Bank First Announces Net Income for the Third Quarter of 2024

Rhea-AI Summary

Bank First (NASDAQ: BFC) reported net income of $16.6 million, or $1.65 per share, for the third quarter of 2024, compared to $14.8 million, or $1.43 per share, for the same period in 2023. For the nine months ended September 30, 2024, the bank earned $48.0 million, or $4.75 per share, up from $39.6 million, or $3.89 per share, in 2023.

Key highlights include:

• Net interest income increased to $35.9 million in Q3 2024
• Net interest margin improved to 3.76%
• No provision for credit losses recorded in Q3 2024
• Total assets reached $4.29 billion, up $207.0 million year-over-year
• Total loans grew to $3.47 billion, a 4.9% annualized increase in Q3
• Deposits increased to $3.48 billion, with 10% annualized growth in Q3
• Quarterly cash dividend increased by 12.5% to $0.45 per share

Positive

• Net income increased to $16.6 million in Q3 2024, up from $14.8 million in Q3 2023
• Earnings per share rose to $1.65 in Q3 2024, compared to $1.43 in Q3 2023
• Net interest income grew to $35.9 million in Q3 2024, up $1.8 million from Q3 2023
• Net interest margin improved to 3.76% in Q3 2024 from 3.71% in Q3 2023
• Total assets increased by $207.0 million year-over-year to $4.29 billion
• Total loans grew by 4.9% annualized in Q3 2024
• Total deposits increased by 10% annualized in Q3 2024
• Noninterest-bearing deposits grew by 18.8% annualized in Q3 2024
• Quarterly cash dividend increased by 12.5% to $0.45 per share
• Tangible book value per common share increased to $43.07 from $36.00 year-over-year

Negative

• Nonperforming assets increased to $11.9 million, up from $5.2 million in Q3 2023
• $0.3 million charge-off related to a single customer relationship in Q3 2024
• Negative $0.3 million valuation adjustment to mortgage servicing rights asset in Q3 2024
• Noninterest expense increased to $20.1 million in Q3 2024 from $19.6 million in Q3 2023

Insights

Financial Analyst

Bank First 's Q3 2024 results show strong financial performance and growth. Key highlights include:

• Net income of $16.6 million ($1.65 per share), up 12.2% year-over-year
• Year-to-date net income of $48.0 million ($4.75 per share), up 21.2% from 2023
• Annualized return on average assets of 1.56%
• Net interest income increased to $35.9 million, up 5.3% year-over-year
• Net interest margin improved to 3.76%
• Loan growth of 4.9% annualized in Q3
• Deposit growth of 10.0% annualized in Q3
• Nonperforming assets remain low at 0.28% of total assets
• Tangible book value per share increased to $43.07, up 19.6% year-over-year
• Quarterly dividend increased by 12.5% to $0.45 per share

These results demonstrate Bank First's ability to grow earnings, maintain strong asset quality and increase shareholder value in a challenging interest rate environment. The significant dividend increase signals management's confidence in the bank's financial position and future prospects.

Banking Industry Expert

Bank First's Q3 results highlight its resilience and strategic positioning in the current banking landscape. The bank's ability to expand its net interest margin to 3.76% amidst a high-rate environment is particularly noteworthy. This expansion, coupled with controlled noninterest expenses, has driven the impressive 12.2% year-over-year increase in quarterly net income.

The 18.8% annualized growth in noninterest-bearing deposits is a significant achievement, as it provides a low-cost funding source in a competitive deposit market. This growth, along with the overall 10.0% annualized deposit growth, suggests strong customer relationships and effective deposit gathering strategies.

Bank First's asset quality remains exceptional, with nonperforming assets at just 0.28% of total assets. This low level of problem loans, combined with the absence of provision for credit losses in Q3, indicates a conservative lending approach and robust risk management practices.

The 50.0% year-over-year increase in the quarterly dividend demonstrates management's confidence in the bank's earnings capacity and capital position. This shareholder-friendly action, along with the ongoing share repurchase program, should be well-received by investors seeking both growth and income.

• Net income of $16.6 million and $48.0 million for the three and nine months ended September 30, 2024, respectively
• Earnings per common share of $1.65 and $4.75 for the three and nine months ended September 30, 2024, respectively
• Annualized return on average assets of 1.56% and 1.54% for the three and nine months ended September 30, 2024, respectively
• Quarterly cash dividend of $0.45 per share declared, an increase of 12.5% from the prior quarter and 50.0% from the prior-year third quarter

MANITOWOC, Wis., Oct. 15, 2024 /PRNewswire/ -- Bank First Corporation (NASDAQ: BFC) ("Bank First" or the "Bank"), the holding company for Bank First, N.A., reported net income of $16.6 million, or $1.65 per share, for the third quarter of 2024, compared with net income of $14.8 million, or $1.43 per share, for the prior-year third quarter. For the nine months ended September 30, 2024, Bank First earned $48.0 million, or $4.75 per share, compared to $39.6 million, or $3.89 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 $15.1 million, or $1.46 per share, for the third quarter of 2023. There were no such expenses during the third quarter of 2024. For the first nine months of 2024, adjusted net income (non-GAAP) totaled $47.4 million, or $4.69 per share, compared to $44.4 million, or $4.36 per share for the same period in 2023.

Operating Results

Net interest income ("NII") during the third quarter of 2024 was $35.9 million, $2.9 million higher than the previous quarter and up $1.8 million from the third 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 $1.7 million, or $0.13 per share after tax, during the third quarter of 2024, compared to $1.2 million, or $0.09 per share after tax, during the previous quarter and $1.8 million, or $0.13 per share after tax, during the third 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 quarter.

Net interest margin ("NIM") was 3.76% for the third quarter of 2024, compared to 3.63% for the previous quarter and 3.71% for the third quarter of 2023. NII from purchase accounting increased NIM by 0.17%, 0.13%, and 0.19% for each period, respectively. While the Bank continued to see average rates paid on interest-bearing deposits rise, the velocity of those increases slowed during the most recent quarter, with month-by-month results showing these rates at 2.66% in July, 2.71% in August, and 2.70% in September. Meanwhile, new loan originations and loan repricing from low rates over the last several years have allowed for continued improvement in the yield of the Bank's loan portfolio, coming in at 5.73% during the most recent quarter compared to 5.51% during the prior quarter and 5.23% during the prior-year third quarter.

Bank First did not record a provision for credit losses during the third quarter of 2024, matching the previous quarter and third quarter of 2023. Provision expense was $0.2 million for the first nine 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 one provision for credit losses expense of $3.6 million. Recoveries of previously charged-off loans exceeded currently charged-off loans by $0.5 million through the first nine months of 2024, compared to recoveries exceeding charge-offs by $0.1 million through the first nine months of 2023. Other than a $0.3 million charge-off during the third quarter of 2024, related to a single customer relationship, the Bank's loan portfolio continues to exhibit very little credit stress. The Bank experienced a reduction in unfunded loan commitments during the most recent quarter, allowing it to move $0.4 million from its liability for potential credit losses in unfunded commitments to its allowance for credit losses in its loan portfolio. While this move did not 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 during the quarter.

Noninterest income was $4.9 million for the third quarter of 2024, compared to $5.9 million and $5.3 million for the prior quarter and third quarter of 2023, respectively. Service charge income increased by $0.1 million, or 4.2%, and $0.4 million, or 20.2%, from the prior quarter and prior-year third quarter, respectively, as the Bank continues to benefit from the renegotiation of vendor incentive programs related to the Bank's credit and debit card payments processing. Income provided by the Bank's investment in Ansay & Associates, LLC ("Ansay") increased by $0.3 million from the prior-year third quarter while declining $0.3 million from the prior quarter. Although income from Ansay has historically been less consistent than most areas of the Bank quarter-to-quarter, it has remained strong during 2024, increasing by $0.6 million, or 21.6%, through the first nine months of 2024 compared to the same period in 2023. Finally, the Bank experienced a negative $0.3 million valuation adjustment to its mortgage servicing rights asset during the third quarter of 2024 which compared unfavorably to positive valuation adjustments of $0.3 million and $0.2 million during the prior quarter and prior-year third quarter, respectively. Changes in the valuation of this asset historically correlate to changes in prevailing residential mortgage rates. Residential mortgage rates have ebbed and flowed during 2024, causing the valuation of this asset to be volatile through the first three quarters of the year. 

Noninterest expense was $20.1 million for the third quarter of 2024, compared to $19.1 million during the prior quarter and $19.6 million during the third quarter of 2023. Most 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. The prior quarter included a $0.5 million gain on the sale of OREO which offset total noninterest expense, leading to some of the increase quarter-over-quarter. Beyond that, occupancy, equipment, and office expenses were elevated during the current quarter due to $0.2 million in losses on the disposal of equipment that needed to be upgraded. Finally, data processing contained $0.4 million in project-related expenses during the current quarter as part of the Bank's continued upgrade of its online customer platform.

Balance Sheet

Total assets were $4.29 billion on September 30, 2024, a $72.7 million increase from December 31, 2023, and a $207.0 million increase from September 30, 2023.

Total loans were $3.47 billion on September 30, 2024, up $127.9 million from December 31, 2023, and up $115.4 million from September 30, 2023. Loans grew 4.9% on an annualized basis during the third quarter of 2024.

Total deposits, nearly all of which remain core deposits, were $3.48 billion on September 30, 2024, up $51.8 million from December 31, 2023, and up $86.4 million from September 30, 2023. Total deposits grew by 10.0% and noninterest-bearing deposits grew by 18.8% on an annualized basis during the third quarter of 2024.

Asset Quality

Nonperforming assets on September 30, 2024, remained negligible, totaling $11.9 million compared to $11.0 million and $5.2 million at the end of the prior quarter and third quarter of 2023, respectively. Nonperforming assets to total assets ended the third quarter of 2024 at 0.28%.

Capital Position

Stockholders' equity totaled $628.9 million on September 30, 2024, an increase of $9.1 million from the end of 2023 and $51.6 million from September 30, 2023. Earnings of $48.0 million through the first nine months of 2024, offset by dividends totaling $11.1 million and repurchases of BFC common stock totaling $31.2 million during that period, were the primary factors leading to the increase in capital year-to-date. The Bank's book value per common share totaled $62.82 on September 30, 2024, compared to $59.80 on December 31, 2023, and $55.62 on September 30, 2023. Tangible book value per common share (non-GAAP) totaled $43.07 on September 30, 2024 ,compared to $40.30 on December 31, 2023, and $36.00 on September 30, 2023.

Dividend Declaration

Bank First's Board of Directors approved a quarterly cash dividend of $0.45 per common share, payable on January 6, 2025, to shareholders of record as of December 23, 2024. This dividend represents a 12.5% increase over the previous quarter's dividend and a 50.0% increase over the dividend declared one year earlier.

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 Q3 2024?

Bank First (BFC) reported net income of $16.6 million for the third quarter of 2024.

How much did Bank First's (BFC) earnings per share increase in Q3 2024 compared to Q3 2023?

Bank First's earnings per share increased to $1.65 in Q3 2024, up from $1.43 in Q3 2023.

What was Bank First's (BFC) net interest margin in Q3 2024?

Bank First's net interest margin was 3.76% for the third quarter of 2024.

How much did Bank First (BFC) increase its quarterly cash dividend in Q3 2024?

Bank First increased its quarterly cash dividend by 12.5% to $0.45 per share in Q3 2024.

What was the growth rate of Bank First's (BFC) total deposits in Q3 2024?

Bank First's total deposits grew by 10% on an annualized basis during the third quarter of 2024.