Bank First(BFC) - 2024 Q3 - Quarterly Report

Merger and Acquisition - Bank First Corporation completed its merger with Hometown on February 10, 2023, expanding its presence with six new branches in Fond du Lac, Columbia, Dane, and Waushara County[104] - The merger was accounted for under the acquisition method, with assets and liabilities recorded at their fair values at the date of acquisition[105] - The financial position and results of operations of Hometown prior to the merger are not included in the consolidated financial statements[105] - The integration of Hometown's system was completed successfully, enhancing the Bank's operational capabilities[104] Financial Performance - Interest income for Q3 2024 was $54,032, an increase from$ 49,347 in Q2 2024, representing a growth of 3.4%[107] - Net interest income after provision for credit losses was $35,883 for Q3 2024, compared to$ 33,007 in Q2 2024, reflecting a 8.6% increase[107] - Noninterest income decreased to $4,893 in Q3 2024 from$ 5,877 in Q2 2024, a decline of 16.7%[107] - Total noninterest expense increased to $20,100 in Q3 2024 from$ 19,057 in Q2 2024, marking a rise of 5.5%[107] - Net income for Q3 2024 was $16,552, up from$ 16,059 in Q2 2024, indicating a growth of 3.1%[107] - Earnings per common share (diluted) for Q3 2024 was $1.65, compared to$ 1.59 in Q2 2024, an increase of 3.8%[107] Assets and Liabilities - Cash and cash equivalents at the end of Q3 2024 were $204,427, significantly higher than$ 98,950 at the end of Q2 2024, showing a growth of 106.5%[107] - Total assets increased to $4,294,498 in Q3 2024 from$ 4,145,820 in Q2 2024, reflecting a growth of 3.6%[107] - Deposits rose to $3,484,741 in Q3 2024, up from$ 3,399,941 in Q2 2024, representing an increase of 2.5%[107] - Stockholders' equity increased to $628,895 in Q3 2024 from$ 614,579 in Q2 2024, a growth of 2.1%[107] Year-over-Year Comparisons - Net income increased by $1.8 million to$ 16.6 million for the three months ended September 30, 2024, compared to $14.8 million for the same period in 2023[116] - Total interest income increased by$ 7.0 million, or 15.0%, to $54.0 million for the three months ended September 30, 2024, compared to$ 47.0 million for the same period in 2023[119] - Average interest-earning assets increased to $3.83 billion for the three months ended September 30, 2024, up from$ 3.67 billion for the same period in 2023[118] - Net interest income increased by $1.8 million to$ 35.9 million for the three months ended September 30, 2024, compared to $34.1 million for the same period in 2023[118] Credit Losses and Provisions - The allowance for credit losses (ACL) was$ 45.2 million, or 1.30% of total loans, at September 30, 2024, compared to $43.4 million, or 1.29% of total loans at September 30, 2023[124] - The provision for credit losses was$ 0.2 million for the nine months ended September 30, 2024, compared to $4.2 million for the same period in 2023[136] - The balance of the Allowance for Credit Losses (ACL) on loans at the end of the period was$ 45.2 million, up from $43.6 million at the end of December 2023, indicating a 3.7% increase[186] Loan Portfolio - Net loans increased by$ 126.3 million, totaling $3.43 billion at September 30, 2024, compared to$ 3.30 billion at December 31, 2023[150] - Loans increased by $127.9 million, or 3.8%, to$ 3.47 billion as of September 30, 2024, compared to $3.34 billion as of December 31, 2023[157] - The commercial and industrial loan portfolio totaled$ 517.8 million at September 30, 2024, representing 15% of total loans[160] - The commercial real estate loan portfolio totaled $1.73 billion at September 30, 2024, representing 50% of total loans[162] Interest Rate Management - The company actively manages interest rate risk to minimize adverse impacts on net interest income and capital[238] - Interest rate sensitivity analysis is utilized to assess the impact of interest rate changes on net interest income[244] - The company’s asset-liability structure is configured to maximize yield-cost spread while controlling interest rate risk[240] - As of September 30, 2024, a 400 basis point increase in interest rates is projected to result in a 5.2% decrease in net interest income[248] Regulatory and Capital Position - The Company is regulated by the Office of the Comptroller of the Currency and is a member of the Federal Reserve System[101] - The company is well-capitalized, exceeding the required minimum capital ratios, including a CET1 ratio of at least 6.5%[227] - As of September 30, 2024, Bank First Corporation reported total capital to risk-weighted assets at$ 495.493 million, representing a ratio of 13.9%[231] - The Tier I capital to risk-weighted assets was $442.697 million, with a ratio of 12.4% as of September 30, 2024[231] Nonperforming Loans and Assets - Total nonperforming loans reached$ 11.169 million as of September 30, 2024, up from $6.555 million at the end of 2023[179] - Nonaccrual loans increased to$ 9.693 million as of September 30, 2024, compared to $5.662 million at the end of 2023[179] - The ratio of nonaccrual loans to total loans increased to 0.28% from 0.17% in the previous quarter[179] Operational Efficiency - The company aims to minimize reliance on certificates of deposits by increasing relationship deposits in lower-earning savings and demand deposit accounts[191] - Data processing expenses rose by$ 894,000, or 15%, due to project-related costs for upgrading the online customer platform and the acquisition of Hometown[141] - The company continuously monitors liquidity to meet short-term and long-term cash requirements[217]