Business First Bancshares, Inc. (BFST)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 delivered steady profitability: GAAP diluted EPS $0.73 and core diluted EPS $0.72; NIM held at 3.68% and the core efficiency ratio improved to 60.45% .
• Against Wall Street (S&P Global) consensus, EPS beat ($0.72 vs $0.6675) while revenue (SPGI definition) missed ($77.76M vs $80.00M); beat driven by expense control, miss reflects lower “net revenue” after provision despite strong noninterest income* .
• Dividend increased to $0.15 (+$0.01) for Q3; Board authorized a $30M share repurchase program on Oct 28, 2025, creating incremental capital deployment optionality .
• Management expects modest margin expansion in Q4 (“a couple of bps”) with loan growth normalizing to low/mid-single digits and noninterest income potentially flat near-term due to SBA sale timing (government shutdown), a setup likely to be a tactical stock catalyst if the outlook materializes .

What Went Well and What Went Wrong

• What Went Well

  • Expense discipline and operating leverage: “three quarters of essentially flat core non-interest expenses” supported improving ROAA/ROAE and efficiency ratio .
  • Successful Oakwood core conversion and platform modernization: “executed magnificently” on consecutive system conversions (b1BANK in Q2; Oakwood in Q3) to position for scalable M&A integration and future growth .
  • Noninterest income momentum and correspondent banking: management expects ~175 bank partners and “over $17 million in revenue this year” with ~“$5 million towards combined net income,” building a capital-efficient earnings stream .

• What Went Wrong

  • Net “revenue” miss vs consensus (SPGI def.): revenue at $77.76M fell short of consensus $80.00M as provision for credit losses rose to $3.2M (+$1.0M q/q) and NII-after-provision compressed* .
  • Loan balances contracted modestly (-$26.6M, 1.7% annualized) amid elevated paydowns ($479M) despite robust originations ($452M), temporarily weighing on net loan growth .
  • NPA ratio ticked up to 0.83% (from 0.76% in Q2) due to transfers of nonaccruals to OREO, even as NPL ratio improved to 0.82% (from 0.97%); credit normalization is progressing but remains a focal investor concern .

Financial Results

Values retrieved from S&P Global.*

Segment and Balance Composition

KPIs and Asset Quality

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We continue to show incremental quality earnings improvement… driven in large part by strong expense control. To be specific, three quarters of essentially flat core non-interest expenses.” — Jude Melville, CEO .
• “Our team has executed magnificently… converting our entire core bank… and following quickly behind that, converting Oakwood Bank.” — CEO .
• “We expect to see much more of the all-in economic benefit from the Oakwood transaction achieved by the first quarter of 2026… on pace to close the Progressive Bank transaction early in the first quarter… convert that asset in August.” — CEO .
• “Third quarter… core net income and EPS… $21.2 million and $0.72… core efficiency ratio falling to 60.45%.” — CFO .
• “We expect to pick up a couple of bps in the fourth quarter in margin… and loan growth will come back and normalize.” — CFO .

Q&A Highlights

• Margin outlook: Management expects Q4 NIM expansion by “a couple of bps” aided by deposit cost momentum and normalization in loan growth; deposit pricing remains competitive, requiring nimbleness .
• Loan growth trajectory: Elevated Q3 paydowns masked strong originations; pipeline supports low/mid-single-digit rebound in Q4; unfunded commitments provide additional runway .
• Noninterest income: SBA guaranteed loan sales could be delayed by a government shutdown, making Q4 noninterest income more likely flat Q/Q (timing shift, not demand destruction) .
• Capital deployment: Buybacks increasingly contemplated given valuation; continued capital accretion enhances optionality as integration progresses .
• Expenses and hiring: Core expenses expected to be modestly higher in Q4 given investment timing; disciplined approach enables targeted banker hiring in Texas markets amid industry disruption .

Estimates Context

• EPS beat and revenue miss vs S&P Global consensus in Q3 2025:
  • EPS: Actual $0.72 vs consensus $0.6675 (beat)*.
  • Revenue: Actual $77.764M vs consensus $80.000M (miss)*.
• Multi-quarter context:

Values retrieved from S&P Global.*

Implications: Street likely raises EPS estimates modestly on better-than-expected expense control and stable margin, but could trim near-term noninterest income assumptions and net “revenue” (SPGI def.) due to higher provision and SBA sale timing.

Key Takeaways for Investors

• Execution quarter: Strong EPS, improved efficiency, and stable NIM despite loan paydowns; continued capital growth and TBV accretion give flexibility for buybacks and M&A .
• Near-term setup: Modest Q4 margin expansion and normalized loan growth are plausible catalysts; watch SBA shutdown resolution for noninterest income trajectory .
• Credit watchlist: NPLs improved, NPAs elevated due to OREO; provision increased—monitor resolution of identified credits as a swing factor for net “revenue” (SPGI def.) .
• Funding dynamics: Deposit mix shifted toward interest-bearing; September cost trends favorable; deposit betas suggest leverage to rate cuts while managing retention (core CD retention ~83% in Sep) .
• Strategic growth: Platform upgrades and successful conversions underpin Progressive integration and correspondent banking expansion—supporting medium-term operating leverage and diversified fee streams .
• Capital returns: Dividend increased; $30M buyback authorization offers downside support and potential accretion if shares remain attractively valued .
• Estimate recalibration: Expect modest EPS upward revisions and cautious revenue (“net”) adjustments near-term; sustained efficiency gains are the core narrative to watch* .

Additional Data Points and Notes

• Q3 net interest income after provision: $66.093M; total other income: $11.671M; SPGI “revenue” equivalent = $77.764M (NII after provision + other income) .
• Dividend history: Ninth consecutive annual increase since 2015, highlighting commitment to retail shareholder base .
• Balance sheet: Interest-bearing deposits up $131.4M q/q; noninterest-bearing down $44.2M q/q; FHLB borrowings reduced by $118.3M q/q .

Document Availability Note: An 8-K Item 2.02 filing was not separately available; the Q3 earnings press release and related materials served as the primary source for reported results -.