Bank First(BFC) - 2025 Q1 - Quarterly Results

Q1 2025 Earnings Announcement Bank First reported strong Q1 2025 net income of $18.2 million, with EPS up 20.53% and a dividend increase Financial Highlights Bank First Corporation reported strong financial results for the first quarter of 2025, with net income reaching $18.2 million, or $1.82 per share, a 20.53% increase in EPS compared to the prior-year quarter Q1 2025 Key Financial Metrics | Metric | Q1 2025 | Change vs. Q1 2024 | | :--- | :--- | :--- | | Net Income | $18.2 million | +$2.8 million | | Earnings Per Share (EPS) | $1.82 | +20.53% | | Annualized Return on Average Assets (ROA) | 1.64% | N/A | | Quarterly Cash Dividend | $0.45 per share | +28.6% | - CEO Mike Molepske attributed the strong financial returns to an increase in core loan and deposit growth that began in late 2024 and continued into early 2025[2] Operating Results Analysis of Q1 2025 operating performance, including net interest income, credit loss provisions, and noninterest items Net Interest Income and Margin (NII & NIM) Net interest income (NII) for Q1 2025 was $36.5 million, an increase of $3.2 million year-over-year and $1.0 million quarter-over-quarter Net Interest Income (NII) Comparison | Period | Net Interest Income | Impact from Purchase Accounting | | :--- | :--- | :--- | | Q1 2025 | $36.5 million | +$1.0 million | | Q4 2024 | $35.5 million | +$0.8 million | | Q1 2024 | $33.3 million | +$1.2 million | Net Interest Margin (NIM) Comparison | Period | Net Interest Margin (NIM) | Impact from Purchase Accounting | | :--- | :--- | :--- | | Q1 2025 | 3.65% | +0.10% | | Q4 2024 | 3.61% | +0.08% | | Q1 2024 | 3.62% | +0.13% | - The bank's cost of funds decreased by 0.08% quarter-over-quarter, and the average rate paid on non-brokered certificates of deposit fell by 0.18% compared to the prior quarter[4] Provision for Credit Losses The provision for credit losses was $0.4 million in Q1 2025, up from $0.2 million in Q1 2024, with net loan charge-offs primarily from a 2023 acquisition - The provision for credit losses was $0.4 million for Q1 2025, compared to $0.2 million for Q1 2024[5] - Net loan charge-offs totaled $0.8 million in Q1 2025, a significant shift from net recoveries of $0.6 million in Q1 2024. The charge-off was related to a single customer from a 2023 acquisition[5] Noninterest Income Noninterest income increased significantly to $6.6 million in Q1 2025, driven by higher service charges, partnership income, and a BOLI death benefit - Total noninterest income was $6.6 million for Q1 2025, a substantial increase from $4.4 million in Q1 2024[6] - Key drivers of noninterest income growth include: - Service charges increased by $0.4 million (23.1%) YoY - Income from the 40% interest in Ansay & Associates, LLC grew by $0.2 million (20.6%) YoY - A $0.2 million positive valuation adjustment on mortgage servicing rights, compared to a $0.3 million negative adjustment in the prior year - A $1.0 million gain from a BOLI death benefit[6] Noninterest Expense Noninterest expense remained relatively stable at $20.6 million in Q1 2025, as efficiency improvements offset wage pressures and special projects concluded - Personnel expense was consistent year-over-year, as efficiency gains offset wage inflation[7] - Data processing and outside service fees declined from recent quarters due to the completion of special projects[7] - Amortization of core deposit intangible assets is decreasing over time due to the accelerated amortization method used[7] Income Tax Expense The effective tax rate for Q1 2025 was 17.5%, favorably impacted by a tax-exempt BOLI death benefit, higher than the prior year's rate due to a one-time benefit - The effective tax rate in Q1 2025 was 17.5%, benefiting from a tax-exempt BOLI death benefit[8] - The Q1 2024 effective tax rate was an unusually low 10.5% due to a $1.3 million benefit recorded from a new Wisconsin state tax exclusion, which was finalized in Q1 2024 but related to 2023[8] Balance Sheet and Asset Quality Overview of the bank's balance sheet growth and significant improvements in asset quality during Q1 2025 Balance Sheet As of March 31, 2025, total assets grew to $4.51 billion, with increases in loans and deposits, alongside a shift in deposit mix Balance Sheet Highlights (as of March 31, 2025) | Metric | Balance | Change vs. Dec 31, 2024 | Change vs. Mar 31, 2024 | | :--- | :--- | :--- | :--- | | Total Assets | $4.51 billion | +$11.4 million | +$406.6 million | | Total Loans | $3.55 billion | +$30.9 million | +$164.7 million | | Total Deposits | $3.67 billion | +$13.1 million | +$258.2 million | - Noninterest-bearing demand deposits constituted 27.4% of total deposits, down from 29.0% a year ago, indicating a shift in the deposit portfolio towards pre-2020 levels[10] Asset Quality Asset quality showed significant improvement in Q1 2025, with nonperforming assets decreasing to $7.6 million, reducing the ratio to total assets Nonperforming Assets Trend | Period | Nonperforming Assets | Nonperforming Assets to Total Assets | | :--- | :--- | :--- | | Q1 2025 | $7.6 million | 0.17% | | Q4 2024 | $9.2 million | 0.21% | | Q1 2024 | $12.5 million | 0.31% | - A significant portion of the quarterly decline in nonperforming assets was related to the charge-off of a $0.8 million loan[11] Capital Position and Dividend Details on the bank's robust capital growth and the declaration of its quarterly cash dividend Capital Position Stockholders' equity grew to $648.4 million at the end of Q1 2025, driven by earnings that offset dividends and share repurchases, leading to healthy increases in book value per share - During Q1 2025, earnings of $18.2 million offset $4.5 million in dividends and $6.4 million in common stock repurchases, leading to an $8.7 million increase in stockholders' equity from the prior quarter[12] Book Value Per Share Growth | Metric | Mar 31, 2025 | Dec 31, 2024 | Mar 31, 2024 | | :--- | :--- | :--- | :--- | | Book Value per Share | $65.02 | $63.89 | $60.16 | | Tangible Book Value per Share (non-GAAP) | $45.46 | $44.28 | $40.35 | Dividend Declaration The Board of Directors declared a quarterly cash dividend of $0.45 per common share, payable on July 9, 2025, representing a 28.6% increase year-over-year - A quarterly cash dividend of $0.45 per common share was approved, payable on July 9, 2025, to shareholders of record as of June 25, 2025[13] Financial Tables and Reconciliations Comprehensive financial data, including unaudited summaries, non-GAAP reconciliations, and average balance analyses Consolidated Financial Summary (Unaudited) This section presents detailed unaudited consolidated financial data for the five quarters ending March 31, 2025, covering income statements, balance sheets, and key ratios Selected Consolidated Financial Data (Millions) | Metric | 3/31/2025 (Millions) | 12/31/2024 (Millions) | 3/31/2024 (Millions) | | :--- | :--- | :--- | :--- | | Operations | | | | | Net interest income | $36.5 | $35.6 | $33.3 | | Net income | $18.2 | $17.5 | $15.4 | | Balance Sheet | | | | | Total assets | $4,506.5 | $4,495.1 | $4,099.9 | | Total loans | $3,548.1 | $3,517.2 | $3,383.4 | | Total deposits | $3,674.2 | $3,661.1 | $3,416.0 | | Stockholders' equity | $648.4 | $639.7 | $609.3 | Non-GAAP Financial Measures This section provides reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures, including tangible assets and equity - The report provides reconciliations for non-GAAP measures, including tangible assets and tangible common equity, to their GAAP equivalents (Total Assets and Total Stockholders' Equity)[21] Average Balances and Rates This table presents a detailed analysis of average asset and liability balances for the three months ended March 31, 2025, compared to the same period in 2024 Net Interest Margin and Spread Comparison | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Avg. Rate Earned (Assets) | 5.49% | 5.33% | | Avg. Rate Paid (Liabilities) | 2.65% | 2.55% | | Net Interest Spread | 2.84% | 2.78% | | Net Interest Margin | 3.65% | 3.62% |