BFST Stock Forecast & Price Target

Business First Bancshares Inc. is demonstrating a favorable profitability outlook, bolstered by an expanding market presence in Texas and anticipated growth from the acquisition of Progressive Bancorp, which is expected to enhance its northern Louisiana market share. The company's core net interest margin (NIM) is projected to improve as loan repricing impacts benefit the margin, with recent loan production yielding a rate of 7.46%. Additionally, a 5.4% increase in end-of-period deposits indicates strong deposit growth, while a total risk-based capital ratio of 13.2% and a tangible common equity ratio increasing to 8.57% suggest solid capital management and growth potential.

Business First Bancshares has demonstrated a decline in end-of-period loans by 1.7% LQA, highlighting a concerning shift from the prior quarter's 4.5% LQA growth, which may indicate weakening demand or credit quality issues. The bank's significant exposure to the oil and gas sector poses risks, as prolonged low energy prices could diminish loan demand and increase losses within this portfolio, further stressing financial stability. Additionally, rising competitive pressures on loan and deposit pricing, along with a decline in noninterest-bearing deposits, are likely to exert pressure on the company's net interest margin (NIM) and overall profitability.