Bank First: High-Quality Bank But Beware Of A Challenging Economy

2025-04-02 01:44:41 ET

Summary

• Bank First Corporation has outperformed the S&P 500 in the last three months, gaining 2% while the index declined 6%.
• BFC's disciplined approach to loan quality and strategic acquisitions have driven exceptional growth, with earnings per share increasing at a 13% average annual rate.
• Despite solid Q4 2024 results, the economic outlook has worsened due to persistent tariffs and paused interest rate cuts, increasing recession risks.
• Given its premium valuation and uncertain economic conditions, Bank First is fairly valued; a 10% correction to $90 would make it more attractive.

About three months ago, I recommended holding Bank First Corporation ( BFC ). In that article, I analyzed the high-quality business model of this best-of-breed financial institution but I also stated that the stock appeared fairly valued due to its high valuation premium when compared to its peers. Since that article, the stock has outperformed the S&P 500, as it has gained 2%, exactly in line with the Financial Select Sector SPDR Fund ETF ( XLF ), whereas the index has declined 6%....

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