Business First Bancshares Delivers Strong Results: Analysts Revise Estimates Higher

Business First Bancshares (NASDAQ: BFST) has solidified its position as a standout performer in the banking sector, posting robust Q1 2025 results that exceeded Wall Street’s expectations. The company’s earnings per share (EPS) of $0.65 surpassed the consensus estimate of $0.61 by 6.56%, marking the fourth consecutive quarter of beating expectations. Revenue hit $79.21 million, a 3.44% beat over forecasts and a 28% year-over-year surge, while net interest margin expanded to 3.64%, signaling operational efficiency. These results have spurred analysts to revise their outlook, positioning BFST as a potential outperformer in a competitive banking landscape.

Key Financial Highlights

BFST’s Q1 performance was driven by disciplined cost management and margin expansion. Net interest margin rose by 8 basis points (bps) sequentially to 3.64%, aided by a 18 bps decline in deposit costs to 2.69%. Management emphasized further margin growth in low single-digit bps increments, though cautioned that Federal Reserve rate policies could introduce volatility. Loan growth remained flat at $480 million due to elevated payoffs, but executives highlighted a healthy pipeline for Q2 and anticipate low-to-mid-single-digit quarterly loan growth by year-end.

Deposits fell by $53.2 million in Q1, primarily from non-interest-bearing accounts, but the bank attracted $380 million in new deposit relationships and maintained an 83% CD retention rate. Non-interest income also shone, boosted by SBA loan sales and swap fees, though these gains are expected to normalize.

Analyst Estimates and Valuation

Analysts have responded to BFST’s strong execution by upgrading their forecasts. The consensus EPS estimate for Q2 2025 is now $0.66, while full-year 2025 expectations sit at $2.78, a 12% increase over 2024’s $2.48. Despite these positive revisions, the Zacks Rank remains at #2 (Buy), reflecting near-term outperformance potential.

The stock closed at $23.64 post-earnings, up 1.85%, but has underperformed the broader market year-to-date, dropping 9.7% versus the S&P 500’s -8.6% decline.

Operational Momentum and Risks

BFST’s strategic initiatives, including the Oakwood Bank acquisition integration, are progressing on schedule. Post-conversion in Q3 2025, synergies are expected to bolster capital efficiency. Management prioritized retaining earnings to strengthen its capital ratios (TCE >8%, TRBC >13%) before resuming buybacks.

However, risks persist. Deposit competition could pressure margins, while macroeconomic uncertainty poses threats to loan demand and credit quality. Two C&I loans totaling $8.4 million were flagged as underperforming, though management dismissed broader credit concerns.

Industry Context and Outlook

BFST operates in the Banks – Northeast sector, ranked in the top 22% of Zacks’ industries. Historically, top-ranked industries outperform the bottom half by a 2:1 margin, suggesting favorable sector dynamics. Analysts project low single-digit annual revenue growth for BFST, exceeding the U.S. Banks industry’s 7.1% growth forecast.

Conclusion

Business First Bancshares has delivered a compelling Q1 performance, combining margin resilience, disciplined cost management, and strong capital positioning. With consensus estimates revised upward and a Zacks Rank #2 (Buy), the stock appears poised to capitalize on its strategic initiatives and sector tailwinds.

Key data points reinforce this thesis:
- 33% EPS growth year-over-year and a 25% profit margin highlight profitability.
- $380 million in new deposit relationships and an 83% CD retention rate underscore deposit stability.
- The Banks – Northeast industry’s top 22% ranking suggests a favorable macro backdrop.

While risks such as deposit competition and Fed rate decisions linger, BFST’s consistent beat-and-raise record and margin expansion trajectory position it as a compelling investment. Investors should monitor loan pipeline execution and margin trends in upcoming quarters, but the current data supports a Buy rating for the stock.