Bank First reports second quarter 2021 net income
MANITOWOC, Wisconsin., July 20, 2021 / PRNewswire / – Bank First Corporation (NASDAQ: BFC) (“Bank First” or “Bank”), the holding company of Bank First, NA, reported net income of $ 11.5 million, or $ 1.50 per share, for the second quarter of 2021, compared to net income of $ 8.3 million, or $ 1.11 per share, for the second quarter of the previous year. For the past six months June 30, 2021, Bank First just won $ 23.1 million, or $ 2.99 per share, compared to $ 15.6 million, or $ 2.14 per share for the same period in 2020.
Net interest income (“NII”) during the second quarter of 2021 was $ 21.8 million, down $ 0.3 million compared to the previous quarter but up $ 1.0 million from the second quarter of 2020. The quarter-over-quarter decline in NII was entirely related to interest income accrued on Paycheck Protection Program (“PPP”) loans. These loans produce a volatile NII accounting as discussed in the next paragraph. NII for the first six months of 2021 was $ 43.9 million, from $ 39.4 million for the first six months of 2020.
Over the past fifteen months, Bank First has been very active in PPP, a Small Business Administration (“SBA”) loan program aimed at supporting small businesses in the turbulent economic environment created by the COVID-19 pandemic. (“COVID”). This program provided funds to small businesses with very favorable loan terms and allowed a rebate by the SBA provided the funds were used by the businesses as stipulated by the program. Bank First was born on $ 381.3 million in loans to new and existing customers under this program, $ 127.3 million of which remained unpaid and unpaid at June 30, 2021. In addition to providing essential support to these small businesses, this program has generated significant income for the Bank. The origination fees collected on the origination of PPP loans totaled more than $ 14.6 million. Under accounting rules, the Bank accounts for these charges as an addition to the NII over the contractual life of the related loan, with any remaining commission being fully recognized in the NII if the loan is repaid or canceled before the original maturity date. As is the case for any institution participating in PPP arrangements, this accounting treatment resulted in significant variations in the NII and the Bank’s interest margins from one quarter to another depending on the number of PPP loans. canceled during the period. The unrecognized PPP origination fees totaled $ 4.3 million at June 30, 2021, compared to $ 2.6 million and $ 7.5 million at the 31st of December and June 30, 2020, respectively.
The NII related to purchase ledger entries, resulting from our acquisitions of other institutions in recent years, increased net income (after tax) in the second quarter of 2021 by $ 0.3 million, or $ 0.04 per share, compared to $ 0.7 million, or $ 0.09 per share, for the second quarter of 2020. For the first six months of 2021 and 2020, the impact of these purchase loan accounting entries increased net income (after tax) by $ 0.7 million, or $ 0.09 per share, and $ 1.4 million, or $ 0.20 per share, respectively.
The net interest margin (“NIM”) stands at 3.37% for the second quarter of 2021, compared to 3.67% for the second quarter of 2020. The aforementioned purchase credit accounting entries added 0.08 % and 0.16% at NIM for each of these periods, respectively. The NIM is 3.47% in the first half of 2021, including 0.08% of the impact of purchasing accounting entries, against 3.74%, of which 0.19% of the impact of purchasing accounting entries, in the first half of the year 2020.
Bank First recorded an allowance for loan losses of $ 1.0 million during the second quarter of 2021, compared to $ 3.2 million during the second quarter of 2020. The provision charge was $ 1.9 million for the first six months of 2021 compared to $ 4.1 million for the same period in 2020. Recoveries of previously written off loans negligibly exceeded loans currently written off in the first six months of 2021, compared to a net recovery of previously written off loans totaling $ 0.6 million in the first six months of 2020. The provision charge recorded in the last quarter is mainly due to strong loan growth, excluding reductions in PPP loan stocks, during the period.
Non-interest income was $ 6.6 million for the second quarter of 2021, compared to $ 7.8 million for the second quarter of 2020. The year-over-year decline in quarterly non-interest income is due to the sale of $ 36.6 million US Treasury bills during the second quarter of 2020, generating a gain on the sale of $ 3.1 million. No similar gain was recorded in the second quarter of 2021. Following the trend of recent quarters, service revenues were strong at $ 1.6 million, an increase of 37.8% compared to the second quarter of the previous year. Loan management revenues totaled $ 1.2 million, compared to $ 0.2 million in the second quarter of the previous year. The second quarter of the current fiscal year included a $ 0.6 million positive adjustment of the value of the Bank’s mortgage management rights, compared to a $ 0.5 million negative adjustment of these rights in the second quarter of the previous fiscal year. Finally, net capital gains on mortgage loan sales on the secondary market amounted to $ 2.2 million in the second quarter of 2021, comparing favorably to $ 1.3 million during the second quarter of 2020.
Non-interest charges were $ 12.2 million in the second quarter of 2021, compared to $ 14.4 million during the second quarter of 2020. The year-over-year decrease in quarterly non-interest expense was primarily related to expenses resulting from Bank First’s acquisition of Tomah Bancshares, Inc., totaling $ 0.8 million, and the recognition of an early repayment penalty linked to the early repayment of $ 30.0 million in loans from the Federal Home Loan Bank of Chicago, totaling $ 1.3 million, both of which were one-time expenses that occurred in the second quarter of 2020. Net gains on sales and appraisals of other real estate held during the second quarter of 2021 totaled $ 0.1 million, comparing favorably to the net losses of $ 0.5 million during the second quarter of 2020.
Total assets were $ 2.82 billion at June 30, 2021, a $ 100.9 million increase December 31, 2020, and up to $ 161.0 million of June 30, 2020. The total loans were $ 2.23 billion at June 30, 2021, up $ 33.8 million of December 31, 2020, and up to $ 110.2 million of June 30, 2020. Excluding PPP set-ups and repayments or discounts, loans increased by 14.4% over the last twelve months. Annualized loan growth in the second quarter of 2021, also excluding PPP activity, amounted to 12.1%. Total deposits, which almost all remain core deposits, were $ 2.45 billion at June 30, 2021, up $ 125.7 million of December 31, 2020, and up to $ 183.5 million of June 30, 2020. Demand deposits not bearing interest represented 32.1% of the total core deposits of the Bank at June 30, 2021, against 31.2% and 31.4% at the 31st of December and June 30, 2020, respectively.
Non-performing assets at June 30, 2021, totaled $ 12.6 million, below $ 14.0 million and $ 25.0 million at the end of the fourth and second quarters of 2020, respectively. Non-performing assets to total assets at the end of the second quarter 2021 at 0.45%, compared to 0.52% and 0.94% at the end of the fourth and second quarters of 2020, respectively.
Position of the capital
Equity rises $ 311.4 million at June 30, 2021, an augmentation of $ 16.6 million from the end of 2020 and $ 35.3 million of June 30, 2020. Strong profits were used to increase capital while being offset by dividends totaling $ 3.2 million during the first semester of 2021 and $ 6.4 million during the last twelve months. A further reduction in capital was $ 2.9 million used to repurchase 40,000 common shares during the second quarter of 2021. The tangible book value per share of Bank First common stock experienced an annualized increase of 16.2% during the second quarter of 2021 and an increase of 17, 8% in the last twelve months.
Declaration of dividend
Bank First’s board of directors approved both a quarterly cash dividend of $ 0.21 per common share and a one-time cash dividend of $ 0.29 per common share. These dividends will be payable on October 6, 2021, to shareholders of record on September 22, 2021. The special dividend was declared in response to record earnings in recent quarters, which resulted in a drop in the dividend payout ratio. The unique nature of this dividend allows flexibility to move forward if capital is required for other Bank First strategic initiatives.
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 bank locations in Wisconsin. The Bank has grown through acquisitions and the expansion of new branches. The Bank offers loan, deposit and cash management products in each of its bank offices. Insurance services are available through our link with Ansay & Associates, LLC. Trust, investment advice 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 co-owns a data processing subsidiary, UFS, LLC, which provides data and technology services to banks in the Midwest. The Company employs approximately 302 full-time equivalent employees and has assets of approximately $ 2.8 billion. Further information on Bank First Corporation is available by clicking on the Investor Relations tab at www.BankFirstWI.bank.
For more information, contact:
Kevin M LeMahieu, Chief Financial Officer
Telephone: (920) 652-3200 / [email protected]
SOURCE Bank First Corporation