninterest expense (excluding provision for loan losses) divided by noninterest income plus net interest income less gain/loss on sales of securities.  


    Business First Bancshares, Inc.  
    Consolidated Balance Sheets  
    (Unaudited)  
             
      September 30, June 30, September 30,  
    (Dollars in thousands)  2020  2020  2019  
             
    Assets        
             
    Cash and Due From Banks $ 103,894   $ 116,021   $ 63,356    
    Federal Funds Sold   8,395     40,329     43,705    
    Securities Available for Sale, at Fair Values   547,535     583,118     288,231    
    Mortgage Loans Held for Sale   671     456     256    
    Loans and Lease Receivable   3,082,474     2,994,812     1,694,727    
    Allowance for Loan Losses   (20,340 )   (18,715 )   (12,090 )  
    Net Loans and Lease Receivable   3,062,134     2,976,097     1,682,637    
    Premises and Equipment, Net   59,241     63,959     27,092    
    Accrued Interest Receivable   25,622     33,844     7,513    
    Other Equity Securities   15,641     18,681     12,697    
    Other Real Estate Owned   10,994     7,642     2,326    
    Cash Value of Life Insurance   44,779     44,542     32,398    
    Deferred Taxes, Net   5,829     6,858     2,674    
    Goodwill   53,627     53,649     48,333    
    Core Deposit Intangible   10,061     10,389     6,916    
    Other Assets   6,247     5,553     2,706    
             
    Total Assets $ 3,954,670   $ 3,961,138   $ 2,220,840    
             
             
    Liabilities        
             
    Deposits:        
    Noninterest-Bearing $ 945,485   $ 985,537   $ 406,146    
    Interest-Bearing   2,290,776     2,265,485     1,327,244    
    Total Deposits   3,236,261     3,251,022     1,733,390    
             
    Securities Sold Under Agreements to Repurchase   24,604     25,391     31,037    
    Short-Term Borrowings   5,033     6,145     -    
    Long-Term Borrowings   6,000     7,797     -    
    Paycheck Protection Program Liquidity Facility   107,076     107,076     -    
    Subordinated Debt   25,000     25,000     25,000    
    Subordinated Debt -Trust Preferred Securities   5,000     5,000     -    
    Federal Home Loan Bank Borrowings   117,950     118,177     128,000    
    Accrued Interest Payable   3,621     3,920     1,837    
    Other Liabilities   26,039     25,274     21,236    
             
    Total Liabilities   3,556,584     3,574,802     1,940,500    
             
    Shareholders' Equity        
             
    Common Stock   20,667     20,667     13,275    
    Additional Paid-In Capital   299,762     297,606     212,104    
    Retained Earnings   67,399     59,850     52,265    
    Accumulated Other Comprehensive Income   10,258     8,213     2,696    
             
    Total Shareholders' Equity   398,086     386,336     280,340    
             
    Total Liabilities and Shareholders' Equity $ 3,954,670   $ 3,961,138   $ 2,220,840    


    Business First Bancshares, Inc.  
    Consolidated Statements of Income  
    (Unaudited)  
                   
        Three Months Ended   Nine Months Ended  
      September 30, June 30, September 30,   September 30, September 30,  
    (Dollars in thousands) 2020 2020 2019   2020 2019  
                   
    Interest Income:              
    Interest and Fees on Loans $ 39,918 $ 34,636 $ 24,408   $ 98,697 $ 70,701  
    Interest and Dividends on Securities   2,474   2,175   1,783     6,380   5,486  
    Interest on Federal Funds Sold and Due From Banks   69   80   129     291   616  
    Total Interest Income   42,461   36,891   26,320     105,368   76,803  
                   
    Interest Expense:              
    Interest on Deposits   4,345   4,795   5,050     13,826   14,845  
    Interest on Borrowings   1,184   1,177   1,012     3,480   2,387  
    Total Interest Expense   5,529   5,972   6,062     17,306   17,232  
                   
    Net Interest Income   36,932   30,919   20,258     88,062   59,571  
                   
    Provision for Loan Losses:   2,491   5,443   479     9,301   2,414  
                   
    Net Interest Income After Provision for Loan Losses   34,441   25,476   19,779     78,761   57,157  
                   
    Other Income:              
    Service Charges on Deposit Accounts   1,592   1,163   1,035     3,686   3,007  
    Gain on Sales of Securities   95   -   26     120   84  
    Other Income   2,530   3,833   861     8,211   5,361  
    Total Other Income   4,217   4,996   1,922     12,017   8,452  
                   
    Other Expenses:              
    Salaries and Employee Benefits   15,430   17,621   8,793     42,486   26,101  
    Occupancy and Equipment Expense   3,228   2,888   2,135     8,007   5,913  
    Merger and Conversion-Related Expense   556   1,726   235     3,430   331  
    Other Expenses   7,737   5,562   3,715     17,468   10,900  
    Total Other Expenses   26,951   27,797   14,878     71,391   43,245  
                   
    Income Before Income Taxes:   11,707   2,675   6,823 -   19,387   22,364  
                   
    Provision for Income Taxes:   2,098   623   1,312     3,227   4,351  
                   
    Net Income: $ 9,609 $ 2,052 $ 5,511   $ 16,160 $ 18,013  


    Business First Bancshares, Inc.  
    Consolidated Net Interest Margin  
    (Unaudited)  
                             
                             
      Three Months Ended  
      September 30, 2020   June 30, 2020   September 30, 2019  
      Average       Average       Average      
      Outstanding Interest Earned / Average   Outstanding Interest Earned / Average   Outstanding Interest Earned / Average  
    (Dollars in thousands) Balance Interest Paid Yield / Rate   Balance Interest Paid Yield / Rate   Balance Interest Paid Yield / Rate  
                             
    Assets                        
                             
    Interest-Earning Assets:                        
    Total Loans (Excluding SBA PPP) $ 2,638,417   $ 37,250 5.65 %   $ 2,304,438   $ 32,306 5.61 %   $ 1,664,283   $ 24,408 5.87 %  
    SBA PPP Loans   399,366     2,668 2.67 %     321,127   $ 2,330 2.90 %     -     - 0.00 %  
    Securities Available for Sale   564,630     2,474 1.75 %     481,422     2,175 1.81 %     297,121     1,783 2.40 %  
    Interest-Bearing Deposit in Other Banks   33,970     69 0.81 %     69,169     80 0.46 %     16,070     129 3.21 %  
    Total Interest-Earning Assets   3,636,383     42,461 4.67 %     3,176,156     36,891 4.65 %     1,977,474     26,320 5.32 %  
    Allowance for Loan Losses   (19,329 )         (13,606 )         (11,783 )      
    Noninterest-Earning Assets   316,577           333,524           191,068        
    Total Assets $ 3,933,631   $ 42,461     $ 3,496,074   $ 36,891     $ 2,156,759   $ 26,320    
                             
                             
    Liabilities and Shareholders' Equity                        
                             
    Interest-Bearing Liabilities:                        
    Interest-Bearing Deposits $ 2,262,774   $ 4,345 0.77 %   $ 1,994,680   $ 4,795 0.96 %   $ 1,300,740   $ 5,050 1.55 %  
    Subordinated Debt   25,000     422 6.75 %     25,000     422 6.75 %     25,000     422 6.75 %  
    Subordinated Debt - Trust Preferred Securities   5,000     45 3.60 %     3,333     34 4.08 %     -     - 0.00 %  
    Advances from Federal Home Loan Bank (FHLB)   122,592     515 1.68 %     129,441     526 1.63 %     105,588     560 2.12 %  
    Paycheck Protection Program Liquidity Facility (PPPLF)   107,076     95 0.35 %     76,902     72 0.37 %     -     - 0.00 %  
    Other Borrowings   35,437     107 1.21 %     32,975     123 1.49 %     23,718     30 0.51 %  
    Total Interest-Bearing Liabilities   2,557,879     5,529 0.86 %     2,262,331     5,972 1.06 %     1,455,046     6,062 1.67 %  
                             
    Noninterest-Bearing Liabilities:                        
    Noninterest-Bearing Deposits $ 957,090         $ 852,608           398,748        
    Other Liabilities   28,453           31,501           24,937        
    Total Noninterest-Bearing Liabilities   985,543           884,109           423,685        
    Shareholders' Equity:   390,209           349,634           278,028        
    Total Liabilities and Shareholders' Equity $ 3,933,631         $ 3,496,074         $ 2,156,759        
                             
    Net Interest Spread     3.81 %       3.59 %       3.66 %  
    Net Interest Income   $ 36,932       $ 30,919       $ 20,258    
    Net Interest Margin     4.06 %       3.89 %       4.10 %  
                             
    Overall Cost of Funds     0.63 %       0.77 %       1.31 %  
                             
    NOTE: Average outstanding balances are determined utilizing monthly averages and average yield/rate is calculated utilizing a 30/360 day count convention.          


    Business First Bancshares, Inc.  
    Consolidated Net Interest Margin  
    (Unaudited)  
                     
                     
      Nine Months Ended  
      September 30, 2020   September 30, 2019  
      Average       Average      
      Outstanding Interest Earned / Average   Outstanding Interest Earned / Average  
    (Dollars in thousands) Balance Interest Paid Yield / Rate   Balance Interest Paid Yield / Rate  
                     
    Assets                
                     
    Interest-Earning Assets:                
    Total Loans (Excluding SBA PPP) $ 2,227,681 $ 93,699 5.61%   $ 1,605,423 $ 70,701 5.87%  
    SBA PPP Loans 240,164 4,998 2.77%   - - 0.00%  
    Securities Available for Sale 444,237 6,380 1.91%   303,374 5,486 2.41%  
    Interest-Bearing Deposit in Other Banks 43,965 291 0.88%   26,621 616 3.09%  
    Total Interest-Earning Assets 2,956,047 105,368 4.75%   1,935,418 76,803 5.29%  
    Allowance for Loan Losses (15,046)       (11,625)      
    Noninterest-Earning Assets 283,939       187,924      
    Total Assets $ 3,224,940 $ 105,368     $ 2,111,717 $ 76,803    
                     
                     
    Liabilities and Shareholders' Equity                
                     
    Interest-Bearing Liabilities:                
    Interest-Bearing Deposits $ 1,866,556 $ 13,826 0.99%   $ 1,323,927 $ 14,845 1.50%  
    Subordinated Debt 25,000 1,266 6.75%   25,000 1,267 6.76%  
    Subordinated Debt - Trust Preferred Securities 2,778 79 3.79%   - - 0.00%  
    Advances from Federal Home Loan Bank (FHLB) 116,785 1,538 1.76%   59,990 1,065 2.37%  
    Paycheck Protection Program Liquidity Facility (PPPLF) 61,326 167 0.36%   - - 0.00%  
    Other Borrowings 45,179 430 1.27%   16,863 55 0.43%  
    Total Interest-Bearing Liabilities 2,117,624 17,306 1.09%   1,425,780 17,232 1.61%  
                     
    Noninterest-Bearing Liabilities:                
    Noninterest-Bearing Deposits 738,578       396,452      
    Other Liabilities 26,834       19,105      
    Total Noninterest-Bearing Liabilities 765,412       415,557      
    Shareholders' Equity: 341,904       270,380      
    Total Liabilities and Shareholders' Equity $ 3,224,940       $ 2,111,717      
                     
    Net Interest Spread     3.66%       3.68%  
    Net Interest Income   $ 88,062       $ 59,571    
    Net Interest Margin     3.97%       4.10%  
                     
    Overall Cost of Funds     0.81%       1.26%  
                     
    NOTE: Average outstanding balances are determined utilizing monthly averages and average yield/rate is calculated utilizing a 30/360 day count convention.  


    Business First Bancshares, Inc.  
    Non-GAAP Measures  
    (Unaudited)  
                   
      Three Months Ended   Nine Months Ended  
      September 30, June 30, September 30,   September 30, September 30,  
    (Dollars in thousands, except per share data)  2020  2020  2019    2020  2019  
                   
    Interest Income:              
    Interest income $ 42,461   $ 36,891   $ 26,320     $ 105,368   $ 76,803    
    Core interest income   42,461     36,891     26,320       105,368     76,803    
    Interest Expense:              
    Interest expense   5,529     5,972     6,062       17,306     17,232    
    Core interest expense   5,529     5,972     6,062       17,306     17,232    
    Provision for Loan Losses: (b)              
    Provision for loan losses   2,491     5,443     479       9,301     2,414    
    Core provision expense   2,491     5,443     479       9,301     2,414    
    Other Income:              
    Other income   4,217     4,996     1,922       12,017     8,452    
    Sale of impaired credit   -     -     -       -     (91 )  
    (Gains) losses on former bank premises and equipment   635     -     594       509     594    
    (Gains) on sale of securities   (95 )   -     (26 )     (120 )   (84 )  
    (Gains) on sale of banking center   -     -     12       -     (581 )  
    Core other income   4,757     4,996     2,502       12,406     8,290    
    Other Expense:              
    Other expense   26,951     27,797     14,878       71,391     43,245    
    Acquisition-related expenses (2)   (1,206 )   (6,573 )   (288 )     (8,991 )   (674 )  
    Stock option exercises - excess taxes   -     -     -       (71 )   -    
    Early lease termination   -     -     (87 )     -     (87 )  
    Core other expense   25,745     21,224     14,503       62,329     42,484    
    Pre-Tax Income: (a)              
    Pre-tax income   11,707     2,675     6,823       19,387     22,364    
    Sale of impaired credit   -     -     -       -     (91 )  
    (Gains) losses on former bank premises and equipment   635     -     594       509     594    
    (Gains) on sale of securities   (95 )   -     (26 )     (120 )   (84 )  
    (Gains) losses on sale of banking center   -     -     12       -     (581 )  
    Acquisition-related expenses (2)   1,206     6,573     288       8,991     674    
    Stock option exercises - excess taxes   -     -     -       71     -    
    Early lease termination   -     -     87       -     87    
    Core pre-tax income   13,453     9,248     7,778       28,838     22,963    
    Provision for Income Taxes: (1)              
    Provision for income taxes   2,098     623     1,312       3,227     4,351    
    Tax on sale of impaired credit   -     -     -       -     (19 )  
    Tax on (gains) on former bank premises and equipment   133     -     125       107     125    
    Tax on (gains) on sale of securities   (20 )   -     (5 )     (25 )   (18 )  
    Tax on sale of banking center   -     -     3       -     (122 )  
    Tax on acquisition-related expenses (2)   241     1,275     60       1,607     135    
    Tax on stock option exercises   -     -     -       601     -    
    Tax on early lease termination   -     -     18       -     18    
    Core provision for income taxes   2,452     1,898     1,513       5,517     4,470    
    Net Income:              
    Net income   9,609     2,052     5,511       16,160     18,013    
    Sale of impaired credit, net of tax   -     -     -       -     (72 )  
    (Gains) losses on former bank premises and equipment, net of tax   502     -     469       402     469    
    (Gains) on sale of securities, net of tax   (75 )   -     (21 )     (95 )   (66 )  
    (Gains) losses on sale of banking center, net of tax   -     -     9       -     (459 )  
    Acquisition-related expenses (2), net of tax   965     5,298     228       7,384     539    
    Stock option exercises, net of tax   -     -     -       (530 )   -    
    Early lease termination, net of tax   -     -     69       -     69    
    Core net income $ 11,001   $ 7,350   $ 6,265     $ 23,321   $ 18,493    
                   
    Pre-tax, pre-provision earnings (a+b) $ 14,198   $ 8,118   $ 7,302     $ 28,688   $ 24,778    
    Sale of impaired credit   -     -     -       -     (91 )  
    (Gains) losses on former bank premises and equipment   635     -     594       509     594    
    (Gains) on sale of securities   (95 )   -     (26 )     (120 )   (84 )  
    (Gains)/losses on sale of banking center   -     -     12       -     (581 )  
    Acquisition-related expenses (2)   1,206     6,573     288       8,991     674    
    Stock option exercises   -     -     -       71     -    
    Early lease termination       87         87    
    Core pre-tax, pre-provision earnings $ 15,944   $ 14,691   $ 8,257     $ 38,139   $ 25,377    
                   
    Average Diluted Shares Outstanding   20,704,444     18,121,958     13,669,370       17,409,821     13,675,585    
                   
    Diluted Earnings Per Share:              
    Diluted earnings per share $ 0.46   $ 0.11   $ 0.40     $ 0.93   $ 1.32    
    Sale of impaired credit, net of tax   -     -     -       -     (0.01 )  
    (Gains) losses on former bank premises and equipment , net of tax   0.02     -     0.03       0.02     0.03    
    (Gains) on sale of securities, net of tax   (0.00 )   -     (0.00 )     (0.01 )   (0.01 )  
    (Gains) losses on sale of banking center   -     -     0.00       -     (0.03 )  
    Acquisition-related expenses (2), net of tax   0.05     0.30     0.02       0.43     0.04    
    Stock option exercises   -     -     -       (0.03 )   -    
    Early lease termination, net of tax   -       0.01       -     0.01    
    Core diluted earnings per share $ 0.53   $ 0.41   $ 0.46     $ 1.34   $ 1.35    
                   
    Pre-tax, pre-provision profit diluted earnings per share $ 0.69   $ 0.45   $ 0.53     $ 1.65   $ 1.81    
    Sale of impaired credit   -     -     -       -     (0.01 )  
    (Gains) losses on former bank premises and equipment   0.03     -     0.04       0.03     0.04    
    (Gains) on sale of securities   (0.01 )   -     (0.00 )     (0.01 )   (0.01 )  
    (Gains) losses on sale of banking center       0.00       -     (0.04 )  
    Acquisition-related expenses (2)   0.06     0.36     0.02       0.52     0.05    
    Stock option exercises   -     -     -       0.00     -    
    Early lease termination   -       0.01       -     0.01    
    Core pre-tax, pre-provision diluted earnings per share $ 0.77   $ 0.81   $ 0.60     $ 2.19   $ 1.86    
                   
    (1) Tax rates, exclusive of certain nondeductible merger-related expenses and goodwill, utilized were 21% for 2020 and 2019. These rates approximated the marginal tax rates.    
    (2) Includes merger and conversion-related expenses and salary and employee benefits.          


    Business First Bancshares, Inc.  
    Non-GAAP Measures  
    (Unaudited)  
                   
      Three Months Ended   Nine Months Ended  
      September 30, June 30, September 30,   September 30, September 30,  
    (Dollars in thousands, except per share data)  2020  2020  2019    2020  2019  
                   
                   
    Total Quarterly/Year-to-Date Average Assets $ 3,933,631   $ 3,496,074   $ 2,156,759     $ 3,224,940   $ 2,111,717    
    Total Quarterly/Year-to-Date Average Equity $ 390,209   $ 349,634   $ 278,028     $ 341,904   $ 270,380    
                   
    Net Income:              
    Net income $ 9,609   $ 2,052   $ 5,511     $ 16,160   $ 18,013    
    Sale of impaired credit, net of tax   -     -     -       -     (72 )  
    (Gains) losses on former bank premises and equipment , net of tax   502     -     469       402     469    
    (Gains) on sale of securities, net of tax   (75 )   -     (21 )     (95 )   (66 )  
    (Gains) losses on sale of banking center, net of tax   -     -     9       -     (459 )  
    Acquisition-related expenses (2), net of tax   965     5,298     228       7,384     539    
    Stock option exercises, net of tax   -     -     -       (530 )   -    
    Early lease termination, net of tax       69       -     69    
    Core net income $ 11,001   $ 7,350   $ 6,265     $ 23,321   $ 18,493    
                   
    Return on average assets   0.98%     0.23%     1.02%       0.67%     1.14%    
    Core return on average assets   1.12%     0.84%     1.16%       0.96%     1.17%    
    Return on equity   9.85%     2.35%     7.93%       6.30%     8.88%    
    Core return on average equity   11.28%     8.41%     9.01%       9.09%     9.12%    
                   
    Interest Income:              
    Interest income $ 42,461   $ 36,891   $ 26,320     $ 105,368   $ 76,803    
    Core interest income   42,461     36,891     26,320       105,368     76,803    
    Interest Expense:              
    Interest expense   5,529     5,972     6,062       17,306     17,232    
    Core interest expense   5,529     5,972     6,062       17,306     17,232    
    Other Income:              
    Other income   4,217     4,996     1,922       12,017     8,452    
    Sale of impaired credit   -     -     -       -     (91 )  
    (Gains) losses on former bank premises and equipment   635     -     594       509     594    
    (Gains) on sale of securities   (95 )   -     (26 )     (120 )   (84 )  
    (Gains) losses on sale of banking center   -     -     12       -     (581 )  
    Core other income   4,757     4,996     2,502       12,406     8,290    
    Other Expense:              
    Other expense   26,951     27,797     14,878       71,391     43,245    
    Acquisition-related expenses   (1,206 )   (6,573 )   (288 )     (8,991 )   (674 )  
    Stock option exercises - excess taxes   -     -     -       (71 )   -    
    Early lease termination       (87 )     -     (87 )  
    Core other expense $ 25,745   $ 21,224   $ 14,503     $ 62,329   $ 42,484    
                   
    Efficiency Ratio:              
    Other expense (a) $ 26,951   $ 27,797   $ 14,878     $ 71,391   $ 43,245    
    Core other expense (c) $ 25,745   $ 21,224   $ 14,503     $ 62,329   $ 42,484    
    Net interest and other income (1) (b) $ 41,054   $ 35,915   $ 22,154     $ 99,959   $ 67,939    
    Core net interest and other income (1) (d) $ 41,689   $ 35,915   $ 22,760     $ 100,468   $ 67,861    
    Efficiency ratio (a/b)   65.65%     77.40%     67.16%       71.42%     63.65%    
    Core efficiency ratio (c/d)   61.75%     59.10%     63.72%       62.04%     62.60%    
                   
    Total Average Interest-Earnings Assets $ 3,636,383   $ 3,176,156   $ 1,977,474     $ 2,956,047   $ 1,935,418    
                   
    Net Interest Income:              
    Net interest income $ 36,932   $ 30,919   $ 20,258       88,062   $ 59,571    
    Loan discount accretion   (2,270 )   (1,465 )   (544 )     (4,025 )   (1,802 )  
    Net interest income excluding loan discount accretion $ 34,662   $ 29,454   $ 19,714     $ 84,037   $ 57,769    
                   
    Net interest margin (2)   4.06%     3.89%     4.10%       3.97%     4.10%    
    Net interest margin excluding loan discount accretion (2)   3.81%     3.71%     3.99%       3.79%     3.98%    
    Net interest spread   3.81%     3.59%     3.66%       3.66%     3.68%    
    Net interest spread excluding loan discount accretion   3.56%     3.41%     3.55%       3.48%     3.56%    
                   
    (1) Excludes gains/losses on sales of securities.              
    (2) Calculated utilizing a 30/360 day count convention.              


    Business First Bancshares, Inc.  
    Non-GAAP Measures  
    (Unaudited)  
             
             
      September 30, June 30, September 30,  
    (Dollars in thousands, except per share data)  2020  2020  2019  
             
    Total Shareholders' (Common) Equity:        
    Total shareholders' equity $ 398,086   $ 386,336   $ 280,340    
    Goodwill   (53,627 )   (53,649 )   (48,333 )  
    Core deposit intangible   (10,061 )   (10,389 )   (6,916 )  
    Total tangible common equity $ 334,398   $ 322,298   $ 225,091    
             
             
    Total Assets:        
    Total assets $ 3,954,670   $ 3,961,138   $ 2,220,840    
    Goodwill   (53,627 )   (53,649 )   (48,333 )  
    Core deposit intangible   (10,061 )   (10,389 )   (6,916 )  
    Total tangible assets $ 3,890,982   $ 3,897,100   $ 2,165,591    
             
    Common shares outstanding   20,667,237     20,667,237     13,274,823    
             
    Book value per common share $ 19.26   $ 18.69   $ 21.12    
    Tangible book value per common share $ 16.18   $ 15.59   $ 16.96    
    Common equity to total assets   10.07%     9.75%     12.62%    
    Tangible common equity to tangible assets   8.59%     8.27%     10.39%    
             



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    Business First Bancshares, Inc., Announces Financial Results for Q3 2020 BATON ROUGE, La., Oct. 22, 2020 (GLOBE NEWSWIRE) - Business First Bancshares, Inc. (NASDAQ: BFST) (Business First), parent company of b1BANK, Baton Rouge, Louisiana, today announced its unaudited results for the quarter ended September 30, 2020, …