Net income of $12.8 and $45.2 million for the three months and year ended December 31, 2022
Earnings per common share of $1.43 and $5.58 for the three months and year ended December 31, 2022
Quarterly cash dividend of $0.25 per share declared, an increase of 13.6% from prior-year fourth quarter quarterly cash dividend

MANITOWOC, Wis., Jan. 17, 2023 /PRNewswire/ -- Bank First Corporation (NASDAQ:BFC) ("Bank First" or the "Bank"), the holding company for Bank First, N.A., reported net income of $12.8 million, or $1.43 per share, for the fourth quarter of 2022, compared with net income of $11.2 million, or $1.46 per share, for the prior-year fourth quarter. For the year ended December 31, 2022, Bank First earned $45.2 million, or $5.58 per share, compared to $45.4 million, or $5.92 per share for the year ended December 31, 2021. Pre-tax expenses related to the Bank's completed acquisition of Denmark Bancshares, Inc. ("Denmark") and planned acquisition of Hometown Bancorp, Ltd. ("Hometown") totaled $1.4 million during the fourth quarter of 2022, reducing after-tax earnings per share by approximately $0.12. For the year ended December 31, 2022, these expenses reduced after-tax earnings per share by $0.69.

Operating Results

Net interest income ("NII") during the fourth quarter of 2022 was $30.6 million, up $2.9 million from the previous quarter and up $7.4 million from the fourth quarter of 2021. NII for the year ended December 31, 2022 was $104.1 million, up from $90.1 million during the prior year. The fourth quarter of 2022 marked the first quarter since 2020 in which NII was not positively impacted by loans originated through the Small Business Administration's Paycheck Protection Program ("PPP"). Interest income from PPP loans totaled $0.1 million during the previous quarter and $1.3 million during the fourth quarter of 2021.

Purchase accounting entries, resulting from our acquisition of Denmark during the third quarter of 2022, as well as acquisitions of other institutions over the last several years, increased NII during the fourth quarter of 2022 by $1.2 million, or $0.10 per share after tax, compared to $0.7 million, or $0.07 per share after tax, for both the previous quarter and fourth quarter of 2021. For the years ended December 31, 2022 and 2021, the impact of these purchase accounting entries increased NII by $2.6 million, or $0.23 per share after tax, and $1.9 million, or $0.19 per share after tax, respectively.

Net interest margin ("NIM") was 3.71% for the fourth quarter of 2022, compared to 3.63% for the previous quarter and 3.47% for the fourth quarter of 2021. NIM was 3.41% and 3.47% for the years ended December 31, 2022 and 2021, respectively. During much of the first half of 2022 the Bank engaged in a strategy to enhance NII, utilizing $300.0 million in short-term borrowings from the Federal Home Loan Bank and investing these funds in short-term, liquid, risk-free, interest-earning assets. This non-core strategy reduced NIM by approximately 0.15% for the year ended December 31, 2022.

Bank First recorded a provision for loan losses of $0.5 million during the fourth quarter of 2022, compared to $0.6 million during the fourth quarter of 2021. Provision expense was $2.2 million for the year ended December 31, 2022 compared to $3.1 million for the year ended December 31, 2021. While near-term economic headwinds remain, both locally and nationally, asset quality metrics for the Bank remain very strong.

Noninterest income was $3.9 million for the fourth quarter of 2022, compared to $5.5 million for the fourth quarter of 2021. Income provided by the Bank's investment in Ansay declined $0.4 million from the prior quarter and $0.1 million from the prior-year fourth quarter. The final quarter of each year has historically seen seasonal lows in income provided by Ansay, and 2022 was no exception. While loan servicing income has seen a steady increase over the second half of 2022 as a result of the serviced loan portfolio acquired from Denmark, valuation adjustments to the Bank's mortgage servicing rights asset on its balance sheet have created significant variances quarter-to-quarter. These valuation adjustments were negligible for the fourth quarter of 2022 compared to a positive adjustment of $0.9 million in the prior quarter and $0.7 million in the prior-year fourth quarter. Gains on the sale of secondary market mortgage loans declined from $1.2 million during the fourth quarter of 2021 to $0.2 million during the fourth quarter of 2022. Full year gains on these sales for 2022 totaled $1.6 million compared to $7.4 million during 2021, a decline of $5.8 million.

Noninterest expense was $17.3 million in the fourth quarter of 2022, compared to $18.9 million during the prior quarter and $13.4 million during the fourth quarter of 2021. Personnel expense declined by $2.7 million from the prior quarter primarily as a result of $3.0 million in one-time severance and employment agreement payments as part of the Denmark transaction which closed in the prior quarter. Occupancy, equipment and office expenses increased by $0.8 million from the prior quarter and $1.3 million from the prior-year fourth quarter. These increases were primarily the result of a one-time charge of $0.6 million during the fourth quarter of 2022 related to the termination of a long-term lease on a former Denmark branch location that was not opened by Bank First. Data processing expense and outside service fees have been elevated throughout 2022 compared to 2021 levels as a result of costs related to acquisitions. Finally, amortization expense related to core deposit intangibles on the Bank's balance sheet increased $0.2 million from the prior quarter and $0.6 million from the prior-year fourth quarter. The acquisition of Denmark created a core deposit intangible of approximately $15.1 million (3.1% of core deposits acquired). Amortization of this core deposit intangible, which began during the third quarter of 2022, added $0.7 million in amortization expense to the fourth quarter of 2022.

Balance Sheet

Total assets were $3.66 billion at December 31, 2022, a $722.9 million increase from December 31, 2022. The preliminary fair value of assets acquired in the Denmark acquisition during the third quarter of 2022 totaled approximately $687.5 million, comprising a significant portion of asset growth during 2022.

Total loans were $2.89 billion at December 31, 2022, up $658.5 million from December 31, 2021, and up $34.7 million from the end of the prior quarter. Excluding the impact of PPP repayments or forgiveness as well as approximately $458.1 million in loans acquired from Denmark, loans grew by 10.9% during the year ended December 31, 2022. Annualized loan growth during the fourth quarter of 2022 amounted to 5.8%. As previously noted in Bank First's release of results for the third quarter of 2022, management made the decision to slow loan growth while concentrating more aggressive rate offerings on customers who maintain their full banking relationship with the Bank. This decision was intended to conserve the Bank's liquidity until competitors better aligned rate offerings with movements in the interest rate environment.

Total deposits, nearly all of which remain core deposits, were $3.06 billion at December 31, 2022, up $531.8 million from December 31, 2021. Noninterest-bearing demand deposits comprised 31.1% of the Bank's total core deposits at December 31, 2022.

Asset Quality

Nonperforming assets at December 31, 2022 totaled $6.7 million, down $1.6 million from December 31, 2021. Nonperforming assets to total assets ended 2022 at 0.18%, down from 0.29% at the end of 2021. Nonperforming assets at December 31, 2022 include four properties valued at $2.5 million that were previously operating branch locations of Bank First or Denmark which are no longer part of the Bank's branch network. These properties have all been listed for sale.

Capital Position

Stockholders' equity totaled $453.1 million at December 31, 2022, an increase of $130.5 million from the end of 2021. Interest rate movements during 2022 impacted the value of investments in the Bank's available-for-sale investment portfolio, creating a loss in other comprehensive income which reduced stockholders' equity by $19.2 million during the year ended December 31, 2022. Dividends totaling $7.6 million and share repurchases totaling $13.8 million, at an average per share price of $72.63, further reduced capital during 2022. Strong earnings served to offset these items, increasing capital by $45.2 million. Finally, the acquisition of Denmark increased total stockholders' equity by $125.3 million. Bank First's tangible book value increased by $62.8 million during 2022 and tangible book value per common share outstanding totaled $35.88 at December 31, 2022 compared to $34.56 at December 31, 2021.

Dividend Declaration

Bank First's Board of Directors approved a quarterly cash dividend of $0.25 per common share, payable on April 5, 2023, to shareholders of record as of March 22, 2023.

Bank First Corporation provides financial services through its subsidiary, Bank First, which was incorporated in 1894. Bank First offers loan, deposit and treasury management products at each of its 26 banking locations in Wisconsin. The bank has grown through both acquisitions and de novo branch expansion. The company employs approximately 327 full-time equivalent staff and has assets of approximately $3.7 billion.

Bank First Corporation
Consolidated Financial Summary (Unaudited)

(In thousands, except per share data)	At or for the Three Months Ended										At or for the Year Ended
		12/31/2022		9/30/2022		6/30/2022		3/31/2022		12/31/2021		12/31/2022		12/31/2021
Results of Operations:
Interest income	$	35,754	$	30,740	$	25,820	$	24,220	$	25,043	$	116,534	$	98,386
Interest expense		5,132		3,047		2,340		1,930		1,812		12,449		8,304
Net interest income		30,622		27,693		23,480		22,290		23,231		104,085		90,082
Provision for loan losses		500		-		500		1,200		600		2,200		3,100
Net interest income after provision for loan losses		30,122		27,693		22,980		21,090		22,631		101,885		86,982
Noninterest income		3,896		5,166		5,551		5,234		5,520		19,847		23,541
Noninterest expense		17,254		18,895		13,219		12,731		13,435		62,099		50,556
Income before income tax expense		16,764		13,964		15,312		13,593		14,716		59,633		59,967
Income tax expense		3,920		3,431		3,658		3,410		3,553		14,419		14,523
Net income	$	12,844	$	10,533	$	11,654	$	10,183	$	11,163	$	45,214	$	45,444

Earnings per common share - basic	$	1.43	$	1.26	$	1.55	$	1.34	$	1.46	$	5.58	$	5.92
Earnings per common share - diluted		1.43		1.26		1.55		1.34		1.46		5.58		5.92

Common Shares:
Basic weighted average		8,962,400		8,205,914		7,457,443		7,540,264		7,570,128		8,044,906		7,621,632
Diluted weighted average		8,993,685		8,228,197		7,472,561		7,559,844		7,595,052		8,069,260		7,643,167
Outstanding		9,021,697		9,028,629		7,470,255		7,570,766		7,616,540		9,021,697		7,616,540

Noninterest income / noninterest expense:
Service charges	$	1,564	$	1,383	$	1,441	$	1,422	$	1,574	$	5,810	$	6,128
Income from Ansay		242		671		819		826		383		2,558		2,587
Income from UFS		935		852		563		705		776		3,055		2,556
Loan servicing income		545		491		448		438		434		1,922		1,622
Valuation adjustment on mortgage servicing rights		19		885		1,511		450		671		2,865		1,290
Net gain on sales of mortgage loans		222		264		403		671		1,167		1,560		7,371
Net gain (loss) on other real estate owned		-		-		(25)		171		(186)		146		20
Other noninterest income		369		620		391		551		701		1,931		1,967
Total noninterest income	$	3,896	$	5,166	$	5,551	$	5,234	$	5,520	$	19,847	$	23,541

Personnel expense	$	8,162	$	10,812	$	7,006	$	7,175	$	7,307	$	33,155	$	28,515
Occupancy, equipment and office		1,962		1,176		1,214		1,115		950		5,467		4,198
Data processing		1,971		1,577		1,431		1,345		1,334		6,324		5,344
Postage, stationery and supplies		229		215		144		183		181		771		713
Advertising		66		61		55		89		75		271		227
Charitable contributions		165		150		235		168		135		718		534
Outside service fees		1,631		2,538		1,386		1,172		776		6,727		3,076
Net loss on sales of securities		-		-		-		-		-		-		3
Amortization of intangibles		980		751		294		293		352		2,318		1,405
Other noninterest expense		2,088		1,615		1,454		1,191		2,325		6,348		6,541
Total noninterest expense	$	17,254	$	18,895	$	13,219	$	12,731	$	13,435	$	62,099	$	50,556

Period-end balances:
Cash and cash equivalents	$	119,350	$	143,441	$	43,986	$	107,359	$	296,860	$	119,350	$	296,860
Investment securities available-for-sale, at fair value		304,637		303,280		292,426		297,063		212,689		304,637		212,689
Investment securities held-to-maturity, at cost		45,097		40,826		33,867		5,841		5,911		45,097		5,911
Loans		2,893,978		2,859,293		2,387,617		2,316,688		2,235,515		2,893,978		2,235,515
Allowance for loan losses		(22,680)		(23,045)		(22,699)		(21,749)		(20,315)		(22,680)		(20,315)
Premises and equipment		56,448		57,019		50,608		50,068		49,461		56,448		49,461
Goodwill and core deposit intangible, net		127,036		129,361		58,805		59,099		59,392		127,036		59,392
Mortgage servicing rights		9,582		9,563		6,977		5,466		5,016		9,582		5,016
Other assets		126,984		121,016		109,440		105,101		93,023		126,984		93,023
Total assets		3,660,432		3,640,754		2,961,027		2,924,936		2,937,552		3,660,432		2,937,552

Deposits		3,060,229		3,138,201		2,601,479		2,557,106		2,528,440		3,060,229		2,528,440
Securities sold under repurchase agreements		97,196		21,963		16,125		13,130		41,122		97,196		41,122
Borrowings		25,429		26,069		19,235		25,247		25,511		25,429		25,511
Other liabilities		24,475		15,106		10,026		11,150		19,826		24,475		19,826
Total liabilities		3,207,329		3,201,339		2,646,865		2,606,633		2,614,899		3,207,329		2,614,899

Stockholders' equity		453,103		439,415		314,162		318,303		322,653		453,103		322,653

Book value per common share		50.22		48.67		42.06		42.04		42.36		50.22		42.36
Tangible book value per common share		36.14		34.34		34.18		34.24		34.56		36.14		34.56

Average balances:
Loans	$	2,860,967	$	2,640,397	$	2,341,954	$	2,271,956	$	2,207,615	$	2,530,737	$	2,217,305
Interest-earning assets		3,316,406		3,062,921		2,975,376		3,001,174		2,695,175		3,089,760		2,634,565
Total assets		3,633,251		3,349,615		3,186,384		3,209,202		2,901,685		3,347,857		2,837,793
Deposits		3,111,328		2,911,561		2,566,520		2,543,471		2,513,918		2,785,127		2,451,203
Interest-bearing liabilities		2,198,549		2,034,158		2,053,369		2,080,172		1,759,437		2,091,729		1,729,313
Goodwill and other intangibles, net		111,440		90,962		58,987		59,285		59,614		76,362		60,178
Stockholders' equity		446,579		401,130		317,484		322,852		318,837		372,430		310,370

Paycheck Protection Program ("PPP") loan information
PPP Loans (period end)	$	-	$	-	$	5,625	$	16,904	$	31,100	$	-	$	31,100
PPP Loan Deferred Origination Fees (period end)		-		-		106		477		1,080		-		1,080
PPP Loans (average during the period)		-		2,663		10,138		23,552		50,602		3,164		122,468
Interest income recognized during the period (includes
recognized origination fees)		-		94		396		662		1,290		1,152		7,831

Financial ratios:
Return on average assets *		1.40 %		1.25 %		1.47 %		1.27 %		1.53 %		1.35 %		1.60 %
Return on average common equity *		11.41 %		10.42 %		14.72 %		12.62 %		13.89 %		12.14 %		14.64 %
Average equity to average assets		12.29 %		11.98 %		9.96 %		10.06 %		10.99 %		11.12 %		10.94 %
Stockholders' equity to assets		12.38 %		12.07 %		10.61 %		10.88 %		10.98 %		12.38 %		10.98 %
Tangible equity to tangible assets		9.23 %		8.83 %		8.80 %		9.04 %		9.15 %		9.23 %		9.15 %
Loan yield *		4.58 %		4.29 %		4.06 %		4.02 %		4.25 %		4.26 %		4.25 %
Earning asset yield *		4.32 %		4.03 %		3.53 %		3.32 %		3.74 %		3.82 %		3.79 %
Cost of funds *		0.93 %		0.59 %		0.46 %		0.38 %		0.41 %		0.60 %		0.48 %
Net interest margin, taxable equivalent *		3.71 %		3.63 %		3.21 %		3.06 %		3.47 %		3.41 %		3.47 %
Net loan charge-offs to average loans *		0.12 %		-0.05 %		-0.08 %		-0.04 %		0.02 %		0.00 %		0.02 %
Nonperforming loans to total loans		0.15 %		0.17 %		0.22 %		0.24 %		0.37 %		0.15 %		0.37 %
Nonperforming assets to total assets		0.18 %		0.18 %		0.18 %		0.19 %		0.28 %		0.18 %		0.28 %
Allowance for loan losses to loans		0.78 %		0.81 %		0.95 %		0.94 %		0.91 %		0.78 %		0.91 %

* Components of the quarterly ratios were annualized

Bank First Corporation
Average assets, liabilities and stockholders' equity, and average rates earned or paid

	Three Months Ended
	December 31, 2022			December 31, 2021
	Average Balance	Interest Income/ Expenses (1)	Rate Earned/ Paid (1)	Average Balance	Interest Income/ Expenses (1)	Rate Earned/ Paid (1)
	(dollars in thousands)
ASSETS
Interest-earning assets
Loans (2)
Taxable	$ 2,764,365	$ 126,842	4.59 %	$ 2,117,319	$ 90,468	4.27 %
Tax-exempt	96,602	4,263	4.41 %	90,296	4,152	4.60 %
Securities
Taxable (available for sale)	237,789	5,380	2.26 %	119,901	3,311	2.76 %
Tax-exempt (available for sale)	81,497	2,183	2.68 %	71,804	2,179	3.03 %
Taxable (held to maturity)	38,457	1,102	2.87 %	-	-	-
Tax-exempt (held to maturity)	5,196	134	2.58 %	5,912	151	2.55 %
Cash and due from banks	92,500	3,328	3.60 %	289,943	454	0.16 %
Total interest-earning assets	3,316,406	143,232	4.32 %	2,695,175	100,715	3.74 %
Non interest-earning assets	339,345			226,891
Allowance for loan losses	(22,500)			(20,381)
Total assets	$ 3,633,251			$ 2,901,685
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits
Checking accounts	$ 279,638	$ 2,224	0.80 %	$ 203,363	$ 253	0.12 %
Savings accounts	833,316	4,892	0.59 %	550,402	1,835	0.33 %
Money market accounts	630,001	5,051	0.80 %	687,353	1,911	0.28 %
Certificates of deposit	377,617	4,806	1.27 %	248,318	2,082	0.84 %
Brokered Deposits	6,719	198	2.95 %	12,079	349	2.89 %
Total interest bearing deposits	2,127,291	17,171	0.81 %	1,701,515	6,430	0.38 %
Other borrowed funds	71,258	3,188	4.47 %	57,922	759	1.31 %
Total interest-bearing liabilities	2,198,549	20,359	0.93 %	1,759,437	7,189	0.41 %
Non-interest bearing liabilities
Demand Deposits	984,037			812,403
Other liabilities	4,086			11,008
Total Liabilities	3,186,672			2,582,848
Shareholders' equity	446,579			318,837
Total liabilities & sharesholders' equity	$ 3,633,251			$ 2,901,685
Net interest income on a fully taxable equivalent basis		122,873			93,526
Less taxable equivalent adjustment		(1,381)			(1,361)
Net interest income		$ 121,492			$ 92,165
Net interest spread (3)			3.39 %			3.33 %
Net interest margin (4)			3.71 %			3.47 %


(1) Annualized on a fully taxable equivalent basis calculated using a federal tax rate of 21%.
(2) Nonaccrual loans are included in average amounts outstanding.
(3) Represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(4) Represents net interest income on a fully tax equivalent basis as a percentage of average interest-earning assets.

Bank First Corporation
Average assets, liabilities and stockholders' equity, and average rates earned or paid

	Year Ended
	December 31, 2022			December 31, 2021
	Average Balance	Interest Income/ Expenses (1)	Rate Earned/ Paid (1)	Average Balance	Interest Income/ Expenses (1)	Rate Earned/ Paid (1)
	(dollars in thousands)
ASSETS
Interest-earning assets
Loans (2)
Taxable	$ 2,434,554	$ 103,612	4.26 %	$ 2,128,327	$ 90,172	4.24 %
Tax-exempt	96,183	4,227	4.39 %	88,978	4,113	4.62 %
Securities
Taxable (available for sale)	227,101	5,230	2.30 %	103,277	2,788	2.70 %
Tax-exempt (available for sale)	81,181	2,140	2.64 %	70,864	2,207	3.11 %
Taxable (held to maturity)	24,416	670	2.74 %	-	-	-
Tax-exempt (held to maturity)	5,396	139	2.58 %	6,098	155	2.54 %
Cash and due from banks	220,929	1,883	0.85 %	237,021	310	0.13 %
Total interest-earning assets	3,089,760	117,901	3.82 %	2,634,565	99,745	3.79 %
Non interest-earning assets	280,249			222,548
Allowance for loan losses	(22,152)			(19,320)
Total assets	$ 3,347,857			$ 2,837,793
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits
Checking accounts	$ 253,443	$ 1,075	0.42 %	$ 209,970	$ 252	0.12 %
Savings accounts	691,599	3,099	0.45 %	497,958	1,773	0.36 %
Money market accounts	666,717	3,025	0.45 %	664,591	2,115	0.32 %
Certificates of deposit	286,054	2,818	0.99 %	278,602	2,967	1.06 %
Brokered Deposits	8,587	251	2.92 %	14,718	420	2.85 %
Total interest bearing deposits	1,906,400	10,268	0.54 %	1,665,839	7,527	0.45 %
Other borrowed funds	185,329	2,181	1.18 %	63,474	777	1.22 %
Total interest-bearing liabilities	2,091,729	12,449	0.60 %	1,729,313	8,304	0.48 %
Non-interest bearing liabilities
Demand Deposits	878,727			785,364
Other liabilities	4,971			12,746
Total Liabilities	2,975,427			2,527,423
Shareholders' equity	372,430			310,370
Total liabilities & sharesholders' equity	$ 3,347,857			$ 2,837,793
Net interest income on a fully taxable equivalent basis		105,452			91,441
Less taxable equivalent adjustment		(1,366)			(1,359)
Net interest income		$ 104,086			$ 90,082
Net interest spread (3)			3.22 %			3.31 %
Net interest margin (4)			3.41 %			3.47 %


(1) Annualized on a fully taxable equivalent basis calculated using a federal tax rate of 21%.
(2) Nonaccrual loans are included in average amounts outstanding.
(3) Represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(4) Represents net interest income on a fully tax equivalent basis as a percentage of average interest-earning assets.

For further information, contact:

Kevin M LeMahieu, Chief Financial Officer

Phone: (920) 652-3200 / klemahieu@bankfirst.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/bank-first-announces-net-income-for-the-fourth-quarter-of-2022-301723760.html

SOURCE Bank First Corporation

Bank First Announces Net Income for the Fourth Quarter of 2022