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BankFirst Capital Corporation Reports Second Quarter 2020 Earnings Of $3.2 Million

BankFirst Capital Corporation Reports Second Quarter 2020 Earnings Of $3.2 Million

PR Newswire

COLUMBUS, Miss., July 24, 2020 /PRNewswire/ -- BankFirst Capital Corporation (OTCQX: BFCC) (the "Company") reported record net income of $3.2 million for the second quarter of 2020, an increase of 10% over net income of $2.9 million for the second quarter of 2019.  Basic and diluted earnings per share for the second quarter of 2020 and 2019 were $0.72 and $0.65, respectively.  Net income was $6.1 million for the first half of 2020, an increase of 16% over net income of $5.3 million for the first half of 2019.  Basic and diluted earnings per share for the first half of 2020 and 2019 were $1.37 and $1.25, respectively.

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 all familiar with the challenges and uncertainty brought upon us all by the COVID-19 pandemic and we are extremely proud of our response and our results during the second quarter of 2020. In addition to the pandemic, the second quarter also brought several significant challenges to the overall banking industry starting with the 150 basis point drop in interest rates, the creation of the PPP and the guidance released by the regulatory agencies allowing banks to work with loan customers to do what was necessary to help those customers through these unprecedented times. Each of these challenges required extraordinary effort from our team to implement solutions to help our customers and communities. As we often see, in times of great uncertainty and difficulty, people rise to the occasion to serve and help others; and the employees of BankFirst did just that. The overall response of our customers, employees and communities in the second quarter was extremely rewarding and is the very reason many of us chose to be community bankers."

Financial Condition and Results of Operations

Total assets were $1.5 billion at June 30, 2020, as compared to $1.3 billion at June 30, 2020, an increase of 20%.  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.  Net loans outstanding at June 30, 2020 totaled $1,044 million, as compared to $897 million in the first quarter of 2020 an increase of 17%, and $922 million in the second quarter of 2019, an increase of 14%.    Net loans outstanding, excluding loans associated with the Payment Protection Program, at June 30, 2020 totaled $917 million, as compared to $897 million in the first quarter of 2020 an increase of 2%, and $922 million in the second quarter of 2019, a decrease of 1%.  Asset quality remained solid with non-performing assets to total assets at 0.69% as of June 30, 2020, down from 0.77% as of June 30, 2019.   

Non-interest-bearing deposits increased to $330.6 million as of June 30, 2020, as compared to $248.1 million in the first quarter of 2020, an increase of 25% and $225.8 at June 30, 2019, an increase of 46%.  Non-interest-bearing deposits represented 27% of total deposits at June 30, 2020.  Total deposits as of June 30, 2020 were $1.23 billion, as compared to $1.15 billion for the first quarter of 2020, an increase of 8%, and $1.10 billion for the second quarter of 2019, an increase of 12%.

The Company's ratio of loans to deposits was 84.9% at June 30, 2020, compared to 79.1% at March 31, 2020, and 83.4% at June 30, 2019.

We recorded a $1.85 million provision for credit losses during second quarter 2020 compared to $950,000 for the first quarter of 2020 and $212,000 for the comparable period of 2019. The Allowance for Loan Losses was equal to 1.13% of gross loans and equal to 1.27% of gross loans less loans originated through the PPP.  Net loan charge-offs (recoveries) in the second quarter 2020 were $216,000, compared to $174,000, in the first quarter 2020, and $173,000, in the second quarter 2019.

As of June 30, 2020, the Company's tangible book value per share was $22.64.  According to OTCQX, there were 57 trades during the second quarter of 2020 for a total of 6,417 shares for a total price of $126,971.  The closing share price on June 30, 2020 was $20.20.  Based on this closing share price, the Company's market cap was $90.9 million as of June 30, 2020.

Merger & Acquisition Activity

BankFirst completed its acquisition of Traders & Farmers Bancshares, Inc. ("Traders & Farmers") and its subsidiary, Traders & Farmers Bank, headquartered in Haleyville, Alabama on July 1, 2020. Traders & Farmers had total assets of $378.1 million, loans of $158.7 million, and deposits of $348.2 million.  Total assets were approximately $1.8 billion upon completion of this transaction.

COVID-19 Impacts

Operations

As the COVID-19 related events unfolded throughout first six months of 2020, BankFirst implemented various plans, strategies and protocols to protect our employees, maintain services for clients, assure the functional continuity of our operating systems, controls and processes, and mitigate financial risks posed by changing market conditions. In order to protect employees and assure workforce continuity and operational redundancy, we imposed business travel restrictions, enhanced our sanitizing protocols within our facilities and physically separated, to the extent possible, our critical operations workforce that cannot work remotely. To limit the risk of virus spread, the Company implemented drive-thru only and by appointment operating protocols throughout its bank branch network. We also maintained active communications with our critical vendors to assure all mission-critical activities and functions are being performed in line with our client-service standards.

Capital and Liquidity

Although there is a high degree of uncertainty around the magnitude and duration of the economic impact of the COVID-19 pandemic, management believes that our financial position, including our levels of capital and liquidity, will allow us to successfully endure the negative economic impacts of the crisis. Our capital management activities, coupled with our historical earnings performance and our dividend practices, have allowed us to build and maintain our capital reserves. At June 30, 2020, all BankFirst's regulatory capital ratios exceeded well-capitalized standards.

In addition, management believes the Company's liquidity position is strong. The Company's bank subsidiary maintains a funding base largely comprised of core noninterest bearing demand deposit accounts and low cost interest-bearing transactional deposit accounts with clients that operate or reside within the footprint of its branch bank network. At June 30, 2020, the Company's cash and cash equivalent balances were $129.1 million.

The Company has not experienced significant draws on clients' available commercial lines of credit and home equity lines of credit due to the COVID-19 crisis, nor has it observed any significant or unusual client activity that portends unmanageable levels of stress on our liquidity profile.

Paycheck Protection Program ("PPP")

BankFirst is participating in the Paycheck Protection Program ("PPP"), a $660 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. Through June 30, 2020, BankFirst had approved 1,489 PPP loans totaling $115.4 million. In order to provide additional liquidity to the bank while participating in the PPP Program, the Bank also participated in the Paycheck Protection Program Liquidity Facility ("PPPLF") in which it borrowed $104.2 in order to be able to match fund the majority of the PPP loans that were made.  

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 June 30, 2020.


Loan Balance


Loans Modified to
Interest Only
Payments (6
Months or Less)


Loans Modified to
Payment Deferral
(3 Months)


Total Loans
Modified


Percentage of
Loans Modified











Secured by real estate










Construction

99,100


1,373


5,874


7,247


7.31%

Farmland

52,092


0


2,039


2,039


3.91%

Residential real estate

224,835


9,784


25,165


34,949


15.54%

Commercial real estate

415,989


16,047


73,651


89,698


21.56%

Consumer

11,942


0


279


279


2.34%

Commercial and other

243,787


5,938


3,881


9,819


4.03%











Total Loans

1,047,745


33,142


110,889


144,031


13.75%

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, 2020.

The COVID-19 crisis is expected to continue to impact our financial results, as well as demand for our services and products during the third quarter of 2020 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, Hickory, Jackson, Lake, 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 one mortgage production office in Oxford, 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 T&F with and into 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 Corporation
Unaudited Consolidated Balance Sheets
(In Thousands, Except Per Share Data)












June 30


March 31


December 31


September 30


June 30


2020


2020


2019


2019


2019

Assets










Cash and due from banks

$      37,619


$      44,311


$         34,757


$          38,943


$      33,659

Interest bearing bank balances

86,631


19,106


27,281


7,456


19,931

Federal funds sold

4,900


4,900


-


4,391


7,569

Available-for-sale securities

258,005


248,510


217,647


200,061


199,927











Loans

1,044,164


907,458


904,440


927,875


922,409

Allowance for loan losses

(11,832)


(10,153)


(9,418)


(9,158)


(9,399)

Loans, net of allowance for loan losses

1,032,332


897,305


895,022


918,717


913,010











Premises and equipment

33,340


33,526


31,900


31,822


31,659

Interest receivable

5,902


4,549


4,881


4,772


4,702

Goodwill

19,526


19,526


19,408


19,525


19,525

Other intangible assets

4,189


4,333


4,476


4,620


4,763

Other

47,079


45,591


45,241


43,048


44,899











Total assets

$ 1,529,523


$ 1,321,657


$    1,280,613


$     1,273,355


$ 1,279,644











Liabilities and Stockholders' Equity










Liabilities










Noninterest bearing deposits

$    330,562


$    248,142


$       246,630


$        238,953


$    225,874

Interest bearing deposits

903,850


898,427


863,161


866,361


880,304

Notes payable

129,995


16,155


15,750


16,000


21,250

Subordinated debt

28,841


29,186


28,564


28,841


31,341

Interest payable

972


1,128


1,392


1,515


1,343

Other 

9,683


8,938


10,101


7,612


8,880

Total liabilities

1,403,903


1,201,976


1,165,598


1,159,282


1,168,992











Stockholders' Equity










Common stock

1,351


1,350


1,347


1,346


1,346

Additional paid-in capital

42,843


42,807


42,729


42,624


42,532

Retained earnings

75,814


72,575


69,676


68,529


65,383

Accumulated other comprehensive income

5,612


2,949


1,263


1,574


1,391

Total stockholders' equity

125,620


119,681


115,015


114,073


110,652











Total liabilities and stockholders' equity

$ 1,529,523


$ 1,321,657


$    1,280,613


$     1,273,355


$ 1,279,644











Common shares outstanding

4,500,784


4,501,054


4,489,414


4,485,585


4,486,184

Book value per share

$        27.91


$        26.59


$           25.62


$            25.43


$        24.67

Tangible book value per share

$        22.64


$        21.29


$           20.30


$            20.05


$        19.25

 

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










For Three Months Ended


For the Six Months Ended


June 30


June 30


June 30


June 30


2020


2019


2020


2019

Interest Income








Interest and fees on loans

$     12,403


$     11,857


$     23,882


$     21,143

Taxable securities

1,189


1,179


2,393


1,810

Tax-exempt securities

242


197


476


393

Federal funds sold 

24


319


254


562

Interest bearing bank balances

16


29


33


44

Total interest income

13,874


13,581


27,038


23,952









Interest Expense








Deposits

1,942


2,350


4,244


4,072

Federal Home Loan Bank advances

82


197


163


411

Other borrowings

469


491


891


673

Total interest expense

2,493


3,038


5,298


5,156









Net Interest Income

11,381


10,543


21,740


18,796









Provision for Loan Losses

1,853


212


2,804


677









Net Interest Income After Provision for Loan Losses

9,528


10,331


18,936


18,119









Noninterest Income








Service charges on deposit accounts

1,148


1,373


2,665


2,383

Mortgage income

1,823


773


2,700


1,049

Interchange income

790


639


1,552


1,208

Net realized gains on available-for-sale securities

522


153


748


221

Other

527


799


1,704


1,407

Total noninterest income

4,810


3,737


9,369


6,268









Noninterest Expense








Salaries and employee benefits

6,182


5,566


11,921


9,636

Net occupancy expenses

580


559


1,181


972

Equipment and data processing expenses

250


925


491


1,628

Other

3,606


3,113


7,271


5,225

Total noninterest expense

10,618


10,163


20,864


17,461









Income Before Income Taxes

3,720


3,905


7,441


6,926









Provision for Income Taxes

481


972


1,302


1,647









Net Income

$       3,239


$       2,933


$       6,139


$       5,279

















Basic Earnings Per Common Share

$         0.72


$         0.65


$         1.37


$         1.25









Diluted Earnings Per Common Share

$         0.72


$         0.65


$         1.37


$         1.25

 

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












Quarter Ended


June 30


March 31


December 31


September 30


June 30


2020


2020


2019


2019


2019

Interest Income










Interest and fees on loans

$      12,403


$         11,479


$                  11,732


$                    11,981


$      11,857

Taxable securities

1,189


1,204


1,199


1,164


1,179

Tax-exempt securities

242


234


206


166


197

Federal funds sold 

24


230


98


120


319

Interest bearing bank balances

16


16


22


14


29

Total interest income

13,874


13,163


13,257


13,445


13,581











Interest Expense










Deposits

1,942


2,302


2,148


2,321


2,350

Federal Home Loan Bank advances

82


81


81


190


197

Other borrowings

469


422


431


443


491

Total interest expense

2,493


2,805


2,660


2,954


3,038











Net Interest Income

11,381


10,358


10,597


10,491


10,543











Provision for Loan Losses

1,853


951


656


233


212











Net Interest Income After Provision for Loan Losses

9,528


9,407


9,941


10,258


10,331











Noninterest Income










Service charges on deposit accounts

1,148


1,516


1,586


1,463


1,373

Mortgage income

1,823


876


726


942


773

Interchange income

790


762


707


701


639

Net realized gains on available-for-sale securities

522


226


150


59


153

Other

527


1,177


1,725


596


799

Total noninterest income

4,810


4,557


4,894


3,761


3,737











Noninterest Expense










Salaries and employee benefits

6,182


5,738


5,514


5,633


5,566

Net occupancy expenses

580


600


588


591


559

Equipment and data processing expenses

250


242


242


229


925

Other

3,606


3,663


4,051


3,609


3,113

Total noninterest expense

10,618


10,243


10,395


10,062


10,163











Income Before Income Taxes

3,720


3,721


4,440


3,957


3,905











Provision for Income Taxes

481


821


1,052


810


972











Net Income

$        3,239


$           2,900


$                    3,388


$                      3,147


$        2,933





















Basic Earnings Per Common Share

$          0.72


$             0.64


$                      0.77


$                        0.70


$          0.65











Diluted Earnings Per Common Share

$          0.72


$             0.64


$                      0.77


$                        0.70


$          0.65

 

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SOURCE BankFirst Capital Corporation

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