Bank First(US:BFC)2022-03-15 16:00Financial Position - As of December 31, 2021, total consolidated assets were $2.94 billion, total loans were $2.24 billion, total deposits were $2.53 billion, and total stockholders' equity was $322.7 million[11]. - As of December 31, 2021, total loans receivable amounted to $2.24 billion, representing approximately 81.9% of total earning assets[29]. - Nonaccrual loans totaled approximately $7.2 million, or 0.3% of total loans as of December 31, 2021[29]. - The Bank's legal lending limit was $43.8 million, while the internal lending limit was $35.0 million as of December 31, 2021[32]. - As of December 31, 2021, the company had approximately 287 full-time equivalents (FTEs)[50]. Mergers and Acquisitions - The Company completed a merger with Partnership Community Bancshares, Inc. on July 12, 2019, with a total merger consideration of approximately $49.6 million[13]. - The merger with Timberwood Bancshares, Inc. was completed on May 15, 2020, with a total merger consideration of approximately $29.8 million[15]. - The Company entered into a merger agreement with Denmark Bancshares, Inc. on January 18, 2022, with Denmark shareholders having the option to receive either $38.10 in cash or 0.5276 of a share of the Company's common stock[17][18]. Loan Portfolio Composition - Loans secured by real estate made up approximately $1.68 billion, or 75.3% of the loan portfolio[34]. - Commercial real estate loans constituted approximately $1.11 billion, or 49.7% of the loan portfolio[34]. - Residential mortgage loans and home equity loans accounted for approximately $571.8 million, or 25.6% of the loan portfolio[34]. - Commercial and industrial loans represented approximately $366.2 million, or 16.4% of the loan portfolio[35]. - Construction and development loans totaled approximately $132.5 million, or 5.9% of the loan portfolio[38]. - Consumer loans made up approximately $32.1 million, or 1.4% of the loan portfolio[40]. Capital and Regulatory Compliance - The Bank is required to maintain a common equity Tier 1 (CET1) capital ratio of at least 6.5% to be considered well-capitalized[71]. - The Bank's regulatory capital ratios were above the applicable well-capitalized standards as of December 31, 2021[73]. - The required minimum leverage ratio for all banks is 4.0%[68]. - A capital conservation buffer of CET1 of 2.5% is required above each minimum capital ratio[69]. - The Economic Growth Act raised the asset threshold for bank holding companies subject to the Federal Reserve's Small Bank Holding Company Policy Statement to $3 billion[74]. - The federal banking agencies set the minimum capital for the Community Bank Leverage Ratio at 9%[76]. - The Bank does not intend to opt into the Community Bank Leverage Ratio Framework[76]. - The Bank was well-capitalized at December 31, 2021, and brokered deposits are not restricted[72]. - The federal banking agencies may require smaller bank holding companies to maintain certain minimum capital levels based on their risk profile[74]. Regulatory Environment - The Company is subject to comprehensive supervision and regulation by the OCC, with its primary bank subsidiary, Bank First, N.A., being regulated under federal banking laws[82]. - The Bank's deposits are insured by the FDIC up to $250,000 per depositor, per insured bank, for each account ownership category[87]. - The Federal Reserve reduced reserve requirement ratios to zero percent effective March 26, 2020, eliminating reserve requirements for all depository institutions[86]. - The Company must maintain adequate capital above regulatory minimums, and the OCC may prohibit dividend payments if it deems them unsafe or unsound[79]. - The OCC requires prior approval if total dividends declared by the Bank exceed its net profits for the year plus retained net profits from the previous two years[81]. Community and Consumer Protection - The Bank had a "Satisfactory" rating in its most recent Community Reinvestment Act evaluation, which assesses its efforts to meet the credit needs of the communities it serves[97]. - The Company is required to comply with the GLB, which mandates annual disclosure of privacy policies to customers and allows them to opt out of certain information disclosures[98]. - The Company has implemented an Information Security Program to comply with regulatory cybersecurity guidance, including notifying regulators within 36 hours of significant security incidents[98]. - The Bank is subject to various consumer protection laws that limit interest charges, govern credit disclosures, and prohibit discriminatory lending practices[99]. - The Company must monitor and augment its anti-money laundering compliance programs to meet evolving regulatory requirements[91]. - The CFPB's ATR/QM rule requires lenders to consider income, employment status, assets, payment amounts, and credit history before mortgage approval, with a total debt-to-income ratio limit of 43%[101]. - The rule defines "qualified mortgages" and prohibits negative amortization, interest-only payments, balloon payments, or terms exceeding 30 years[101]. - The CARES Act provided forbearance rights and foreclosure protection for borrowers with federally backed mortgage loans during the COVID-19 pandemic[102]. - The Bank is subject to the Equal Credit Opportunity Act and Fair Housing Act, prohibiting discrimination in credit transactions based on race, religion, and other factors[103]. Economic Factors - Inflation impacts a financial institution's operating expenses, particularly salaries, but changes in interest rates have a more significant effect on performance[369]. - Monetary items such as cash, investments, loans, and deposits are affected by interest rate changes rather than general inflation[369]. - Inflation may influence customers' ability to invest, save, or spend, potentially affecting their loan repayment capabilities[369].