Bank First Announces Net Income for the Second Quarter of 2022

• Net income of $11.7 and $21.8 million for the three and six months ended June 30, 2022, respectively
• Earnings per common share of $1.55 and $2.89 for the three and six months ended June 30, 2022, respectively
• Quarterly cash dividend of $0.25 per share declared, a 13.6% increase from the prior quarter and 19.0% increase from the prior year second quarter

MANITOWOC, Wis., July 19, 2022 /PRNewswire/ -- Bank First Corporation (NASDAQ: BFC) ("Bank First" or the "Bank"), the holding company for Bank First, N.A., reported net income of $11.7 million, or $1.55 per share, for the second quarter of 2022, compared with net income of $11.5 million, or $1.50 per share, for the prior-year second quarter. For the six months ended June 30, 2022, Bank First earned $21.8 million, or $2.89 per share, compared to $23.1 million, or $2.99 per share for the same period in 2021.

Operating Results

Net interest income ("NII") during the second quarter of 2022 was $23.5 million, up $1.2 million from the previous quarter and up $1.7 million from the second quarter of 2021. Interest income on loans originated through the Small Business Administration's Paycheck Protection Program ("PPP") totaled $0.4 million during the second quarter of 2022, compared to $0.7 million during the previous quarter and $1.9 million during the second quarter of 2021.

During much of the first two quarters of 2022 the Bank engaged in a strategy to enhance NII, utilizing $300.0 million in short-term borrowings from the Federal Home Loan Bank and investing these funds in short-term, liquid, risk-free, interest-earning assets. This strategy increased NII by $0.2 million and $0.1 million during the second and first quarters of 2022, respectively.

Purchase accounting entries, resulting from our acquisitions of other institutions over the last several years, increased NII during the second quarter of 2022 by $0.4 million, or $0.04 per share after tax, compared to $0.3 million and $0.4 million, or $0.03 and $0.04 per share after tax, for the previous quarter and second quarter of 2021, respectively. For the first six months of 2022 and 2021 the impact of these purchase accounting entries increased NII by $0.7 million, or $0.07 per share after tax, and $0.9 million, or $0.09 per share after tax, respectively.

Net interest margin ("NIM") was 3.21% for the second quarter of 2022, compared to 3.06% for the previous quarter and 3.37% for the second quarter of 2021. Purchase accounting entries added 0.05%, 0.04% and 0.08% to NIM for each of these periods, respectively. The aforementioned short-term NII enhancement strategy decreased NIM by 0.27% during the current quarter and 0.29% during the previous quarter.

Bank First recorded a provision for loan losses of $0.5 million during the second quarter of 2022, compared to $1.2 million during the previous quarter and $1.0 million during the second quarter of 2021. Provision expense was $1.7 million for the first six months of 2022 compared to $1.9 million for the same period during 2021. Recoveries of previously charged-off loans exceeded currently charged-off loans by $0.7 million through the first six months of 2022, compared to recoveries negligibly exceeding charge-offs through the first six months of 2021.

Noninterest income was $5.6 million for the second quarter of 2022, compared to $5.2 million during the previous quarter and $6.6 million for the second quarter of 2021. The primary catalyst of the decrease in noninterest income between the year-over-year second quarters was the industry-wide slowdown in residential mortgage lending which led to a decline in gains on sales of mortgage loans to the secondary market of $1.8 million. Offsetting this decline, the Bank experienced a $1.5 million increase in the value of mortgage servicing rights during the second quarter of 2022, compared to an increase of $0.6 million in this valuation during the second quarter of 2021.

Noninterest expense was $13.2 million in the second quarter of 2022, compared to $12.7 million during the previous quarter and $12.3 million during the second quarter of 2021. The year-over-year increase in second quarter noninterest expense was principally related to expenses resulting from Bank First's pending acquisition of Denmark Bancshares, Inc., totaling $0.6 million in the second quarter of 2022 (negatively impacting earnings per share after tax by $0.06 during that period) and $1.1 million through the first six months of 2022 (negatively impacting earnings per share after tax by $0.12 during that period). The majority of these expenses were classified as outside service fees. Occupancy, equipment and office expenses have increased during the first six months of 2022 as a result of significant inflationary pressure.

Balance Sheet

Total assets were $2.96 billion at June 30, 2022, a $23.5 million increase from December 31, 2021, and up $142.1 million from June 30, 2021. Total loans were $2.39 billion at June 30, 2022, up $152.1 million from December 31, 2021, and up $162.4 million from June 30, 2021. Excluding PPP repayments or forgiveness, loans grew by 13.3% over the trailing twelve months. Annualized loan growth during the second quarter of 2022 and first six months of 2022, also excluding PPP activity, amounted to 14.3% and 16.2%, respectively. Total deposits, nearly all of which remain core deposits, were $2.60 billion at June 30, 2022, up $73.0 million from December 31, 2021, and up $142.1 million from June 30, 2021. Noninterest-bearing demand deposits comprised 31.7% of the Bank's total core deposits at June 30, 2022.

Asset Quality

Nonperforming assets at June 30, 2022, totaled $5.3 million, down from $8.2 million and $12.6 million at the end of the fourth and second quarters of 2021, respectively. Nonperforming assets to total assets ended the second quarter of 2022 at 0.18%, down from 0.28% and 0.45% at the end of the fourth and second quarters of 2021, respectively.

Capital Position

Stockholders' equity totaled $314.2 million at June 30, 2022, a decrease of $8.5 million from the end of 2021 but an increase of $2.7 million from June 30, 2021. Interest rate movements during the first half of 2022 significantly impacted the value of investments in the Bank's available-for-sale investment portfolio, creating an unrealized loss in other comprehensive income which reduced stockholders' equity by $7.4 million during the second quarter and $15.6 million year-to-date. Dividends totaling $3.3 million and share repurchases totaling $12.1 million further reduced capital through the first six months of 2022. Strong earnings served to partially offset these items, increasing capital by $21.8 million.

Dividend Declaration

Bank First's Board of Directors approved a quarterly cash dividend of $0.25 per common share, payable on October 5, 2022, to shareholders of record as of September 21, 2022. This dividend represents a 13.6% increase over the previous quarter's dividend, and a 19.0% 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