BANKFIRST CAPITAL CORPORATION Reports Record First Quarter 2021 Earnings of $4.3 Million

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:

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

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 1^st 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.

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.

SOURCE BankFirst Capital Corporation

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