In This Article:
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GAAP Net Income: $16.5 million.
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GAAP EPS: $0.065 per share.
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Non-GAAP Core Net Income: $17.2 million.
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Non-GAAP EPS: $0.068 per share.
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Net Interest Margin: 3.51% (GAAP), 3.46% (Core).
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Total Loans Held for Investment: Increased by $57.3 million or 4.4% annualized.
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Total Deposits: Increased by $77.3 million or 5.5% annualized.
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Non-Interest Expense: $42.4 million (GAAP), $41.6 million (Core).
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Non-Interest Income: $10.8 million (GAAP), driven by $900,000 from customer swap business.
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Core Margin Expansion: 12 basis points linked quarter to 3.46%.
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Commercial Real Estate Portfolio Growth: $58.2 million.
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Money Market Accounts Growth: $161 million.
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Weighted Average Money Market Portfolio Rate: Declined from 4.22% to 3.87%.
Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Business First Bancshares Inc (NASDAQ:BFST) achieved an improvement in operating leverage through the expansion of net interest margin and expense control.
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The company reported a 12 basis point increase in core margin to 3.46%, driven by stable loan pricing and controlled deposit costs.
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BFST successfully diversified its revenue streams with investments in non-interest income sources, including asset management and SBA loan services.
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The company demonstrated disciplined balance sheet management, growing deposits faster than loans and increasing capital levels.
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BFST successfully closed the Oakwood transaction, enhancing its asset exposure in the Dallas and Houston markets.
Negative Points
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Non-interest bearing deposits decreased, isolated to a few clients, impacting the overall deposit mix.
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The provision for credit losses was lower than expected, but there was an increase in special mention loans and non-performing loans.
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Loan growth was slower compared to previous quarters, although still above peer levels.
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The company anticipates some volatility in non-interest income due to the nature of its swap business.
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Cost savings from the Oakwood merger are not expected to be realized until late 2025, impacting short-term expense management.
Q & A Highlights
Q: Can you provide an update on the brokered CDs and the expected impact on the core margin? A: Gregory Robertson, CFO, explained that they are seeing a 50% retention rate on the $400 million in retail CD renewals, which should help achieve a core margin of 3.50% by the second quarter of 2025. Matt Sealy, SVP, added that they are slightly ahead of schedule for this target, but some factors, like client retention, could affect this trajectory.