Business First Bancshares, Inc.

Thank you for standing by. My name is Mandeep and I'll be your operator today. At this time, I'd like to welcome everyone to the Business First Bank Shares Q2 2024 earnings call. All lines being placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Matt Seeley, Senior Vice President, Director of Corporate Strategy and FP&A. You may begin.

Good afternoon, and thank you all for joining. Earlier today, we issued our second quarter 2024 earnings press release, a copy of which is available on our website, along with the slide presentation that we'll reference during today's call. Please refer to slide three of our presentation, which includes our safe harbor statements regarding forward-looking statements and the use of non-GAAP financial measures. For those of you joining by phone, please note the slide presentation is available at our website at www.b1bank.com. Please also note our safe harbor statements are available on page seven of our earnings press release that was filed with the SEC today. All comments made during our call today are subject to safe harbor statements in our slide presentation and earnings release. I'm joined this afternoon by Business First Bank Chair's President and CEO, Jude Melville, Chief Financial Officer, Greg Robertson, Chief Banking Officer Philip Jordan and Chief Administrative Officer Jerry Vaskegu. After the presentation, we'll be happy to address any questions that you may have. And with that, I'll turn the call over to you, Jude.

Okay, thanks, Matt. Good afternoon, and thanks, everybody, for taking time out of your schedule to have this conversation with us. The quarter was for us relatively straightforward and generally positive. Our team produced a healthy rebound in net interest margins and an appropriate amount of loan growth. an improvement in the composition of our deposit base, increasing the capital levels and tangible book value, and our asset quality remained consistent, an all-around solid quarter. Now, last quarter, I noted that in our world, still small on a relative basis, there are always a handful of things that can go either way based on a limited number of relationships. None of these individually make or break a quarter, but sometimes they happen to line up in the same direction, and when they do, they produce outsized movement in the aggregate quarterly results. even though they may not be truly indicative of the larger health of the franchise. In the first quarter, you'll remember we had a number of elements go the wrong way concurrently, and that led to weaker-than-desired quarterly results, even though the franchise, when viewed from a broader time horizon, continued to move in the right direction. In this quarter, we had something of the opposite effect. The health and direction of the franchise remained strong, but we also had a handful of events leading to outside positive results. I'd like to highlight a couple of the most material items so that you'll be aware that, while real earnings, they may not yet be repeatable on a regular basis. First, we benefited from the sale of a newly originated USDA guaranteed loan, which produced a gain of 1.9 million. While our pace of government guaranteed loan production is accelerating, we don't expect to have very many of these kind of lumpy opportunities at this stage of our development. So it does offer a window into what's possible down the road as we continue to build out our capacity. Second, our core earnings benefited from about $1.7 million in loan discount accretion, which is roughly $900,000 higher than that of the prior quarter and $700,000 higher than market expectations, which are generally reflective of our normal run rate, at least until we close the opioid acquisition. While I'm pleased to have these earnings and certainly prefer things going our way as opposed to the opposite, I think it's important to not give the impression that they are easily replicated. And so I'd like to point out that after adjusting for these unique movements, we estimate the core profitability for the quarter at closer to $14.3 million. Still quite positive in excess of consensus expectations. Beyond short-term earnings, I'd like to emphasize our longer-term success transitioning our balance sheet. As you know from our communication over time, we decided nearly two years ago to slow loan production in order to effectively manage growth through retained earnings, while also relieving pressure on the funding side of our balance sheet. With each quarter, we've improved a degree or two, and I'm pleased that in the current quarter, we both accreted capital, about 10 basis points, and continue to improve the composition of our deposit base. For the first time in a number of quarters, increasing both the absolute and relative level of non-interest-bearing deposits, and continuing our trend of paying down levels of wholesale funding. This has paid off in the form of a more stable margin, which I was proud of our team for actually growing over the course of the second quarter, first time in seven quarters. Finally, I'd like to mention that we are currently on pace to consummate the acquisition of Dallas-based Oakwood Bank and should do it in the fourth quarter. Having gotten to know our future teammates better since announcement with earnings last quarter, we're even more excited about the partnership than we were when we announced it. I believed at the time they'd be a good cultural fit, and now I know it. So congratulations to our team for what was a solid second quarter, highlighted by improved metrics essentially across the board. Thanks again to our listeners today for prioritizing us, and I'll now turn the call over to Greg Robertson, our CFO, to review results in greater detail.