PR Newswire | Jul 26, 2021 06:00PM EDT

Million

07/26 17:00 CDT

BANKFIRST CAPITAL CORPORATION Reports Second Quarter 2021 Earnings of $4.3 Million2021 Second Quarter Highlights:- Net income totaled $4.3 million or $0.81 per share, compared to $3.2 million or $0.72 per share for the second quarter of 2020- EPS increased to $1.62 for the first six months compared to $1.37 last year, an increase of 18%- During round-three of the Paycheck Protection Program ("PPP") the Company funded 1,382 PPP loans totaling $62.0 million- Total assets increased 18% to $1.8 billion at June 30, 2021 from $1.5 billion at June 30, 2020- Total deposits increased 28% to $1.6 billion at June 30, 2021 from $1.2 billion at June 30, 2020- Non-interest bearing deposits increased to 29% of total deposits from 27% at June 30, 2020- Provision for credit losses decreased to $144 thousand for Q2 2021 compared to $1.85 million in Q2 of 2020- Total loan deferrals of $7 million or 0.6% of the total loan portfolio compared to $29 million or 2.6% in the first quarter COLUMBUS, Miss., July 26, 2021

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.

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

June 30 March 31 December 31 September 30 June 30

2021 2021 2020 2020 2020

Assets

Cash and due from banks $ 43,997 $ 33,046 $ 37,208 $ 30,492 $ 37,619

Interest bearing bank balances 47,049 60,599 83,324 10,056 86,631

Federal funds sold 9,313 8,968 8,408 9,391 4,900

Available-for-sale securities 427,390 411,930 329,409 296,748 258,005

Loans 1,140,349 1,135,123 1,142,624 1,206,834 1,044,164

Allowance for loan losses (16,526) (16,647) (16,496) (16,857) (11,832)

Loans, net of allowance for loan losses 1,123,823 1,118,476 1,126,128 1,189,977 1,032,332

Premises and equipment 42,164 42,227 42,414 42,232 33,340

Interest receivable 8,366 8,574 8,978 9,829 7,993

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

Other intangible assets 4,214 4,375 4,535 4,695 4,189

Other 57,338 57,206 54,387 53,496 44,988

Total assets $ 1,798,218 $ 1,779,965 $ 1,729,355 $ 1,681,480 $ 1,529,523

Liabilities and Stockholders' Equity

Liabilities

Noninterest bearing deposits $ 462,436 $ 446,921 $ 432,252 $ 417,135 $ 330,562

Interest bearing deposits 1,115,992 1,120,748 1,082,920 1,051,618 903,850

Total deposits 1,578,428 1,567,669 1,515,172 1,468,753 1,234,412

Notes payable 27,030 27,843 28,605 29,375 129,995

Subordinated debt 26,341 26,341 26,341 26,341 28,841

Interest payable 817 1,084 1,123 987 972

Other 12,716 11,801 11,162 10,856 9,683

Total liabilities 1,645,332 1,634,738 1,582,403 1,536,312 1,403,903

Stockholders' Equity

Common stock 1,583 1,585 1,581 1,578 1,351

Additional paid-in capital 60,279 60,229 60,113 59,980 42,843

Retained earnings 89,083 84,798 80,479 79,169 75,814

Accumulated other comprehensive income 1,941 (1,385) 4,779 4,441 5,612

Total stockholders' equity 152,886 145,227 146,952 145,168 125,620

Total liabilities and stockholders' equity $ 1,798,218 $ 1,779,965 $ 1,729,355 $ 1,681,480 $ 1,529,523

Common shares outstanding 5,278,771 5,282,164 5,270,323 5,260,294 4,500,784

Book value per share $ 28.96 $ 27.49 $ 27.88 $ 27.60 $ 27.91

Tangible book value per share $ 21.62 $ 20.12 $ 20.46 $ 20.13 $ 22.64

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

For Three Months Ended For the Six Months Ended

June March June June

2021 2021 2021 2020

Interest Income

Interest and fees on loans $ 12,856 $ 13,043 $ 25,899 $ 23,882

Taxable securities 1,270 1,195 2,465 2,393

Tax-exempt securities 442 444 886 476

Federal funds sold 19 28 47 254

Interest bearing bank balances 11 11 22 33

Total interest income 14,598 14,721 29,319 27,038

Interest Expense

Deposits 1,189 1,454 2,643 4,244

Federal Home Loan Bank advances 81 82 163 163

Other borrowings 438 438 876 891

Total interest expense 1,708 1,974 3,682 5,298

Net Interest Income 12,890 12,747 25,637 21,740

Provision for Loan Losses 144 246 390 2,804

Net Interest Income After Provision for Loan Losses 12,746 12,501 25,247 18,936

Noninterest Income

Service charges on deposit accounts 1,658 1,547 3,205 2,665

Mortgage income 1,737 1,822 3,559 2,700

Interchange income 1,201 975 2,176 1,552

Net realized gains (losses) on available-for-sale securities - 13 13 748

Other 1,002 1,649 2,651 1,704

Total noninterest income 5,598 6,006 11,604 9,369

Noninterest Expense

Salaries and employee benefits 7,561 7,750 15,311 11,921

Net occupancy expenses 739 755 1,494 1,181

Equipment and data processing expenses 387 340 727 491

Other 4,606 4,382 8,988 7,271

Total noninterest expense 13,293 13,227 26,520 20,864

Income Before Income Taxes 5,051 5,280 10,331 7,441

Provision for Income Taxes 766 1,002 1,768 1,302

Net Income $ 4,285 $ 4,278 $ 8,653 $ 6,139

Basic/Diluted Earnings Per Common Share $ 0.81 $ 0.81 $ 1.62 $ 1.37

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

Quarter Ended

June March December 31 September 30 June 30

2021 2021 2020 2020 2020

Interest Income

Interest and fees on loans $ 12,856 $ 13,043 $ 13,463 $ 15,671 $ 12,403

Taxable securities 1,270 1,195 1,062 1,106 1,189

Tax-exempt securities 442 444 447 419 242

Federal funds sold 19 28 13 23 24

Interest bearing bank balances 11 11 15 16 16

Total interest income 14,598 14,721 15,000 17,235 13,874

Interest Expense

Deposits 1,189 1,454 1,542 1,883 1,942

Federal Home Loan Bank advances 81 82 81 81 82

Other borrowings 438 438 443 494 469

Total interest expense 1,708 1,974 2,066 2,458 2,493

Net Interest Income 12,890 12,747 12,934 14,777 11,381

Provision for Loan Losses 144 246 147 5,161 1,853

Net Interest Income After Provision for Loan Losses 12,746 12,501 12,787 9,616 9,528

Noninterest Income

Service charges on deposit accounts 1,658 1,547 1,622 1,520 1,148

Mortgage income 1,737 1,822 1,770 1,871 1,823

Interchange income 1,201 975 986 812 790

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

Other 1,002 1,649 1,351 849 527

Total noninterest income 5,598 6,006 5,728 7,897 4,810

Noninterest Expense

Salaries and employee benefits 7,561 7,750 7,668 7,778 6,182

Net occupancy expenses 739 755 761 785 580

Equipment and data processing expenses 387 340 343 320 250

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

Total noninterest expense 13,293 13,227 13,779 13,544 10,618

Income Before Income Taxes 5,051 5,280 4,736 3,969 3,720

Provision for Income Taxes 766 1,002 749 613 481

Net Income $ 4,285 $ 4,278 $ 3,987 $ 3,356 $ 3,239

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

BankFirst Capital CorporationUnaudited Risk Category of Loans by Type(In Thousands)

Grades Watch Substandard Total

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

June 30, 2021

Secured by real estate

Construction $ 98,092 $ 39 $ 4,665 $ 102,796

Farmland 57,699 913 237 58,849

Residential real estate 272,289 4,402 5,710 282,401

Commercial real estate 441,416 6,372 5,925 453,713

Consumer 20,290 213 228 20,731

Commercial and other 218,050 1,172 2,637 221,859

$ 1,107,836 $ 13,111 $ 19,402 $ 1,140,349

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

$ 1,106,051 $ 9,661 $ 19,411 $ 1,135,123

BankFirst Capital CorporationUnaudited Past Due Loans(In Thousands)

Accruing Loans Past Due Total

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

Days or More accrual Nonaccrual Loans Loans

June 30, 2021

Secured by real estate

Construction $ 369 $ - $ 4,391 $ 4,760 $ 98,036 $ 102,796

Farmland 115 - 15 130 58,719 58,849

Residential real estate 764 - 2,006 2,770 279,631 282,401

Commercial real estate - - 1,820 1,820 451,893 453,713

Consumer 108 1 110 219 20,512 20,731

Commercial and other 589 - 2,056 2,645 219,214 221,859

$ 1,945 $ 1 $ 10,398 $ 12,344 $ 1,128,005 $ 1,140,349

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 $ 1,120,544 $ 1,135,123

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SOURCE BankFirst Capital Corporation