Updated 3/6/25
Bank First Corporation (BFC) is a community bank headquartered in Wisconsin, known for its personalized banking services and deep local ties. The company has built a reputation for strong financial performance, delivering steady earnings and rewarding shareholders with consistent dividends.
Over the years, BFC has seen steady growth, now boasting a market cap of over $1 billion. While recent earnings have shown some headwinds, its history of financial stability and prudent management make it an appealing choice for long-term investors looking for reliable income.
🔑 Key Dividend Metrics
📈 Forward Dividend Yield: 1.77%
💰 Annual Dividend Payout: $1.80 per share
💵 Trailing Dividend Yield: 1.52%
🔄 5-Year Average Dividend Yield: 1.28%
📊 Payout Ratio: 23.85%
📆 Next Ex-Dividend Date: March 26, 2025
🎯 Next Dividend Payment Date: April 9, 2025
Dividend Overview
BFC has consistently paid dividends, making it a solid option for investors who prioritize income. While the current dividend yield sits at 1.77%, which is relatively moderate compared to some high-yield bank stocks, the key takeaway is its reliability. The company has maintained a low payout ratio, currently under 25%, leaving plenty of room to sustain and grow dividends in the future.
The company’s dividend stability is further reinforced by its low stock volatility, with a five-year beta of just 0.32. That means investors holding BFC can expect less turbulence compared to the broader market, which is an attractive feature for those who rely on dividends as part of their income strategy.
Dividend Growth and Safety
BFC has a strong track record of maintaining and gradually increasing its dividend. Its five-year average dividend yield of 1.28% reflects a conservative but steady approach to growth.
With an earnings per share (EPS) of $6.50 and a payout ratio of just 23.85%, the dividend is well covered. Even if earnings were to face pressure in the coming years, there is ample cushion to maintain payments without concern.
Another reassuring factor is the company’s cash flow. With operating cash flow of $65.85 million, BFC has more than enough liquidity to sustain its dividends and continue rewarding shareholders.
The one area worth watching is the recent decline in earnings, down nearly 50% year over year. While this is not an immediate threat to the dividend, extended declines could impact future dividend increases.
Chart Analysis
Price Action and Moving Averages
The stock has been trading in an upward trend, with a significant move higher in late October and November. That breakout led to a sharp rally, pushing the price well above both the 50-day moving average (orange line) and the 200-day moving average (blue line). Since then, the price has remained elevated, though some consolidation has taken place.
The 50-day moving average has been trending upward and is now acting as dynamic support. The stock recently tested this level, and so far, it has managed to hold above it. The 200-day moving average remains in a steady climb, showing that the longer-term trend is still intact.
Volume Activity
Volume spikes are visible at key moments, particularly during the breakout period in the fall. Higher-than-normal volume accompanied the price surge, which is typically a strong confirmation of trend continuation. More recently, volume has tapered off, suggesting a slowdown in aggressive buying. However, there are no signs of a major distribution phase, as selling pressure does not appear to be overwhelming demand.
Relative Strength Index (RSI)
The RSI shows that the stock was in overbought territory during its sharp run-up but has since cooled off. The indicator remains above the midpoint, suggesting that momentum is still in favor of the bulls. There has been some mild weakening recently, which indicates that the stock might be in a consolidation phase rather than in an aggressive uptrend.
Short-Term Price Behavior
The last five trading sessions have been relatively stable, with price movements staying within a tight range. The most recent candlesticks show both upper and lower wicks, meaning there has been some indecision among traders. Buying pressure is keeping the stock from falling too far, while selling pressure is limiting any major upside movement.
The key level to watch in the near term is how the stock interacts with the 50-day moving average. If it holds, there could be another push higher. If it breaks below, the 200-day moving average may be the next critical support level.
Analyst Ratings
🟢 Upgrades:
- December 20, 2023: Hovde Group upgraded BFC from “Market Perform” to “Outperform,” raising the price target from $88 to $100.
- January 2025: Zacks Investment Research elevated BFC to a Zacks Rank #2 (Buy), placing it in the top 20% of stocks covered in terms of earnings estimate revisions.
🔴 Downgrades:
- January 12, 2023: Piper Sandler downgraded BFC from “Overweight” to “Neutral.”
- March 4, 2024: Hovde Group revised its rating from “Outperform” to “Market Perform.”
📊 Consensus Price Target:
As of the latest available data, the consensus among analysts is a “Hold” rating for BFC, with an average 12-month price target of $104.00.
📉 Reasons for Rating Changes:
- Upgrades: The upgrades were influenced by positive earnings estimate revisions and improved financial performance. The Zacks upgrade was driven by a 3% increase in earnings estimates over the prior three months, with expectations of a 7% year-over-year earnings growth for the fiscal year ending December 2025.
- Downgrades: The downgrades were attributed to concerns over valuation and potential earnings pressure. Piper Sandler’s downgrade to “Neutral” was based on the stock reaching its price target, suggesting limited upside potential. Hovde Group’s revision to “Market Perform” reflected a more cautious outlook on BFC’s near-term performance.
Earnings Report Summary
Bank First Corporation recently announced its financial results for the fourth quarter of 2024, reflecting a period of solid performance and growth.
Net Income and Earnings Per Share (EPS):
The company reported a net income of $17.5 million for Q4 2024. This translates to earnings per share (EPS) of $1.74, surpassing analyst expectations, which had anticipated $1.55 per share.
Revenue Performance:
Total revenue for the quarter reached $35 million, marking a 5% increase compared to the same period in the previous year. This growth was driven by higher net interest income and a modest rise in non-interest income.
Net Interest Income:
Net interest income stood at $25 million, up from $23.5 million in Q4 2023. The improvement is attributed to loan growth and effective asset-liability management, which helped maintain stable net interest margins despite a fluctuating interest rate environment.
Non-Interest Income:
Non-interest income, encompassing fees and service charges, experienced a slight uptick, contributing $10 million to the quarterly revenue. This reflects the company’s ongoing efforts to diversify income streams beyond traditional lending activities.
Loan and Deposit Growth:
The loan portfolio expanded by 4% year-over-year, reaching $1.8 billion. This growth was primarily in commercial lending, indicating robust demand from business clients. On the deposit side, there was a 3% increase, bringing total deposits to $2.2 billion. The rise in deposits underscores customer confidence and supports the bank’s liquidity position.
Asset Quality:
Asset quality remained strong, with non-performing assets constituting just 0.5% of total assets, a slight improvement from the previous quarter. The allowance for loan losses was maintained at a prudent level, reflecting the company’s conservative risk management approach.
Operating Expenses:
Operating expenses were well-controlled, totaling $15 million for the quarter. This represents a 2% increase from the prior year, aligning with inflationary trends and strategic investments in technology and personnel.
Capital Adequacy:
The company’s capital ratios continue to exceed regulatory requirements, with a Tier 1 capital ratio of 12.5%. This robust capital position provides a solid foundation for future growth and risk absorption.
In summary, Bank First Corporation’s fourth-quarter performance highlights its resilience and ability to adapt to changing market conditions. The positive financial metrics, including higher net income, revenue growth, and strong asset quality, position the company well for sustained success in the coming periods.
Financial Health and Stability
One of the main reasons investors trust BFC is its solid financial position. The bank operates with strong profit margins, generating consistent income despite recent revenue challenges.
Profitability metrics look healthy, with a 41.43% profit margin and an operating margin of 56.46%. These figures show that the company remains efficient and capable of maintaining solid earnings.
On the balance sheet, the company has more cash than debt, a reassuring sign in an industry where leverage can sometimes be a risk factor. With $261.33 million in cash and $148.96 million in total debt, BFC is positioned to handle economic uncertainty while continuing its dividend payments.
Its book value per share stands at $63.89, meaning the stock is trading at a premium to its book value. This suggests investors are willing to pay up for BFC’s strong financials, which is a vote of confidence in its long-term outlook.
Valuation and Stock Performance
When evaluating a dividend stock, it’s important to consider whether it is reasonably priced. BFC currently trades at a price-to-earnings (P/E) ratio of 15.69. While this is slightly higher than the average for regional banks, it’s still within a reasonable range.
The stock’s price-to-book ratio is 1.59, indicating that investors are valuing it at a slight premium compared to its assets. Additionally, its price-to-sales ratio of 6.63 suggests that it is trading at a higher valuation relative to revenue, which may be due to its strong dividend and financial stability.
In terms of stock performance, BFC is currently trading at $101.34. This is near its 50-day moving average of $100.94, suggesting it has found support in its current price range. It remains well above its 200-day moving average of $93.38, reinforcing a longer-term uptrend.
With a 52-week high of $110.49 and a low of $74.90, BFC has experienced price fluctuations but remains in a stable upward trajectory.
Risks and Considerations
Even a financially strong dividend stock carries risks, and BFC is no exception.
One notable concern is the recent earnings decline, with a 49.7% year-over-year drop in earnings. While this has not yet affected the dividend, it could slow the pace of future increases if the trend continues.
Valuation is another factor to consider. The stock is trading at a slightly higher multiple compared to some other regional banks, meaning there may be less room for capital appreciation. If broader market conditions turn bearish, BFC’s stock price could face some pressure.
Interest rate sensitivity is also something to watch. As a bank, BFC relies on net interest income, which can fluctuate based on interest rate policies. A lower interest rate environment could impact future earnings potential.
Lastly, for dividend investors seeking high yields, BFC’s 1.77% dividend yield may not be compelling compared to other financial institutions offering 3-4% yields. However, for those prioritizing stability and consistent payouts, BFC remains a strong option.
Final Thoughts
Bank First Corporation is a well-managed, financially sound company that has rewarded investors with consistent dividends. Its strong profitability, solid balance sheet, and low payout ratio make it a dependable choice for those seeking stable income.
The biggest question mark revolves around its earnings decline. If this trend persists, it could limit future dividend growth, though the current payout remains very safe.
For long-term investors who prioritize dividend reliability over high yields, BFC is a strong holding. While it may not deliver rapid dividend increases, it provides steady income backed by a well-run institution.
As with any stock, investors should keep an eye on earnings trends and overall economic conditions, but for now, BFC remains a strong dividend payer with a solid financial foundation.
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