Bank First National beats earnings, raises dividend 11.1%
Net interest margin expands to 4.01% while bank reports zero credit loss provisions
Bank First National Corporation reported stronger-than-expected quarterly earnings, delivering a 10.5% earnings surprise and rewarding shareholders with an 11.1% dividend increase as the Wisconsin-based community bank continued to benefit from higher interest rates.
The bank earned $2.00 per share, topping analyst estimates of $1.81, while revenue reached $44.9 million, modestly exceeding the $44.1 million consensus forecast. The results highlight the resilience of well-managed regional banks in an environment where interest margins have expanded following the Federal Reserve's rate hikes over the past two years.
Most notably, Bank First's net interest margin climbed to 4.01%, up from 3.61% in the same period a year earlier. This improvement came without compromising credit quality—the bank reported zero provisions for credit losses, a rare achievement in the current banking environment that underscores the conservative underwriting standards that have characterized community banks throughout the interest rate cycle.
"The expansion in net interest margin while maintaining excellent credit quality demonstrates the strength of our banking model," the bank's management indicated in their quarterly commentary. Book value per share increased to $65.47 from $63.89, reflecting accumulated earnings retained within the institution.
The dividend increase to $0.50 per share marks the 11th consecutive year of dividend growth for the bank, according to company records. With shares trading at $135.82, the stock now offers a dividend yield of 1.4%, though the company's total shareholder return has been driven more significantly by price appreciation—the stock has climbed 52% from its 52-week low of $89.24.
Analysts maintain a cautious optimism on the shares, with a consensus target price of $143.00 representing roughly 5% upside from current levels. The bank trades at 19.08 times earnings and 2.42 times book value, a premium valuation that reflects its consistent profitability and return on equity of 11.2%.
Community banks like Bank First National have attracted investor attention as they demonstrate the ability to navigate the higher rate environment more effectively than larger institutions. While big banks have faced pressure from deposit migration and commercial real estate exposure, regional banks with strong local relationships have maintained stable funding bases and conservative loan portfolios.
The company's return on assets of 1.62% places it among the more efficient community banks, while its operating margin of 54.7% demonstrates disciplined expense management. With $1.52 billion in market capitalization, Bank First National remains a meaningful player in Wisconsin's banking landscape while operating with the flexibility of a smaller institution.
Looking ahead, investors will focus on whether the bank can sustain its elevated net interest margin as the Federal Reserve potentially shifts toward rate cuts in 2025. The zero credit loss provision suggests management sees limited deterioration ahead, though commercial real estate remains a sector-wide concern for banking regulators. The dividend increase signals confidence that current earnings levels are sustainable.