The following is a summary of the Business First Bancshares, Inc. (BFST) Q3 2024 Earnings Call Transcript:
Financial Performance:
BFST reported Q3 2024 GAAP net income of $16.5 million and EPS of $0.65. Core net income and EPS, excluding non-core items, were $17.2 million and $0.68 respectively.
Total loans held for investment increased by $57.3 million or 4.4% annualized during Q3, led by growth in commercial real estate and C&D portfolios.
Core net interest margin expanded by 12 basis points quarter-over-quarter to 3.46%, benefiting from strong new and renewed loan yields and moderated funding pressures.Total deposits increased by $77.3 million or 5.5% annualized, driven by a $196.5 million growth in interest-bearing accounts balanced by a reduction in non-interest-bearing accounts.
Business Progress:
BFST has seen notable diversification of revenue, with increased contributions from its asset management company, SBA loan service provider, and internal swaps desk.
The bank successfully closed the Oakwood transaction, improving its asset exposure in the Dallas and Houston markets to mid-40s as a percentage of the overall loan book.
The promotion of Jerry Vascocu to President of the Bank and plans for future growth as assets approach the $10 billion level.
Investments in technology and infrastructure continue to support operational efficiencies and service enhancements.
Opportunities:
The integration of Oakwood is expected to bring significant opportunities, particularly in enhancing BFST's presence in the Texas market and contributing positively to net interest margins and non-interest income through product offerings and customer integration.
The bank anticipates continued incremental improvement in core NIM due to favorable positioning in the current interest rate environment and ongoing strategic investments in its revenue diversification efforts.
Risks:
The bank faces exposure to interest rate volatility, which can impact customer financial performance and subsequently the asset quality. This is reflected in the special mention loans and non-performing loans, potentially affecting the bank's credit portfolio despite current management efforts.
Operational risks associated with integrating Oakwood, particularly around aligning systems and absorbing new customers and products into BFST's existing operations.
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