BANKFIRST CAPITAL CORPORATION Reports Second Quarter 2021 Earnings of $4.3 Million

COLUMBUS, Miss., July 26, 2021 /PRNewswire/ -- BankFirst Capital Corporation (OTCQX: BFCC) (the "Company") reported quarterly net income of $4.3 million, or $0.81 per share, for the second quarter of 2021, compared to net income of $4.3 million or $0.81 per share for the first quarter of 2021, and an increase of 39% compared to net income of $3.2 million or $0.72 per share for the second quarter of 2020.  Net Income of $8.6 million, or $1.62 per share, for the first six months of 2021, compared to net income of $6.1 million or $1.37 per share for the first six months of 2020, an increase of 18%. 

CEO Commentary

Moak Griffin, President and Chief Executive Officer of the Company and BankFirst Financial Services, the Company's wholly-owned subsidiary bank, stated "We are pleased to report another strong quarter of earnings. Our local markets have recovered nicely from the pandemic and we have successfully integrated our most recent acquisition. We remain optimistic about the improving economy in our markets and we are excited for what the remainder of the year has to offer."

Financial Condition and Results of Operations

Total assets were $1.8 billion at June 30, 2021 as compared to $1.78 billion at March 31, 2021, an increase of 1%, and as compared to $1.5 billion at June 30, 2020, an increase of 18%. The increase in total assets from the prior year was due to organic loan and deposit growth, supported by participation in the Paycheck Protection Program (PPP), as well as the acquisition of Traders & Farmers Bancshares, Inc. on July 1, 2020. Loans outstanding, net of the allowance for loan losses, as of June 30, 2021 totaled $1,124 million as compared to $1,118 million as of March 31, 2021, and as compared to $1,032 million as of June 30, 2020, an increase of 9%. Net loans outstanding excluding loans associated with the PPP, as of June 30, 2021 totaled $1,052 million, as compared to $1,034 million as of March 31,2021 an increase of 2%, and as compared to $917 million as of June 30, 2020, an increase of 15%.

Non-interest-bearing deposits increased to $462 million as of June 30, 2021, as compared to $447 million as of March 31, 2021, an increase of 3%, and as compared to $331 million as of June 30, 2020, an increase of 40%.  Non-interest-bearing deposits represented 29% of total deposits as of June 30, 2021.  Total deposits as of June 30, 2021 were $1.58 billion, as compared to $1.57 billion as of March 31, 2021, an increase of 1%, and as compared to $1.23 billion as of June 30, 2020 an increase of 28%.  Cost of funds as of June 30, 2021 is 0.31% as compared to 034% as of March 31, 2021, and as compared to 0.61% as of June 30, 2020.

The Company's ratio of loans to deposits was 72.2% as of June 30, 2021 as compared to 72.4% as of March 31, 2021, and as compared to 84.6% as of June 30, 2020. The Company's ratio of loans net of PPP loans to deposits was 67% as of June 30, 2021, as compared to 66% as of March 31, 2021, and compared to 74% as of June 30, 2020.

Net interest income was $12.9 million for the second quarter of 2021, an increase of 1% as compared to $12.7 million for the first quarter of 2021. Net interest margin increased to 3.02% in the second quarter of 2021, compared to 3.01% in the first quarter of 2021. The increase is primarily due to the decrease in interest expense of $266,000 or 13%, due to changes in the mix of our interest-bearing deposits and non-interest deposits. Yield on earning assets decreased 1 basis point to 3.32% in the second quarter 2021, compared to 3.34% during the first quarter of 2021.  The decrease, despite an increase in loan volume, is due to the lower interest rate environment as a result of the Federal reserve's interest rate reductions in response to the pandemic.

Noninterest income was $5.6 million for the second quarter of 2021, a decrease of 7% as compared to $6 million for the first quarter of 2021, and an increase of 5% as compared to $4.8 million for the second quarter of 2020.  Mortgage banking revenue decreased $85,000 to $1.74 million in the second quarter of 2021 from $1.82 million in the first quarter of 2021, or 4.7%. The primary reason for the overall decrease in noninterest income in the second quarter is due to the receipt of a Community Development Financial Institution Financial Assistance grant of $888,000 in the first quarter of 2021. 

As of June 30, 2021, the Company's tangible book value per share was $21.62. According to OTCQX, there were 157 trades during the second quarter of 2021 for a total of 68,906 shares for a total price of $1,692,681.  The closing share price on June 30, 2021 was $26.25.  Based on this closing share price, the Company's market cap was $138.568 million as of June 30, 2021.

Credit Quality

The Company recorded $144,000 provision for credit losses during the second quarter of 2021 as compared to $246,000 for the first quarter of 2021, and as compared to $1.85 million for the second quarter of 2020. The allowance for loan losses was equal to 1.45% of gross loans and equal to 1.55% of gross loans less loans originated through the PPP. Net loan charge-offs in the second quarter of 2021 were $265,000 as compared to $95,000 in the first quarter 2021, and as compared to $174,000 in the second quarter 2020. Non-performing assets to total assets were 0.63% for the second quarter of 2021, a decrease of 2 basis points compared to 0.65% for the first quarter of 2021 and a decrease of 6 basis points compared to 0.69% for the second quarter of 2020. Annualized net charge-offs to average loans were 0.02%, compared to 0.01% for the first quarter of 2021 compared to 0.01% for the second  quarter of 2020. 

Paycheck Protection Program ("PPP")

BankFirst Financial Services (the "Bank") participated in the Paycheck Protection Program ("PPP"), a $944 billion low-interest business loan program funded by the U.S. Treasury Department and administered by the U.S. Small Business Administration which officially ended May 31, 2021. The PPP Loan Program provides U.S. government guarantees for lenders, as well as loan forgiveness incentives for borrowers that predominately utilize the loan proceeds to cover employee compensation-related business costs. The Bank participated in Rounds 1 and 2, during 2020 and in Round 3 in 2021.  In 2020, the Bank approved 1,489 PPP loans totaling $115.6 million. Through June 30, 2021, the Bank has received loan forgiveness payments from the SBA totaling $103 million on Rounds 1 and 2 PPP loans. The bank received approximately $4.4 million in fees (net of expenses) paid by the SBA on our first round of PPP loans, which we have recognized $275,000 as loan fee income during the second quarter of 2021, year-to-date we have recognized $940,000, compared to $940,000 for the first six months of 2020 and $2.4 million was recognized in total as loan fee income during 2020.

In 2021, during Round 3, the Bank approved 1,382 PPP loans totaling $62 million.  Through June 30, 2021 the Bank has received forgiveness payments from the SBA totaling $2.7 million on Round 3 PPP loans.  The bank received approximately $4 million in fees (net of expenses) for the 2021 loans, which we have recognized $50,000 as loan fee income during the second quarter of 2021.

Lending

We have taken actions to identify and assess our COVID-19 related credit exposures by asset classes and borrower types. We implemented a loan modification program to assist both consumer and business borrowers that are experiencing or expect to experience financial hardships due to COVID-19 related challenges. As of June 30, 2021, the Bank had 0.59% of its loan portfolio that has modified as result of COVID-19 compared to 2.59% as of March 31, 2021 and 2.03% as of December 31, 2020.

Modified loans with deferred payments will continue to accrue interest during the deferral period unless otherwise classified as nonperforming. Consistent with bank regulatory guidance, borrowers that were otherwise current on loan payments that were granted COVID-19 related financial hardship payment deferrals will continue to be reported as current loans throughout the agreed upon deferral periods. COVID-19 related loan modifications are also deemed to be insignificant borrower concessions, and therefore, such modified loans were not classified as troubled-debt restructured loans as of June 30, 2021.

The COVID-19 crisis has continued to impact our financial results, as well as demand for our services and products during the second quarter of 2021 and potentially beyond. The short and long-term implications of the COVID-19 crisis, and related monetary and fiscal stimulus measures, on our future revenues, earnings results, allowance for credit losses, capital reserves and liquidity are unknown at present.

ABOUT BANKFIRST CAPITAL CORPORATION  

BankFirst Financial Services, the wholly-owned banking subsidiary of BankFirst Capital Corporation, was founded in 1888 and is a $1.8 billion financial institution that is locally owned, controlled, and operated. The Bank is headquartered in Columbus, Mississippi, with additional branch offices in Flowood, Hattiesburg, Jackson, Louin, Macon, Madison, Newton, Starkville, and West Point, Mississippi and Addison, Aliceville, Arley, Bear Creek, Carrollton, Curry, Double Springs, Gordo, Haleyville, Lynn, Northport, and Tuscaloosa, Alabama. The Bank also operates two mortgage production offices, one in Oxford, Mississippi and one in Brookhaven, Mississippi. BankFirst offers a wide variety of services for businesses and consumers. The Bank also offers internet banking, no-fee ATM access, checking, CD, and money market accounts, merchant services, mortgage loans, remote deposit capture, and more. For more information, visit www.bankfirstfs.com.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This press release contains, among other things, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements regarding certain of the Company's goals and expectations with respect to future events that are subject to various risks and uncertainties, (ii) statements about the merger of Traders & Farmers Bancshares, Inc. with BankFirst (the "merger"), and (iii) statements preceded by, followed by, or that include the words "may," "will," "could," "should," "expect," "plan," "project," "intend," "anticipate," "believe," "estimate," "predict," "potential," "pursuant," "target," "continue," and similar expressions.  These statements are based upon the current belief and expectations of the Company's management team and are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond the Company's control).  Factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations include, but are not limited to: fluctuation in market rates of interest and loan and deposit pricing, adverse changes in the overall national economy as well as adverse economic conditions in our specific market areas, including as a result of the coronavirus pandemic, our ability to complete the merger and recognize the expected benefits and synergies of the merger, maintenance and development of well-established and valued client relationships and referral source relationships, and acquisition or loss of key production personnel.  Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate.  Therefore, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized.  The inclusion of this forward-looking information should not be construed as a representation by the Company or any person that the future events, plans or expectations contemplated by the Company will be achieved.  All subsequent written and oral forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above.  The forward-looking statements are made as of the date of this press release.  The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law.

NO OFFER OR SOLICITATION

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities.  The shares of common stock of BankFirst are not savings or deposit accounts and are not insured by the Federal Deposit Insurance Corporation or any other government agency.

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SOURCE BankFirst Capital Corporation