Business First Bancshares (BFST) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income available to common shareholders was $15.9 million, or $0.62 per diluted share, up from Q1 2024, with core net income at $16.3 million ($0.64/share); results benefited from non-recurring gains and improved NIM, loan growth, and deposit composition.

• Announced acquisition of Oakwood Bancshares, Inc. in an all-stock deal valued at $85.7 million, expanding North Texas presence and expected to close in the second half of 2024.

• Total assets reached $6.7 billion as of June 30, 2024, with loans at $5.2 billion and deposits at $5.6 billion.

• Organic loan growth was 1.45% for the quarter (5.85% annualized), led by C&I lending; Texas markets represent 36% of credit exposure.

• Investments in non-interest income initiatives, such as SBA and USDA loan sales and customer swap business, are showing early results.

Financial highlights

• Net interest margin improved to 3.45% in Q2 2024 from 3.32% in Q1 2024; core NIM was 3.34%.

• GAAP net income was $15.9M and EPS $0.62; non-GAAP core net income was $16.3M and EPS $0.64.

• Efficiency ratio improved to 65.14% (core: 64.50%) from 69.80% in Q1 2024.

• Book value per common share increased to $23.24; tangible book value per share rose to $19.22.

• Allowance for credit losses was 0.86% of total loans; nonperforming loans ratio was 0.43%.

Outlook and guidance

• Management expects continued organic loan and deposit growth, with a focus on core deposit funding and disciplined loan origination.

• Core NIM expected to improve by low to mid-single digits over the next few quarters, targeting a 3.50% core margin by spring next year.

• Loan discount accretion projected to stabilize at ~$700K per quarter for the next 12 months.

• Oakwood Bancshares acquisition expected to close in the second half of 2024, with integration in 2025.

• Interest rate risk, credit quality, and liquidity remain key focus areas given market volatility and economic conditions.