[Management View]
Management highlighted successful financial and operational achievements, including a 1% ROAA, stable net interest margin, increased capital levels, and a 15% annualized increase in tangible book value. The core processing system conversion to FIS-IPS and the branch sale were noted as key operational successes, positioning the company for efficient future growth and M&A integration.

[Outlook]
The company is preparing for 2026 with a strong balance sheet and diversified geographic footprint. Management expects margin improvement for the rest of the year, subject to liquidity normalization and fixed-rate loan repricing. Fee income initiatives, including SBA loan services and derivatives, are expected to contribute more significantly in the next 12–24 months.

[Financial Performance]
GAAP net income for Q2 2025 was $20.8 million, including gains from a branch sale and expenses related to acquisitions and core conversion. Non-GAAP core net income was $19.5 million. Total loans held for investment increased by 4.5% annualized, while total deposits decreased by $38.5 million due to strategic reductions in interest-bearing deposits.

[Q&A Highlights]
Question 1: Freddie Strickland from Hovde Group asked about excess liquidity related to the core conversion and its future implications.
Answer: Greg Robertson explained that excess liquidity was necessary during the core conversion and will be maintained until the Oakwood franchise conversion is complete. This liquidity helps manage balance sheets in real-time.

Question 2: Freddie Strickland inquired about credit moves and their impact on non-performing assets (NPAs).
Answer: Robertson detailed that credit migration involved moving loans from substandard to non-accrual status, with adequate reserves in place. He expects NPAs to drop as resolutions are reached, with significant reductions anticipated by year-end.

Question 3: Michael Rose from Raymond James asked about expense outlook and margin trajectory.
Answer: Robertson projected expenses to rise slightly in Q3 due to investments, with Oakwood conversion savings expected in Q4. Margin improvement is anticipated, though timing may vary due to liquidity management and fixed-rate loan repricing.

Question 4: Matt Olney from Stephens queried about loan yields and FHLB borrowings.
Answer: Robertson noted competitive pressures on loan yields, with pricing in the mid to low sevens. FHLB borrowings are used strategically for liquidity management and may fluctuate based on funding opportunities.

Question 5: Christopher Marinac from Janney Montgomery Scott asked about Smith, Seanott's growth potential.
Answer: Jude Melville expressed optimism about correspondent banking growth, including swaps and SBA services, with expectations to double its impact in the next 12–24 months.

Question 6: Manuel Navas from D. A. Davidson inquired about loan growth and borrower sentiment.
Answer: Robertson indicated mid single-digit loan growth for the year, with improved sentiment and demand from borrowers. Melville noted increased flexibility in construction lending due to reduced concentration risk.

[Sentiment Analysis]
Analysts and management maintained a positive tone, focusing on strategic growth, operational efficiency, and future opportunities. Management expressed confidence in achieving margin improvements and expanding fee income initiatives.

[Quarterly Comparison]
| Metric | Q2 2025 | Q1 2025 |
|--------|---------|---------|
| GAAP Net Income | $20.8M | N/A |
| Non-GAAP Core Net Income | $19.5M | N/A |
| Core ROAA | 1.01% | N/A |
| Total Loans Held for Investment | +4.5% | N/A |
| Total Deposits | -$38.5M | N/A |
| Noninterest-Bearing Deposits | +$102M | N/A |
| Net Interest Margin | 3.68% | 3.68% |

[Risks and Concerns]
Asset quality metrics trended negatively due to specific loan relationships migrating to nonaccrual status. Management is focused on resolving these issues, with adequate reserves in place. The timing of margin improvements is subject to liquidity normalization and fixed-rate loan repricing.

[Final Takeaway]
Business First demonstrated strong financial and operational performance in Q2 2025, with strategic initiatives positioning the company for future growth. Management's focus on operational efficiency, strategic funding actions, and fee income expansion reflects a commitment to enhancing shareholder value. While challenges in asset quality persist, the company is well-prepared to address these issues and capitalize on growth opportunities in the coming quarters.