Business First Bancshares (BFST) Q1 2025 earnings summary

Executive summary

• Q1 2025 net income available to common shareholders was $19.2 million ($0.65 per share), up 57.1% year-over-year, with ROAA at 1.00% and ROACE at 10.48%, reflecting strong profitability and stable credit performance, aided by the Oakwood acquisition.

• Net interest margin expanded to 3.68%, driven by disciplined loan pricing and lower funding costs, while tangible book value per share rose to $20.84.

• Non-interest revenue remained robust, supported by SBA loan sales, swap fees, and SBIC investment gains; Oakwood Bank integration and technology investments, including a core conversion, are ongoing.

• Total assets at March 31, 2025, were $7.8 billion, with $6.0 billion in loans and $6.5 billion in deposits; the Oakwood acquisition added $862–$864 million in assets and expanded the Texas presence.

• Dividends of $0.14 per common share and $18.75 per preferred share were declared for Q2 2025.

Financial highlights

• Net interest income was $66.0 million, with net interest margin at 3.68% (up from 3.32% a year ago); noninterest income totaled $13.2 million, driven by SBA loan sales and a $630,000 gain on debt extinguishment.

• Loans held for investment were flat, with $500 million in paydowns/payoffs matched by new/renewed production; deposits decreased $53 million, mainly from non-interest-bearing accounts.

• Book value per share rose to $25.51; tangible common equity/tangible assets improved to 8.06%.

• Efficiency ratio was 63.85% (63.35% core), nearly flat sequentially.

• Allowance for credit losses was 1.01% of total loans; nonperforming loans to total loans increased to 0.69% from 0.42% at year-end 2024.

Outlook and guidance

• Loan growth is expected in low to mid-single digits quarter-over-quarter, with annualized growth likely in the lower single digits due to a flat Q1.

• Core margin is expected to improve by low single-digit basis points per quarter, with less expansion than Q1 due to rate and deposit pressures.

• Non-interest income run rate projected at $11.5–$12 million per quarter, slightly below Q1's outperformance.

• Management is focused on Oakwood integration, technology investments, and maintaining compliance with regulatory capital standards.

• Quarterly dividends of $0.14 per common share and $18.75 per preferred share were declared for Q2 2025.