Bank First Announces Net Income for the Second Quarter of 2024

Rhea-AI Summary

Bank First (NASDAQ: BFC) reported net income of $16.1 million, or $1.59 per share, for the second quarter of 2024. This compares to $14.1 million, or $1.37 per share, for the same period in 2023. For the first six months of 2024, the bank earned $31.5 million, or $3.10 per share.

Key financial highlights include:

• Net interest income of $33.0 million, down slightly from previous periods
• Net interest margin of 3.63%
• No provision for credit losses in Q2 2024
• Noninterest income of $5.9 million, up from previous quarters
• Total assets of $4.15 billion as of June 30, 2024
• Total loans of $3.43 billion, up $85.7 million from December 31, 2023
• Total deposits of $3.40 billion

The Board of Directors approved a quarterly cash dividend of $0.40 per share, a 14.3% increase from the prior quarter and a 33.3% increase year-over-year.

Positive

• Net income increased to $16.1 million in Q2 2024, up from $14.1 million in Q2 2023
• Earnings per share rose to $1.59 in Q2 2024, compared to $1.37 in Q2 2023
• Noninterest income increased to $5.9 million in Q2 2024, up from $4.6 million in Q2 2023
• Total loans grew by $85.7 million from December 31, 2023, to $3.43 billion
• Quarterly cash dividend increased by 14.3% from the prior quarter and 33.3% year-over-year
• Nonperforming assets remained low at 0.27% of total assets
• Book value per common share increased to $61.27, up from $54.95 in June 2023

Negative

• Net interest income decreased by $1.3 million compared to Q2 2023
• Net interest margin declined to 3.63% from 3.77% in Q2 2023
• Total deposits decreased by $33.0 million from December 31, 2023
• Noninterest-bearing deposits as a percentage of total core deposits decreased to 28.7% from 31.8% in June 2023
• The bank entered $55.0 million in borrowings to fund loan demand outpacing deposit growth

Insights

Financial Analyst

Bank First’s performance in the second quarter of 2024 has shown a noticeable improvement over the same period last year. The net income of $16.1 million represents a 14.2% increase year-over-year. This solid growth is reflected in the earnings per share (EPS) of $1.59, up from $1.37 last year, demonstrating the bank's capacity to generate higher returns for its shareholders.

Another positive indicator is the increased dividend per share to $0.40, showcasing a substantial 33.3% growth from the previous year. This is encouraging for income-focused investors who prioritize dividend returns.

However, the net interest income (NII) has decreased by $1.3 million year-over-year. This could be due to rising interest rates affecting the bank's cost of funds. Additionally, the net interest margin (NIM) slightly declined to 3.63% from 3.77% last year.

In terms of asset quality, nonperforming assets remain negligible, but there’s been a slight increase to $11.0 million. The bank’s strong recovery of charged-off loans indicates effective credit risk management.

Overall, these results suggest a mixed, yet positive outlook for the bank's performance. Investors should watch interest rate trends closely as they impact future interest income and margins.

Market Research Analyst

Bank First’s strategy appears to be balancing asset growth and shareholder returns effectively. The total assets have slightly declined from the end of 2023 but increased from June 2023, indicating steady growth. Loan growth has been solid, with total loans reaching $3.43 billion, showing a healthy demand for the bank's credit products.

The bank’s high percentage of noninterest-bearing deposits significantly benefits its financial performance. Despite a modest shift from noninterest-bearing to interest-bearing deposits, noninterest-bearing deposits still account for a significant portion of total deposits, aiding in cost management.

The uptick in noninterest income due to service charges and investments also highlights the bank's diversified revenue streams. The recent vendor negotiations that enhanced service charge income and projected savings underscore management's proactive approach to expense management.

Considering the competitive market landscape, Bank First’s focus on maintaining high noninterest-bearing deposits and increasing noninterest income is commendable. It positions the bank well to sustain profitability even in fluctuating interest rate environments.

• Net income of $16.1 million and $31.5 million for the three and six months ended June 30, 2024, respectively
• Earnings per common share of $1.59 and $3.10 for the three and six months ended June 30, 2024, respectively
• Annualized return on average assets of 1.58% and 1.54% for the three and six months ended June 30, 2024, respectively
• Quarterly cash dividend of $0.40 per share declared, 14.3% higher than the prior quarter and a 33.3% increase from the prior-year second quarter

MANITOWOC, Wis,, July 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 $16.1 million, or $1.59 per share, for the second quarter of 2024, compared with net income of $14.1 million, or $1.37 per share, for the prior-year second quarter. For the six months ended June 30, 2024, Bank First earned $31.5 million, or $3.10 per share, compared to $24.8 million, or $2.46 per share for the same period in 2023. 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 ("OREO"), the Bank reported adjusted net income (non-GAAP) of $15.7 million, or $1.56 per share, for the second quarter of 2024, compared with $14.6 million, or $1.42 per share, for the prior-year second quarter. For the first six months of 2024 adjusted net income (non-GAAP) totaled $31.1 million, or $3.06 per share, compared to $29.3 million, or $2.92 per share for the same period in 2023.

Operating Results
Net interest income ("NII") during the second quarter of 2024 was $33.0 million, down $0.3 million from the previous quarter and down $1.3 million from the second 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 $1.2 million, or $0.09 per share after tax, during the second quarter of 2024, compared to $1.2 million, or $0.09 per share after tax, during the previous quarter and $2.5 million, or $0.18 per share after tax, during the second quarter of 2023.

Net interest margin ("NIM") was 3.63% for the second quarter of 2024, compared to 3.62% for the previous quarter and 3.77% for the second quarter of 2023. NII from purchase accounting increased NIM by 0.13%, 0.13% and 0.27% for each of these periods, respectively. While the Bank's average rate paid on interest-bearing liabilities continued to rise during the second quarter of 2024, the momentum of these increases has begun to slow while average rates earned on interest-earning assets continued a steady move higher. The increase in yields on interest-earnings assets was due to fixed-rate loans which matured and were renewed at higher rates during the quarter as well as higher prevailing market rates on recent new loan growth compared to the loan portfolio as a whole. The beneficial impact of the Bank's high percentage of noninterest-bearing deposits also had a positive impact, adding 89 basis points to NIM during the second quarter of 2024 compared to 84 basis points and 65 basis points for the prior quarter and second quarter of 2023, respectively.

Bank First did not record a provision for credit losses during the second quarter of 2024, compared to recording a provision of $0.2 million during the previous quarter. The Bank also did not record a provision for credit losses during the second quarter of 2023. Provision expense was $0.2 million for the first six months of 2024 compared to $4.2 million for the same period during 2023. The acquisition of the loan portfolio of Hometown Bancorp, Ltd. ("Hometown") during the first quarter of 2023 resulted in a day 1 provision for credit losses expense of $3.6 million. Recoveries of previously charged-off loans exceeded currently charged-off loans by $0.8 million through the first six months of 2024, compared to recoveries exceeding charge-offs by $0.1 million through the first six months of 2023. Also, due to a reduction in unfunded loan commitments and an increase in outstanding loans, the Bank moved $0.5 million from its liability for potential credit losses in unfunded commitments to its allowance for credit losses in its loan portfolio. While this move had no impact on the Bank's profitability for the quarter, it did increase the allowance for potential loan credit losses to correspond with the increase in overall loan portfolio balances.

Noninterest income was $5.9 million for the second quarter of 2024, compared to $4.4 million and $4.6 million for the prior quarter and second quarter of 2023, respectively. Service charge income increased by $0.5 million, or 28.6%, and $0.3 million, or 19.0%, from the prior quarter and prior-year second quarter, respectively, primarily due to a recently negotiated vendor incentive program related to the Bank's credit and debit card payments processing. Income provided by the Bank's investment in Ansay & Associates, LLC totaled $1.4 million during the second quarter of 2024, up $0.4 million from both the prior quarter and the prior-year second quarter. Finally, the Bank experienced a $0.3 million positive valuation adjustment to its mortgage servicing rights asset during the second quarter of 2024 which compared favorably to $0.3 million and $0.5 million in negative valuation adjustments during the prior quarter and prior-year second quarter, respectively.

Noninterest expense was $19.1 million in the second quarter of 2024, compared to $20.3 million during the prior quarter and $19.9 million during the second quarter of 2023. Personnel expense remained well-managed, down $0.9 million from the prior quarter, as employee retirements in the first quarter of 2024 allowed certain acquired branches to reach expected long-term staffing levels. Outside service fees were a notable exception to overall lower noninterest expenses during the second quarter of 2024. Included in outside service fees during the most recent quarter was $0.2 million paid to an advisory firm which assisted the Bank in negotiations with a vendor, resulting in projected savings for the Bank of $1.1 million over the next five years. Also included in outside service fees during the most recent quarter was $0.3 million in commissions paid related to sales of former branch buildings which were no longer in use by the Bank. These sales resulted in net gains on sale of other real estate owned totaling $0.5 million during the quarter, comparing favorably to negligible gains on similar sales in the prior quarter and net losses totaling $0.5 million in the second quarter of 2023.

Balance Sheet
Total assets were $4.15 billion at June 30, 2024, a $76.0 million decline from December 31, 2023, but a $53.7 million increase from June 30, 2023.

Total loans were $3.43 billion at June 30, 2024, up $85.7 million from December 31, 2023, and up $114.2 million from June 30, 2023.

Total deposits, nearly all of which remain core deposits, were $3.40 billion at June 30, 2024, down $33.0 million from December 31, 2023, and down $5.8 million from June 30, 2023. Noninterest-bearing demand deposits comprised 28.7% of the Bank's total core deposits at June 30, 2024, compared to 30.6% and 31.8% at December 31 and June 30, 2023, respectively. Like most in the banking industry, the Bank has seen a modest shift in its deposit portfolio from noninterest-bearing deposits to interest-bearing deposits as prevailing interest rates have increased over the last several quarters. Even with this shift, the Bank's noninterest-bearing deposit percentage remains high and continues to assist its strong financial performance. During the second quarter of 2024 Bank First entered $55.0 million in borrowings from the Federal Home Loan Bank with maturities ranging from one to three years. The Bank intends to use these borrowings to fund loan demand by our customer base as it has recently outpaced deposit growth.

Asset Quality
Nonperforming assets at June 30, 2024 remained negligible, totaling $11.0 million compared to $9.1 million and $7.2 million at the end of the fourth and second quarters of 2023, respectively. Nonperforming assets to total assets ended the second quarter of 2024 at 0.27%, compared to 0.21% and 0.18% at the end of the fourth and second quarters of 2023, respectively. Including the most recent quarter, the Bank has seen recoveries of previously charged-off loans exceed currently charged-off loans for six consecutive quarters.

Capital Position
Stockholders' equity totaled $614.6 million at June 30, 2024, a decrease of $5.2 million from the end of 2023 but an increase of $43.7 million from June 30, 2023. Dividends totaling $7.1 million and repurchases of BFC common stock totaling $29.5 million outpaced earnings of $31.5 million through the first six months of 2024, causing the decline in capital. The Bank's book value per common share totaled $61.27 at June 30, 2024 compared to $59.80 at December 31, 2023 and $54.95 at June 30, 2023. Tangible book value per common share (non-GAAP) totaled $41.42 at June 30, 2024 compared to $40.30 at December 31, 2023 and $35.18 at June 30, 2023.

Dividend Declaration
Bank First's Board of Directors approved a quarterly cash dividend of $0.40 per common share, payable on October 9, 2024, to shareholders of record as of September 25, 2024. This dividend represents a 14.3% and 33.3% increase from the dividend from the prior quarter and prior-year second quarter, respectively.

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 371 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 (BFC) net income for Q2 2024?

Bank First (BFC) reported net income of $16.1 million for the second quarter of 2024.

How much did Bank First's (BFC) earnings per share increase in Q2 2024 compared to Q2 2023?

Bank First's earnings per share increased to $1.59 in Q2 2024, up from $1.37 in Q2 2023, representing a 16% increase.

What was Bank First's (BFC) total loan balance as of June 30, 2024?

Bank First's total loans were $3.43 billion as of June 30, 2024, an increase of $85.7 million from December 31, 2023.

How much did Bank First (BFC) increase its quarterly dividend in Q2 2024?

Bank First increased its quarterly cash dividend by 14.3% to $0.40 per share, which represents a 33.3% increase from the prior-year second quarter.

What was Bank First's (BFC) net interest margin in Q2 2024?

Bank First's net interest margin was 3.63% for the second quarter of 2024, compared to 3.77% for the second quarter of 2023.