- Net income of $14.1 million
and $24.8 million for the three and
six months ended June 30, 2023,
respectively
- Earnings per common share of $1.37 and $2.46 for
the three and six months ended June 30,
2023, respectively
- Annualized return on average assets of 1.38% and 1.25% for
the three and six months ended June 30,
2023, respectively
- Quarterly cash dividend of $0.30 per share declared, matching the prior
quarter and a 20.0% increase from the prior-year second
quarter
MANITOWOC, Wis., July 18,
2023 /PRNewswire/ -- Bank First Corporation (NASDAQ:
BFC) ("Bank First" or the "Bank"), the holding company for Bank
First, N.A., reported net income of $14.1
million, or $1.37 per share,
for the second quarter of 2023, compared with net income of
$11.7 million, or $1.55 per share, for the prior-year second
quarter. For the six months ended June 30,
2023, Bank First earned $24.8
million, or $2.46 per share,
compared to $21.8 million, or
$2.89 per share for the same period
in 2022. After removing the impact of one-time expenses related to
acquisitions as well as gains and losses on sales of securities and
other real estate owned ("OREO"), the Bank reported adjusted net
income (non-GAAP) of $14.6 million,
or $1.41 per share, for the second
quarter of 2023, compared with $12.1
million, or $1.61 per share,
for the prior-year second quarter. For the first six months of 2023
adjusted net income (non-GAAP) totaled $29.3
million, or $2.91 per share,
compared to $22.6 million, or
$2.99 per share for the same period
in 2022.
Operating Results
Net interest income ("NII") during the second quarter of 2023
was $34.3 million, up $2.0 million from the previous quarter and up
$10.8 million from the second quarter
of 2022. The impact of purchase accounting increased NII by
$2.5 million, or $0.18 per share after tax, during the second
quarter of 2023, compared to $2.2
million, or $0.17 per share
after tax, during the previous quarter and $0.4 million, or $0.04 per share after tax, during the second
quarter of 2022.
Net interest margin ("NIM") was 3.77% for the second quarter of
2023, compared to 3.74% for the previous quarter and 3.21% for the
second quarter of 2022. NII from purchase accounting increased NIM
by 0.27%, 0.26% and 0.05% for each of these periods, respectively.
While the Bank's average rate paid on interest-bearing liabilities
continued to rise during the second quarter of 2023, average rates
earned on interest-earning assets also saw a significant increase
due to continual repricing of variable-rate loans as well as
fixed-rate loans which matured and were renewed during the quarter.
The beneficial impact of the Bank's continuing high percentage of
noninterest-bearing deposits (32.3% of the Bank's total core
deposits at June 30, 2023) also had a
positive impact, adding 65 basis points to NIM during the second
quarter of 2023 compared to 51 basis points and 14 basis points for
the prior quarter and second quarter of 2022, respectively.
Bank First did not record a provision for credit losses during
the second quarter of 2023, compared to recording a provision of
$4.2 million during the previous
quarter and $0.5 million during the
second quarter of 2022. Provision expense was $4.2 million for the first six months of 2023
compared to $1.7 million for the same
period during 2022. The acquisition of the loan portfolio of
Hometown Bancorp, Ltd. ("Hometown") during the first quarter of
2023 resulted in a day 1 provision for credit losses expense of
$3.6 million as required under the
Current Expected Credit Losses ("CECL") methodology, which the Bank
adopted on January 1, 2023. The lack
of a provision for credit losses during the second quarter of 2023
was the result of a negligible contraction in the Bank's loan
portfolio during that quarter as well as continued strong asset
quality metrics discussed later in this release. Recoveries of
previously charged-off loans exceeded currently charged-off loans
by $0.1 million through the first six
months of 2023, compared to recoveries exceeding charge-offs by
$0.7 million through the first six
months of 2022.
Noninterest income was $4.1
million for the second quarter of 2023, compared to
$5.8 million and $5.6 million for the prior quarter and second
quarter of 2022, respectively. Service charge income increased by
$0.2 million, or 10.4%, and
$0.3 million, or 22.6%, from the
prior quarter and prior-year second quarter, respectively, as a
result of the added scale from the acquisitions of Denmark
Bancshares, Inc. ("Denmark") and
Hometown. Income provided by the Bank's investments in Ansay &
Associates and UFS increased by $0.1
million and $0.2 million from
the prior-year second quarter, representing 16.0% and 36.8%
increases, respectively, while each declined $0.1 million from the prior quarter. Loan
servicing income from loans previously sold to the secondary market
with servicing rights, and therefore servicing income, retained by
the Bank increased by $0.1 million,
or 17.8%, and $0.3 million, or 67.2%,
from the prior quarter and prior-year second quarter, respectively.
Sold but serviced loan portfolios acquired from Denmark and Hometown totaled $159.5 million and $343.6
million, respectively, leading to this increase in loan
servicing income. The Bank experienced a $0.5 million negative valuation adjustment to its
mortgage servicing rights asset during the second quarter of 2023
which compared unfavorably to $0.8
million and $1.5 million
positive valuation adjustments during the prior quarter and
prior-year second quarter, respectively. Finally, net losses on
sales of OREO totaled $0.5 million
during the second quarter of 2023 compared to no corresponding loss
in the prior quarter and a negligible loss during the second
quarter of 2022. These current quarter losses related to operating
locations acquired from Hometown and Denmark, as well as one from a previously
acquired institution, which were not utilized as operating
locations by Bank First. At the start of the second quarter of 2023
Bank First held nine such buildings, but finished the quarter with
only four as a result of these sales.
Noninterest expense was $19.5
million in the second quarter of 2023, compared to
$19.7 million during the prior
quarter and $13.2 million during the
second quarter of 2022. Most areas of noninterest expense have
increased over the past four quarters as a result of added
operational scale from the acquisitions of Denmark and Hometown, which increased the
Bank's total assets by $1.13 billion,
or 38.2%, from the end of the second quarter of 2022 to the end of
the second quarter of 2023. In addition to this trend, expenses
directly attributable to these acquisitions totaling $0.2 million, $1.3
million and $0.6 million
during the second and first quarters of 2023 and second quarter of
2022, respectively, have caused volatility in several noninterest
expense areas, most notably personnel, occupancy and outside
service fee expenses. Core deposit intangible assets of
$15.1 million and $16.5 million created by the Denmark and Hometown acquisitions,
respectively, created an increase in amortization of intangible
assets expense over the last several quarters.
Balance Sheet
Total assets were $4.09 billion at
June 30, 2023, a $431.6 million increase from December 31, 2022, and a $1.13 billion increase from June 30, 2022. The preliminary fair value of
assets acquired in the Denmark
acquisition during the third quarter of 2022 and the Hometown
acquisition during the first quarter of 2023 totaled approximately
$687.5 million and $614.4 million, respectively.
Total loans were $3.31 billion at
June 30, 2023, up $420.5 million from December 31, 2022, and up $926.9 million from June
30, 2022.
Total deposits, nearly all of which remain core deposits, were
$3.41 billion at June 30, 2023, up $345.5
million from December 31,
2022, and up $804.3 million
from June 30, 2022. As mentioned
earlier in this release, noninterest-bearing demand deposits
comprised 32.3% of the Bank's total core deposits at June 30, 2023, compared to 31.1% and 31.7% at
December 31 and June 30, 2022, respectively.
Asset Quality
Nonperforming assets at June 30,
2023 remained negligible, totaling $7.2 million compared to $6.7 million and $5.3
million at the end of the fourth and second quarters of
2022, respectively. Nonperforming assets to total assets ended the
second quarter of 2023 at 0.18%, matching the level from the end of
the fourth and second quarters of 2022. Nonperforming assets at
June 30, 2023 included four
properties valued at $2.2 million
that were previously operating branch locations of acquired
institutions which are no longer part of the Bank's branch network.
These properties have all been listed for sale.
Capital Position
Stockholders' equity totaled $570.9
million at June 30, 2023, an
increase of $117.8 million from the
end of 2022 and $256.7 million from
June 30, 2022. The acquisitions of
Denmark and Hometown increased
total stockholders' equity by $124.8
million and $115.1 million,
respectively. Bank First's tangible common equity (non-GAAP)
increased by $39.5 million and
$110.2 million during the first half
of 2023 and trailing twelve months, respectively. The Bank's book
value per common share totaled $54.95
at June 30, 2023 compared to
$50.22 at December 31, 2022 and $42.06 at June 30,
2022. Tangible book value per common share (non-GAAP)
totaled $35.18 at June 30, 2023 compared to $36.14 at December 31,
2022 and $34.18 at
June 30, 2022.
Dividend Declaration
Bank First's Board of Directors approved a quarterly cash
dividend of $0.30 per common share,
payable on October 4, 2023, to
shareholders of record as of September 20,
2023. This dividend represents a 20.0% 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