Business First Bancshares: Q4 2024 Earnings Call Highlights Strong Loan and Deposit Growth

Business First Bancshares, Inc. (BFST) reported its unaudited results for the quarter ended December 31, 2024, highlighting strong loan and deposit growth, as well as an expansion in net interest margin (NIM) and net interest spread. The bank's earnings call provided valuable insights into its financial performance and strategic initiatives.



Strong Loan and Deposit Growth

BFST reported a 14.58% increase in loans held for investment, annualized at 58.02%, from the linked quarter. Excluding Oakwood loan balances, organic loan growth was 1.20%, annualized at 4.79%. Deposits increased by 15.43%, annualized at 61.38%, compared to the linked quarter. Excluding Oakwood deposit balances, organic deposit growth was 2.78%, annualized at 11.06%.



Net Interest Margin (NIM) and Net Interest Spread Expansion

BFST's NIM and net interest spread expanded due to a reduction in the bank's overall cost of funding. Net interest income totaled $65.7 million, compared to $56.1 million in the linked quarter. Non-GAAP net interest margin and net interest spread, excluding loan discount accretion, were 3.56% and 2.72%, respectively, compared to 3.46% and 2.50% in the linked quarter.

Oakwood Acquisition Synergies and Challenges

The Oakwood acquisition contributed significantly to BFST's financial performance in Q4 2024. However, the integration process is still ongoing, and material synergies are not yet reflected in the bank's earnings. Challenges in the integration process include integrating systems and processes, cultural integration, and realizing synergies.



In conclusion, BFST's Q4 2024 earnings call highlighted strong loan and deposit growth, as well as an expansion in NIM and net interest spread. The Oakwood acquisition has contributed to the bank's financial performance, but the integration process is still ongoing. As BFST continues to execute its strategic initiatives and navigate the integration challenges, investors will be watching closely to see how the bank's performance unfolds in the coming quarters.