Bank First Announces Net Income for the First Quarter of 2024

Rhea-AI Summary

Bank First (NASDAQ: BFC) reported a net income of $15.4 million and earnings per common share of $1.51 for the first quarter of 2024. The company repurchased 261,340 common shares, declared a quarterly cash dividend of $0.35 per share, and recorded a provision for credit losses of $0.2 million. Total assets decreased to $4.10 billion, while total loans increased to $3.38 billion. Nonperforming assets increased to $12.5 million, and stockholders' equity rose to $609.3 million.

Positive

• Bank First reported a net income of $15.4 million and earnings per common share of $1.51 for the first quarter of 2024.
• The company repurchased 261,340 common shares and declared a quarterly cash dividend of $0.35 per share.
• Total assets decreased to $4.10 billion, while total loans increased to $3.38 billion during the first quarter of 2024.
• Nonperforming assets increased to $12.5 million, and stockholders' equity rose to $609.3 million at the end of the quarter.

Negative

• Noninterest income decreased to $4.4 million in the first quarter of 2024 compared to $5.8 million in the first quarter of 2023.
• Nonperforming assets increased to $12.5 million at the end of the first quarter of 2024.
• Stockholders' equity decreased by $10.5 million from December 31, 2023, to March 31, 2024.

Insights

Financial Analyst

Bank First's reported net income of $15.4 million for the first quarter of 2024, reflected in earnings per share (EPS) of $1.51, denotes a solid performance especially when considering the year-over-year comparison with the first quarter of 2023, which saw a net income of $10.7 million and an EPS of $1.09. This represents a considerable uplift in profitability, presumptively due to optimized operations and a beneficial business environment.

The bank's decision to repurchase over 261,340 of its own common shares, equivalent to 2.5% of its outstanding shares, could indicate confidence in their intrinsic value and a strategic approach to enhancing shareholder value. Furthermore, the consistent dividend payout of $0.35 per share signifies stability and a commitment to returning profits to shareholders, which is a reassuring signal for investors looking for consistent income streams.

From a balance sheet standpoint, the marginal decrease in total assets may call for a closer examination of asset management strategies and portfolio composition over time. However, the increase in loans by $60.1 million year-over-year could bode well for future interest income generation, assuming that asset quality remains strong.

Credit Analyst

The provision for credit losses of $0.2 million in the first quarter of 2024, which is markedly lower than the $4.2 million during the same quarter in 2023, suggests improved asset quality or an adjusted risk assessment framework. The recorded net recoveries add a positive nuance to the credit performance narrative, potentially indicating robust loan underwriting standards and effective credit management practices. However, the uptick in nonperforming assets to $12.5 million raises a flag that requires monitoring as it could reflect an emerging risk within the loan portfolio, particularly as it pertains to the integration of acquired loan portfolios.

Market Research Analyst

The bank's strategic moves, such as the sale of its member interest in UFS and the ongoing upgrades to its online customer platform, underscore an intent to adapt to changing market conditions and customer expectations. While noninterest income has slightly dipped, likely due to the absence of revenue from UFS, the investment in tech infrastructure is an anticipatory move that could strengthen competitive positioning in the digital banking space and enhance customer retention in the long-term.

Additionally, the changes in the deposit portfolio composition, with a modest shift from noninterest-bearing to interest-bearing deposits, suggest an evolving depositor behavior which might reflect broader economic trends such as fluctuating interest rates or changes in savers' preferences that have to be navigated adeptly by the bank's management.

• Net income of $15.4 million and earnings per common share of $1.51 for the three months ended March 31, 2024
• Annualized return on average assets of 1.50% for the three months ended March 31, 2024
• 261,340 common shares repurchased, 2.5% of outstanding shares as of the beginning of the period, during the first quarter of 2024
• Quarterly cash dividend of $0.35 per share declared, matching the prior-quarter and 16.7% higher than the prior-year first quarter

MANITOWOC, Wis., April 16, 2024 /PRNewswire/ -- Bank First Corporation (NASDAQ: BFC) ("Bank First" or the "Bank"), the holding company for Bank First, N.A., reported net income of $15.4 million, or $1.51 per share, for the first quarter of 2024, compared with net income of $10.7 million, or $1.09 per share, for the prior-year first quarter. After removing the impact of one-time expenses related to acquisitions, as well as gains and losses on sales of securities and other real estate owned, the Bank reported adjusted net income (non-GAAP) of $15.4 million, or $1.51 per share, for the first quarter of 2024, compared with $14.7 million, or $1.50 for the prior-year first quarter.

Operating Results
Net interest income ("NII") during the first quarter of 2024 was $33.3 million, up $0.4 million from the previous quarter and up $1.1 million from the first quarter of 2023. The impact of purchase accounting increased NII by $1.2 million, or $0.09 per share after tax, during the first quarter of 2024, compared to $0.4 million, or $0.03 per share after tax, during the previous quarter and $1.2 million, or $0.17 per share after tax, during the first quarter of 2023.

Net interest margin ("NIM") was 3.62% for the first quarter of 2024, compared to 3.53% for the previous quarter and 3.74% for the first quarter of 2023. NII from purchase accounting increased NIM by 0.13%, 0.03% and 0.26% for each period, respectively.

Bank First recorded a provision for credit losses of $0.2 million during the first quarter of 2024, compared to $0.5 million during the previous quarter and $4.2 million during the first quarter of 2023. Net recoveries of previously charged-off loan balances over currently charged-off loans totaled $0.6 million during the first quarter of 2024, adding to the recorded provision for credit losses in creating an adequate credit loss reserve for the Bank's growth in its loan portfolio. The acquisition of the loan portfolio of Hometown Bancorp, Ltd. ("Hometown") during the first quarter of 2023 resulted in a day one provision for credit losses expense of $3.6 million, leading to the significant year-over-year first quarter variance in provision expense.

Noninterest income was $4.4 million for the first quarter of 2024, compared to $5.8 million for the first quarter of 2023. One differentiator in year-over-year first quarter noninterest income was the absence of income from UFS, LLC ("UFS") during 2024 compared to $0.9 million of revenue from UFS during the first quarter of 2023. The Bank sold 100% of its member interest in UFS in a transaction that closed on October 1, 2023. The Bank also experienced a $0.3 million negative valuation adjustment to its mortgage servicing rights asset during the first quarter of 2024, which compared unfavorably to a $0.8 million favorable adjustment in the prior-year first quarter. All other components of noninterest income were relatively consistent year-over-year.

Noninterest expense was $20.3 million in the first quarter of 2024, compared to $19.7 million during the first quarter of 2023. Personnel expense increased by $1.0 million year-over-year as additional staff from the acquisition of Hometown impacted the full first quarter of 2024 compared to just over one-half of the first quarter of 2023. Data processing expenses, which increased by $0.5 million year-over-year, included $0.3 million paid to a vendor during the first quarter of 2024 related to upgrading the Bank's online customer platform. Postage, stationery and supplies expenses, as well as outside service fees, were heavily impacted by one-time acquisition expenses from the acquisition of Hometown during the first quarter of 2023, leading to a year-over-year reduction in these expense categories during the first quarter of 2024.

The comparability of year-over-year income tax expense was affected by a provision enacted in the Bank's home state during 2023 which offered an income tax exclusion on certain commercial and agricultural loans to borrowers who reside or are located in the state of Wisconsin. While Wisconsin's governor signed this provision on July 5, 2023, rules related to qualifying loans under it were not finalized until the first quarter of 2024. Based on these final rules, an additional benefit of $1.3 million was recorded during the first quarter of 2024 as a refinement to provisions for income taxes from 2023.

Balance Sheet
Total assets were $4.10 billion at March 31, 2024, a decrease of $121.9 million from December 31, 2023, and $67.3 million lower than March 31, 2023.

Total loans were $3.38 billion at March 31, 2024, up $40.4 million from December 31, 2023, and up $60.1 million from March 31, 2023. Loans grew by 4.9% annualized during the first quarter of 2024. Much of this growth occurred later in the quarter, muting the impact on earnings and NII, but future quarters should benefit to a greater degree.

Total deposits, nearly all of which remain core deposits, were $3.42 billion at March 31, 2024, down $16.9 million from December 31, 2023, and down $47.2 million from March 31, 2023. Noninterest-bearing demand deposits comprised 29.0% of the Bank's total deposits at March 31, 2024, compared to 31.8% at March 31, 2023, as the Bank experienced a modest shift in the makeup of its deposit portfolio towards interest-bearing balances.

Asset Quality
Nonperforming assets at March 31, 2024 totaled $12.5 million, up from $9.1 million at the end of the fourth and first quarters of 2023. The current quarter increase in nonperforming assets resulted from one loan totaling $3.6 million which was moved to nonaccrual status. This loan and over 95% of the Bank's total nonaccrual loan balances were included in the loan portfolios of the Bank's previous two acquisitions. Nonperforming assets to total assets ended the first quarter of 2024 at 0.31%, up from 0.21% at the end of the prior quarter and 0.22% at the end of the prior-year first quarter.

Capital Position
Stockholders' equity totaled $609.3 million at March 31, 2024, an increase of $47.0 million from the end of the first quarter of 2023, but a decrease of $10.5 million from December 31, 2023. Dividends totaling $3.5 million and repurchases of BFC common stock totaling $22.3 million outpaced earnings of $15.4 million during the quarter, causing the decline in capital. The Bank's book value per common share totaled $60.16 at March 31, 2024 compared to $59.80 at December 31, 2023 and $54.04 at March 31, 2023. Tangible book value per common share (non-GAAP) totaled $40.35 at March 31, 2024 compared to $40.30 at December 31, 2023 and $34.14 at March 31, 2023.

Dividend Declaration
Bank First's Board of Directors approved a quarterly cash dividend of $0.35 per common share, payable on July 10, 2024, to shareholders of record as of June 26, 2024.

Bank First Corporation provides financial services through its subsidiary, Bank First, N.A., which was incorporated in 1894. Bank First offers loan, deposit and treasury management products at each of its 26 banking locations in Wisconsin. The Bank has grown through both acquisitions and de novo branch expansion. The Bank employs approximately 361 full-time equivalent staff and has assets of approximately $4.1 billion. Insurance services are available through our bond with Ansay & Associates, LLC. Trust, investment advisory and other financial services are offered in collaboration with several regional partners. Further information about Bank First Corporation is available by clicking on the Shareholder Services tab at www.bankfirst.com.

For further information, contact:
Kevin M. LeMahieu, Chief Financial Officer
Phone: (920) 652-3200  /  klemahieu@bankfirst.com

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SOURCE Bank First Corporation

FAQ

What was Bank First 's net income for the first quarter of 2024?

Bank First reported a net income of $15.4 million for the first quarter of 2024.

How many common shares did Bank First repurchase during the first quarter of 2024?

Bank First repurchased 261,340 common shares during the first quarter of 2024.

What was the quarterly cash dividend declared by Bank First for the first quarter of 2024?

Bank First declared a quarterly cash dividend of $0.35 per share for the first quarter of 2024.

What was the total assets value at the end of the first quarter of 2024?

Total assets were $4.10 billion at the end of the first quarter of 2024.

How did nonperforming assets change from the previous quarter to the first quarter of 2024?

Nonperforming assets increased to $12.5 million at the end of the first quarter of 2024.