Bank First Announces Net Income for the Third Quarter of 2021

MANITOWOC, Wis., Oct. 19, 2021 /PRNewswire/ -- Bank First Corporation (NASDAQ: BFC) ("Bank First" or the "Bank"), the holding company for Bank First, N.A., reported net income of $11.2 million, or $1.46 per share, for the third quarter of 2021, compared with net income of $11.0 million, or $1.42 per share, for the prior-year third quarter. For the nine months ended September 30, 2021, Bank First earned $34.3 million, or $4.45 per share, compared to $26.5 million, or $3.57 per share for the same period in 2020.

Operating Results
Net interest income ("NII") during the third quarter of 2021 was $22.9 million, up $1.1 million from the previous quarter and matching the third quarter of 2020. NII for the first nine months of 2021 was $66.9 million, up from $62.4 million for the first nine months of 2020.

Throughout the previous 18 months Bank First was a very active participant in the Paycheck Protection Program ("PPP"), a Small Business Administration ("SBA") loan program aimed at supporting small business through the turbulent economic environment created by the COVID-19 pandemic ("COVID"). Bank First originated over $381.3 million in loans to new and existing customers under this program, $62.6 million of which remained unpaid and unforgiven as of September 30, 2021. Origination fees collected from PPP loan originations totaled over $14.6 million. Under accounting rules, the Bank recognizes these fees as an addition to NII over the contractual life of the related loan, with any remaining fee being fully recognized into NII if the loan is paid off or forgiven prior to the original maturity date. As is the case with any institution participating in PPP originations, this accounting treatment has caused significant variations in the Bank's NII and interest margins quarter-to-quarter based on how many PPP loans are forgiven during the period. Unrecognized PPP origination fees totaled $2.2 million at September 30, 2021, compared to $2.6 million and $5.8 million at December 31 and September 30, 2020, respectively.

NII related to purchase accounting entries, resulting from our acquisitions of other institutions over the last several years, increased net income (after tax) during the third quarter of 2021 by $0.2 million, or $0.03 per share, compared to $1.1 million, or $0.15 per share, for the third quarter of 2020. For the first nine months of 2021 and 2020 the impact of these purchase accounting entries increased net income (after tax) by $0.9 million, or $0.12 per share, and $2.5 million, or $0.34 per share, respectively.

Net interest margin ("NIM") was 3.47% for the third quarter of 2021, compared to 3.84% for the third quarter of 2020. The aforementioned purchase accounting entries added 0.04% and 0.26% to NIM for each of these periods, respectively. NIM was 3.47% for the first nine months of 2021, including 0.07% from the impact of purchase accounting entries, compared to 3.77%, including 0.21% from the impact of purchase accounting entries, for the first nine months of 2020.

Bank First recorded a provision for loan losses of $0.7 million during the third quarter of 2021, compared to $1.4 million during the third quarter of 2020. Provision expense was $2.5 million for the first nine months of 2021 compared to $5.5 million for the same period during 2020. While provision expense was elevated during 2020 in response to uncertainty created by COVID and society's response to it, actual asset quality metrics through the first three quarters of 2021, as further discussed later in this release, have remained strong and allowed for a reduction in provision expense during 2021.

Noninterest income was $5.0 million for the third quarter of 2021, compared to $5.1 million for the third quarter of 2020. Service charge income continues to perform strongly during 2021, showing an increase of over eleven percent in the third quarter of 2021 compared to the third quarter of 2020 as the Bank's added markets from three acquisitions in the last four years continue to integrate fully into the branch network. All other components of noninterest income were very comparable in the year-over-year third quarters. While gain on sales of secondary market mortgage loans was comparable for the year-over-year third quarters, we did see our profitability on these sold loans decrease compared to historic highs during the most recent three trailing quarters. While origination volume remained at an elevated level, the average profit margin on each sale has decreased as the industry has become more competitive with rate pricing.

Noninterest expense was $12.5 million in the third quarter of 2021, compared to $12.2 million during the previous quarter as well as the third quarter of 2020. Data processing expense decreased $0.1 million and $0.2 million from the prior quarter and prior-year third quarter, respectively, primarily from reduced expense caused by significant originations of PPP loans beginning during the second quarter of 2020 and ending during the second quarter of 2021. Other noninterest expense increased by 23.5% from the prior quarter and 27.3% from the prior year third quarter primarily due to several miscellaneous one-time immaterial expense items which summed together to create larger variances.

Balance Sheet
Total assets were $2.85 billion at September 30, 2021, a $128.6 million increase from December 31, 2020, and up $207.4 million from September 30, 2020. Total loans were $2.21 billion at September 30, 2021, up $17.5 million from December 31, 2020, and up $15.7 million from September 30, 2020. Excluding PPP originations and repayments or forgiveness, loans grew by 12.3% over the trailing twelve months. Annualized loan growth during the third quarter of 2021, also excluding PPP activity, amounted to 8.8%. Total deposits, nearly all of which remain core deposits, were $2.47 billion at September 30, 2021, up $151.3 million from December 31, 2020, and up $201.2 million from September 30, 2020. Noninterest-bearing demand deposits comprised 32.1% of the Bank's total core deposits at September 30, 2021, compared to 31.2% and 30.4% at December 31 and September 30, 2020, respectively. Time deposits, which typically carry the highest interest rates of all deposit products, comprised 10.5% of the Bank's total core deposits at September 30, 2021, compared to 14.8% and 16.8% at December 31 and September 30, 2020.

Asset Quality
Nonperforming assets at September 30, 2021 totaled $12.1 million, down from $14.0 million and $20.8 million at the end of the fourth and third quarters of 2020, respectively. Nonperforming assets to total assets ended the third quarter of 2021 at 0.42%, down from 0.52% and 0.79% at the end of the fourth and third quarters of 2020, respectively. A majority of the non-performing assets at September 30, 2021, relate to one commercial real estate loan totaling $7.1 million which was moved to nonaccrual status during June 2020. While payments have remained current on this loan, the move to nonaccrual status was deemed prudent by management due to the loss of a significant tenant in the underlying commercial property.

Capital Position
Stockholders' equity totaled $315.3 million at September 30, 2021, an increase of $20.4 million from the end of 2020 and $29.2 million from September 30, 2020. Strong earnings served to increase capital while being offset by dividends totaling $7.1 million through the first three quarters of 2021 and $8.7 million during the trailing twelve months. Further reducing capital was $6.1 million used to repurchase 87,319 shares of common stock through the first three quarters of 2021. Tangible book value per share of Bank First's common stock experienced an increase during the trailing twelve months of 14.8%.

Dividend Declaration
Bank First's Board of Directors approved a quarterly cash dividend of $0.22 per common share, payable on January 5, 2022, to shareholders of record as of December 22, 2021.

Bank First Corporation provides financial services through its subsidiary, Bank First, which was incorporated in 1894. The bank is an independent community bank with 21 banking locations in Wisconsin. The bank has grown through both acquisitions and de novo branch expansion. The company employs approximately 302 full-time equivalent staff and has assets of approximately $2.8 billion. Bank First offers loan, deposit and treasury management products at each of its banking offices. Insurance services are available through our bond with Ansay & Associates, LLC. Trust, investment advisory and other financial services are offered through the bank's partnership with Legacy Private Trust, an alliance with Morgan Stanley and an affiliation with McKenzie Financial Services, LLC. The bank is a co-owner of a bank technology outfitter, UFS, LLC, which provides digital, core, cybersecurity, managed IT and cloud services. Further information about Bank First Corporation is available by clicking on the Investor Relations tab at www.BankFirstWI.bank.

Forward Looking Statements: This news release may contain certain "forward-looking statements" that represent Bank First Corporation's expectations or beliefs concerning future events. Such forward-looking statements are about matters that are inherently subject to risks and uncertainties. Because of the risks and uncertainties inherent in forward looking statements, readers are cautioned not to place undue reliance on them, whether included in this news release or made elsewhere from time to time by Bank First Corporation or on its behalf. Bank First Corporation disclaims any obligation to update such forward-looking statements. In addition, statements regarding historical stock price performance are not indicative of or guarantees of future price performance.

For further information, contact:
Kevin M LeMahieu, Chief Financial Officer
Phone: (920) 652-3200  /  klemahieu@bankfirstwi.bank

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SOURCE Bank First Corporation