Bank First Announces Net Income for the Fourth Quarter of 2021

MANITOWOC, Wis., Jan. 18, 2022 /PRNewswire/ -- Bank First Corporation (NASDAQ: BFC) ("Bank First" or the "Bank"), the holding company for Bank First, N.A., reported net income of $11.2 million, or $1.46 per share, for the fourth quarter of 2021, compared with net income of $11.5 million, or $1.49 per share, for the prior-year fourth quarter. For the year ended December 31, 2021, Bank First earned $45.4 million, or $5.92 per share, compared to $38.0 million, or $5.07 per share for the year ended December 31, 2020.

Operating Results
Net interest income ("NII") during the fourth quarter of 2021 was $23.2 million, up $0.3 million from the previous quarter but down $1.2 million from the fourth quarter of 2020. NII for the year ended December 31, 2021 was $90.1 million, up from $86.8 million during the prior year.

As mentioned in previous releases, 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, $31.1 million of which remained unpaid and unforgiven as of December 31, 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 $1.1 million at December 31, 2021, compared to $2.2 million and $2.6 million at September 30, 2021 and December 31, 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 fourth quarter of 2021 by $0.6 million, or $0.07 per share, compared to $0.5 million, or $0.07 per share, for the fourth quarter of 2020. For the years ended December 31, 2021 and 2020, the impact of these purchase accounting entries increased net income (after tax) by $1.5 million, or $0.19 per share, and $3.1 million, or $0.41 per share, respectively.

Net interest margin ("NIM") was 3.47% for the fourth quarter of 2021, matching the prior quarter and lower than 4.01% for the fourth quarter of 2020. The aforementioned purchase accounting entries added 0.11%, 0.04% and 0.12% to NIM for each of these periods, respectively. NIM created by the presence of PPP activity during these periods added approximately 0.12%, 0.21% and 0.29%, respectively. NIM was 3.47% for the year ended December 31, 2021, including 0.08% from the impact of purchase accounting entries, compared to 3.84%, including 0.19% from the impact of purchase accounting entries, for the year ended December 31, 2020.

Bank First recorded a provision for loan losses of $0.6 million during the fourth quarter of 2021, compared to $1.7 million during the fourth quarter of 2020. Provision expense was $3.1 million for the year ended December 31, 2021 compared to $7.1 million for the year ended December 31, 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 during the course of 2021, as further discussed later in this release, have remained strong and allowed for a reduction in provision expense during the current year.

Noninterest income was $5.7 million for the fourth quarter of 2021, compared to $6.7 million for the fourth quarter of 2020. Loan servicing income, which includes the impact of changes in the valuation of mortgage servicing rights ("MSR") on the Bank's balance sheet, totaled $1.6 million for the fourth quarter of 2021, comparing favorably to $0.2 million during the prior-year fourth quarter. During the fourth quarter of 2021 the Bank experienced a positive valuation adjustment to its MSR of $0.6 million compared to a negative valuation adjustment of $0.4 million during the fourth quarter of 2020, leading to much of the improvement year-over-year in this noninterest income classification. Gains on the sale of secondary market mortgage loans declined from $2.2 million during the fourth quarter of 2020 to $1.2 million during the fourth quarter of 2021. While these gains remained elevated through the final two quarters of 2021, they have declined from unprecedented profitability in this area between the fourth quarter of 2020 and the second quarter of 2021. Finally, the Bank recognized a $1.7 million gain due to the sale of a branch location during the fourth quarter of 2020. There was no similar event during 2021, leading to a decrease in other noninterest income.

Noninterest expense was $13.6 million in the fourth quarter of 2021, compared to $14.0 million during the fourth quarter of 2020. Occupancy, equipment and office expenses decreased by $0.4 million from elevated levels during the prior-year fourth quarter as the Bank completed several large scale remodel projects during that quarter. Data processing expense decreased $0.2 million from the prior-year fourth quarter, primarily due to expense incurred during the fourth quarter of 2020 from the significant PPP activity during that year. During the fourth quarter of 2021 the Bank incurred a $0.2 million charge-down on its sole foreclosed property owned, leaving a value of $10,000 on that property. This charge-down compared unfavorably to minor gains on sales of foreclosed property during the prior-year fourth quarter, leading to a negative $0.2 million variance year-over-year. Finally, other noninterest expense increased by $0.8 million, or 56.7%, from the prior-year fourth quarter. During the fourth quarter of 2021, Bank First incurred a one-time expense when it purchased a domain name from another institution for $0.8 million as part of a rebranding initiative.

Balance Sheet
Total assets were $2.94 billion at December 31, 2021, a $219.5 million increase from December 31, 2020. Total loans were $2.24 billion at December 31, 2021, up $44.8 million from December 31, 2020. Excluding PPP originations and repayments or forgiveness, loans grew by 9.1% over the trailing twelve months, including annualized growth of 10.5% during the fourth quarter. Total deposits, nearly all of which remain core deposits, were $2.53 billion at December 31, 2021, up $207.5 million from December 31, 2020. Noninterest-bearing demand deposits comprised 32.0% of the Bank's total core deposits at December 31, 2021, compared to 31.2% at December 31, 2020. Time deposits, which typically carry the highest interest rates of all deposit products, comprised 10.1% of the Bank's total core deposits at December 31, 2021, compared to 14.8% at December 31, 2020.

Asset Quality
Nonperforming assets at December 31, 2021 totaled $8.2 million, down from $12.1 million at the end of the previous quarter and $14.0 million at the end of 2020. Nonperforming assets to total assets ended 2021 at 0.28%, down from 0.42% at the end of the previous quarter and 0.52% at the end of 2020.

Capital Position
Stockholders' equity totaled $322.7 million at December 31, 2021, an increase of $27.8 million from the end of 2020. Strong earnings served to increase capital while being offset by dividends totaling $8.7 million during the year ended December 31, 2021. Further reducing capital during 2021 was $7.9 million used to repurchase 112,141 shares of common stock. Tangible book value per share of Bank First's common stock experienced an increase of 13.9% during the trailing twelve months.

Dividend Declaration
Bank First's Board of Directors approved a quarterly cash dividend of $0.22 per common share, payable on April 6, 2022, to shareholders of record as of March 23, 2022.

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 287 full-time equivalent staff and has assets of approximately $2.9 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  /  [email protected]

SOURCE Bank First Corporation