Business First Bancshares Reports 19.3% Asset Growth, Net Income Decline in 2024

Business First Bancshares, Inc. (BFST) reported total assets of $7.9 billion for the year ended December 31, 2024, a 19.3% increase from the previous year. Total loans held for investment rose 19.8% to $6.0 billion, while total deposits increased by 24.1% to $6.5 billion. Net income available to common shareholders decreased by 9.0% to $59.7 million, resulting in earnings per share of $2.27 (basic) and $2.26 (diluted), down from $2.62 and $2.59, respectively, in 2023. The return on average assets and average common equity also decreased to 0.86% and 9.54%, respectively, compared to 1.04% and 12.36% in 2023.

The company's net interest income increased by 5.7% to $227.4 million, driven by a rise in the average yield on the loan portfolio (7.03% vs. 6.65% in 2023) and total interest-earning assets (6.35% vs. 5.95% in 2023). However, this increase was partially offset by a 58 basis point increase in the overall cost of funds. Noninterest income rose 20.6% to $44.2 million, primarily due to increased SBA loan sale activity and higher swap fee income. Noninterest expense increased by 13.4% to $177.7 million, mainly due to acquisitions, increased staffing, and higher data processing fees.

Significant changes in 2024 included the acquisitions of Waterstone LSP, LLC, an SBA lending services provider, and Oakwood Bancshares, Inc., a bank holding company with operations in the Dallas area. The Waterstone acquisition involved a cash payment of $3.3 million, while the Oakwood acquisition resulted in the issuance of 3,973,134 shares of BFST common stock. The company also sold its Leesville banking center, generating a pre-tax gain of $945,000. As of December 31, 2024, BFST employed 872 people (849 full-time and 23 part-time).

The company identified a material weakness in its internal control over financial reporting related to change management and segregation of duties within its outsourced IT systems. Management is working to remediate this weakness. The company's allowance for credit losses increased to 0.98% of total loans held for investment, up from 0.88% in 2023, primarily due to the Oakwood acquisition and organic loan growth. The ratio of nonperforming loans to total loans also increased to 0.42% from 0.34% in 2023.

BFST's forward-looking statements highlight risks related to the integration of acquired businesses, economic conditions in its concentrated geographic markets, interest rate volatility, increased competition, and the material weakness in its internal control over financial reporting. The company intends to continue its disciplined growth strategy, focusing on organic expansion and opportunistic acquisitions.