Bank First Announces Net Income for the Third Quarter of 2018

MANITOWOC, Wis., Oct. 16, 2018 /PRNewswire/ -- Bank First National Corporation (OTC-PINK: BFNC), the holding company for Bank First, reported net income for the third quarter of 2018 of $5.9 million, or $0.89 per share, up 43.5% from the same period in 2017. For the nine months ended September 30, 2018, Bank First earned $19.4 million or $2.90 per share, up 48.7% from the first nine months of 2017. Results for the third quarter and first nine months of 2018 were positively impacted by the acquisition of Waupaca Bancorporation, Inc. (Waupaca) during the fourth quarter of 2017.

Net interest income after provision for loan losses was $14.7 million for the quarter ended September 30, 2018, compared to $10.4 million for the prior year third quarter, representing a 41.3% increase year-over-year. Through nine months ended September 30, 2018, net interest income after provision for loan losses totaled $45.4 million, up 51.5% from $30.0 million through the first nine months of 2017. Net interest income after provision for loan losses declined by $0.13 million from the prior quarter due to a reduction of $0.21 million in accretion of fair value adjustments of the acquired Waupaca loan portfolio into interest income quarter-over-quarter.

Noninterest expense was $9.7 million in the third quarter of 2018, compared to $7.0 million during the third quarter of 2017. For the nine months ended September 30, 2018, noninterest expense was $29.7 million, up 48.9% from $20.0 million in the prior year period. The primary reason for the increase in noninterest expense for the quarter and year-to-date is the aforementioned acquisition of Waupaca which occurred during the fourth quarter of 2017, significantly increasing the scale of the Bank's operations. Bank First's efficiency ratio was 51.6% through the first nine months of 2018, compared to 50.5% through the first nine months of 2017.

"In 2018, we utilized the benefits from the reduction in the Bank's corporate tax rate to invest in our remarkable team of bankers," stated Mike Molepske, Chief Executive Officer. "We have invested in our operations, compliance and enterprise risk management departments to position the Bank to grow organically and through strategic acquisitions. In addition, we continue to add quality business development bankers to our team. Most recently, we welcomed new bankers to our Sheboygan, Oshkosh, Waupaca and Appleton markets and hired a leader for our agricultural banking group."

Bank First experienced total loan growth of $7.5 million during the third quarter of 2018, representing a 2.1% annualized growth rate. Solid organic loan growth during the quarter was partially offset by the Bank's continued targeted reduction of portions of the loan portfolio acquired from Waupaca that do not align with its relationship-based approach to community banking. Deposits showed a decline of $9.0 million during the third quarter of 2018, representing a 2.4% annualized decline. This decline is the result of normal seasonal shifts in the Bank's deposit base that it has seen historically during the third quarter. It is anticipated that core deposits will increase through the end of 2018, once again based on seasonal shifts experienced in prior years.

Bank First's asset quality continued to feel the impact of the acquisition of Waupaca. Nonperforming assets to total assets finished the quarter at 1.79%, an increase from 1.32% at the end of the previous quarter. Nearly all of this increase was the result of one Waupaca agricultural relationship which went over 90 days past due as we await a Chapter 11 bankruptcy plan. The Bank does not anticipate incurring any loss on this relationship. The Bank did incur a significant charge-off of $1.8 million on a separate relationship, resulting in a decline quarter-over-quarter in the allowance coverage ratio. The full amount of this charge-off had previously been reserved for in the allowance for loan losses. Bank First ended the third quarter with a ratio of total classified assets to risk based capital of 34.0%, down from 40.0% one quarter earlier, indicating that it continues to either improve or exit loans that have shown stressed credit quality. "Our team has made great strides in reducing the level of classified assets we acquired with Waupaca. This is being accomplished by going back to Waupaca's roots of relationship-based banking instead of transactional banking," stated Molepske.

The Corporation's Board of Directors approved a quarterly cash dividend of $0.20 per common share, payable on January 7, 2019, to shareholders of record as of December 21, 2018. This represents a 25% increase in the Corporation's quarterly cash dividend compared to the previous quarter.

Contact: Debbie Weyker, (920) 652-3274

SOURCE Bank First National Corporation