Business First Bancshares delivered a solid QQ2 2024 performance characterized by a rebound in net interest margin and disciplined balance sheet management. GAAP net income rose to $15.9 million with basic EPS of $0.62, while the core earnings base (excluding acquisition-related items) reached $16.3 million and $0.64 per share, underscoring a resilient profitability run rate even before Oakwood integration. The quarter featured a meaningful improvement in funding stability, with non-interest-bearing deposits rising and total deposit costs decelerating to a 10 basis point quarter-over-quarter increase. The company also highlighted the ongoing balance sheet transition away from wholesale funding and toward a higher-quality deposit base, contributing to a more stable margin for Q2. Management stressed that several quarter-specific tailwinds—chiefly a $1.9 million gain from USDA loan sale and $1.7 million of loan discount accretion—are not expected to be repeatable at the same cadence, and the team cautioned that the core profitability, excluding these items, remained the sustainable driver of earnings (core profitability estimated near $14.3 million).
Strategically, BFST remains on track to close the Dallas-based Oakwood Bank acquisition in Q4 2024, with integration activities anticipated to kick off in earnest next year. The Waterstone SBA platform is contributing to higher originations and loan-sale opportunities, while the balance sheet evolution targets a lower concentration in construction and development (C&D) and CRE, offset by stronger C&I and fee-based growth. In sum, BFST entered H2 2024 with a healthier margin trajectory, stronger deposit metrics, and an explicit pathway to accretive capital and earnings via Oakwood and expanded fee income, even as management acknowledges the need to manage wage pressures and CRE asset quality risks.