Bank First Announces Net Income for the Fourth Quarter of 2024

Rhea-AI Summary

Bank First (BFC) reported Q4 2024 net income of $17.5 million ($1.75 per share), compared to $34.9 million ($3.39 per share) in Q4 2023. Full-year 2024 earnings were $65.6 million ($6.50 per share), versus $74.5 million ($7.28 per share) in 2023.

The bank's net interest income was $35.6 million in Q4 2024, with a net interest margin of 3.61%. Total assets reached $4.50 billion, up 6.5% year-over-year. Loans grew 5.2% to $3.52 billion, while deposits increased 6.7% to $3.66 billion.

The Board declared a quarterly cash dividend of $0.45 per share, matching the previous quarter and representing a 28.6% increase from the prior year. Asset quality remained strong with nonperforming assets at just 0.21% of total assets.

Positive

• Net interest margin improved to 3.61% in Q4 2024 from 3.53% in Q4 2023
• Total assets grew 6.5% year-over-year to $4.50 billion
• Loan portfolio increased 5.2% year-over-year to $3.52 billion
• Core deposits grew 6.7% to $3.66 billion
• Quarterly dividend increased 28.6% year-over-year
• Strong asset quality with nonperforming assets at only 0.21%
• Net loan recoveries of $0.4 million for 2024

Negative

• Q4 2024 net income decreased 49.9% year-over-year from $34.9M to $17.5M
• Full-year 2024 earnings declined 12% from $74.5M to $65.6M
• Net interest income decreased $0.3M from previous quarter
• Noninterest income declined from $4.9M to $4.5M quarter-over-quarter

Insights

Financial Analyst

Bank First delivered a mixed but generally positive performance in Q4 2024. The headline net income of $17.5 million shows resilience, though it appears lower compared to Q4 2023's $34.9 million. However, this comparison is misleading due to significant one-time items in the prior year, including a $38.9 million gain from the UFS sale.

Three key strengths stand out:

• Robust Core Performance: Adjusted net income grew by 17.6% year-over-year to $17.4 million, indicating strong underlying business momentum.
• Excellent Asset Quality: Nonperforming assets remain minimal at 0.21% of total assets, allowing a $1.0 million negative provision for credit losses.
• Efficient Capital Management: The bank returned significant value to shareholders through $31.2 million in stock buybacks and increased dividends, while maintaining strong capital levels.

However, some challenges are evident in the net interest margin (NIM), which declined to 3.61% from 3.76% in Q3 2024. This compression was partly due to seasonal high-rate deposits, though the bank's overall cost of funds improved by 6 basis points quarter-over-quarter.

The balance sheet shows healthy growth with total assets increasing 6.5% year-over-year to $4.50 billion. The 5.2% loan growth and 6.7% deposit growth demonstrate the bank's ability to expand its core business. The investment portfolio expansion appears tactical, with a $100 million 30-day Treasury note purchase to manage seasonal deposit collateral requirements.

Looking ahead, Bank First's strong ROA above 1.50% for the second consecutive year positions it well in the regional banking sector. The continued focus on relationship banking and operational efficiency should support sustainable growth, though NIM pressure may persist in the current rate environment.

• Net income of $17.5 million and $65.6 million for the three months and year ended December 31, 2024, respectively
• Earnings per common share of $1.75 and $6.50 for the three months and year ended December 31, 2024, respectively
• Annualized return on average assets of 1.60% and 1.56% for the three months and year ended December 31, 2024, respectively
• Quarterly cash dividend of $0.45 per share declared, matching the prior quarter and a 28.6% increase from the prior-year fourth quarter

MANITOWOC, Wis., Jan. 21, 2025 /PRNewswire/ -- Bank First Corporation (NASDAQ: BFC) ("Bank First" or the "Bank"), the holding company for Bank First, N.A., reported net income of $17.5 million, or $1.75 per share, for the fourth quarter of 2024, compared with net income of $34.9 million, or $3.39 per share, for the prior-year fourth quarter. For the year ended December 31, 2024, Bank First earned $65.6 million, or $6.50 per share, compared to $74.5 million, or $7.28 per share for the full year of 2023.

Financial results for the fourth quarter and full year of 2023 included several significant one-time transactions:

• The Bank sold 100% of its member interest in UFS, LLC ("UFS") in a transaction that closed on October 1, 2023, resulting in a pre-tax gain on sale of $38.9 million.
• The Bank redeemed $8.3 million in debt securities related to the Hometown Bancorp, Ltd. Capital Trust II ("Trust II") during the fourth quarter of 2023 and informed holders of securities of Hometown Bancorp, Ltd. Capital Trust I ("Trust I") of its intent to redeem $4.1 million in debt securities related to that trust on January 7, 2024. These redemptions led to the accelerated amortization of $1.4 million in fair value adjustments assigned to these liabilities when they were acquired along with Hometown Bancorp Ltd. ("Hometown") earlier in 2023. The impact of this acceleration was recorded as an addition to interest expense for the fourth quarter of 2023.
• The Bank sold available-for-sale US Treasury securities with a par value of $50.0 million, resulting in a realized loss on sale totaling $7.8 million recorded during the fourth quarter of 2023. These securities had an average yield of 1.36%. Proceeds of these sales were reinvested in a combination of short and long-term investments with an average yield of 4.98%, increasing future interest income by over $1.8 million annually.
• The Bank vacated the former corporate headquarters of Hometown, moving this building to other real estate owned ("OREO"), and revalued four other OREO properties (all former bank branches), leading to a combined loss on OREO valuations of $1.6 million during the fourth quarter of 2023.
• The Bank closed a branch in Ashwaubenon during the first quarter of 2024, concurrent with opening a new flagship location in its Green Bay market. Anticipating that the closed branch would be moved to OREO in the first quarter of 2024 at an expected valuation significantly below its carrying value, the Bank impaired its cost basis by $0.4 million. This impairment expense was included in "other noninterest expense" in the fourth quarter and full year of 2023.

After removing the impact of these one-time transactions, as well as other one-time expenses related to acquisitions and gains and losses on sales of securities and OREO, the Bank reported adjusted net income (non-GAAP) of $17.4 million, or $1.74 per share, for the fourth quarter of 2024, compared with $14.8 million, or $1.44 per share, for the prior-year fourth quarter. For the year ended December 31, 2024, adjusted net income (non-GAAP) totaled $65.0 million, or $6.45 per share, compared to $59.2 million, or $5.82 per share for the full year of 2023.

"We are pleased with the financial results for 2024," stated CEO Mike Molepske. "The Bank delivered a return on assets, a measure of both profitability and efficiency, of 1.56%, marking the second consecutive year this metric exceeded 1.50%. Our consistently strong financial performance is directly related to the tireless efforts of our team to remain true to our promise to be 'a relationship-based bank that delivers innovative solutions to the communities we serve.'"

Operating Results
Net interest income ("NII") during the fourth quarter of 2024 was $35.6 million, $0.3 million less than the previous quarter but $2.6 million higher than the fourth quarter of 2023. The impact of net accretion and amortization of purchase accounting related to interest-bearing assets and liabilities from past acquisitions ("purchase accounting") increased NII by $0.8 million, or $0.06 per share after tax, during the fourth quarter of 2024, compared to $1.7 million, or $0.13 per share after tax, during the previous quarter and $0.4 million, or $0.03 per share after tax, during the fourth quarter of 2023. A previously purchased loan with remaining associated purchase accounting adjustments of $0.6 million was fully repaid before maturity during the third quarter of 2024, leading to the elevated impact of purchase accounting during the previous quarter. The redemptions of Trust I and Trust II, noted earlier in this release, reduced the impact of purchase accounting during the fourth quarter of 2023.

Net interest margin ("NIM") was 3.61% for the fourth quarter of 2024, compared to 3.76% for the previous quarter and 3.53% for the fourth quarter of 2023. NII from purchase accounting increased NIM by 0.08%, 0.17%, and 0.01% for each period, respectively. In addition to the volatility caused by purchase accounting over recent quarters, a seasonal buildup of higher interest rate deposits through the fourth quarter of 2024 further hampered NIM for that quarter. While the Bank makes a margin on these funds (approximately 0.35%), elevated levels in these products decreases the Bank's overall NIM. Even with the buildup of these deposits, cost of funds for the Bank declined 6 basis points quarter-over-quarter.

Bank First recorded a negative provision for credit losses totaling $1.0 million during the fourth quarter of 2024, comparing favorably to no provision in the previous quarter and a positive provision of $0.5 million during the fourth quarter of 2023. While the Bank's overall credit quality has remained consistently strong over all these periods, improvement in financial trends related to two relationships that were part of the Hometown acquisition allowed for a reduction in specific reserves related to them, causing the decrease in overall required allowance for credit losses related to the loan portfolio. Recoveries of previously charged-off loans exceeded currently charged-off loans by $0.4 million for the year ended December 31, 2024, compared to recoveries exceeding charge-offs by $0.1 million for the prior year.

Noninterest income was $4.5 million for the fourth quarter of 2024, compared to $4.9 million and $42.5 million for the prior quarter and fourth quarter of 2023, respectively. Noninterest income during the fourth quarter of 2023 included the aforementioned gain on sale of UFS, totaling $38.9 million. Income provided by the Bank's investment in Ansay & Associates, LLC ("Ansay") experienced a typical seasonal fourth-quarter decline, down $1.0 million from the prior quarter but nearly matching the fourth quarter of 2023. Income from Ansay increased by $0.6 million, or 19.8%, for the full year of 2024 compared to 2023. The Bank experienced a minimal positive adjustment to its mortgage servicing rights asset during the fourth quarter of 2024, comparing favorably to a negative valuation adjustment of $0.3 million and $0.1 million during the prior quarter and prior-year fourth quarter, respectively. All other areas of noninterest income remained consistent with recent quarterly results.

Noninterest expense was $19.3 million for the fourth quarter of 2024, compared to $20.1 million during the prior quarter and $28.9 million during the fourth quarter of 2023. Noninterest expenses during the fourth quarter of 2023 included the aforementioned $7.8 million loss on the sale of securities, $1.6 million loss on the sale and valuation adjustments of OREO, and $0.4 million impairment to the cost basis of a branch location. Data processing expense continued its elevated trend during 2024 as the Bank incurred another $0.4 million in project-related expenses during the current quarter as part of the Bank's continued upgrade of its digital banking platform. All other areas of noninterest expense have remained well-contained over the past five quarters as the Bank has worked efficiencies from recent acquisitions into its operations.

Balance Sheet
On December 31, 2024, total assets were $4.50 billion, an increase of $273.2 million, or 6.5%, from December 31, 2023.

Total investment securities available-for-sale and held-to-maturity were $333.8 million on December 31, 2024, increasing $88.3 million, or 36.0%, from December 31, 2023. The previously mentioned seasonal buildup of higher interest rate deposits during the fourth quarter of 2024 included many that required collateralization by the Bank's investment portfolio. In response to this heightened need for collateral, the Bank invested $100.0 million into a 30-day US Treasury note which will mature before the end of January 2025.

Total loans were $3.52 billion on December 31, 2024, up $174.2 million, or 5.2%, from December 31, 2023. Loans grew 5.3% on an annualized basis during the fourth quarter of 2024.

Total deposits, nearly all of which remain core deposits, were $3.66 billion on December 31, 2024, which is up $228.2 million, or 6.7%, from December 31, 2023. Total deposits grew 20.2% on an annualized basis during the fourth quarter of 2024, though much of this growth was in higher interest earning seasonal deposits.

Asset Quality
Nonperforming assets on December 31, 2024, remained negligible, totaling $9.2 million compared to $11.9 million and $9.1 million at the end of the prior quarter and prior year, respectively. Nonperforming assets to total assets ended the fourth quarter of 2024 at 0.21%, down from 0.28% at the end of the prior quarter and matching the end of the prior year. OREO on December 31, 2024, consisted of one property valued at $0.7 million, currently listed for sale, previously an operating branch location of an acquired institution.

Capital Position
Stockholders' equity totaled $639.7 million on December 31, 2024, an increase of $19.9 million from the end of 2023. Earnings of $65.6 million were offset by dividends totaling $15.6 million and repurchases of BFC common stock totaling $31.2 million during 2024. The Bank's book value per common share totaled $63.89 on December 31, 2024, compared to $59.80 on December 31, 2023. Tangible book value per common share (non-GAAP) totaled $44.28 on December 31, 2024, compared to $40.30 on December 31, 2023.

Dividend Declaration
Bank First's Board of Directors approved a quarterly cash dividend of $0.45 per common share, payable on April 9, 2025, to shareholders of record as of March 26, 2025. This dividend matches the previous quarter's dividend and represents a 28.6% increase over the dividend declared one year earlier.

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 its 26 banking locations in Wisconsin. The Bank has grown through both acquisitions and de novo branch expansion. The Bank employs approximately 357 full-time equivalent staff and has assets of approximately $4.5 billion. Insurance services are available through its 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 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 (BFC) net income for Q4 2024?

Bank First reported net income of $17.5 million ($1.75 per share) for Q4 2024.

How much did BFC's total assets grow in 2024?

BFC's total assets grew by $273.2 million or 6.5% to $4.50 billion in 2024.

What is Bank First's (BFC) latest quarterly dividend?

BFC declared a quarterly cash dividend of $0.45 per share, payable on April 9, 2025, representing a 28.6% increase from the previous year.

How did BFC's loan portfolio perform in 2024?

BFC's total loans increased by $174.2 million or 5.2% to $3.52 billion in 2024, with a 5.3% annualized growth in Q4.

What was Bank First's (BFC) net interest margin in Q4 2024?

BFC's net interest margin was 3.61% for Q4 2024, compared to 3.76% in Q3 2024 and 3.53% in Q4 2023.