BANKFIRST CAPITAL CORPORATION Reports Second Quarter 2025 Earnings of $6.88 Million

COLUMBUS, Miss., July 29, 2025 /PRNewswire/ -- BankFirst Capital Corporation (OTCQX: BFCC) ("BankFirst" or the "Company"), parent company of BankFirst Financial Services, Macon, Mississippi (the "Bank"), reported net income of $6.88 million, or $1.07 per common share, for the second quarter of 2025, compared to net income of $6.43 million, or $0.98 per common share, for the first quarter of 2025, and compared to net income of $6.52 million, or $1.09 per share, for the second quarter of 2024.

Second Quarter 2025 Highlights:

• Net income totaled $6.88 million, or $1.07 per common share, in the second quarter of 2025 compared to $6.52 million, or $1.09 per common share, in the second quarter of 2024.
• Net interest income totaled $23.07 million in the second quarter of 2025 compared to $20.77 million in the second quarter of 2024.
• Total assets increased 3% to $2.85 billion at June 30, 2025 from $2.76 billion at June 30, 2024.
• Total gross loans equaled $1.84 billion at June 30, 2025 which was unchanged from $1.84 billion at June 30, 2024.
• Total deposits increased 3% to $2.38 billion at June 30, 2025 from $2.32 billion at June 30, 2024.
• Available liquidity sources totaled approximately $977.96 million as of June 30, 2025 through (i) available advances from the Federal Home Loan Bank of Dallas ("FHLB"), (ii) the Federal Reserve Bank of St. Louis ("FRB") discount window, and (iii) access to funding through several relationships with correspondent banks.
• Total off-balance sheet liquidity through the IntraFi Insured Cash Sweep program totaled approximately $127.58 million as of June 30, 2025.
• Credit quality remains strong with the ratio of non-performing assets (excluding restructured) to total assets equal to 0.50% as of June 30, 2025 compared to 0.41% June 30, 2024.

Recent Developments

• On July 1, 2025, the Company completed its acquisition of The Magnolia State Corporation ("Magnolia"), parent company of Magnolia State Bank, Bay Springs, Mississippi ("Magnolia Bank") for all cash consideration. On June 30, 2025, Magnolia Bank had total assets of $465.61 million, total loans of $358.13 million, and total deposits of $414.51 million. The acquisition of Magnolia resulted in the Bank having 52 locations serving Mississippi and Alabama, with total assets of approximately $3.32 billion, total loans of approximately $2.20 billion and total deposits of approximately $2.80 billion as of July 1, 2025.
• As previously reported, on May 21, 2025, the Company's Board of Directors authorized a stock repurchase program pursuant to which the Company may repurchase up to $10.0 million of the outstanding shares of the Company's common stock from time to time through various means, including open market purchases or privately negotiated transactions (the "Stock Repurchase Program"). The Stock Repurchase Program will expire on Thursday, May 21, 2026, subject to the earlier suspension, termination or extension by the Company's Board of Directors, in its sole discretion and without prior notice, or until such time that the funds designated for the Stock Repurchase Program are depleted. During the second quarter of 2025, the Company did not repurchase shares under the Stock Repurchase Program.
• As previously disclosed, the Company closed on the issuance of $175.00 million of senior perpetual noncumulative preferred stock (the "Senior Preferred") to the U.S. Department of the Treasury ("Treasury") pursuant to the Emergency Capital Investment Program ("ECIP") in April 2022 and assumed an additional $43.57 million of outstanding Senior Preferred through the Company's acquisition of Mechanics Banc Holding Company, which was effective on January 1, 2023. In addition, the Company assumed an additional $30.0 million of outstanding subordinated note due 2052 (the "Magnolia ECIP Subordinated Note") through the Company's acquisition of Magnolia and Magnolia Bank, which was effective on July 1, 2025. The Senior Preferred issued to Treasury pays non-cumulative dividends, payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year beginning on the second dividend payment date after the two-year anniversary of the date of issuance. The dividend rate paid on the Senior Preferred adjusts annually based on certain measurements of the Company's extensions of credit to minority, rural, and urban low-income and underserved communities and low- and moderate-income borrowers. The Company began paying a quarterly dividend to Treasury on June 15, 2024 and the Company paid its fifth consecutive quarterly dividend to Treasury in an amount equal to $1.09 million on June 15, 2025.
• As previously disclosed, the Company entered into an ECIP Securities Purchase Option Agreement (the "ECIP Option Agreement") with the Treasury, pursuant to which Treasury granted to the Company an option to purchase all of the Senior Preferred.  The purchase option may not be exercised unless and until at least one of the following "Threshold Conditions" defined under the Option Agreement has been met:  (1) over any sixteen consecutive quarters, an average of at least 60% of the Company's Total Originations, as defined in the ECIP Disposition Policy promulgated by the Treasury (the "Policy"), qualifies as "Deep Impact Lending," as defined pursuant to the Policy (the "Deep Impact Condition"); (2) over any twenty-four consecutive quarters, an average of at least 85% of the Company's Total Originations qualifies as "Qualified Lending," as defined pursuant to the Policy (the "Qualified Lending Condition"); or (3) the Senior Preferred  has a dividend rate of no more than 0.5% at each of six consecutive Reset Dates, as defined pursuant to the Policy.  As of the date of this press release, the Company has met the Qualified Lending Condition for the past twelve consecutive quarters. Assuming the Company continues to satisfy the Qualified Lending Condition, as well as complying with the other ECIP program requirements and completing the necessary ECIP Option Agreement closing conditions, the Company may exercise its option to repurchase the Senior Preferred as early as September 2028.  The Company cautions readers that no assurances can be made regarding the Company's continued satisfaction of the Qualified Lending Condition in future periods and the Company's future willingness or ability to exercise its option to repurchase the Senior Preferred is not guaranteed.

CEO Commentary

Moak Griffin, President and Chief Executive Officer of the Company and the Bank, stated, "The second quarter of 2025 resulted in solid financial results, highlighted by our improving net interest margin and loan yields, stable cost of funds, and modest organic growth. The second quarter was also an exciting time for BankFirst, as we completed our acquisition of Magnolia, further expanding our branch network for our customers and reinforcing our strategic plan of partnering with community banks with strong relationships in our local markets. We look forward to integrating our new colleagues into the BankFirst family and are focused on completing the core data processing systems conversion in November 2025."

Mr. Griffin continued, "Additionally, we believe our credit quality remained solid during the second quarter of 2025 and while recent economic, trade and tariff-related headlines signal uncertainty and potential headwinds, we continue to have a strong capital position and liquidity levels which we believe favorably position the Bank to capitalize on future opportunities."

Financial Condition and Results of Operations

Total assets were $2.85 billion at June 30, 2025, compared to $2.86 billion at March 31, 2025, and $2.76 billion at June 30, 2024. Total loans outstanding, net of the allowance for credit losses, as of June 30, 2025 totaled $1.81 billion, compared to $1.80 billion as of March 31, 2025 and $1.82 billion as of June 30, 2024.

Total deposits as of June 30, 2025 were $2.38 billion, compared to $2.41 billion at March 31, 2025 and $2.32 billion at June 30, 2024. Non-interest-bearing deposits were $514.38 million as of June 30, 2025, compared to $533.14 million as of March 31, 2025, a decrease of 4%, and $537.52 million as of June 30, 2024, a decrease of 4%. Non-interest-bearing deposits represented 22% of total deposits as of June 30, 2025.

The Company's consolidated cost of funds was 1.92% for the second quarter of 2025, compared to 1.88% for the first quarter of 2025 and 2.05% for the second quarter 2024. Bank-only cost of funds for the second quarter of 2025 was 1.87 % compared to 1.84% for the first quarter of 2025 and 1.98% for the first quarter of 2024. The Company's consolidated cost of funds remained consistent over the past few quarters and the Bank-only cost of funds increased slightly due to interest rate increases in money market accounts in the Bank's market areas. 

The ratio of loans to deposits was 77.2% as of June 30, 2025, compared to 75.6% as of March 31, 2025 and 79.3% as of June 30, 2024.

Net interest income was $23.07 million for the second quarter of 2025, compared to $21.93 million for the first quarter of 2025 and $20.77 million for the second quarter of 2024. Net interest margin was 3.71% in the second quarter of 2025, an increase from 3.57% in the first quarter of 2025 and an increase from 3.46% in the second quarter of 2024. Yield on interest-earning assets was 5.57% during the second quarter of 2025, compared to 5.42% during the first quarter of 2025 and 3.46% during the second quarter of 2024.  The increase in net interest margin during the second quarter of 2025 was primarily due to the receipt of semi-annual dividends and an increase in our total loan balance, which in turn had a positive impact on our overall earning asset yield for the second quarter of 2025.

Noninterest income was $7.06 million for the first quarter of 2025, compared to $6.63 million for the first quarter of 2025, an increase of 6%, and compared to $7.99 million for the second quarter of 2024, a decrease of 12%. Mortgage banking revenue during the second quarter of 2025 was $758 thousand, a decrease of $1 thousand, or 0.1%, from $759 thousand in the first quarter of 2025, and a decrease of $100 thousand, or 12%, from $858 thousand in the second quarter of 2024. During the second quarter of 2025, the Bank retained $16.48 million of the $41.81 million in secondary market mortgages originated to hold in-house, compared to $30.66 million secondary market loans originated during the first quarter of 2025, of which $7.28 million were retained to hold-in house, and compared to $37.30 million secondary market loans originated during the second quarter of 2024, of which $3.6 million were retained to hold in-house.

Noninterest expense was $20.25 million for the second quarter of 2025, compared to $20.05 million for the first quarter of 2025 and $19.72 million for the second quarter of 2024.

As of June 30, 2025, tangible common book value per share (non-GAAP) was $26.39. According to OTCQX, there were 519 trades of the Company's shares of common stock during the second quarter of 2025 for a total of 128,017 shares and for an aggregate price of approximately $4.97 million. The closing price of the Company's common stock quoted on OTCQX on June 30, 2025 was $40.50 per share. Based on this closing share price, the Company's market capitalization was $219.89 million as of June 30, 2025.

Credit Quality

The Company recorded a provision for credit losses of $850 thousand during the second quarter of 2025, compared to a provision of $600 thousand during the first quarter of 2025 and a provision of $525 thousand for the second quarter of 2024. The Company continues to closely monitor the ongoing economic uncertainty, especially in the commercial real estate market, as discussed below. 

The Company recorded $341 thousand of net loan charge-offs in the second quarter of 2025, compared to $586 thousand in the first quarter of 2025 and $1.1 million in the second quarter of 2024. Non-performing assets, excluding restructured loans, to total assets were 0.50% for the second quarter of 2025, compared to 0.51% for the first quarter of 2025 and 0.41% for the second quarter of 2024. Annualized net charge-offs to average loans for the second quarter of 2025 were 0.02% compared to annualized net charge-offs of 0.03% for the first quarter of 2025 and 0.06% for the second quarter of 2024. 

As of June 30, 2025, the allowance for credit losses equaled $24.05 million, compared to $23.54 million as of March 31, 2025, and $23.7 million as of June 30, 2024.  Allowance for credit losses as a percentage of total loans was 1.31% at June 30, 2025, compared to 1.29% at March 31, 2025, and 1.29% at June 30, 2024.  Allowance for credit losses as a percentage of nonperforming loans was 168% at June 30, 2025, compared to 160% at March 31, 2025, and 208% at June 30, 2024. 

The Company continues to closely monitor credit quality in light of the continued economic uncertainty caused by, among other factors, the prolonged elevated interest rate environment, stronger than expected employment data in recent periods, continued uncertainty regarding U.S. trade and tariff policy and the lingering inflationary pressures, and the risk of the resurgence of elevated levels of inflation, in the United States and our market areas. Accordingly, additional provisions for credit losses may be necessary in future periods.

Liquidity and Capital Position

Liquidity – We have a limited reliance on wholesale funding and, as of June 30, 2025, had no brokered deposits. As of June 30, 2025, we had the capacity to borrow up to approximately $905.13 million from the FHLB, $12.83 million from the FRB discount window and an estimated additional $60.00 million in funding through several relationships with correspondent banks.

Capital Requirements and the Community Bank Leverage Ratio Framework – Pursuant to federal regulations, bank holding companies and banks, like the Company and the Bank, must maintain capital levels commensurate with the level of risk to which they are exposed, including the volume and severity of problem loans. Federal banking regulations implementing the international regulatory capital framework, referred to as the "Basel III Rules," apply to both depository institutions and (subject to certain exceptions not applicable to the Company) their holding companies. The Basel III Rules also establish a "capital conservation buffer" of 2.5% above the regulatory minimum risk-based capital requirements. The Basel III minimum capital ratios with the full capital conservation buffer are summarized in the table below.

On September 17, 2019, the federal banking agencies jointly finalized a rule intended to simplify the Basel III regulatory capital requirements described above for qualifying community banking organizations that opt into the Community Bank Leverage Ratio ("CBLR") framework, as required by Section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. The final rule became effective on January 1, 2020, and the CBLR framework became available for banks to use beginning with their March 31, 2020 Call Reports. Under the final rule, if a qualifying community banking organization opts into the CBLR framework and meets all requirements under the framework, it will be considered to have met the "well-capitalized" regulatory capital ratio requirements under the "prompt corrective action" regulations promulgated by the federal banking agencies and will not be required to report or calculate risk-based capital under the Basel III Rules. In order to qualify for the CBLR framework, a community banking organization must have a tier 1 leverage ratio of greater than 9.0%, less than $10 billion in total consolidated assets, and limited amounts of off-balance-sheet exposures and trading assets and liabilities.

The Company and the Bank are qualifying community banking organizations and, on June 15, 2022, the Company and the Bank elected to opt into the CBLR framework. However, the Company currently operates under the Small Bank Holding Company Policy Statement of the Board of Governors of the Federal Reserve System (the "Federal Reserve") and, therefore, is not currently subject to the Federal Reserve's consolidated capital reporting requirements. Accordingly, the Company's election to opt into the CBLR framework will commence for the first reporting period for which the Company no longer operates under the Federal Reserve's Small Bank Holding Company Policy Statement, at which time the Company will become subject to the Federal Reserve's consolidated capital requirements. 

By electing to opt into the CBLR framework, the Company and the Bank are not required to report or calculate risk-based capital under the Basel III Rules described above. As of June 30, 2025, the Bank's bank-only CBLR amounted to 9.89%. While the Company is currently not subject to the Federal Reserve's consolidated capital requirements, as discussed above, the Company's consolidated CBLR would have amounted BFCCto 12.77% as of June 30, 2025. These levels exceeded the 9.0% minimum CBLR necessary to be deemed "well-capitalized."

Included in shareholders' equity at June 30, 2025 was an unrealized loss in accumulated other comprehensive income of $7.94 million related to unrealized losses in the Company's investment securities portfolio primarily due to the continued elevated market interest rates during the period. At June 30, 2025, the composition of the Bank's investment securities portfolio includes $244.97 million, or 45.13%, classified as available-for-sale, and $297.83 million, or 54.87%, classified as held to maturity. All investments in our investment securities portfolio are expected to mature at par value.

Our investment securities portfolio made up 19.04% of our total assets at June 30, 2025, compared to 18.49% and 20.00% at March 31, 2025 and June 30, 2024, respectively.

Merger and Acquisition Activity

The Company completed its acquisition of Magnolia and Magnolia Bank on July 1, 2025.  Under the terms of the definitive agreement with Magnolia and Magnolia Bank, the Company paid a fixed amount of cash consideration. Although the Company has not finalized the exact amounts of the purchase accounting adjustments, the following table presents the estimated impact on certain financial information for the Company (in thousands, except per share data):

ABOUT BANKFIRST CAPITAL CORPORATION  

BankFirst Capital Corporation (OTCQX: BFCC) is a registered bank holding company headquartered in Columbus, Mississippi with approximately $2.85 billion in total assets as of June 30, 2025. BankFirst Financial Services, the Company's wholly-owned banking subsidiary, was founded in 1888 and is locally owned, controlled, and operated. The Bank is headquartered in Macon, Mississippi, and operates additional branch offices in Coldwater, Columbus, Flowood, Hattiesburg, Hernando, Independence, Jackson, Louin, Madison, Newton, Oxford, Senatobia, Southaven, Starkville, Tupelo, Water Valley, and West Point, Mississippi; and Addison, Aliceville, Arley, Carrollton, Curry, Double Springs, Fayette, Gordo, Haleyville, Northport, and Tuscaloosa, Alabama. The Bank also operates four loan production offices in Biloxi and Brookhaven, Mississippi, and in Birmingham and Huntsville, Alabama. 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.

NON-GAAP FINANCIAL MEASURES

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with generally accepted accounting principles in the United States ("GAAP"). These non-GAAP financial measures include tangible book value per share. The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company's financial position and performance. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures.

We classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies.

A reconciliation of non-GAAP financial measures to GAAP financial measures is provided at the end of this press release.

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, statements regarding certain of the Company's goals and expectations with respect to future events that are subject to various risks and uncertainties, and 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: (i) the impact on us or our customers of a decline in general economic conditions and any regulatory responses thereto; (ii) potential recession in the United States and our market areas; (iii) the impacts related to or resulting from uncertainty in the banking industry as a whole; (iv) increased competition for deposits and related changes in deposit customer behavior; (v) the impact of changes in market interest rates, whether due to a continuation of the elevated interest rate environment or further reductions in interest rates and a resulting decline in net interest income; (vi) the lingering inflationary pressures, and the risk of the resurgence of elevated levels of inflation, in the United States and our market areas; (vii) the uncertain impacts of ongoing quantitative tightening and current and future monetary policies of the Federal Reserve; (viii) changes in unemployment rates in the United States and our market areas; (ix) adverse changes in customer spending and savings habits; (x) declines in commercial real estate values and prices; (xi) a deterioration of the credit rating for U.S. long-term sovereign debt or uncertainty regarding United States fiscal debt, deficit and budget matters; (xii) cyber incidents or other failures, disruptions or breaches of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber-attacks; (xiii) severe weather, natural disasters, acts of war or terrorism, geopolitical instability or other external events, including as a result of in the policies of the current U.S. presidential administration or Congress; (xiv) the impact of tariffs, sanctions and other trade policies of the U.S. and its global trading counterparts and the resulting impact on the Company and its customers; (xv) the maintenance and development of well-established and valued client relationships and referral source relationships; (xvi) acquisition or loss of key production personnel; (xvii) changes in tax laws; (xviii) the risks related to the development, implementation, use and management of emerging technologies, including artificial intelligence and machine learnings; (xix) potential costs related to the impacts of climate change; (xx) current or future litigation, regulatory examinations or other legal and/or regulatory actions; (xxi) risks related to the Company's acquisition of Magnolia and acquisitions generally, including disruption to current plans and operations; (xxiii) our ability to recognize the expected benefits and synergies of our completed acquisitions; and (xxiv) our ability to successfully complete the conversion of the core data processing systems of Magnolia Bank into the core data processing system of the Bank. These forward-looking statements are based on current information and/or management's good faith belief as to future events. 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. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release. 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. All forward-looking statements, express or implied, included in the press release are qualified in their entirety by this cautionary statement.

AVAILABLE INFORMATION

The Company maintains an Internet web site at www.BankFirstfs.com/about/investor-relations. The Company makes available, free of charge, on its web site the Company's annual reports, quarterly earnings reports, and other press releases. In addition, the OTC Markets Group maintains an Internet site that contains reports, proxy and information statements, and other information regarding the Company (at www.otcmarkets.com/stock/BFCC/overview).

The Company routinely posts important information for investors on its web site (under www.BankFirstfs.com and, more specifically, under the Investor Relations tab at www.BankFirstfs.com/about/investor-relations). The Company intends to use its web site as a means of disclosing material non-public information and for complying with its disclosure obligations under the OTC Markets Group OTCQX Rules for U.S. Banks. Accordingly, investors should monitor the Company's web site, in addition to following the Company's press releases, OTC filings, public conference calls, presentations and webcasts.

The information contained on, or that may be accessed through, the Company's web site is not incorporated by reference into, and is not a part of, this press release.

Member FDIC

SOURCE BankFirst Capital Corporation