PR Newswire | Apr 26, 2021 07:00AM EDT

$4.3 Million

04/26 06:00 CDT

BANKFIRST CAPITAL CORPORATION Reports Record First Quarter 2021 Earnings of $4.3 Million2021 First Quarter Highlights:- Net income totaled $4.3 million or $0.81 per share, compared to $2.9 million or $0.64 per share for the first quarter of 2020- We funded approximately 608 Payroll Protection Program ("PPP") loans totaling approximately $43.4 million through March 31, 2021- Total assets increased 35% to $1.78 billion at March 31, 2021 from $1.32 billion at March 31, 2020- Total deposits increased 37% to $1.57 billion at March 31, 2021 from $1.15 billion at March 31, 2020- Non interest bearing deposits increased to 29% of total deposits from 22% at March 31, 2020- Provision for credit losses decreased to $246 thousand for Q1 2021 compared to $951 thousand in Q1 of 2020. COLUMBUS, Miss., April 26, 2021

COLUMBUS, Miss., April 26, 2021 /PRNewswire/ -- BankFirst Capital Corporation (OTCQX: BFCC) (the "Company") reported record quarterly net income of $4.3 million, or $0.81 per share, for the first quarter of 2021, an increase of 7% compared to net income of $4.0 million or $0.76 per share for the fourth quarter of 2020, and an increase of 48% compared to net income of $2.9 million or $0.64 per share for the first quarter of 2020.

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 that the activity in our local markets has increased to near pre-pandemic levels which has resulted in a record first quarter for BankFirst. We remain optimistic that BankFirst is well positioned to continue to build on the successes achieved during 2020 as we continue to meet the needs of our customers, shareholders, and our employees.

Financial Condition and Results of Operations

Total assets were $1.78 billion at March 31, 2021 as compared to $1.73 billion at December 31, 2020, an increase of 3%, and as compared to $1.32 billion at March 31, 2020, an increase of 35%. 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, at March 31, 2021 totaled $1,118 million as compared to $1,126 million in the fourth quarter of 2020 a decrease of 1%, and as compared to $897 million in the first quarter of 2020, an increase of 25%. Net loans outstanding excluding loans associated with the PPP, at March 31, 2021 totaled $1,034 million, as compared to $1,044 million in the fourth quarter of 2020 a decrease of 1%, and as compared to $897 million in the first quarter of 2020, an increase of 15%. Asset quality remained solid with non-performing assets to total assets at 0.65% as of both March 31, 2021 and December 31, 2020, down from 0.77% as of March 31, 2020.

Non-interest-bearing deposits increased to $446.9 million as of March 31, 2021, as compared to $432.3 million in the fourth quarter of 2020, an increase of 3%, and as compared to $248.1 million as of March 31, 2020, an increase of 80%. Non-interest-bearing deposits represented 28.51% of total deposits at March 31, 2021. Total deposits as of March 31, 2021 were $1.57 billion, as compared to $1.52 billion for the fourth quarter of 2020, an increase of 3%, and as compared to $1.15 billion for March 31, 2020 an increase of 37%. Cost of funds as of March 31, 2021 is 0.34% as compared to 0.41% at December 31, 2020, and as compared to 0.80% as of March 31, 2020.

The Company's ratio of loans to deposits is 72.4% at March 31, 2021 as compared to 75.4% at December 31, 2020, and as compared to 79.1% at March 31, 2020.

Net interest income is $12.7 million for the first quarter of 2021 a decrease of 1% as compared to $12.9 million for the fourth quarter of 2020. The decrease is primarily due to the interest rate reductions by the Federal Reserve in response to COVID-19. Net interest margin decreased to 3.01% as of March 31, 2021 from 3.21% as of December 31, 2020.

Noninterest income was $6 million for the first quarter of 2021, an increase of 32% as compared to $4.6 million for the first quarter of 2020, and an increase of 5% as compared to $5.7 million for the fourth quarter of 2020. The primary reasons for the increase are due to the increase in secondary mortgage lending income in 2021 and 2020 as well the receipt of a Community Development Financial Institution Financial Assistance grant of $888,000 in the first quarter of 2021.

As of March 31, 2021, the Company's tangible book value per share was $20.12. According to OTCQX, there were 332 trades during the first quarter of 2021 for a total of 66,877 shares for a total price of $1,445,182. The closing share price on March 31, 2021 was $23.00. Based on this closing share price, the Company's market cap was $121.49 million as of March 31, 2021.

Credit Quality

The Company' recorded $246,000 provision for credit losses during the first quarter of 2021 as compared to $147,000 for the fourth quarter of 2020, and as compared to $951,000 for the first quarter of 2020. The Allowance for Loan Losses was equal to 1.47% of gross loans and equal to 1.58% of gross loans less loans originated through the PPP. Net loan charge-offs in the first quarter of 2021 were $95,000 as compared to $508,000 in the fourth quarter 2020, and as compared to $217,000 in the first quarter 2020.

As of March 31, 2021 and December 31, 2020, and based on the most recent analysis performed, the risk category of loans by type of loans (excluding mortgage held for sale) were as follows:

Grades Watch Substandard Total

(1 - 5) (6) (7) Loans

March 31, 2021

Secured by real estate

Construction $ 97,808 $ 69 $ 4,703 $ 102,580

Farmland 47,267 1,316 288 48,871

Residential real estate 283,260 4,600 6,131 293,991

Commercial real estate 430,764 1,738 5,362 437,864

Consumer 20,849 299 164 21,312

Commercial and other 226,103 1,639 2,763 230,505

$ 1,106,050 $ 9,661 $ 19,411 $ 1,135,123

Grades Watch Substandard Total

(1 - 5) (6) (7) Loans

December 31, 2020

Secured by real estate

Construction $ 100,530 $ 67 $ 4,441 $ 105,038

Farmland 47,432 1,287 317 49,036

Residential real estate 299,310 5,926 6,394 311,630

Commercial real estate 414,616 1,727 6,789 423,132

Consumer 23,283 297 147 23,727

Commercial and other 225,416 2,035 2,610 230,061

$ 1,110,587 $ 11,339 $ 20,698 $ 1,142,624

The following tables present past due loans by type as of March 31, 2021 and as of December 31, 2020:

Accruing Loans Past Due Total

30 - 89 90 Days Non- Past Due and Current Total

Days or More accrual Nonaccrual Loans Loans

March 31, 2021

Secured by real estate

Construction $ - $ - $ 4,428 $ 4,428 $ 98,152 $ 102,580

Farmland 189 - 115 304 48,567 48,871

Residential real estate 2,241 - 2,304 4,545 289,446 293,991

Commercial real estate 862 - 1,508 2,370 435,494 437,864

Consumer 123 10 110 243 21,069 21,312

Commercial and other 672 - 2,017 2,689 227,816 230,505

$ 4,087 $ 10 $ 10,482 $ 14,579 $ 1,120,543 $ 1,135,123

Accruing Loans Past Due Total

30 - 89 90 Days Non- Past Due and Current Total

Days or More accrual Nonaccrual Loans Loans

December 31, 2020

Secured by real estate

Construction $ 11 $ - $ 4,414 $ 4,425 $ 100,613 $ 105,038

Farmland 27 - 114 141 48,895 49,036

Residential real estate 1,786 20 2,072 3,878 307,752 311,630

Commercial real estate 8 - 1,536 1,544 421,588 423,132

Consumer 228 10 80 318 23,409 23,727

Commercial and other 324 - 1,806 2,130 227,931 230,061

$ 2,384 $ 30 $ 10,022 $ 12,436 $ 1,130,188 $ 1,142,624

Paycheck Protection Program ("PPP")

BankFirst Financial Services (the "Bank") is participating 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. 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 is currently participating in Round 3 in 2021. In 2020, the Bank approved 1,489 PPP loans totaling $115.6 million. Through March 31, 2021, the Bank has received loan forgiveness payments from the SBA totaling $74.7 million. During the 1st quarter of 2021, the Bank approved 608 PPP loans totaling $43.4 million. The Bank anticipates approving a total of $55 - $60 million PPP loans in Round 3. 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 $650,000 as loan fee income for the first quarter of 2021, and $2.4 million was recognized as loan fee income during 2020. We anticipate receiving approximately $4 million for the 2021 loans. The average balance of the approved PPP loans is approximately $75,000.

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. Accordingly, the following table summarizes the aggregate balances of loans with deferred payments that the Company has modified as result of COVID-19 as of March 31, 2021 and December 31, 2020.

Loan Balances Modified Due to COVID-19 as of 3/31/2021

Loans Modified to Loans Modified to Total Loans Percentage of Loan Balance Interest Only Payment Deferral Modified Loans Modified Payments

Secured by real estate

Construction $ 102,580 $ - $ - $ - 0.00%

Farmland 48,871 - - - 0.00%

Residential real estate 293,991 - - - 0.00%

Commercial real estate 437,864 29,392 - 29,392 6.71%

Consumer 21,312 - - - 0.00%

Commercial and other 230,505 - - - 0.00%

Total Loans $ 1,135,123 $ 29,392 $ - $ 29,392 2.59%

Loan Balances Modified Due to COVID-19 as of 12/31/2020

Loans Modified to Loans Modified to Total Loans Percentage of Loan Balance Interest Only Payment Deferral Modified Loans Modified Payments

Secured by real estate

Construction $ 105,038 $ - $ - $ - 0.00%

Farmland 49,036 - - - 0.00%

Residential real estate 311,630 - - - 0.00%

Commercial real estate 423,132 20,737 2,432 23,169 5.48%

Consumer 23,727 - 4 4 0.02%

Commercial and other 230,061 - 15 15 0.01%

Total Loans $ 1,142,624 $ 20,737 $ 2,451 $ 23,188 2.03%

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 March 31, 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 $1.78 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.

BankFirst Capital CorporationUnaudited Consolidated Balance Sheets(In Thousands, Except Per Share Data)

March 31 December September June 30 March 31 31 30

2021 2020 2020 2020 2020

Assets

Cash and due from banks $ $ $ $ $ 33,046 37,208 30,492 37,619 44,311

Interest bearing bank 60,599 83,324 10,056 86,631 19,106balances

Federal funds sold 8,968 8,408 9,391 4,900 4,900

Available-for-sale 411,930 329,409 296,748 258,005 248,510securities

Loans 1,135,123 1,142,624 1,206,834 1,044,164 907,458

Allowance for loan (16,647) (16,496) (16,857) (11,832) (10,153)losses

Loans, net of allowance 1,118,476 1,126,128 1,189,977 1,032,332 897,305for loan losses

Premises and equipment 42,227 42,414 42,232 33,340 33,526

Interest receivable 8,574 8,978 9,829 7,993 4,549

Goodwill 34,564 34,564 34,564 19,526 19,526

Other intangible assets 4,375 4,535 4,695 4,189 4,333

Other 57,206 54,387 53,496 44,988 45,591

Total assets $ $ $ $ $ 1,779,965 1,729,355 1,681,480 1,529,523 1,321,657

Liabilities andStockholders' Equity

Liabilities

Noninterest bearing $ $ $ $ $ deposits 446,921 432,252 417,135 330,562 248,142

Interest bearing 1,120,748 1,082,920 1,051,618 903,850 898,427deposits

Total deposits 1,567,669 1,515,172 1,468,753 1,234,412 1,146,569

Notes payable 27,843 28,605 29,375 129,995 16,155

Subordinated debt 26,341 26,341 26,086 28,841 29,186

Interest payable 1,084 1,123 987 972 1,128

Other 11,801 11,162 11,111 9,683 8,938

Total liabilities 1,634,738 1,582,403 1,536,312 1,403,903 1,201,976

Stockholders' Equity

Common stock 1,585 1,581 1,578 1,351 1,350

Additional paid-in 60,229 60,113 59,980 42,843 42,807capital

Retained earnings 84,798 80,479 79,169 75,814 72,575

Accumulated other (1,385) 4,779 4,441 5,612 2,949comprehensive income

Total stockholders' 145,227 146,952 145,168 125,620 119,681equity

Total liabilities and $ $ $ $ $stockholders' equity 1,779,965 1,729,355 1,681,480 1,529,523 1,321,657

Common shares 5,282,164 5,270,323 5,260,294 4,500,784 4,501,054outstanding

Book value per share $ $ $ $ $ 27.49 27.88 27.60 27.91 26.59

Tangible book value per $ $ $ $ $ share 20.12 20.46 20.13 22.64 21.29

BankFirst Capital CorporationUnaudited Consolidated Statements of Income(In Thousands, Except Per Share Data)

For Three Months Ended

March December

2021 2020

Interest Income

Interest and fees on loans $ 13,043 $ 13,463

Taxable securities 1,195 1,062

Tax-exempt securities 444 447

Federal funds sold 28 13

Interest bearing bank balances 11 15

Total interest income 14,721 15,000

Interest Expense

Deposits 1,454 1,542

Federal Home Loan Bank advances 82 81

Other borrowings 438 443

Total interest expense 1,974 2,066

Net Interest Income 12,747 12,934

Provision for Loan Losses 246 147

Net Interest Income After Provision for Loan Losses 12,501 12,787

Noninterest Income

Service charges on deposit accounts 1,547 1,622

Mortgage income 1,822 1,770

Interchange income 975 986

Net realized gains (losses) on available-for-sale 13 (1)securities

Other 1,649 1,351

Total noninterest income 6,006 5,728

Noninterest Expense

Salaries and employee benefits 7,750 7,668

Net occupancy expenses 755 761

Equipment and data processing expenses 340 343

Other 4,382 5,007

Total noninterest expense 13,227 13,779

Income Before Income Taxes 5,280 4,736

Provision for Income Taxes 1,002 749

Net Income $ 4,278 $ 3,987

Basic Earnings Per Common Share $ $ 0.81 0.76

BankFirst Capital CorporationUnaudited Consolidated Statements of Income(In Thousands, Except Per Share Data)

Quarter Ended

March December September June March 31 30 30 31

2021 2020 2020 2020 2020

Interest Income

Interest and fees on loans $ $ $ $ $ 13,043 13,463 15,671 12,403 11,479

Taxable securities 1,195 1,062 1,106 1,189 1,204

Tax-exempt securities 444 447 419 242 234

Federal funds sold 28 13 23 24 230

Interest bearing bank balances 11 15 16 16 16

Total interest income 14,721 15,000 17,235 13,874 13,163

Interest Expense

Deposits 1,454 1,542 1,883 1,942 2,302

Federal Home Loan Bank advances 82 81 81 82 81

Other borrowings 438 443 494 469 422

Total interest expense 1,974 2,066 2,458 2,493 2,805

Net Interest Income 12,747 12,934 14,777 11,381 10,358

Provision for Loan Losses 246 147 5,161 1,853 951

Net Interest Income After 12,501 12,787 9,616 9,528 9,407Provision for Loan Losses

Noninterest Income

Service charges on deposit 1,547 1,622 1,520 1,148 1,516accounts

Mortgage income 1,822 1,770 1,871 1,823 876

Interchange income 975 986 812 790 762

Net realized gain (loss) on 13 (1) 2,845 522 226available-for-sale securities

Other 1,649 1,351 849 527 1,177

Total noninterest income 6,006 5,728 7,897 4,810 4,557

Noninterest Expense

Salaries and employee benefits 7,750 7,668 7,778 6,182 5,738

Net occupancy expenses 755 761 785 580 600

Equipment and data processing 340 343 320 250 242expenses

Other 4,382 5,007 4,661 3,606 3,663

Total noninterest expense 13,227 13,779 13,544 10,618 10,243

Income Before Income Taxes 5,280 4,736 3,969 3,720 3,721

Provision for Income Taxes 1,002 749 613 481 821

Net Income $ $ $ $ $ 4,278 3,987 3,356 3,239 2,900

Basic Earnings Per Common Share $ $ $ $ $ 0.81 0.76 0.64 0.72 0.64

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SOURCE BankFirst Capital Corporation