What changed in this filing

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Item 1. Financial Statements

2021-11-09 compared with 2021-08-09 · 68 added, 63 removed, 532 unchanged (20% of the section changed)

3 unchanged sentences

(In thousands) (Unaudited)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from financing activities, net of effects of business combination:

Net increase in deposits

Net (decrease) increase in securities sold under repurchase agreements

Net decrease in securities sold under repurchase agreements

Proceeds from advances of notes payable

Repayment of notes payable

Proceeds from issuance of subordinated debt

Dividends paid

2 unchanged sentences

Net cash provided by financing activities

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

5 unchanged sentences

MSR resulting from sale of loans

Amortization of unrealized holding gains on securities transferred from available for sale to held to maturity recognized in other from available for sale to held to maturity recognized in other comprehensive income, net of tax

Amortization of unrealized holding gains on securities transferred from available for sale to held to maturity recognized in other comprehensive income, net of tax

Change in unrealized gains and losses on investment securities available for sale, net of tax

53 unchanged sentences

Under the two-class method, earnings available to common shareholders for the period are allocated between common shareholders and participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings.

There were no anti-dilutive stock options for the six months ended June 30, 2021 or 2020.

There were no anti-dilutive stock options for the nine months ended September 30, 2021 or 2020.

The following table presents the factors used in the earnings per share computations for the period indicated.

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Net income available to common shareholders

12 unchanged sentences

NOTE 4 – SECURITIES

The Company’s securities available for sale as of June 30, 2021 and December 31, 2020 is summarized as follows:

June 30, 2021

The Company’s securities available for sale as of September 30, 2021 and December 31, 2020 is summarized as follows:

September 30, 2021

Treasury securities

14 unchanged sentences

Total available for sale securities

The Company’s securities held to maturity as of June 30, 2021 and December 31, 2020 is summarized as follows:

June 30, 2021

The Company’s securities held to maturity as of September 30, 2021 and December 31, 2020 is summarized as follows:

September 30, 2021

Obligations of states and political subdivisions

4 unchanged sentences

Greater Than 12 Months

June 30, 2021 - Available for Sale

September 30, 2021 - Available for Sale

Obligations of U.S.

5 unchanged sentences

Corporate notes

As of June 30, 2021, the Company does not consider its securities with unrealized losses to be other-than-temporarily impaired, as the unrealized losses in each category have occurred as a result of changes in interest rates, market spreads and market conditions subsequent to purchase, not credit deterioration.

As of September 30, 2021, the Company does not consider its securities with unrealized losses to be other-than-temporarily impaired, as the unrealized losses in each category have occurred as a result of changes in interest rates, market spreads and market conditions subsequent to purchase, not credit deterioration.

The Company has the intent and ability to hold its securities to maturity or until par is recovered.

There were no other-than-temporary impairments charged to earnings during the six months ended June 30, 2021 or 2020.

The following is a summary of amortized cost and estimated fair value of securities by contractual maturity as of June 30, 2021.

There were no other-than-temporary impairments charged to earnings during the nine months ended September 30, 2021 or 2020.

The following is a summary of amortized cost and estimated fair value of securities by contractual maturity as of September 30, 2021.

Contractual maturities will differ from expected maturities for mortgage-backed securities because borrowers may have the right to call or prepay obligations without penalties.

6 unchanged sentences

Mortgage-backed securities

The following is a summary of the proceeds from sales of securities available for sale and held to maturity, as well as gross gains and losses for the six months ended June 30, 2021 and 2020.

The following is a summary of the proceeds from sales of securities available for sale and held to maturity, as well as gross gains and losses for the nine months ended September 30, 2021 and 2020.

Proceeds from sales of securities

2 unchanged sentences

NOTE 5 – LOANS, ALLOWANCE FOR LOAN LOSSES, AND CREDIT QUALITY

The following table presents total loans by portfolio segment and class of loan as of June 30, 2021 and December 31, 2020:

The following table presents total loans by portfolio segment and class of loan as of September 30, 2021 and December 31, 2020:

September 30,

Commercial/industrial

5 unchanged sentences

Deferred loan fees and costs

The ALL by loan type as of June 30, 2021 and 2020 is summarized as follows:

The ALL by loan type as of September 30, 2021 and 2020 is summarized as follows:

Real Estate -

1 unchanged sentence

ALL - January 1, 2021

ALL - June 30, 2021

ALL - September 30, 2021

ALL ending balance individually evaluated for impairment

ALL ending balance collectively evaluated for impairment

Loans outstanding - June 30, 2021

Loans outstanding - September 30, 2021

Loans ending balance individually evaluated for impairment

3 unchanged sentences

ALL - January 1, 2020

ALL - June 30, 2020

ALL - September 30, 2020

ALL ending balance individually evaluated for impairment

ALL ending balance collectively evaluated for impairment

Loans outstanding - June 30, 2020

Loans outstanding - September 30, 2020

Loans ending balance individually evaluated for impairment

Loans ending balance collectively evaluated for impairment

The Company’s past due loans as of June 30, 2021 is summarized as follows:

The Company’s past due loans as of September 30, 2021 is summarized as follows:

Commercial/industrial

25 unchanged sentences

collection or liquidation in full is not probable.

The breakdown of loans by risk rating as of June 30, 2021 is as follows:

The breakdown of loans by risk rating as of September 30, 2021 is as follows:

Commercial/industrial

27 unchanged sentences

Such agencies may require that changes in the ALL be recognized when such regulators’ credit evaluations differ from those of management based on information available to the regulators at the time of their examinations.

A summary of impaired loans individually evaluated as of June 30, 2021 is as follows:

A summary of impaired loans individually evaluated as of September 30, 2021 is as follows:

Real Estate -

27 unchanged sentences

Average recorded investment

Interest recognized while these loans were impaired is considered immaterial to the consolidated financial statements for the six months ended June 30, 2021 and 2020.

The following table presents loans acquired with deteriorated credit quality as of June 30, 2021 and December 31, 2020.

Interest recognized while these loans were impaired is considered immaterial to the consolidated financial statements for the nine months ended September 30, 2021 and 2020.

The following table presents loans acquired with deteriorated credit quality as of September 30, 2021 and December 31, 2020.

No loans in this table had a related allowance at either date, and therefore, the below disclosures were not expanded to include loans with and without a related allowance.

June 30, 2021

September 30, 2021

December 31, 2020

8 unchanged sentences

Management regularly monitors these loan relationships, and if information becomes available that indicates expected cash flows will differ from initial expectations, it may necessitate reclassification between accretable and non-accretable components of the original discount calculation.

The following table represents the change in the accretable and non-accretable components of discounts on loans acquired with deteriorated credit quality for the six months ended June 30, 2021, and year ended December 31, 2020:

June 30, 2021

The following table represents the change in the accretable and non-accretable components of discounts on loans acquired with deteriorated credit quality for the nine months ended September 30, 2021, and year ended December 31, 2020:

September 30, 2021

December 31, 2020

12 unchanged sentences

If a TDR is placed on nonaccrual status, which could occur based on the same criteria as non-TDR loans, it remains there until a sufficient period of performance under the restructured terms has occurred at which it returned to accrual status, generally 6 months.

As of June 30, 2021 and December 31, 2020 the Company had no specific reserves for TDRs.

As of September 30, 2021 and December 31, 2020 the Company had no specific reserves for TDRs.

As a result of the COVID-19 pandemic, the Bank experienced an increase in customer requests for loan modifications and payment deferrals.

2 unchanged sentences

This relief is allowable on modifications on loans which were not more than 30 days past due as of December 31, 2019, and that occur after March 1, 2020, and before the earlier of 60 days after the date on which the national emergency related to the COVID-19 outbreak is terminated.

The following table presents the TDRs during the six months ended June 30, 2021:

The following table presents the TDRs during the nine months ended September 30, 2021:

Pre-Modification

4 unchanged sentences

Commercial Real Estate

The following table presents the TDRs during the six months June 30, 2020:

The following table presents the TDRs during the nine months September 30, 2020:

Pre-Modification

14 unchanged sentences

Following is an analysis of activity in the MSR asset:

Six Months Ended

June 30, 2021

Nine Months Ended

September 30, 2021

December 31, 2020

8 unchanged sentences

Mortgage servicing rights as a percent of loans serviced for others

The primary economic assumptions utilized by the Company in measuring the value of MSRs were constant prepayment speeds of 15.9 and 16.3 months as of June 30, 2021 and December 31, 2020, respectively, and discount rates of 10.3 % as of each period end.

The primary economic assumptions utilized by the Company in measuring the value of MSRs were constant prepayment speeds of 15.9 and 16.3 months as of September 30, 2021 and December 31, 2020, respectively, and discount rates of 10.3 % as of each period end.

NOTE 7 – NOTES PAYABLE

From time to time the Company utilizes FHLB advances to fund liquidity.

At June 30, 2021 and December, 31, 2020, the Company had outstanding balances borrowed from the FHLB of $ 9.2 million and $ 23.5 million, respectively.

At September 30, 2021 and December, 31, 2020, the Company had outstanding balances borrowed from the FHLB of $ 9.1 million and $ 23.3 million, respectively.

The advances, rate, and maturities of FHLB advances were as follows:

September 30,

Fixed rate, fixed term

19 unchanged sentences

Future maturities of borrowings were as follows:

September 30,

1 year or less

The Company maintains a $ 7.5 million line of credit with a commercial bank, which was entered into on May 15, 2021.

There were no outstanding balances on this note at June 30, 2021 or December 31, 2020.

There were no outstanding balances on this note at September 30, 2021 or December 31, 2020.

Any future borrowings will require monthly payments of interest at a variable rate, and will be due in full on May 15, 2022.

1 unchanged sentence

During September 2017, the Company entered into subordinated note agreements with three separate commercial banks.

The Company had outstanding balances of $ 11.5 million under these agreements as of June 30, 2021 and December 31, 2020.

The Company had outstanding balances of $ 11.5 million under these agreements as of September 30, 2021 and December 31, 2020.

These notes were all issued with 10 -year maturities, carry interest at a variable rate payable quarterly, are callable on or after the sixth anniversary of the issuance dates, and qualify for Tier 2 capital for regulatory purposes.

During July 2020, the Company entered into subordinated note agreements with two separate commercial banks.

The Company had outstanding balances of $ 6.0 million under these agreements as of June 30, 2021 and December 31, 2020.

The Company had outstanding balances of $ 6.0 million under these agreements as of September 30, 2021 and December 31, 2020.

These notes were issued with 10 -year maturities, carry interest at a fixed rate of 5.0 % through June 30, 2025, and at a variable rate thereafter, payable quarterly.

9 unchanged sentences

Under regulatory guidance for non-advanced approaches institutions, the Bank is required to maintain minimum amounts and ratios of common equity Tier I capital to risk-weighted assets, including an additional conservation buffer determined by banking regulators.

As of June 30, 2021 and December 31, 2020, this buffer was 2.5 %.

As of June 30, 2021 and December 31, 2020, the Bank met all capital adequacy requirements to which they are subject.

As of September 30, 2021 and December 31, 2020, this buffer was 2.5 %.

As of September 30, 2021 and December 31, 2020, the Bank met all capital adequacy requirements to which they are subject.

Actual and required capital amounts and ratios are presented below at period-end:

3 unchanged sentences

Prompt Corrective

Adequacy Purposes

Capital Buffer

Action Provisions

June 30, 2021

September 30, 2021

Total capital (to risk-weighted assets):

12 unchanged sentences

Fair value is based on fees currently charged to enter into similar agreements and for fixed rate commitments also considers the difference between current levels of interest rates and committed rates.

The notional amount of rate-lock commitments at June 30, 2021 and December 31, 2020 was approximately $ 46.3 million and $ 69.6 million, respectively.

The notional amount of rate-lock commitments at September 30, 2021 and December 31, 2020 was approximately $ 44.0 million and $ 69.6 million, respectively.

The Company is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers.

5 unchanged sentences

Notional Amount

June 30, 2021

September 30, 2021

December 31, 2020

12 unchanged sentences

for Identical

June 30, 2021

September 30, 2021

Securities available for sale

20 unchanged sentences

for Identical

June 30, 2021

September 30, 2021

Impaired Loans, net of impairment reserve

6 unchanged sentences

Valuation Technique

As of June 30, 2021

As of September 30, 2021

Other real estate owned

31 unchanged sentences

Since this amount is immaterial, no amounts for fair value are presented.

The carrying value and estimated fair value of financial instruments at June 30, 2021 and December 31, 2020 follows:

June 30, 2021

The carrying value and estimated fair value of financial instruments at September 30, 2021 and December 31, 2020 follows:

September 30, 2021

Financial assets:

44 unchanged sentences

The number of shares of Company stock that may be issued pursuant to awards under the 2020 Plan shall not exceed, in the aggregate, 700,000 .

As of June 30, 2021, 25,416 shares of Company stock have been awarded under the 2020 Plan.

As of September 30, 2021, 25,416 shares of Company stock have been awarded under the 2020 Plan.

Compensation expense for restricted stock is based on the fair value of the awards of Bank First Corporation common stock at the time of grant.

The value of restricted stock grants that are expected to vest is amortized into expense over the vesting periods.

For the six months ended June 30, 2021 and 2020, compensation expense of $ 0.7 million and $ 0.5 million, respectively, was recognized related to restricted stock awards.

As of June 30, 2021, there was $ 3.0 million of unrecognized compensation cost related to non-vested restricted stock awards granted under the plan.

For the nine months ended September 30, 2021 and 2020, compensation expense of $ 1.0 million and $ 0.8 million, respectively, was recognized related to restricted stock awards.

As of September 30, 2021, there was $ 2.7 million of unrecognized compensation cost related to non-vested restricted stock awards granted under the plan.

That cost is expected to be recognized over a weighted average period of 2.78 years.

The aggregate grant date fair value of restricted stock awards that vested during the six months ended June 30, 2021, was approximately $ 1.1 million.

For the six months ended

June 30, 2021

June 30, 2020

The aggregate grant date fair value of restricted stock awards that vested during the nine months ended September 30, 2021, was approximately $ 1.1 million.

For the nine months ended

September 30, 2021

September 30, 2020

Average Grant-

21 unchanged sentences

The Company is electing to utilize the Wall Street Journal Prime Rate on the date of lease commencement.

Six-month period ended

June 30, 2021

June 30, 2020

Nine-month period ended

September 30, 2021

September 30, 2020

Amortization of ROU Assets - Operating Leases

3 unchanged sentences

Weighted Average Discount Rate - Operating Leases

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liabilities as of June 30, 2021 is as follows:

June 30, 2021

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liabilities as of September 30, 2021 is as follows:

September 30, 2021

Operating lease payments due:

9 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements