Bank First Corporation (NASDAQ:BFC) is a Wisconsin-based financial institution that has been serving its local communities for over a century. Founded in 1894, the company has evolved from a small community bank to a regional powerhouse, catering to the diverse financial needs of individuals, businesses, and organizations across the Midwest.
Comprehensive Business Overview
Bank First Corporation, headquartered in Manitowoc, Wisconsin, operates as a bank holding company for Bank First, N.A., a nationally-chartered bank. The company’s journey began in 1894, and over the decades, it has expanded its presence to include 26 banking locations across 14 counties in Wisconsin. This growth has been achieved through a combination of strategic acquisitions and organic expansion, solidifying Bank First’s position as a leading financial services provider in the region.
In 2021, Bank First completed a significant acquisition of Hometown Bancorp, Ltd., which marked a major milestone in the company’s growth strategy. This acquisition added 10 additional branch locations to Bank First’s network and brought over $600 million in assets under its management. The integration process of Hometown Bank into Bank First’s operations was successfully completed in early 2023, demonstrating the company’s ability to execute complex mergers while maintaining operational efficiency.
Throughout its history, Bank First has faced and overcome various challenges typical to community banks. These include navigating fluctuations in interest rates, managing operating costs effectively, and maintaining high asset quality standards. The company’s resilience was particularly evident during the COVID-19 pandemic in 2020, when Bank First continued to operate and serve its markets despite the unprecedented economic conditions. This period showcased the bank’s adaptability and commitment to supporting its customers and communities during challenging times.
Financials
Bank First has consistently maintained a strong financial position. For the fiscal year 2023, the bank reported impressive financial metrics, including total revenue of $137.47 million, net income of $74.51 million, operating cash flow of $52.95 million, and free cash flow of $39.46 million. These figures underscore the bank’s financial stability and its capacity to create value for shareholders while serving its communities effectively.
In the most recent quarter (Q3 2024), Bank First demonstrated continued growth with revenue of $39.71 million, representing a 13.7% increase year-over-year. Net income for the quarter stood at $16.55 million, an 11.8% increase compared to the same period in the previous year. However, the bank experienced a decrease in operating cash flow and free cash flow, which were -$16.10 million and -$14.11 million respectively, primarily due to increased loan originations and paydowns during the quarter.
As of December 31, 2023, the bank reported total assets of $4.22 billion, total deposits of $3.43 billion, and total stockholders’ equity of $619.8 million. These figures have shown growth, with total assets reaching $4.29 billion as of September 30, 2024, showcasing the bank’s steady expansion and sound financial management.
Financial Resilience and Stability
Bank First’s financial performance has been consistently strong, showcasing its ability to navigate various economic landscapes. The bank’s loan portfolio has experienced robust expansion, growing to $3.47 billion as of September 30, 2024, a 3.8% increase from $3.34 billion at the end of 2023. This growth has been driven by a balanced mix of commercial and consumer lending, reflecting the bank’s diversified approach to risk management.
The bank’s loan portfolio is well-diversified across various segments. As of September 30, 2024, Commercial Real Estate (CRE) loans represented the largest portion at 50% of the total loan portfolio, amounting to $1.73 billion. Residential 1-4 Family loans accounted for 26% of the portfolio at $904.3 million, followed by Commercial and Industrial (CI) loans at 15% with $517.8 million. Construction and Development (CD) loans made up 7% of the portfolio at $246.4 million, while Consumer loans and Other loans represented smaller portions at 2% ($55.6 million) and less than 1% ($15.2 million) respectively.
Liquidity
One of the standout achievements of Bank First is its strong capital position. The bank’s total capital ratio, a key measure of financial stability, stood at 13.9% as of September 30, 2024, well above the regulatory minimum of 8%. This solid capital base provides the bank with the necessary flexibility to support its lending activities, invest in technology and infrastructure, and capitalize on strategic opportunities as they arise.
Bank First maintains a healthy liquidity position with $204.43 million in cash and cash equivalents as of September 30, 2024. The bank’s debt-to-equity ratio is low at 0.23, indicating a conservative approach to leverage. Additionally, Bank First had $672.80 million in available borrowing capacity at the Federal Home Loan Bank (FHLB) as of September 30, 2024, in addition to $135.35 million in outstanding FHLB advances. This robust liquidity profile enables the bank to meet its financial obligations and pursue growth opportunities.
Commitment to Shareholder Value
Bank First’s commitment to delivering shareholder value is evident in its consistent dividend payouts and share repurchase program. The company recently announced a quarterly dividend of $0.40 per share, a 33% increase from the previous year, reflecting the board’s confidence in the bank’s long-term growth prospects. Additionally, Bank First has a robust share repurchase program in place, having repurchased $31.7 million worth of its common stock during the first nine months of 2024.
Successful Acquisition and Integration
In February 2023, Bank First completed the acquisition of Hometown Bancorp, Ltd., a move that significantly expanded the company’s footprint and customer base. The integration of Hometown Bank’s ten branches in Wisconsin has been seamless, allowing Bank First to leverage the combined resources and expertise to better serve its communities. This strategic acquisition not only strengthened Bank First’s market position but also showcased the company’s ability to execute on its growth strategy while maintaining its financial discipline.
Embracing Technological Advancements
Bank First has consistently demonstrated its commitment to technological innovation, investing in cutting-edge solutions to enhance the customer experience and improve operational efficiency. In 2024, the bank successfully implemented UFS’s Empowered Core Banking Platform, a state-of-the-art core banking system that provides advanced features and streamlined processes. This investment has enabled Bank First to stay ahead of the curve, offering its customers a more intuitive and user-friendly digital banking experience.
Navigating Challenges with Resilience
Like any financial institution, Bank First has faced its share of challenges over the years. In 2023, the company successfully navigated the economic disruptions caused by the COVID-19 pandemic, demonstrating its ability to adapt and maintain its financial stability even in the face of adversity. Through prudent risk management, a diversified loan portfolio, and a strong capital position, Bank First was able to weather the storm and continue supporting its customers and communities.
Commitment to Community Engagement
Beyond its financial performance, Bank First is deeply committed to the communities it serves. The company actively engages in local philanthropic initiatives, supporting nonprofit organizations, educational institutions, and community development projects. This dedication to social responsibility is a cornerstone of Bank First’s corporate culture, reinforcing its position as a trusted partner and reliable financial institution in the regions it operates.
Looking Ahead
As Bank First Corporation (NASDAQ:BFC) continues to evolve, the company remains focused on delivering sustainable growth, enhancing shareholder value, and providing exceptional customer service. With its strong financial foundation, innovative mindset, and unwavering commitment to its communities, Bank First is well-positioned to capitalize on future opportunities and navigate the ever-changing financial landscape with resilience and success.
The bank’s performance in key financial metrics, such as the net interest margin of 3.76% for the third quarter of 2024 (up from 3.71% in the same period of the prior year), and its allowance for credit losses on loans (ACL-Loans) of $45.21 million (representing 1.30% of total loans) as of September 30, 2024, indicate sound credit quality and profitability. These factors, combined with Bank First’s diverse loan portfolio and focus on commercial and real estate lending, have contributed significantly to the bank’s financial performance and growth.
Operating primarily in Wisconsin, Bank First’s geographic concentration allows for deep market penetration and a strong understanding of local economic conditions. This focused approach has enabled the bank to maintain close relationships with its customers and tailor its services to meet specific regional needs.
As Bank First moves forward, it will continue to leverage its strong market position, robust financial performance, and commitment to technological innovation to drive growth and create value for its shareholders, customers, and communities. The bank’s ability to adapt to changing market conditions, coupled with its prudent risk management practices, positions it well for continued success in the competitive banking landscape.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.