Bank First(BFC) - 2025 Q1 - Quarterly Report

Part I. Financial Information Financial Statements The unaudited consolidated financial statements for Q1 2025 show stable financial position, increased net income, and strong capital levels Consolidated Balance Sheets Total assets reached $4.51 billion as of March 31, 2025, driven by growth in net loans and stockholders' equity Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Cash and cash equivalents | $300,865 | $261,332 | | Loans, net | $3,504,321 | $3,473,017 | | Total Assets | $4,505,065 | $4,495,060 | | Total deposits | $3,674,218 | $3,661,073 | | Total Liabilities | $3,856,651 | $3,855,377 | | Total Stockholders' Equity | $648,414 | $639,683 | Consolidated Statements of Income Net income for Q1 2025 increased 18.4% to $18.2 million, driven by higher net interest income and diluted EPS growth Q1 2025 vs Q1 2024 Income Statement (in thousands, except per share data) | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net interest income | $36,537 | $33,349 | | Provision for credit losses | $400 | $200 | | Total noninterest income | $6,588 | $4,397 | | Total noninterest expense | $20,604 | $20,324 | | Net Income | $18,241 | $15,412 | | Earnings per share - diluted | $1.82 | $1.51 | Consolidated Statements of Cash Flows Net cash increased by $39.5 million in Q1 2025, primarily from investing activities and operating cash flow Cash Flow Summary for Three Months Ended March 31 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $6,166 | $1,329 | | Net cash provided by (used in) investing activities | $31,543 | $(42,929) | | Net cash provided by (used in) financing activities | $1,824 | $(122,494) | | Net increase (decrease) in cash | $39,533 | $(164,094) | Notes to Unaudited Consolidated Financial Statements Notes detail accounting policies, financial instruments, and regulatory standing, including a $3.50 per share special dividend - On April 25, 2025, the Board of Directors declared a special cash dividend of $3.50 per share, totaling approximately $35.0 million, payable on May 16, 2025[81] - The Allowance for Credit Losses on Loans (ACL-Loans) was $43.7 million as of March 31, 2025, down from $44.2 million at year-end 2024. The company recorded a $400 thousand provision for credit losses in Q1 2025[44] - As of March 31, 2025, the company and its bank subsidiary met all capital adequacy requirements, with the bank's Total capital to risk-weighted assets ratio at 12.14%, well above the 10.00% required to be considered well-capitalized[64][65] - In Q1 2025, the company repurchased 62,564 shares at an average price of $100.22 per share under its renewed $50 million share repurchase program[220][221] ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes strong Q1 2025 performance to increased net interest income, loan growth, improved credit quality, and robust capital Results of Operations Net income increased by $2.8 million in Q1 2025, driven by higher net interest income and noninterest income gains - Net income increased by $2.8 million YoY, primarily due to repricing of new and renewed loans in a higher rate environment and steady growth in interest-bearing assets[98] - Noninterest income was significantly boosted by a $2.3 million death benefit from bank-owned life insurance, resulting in a $1.0 million gain[107] - The effective tax rate was 17.5% in Q1 2025, compared to 10.5% in Q1 2024. The lower rate in 2024 was due to a one-time $1.3 million tax liability reduction based on new state tax legislation rules[110] Changes in Financial Condition Total assets increased to $4.51 billion in Q1 2025, driven by net loan growth despite a decrease in investment securities Key Balance Sheet Changes (Q1 2025 vs Q4 2024) | Account | Change ($M) | % Change | | :--- | :--- | :--- | | Total Assets | +$11.4 | +0.3% | | Net Loans | +$31.3 | +0.9% | | Investment Securities | -$59.8 | -17.9% | | Deposits | +$13.1 | +0.4% | | Stockholders' Equity | +$8.7 | +1.4% | Loans and Credit Quality Loan portfolio grew to $3.55 billion with improved asset quality, as nonperforming assets declined to 0.17% of total assets Loan Portfolio Composition (in thousands) | Loan Category | March 31, 2025 | % of Total | | :--- | :--- | :--- | | Commercial & industrial | $507,850 | 14% | | Commercial real estate | $1,788,658 | 50% | | Construction & development | $278,475 | 8% | | Residential 1-4 family | $903,280 | 26% | | Consumer & other | $69,807 | 2% | | Total Loans | $3,548,070 | 100% | Nonperforming Assets (NPAs) Trend (in thousands) | Metric | Mar 31, 2025 | Dec 31, 2024 | Mar 31, 2024 | | :--- | :--- | :--- | :--- | | Total nonperforming loans | $6,814 | $8,496 | $9,877 | | Total OREO | $741 | $741 | $2,674 | | Total NPAs | $7,555 | $9,237 | $12,551 | | NPAs to total assets | 0.17% | 0.21% | 0.31% | Liquidity and Capital Resources The company maintains strong liquidity with $1.54 billion in available funding and robust capital ratios exceeding 'well-capitalized' standards - The company has access to $1.54 billion in available funding between borrowings and brokered deposits to meet future liquidity needs[179] Bank First, N.A. Capital Ratios (as of March 31, 2025) | Ratio | Actual | Minimum to be Well-Capitalized | | :--- | :--- | :--- | | Common equity Tier 1 capital ratio | 11.0% | 6.5% | | Tier 1 capital ratio | 11.0% | 8.0% | | Total capital ratio | 12.1% | 10.0% | | Tier 1 leverage ratio | 9.3% | 5.0% | ITEM 3. Quantitative and Qualitative Disclosures about Market Risk The company's primary market risk is interest rate risk, with simulations showing short-term liability sensitivity and long-term asset sensitivity Net Interest Income Sensitivity (as of March 31, 2025) | Change in Interest Rates (Basis Points) | Percentage Change in Net Interest Income | | :--- | :--- | | +300 | (4.9)% | | +200 | (3.3)% | | +100 | (1.6)% | | -100 | (0.8)% | - The economic value of equity analysis estimated that an instantaneous 200 basis point increase in interest rates would result in a 3.14% increase in the economic value of equity[212] ITEM 4. Controls and Procedures Disclosure controls and procedures were deemed effective, with no material changes to internal control over financial reporting in Q1 2025 - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of the end of the reporting period[214] - No material changes were made to internal control over financial reporting during the quarter ended March 31, 2025[215] Part II. Other Information ITEM 1. Legal Proceedings Management believes ongoing litigation will not materially affect the company's financial position, results of operations, or liquidity - Management believes that any liability resulting from ongoing litigation will not have a material effect on the company's financial condition or operations[217] ITEM 1A. Risk Factors No material changes to previously disclosed risk factors were reported for the quarter ended March 31, 2025 - No material changes to the risk factors disclosed in the company's 2024 Annual Report on Form 10-K were reported for the first quarter of 2025[218] Issuer Purchases of Equity Securities The company renewed its $50 million share repurchase program and repurchased 62,564 shares in Q1 2025 Share Repurchases in Q1 2025 | Month (2025) | Total Shares Repurchased | Average Price Paid per Share | | :--- | :--- | :--- | | January | 7,001 | $94.47 | | February | 11,083 | $103.37 | | March | 44,480 | $102.82 | | Total | 62,564 | $100.22 | - The company renewed its share repurchase program on February 18, 2025, for up to $50 million of its common stock, ending February 17, 2026[220] Other Items and Exhibits The company reported no defaults on senior securities, no mine safety disclosures, and no new Rule 10b5-1 trading plans in Q1 2025 - The company reported no defaults on senior securities, no mine safety disclosures, and no new or modified Rule 10b5-1 trading plans for its directors and officers in Q1 2025[222][223][224]