Business First Bancshares (BFST) Q3 2024 earnings summary

Executive summary

• Net income available to common shareholders was $16.5 million ($0.65 per diluted share) in Q3 2024, up from $15.9 million in Q2 2024; core net income was $17.2 million ($0.68 per share), with improved margins and expense discipline.

• Closed the Oakwood Bancshares acquisition on October 1, 2024, adding $863.6 million in assets and increasing Dallas and Houston market exposure to the mid-40% range of the loan book.

• Revenue diversification advanced via non-interest income from asset management, SBA services, FIG group, and swaps desk, contributing positively throughout 2024.

• Leadership changes included the promotion of Jerry Vascocu to President, positioning for growth as assets approach $10 billion.

• Quarterly preferred dividend of $18.75 per share and common dividend of $0.14 per share declared in October 2024.

Financial highlights

• Total assets reached $6.9 billion as of September 30, 2024, with gross loans at $5.22 billion and deposits at $5.64 billion.

• Net interest margin was 3.51% in Q3 2024, up from 3.45% in Q2 2024; core NIM was 3.46%.

• Efficiency ratio improved to 63.45% from 65.14% in Q2 2024; core efficiency ratio was 62.21%.

• Book value per common share increased to $24.59, and tangible book value per share rose to $20.60.

• Return on average assets was 0.97% (core: 1.01%), and return on average common equity was 10.76% (core: 11.23%).

Outlook and guidance

• Management expects continued measured growth, improved capital ratios, and further gains from non-spread-based business lines.

• Integration of Oakwood Bancshares is expected to provide strategic benefits, with incremental NIM improvement and CD repricing tailwinds.

• Confident in achieving a 3.50% core margin run rate by Q2 2025, potentially sooner, with Oakwood adding a few basis points.

• Loan growth targeted in the mid-single-digit range for 2025, with expense growth aligned to asset growth.

• Non-interest income expected to trend upward, though with some quarter-to-quarter volatility as investments mature.