Bank First Announces Net Income for the First Quarter of 2021

MANITOWOC, Wis., April 20, 2021 /PRNewswire/ -- Bank First Corporation (NASDAQ: BFC) ("Bank First" or the "Bank"), the holding company for Bank First, N.A., reported net income of $11.5 million, or $1.49 per share, for the first quarter of 2021, compared with net income of $7.3 million, or $1.03 per share, for the prior-year first quarter.

Operating Results
Net interest income during the first quarter of 2021 was $22.1 million, down $2.4 million from the previous quarter but up $3.5 million from the first quarter of 2020.

Throughout 2020, and continuing into 2021, Bank First has been 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"). This program provides funds to small businesses with very favorable loan terms and allows for forgiveness by the SBA provided the funds are utilized by the companies as stipulated by the program. Under the original rollout of this program during 2020, Bank First originated over $279.6 million in loans to new and existing customers, $106.4 million of which remained unpaid and unforgiven as of March 31, 2021. Under the second phase of this program, which began during the first quarter of 2021, Bank First originated an additional $81.8 million in loans through March 31, 2021, with a robust remaining pipeline of applications in-process that should close during the coming months. In addition to providing much needed support to these small businesses, this program produced significant fee income for the Bank. Origination fees from the initial round of loans during 2020 totaled nearly $9.5 million, with an additional $3.9 million collected or due to be collected for loans originated during the first quarter of 2021. Under accounting rules, the Bank recognizes these fees as an addition to interest income over the contractual life of the related loan, with any remaining fee being fully recognized into interest income 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 over the last year, this accounting treatment will cause significant variations in the Bank's interest income and interest margins quarter-to-quarter based on how many PPP loans are forgiven. Unrecognized PPP origination fees totaled $4.6 million and $2.6 million at March 31, 2021, and December 31, 2020, respectively. PPP origination fees accelerated due to prepayment or forgiveness of PPP loans during the first quarter of 2021 approximated $1.1 million.

Interest income related to purchase accounting entries, resulting from our acquisitions of other institutions over the last several years, increased net income (after tax) during the first quarter of 2021 by $0.4 million, or $0.05 per share, compared to $0.5 million, or $0.07 per share, and $0.8 million, or $0.11 per share, for the fourth and first quarters of 2020, respectively.

Net interest margin was 3.57% for the first quarter of 2021, compared to 4.01% for the previous quarter and 3.81% for the first quarter of 2020. The aforementioned purchase loan accounting entries added 0.09%, 0.12% and 0.20% to net interest margin for each of these periods, respectively.

Bank First recorded a provision for loan losses of $0.9 million during the first quarter of 2021, compared to $1.7 million and $1.0 million during the fourth and first quarters of 2020, respectively. Through the first three months of 2021, net charged-off loan amounts were negligible, compared to a net recovery of previously charged-off loans totaling $0.6 million during the first three months of 2020. Management continues to monitor the stress on the overall economy cause by COVID for any specific impacts on Bank First customers. As discussed later in this release, evidence of significant negative impacts have not been noted to date.

Noninterest income was $6.2 million during the first quarter of 2021, compared to $6.7 million and $3.9 million during the fourth and first quarters of 2020, respectively. Noninterest income for the fourth quarter of 2020 included a gain of $1.7 million related to the sale of a branch location. Excluding that gain, noninterest income increased by $1.2 million, or 23.1%, over the prior quarter and $2.3 million, or 59.4%, over the prior-year first quarter. Service charge income experienced a 60.2% increase over the first quarter of 2020, the result of continued benefits of added scale from integrating new markets from our recent acquisitions. Income from Bank First's ownership in UFS, LLC declined $0.2 million and $0.5 million from the fourth and first quarters of 2020, respectively, the result of expense from an unfavorable sales tax audit as well as the absence of one-time de-conversion fees that existed during 2020. Finally, as was the case over the last several quarters, strong activity in sales of mortgage loans to the secondary market led to a large year-over-year increase in gains on these sales from $0.4 million in the first quarter of 2020 to $2.8 million in the first quarter of 2021.

Noninterest expense was $12.2 million in the first quarter of 2021, compared to $14.0 million and $12.7 million during the fourth and first quarters of 2020, respectively. Personnel expense totaled $7.1 million for the first quarter of 2021, compared to $7.6 million and $6.5 million for the fourth and first quarters of 2020, respectively. The negative variance to the prior year first quarter was due to added scale from the acquisition of Tomah Bancshares, Inc. ("Tomah") during May 2020. The positive variance from the prior quarter was due to year-end incentive compensation adjustments made during the fourth quarter of 2020 based on very strong financial performance during that year. Occupancy, equipment and office expense declined $0.1 million from the fourth and first quarter of the prior year as we moved past expenses incurred during 2020 to equip a large portion of our staff to work remotely in response to COVID. Data processing expense declined from the fourth quarter of 2020 due to a one-time $0.1 million charge related to our branch sale during that quarter but increased from the first quarter of 2020 due to the added scale from the Tomah acquisition as well as accounts and relationships added during 2020 in coordination with the PPP loans. During the first quarter of 2020, as a result of the uncertainty caused by the onset of COVID, the Bank recognized $1.0 million in negative valuation adjustments on two large other real estate owned. During the first quarter of 2021 the Bank recognized gains of $0.1 million on sales of other real estate owned, causing a significant improvement in year-over-year first quarter profitability.

Balance Sheet
Total assets were $2.85 billion at March 31, 2021, a $128.2 million increase from December 31, 2020, and up $645.9 million from March 31, 2020. Total loans were $2.23 billion at March 31, 2021, up $37.4 million from December 31, 2020, and up $463.7 million from March 31, 2020. Excluding loans acquired in the Tomah acquisition and PPP originations and repayments or forgiveness, loans grew by 8.8% over the trailing twelve months. Annualized loan growth during the first quarter of 2021 net of these same items amounted to 4.0%. Total deposits, nearly all of which remain core deposits, were $2.45 billion at March 31, 2021, up $127.1 million from December 31, 2020, and up $600.8 million from March 31, 2020. Noninterest-bearing demand deposits comprised 31.9% of the Bank's total core deposits at March 31, 2020, compared to 31.2% and 25.8% at December 31 and March 31, 2020, respectively.

Asset Quality
Nonperforming assets at March 31, 2021, totaled $14.7 million, up from $14.0 million and $11.1 million at the end of the fourth and first quarters of 2020, respectively. Nonperforming assets to total assets remained level, ending the first quarter of 2021 at 0.52%, equaling the level at the end of the prior quarter and up from 0.51% from the end of the first quarter of 2020. After spiking to $23.0 million at the end of the second quarter of 2020, nonperforming assets have been well maintained due to a combination of government stimulus and very active management and support by our effective group of bankers. After topping out at $271.5 million during 2020, total balances on loans which were granted payment deferrals under the Coronavirus Aid, Relief, and Economic Security Act, as extended, ended the current quarter at $7.6 million.

Capital Position
Stockholders' equity totaled $303.4 million at March 31, 2021, an increase of $8.6 million from the previous quarter and $65.8 million from March 31, 2020. The acquisition of Tomah during May 2020 added $29.4 million to capital. In addition, strong earnings served to increase capital while being offset by dividends totaling $1.6 million during the most recent quarter and $6.3 million during the trailing twelve months. Tangible book value per share of Bank First's common stock experienced an annualized increase of 14.1% during the first quarter of 2021 and an increase during the trailing twelve months of 18.8%.

Dividend Declaration
Bank First's Board of Directors approved a quarterly cash dividend of $0.21 per common share, payable on July 7, 2021, to shareholders of record as of June 23, 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 Bank 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 data processing subsidiary, UFS, LLC, which provides data and technology services to banks in the Midwest. The Company employs approximately 299 full-time equivalent staff and has assets of approximately $2.8 billion. Further information about Bank First Corporation is available by clicking on the Investor Relations tab at www.BankFirstWI.bank.

For further information, contact:
Kevin M LeMahieu, Chief Financial Officer
Phone: (920) 652-3200 / [email protected]

SOURCE Bank First Corporation

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http://www.BankFirstWI.bank