BFST delivered a solid start to 2025, combining top-line momentum with disciplined expense management and margin discipline.Q1 2025 revenue of $125.54 million translated into a net income of $20.54 million and earnings per share (EPS) of $0.65, underscored by a GAAP net interest margin (NIM) expansion of 7 basis points to 3.68% and a core NIM of 3.64%. Management emphasized a revenue mix supported by noninterest income, including swap fees, SBA loan gains, and SPIC investments, helping to offset ongoing funding-cost relief amid a still volatile rate environment. The quarterly results benefited from continued capital accumulation and diversification in credit exposure, even as portfolio metrics normalized after a couple of larger payoffs and two C&I relationships drove modest credit migration.
From a balance-sheet perspective, loans were effectively flat versus the prior quarter, while deposits declined by roughly $53 million, reflecting seasonal dynamics and a strategic branch disposition (Kaplan, LA) with an 8% deposit premium. The Oakwood Bank acquisition closed last year and remains a central strategic accelerator, with integration proceeding as planned and conversion anticipated in September 2025. Management highlighted a strong deposit pipeline in Q2 and an improving funding cost trajectory, supported by a substantial reduction in deposit costs and a high single-digit level of contingent liquidity growth. The noninterest revenue runway remains a meaningful growth driver, though some near-term volatility is expected given the lumpiness of SBIC income and SBA loan activity.
Looking ahead, BFST guides to low-to-mid single-digit loan growth for 2Q onward, with ongoing margin expansion as deposit costs normalize and the mix of floating-rate and fixed-rate loans evolve. While near-term uncertainties (tariff environment, macro volatility, and deposit competition) warrant caution, BFST enters 2025 with a stronger, more diversified capital base, improved liquidity, and a clear plan to optimize its footprint and cost structure while leveraging Oakwood’s platform.