Timothy J. McFarlane
About Timothy J. McFarlane
President of Bank First Corporation and Bank First, N.A.; director since 2023; age 58; BBA, University of Wisconsin–Oshkosh. Joined Bank First on February 11, 2023 as part of the Hometown Bank merger; responsible for retail and business banking, and oversight of Marketing, HR, Credit, and Operations . 2024 incentive design tied to Assets per FTE, EPS, and ROA, all achieved above target (EPS $6.50 vs $6.21 target; ROA 1.56% vs 1.51% target; Assets per FTE $11.48m vs $10.9m target); company TSR cumulative index value was 152.04 in 2024 (Russell 2000: 133.60); net income $65.6m and EPS $6.50 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Valley Bank (Oshkosh, WI) | Credit Analyst | 1988 | Early career credit training |
| Bank One (Fond du Lac, WI) | Credit Analyst; Commercial Loan Officer; AVP Business Banking | 1990–mid-1990s | Progressed through front-line and lending roles |
| Associated Bank | Community Bank President (Fond du Lac) | 1995–2003 | Drove market growth from $8m to $100m; top-quartile production |
| Hometown Bank (and holding co.) | President, CEO, and Chairman | 2003–2023 | Led acquisitions of Farmers Exchange Bank (2015) and United Community Bank (2018); assets grew from $189m to $654m |
| Bank First | President (joined via merger) | 2023–present | Leads retail and business banking and key corporate functions |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Fond du Lac Association of Commerce / Envision Greater Fond du Lac | Community/industry involvement | Recent years (not specified) | Civic and business community engagement |
Fixed Compensation
| Metric (USD) | 2023 | 2024 |
|---|---|---|
| Base Salary | $393,208 | $489,000 |
| Cash Incentive (Annual Bonus) | — | $263,105 |
| Stock Awards (Grant-date FV) | — | $263,216 |
| All Other Compensation | $16,610 | $21,673 (incl. $3,373 dividends on unvested stock; $18,300 401k match) |
| Total Compensation | $409,818 | $1,036,994 |
Notes:
- 2024 salary reflected a 24.36% YoY increase (partial 2023 year; market study by Pearl Meyer) .
- Mr. McFarlane was not eligible for incentives in 2023 due to partial-year employment .
Performance Compensation
Annual Cash Incentive Plan (2024)
| Metric | Weight | Threshold | Target | Maximum | Actual |
|---|---|---|---|---|---|
| Assets per FTE | 33% | $9.90m | $10.90m | $11.90m | $11.48m |
| Consolidated EPS | 34% | $5.28 | $6.21 | $7.14 | $6.50 |
| Consolidated ROA | 33% | 1.28% | 1.51% | 1.74% | 1.56% |
| Actual payout (as % of salary) | — | — | 50% target | 75% max | 59.2% actual |
Plan design requires meeting risk “triggers” (NPA/Assets ≤2.0%, NPS ≥55, Liquidity ≥25%, good regulatory standing, active employment) before paying any incentive .
Long-Term Equity Incentive (Restricted Stock)
| Grant date | Instrument | Shares | Grant FV/Share | Grant FV | Vesting | Dividends/Voting |
|---|---|---|---|---|---|---|
| Mar 1, 2024 | Restricted Stock | 3,066 | $85.85 | $263,216 | Ratable over 3 years; 1/3 on each anniversary | Eligible for dividends and voting during restriction |
Equity award “actual” equated to ~58.9% of salary vs target 50% and max 75% (aligned with AIP performance criteria) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 65,853 shares (6,309 spouse; 12,817 beneficially owned; 46,272 directly) |
| % of shares outstanding | <1%; ≈0.66% based on 9,980,470 shares outstanding (65,853/9,980,470) |
| Unvested RSUs (12/31/24) | 3,066 shares; market value $303,810 at $99.09 |
| Known vesting cadence | 1,022 shares vest in each of 2025, 2026, 2027 |
| Options outstanding | None disclosed; awards are restricted stock (no options granted in 2024) |
| Ownership guidelines | President: ≥5,000 shares at role acceptance; ≥2.5x base salary within 5 years; all executives/directors complied in 2024 |
| Hedging/pledging | Prohibited under the Equity Plan; no pledging allowed |
Implication: Upcoming vesting (1,022 shares/year through 2027) can create modest, periodic selling supply if used for tax withholding or liquidity, though ownership guidelines and no-hedge/pledge policies reinforce alignment .
Employment Terms
| Provision | Economics / Terms |
|---|---|
| Change-in-control (CIC) agreement | Double-trigger: upon qualifying termination within 1-year post-CIC, lump sum = 3x base salary (for McFarlane), plus lump sum of 3-year average bonus, plus reimbursement of health premiums for 3 years; all unvested stock vests upon CIC |
| Estimated CIC figures (12/31/24) | Salary component $1,467,000; bonus component $263,105; unvested shares 3,066 ($303,810) |
| Equity treatment (non-CIC) | Forfeiture if terminated for cause or voluntary termination; committee discretion to accelerate upon retirement |
| Restrictive covenants | Non-solicitation (customers and employees) and confidentiality obligations tied to equity awards |
| Clawback | Applies to cash and equity incentives per Rule 10D-1 and Nasdaq; triggered by restatement or restrictive covenant violations |
| Perquisites | Limited; in 2024 received $3,373 in dividends on unvested stock and $18,300 401(k) match |
| Tax gross-ups | None; company policy prohibits tax gross-ups |
Board Governance
- Board service: Director since 2023; not independent due to executive role; no committee memberships .
- Board structure: Combined CEO/Chair (M. Molepske) with Lead Independent Director (Mary‑Kay H. Bourbulas) to mitigate concentration; independent directors met twice in executive session in 2024 .
- Committee composition (2024): All voting members of Audit, Compensation, and Governance/Nominating are independent; Compensation Committee: Van Sistine (Chair), Gregorski, Johnson, Kohler .
- Director compensation: McFarlane does not receive additional pay for board service (non-employee director structure shown for others) .
Director Compensation (context; McFarlane receives none as an employee-director)
| Component (2024, non-employee directors) | Amount |
|---|---|
| Annual cash retainer | $25,000 |
| Annual stock award | $55,000 |
| Committee chair fee (Audit/Comp/Gov–Nom) | $15,000 |
| Board Chair fee (if independent) | $25,000 |
| Lead Independent Director fee (if Chair not independent) | $25,000 |
Say‑on‑Pay & Shareholder Feedback
- 2024 advisory vote on NEO compensation: 4,943,706 For; 204,850 Against; 147,773 Abstentions (broker non‑votes 1,776,456) .
- Frequency vote: plurality favored one-year frequency (2,633,221), with sizable support for three years (2,381,143) .
Compensation Peer Group (Pearl Meyer 2023 study)
Peer group used to benchmark executive/director pay included 20 publicly traded banks (e.g., NIC, SYBT, FMBH, LKFN, CHCO, GABC, TFIN, HBT, MBWM, BWB, SMBC, SPFI, ALRS, PFIS, WTBA, CIVB, MVBF, GNTY, FMAO, RRBI), with assets $3–$8bn and performance screens (ROAA ≥1%, 3‑yr TSR ≥10%) .
Performance & Track Record
- Company performance during tenure (select PVP metrics): 2024 net income $65.6m and EPS $6.50; TSR index value 152.04 (peer index 133.60) .
- Bank First recognized for performance (e.g., BankDirector, S&P Global MI, Forbes Best Banks; Raymond James Community Bankers Cup 4th consecutive year), presented in shareholder materials while McFarlane served as President .
- No material legal proceedings involving McFarlane disclosed over the past ten years .
Related-Party Transactions and Red Flags
- Related-party transactions: Policy in place; only notable affiliate disclosure relates to TVG’s 40% ownership of Ansay & Associates (tied to a retired director); no other transactions requiring disclosure reported; no preferential insider loans in 2024 .
- Risk mitigants: No hedging/pledging; no tax gross-ups; no single-trigger CIC; clawback policy; metrics/credit-quality triggers for incentives; no discretionary bonuses .
Board Service Snapshot (dual-role implications)
- McFarlane serves concurrently as President and director (non-independent). Combined CEO/Chair model elevates the importance of the Lead Independent Director and fully independent committees for oversight; BFC cites benefits of unified leadership and uses executive sessions to preserve independence .
Investment Implications
- Pay-for-performance alignment: 2024 cash and equity payouts (≈59% of salary each) were formulaic and above target due to exceeding budgeted EPS/ROA/Assets-per-FTE, with robust risk triggers and a clawback policy—supportive for incentive integrity and risk control .
- Retention vs. selling pressure: Three-year ratable vesting and significant unvested stock (3,066) promote retention; scheduled vests of 1,022 shares in 2025–2027 could create limited, periodic liquidity needs but are modest relative to total ownership and guideline requirements .
- Change-in-control economics: Double-trigger CIC with 3x salary plus average bonus and healthcare reimbursement for three years is above many community-bank norms, implying meaningful exit optionality if strategic activity accelerates; immediate vesting upon CIC raises potential event-driven dilution but aligns with market practice .
- Alignment/oversight: Ownership guidelines (2.5x salary) and prohibited hedging/pledging strengthen alignment; combined CEO/Chair structure is mitigated by a strong Lead Independent Director and independent committees; say‑on‑pay support was strong in 2024 .