MANITOWOC, Wis., Jan. 23, 2019 /PRNewswire/ -- Bank First National Corporation BFC ("Bank First"), the holding company for Bank First, N.A., reported net income of $6.1 million, or $0.91 per share, for the fourth quarter of 2018, compared with net income of $3.3 million, or $0.50 per share, for the respective prior-year period. For the year ended December 31, 2018, Bank First earned $25.5 million, or $3.81 per share, compared to $15.3 million, or $2.44 per share for the full year of 2017.
"I am very proud of our team at Bank First. This past year represented a successful integration of our new western region offices along with significant improvements in the asset quality issues that were present when we acquired them in October 2017," stated Mike Molepske, CEO and President of Bank First. "Last year Bank First also achieved a major milestone in becoming a fully public SEC registrant and up-listing our common stock on the NASDAQ exchange. We are excited for the coming year as we continue to make significant investments in our legacy market communities and move towards the completion of our recently announced definitive agreement to add the Partnership Bank team to our organization."
Operating Results
Net interest income during the fourth quarter of 2018 was $15.5 million, roughly even with the prior 2018 quarter, and up $0.4 million from the fourth quarter of 2017. Net interest income for the full year 2018 was $63.1 million, up from $45.7 million for the full year 2017.
Interest income related to purchase loan accounting entries, resulting from our purchase of Waupaca Bancorporation, Inc. ("Waupaca") during the fourth quarter of 2017, increased net income (after tax) during the fourth quarter of 2018 by $0.8 million, or $0.12 per share, compared to $1.0 million, or $0.15 per share, for the fourth quarter of 2017. For the full year 2018, these entries increased net income by $4.2 million, or $0.63 per share, compared to $1.0 million, or $0.15 per share, for the full prior year.
Net interest margin was 3.85% for the fourth quarter of 2018, compared to 3.81% for the previous quarter and 3.89% for the fourth quarter of 2017. The aforementioned purchase loan accounting entries added 0.26%, 0.29% and 0.35% to net interest margin for each of these periods, respectively.
Bank First recorded a provision for loan losses of $0.8 million during the fourth quarter of 2018, compared to $0.4 million during the prior-year fourth quarter. Provision expense was $2.9 million for the full year 2018, compared to $1.1 million for the full year 2017. The elevated provision expense was primarily a result of needing to provide an allowance for loan losses for the loans acquired in the Waupaca transaction as they renewed and rolled off of purchase loan accounting treatment.
Noninterest income was $2.6 million during the fourth quarter of 2018, compared to $2.5 million during the prior 2018 quarter and $1.9 million during the fourth quarter of 2017. The increase in year-over-year quarterly noninterest income was partially due to an improvement of $0.4 million in loan servicing income which resulted from a positive revaluation of our mortgage servicing rights asset during the fourth quarter of 2018. Also, income from our investment in Ansay & Associates, LLC (Ansay) totaling $0.2 million during the fourth quarter of 2018 compared favorably to a loss of $0.1 million during the fourth quarter of 2017. Income from Ansay on a full-year basis during 2018 saw a 27% increase from 2017.
Noninterest expense was $9.9 million in the fourth quarter of 2018, compared to $9.7 million during the previous 2018 quarter and $10.4 million during the fourth quarter of 2017. The aforementioned acquisition of Waupaca during the fourth quarter of 2017 led to significantly elevated noninterest expense for that quarter, and also significantly increased the scale of the Bank's operations. This increased scale led the full year 2018 to exhibit higher expenses in the areas of personnel, occupancy and data processing.
Net income during the fourth quarter and full year 2018 benefited from a reduction in the corporate federal income tax rate, which was lowered from 35 percent to 21 percent on January 1, 2018, as a result of the enactment of the Tax Cuts and Jobs Act. Bank First's effective tax rate was 18.3% and 20.6% during the fourth quarter and full year of 2018, compared to 47.0% and 36.6% for the respective prior-year periods.
Balance Sheet
Total assets were $1.79 billion at December 31, 2018, up $39.8 million from December 31, 2017. Over that same time period, total loans increased $30.9 million, equating to an annualized growth rate of 2.2%. Bank First's legacy markets saw loan growth of 7.5% during 2018, while loan balances in markets acquired in the Waupaca transaction saw year-over-year contraction of $51.8 million, or approximately 17.2%. Annualized loan growth in legacy markets was slightly muted for 2018 by several large payoffs and pay-downs on commercial credits near year end.
"We are happy when our customers are successful in developing and eventually selling their businesses," continued Molepske. "Unfortunately, these situations can cause temporary short-term volatility in our growth trends. We maintain a solid pipeline of commercial credits moving into 2019 and are confident we will continue to develop customer relationships at our historical peer leading metrics."
Total deposits, nearly all of which remain core deposits, ended 2018 at $1.56 billion, up $50.5 million from December 31, 2017. Deposit growth outpaced loan growth by nearly $20.0 million during 2018, leaving the Bank poised to capitalize on the solid loan production pipeline that existed at the end of 2018.
Asset Quality
Nonperforming assets at December 31, 2018, totaled $23.3 million, down from $31.1 million at the end of the third quarter of 2018. Nonperforming assets to total assets ended 2018 at 1.30%, down from 1.79% at the end of the previous quarter. Excluding relationships and foreclosed properties acquired in the Waupaca acquisition, the Bank's nonperforming assets to total assets equaled 0.47% at December 31, 2018, of which two-thirds related to one commercial credit that is anticipated to be resolved favorably during the first quarter of 2019. Loans past due by greater than 30 days and still considered performing totaled only $0.4 million at the end of 2018.
Capital Position
Stockholder's equity totaled $174.3 million at December 31, 2018, an increase of $5.2 million from the previous quarter and $12.6 million from December 31, 2017. Strong earnings served to increase capital while being offset by dividends totaling $4.5 million and repurchases of BFC stock into treasury totaling $10.4 million during the year. In addition to these items, Ansay recorded an adjustment at the end of 2018 to comply with new revenue recognition accounting standards which resulted in a direct increase to equity of $1.6 million. At December 31, 2018, the Bank's capital position remains above "well-capitalized" with a total risk-based capital ratio of 11.2 percent.
Dividend Declaration
The Corporation's Board of Directors approved a quarterly cash dividend of $0.20 per common share, payable on April 8, 2019, to shareholders of record as of March 25, 2019.
Bank First National Corporation provides financial services through its subsidiary, Bank First, which was incorporated in 1894. The Bank is an independent community bank with 18 banking locations in Manitowoc, Brown, Sheboygan, Outagamie, Winnebago, Waupaca and Barron counties. 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-member of a data processing subsidiary, UFS, LLC, which provides data and technology services for over 50 Midwest banks. The Company employs approximately 253 full-time equivalent staff and has assets of $1.79 billion as of December 31, 2018. Further information about Bank First National 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 National 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 National Corporation or on its behalf. Bank First National 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 / klemahieu@bankfirstwi.bank
Bank First National Corporation | ||||||||||||||||
Consolidated Financial Summary (Unaudited) | ||||||||||||||||
At or for the Three Months Ended | At or for the Year Ended | |||||||||||||||
(In thousands, except per share data) | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | 12/31/2018 | 12/31/2017 | |||||||||
Results of Operations: | ||||||||||||||||
Interest income | $ | 19,753 | $ | 19,510 | $ | 19,372 | $ | 19,309 | $ | 17,430 | $ | 77,944 | $ | 53,472 | ||
Interest expense | 4,240 | 3,974 | 3,604 | 3,027 | 2,298 | 14,845 | 7,732 | |||||||||
Net interest income | 15,513 | 15,536 | 15,768 | 16,282 | 15,132 | 63,099 | 45,740 | |||||||||
Provision for loan losses | 750 | 800 | 900 | 485 | 420 | 2,935 | 1,055 | |||||||||
Net interest income after provision for loan losses | 14,763 | 14,736 | 14,868 | 15,797 | 14,712 | 60,164 | 44,685 | |||||||||
Noninterest income | 2,553 | 2,508 | 3,027 | 3,443 | 1,888 | 11,531 | 9,848 | |||||||||
Noninterest expense | 9,893 | 9,708 | 10,064 | 9,977 | 10,418 | 39,642 | 30,394 | |||||||||
Income before income tax expense | 7,423 | 7,536 | 7,831 | 9,263 | 6,182 | 32,053 | 24,139 | |||||||||
Income tax expense | 1,362 | 1,604 | 1,431 | 2,200 | 2,904 | 6,597 | 8,826 | |||||||||
Net income | $ | 6,061 | $ | 5,932 | $ | 6,400 | $ | 7,063 | $ | 3,278 | $ | 25,456 | $ | 15,313 | ||
Earnings per common share (basic and diluted): | $ | 0.91 | $ | 0.89 | $ | 0.96 | $ | 1.05 | $ | 0.50 | $ | 3.81 | $ | 2.44 | ||
Common Shares: | ||||||||||||||||
Basic and diluted weighted average | 6,647,586 | 6,661,337 | 6,672,344 | 6,714,347 | 6,612,114 | 6,673,758 | 6,285,901 | |||||||||
Outstanding | 6,610,358 | 6,659,021 | 6,662,292 | 6,692,407 | 6,805,684 | 6,610,358 | 6,805,684 | |||||||||
Noninterest income / noninterest expense: | ||||||||||||||||
Service charges | $ | 890 | $ | 971 | $ | 786 | $ | 846 | $ | 790 | $ | 3,493 | $ | 2,950 | ||
Income from Ansay | 180 | 176 | 562 | 1,196 | (125) | 2,114 | 1,663 | |||||||||
Income from UFS | 708 | 660 | 586 | 609 | 679 | 2,563 | 2,390 | |||||||||
Loan servicing income | 372 | 260 | 604 | 242 | 117 | 1,478 | 1,158 | |||||||||
Net gain on sales of mortgage loans | 188 | 144 | 128 | 157 | 182 | 617 | 895 | |||||||||
Noninterest income from strategic alliances | 22 | 24 | 21 | 23 | 24 | 90 | 94 | |||||||||
Other noninterest income | 193 | 273 | 340 | 370 | 221 | 1,176 | 698 | |||||||||
Total noninterest income | $ | 2,553 | $ | 2,508 | $ | 3,027 | $ | 3,443 | $ | 1,888 | $ | 11,531 | $ | 9,848 | ||
Personnel expense | $ | 5,532 | $ | 5,205 | $ | 5,446 | $ | 5,317 | $ | 5,681 | $ | 21,500 | $ | 16,595 | ||
Occupancy, equipment and office | 799 | 817 | 532 | 1,350 | 920 | 3,498 | 3,097 | |||||||||
Data processing | 899 | 856 | 925 | 939 | 848 | 3,619 | 2,939 | |||||||||
Postage, stationery and supplies | 156 | 138 | 159 | 167 | 178 | 620 | 452 | |||||||||
Net (gain) loss on sales of other real estate owned | (79) | 233 | (38) | 136 | (10) | 252 | (49) | |||||||||
Net (gain) loss on sales of securities | - | (19) | 47 | 3 | 23 | 31 | 32 | |||||||||
Advertising | 78 | 36 | 54 | 52 | 59 | 220 | 183 | |||||||||
Charitable contributions | 121 | 169 | 322 | 373 | 104 | 985 | 495 | |||||||||
Outside service fees | 899 | 817 | 896 | 520 | 1,685 | 3,132 | 3,317 | |||||||||
Amortization of intangibles | 189 | 189 | 189 | 189 | 129 | 756 | 132 | |||||||||
Other noninterest expense | 1,299 | 1,267 | 1,532 | 931 | 801 | 5,029 | 3,201 | |||||||||
Total noninterest expense | $ | 9,893 | $ | 9,708 | $ | 10,064 | $ | 9,977 | $ | 10,418 | $ | 39,642 | $ | 30,394 | ||
Period-end balances: | ||||||||||||||||
Loans | $ | 1,428,494 | $ | 1,441,477 | $ | 1,434,504 | $ | 1,405,245 | $ | 1,397,547 | $ | 1,428,494 | $ | 1,397,547 | ||
Allowance for loan losses | 12,248 | 11,560 | 13,047 | 12,113 | 11,612 | 12,248 | 11,612 | |||||||||
Investment securities available-for-sale, at fair value | 118,906 | 119,623 | 121,550 | 124,238 | 119,043 | 118,906 | 119,043 | |||||||||
Investment securities held-to-maturity, at cost | 40,768 | 40,882 | 41,203 | 39,082 | 39,991 | 40,768 | 39,991 | |||||||||
Goodwill and other intangibles, net | 20,321 | 20,425 | 20,614 | 20,413 | 20,663 | 20,321 | 20,663 | |||||||||
Total assets | 1,793,165 | 1,735,754 | 1,741,874 | 1,703,623 | 1,753,404 | 1,793,165 | 1,753,404 | |||||||||
Deposits | 1,557,167 | 1,486,470 | 1,495,424 | 1,468,713 | 1,506,642 | 1,557,167 | 1,506,642 | |||||||||
Stockholders' equity | 174,323 | 169,133 | 165,200 | 161,795 | 161,728 | 174,323 | 161,728 | |||||||||
Book value per common share | 26.37 | 25.40 | 24.80 | 24.18 | 23.76 | 26.37 | 23.76 | |||||||||
Tangible book value per common share | 23.76 | 22.78 | 22.15 | 21.52 | 21.11 | 23.76 | 21.11 | |||||||||
Average balances: | ||||||||||||||||
Loans | $ | 1,435,745 | $ | 1,437,832 | $ | 1,424,604 | $ | 1,404,766 | $ | 1,333,598 | $ | 1,425,847 | $ | 1,130,024 | ||
Interest-earning assets | 1,637,080 | 1,654,966 | 1,676,017 | 1,671,358 | 1,600,473 | 1,659,768 | 1,379,127 | |||||||||
Total assets | 1,755,835 | 1,772,768 | 1,794,227 | 1,786,306 | 1,701,974 | 1,777,188 | 1,468,436 | |||||||||
Deposits | 1,510,978 | 1,487,865 | 1,474,952 | 1,470,579 | 1,385,150 | 1,486,411 | 1,190,848 | |||||||||
Interest-bearing liabilities | 1,144,202 | 1,185,391 | 1,215,923 | 1,211,571 | 1,109,472 | 1,189,077 | 976,423 | |||||||||
Goodwill and other intangibles, net | 20,377 | 20,610 | 20,474 | 20,503 | 18,587 | 20,472 | 11,102 | |||||||||
Stockholders' equity | 170,992 | 167,651 | 162,860 | 161,331 | 148,950 | 165,740 | 136,002 | |||||||||
Financial ratios: | ||||||||||||||||
Return on average assets | 1.37% | 1.33% | 1.42% | 1.57% | 0.76% | 1.43% | 1.04% | |||||||||
Return on average common equity | 14.06% | 14.04% | 15.59% | 17.37% | 8.73% | 15.36% | 11.26% | |||||||||
Average equity to average assets | 9.74% | 9.46% | 9.08% | 9.03% | 8.75% | 9.33% | 9.26% | |||||||||
Stockholders' equity to assets | 9.72% | 9.74% | 9.48% | 9.50% | 9.22% | 9.72% | 9.22% | |||||||||
Tangible equity to tangible assets | 8.85% | 8.83% | 8.56% | 8.54% | 8.28% | 8.85% | 8.28% | |||||||||
Loan yield | 5.09% | 4.98% | 5.04% | 5.12% | 4.80% | 5.06% | 4.32% | |||||||||
Earning asset yield | 4.88% | 4.76% | 4.72% | 4.77% | 4.46% | 4.78% | 4.02% | |||||||||
Cost of funds | 1.47% | 1.33% | 1.19% | 1.01% | 0.82% | 1.25% | 0.79% | |||||||||
Net interest margin, taxable equivalent | 3.85% | 3.81% | 3.86% | 4.04% | 3.89% | 3.89% | 3.45% | |||||||||
Net loan charge-offs to average loans | 0.00% | 0.16% | 0.00% | 0.00% | 0.00% | 0.16% | 0.01% | |||||||||
Nonperforming loans to total loans | 1.44% | 1.99% | 1.43% | 1.45% | 1.47% | 1.44% | 1.47% | |||||||||
Nonperforming assets to total assets | 1.30% | 1.79% | 1.32% | 1.44% | 1.42% | 1.30% | 1.42% | |||||||||
Allowance for loan losses to loans | 0.86% | 0.80% | 0.91% | 0.86% | 0.83% | 0.86% | 0.83% | |||||||||
SOURCE Bank First National Corporation
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