This comprehensive analysis, updated on October 27, 2025, evaluates Bank First Corporation (BFC) from five critical perspectives: Business & Moat, Financial Statements, Past Performance, Future Growth, and Fair Value. We contextualize our findings through the investment philosophies of Warren Buffett and Charlie Munger, while also benchmarking BFC against key peers including Nicolet Bankshares, Inc. (NIC), Lakeland Financial Corporation (LKFN), and German American Bancorp, Inc. (GABC).
Mixed. Bank First is a highly profitable and efficient community bank with a strong operational track record in Wisconsin. Its key strengths are disciplined cost control and a loyal, low-cost local deposit base. However, the bank faces risks from its geographic concentration and a concerning liquidity position, with loans exceeding deposits. The stock appears significantly overvalued, trading at a price-to-earnings ratio well above its peers. This high valuation seems unjustified given its inconsistent earnings growth and moderate future prospects. The current stock price seems to have outpaced its solid, but not spectacular, fundamental performance.
US: NASDAQ
Bank First Corporation (BFC) is a community bank holding company that operates primarily in the state of Wisconsin. Its business model is straightforward and traditional: the bank gathers deposits from local individuals and businesses and uses that money to make loans within the same communities. Its core products and services, which generate the vast majority of its revenue, are commercial lending, residential real estate lending, and consumer deposit services. BFC's strategy is centered on relationship banking, where it leverages local knowledge and personalized customer service to compete against larger, national banks. The bank's operations are geographically concentrated, creating a business that is deeply intertwined with the economic health of the Wisconsin communities it serves.
The largest component of Bank First's business is commercial lending, which includes commercial real estate (CRE), construction and development loans, and commercial and industrial (C&I) loans. This segment is the primary engine for the bank's net interest income, likely contributing over half of its total revenue. The market for commercial lending in Wisconsin is competitive but growing, driven by local economic development. Competition comes from other community banks like Nicolet Bankshares and Associated Banc-Corp, as well as larger regional and national players. BFC differentiates itself not on price, but on service, speed of decision-making, and long-term relationships. Its customers are small-to-medium-sized businesses that value having a direct line to their banker and an institution that understands the local market dynamics. The stickiness of these relationships is high; switching a company's primary banking services is a complex process involving payroll, payment systems, and credit lines, creating a significant moat for BFC with its existing business clients. This local expertise and high-touch service model form the core of its competitive advantage in this segment.
Residential real estate lending is another critical pillar of BFC's operations, consisting of 1-4 family residential mortgages and home equity lines of credit. This segment generates significant interest income and contributes to the bank's fee income through mortgage banking activities when loans are sold on the secondary market. The Wisconsin residential real estate market is competitive, featuring a wide array of competitors from local credit unions to large national mortgage originators like Rocket Mortgage. BFC's competitive edge here is its ability to bundle services for its customers; a client with a checking and savings account is more likely to consider BFC for a mortgage. The customers are individuals and families within the bank's geographic footprint. While the loan itself creates a sticky, long-term relationship, the initial choice of a lender is highly price-sensitive, making the moat in this product line weaker than in commercial lending. BFC's advantage is its reputation and existing customer base, allowing it to cross-sell mortgage products effectively.
Deposit services are the foundation of the entire banking model, providing the low-cost funding necessary for lending. These services include checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs) for both individuals and businesses. While service charges on these accounts generate some fee income, their primary value is in providing a stable and cheap source of capital. The market for deposits is intensely competitive, with pressure from online-only banks offering high-yield savings accounts and large national banks with extensive marketing budgets. BFC's customers are local residents and businesses who prioritize the convenience of a physical branch and personalized service over achieving the highest possible interest rate. The stickiness of core deposit accounts, especially primary checking accounts, is extremely high due to the hassle of changing direct deposits and automatic payments. This customer inertia, combined with BFC's trusted local brand and physical presence, creates a durable moat that allows it to maintain a stable, low-cost deposit base, which is the most critical competitive advantage for any community bank.
Bank First Corporation's recent financial statements paint a picture of a highly efficient and profitable operator facing potential liquidity pressures. On the income statement, the bank demonstrates strength in its core business. Net interest income has shown consistent growth, rising to $38.25 million in the most recent quarter, a year-over-year increase of 6.6%. This core earnings power is amplified by exceptional cost control, evidenced by an efficiency ratio that has improved to 47.7%. This level of efficiency, where less than 48 cents of every dollar of revenue is spent on operations, is a significant competitive advantage and a direct driver of its healthy profitability, including a Return on Equity of 11.6%.
However, the balance sheet reveals areas that warrant caution. While capital levels appear solid, with tangible common equity representing 9.85% of total assets, the bank's liquidity management is a concern. The loan-to-deposit ratio has climbed to 101.3% as of the latest quarter, up from 94.9% at the end of the last fiscal year. A ratio over 100% signifies that the bank is lending more than it holds in customer deposits, forcing it to rely on more expensive and less stable forms of funding. This is compounded by a significant reduction in cash and equivalents over the past year, adding another layer of risk to its liquidity profile.
From a credit risk perspective, the bank appears to be in a stable position. The allowance for credit losses as a percentage of gross loans has remained steady at around 1.23%, which is a reasonable buffer against potential loan defaults. The bank has also been setting aside small provisions for loan losses in recent quarters, suggesting that management does not anticipate significant deterioration in its loan portfolio. This stability in credit quality provides some comfort and supports its consistent earnings.
In conclusion, Bank First Corporation's financial foundation is a tale of two parts. Its operational performance is impressive, characterized by strong profitability and disciplined expense management. However, its balance sheet strategy, particularly its aggressive lending and tightening liquidity, presents a notable risk for investors. The bank's ability to attract more low-cost deposits will be critical to sustaining its growth model safely. Therefore, the financial foundation looks stable from a profitability standpoint but carries elevated risk on the liquidity front.
Bank First Corporation's historical performance from fiscal year 2020 through 2024 reveals a well-managed institution with strong fundamentals, though its earnings path has shown some volatility. The bank's core business has scaled impressively, driven by both organic growth and acquisitions. This is evident in the robust expansion of its balance sheet, with both gross loans and total deposits growing at a compound annual growth rate (CAGR) of approximately 12% over this five-year period. This steady growth in its core lending and deposit-gathering activities demonstrates a consistent ability to gain market share within its Wisconsin footprint.
Profitability has been a standout feature, largely driven by superior cost control. BFC consistently posts a top-tier efficiency ratio, often in the low 50% range, which is significantly better than most regional and community bank peers. This discipline has supported a strong average Return on Equity (ROE) of around 12% over the last three years, a key measure of how effectively the bank uses shareholder money to generate profits. While its Net Interest Margin (the difference between what it earns on loans and pays on deposits) has remained stable, its overall earnings-per-share (EPS) growth has been inconsistent. After strong growth in 2020 and 2021, EPS declined in 2022 and again in 2024, creating a choppy track record that can be a concern for investors seeking predictable growth.
From a shareholder return perspective, the record is also mixed. The bank has been a reliable and growing dividend payer, with dividend per share growing at a CAGR of over 17% from 2020 to 2024. The payout ratio has remained very conservative, typically below 25%, suggesting dividends are safe and have room to grow. However, while the bank has actively repurchased shares, its total share count has increased from 7.71 million in 2020 to 10.01 million in 2024 due to shares issued for acquisitions. This has diluted the ownership stake of existing shareholders over time. Total shareholder returns have been inconsistent year-to-year, reflecting the market's reaction to the choppy earnings.
In conclusion, BFC's past performance shows a clear ability to execute on core banking operations—growing the balance sheet, managing credit risk exceptionally well, and controlling costs. Its operational track record supports confidence in its resilience and execution. However, this has not translated into the smooth, consistent EPS growth that investors typically reward. The bank's history is one of high-quality operations paired with somewhat unpredictable bottom-line results for shareholders.
The U.S. regional and community banking industry is navigating a period of significant change, with growth over the next 3-5 years expected to be modest, with market CAGRs projected around 2-4%. The primary driver of this shift is the normalization of interest rates to a higher baseline, which pressures net interest margins (NIMs) by increasing funding costs. Consequently, banks are intensely competing for stable, low-cost core deposits. Another major trend is the accelerated adoption of digital banking technologies. Customers now expect seamless digital experiences, forcing community banks like BFC to invest heavily in technology to compete with national giants and nimble fintechs. This technology race is increasing operational costs and raising the bar for customer service.
Several catalysts could influence demand in the coming years. A potential decrease in interest rates could reignite mortgage and refinancing activity, while continued economic resilience could sustain demand for commercial loans. Regulatory changes, particularly those affecting capital requirements for mid-sized banks, could also alter the competitive landscape. Competition is expected to intensify, not just from other banks but also from non-bank lenders and fintechs carving out niches in payments, lending, and wealth management. The barrier to entry in traditional deposit-taking remains high due to regulation, but in specific product lines like personal loans or SMB services, technology has lowered the bar, increasing competitive pressure on incumbents like BFC.
Bank First's primary growth engine is its commercial lending portfolio, which includes commercial real estate (CRE) and commercial & industrial (C&I) loans. Currently, consumption is driven by the financing needs of small-to-medium-sized businesses within its Wisconsin footprint. Growth is constrained by the local economic climate, intense competition from other banks, and heightened scrutiny on CRE lending, particularly in the office sector. Over the next 3-5 years, growth in C&I lending is expected to outpace CRE as businesses invest in operations and equipment. A key catalyst would be a resurgence in local manufacturing or business expansion. The Wisconsin commercial lending market is likely valued at over $100 billion. BFC will outperform larger, impersonal banks by leveraging its quick, local decision-making and deep relationships. However, it risks losing share to competitors like Nicolet Bankshares or Associated Banc-Corp if they offer more aggressive pricing or specialized industry expertise. A primary risk is BFC's significant exposure to CRE (~45-50% of its loan portfolio). A downturn in local property values could increase credit losses, a medium-probability risk given current market conditions.
Residential real estate lending remains a core product but faces a challenging outlook. Current consumption is severely limited by high mortgage rates, which have dampened both home purchases and refinancing activity. The affordability crisis is a major constraint on loan volume. Looking ahead, consumption is poised to increase significantly if interest rates fall, which would unlock pent-up demand. The most significant growth would come from first-time homebuyers and existing homeowners looking to move. The U.S. mortgage origination market is projected to grow from ~$1.6 trillion in 2023 to over ~$2.5 trillion by 2026, depending on rate movements. BFC's advantage is its ability to cross-sell to its existing deposit customers. However, it faces immense competition from national non-bank lenders like Rocket Mortgage, who often lead on price and digital experience. BFC is unlikely to win on price and will primarily capture customers who prioritize an existing banking relationship. A key risk is channel conflict; as more customers shop for mortgages online, BFC's branch-centric model could lose relevance, a medium-probability risk over the next 5 years.
Deposit services are the foundation of BFC's funding and growth, but the environment has become highly competitive. Current usage is shifting from noninterest-bearing accounts to higher-yielding products like certificates of deposit (CDs) and money market accounts as customers seek better returns. This trend, which has pushed BFC's cost of deposits up to 2.42%, is the primary constraint on its profitability growth. Over the next 3-5 years, the "war for deposits" will continue, and growth will be about retaining and deepening relationships rather than rapid expansion. The key shift will be towards integrated digital and physical service models. The number of community banks is expected to continue decreasing due to consolidation driven by the high costs of technology and compliance. BFC can outperform by providing superior personal service that national banks cannot match. The biggest risk is continued margin compression if deposit competition forces BFC to raise rates further, directly hitting its net interest income. The probability of this risk remaining is high in the near term.
Expanding fee-based income, particularly through wealth management and treasury services, represents BFC's most significant untapped growth opportunity. Currently, noninterest income is a small part of its revenue (~17%), limiting earnings diversification. Consumption of wealth services is constrained by BFC's brand perception as a traditional lender rather than an advisory firm, and competition from established players like Baird or Edward Jones is intense. Over the next 3-5 years, BFC could increase consumption by integrating wealth services more deeply with its commercial banking relationships, targeting successful business owners for succession planning and investment management. The U.S. wealth management market is expected to grow at a CAGR of 4-6%. BFC's success will depend on its ability to hire and retain talented advisors. The primary risk is execution failure; building a reputable wealth division is a long-term, costly endeavor, and there is a medium-to-high probability that growth will be too slow to meaningfully diversify revenue in the next 3-5 years, failing to offset potential weakness in its core lending business.
Beyond organic growth, mergers and acquisitions (M&A) will be a critical component of BFC's future. The bank has a demonstrated history of successfully acquiring and integrating smaller, in-market banks, such as its 2023 acquisition of Hometown Bankshares. This strategy allows BFC to consolidate its market share, achieve cost synergies, and expand its footprint within Wisconsin at a faster pace than organic growth alone would permit. Future growth will be heavily influenced by its ability to identify and execute similar accretive deals. This path is not without risk, as integration challenges or overpaying for an acquisition could harm shareholder value. However, given the ongoing consolidation trend in the community banking sector, a disciplined M&A strategy is not just an opportunity but a near-necessity for long-term growth and relevance.
This valuation for Bank First Corporation, conducted on October 27, 2025, uses a stock price of $131.4 and indicates that the stock is currently overvalued. The current market price sits well above a fundamentally derived fair value range of $67–$91, implying a significant downside risk of approximately 40%. This suggests a lack of a margin of safety for new investors, making BFC a stock to watch pending a major price correction.
The multiples-based valuation reveals a significant premium. BFC’s TTM P/E ratio is 18.48, far exceeding the regional bank average of 11.74. More importantly for banks, the Price to Tangible Book Value (P/TBV) is a primary valuation tool, and BFC’s P/TBV stands at a high 2.97x. This is well above the typical median for regional banks, which is often in the 1.1x to 1.5x range. A more reasonable P/TBV multiple of 1.5x to 2.0x, given its profitability, would imply a fair value range of approximately $66 to $89.
A dividend-based valuation also points to overvaluation. BFC offers a dividend yield of 1.37%, which is low compared to the average for regional banks, which is often above 3.0%. A simple Gordon Growth Model directionally confirms that the current price is not supported by its dividend stream. Furthermore, the dividend payout ratio of 74.53% is high, limiting the potential for future dividend growth without robust earnings expansion, making the total return proposition less attractive for income-focused investors.
Combining these methods, the stock appears to be trading far above its intrinsic worth. The P/TBV multiple is the most heavily weighted metric in this analysis, as it is a standard and reliable indicator for bank valuation. All approaches point to a similar conclusion of overvaluation, with a triangulated fair value range estimated to be between $67 and $91. The evidence strongly suggests that Bank First Corporation is overvalued at its current price.
Warren Buffett's investment thesis for regional banks is straightforward: find understandable businesses with durable funding advantages, conservative underwriting, and trustworthy management, all purchased at a discount. Bank First Corporation (BFC) would strongly appeal to his quality-focused criteria, particularly its excellent profitability shown by a ~12% return on average equity and a lean ~55% efficiency ratio. Buffett would be most impressed by its pristine asset quality, with non-performing assets at just 0.3% of total assets, which indicates a culture of avoiding unnecessary risk. Despite this operational excellence, he would likely balk at the current valuation of 1.6x price-to-tangible-book-value, deeming it a fair price for a great business but lacking the 'margin of safety' he requires. The bank's concentration in Wisconsin would also be a noted risk. Therefore, the takeaway for retail investors is that while BFC is a top-tier operator, Buffett would classify it as a 'watch list' stock, waiting patiently for a market downturn to provide a better entry point. If forced to identify top operators, he'd highlight Lakeland Financial (LKFN) for its best-in-class ~15% ROAE, BFC itself for its superior risk-adjusted returns, and German American Bancorp (GABC) as a quality peer at a more modest ~1.2x P/TBV. A price drop of 20-25% would likely be the catalyst to turn Buffett from an admirer into a buyer. BFC's management directs cash towards organic growth and small acquisitions while paying a consistent dividend, a balanced and shareholder-friendly approach.
Charlie Munger's approach to banking prioritizes simple, understandable businesses with conservative underwriting, a low-cost deposit base, and rational management that avoids foolish risks. Bank First Corporation (BFC) would appeal to him due to its stellar operational metrics, including a highly efficient operation with an efficiency ratio around 55% and superior profitability, evidenced by a return on average equity (ROAE) of ~12%. Munger would view its pristine asset quality, with non-performing assets at a very low 0.3%, as a clear sign of disciplined and intelligent lending—a crucial defense against stupidity. However, he would be highly cautious about the bank's significant geographic concentration in Wisconsin, which exposes it to the risks of a single regional economy. While the valuation at ~1.6x tangible book value is fair for its quality, the lack of a wider moat through diversification is a critical flaw. Management appears to use cash prudently, reinvesting retained earnings to grow the loan book while paying a steady dividend, a balanced approach that supports long-term shareholder value. If forced to choose the best regional banks, Munger would likely favor Lakeland Financial (LKFN) for its unparalleled efficiency (~48%) and ROAE (~15%), followed by BFC for its own high-quality operations, and perhaps Nicolet (NIC) for its greater scale in the same core market. Ultimately, Munger would likely admire BFC's quality but avoid investing, waiting for a much lower price to compensate for the concentration risk. A significant drop in price of 20-25% or a strategic move to diversify geographically could change his decision.
Bill Ackman would likely view Bank First Corporation as a high-quality, well-managed operator that is unfortunately playing in the wrong league for his investment style. He would admire its best-in-class financial metrics, such as a strong return on average equity of ~12% and a lean efficiency ratio of ~55%, which demonstrate disciplined management and a profitable business model. However, its small scale with $4.0 billion in assets and its geographic concentration in Wisconsin make it fall short of the simple, predictable, and dominant franchises Ackman prefers. The regional banking industry's inherent cyclicality and intense competition would also be significant deterrents. Management primarily uses its cash to fund organic loan growth and pursue small, in-state acquisitions, supplemented by consistent dividends and opportunistic share buybacks; this is a standard and shareholder-friendly approach for a community bank. If forced to invest in the regional banking sector, Ackman would gravitate towards platforms offering superior quality or scale, such as Lakeland Financial (LKFN) for its industry-leading ~15% ROAE, Nicolet Bankshares (NIC) for its larger $8.5 billion asset base, or First Busey (BUSE) for its $12.5 billion size and geographic diversification. Ultimately, Ackman would avoid BFC, concluding that while it's a good bank, it's not a great Ackman-style investment, as it lacks a dominant competitive moat and significant scale. A clear strategy to aggressively consolidate the Wisconsin market and achieve dominant regional scale could potentially change his mind.
Bank First Corporation carves out its competitive space as a quintessential community bank focused exclusively on the Wisconsin market. This sharp geographic focus is both its greatest strength and a significant risk. By concentrating on local relationships with individuals and small-to-medium-sized businesses, BFC builds a loyal customer base with deep roots, which often translates into high-quality loans and stable, low-cost deposits. This relationship-based model allows the bank to compete against larger, less personal institutions by offering superior customer service and quicker, localized decision-making.
However, this strategy inherently pits BFC against a diverse set of competitors. On one end are larger regional banks like Associated Banc-Corp, which possess far greater resources, larger marketing budgets, and the ability to offer a wider array of complex financial products. These larger players can absorb costs more easily and invest more heavily in technology. On the other end are numerous smaller community banks and credit unions that often compete on the very same relationship-based principles, sometimes with even deeper ties to specific towns or counties. BFC must therefore navigate a middle ground, leveraging its larger scale relative to small local banks while maintaining the high-touch service model that differentiates it from major regional players.
The bank's performance is intrinsically tied to the economic health of Wisconsin. While this has been a source of stable growth, any localized economic downturn could impact BFC more severely than its more geographically diversified peers. Its future success will depend on its ability to continue executing its community banking model flawlessly, prudently managing credit risk, and making smart technological investments to keep pace with customer expectations without losing its personal touch. Furthermore, its ability to participate in or defend against industry consolidation will be a defining factor in its long-term competitive positioning.
Lakeland Financial, the parent company of Lake City Bank in Indiana, is a high-performing peer that presents a tough comparison for BFC. While operating in a different state, its business model as a community-focused commercial bank is very similar. Lakeland stands out for its exceptional efficiency and profitability, often leading the peer group in these metrics. BFC holds its own with strong asset quality, but Lakeland's financial performance sets a high benchmark, making it a clear leader in operational excellence.
In the Business & Moat comparison, Lakeland demonstrates significant strengths. Its brand as the largest bank headquartered in Indiana gives it strong recognition and credibility in its home market. BFC's brand is strong but confined to a smaller region of Wisconsin. Switching costs are high and even for both. Lakeland's scale advantage is evident with total assets of $6.5 billion versus BFC's $4.0 billion. Both have solid branch networks in their respective geographies, but Lakeland's dominant position in its core Indiana markets gives it a stronger network effect. Regulatory barriers are even. Overall, Lakeland wins on Business & Moat due to its superior scale and dominant brand positioning in its primary market.
Financial Statement Analysis reveals Lakeland's operational superiority. Lakeland's efficiency ratio is an industry-leading ~48%, significantly better than BFC's already strong ~55%. This translates directly to better profitability, with Lakeland's ROAA at ~1.4% and ROAE at ~15%, both comfortably ahead of BFC's 1.2% and 12%, respectively. In terms of balance sheet, both are excellent, with BFC having a slightly better non-performing assets ratio (0.3% vs. Lakeland's 0.25%, both are elite). However, Lakeland's ability to generate higher profits from its asset base is undeniable. Lakeland is the clear winner on Financials.
Reviewing Past Performance, Lakeland has a track record of consistent, high-quality growth. Its 5-year EPS CAGR has been robust, often in the high single digits, and it has delivered superior total shareholder returns compared to BFC over the last five years. Lakeland has also managed its margins effectively through various interest rate cycles. In terms of risk, both banks are top-tier, maintaining pristine credit quality. However, Lakeland's combination of stronger growth and higher returns gives it the edge. Lakeland is the winner for Past Performance.
Looking at Future Growth, both banks depend on the economic health of their respective Midwest states. Lakeland's growth is tied to the Indiana economy, while BFC's is tied to Wisconsin. Both have strong organic loan generation capabilities. Lakeland has historically been less acquisitive than BFC, preferring to grow organically by leveraging its strong brand and efficient platform. BFC's path to growth is more likely to include M&A. The edge here is slightly even, as both have clear paths to continued growth, albeit through different strategies. However, Lakeland's powerful organic growth engine is arguably a lower-risk strategy. We'll call Lakeland the narrow winner on Future Growth due to its proven organic model.
On Fair Value, Lakeland's superior performance commands a premium valuation. It typically trades at a P/TBV of ~1.8x and a P/E of ~13x, both higher than BFC's 1.6x and 11x, respectively. This premium is fully justified by its best-in-class profitability and efficiency. While BFC is cheaper on a relative basis, Lakeland's higher quality makes its valuation understandable. For an investor seeking quality, the price may be worth it. However, for an investor focused purely on finding a better price for solid performance, BFC is the better value today. BFC wins on Fair Value due to its lower multiples for what is still a very high-quality institution.
Winner: Lakeland Financial Corporation over Bank First Corporation. Lakeland emerges as the winner due to its demonstrably superior financial performance and operational efficiency. Lakeland's key strengths are its industry-leading efficiency ratio of ~48% and ROAE of ~15%, metrics that are difficult for any peer, including BFC, to match. Its notable weakness is its higher valuation, trading at a P/TBV of ~1.8x. The primary risk for an investor in Lakeland is paying too high a price for excellence, which could limit future returns. Despite BFC being a very well-run bank, Lakeland operates at a higher level of profitability and efficiency, making it the stronger overall company.
German American Bancorp (GABC) is a community bank operating in Indiana and Kentucky, making it a solid peer for BFC in terms of size and business model. Both banks focus on building long-term customer relationships in smaller cities and rural communities. GABC is slightly larger than BFC but has historically posted slightly less impressive profitability and efficiency metrics. The comparison highlights BFC's strong operational discipline against a peer with a slightly broader, though still concentrated, geographic footprint.
For Business & Moat, both banks have strong, century-old brands in their respective local markets. Switching costs are high and even. In terms of scale, GABC is larger with assets of $6.8 billion compared to BFC's $4.0 billion, giving it a clear advantage. Both have dense branch networks that create local network effects. Regulatory barriers are even. Overall, German American Bancorp wins on Business & Moat due to its greater asset base and slightly more diversified geographic presence across two states.
In a Financial Statement Analysis, BFC has a distinct edge. BFC's efficiency ratio of ~55% is superior to GABC's ~58%, indicating better cost control. This leads to stronger profitability, with BFC's ROAE of ~12% and ROAA of ~1.2% topping GABC's ~11% and ~1.1%, respectively. GABC's net interest margin is comparable at ~3.2% vs BFC's ~3.3%. Both have strong asset quality, but BFC's non-performing assets ratio of 0.3% is slightly better than GABC's 0.4%. BFC is the winner on Financials due to its superior efficiency and profitability metrics.
Looking at Past Performance, both banks have been steady performers. They have grown consistently through a mix of organic growth and small, bolt-on acquisitions in their markets. Over the last five years, their EPS growth rates have been in the mid-to-high single digits, with neither showing a runaway advantage. Their total shareholder returns have also been closely matched. BFC's risk profile, as measured by its lower NPA ratio, has been slightly better. Due to this stronger risk management and slightly more consistent profitability, BFC is the narrow winner for Past Performance.
For Future Growth, the outlooks are similar and tied to regional economic conditions. GABC's presence in both Indiana and Kentucky provides a slightly more diversified economic base than BFC's pure-play Wisconsin focus. Both banks are expected to continue pursuing organic loan growth and may engage in small M&A deals. Neither has guided for explosive growth. Given the slightly larger and more diverse operating territory, GABC has a minor edge. GABC is the winner on Future Growth outlook.
In terms of Fair Value, German American Bancorp often trades at a discount to BFC. GABC's P/TBV multiple is typically around 1.2x and its P/E ratio around 10x, both lower than BFC's 1.6x and 11x. This valuation gap reflects BFC's stronger profitability and efficiency metrics. An investor is paying more for BFC's higher quality. For those seeking a solid bank at a more attractive price, GABC presents a compelling case. GABC is the winner on Fair Value as its discount is arguably larger than the performance gap between the two banks.
Winner: Bank First Corporation over German American Bancorp, Inc. BFC takes the win based on its superior financial execution. The key strengths for BFC are its better efficiency ratio (~55% vs. ~58%) and higher return on equity (~12% vs. ~11%), which underscore a more profitable and disciplined operation. BFC's primary weakness relative to GABC is its smaller scale and complete reliance on the Wisconsin economy. The main risk for BFC is that its geographic concentration could hurt it in a regional downturn, a risk GABC mitigates slightly by operating in two states. Despite GABC's cheaper valuation and larger size, BFC's stronger core performance makes it the better-quality institution.
Associated Banc-Corp (ASB) is a much larger regional bank and a major competitor to BFC within Wisconsin. With assets multiples larger than BFC's, ASB operates on a completely different scale, offering a wider range of services including wealth management and corporate banking. This comparison highlights the classic David vs. Goliath scenario in regional banking, where BFC's agility and local focus are pitted against ASB's massive resource and brand advantage. ASB's performance, however, has often lagged smaller peers in terms of profitability and efficiency.
From a Business & Moat perspective, ASB has a commanding lead. Its brand is one of the most recognized financial names in Wisconsin, far surpassing BFC's local brand recognition. While switching costs are high for both, ASB's scale is a massive advantage, with assets of $41 billion versus BFC's $4.0 billion. This scale allows for significant investment in technology and marketing. ASB's extensive branch and ATM network across the Midwest creates a much stronger network effect. Regulatory barriers are even but arguably higher for ASB due to its size. ASB is the decisive winner on Business & Moat.
However, the Financial Statement Analysis tells a different story. BFC is a much more profitable and efficient bank. BFC's ROAE of ~12% and ROAA of ~1.2% are significantly higher than ASB's ~9% and ~0.9%, respectively. Furthermore, BFC operates more efficiently, with a ratio of ~55% compared to ASB's less impressive ~62%. ASB's balance sheet also carries more risk, with a non-performing assets ratio of ~0.7%, more than double BFC's ~0.3%. Despite its size, ASB's financial performance is weaker. BFC is the clear winner on Financials.
Past Performance further reinforces this trend. Over the last five years, BFC has delivered more consistent earnings growth and superior total shareholder returns compared to ASB. ASB's performance has been hampered by restructuring efforts and less efficient operations. While ASB is a stable dividend payer, its growth has been lackluster. BFC's ability to grow its earnings and book value per share at a faster clip, combined with its lower-risk profile, makes it the easy choice here. BFC is the winner on Past Performance.
For Future Growth, ASB's large size gives it more options, including large-scale M&A and expansion into new products and markets. However, its organic growth has been slow, and the challenge lies in improving the profitability of its existing franchise. BFC's growth, while smaller in absolute terms, is likely to be faster on a percentage basis. ASB has the potential for a turnaround story, but BFC has a clearer, more proven path to continued growth. The edge goes to BFC for its higher probability of delivering strong percentage growth. BFC wins on Future Growth outlook.
Regarding Fair Value, ASB consistently trades at a significant discount to BFC, reflecting its lower profitability and higher risk. ASB's P/TBV is typically around 1.1x and its P/E around 10x, both well below BFC's multiples. ASB often offers a higher dividend yield as well. The valuation discount is entirely justified by its weaker performance metrics. For a deep value or turnaround investor, ASB might be interesting. However, BFC's quality justifies its premium. ASB is the winner on Fair Value if the primary goal is buying assets on the cheap.
Winner: Bank First Corporation over Associated Banc-Corp. BFC is the winner, proving that better execution can overcome a massive scale disadvantage. BFC's primary strengths are its far superior profitability metrics, including an ROAE of ~12% versus ASB's ~9%, and its much stronger asset quality. Its notable weakness is its tiny size in comparison, which makes it a potential acquisition target and limits its market power. The main risk for BFC is direct competition from ASB on large commercial loans where scale matters. Despite ASB's brand recognition and market presence, BFC is fundamentally a better-run, more profitable, and less risky bank for shareholders.
First Busey Corporation (BUSE), headquartered in Illinois, is a well-regarded regional bank with operations across the Midwest, including Illinois, Missouri, and Florida. It is a relevant peer due to its similar asset size and focus on community and commercial banking. BUSE has grown effectively through a series of acquisitions, making its profile a mix of organic and M&A-driven expansion. The comparison shows two similarly sized banks with different geographic strategies—BFC's Wisconsin purity versus BUSE's multi-state approach.
Analyzing Business & Moat, BUSE has built a strong brand across its multiple markets, but it lacks the single-state dominance of BFC in Wisconsin. Switching costs are even. BUSE's scale is a significant advantage, with assets of $12.5 billion versus BFC's $4.0 billion. This allows for greater diversification and lending power. BUSE's network effect is spread across several states, while BFC's is concentrated, making BFC's feel stronger in its core territory. Regulatory barriers are even. BUSE wins on Business & Moat due to its superior scale and valuable geographic diversification.
In the Financial Statement Analysis, the two banks are more closely matched than other peers. BFC holds an edge in efficiency, with a ratio of ~55% compared to BUSE's ~61%. This contributes to BFC's stronger ROAE of ~12% versus BUSE's ~11%. However, BUSE has historically maintained a healthy net interest margin. BFC's key advantage is its pristine asset quality, with an NPA ratio of 0.3% compared to BUSE's 0.6%. This lower credit risk makes BFC's earnings quality higher. BFC is the winner on Financials due to better efficiency and a much stronger risk profile.
Past Performance for BUSE has been heavily influenced by its M&A activity, leading to strong top-line growth but some choppiness in its efficiency and earnings integration. BFC's growth has been more organic and arguably more consistent. Over a five-year period, BFC has generally produced slightly better total shareholder returns with lower volatility. BUSE's frequent M&A adds a layer of execution risk that has not always been rewarded by the market. BFC wins on Past Performance for its steadier, lower-risk value creation.
Looking at Future Growth, BUSE's multi-state footprint gives it more levers to pull. It can grow organically in several healthy markets and has a wider geography for potential M&A targets. BFC's growth is tied solely to Wisconsin. While BFC can continue to consolidate smaller in-state banks, BUSE's addressable market is simply larger. This diversification is a key advantage, especially if one state's economy falters. BUSE is the winner for Future Growth outlook.
On Fair Value, BUSE often trades at a slight discount to BFC. BUSE's P/TBV is typically around 1.5x and its P/E around 11x, very close to BFC's 1.6x and 11x. Given BFC's better profitability and superior asset quality, its slight premium seems warranted. BUSE's dividend yield is often higher, which may appeal to income-focused investors. The valuation is very close, but BFC's higher quality for a tiny premium makes it slightly more attractive on a risk-adjusted basis. BFC wins on Fair Value, by a very slim margin.
Winner: Bank First Corporation over First Busey Corporation. BFC secures the victory due to its superior asset quality and operational efficiency. BFC's key strengths are its exceptionally low NPA ratio of 0.3% (half of BUSE's 0.6%) and its leaner ~55% efficiency ratio. Its primary weakness is its geographic concentration in Wisconsin, which stands in contrast to BUSE's diversified multi-state footprint. The main risk for BFC is that a Wisconsin-specific economic slowdown would impact it more severely. Despite BUSE's advantages in scale and diversification, BFC's fundamentally lower-risk and more profitable business model make it the stronger choice.
HTLF Bank (formerly Heartland Financial USA, Inc.) is a multi-state bank holding company with a collection of community bank charters across states like Iowa, Colorado, and Minnesota. Its model is to acquire local banks and allow them to maintain their local branding and leadership, creating a 'best of both worlds' approach. This makes it an interesting competitor, as it combines large-scale resources with a community bank feel. However, this complex structure can lead to inefficiencies, which contrasts with BFC's streamlined, single-state operation.
Regarding Business & Moat, HTLF's unique multi-brand strategy gives it strong local identities in many different markets. Switching costs are even. HTLF's scale is a major advantage, with assets of $19 billion compared to BFC's $4.0 billion. This diversification across a dozen states is a significant strength. Its network effect is fragmented by design, existing within each community brand rather than across the whole company. Regulatory barriers are even. HTLF wins on Business & Moat due to its massive advantages in scale and geographic diversification.
Turning to the Financial Statement Analysis, BFC's focused model proves more profitable and efficient. HTLF's efficiency ratio is often high, hovering around 65%, which is significantly worse than BFC's ~55%. This operational drag impacts profitability, with HTLF's ROAE at ~9.5% and ROAA at ~0.8%, both well below BFC's ~12% and ~1.2%, respectively. HTLF does maintain a strong net interest margin, often around 3.5%, which is a positive. However, its credit quality, with an NPA ratio of ~0.5%, is also weaker than BFC's 0.3%. BFC is the decisive winner on Financials.
In terms of Past Performance, HTLF has a long history of growth via acquisition, which has rapidly expanded its asset base. However, this has not consistently translated into strong shareholder returns, as the company has struggled with integration and efficiency. BFC's more measured growth has resulted in better profitability and more stable stock performance over the last five years. BFC's lower-risk, higher-return profile has been a better combination for investors recently. BFC is the winner on Past Performance.
For Future Growth, HTLF's model gives it a perpetual M&A pipeline, as it can look for acquisition targets in numerous states. Its ability to tuck in small community banks is a core part of its strategy. This provides a clear, albeit complex, path to continued growth. BFC's growth is more limited geographically. The breadth of opportunity for HTLF is wider, even if the execution is more challenging. HTLF wins on Future Growth outlook due to its national M&A platform.
Analyzing Fair Value, HTLF's lower profitability and higher operational complexity cause it to trade at a discount to high-quality peers. Its P/TBV is often around 1.2x and its P/E around 11x. This is cheaper than BFC's 1.6x P/TBV. The valuation discount is warranted, as investors demand a lower price for the lower returns and higher complexity. For a value-oriented investor, HTLF could be appealing if they believe management can improve efficiency. However, BFC offers higher quality for a reasonable price. HTLF is the winner on Fair Value based on its lower absolute multiples.
Winner: Bank First Corporation over HTLF Bank. BFC wins this comparison by demonstrating that a focused, efficient operation can outperform a larger, more complex, and geographically diverse one. BFC's key strengths are its significantly better efficiency ratio (~55% vs ~65%) and its superior profitability (ROAE of ~12% vs ~9.5%). Its main weakness is its total reliance on a single state's economy. The primary risk for BFC is that its lack of diversification makes it vulnerable, whereas HTLF's performance is not tied to any single regional economy. In the end, BFC's superior financial results and simpler business model make it the stronger investment case.
Based on industry classification and performance score:
Bank First Corporation operates a classic community banking model, building a strong, localized moat in Wisconsin through deep customer relationships and a network of branches. Its primary strength lies in gathering stable, low-cost local deposits to fund its lending activities, which creates high switching costs for customers. However, the bank is heavily reliant on traditional interest income and lacks a diversified fee-based revenue stream or a specialized lending niche, making it vulnerable to interest rate fluctuations. The investor takeaway is mixed; the bank has a durable, traditional business model but lacks the diversification that would provide greater resilience through different economic cycles.
The bank's revenue is heavily skewed towards interest income, with a below-average contribution from fees, creating a significant dependency on lending spreads.
Bank First generates a relatively small portion of its revenue from noninterest (fee) income. In the most recent quarter, noninterest income accounted for approximately 17% of total revenue, which is below the regional bank average that often ranges from 20% to 25% or higher. This indicates a heavy reliance on net interest income—the spread between what it earns on loans and pays on deposits. While its fee income sources include service charges, wealth management, and mortgage banking, none are large enough to meaningfully offset pressure on its net interest margin during periods of interest rate volatility. This lack of revenue diversification is a key weakness, as it makes the bank's earnings more cyclical and vulnerable to economic conditions that compress lending margins.
Bank First's community-focused model naturally results in a well-diversified and granular deposit base, reducing the risk of large, sudden outflows.
BFC's funding comes from a healthy mix of local retail customers and small-to-medium-sized businesses, which is the ideal customer profile for a community bank. The bank does not rely heavily on volatile funding sources like brokered deposits, which are typically less stable than core community deposits. Furthermore, financial filings do not indicate any significant concentration of deposits from a small number of customers. This granularity is a key strength, as it means the bank is not overly exposed to the risk of a few large depositors withdrawing their funds simultaneously. This diversified and stable funding base is a direct result of its relationship-banking business model and is a significant credit to its overall risk profile.
Bank First operates as a generalist community lender rather than cultivating a specialized lending niche, relying on its geographic focus for its competitive edge.
While BFC is a proficient lender within its markets, it does not possess a distinct, specialized lending franchise in areas like SBA, agriculture, or other niche commercial sectors that would grant it superior pricing power or a national reputation. Its loan portfolio is a traditional mix of commercial real estate, residential mortgages, and general commercial loans. Its competitive advantage comes from its local relationships and service level, not from unique expertise in a specific, hard-to-underwrite loan category. This generalist approach is common and viable for community banks, but it means BFC does not have the differentiated moat that a true niche lending focus would provide, making it more of a competitor on service within a geographic area rather than a specialized product expert.
The bank has a decent base of low-cost deposits, but a lower-than-average proportion of noninterest-bearing accounts and rising deposit costs present a notable risk.
A community bank's strength is its ability to attract stable, low-cost core deposits. As of the first quarter of 2024, Bank First's noninterest-bearing deposits made up 21% of its total deposits. This is below the 25-30% level often seen in top-tier community banks, indicating a greater reliance on interest-bearing accounts. Furthermore, its cost of total deposits was 2.42%, which has been rising in line with the overall interest rate environment. While its deposit base has remained stable, the composition is less favorable than some peers, making its net interest margin more sensitive to changes in interest rates. The bank's uninsured deposits are also a factor to watch, although they are generally in line with peers for a bank of its size. The reliance on interest-bearing funding sources suggests its moat, while present, may not be as deep as competitors with stronger core deposit franchises.
Bank First maintains a focused and efficient branch network in its core Wisconsin markets, leading to strong deposit-gathering capabilities per branch.
Bank First operates approximately 29 branches, primarily concentrated in eastern and central Wisconsin. With total deposits of roughly $3.9 billion, the bank achieves an average of $134 million in deposits per branch. This figure is a key indicator of branch efficiency and is generally considered healthy for a community bank of its size, suggesting good market penetration in its chosen locations. Rather than pursuing wide-ranging expansion, BFC focuses on density within its footprint, which supports its relationship-based model and reinforces its local brand. This strategy allows the bank to build significant local scale without the high overhead costs of a sprawling network, providing a solid foundation for its deposit-gathering and lending operations.
Bank First Corporation shows strong profitability and excellent operational efficiency, driven by consistent growth in net interest income and a top-tier efficiency ratio below 50%. Its return on equity stands at a healthy 11.6% and credit reserves appear adequate. However, a key weakness is its liquidity position, with a loan-to-deposit ratio rising to a concerning 101.3% and cash levels declining. The overall investor takeaway is mixed; the bank is a strong operator but its aggressive lending relative to its deposit base introduces risk.
While the bank's capital levels are healthy, its liquidity is a significant concern due to a loan-to-deposit ratio over 100% and declining cash reserves.
Bank First's capital position appears robust, with a tangible common equity to total assets ratio of 9.85% in the latest quarter. This ratio serves as a key measure of a bank's ability to absorb potential losses and is at a healthy level. However, the bank's liquidity position shows signs of stress, which is a critical risk factor. The loans-to-deposits ratio has risen to 101.3% in Q3 2025, up from 94.9% at fiscal year-end 2024. A ratio exceeding 100% indicates that the bank is funding loan growth with sources other than stable customer deposits, which can be more costly and less reliable, especially in a strained economic environment.
This concern is magnified by the sharp decrease in the bank's cash holdings. Cash and equivalents have fallen from $261.33 million at the end of 2024 to $126.18 million in the most recent quarter. While specific metrics like CET1 ratio and uninsured deposit coverage are not provided, the combination of a high loan-to-deposit ratio and dwindling cash on hand points to a tightening liquidity situation that could limit the bank's flexibility and increase its risk profile.
The bank maintains a stable and adequate reserve for potential loan losses, suggesting management is confident in the quality of its loan portfolio.
Bank First appears to be maintaining disciplined credit quality. The allowance for credit losses as a percentage of gross loans stood at 1.23% in the latest quarter, a level that has been very stable over the past year (1.25% in FY 2024). This ratio indicates the size of the cushion set aside to cover potential bad loans, and a figure above 1% is generally considered adequate for a community bank. The stability of this metric suggests there are no emerging, widespread credit issues in its loan book.
Recent provisions for credit losses have been modest ($0.65 million in Q3 2025 and $0.2 million in Q2 2025), following a reserve release in fiscal 2024. This pattern indicates that while the bank is no longer releasing reserves, it does not see a need for aggressive additions, reflecting a stable outlook on credit performance. Although data on nonperforming loans and net charge-offs is not available, the healthy and consistent allowance level provides a strong indication of prudent credit risk management.
The bank appears to be managing interest rate changes effectively, as shown by its growing net interest income, and the impact of unrealized losses on its equity is minimal.
Bank First Corporation has demonstrated a solid ability to navigate the interest rate environment. Its net interest income, the core profit from lending and funding, grew to $38.25 million in Q3 2025 from $36.7 million in the prior quarter, indicating that the bank is earning more on its assets than its funding costs are increasing. This suggests effective management of its asset and liability repricing schedules.
Furthermore, the impact of unrealized losses on its investment portfolio appears manageable. Accumulated Other Comprehensive Income (AOCI), which reflects these paper losses, was -$7.76 million in Q2 2025, representing a very small fraction (less than 2%) of the bank's tangible common equity of $418.6 million. This low sensitivity means that interest rate fluctuations have not significantly eroded the bank's capital base, which is a key strength. Although specific data on its security portfolio's duration is not available, the stable earnings and limited AOCI impact suggest a well-managed balance sheet.
The bank is successfully growing its core earnings from lending, as evidenced by strong and consistent growth in its net interest income.
Bank First's primary engine of profitability, its net interest income (NII), is performing well. The bank reported NII growth of 6.6% year-over-year in Q3 2025, on top of 11.2% growth in Q2 2025. Sequentially, NII grew 4.2% from the second to the third quarter. This steady upward trend demonstrates the bank's ability to effectively price its loans and manage its funding costs to expand its net interest spread, even in a dynamic rate environment.
While the specific Net Interest Margin (NIM) percentage is not provided, the robust growth in NII is a strong proxy for margin health. The underlying drivers appear solid: total interest income is growing faster than total interest expense on a quarterly basis ($55.46 million vs. $17.2 million in Q3 2025). This positive operating leverage in its core lending business is a fundamental strength and a key driver of the bank's overall earnings.
The bank operates with exceptional efficiency, with a ratio below 50% that indicates strong cost discipline and supports higher profitability.
Bank First Corporation excels at managing its operational costs. Its efficiency ratio, which measures noninterest expenses as a percentage of revenue, was an impressive 47.7% in the most recent quarter. A ratio below 50% is considered best-in-class in the banking industry and demonstrates a lean operational structure. This allows a greater portion of revenue to flow through to the bottom line as profit, giving the bank a significant competitive advantage.
The bank has kept its noninterest expense growth under control, with total noninterest expenses rising only slightly from $20.76 million in Q2 2025 to $21.09 million in Q3 2025. The largest component, salaries and employee benefits, has remained stable at around 50% of total noninterest expense. This disciplined approach to spending is a core strength that directly contributes to the bank's strong and consistent profitability.
Bank First Corporation has a strong track record of operational excellence, but this hasn't always translated into smooth results for shareholders. Over the last five years, the bank has impressively grown loans and deposits by over 12% annually while maintaining elite credit quality, with non-performing assets consistently below 0.5%. Its key strength is efficiency, with a cost-to-income ratio around 55% that beats most competitors. However, its earnings per share (EPS) growth has been choppy, with declines in two of the last three years. The investor takeaway is mixed: the bank is a high-quality, disciplined operator, but its inconsistent EPS growth is a notable weakness in its past performance.
The bank has a consistent and impressive history of growing both its loans and deposits at a double-digit pace while maintaining a stable and prudent balance sheet.
From FY2020 to FY2024, Bank First demonstrated strong and steady growth in its core business. Gross loans grew from $2.19 billion to $3.52 billion, a compound annual growth rate (CAGR) of 12.5%. This signifies the bank's success in lending to individuals and businesses in its communities. Crucially, this loan growth was funded responsibly by a similar expansion in deposits.
Total deposits grew from $2.32 billion to $3.66 billion over the same period, a CAGR of 12.1%. The close alignment of loan and deposit growth is a hallmark of disciplined management. The bank's loan-to-deposit ratio, a key measure of liquidity, has remained stable in a healthy range of 94% to 97% in recent years. This indicates the bank is effectively using its deposits to make loans without taking on excessive liquidity risk. This consistent, balanced growth is a clear historical strength.
The bank has a superb and consistent track record of cost control, reflected in a top-tier efficiency ratio that has driven strong growth in core interest income.
Bank First's operational efficiency is a core component of its historical success. The bank's efficiency ratio, which measures non-interest expenses as a percentage of revenue, has consistently been excellent. Over the last five years, my calculations show the ratio stayed at or below 50%, while peer analysis places it around a still-elite 55%. This is significantly better than competitors like Associated Banc-Corp (~62%) or HTLF Bank (~65%) and indicates superior cost management. A lower ratio means more of each dollar of revenue turns into profit.
This cost discipline has supported strong growth in the bank's primary profit engine: net interest income. This figure grew at a compound annual rate of 12.2% from $86.8 million in FY2020 to $137.8 million in FY2024. The combination of sustained cost control and robust growth in core income is a powerful one, reflecting a well-executed and durable business model.
While the bank's profitability is high, its earnings per share (EPS) growth over the past five years has been volatile and inconsistent, making its track record unpredictable.
Bank First's earnings-per-share (EPS) performance has been choppy. Over the last five fiscal years, EPS went from $5.07 in FY2020 to $6.50 in FY2024, but the path was not a straight line. The bank posted strong growth in 2021 (+16.7%) and 2023 (+30.5%), but these were followed by declines in 2022 (-5.7%) and 2024 (-10.7%). This volatility makes it difficult to assess the company's underlying growth trend. The exceptional result in FY2023, for example, was significantly boosted by a one-time gain on the sale of investments, masking weaker core performance that year.
The bank's Return on Equity (ROE), a measure of profitability, has remained strong, averaging around 12% over the last three years, which is better than many peers. However, the trend has been downward, from 14.72% in FY2021 to 10.41% in FY2024. An inconsistent growth path combined with a declining profitability trend fails the test of a reliable track record.
The bank has a history of elite credit quality, consistently reporting lower problem loans and maintaining more conservative reserves than the majority of its competitors.
Bank First's historical performance on credit is a significant strength. Peer comparisons consistently show its ratio of non-performing assets (NPAs) at a very low 0.3% of total assets. This is superior to most regional bank competitors, such as Nicolet Bankshares (0.5%) and Associated Banc-Corp (0.7%), and signals a highly disciplined and conservative approach to lending. The bank has successfully avoided major credit issues that can severely impact earnings.
Furthermore, the bank has proactively managed its reserves. The allowance for credit losses as a percentage of gross loans increased from 0.81% in FY2020 to 1.25% in FY2024. This means the bank has set aside more capital to cover potential future loan losses, even as its actual record of losses has remained low. For instance, in FY2024, the bank recorded a negative provision for loan losses of -$0.8 million, meaning its credit experience was so positive it could release reserves back into income. This combination of low actual losses and strong reserves reflects a very stable and low-risk credit profile.
The bank has an excellent dividend growth record with a very safe payout ratio, but share buybacks have not been enough to offset dilution from acquisitions.
Bank First has demonstrated a strong commitment to growing its dividend. Over the five-year period from FY2020 to FY2024, the dividend per share grew from $0.81 to $1.55, representing a compound annual growth rate of over 17%. This growth is supported by a very conservative payout ratio that has consistently stayed below 25% of earnings, indicating the dividend is well-covered and sustainable. This is a positive signal for income-focused investors.
However, the company's share repurchase program has not prevented an increase in the total number of shares outstanding. While BFC has spent money on buybacks each year, including $31.9 million in FY2024, the total share count rose from 7.71 million at the end of FY2020 to 10.01 million by FY2024. This increase is primarily due to shares issued to fund acquisitions. While M&A is a common growth strategy for banks, the resulting dilution means each share represents a smaller piece of the company, offsetting some of the value created by buybacks.
Bank First Corporation's future growth appears steady but modest, closely tied to the economic health of its Wisconsin markets. The bank's primary growth driver will continue to be organic loan growth, supported by its strong local relationships and a proven ability to execute small, in-market acquisitions. However, significant headwinds exist, including a heavy reliance on net interest income, which is under pressure from rising deposit costs, and a comparatively underdeveloped fee income business. Compared to more diversified regional peers, BFC's growth is less dynamic and more vulnerable to interest rate cycles. The investor takeaway is mixed; BFC offers stable, low-volatility growth for conservative investors but is unlikely to deliver high-growth returns.
The bank has demonstrated strong recent loan growth, signaling healthy demand in its local markets despite a challenging macroeconomic environment.
In the first quarter of 2024, Bank First reported robust annualized loan growth of 13.1%, a figure that significantly outpaces the industry average. This indicates strong underlying demand from its commercial and retail customers in Wisconsin and effective execution by its lending teams. While the bank does not provide explicit forward-looking loan growth guidance, this strong recent performance serves as a positive indicator for near-term momentum. Maintaining this pace will be challenging, but the demonstrated ability to grow its loan book in the current climate is a clear strength.
Acquisitions are a core part of Bank First's growth strategy, and its solid capital position enables it to continue pursuing accretive, in-market deals.
Bank First has a proven track record of using M&A to expand within Wisconsin, as evidenced by its successful acquisition of Hometown Bankshares. With a strong Common Equity Tier 1 (CET1) ratio, which is well above regulatory minimums, the bank is well-capitalized to pursue future deals. In the fragmented community banking landscape, disciplined M&A is a key driver of earnings per share and tangible book value growth. While no major deals are currently announced, management's strategy clearly includes consolidation, which is a crucial lever for growth in a mature market. This strategic focus, backed by a strong balance sheet, is a significant positive for its future growth outlook.
The bank operates an efficient physical branch network but must continue investing in digital capabilities to meet evolving customer expectations and remain competitive.
Bank First demonstrates strong operational efficiency in its physical footprint, with an average of $134 million in deposits per branch, a healthy figure that suggests good market penetration. However, the future growth narrative in banking is increasingly digital. While the bank has not announced specific large-scale cost-saving targets or digital user growth metrics, its continued competitiveness hinges on its ability to blend its high-touch branch service with a robust digital platform. Failure to invest sufficiently in digital channels could lead to deposit outflows over the long term as customers, especially younger demographics, gravitate towards more technologically advanced competitors. Given its solid current performance and the industry-wide push, it's reasonable to assume BFC is actively managing this transition.
Significant pressure on Net Interest Margin (NIM) from rising deposit costs is a major headwind that is likely to constrain earnings growth in the near future.
The bank's Net Interest Margin compressed to 2.84% in the most recent quarter, a decline driven by a rapid increase in its cost of deposits to 2.42%. This trend reflects intense competition for funding across the industry. Furthermore, with noninterest-bearing deposits making up a relatively low 21% of its deposit base, the bank has less of a buffer against rising interest rates compared to some peers. Without clear guidance suggesting a stabilization or expansion of NIM, the current trajectory points to continued pressure on the bank's primary source of earnings, posing a significant risk to future profitability growth.
The bank's heavy reliance on interest income is a key weakness, with an underdeveloped fee-based business that leaves earnings exposed to interest rate volatility.
Bank First's noninterest income accounts for only ~17% of its total revenue, which is significantly below the 20-25% average for its peers. This lack of diversification is a strategic vulnerability, making its earnings highly dependent on the net interest margin, which is currently under pressure. The bank has not articulated a clear or aggressive growth plan for its fee-generating businesses, such as wealth management, treasury services, or mortgage banking. Without a defined strategy and specific growth targets for noninterest income, the bank's future earnings growth will remain cyclical and constrained by the interest rate environment.
Based on its key valuation metrics, Bank First Corporation (BFC) appears significantly overvalued. The company trades at a substantial premium with a Price-to-Tangible Book (P/TBV) ratio of 2.97x and a P/E ratio of 18.48, both well above industry benchmarks. While its Return on Equity of 11.6% is solid, it does not seem strong enough to justify these high multiples. With the stock trading near its 52-week high, the current price seems to have outpaced its fundamental value. The overall takeaway for investors is negative, signaling a high risk of a price correction.
The stock trades at nearly three times its tangible book value, a premium valuation that is not justified by its current profitability levels.
Price to Tangible Book Value (P/TBV) is a critical valuation metric for banks, as it compares the market price to the hard asset value on the balance sheet. BFC's P/TBV is 2.97x (based on a $131.4 share price and $44.3 tangible book value per share). This is exceptionally high, as most regional banks trade in a 1.0x to 1.5x P/TBV range. A premium P/TBV multiple is typically awarded to banks that generate a very high Return on Tangible Common Equity (ROTCE). While BFC's reported Return on Equity (ROE) is a respectable 11.6%, this level of profitability does not support a P/TBV multiple approaching 3.0x. Generally, a P/TBV above 2.0x requires an ROE or ROTCE consistently above 15%, which is not the case here.
There is a significant mismatch between the company's moderate Return on Equity and its very high Price-to-Book multiple, suggesting the stock is overvalued relative to the profits it generates from its equity.
A core principle of bank valuation is that a higher ROE justifies a higher P/B multiple. BFC’s ROE of 11.6% is solid but not exceptional. A bank earning an ROE close to its cost of equity (typically 9-11%) would be fairly valued around 1.0x to 1.2x P/B. BFC's Price-to-Book (P/B) ratio is 2.06, and its P/TBV is even higher at 2.97x. For a bank to justify a P/B ratio over 2.0x, it should consistently generate an ROE closer to 20%. Since BFC's profitability is well below that level, its high valuation multiple is not aligned with its fundamental performance, indicating a significant overvaluation.
The stock's P/E ratio is significantly higher than industry averages, suggesting the market has priced in very optimistic growth expectations that may be difficult to achieve.
BFC's TTM P/E ratio of 18.48 is elevated for a regional bank. Peer averages for regional banks tend to be much lower, often in the 11x to 14x range. The forward P/E of 15.85 indicates that analysts expect earnings to grow, but this multiple is still high. The recent quarterly EPS growth of 10.87% is healthy; however, the stock's valuation seems to be pricing in a sustained high-growth scenario that may not materialize in the cyclical banking industry. A high P/E ratio relative to both peers and the company's own historical levels creates a valuation risk, as any failure to meet lofty growth expectations could lead to a sharp price decline.
The dividend yield is low for the banking sector, and a high payout ratio limits future growth, making the total income return to shareholders less compelling.
Bank First Corporation's dividend yield of 1.37% is substantially below the typical 3.0% to 4.0% range for regional and community banks. While the company is returning some capital through share repurchases, as evidenced by a year-over-year decrease in shares outstanding, this is not enough to offset the low cash dividend. Furthermore, the dividend payout ratio is 74.53% of trailing twelve-month earnings, which is quite high. This elevated payout level suggests that the company has limited flexibility to increase its dividend in the future unless earnings grow significantly. For investors focused on income, BFC’s current shareholder yield is not attractive compared to its peers.
On almost every key valuation multiple—P/E, P/TBV, and dividend yield—Bank First Corporation appears expensive when compared to its regional banking peers.
A direct comparison with industry peers highlights BFC's stretched valuation. Its TTM P/E of 18.48 is well above the industry average of 11.74. Its P/TBV of 2.97x is more than double the industry median of around 1.1x to 1.5x. Finally, its dividend yield of 1.37% offers significantly less income potential than the peer group average, which is typically above 3%. Taken together, these metrics paint a clear picture of a stock that is trading at a significant premium to its competitors without demonstrating proportionally superior performance to justify it.
The biggest risk for Bank First is its vulnerability to macroeconomic shifts, particularly an economic downturn and changes in interest rates. As a community bank, its health is directly tied to the economy of Wisconsin. A recession would likely increase loan defaults, especially within its significant commercial real estate (CRE) portfolio. While CRE has been a source of growth, a downturn in property values or tenant occupancy could lead to substantial credit losses. Additionally, Bank First's profitability, measured by its Net Interest Margin (NIM), is caught in a delicate balance. If the Federal Reserve cuts rates, the income from its variable-rate loans could fall faster than its deposit costs, squeezing margins. Conversely, if rates remain high, the bank may have to keep paying more for deposits to prevent customers from moving their cash to higher-yielding alternatives, which also pressures profitability.
Competitive pressures represent a constant and growing threat. Bank First operates in a crowded market, competing head-on with giant national banks like JPMorgan Chase and U.S. Bank, which have massive marketing budgets and advanced technology platforms. It also faces challenges from other local banks fighting for the same customers. More recently, financial technology (fintech) companies are chipping away at traditional banking services, offering slick digital solutions for payments, lending, and investing. To stay relevant, Bank First must continually invest in its own technology and digital customer experience, which is a costly and ongoing battle for a smaller institution and can be a drag on earnings.
Finally, the bank faces regulatory and operational risks that could impact future growth. In the wake of the 2023 regional banking crisis, regulators have increased their scrutiny of banks' liquidity, capital levels, and interest rate risk management. This new environment translates into higher compliance costs and could impose stricter limits on how the bank manages its balance sheet, potentially constraining growth. Bank First has also historically grown through acquiring other banks. While this strategy can be effective, it carries significant risks, such as the challenge of smoothly integrating new operations and the danger of overpaying for an acquisition, which could harm long-term shareholder value. Any slowdown in successful M&A activity could also slow the bank's overall growth trajectory.
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