Bank First(US:BFC)2021-11-08 16:00Company Overview - Bank First Corporation operates as a holding company for Bank First, N.A., which has 21 banking locations across multiple counties in Wisconsin[116]. - The company has completed several mergers, including with Waupaca, Partnership, and Timberwood, expanding its presence in various counties in Wisconsin[120][121][122]. Financial Performance - Net income increased by $0.3 million to $11.2 million for the three months ended September 30, 2021, compared to $11.0 million for the same period in 2020[134]. - Net income increased by $7.8 million to $34.3 million for the nine months ended September 30, 2021, compared to $26.5 million for the same period in 2020[147]. - Net interest income for the period was $22,934 million, an increase from $21,814 million in the previous period, reflecting a growth of approximately 5.1%[125]. - Net interest income totaled $22.9 million for the three months ended September 30, 2021, matching the third quarter of 2020[136]. - Net interest income rose by $4.5 million to $66.9 million for the nine months ended September 30, 2021, compared to $62.4 million for the same period in 2020[148]. - Total noninterest income was $5,028 million, down from $6,574 million, representing a decline of about 23.5%[125]. - Noninterest income decreased by $0.1 million to $5.0 million for the three months ended September 30, 2021, compared to $5.1 million for the same period in 2020[143]. - Noninterest income increased by $1.0 million to $17.8 million for the nine months ended September 30, 2021, compared to $16.8 million for the same period in 2020[153]. Asset and Liability Management - Total assets increased to $2,846,605 million from $2,818,950 million, reflecting a growth of approximately 1.0%[125]. - Total liabilities and shareholders' equity amounted to $2,861,959 thousand, an increase from $2,626,136 thousand year-over-year[159]. - Total interest-earning assets increased to $2.614 billion with an interest income of $99.419 million, resulting in a net interest margin of 3.47%[161]. - Total interest-bearing liabilities were $1.719 billion, with an interest expense of $8.681 million, leading to a net interest income of $89.379 million[161]. - The average rate earned on interest-earning assets was 3.76%, compared to 4.33% in the previous year[159]. - The average rate paid on interest-bearing liabilities was 0.45%, down from 0.73% in the previous year[159]. Loan Portfolio - Loans outstanding were $2,208,915 million, a slight decrease from $2,225,217 million, indicating a contraction in loan growth[125]. - Total loans increased by $17.5 million, or 0.8%, to $2.21 billion as of September 30, 2021, from $2.19 billion at December 31, 2020[173]. - The commercial and industrial loan portfolio decreased to $353.6 million, representing 16% of total loans, down from $445.0 million or 20% at December 31, 2020[177]. - The commercial real estate loan portfolio increased to $1.1 billion, representing 50% of total loans, up from $992.2 million or 45% at December 31, 2020[180]. - Residential 1-4 family loans increased to $572.9 million, representing 26% of total loans, compared to $545.8 million or 25% at December 31, 2020[184]. - Nonperforming loans totaled $11,861 thousand as of September 30, 2021, down from $12,534 thousand as of December 31, 2020, indicating a decrease of about 5.4%[198]. Risk Management - Provision for loan losses decreased to $650 million from $950 million, indicating improved asset quality and risk management[125]. - The allowance for loan losses (ALL) reflects management's estimate of probable credit losses, with significant judgment required in its estimation[206]. - The company granted payment deferrals to over 625 customers on loans totaling over $271.5 million during the COVID-19 pandemic, with 89.7% of these deferrals being principal payments only[202]. - The ratio of the allowance for loan losses to loans outstanding was 0.92% as of September 30, 2021, compared to 0.81% at the end of December 2020[209]. Capital Management - The Bank was well capitalized as of September 30, 2021, with total capital to risk-weighted assets at 12.4% and Tier I capital at 10.8%[257][262]. - The Bank's Common Equity Tier I capital ratio was 11.5%, exceeding the minimum requirement of 6.5%[262]. - The leverage capital ratio, a minimum capital standard, is required to be at least 4% for all banks[253]. - The capital management strategy includes meeting regulatory capital requirements to avoid adverse actions from regulators[250]. Interest Rate Risk - The Company aims to minimize the adverse impact of interest rate changes on net interest income and capital while maximizing yield-cost spread through its asset-liability structure[272]. - The Company actively manages its interest rate sensitivity position to control exposure to risks associated with interest rate movements and achieve sustainable growth in net interest income[275]. - Interest rate risk arises from repricing risk, option risk, yield curve risk, and basis risk, affecting the Company's earnings and value[273]. - The Company employs various tools for interest rate risk management, including sensitivity analysis, market value of portfolio equity analysis, and interest rate simulations[276].